Exploration and Exploitation in Latin American Firms: The Determinants of Organizational Ambidexterity and The Country Effect

Abstract

In this article, we explore the determinants of organizational ambidexterity across Latin American countries -Chile, Ecuador, and Peru- from innovation surveys of 2,786 manufacturing companies. The study introduces valuable information on ambidextrous organizations in emerging economies, contrasting to traditional literature frequently focusing on developed countries. Findings confirm the importance to measure ambidexterity in a multidimensional perspective, relating exploration to radical innovation, and breaking down exploitation into incremental exploitation, related to incremental innovation and repetitive exploitation related to operational efficiency. This work also finds that higher GDP per capita relates to higher exploration and exploitation ability of firms and supported our hypotheses that political and economic uncertainty of each country impact on organizational ambidexterity. Additionally, we expand on Diaz-Molina´s model (2018), on the relationship between strategic and operational absorptive capacity on ambidexterity by validating his findings across several countries and uncovering a positive interaction term between strategic and operational absorptive capacity when both impact on ambidexterity.