FINDING the WAY to AMBIDEXTERITY: EXPLORING the RELATIONSHIPS among ORGANISATIONAL DESIGN, KNOWLEDGE CREATION and INNOVATION

Research suggests the firm's structural and contextual attributes that foster ambidexterity, but theory and testing on their combined effects on knowledge creation, ambidexterity and financial performance remain rather poor. By using a theoretical perspectives built on organisation design and the knowledge-based view of the firm, this article takes into consideration firms' exploration attainments and exploitation initiatives in relation to both their ability to create knowledge in innovation processes and their capacity to apply it into product innovation. Using data from a survey on 112 hi-tech firms in Italy, results show that organisational context attributes influence firm's degree of ambidexterity in knowledge creation in the innovation processes, but it does not have a direct influence on the actual degree of ambidexterity in innovation development. A fundamental condition to ambidexterity in innovation development is the structural separation of exploration and exploitation innovation initiatives. Specifically, we found that structural separation of these initiatives within the organisation directly affects ambidexterity and leads to higher sales growth than when firms achieve ambidexterity through an appropriate organisational context solely. These findings provide a rich explanation of the way firms develop ambidexterity and can obtain superior economic performance from it.