Specialized organizations and ambidextrous clusters in the open innovation paradigm

Abstract

Summary By comparing Lucent Technologies and Cisco Systems over twenty years, one illustrates that a firm that outsources exploration through an Acquisition and Development (A&D) strategy of start-ups and exploitation specialization can be more innovative and competitive than an ambidextrous organization. The success of an A&D strategy depends on the embeddedness of the firm in the network of organizations comprised of an open innovation system and supported by an inter-organizational process of innovation. The embeddedness of Cisco Systems in the ambidextrous high-tech cluster of the Silicon Valley, especially its ties to venture capital firms and start-ups, explains the success of its A&D strategy. The spreading of A&D strategy among large firms reinforces the dynamics of the open innovation system and nurtures the clusterÕs ambidexterity by increasing incentives for other organizations and individuals of the network to explore new knowledge and create fresh start-ups. ª

Can a governance structure foster cluster ambidexterity through knowledge management? An empirical study of two French SME clusters

“…Exploration and exploitation involve different degrees and types of learning (Gupta et al, 2006), and finding the appropriate balance is both complicated and essential for organisational survival (March, 1991). Some studies suggest balancing exploration and exploitation with boundary-spanning activities across organisations (Ferrary, 2011). Using external knowledge from other cluster members, firms could limit the necessary trade-offs between knowledge exploitation and exploration activities (Oshri et al, 2005).…”

“…The question of which model is more efficient remains unsolved. Kauppila (2007) considers the dual model more appropriate and manageable in practice, but Ferrary (2011) shows that the specialisation model is also efficient with a 20-year comparison of Lucent Technologies and Cisco Systems. Cisco Systems' presence in the ambidextrous, high-tech Silicon Valley cluster, as well as its close ties to venture capital firms and start-ups, explain the success of its growth strategy.…”

“…We pursue a less developed research line (e.g., Ferrary, 2011) that addresses how to reach ambidexterity at a collective (i.e., cluster) level, to ensure not just individual but also collective performance. This question of whether a cluster may become ambidextrous is gaining interest as (innovation) clusters increase in significance and prominence (Ferrary, 2011). With this research, we analyse precisely how a cluster governance structure might facilitate knowledge management to encourage cluster ambidexterity.…”

“…Although some studies investigate inter-firm knowledge flows at a macro level, such as in innovation networks (Sammarra & Biggiero, 2008), few investigations pertain to ambidexterity in clusters (Ferrary, 2011). With this study, we compare knowledge management strategies and ambidexterity beyond the organisational level, namely, at interorganisational and cluster levels.…”

“…Small firms may procure ambidexterity externally, through inter-organisational ties (Rothaermel & Deeds, 2004), in which case SMEs in search of ambidexterity might compensate for their lack of internal resources by developing relations with other organisations (e.g., research labs, startups, competitors, suppliers, clients). Such network ambidexterity then should mark SME clusters, which aim to benefit from firm heterogeneity and labour divisions within the cluster (Ferrary, 2011) to boost collective innovation.…”