J Technol Transf (2017) 42:374–388

DOI 10.1007/s10961-016-9502-7

Ambidexterity, external knowledge and performance

in knowledge-intensive firms

Demetris Vrontis1 • Alkis Thrassou1 • Gabriele Santoro2 •

Armando Papa3

Published online: 7 September 2016

 Springer Science+Business Media New York 2016

Abstract The paper investigates the relationship between organizational ambidexterity

and firm performance in knowledge-intensive firms. In particular, using a quantitative
methodology involving a structural equation model, the research investigates whether
external knowledge sourcing enhances the impact of ambidexterity on firm performance.
The results show that organizational ambidexterity in knowledge-intensive firms does not,
in fact, have a significant impact on firm performance, but it does have a positive and
significant mediating effect considering external knowledge sourcing. The findings are
presented along with interesting and significant implications for both theory and practice,
largely stemming from the still much neglected relationship between organizational
ambidexterity and external knowledge sourcing in the open innovation context.

Keywords Knowledge-intensive firms
Ambidexterity
External knowledge sourcing

Performance
Open innovation

JEL Classification O31

& Alkis Thrassou

thrassou.a@unic.ac.cy
Demetris Vrontis
vrontis.d@unic.ac.cy
Gabriele Santoro
gabriele.santoro@unito.it
Armando Papa
armando.papa@unina.it
1
School of Business, University of Nicosia, 46 Makedonitissas Ave., P.O. Box 24005, 1700 Nicosia,
Cyprus
2
Department of Management, University of Torino, Corso Unione Sovietica, 218 bis, 10134 Turin,
Italy
3
University of Naples ‘‘Federico II’’, Naples, Italy

123
Ambidexterity, external knowledge and performance in knowledge… 375

1 Introduction

In an incessantly changing and ever demanding business environment, managers across the
globe are correspondingly, proportionately and inexorably obliged to reconsider the very
fundamentals of their business approaches and constantly to renew, redefine and reinvent
their organizations with the aim of achieving sustainable competitiveness within a dynamic
environment (Danneels 2002; Vrontis et al. 2012). This challenge is prominent in the
current business context, which is characterized by the shifting behavior of customers,
deeply and widely impacting technologies and fierce competition (Bresciani and Ferraris
2014; Thrassou et al. 2014), requiring the building and expansion of significant and rel-
evant knowledge over time. In fact, knowledge is considered to be the most valuable global
commodity, which can give a firm an advantage over its competitors (Gorman 2002).
The importance of both current and new knowledge, resources and competencies thus
dictates that innovative firms have to maintain their adaptiveness by exploiting their
existing knowledge and exploring new knowledge (Levinthal and March 1993; Floyd and
Lane 2000; Chesbrough et al. 2006). In this context, the concept of organizational
ambidexterity has attracted growing attention in both organizational (Adler et al. 1999;
Raisch and Birkinshaw 2008; Chebbi et al. 2015) and strategic (Ghemawat and Costa
1993; Porter 1996) theories.
An ambidextrous firm is one that is capable of both exploiting existing competencies
and exploring new opportunities, and achieving ambidexterity enables a firm to enhance its
competitiveness and performance (Lubatkin et al. 2006; Carayannis and Rakhmatullin
2014). Although the literature substantially investigates the concept of organizational
ambidexterity, highlighting the complementarities, contingencies and limitations of
exploitation and exploration, few studies consider the strategic role of external knowledge
in enhancing ambidexterity and firm performance. This relationship is even less studied in
the context of knowledge-intensive firms (KIFs). In fact, to cope with the increasing
technological complexity and market uncertainty (Thrassou 2007), KIFs must increasingly
involve external sources of knowledge within their innovation process (Enkel et al. 2009),
based on the extent of the ambidextrous strategy adopted. KIFs are those ‘‘having a high
added value of scientific knowledge embedded in both product and process’’ (Coviello
1994), such as firms operating in information and communication technologies (ICT) and
in high-technology manufacturing sectors such as electronics (Bell et al. 2004). This
knowledge-based embedded added value also constitutes a primary reason for this
research’s natural focus on KIFs.
This research fills the above-identified gap in knowledge. In particular, we build on the
organization context (March 1991; Ghoshal and Bartlett 1994) and on the open innovation
literature (Chesbrough et al. 2006; Laursen and Salter 2006) to suggest that external
knowledge sourcing mediates the relationship between organizational ambidexterity and
firm performance, in terms of exploitation and exploration, for KIFs. Moreover, we employ
a quantitative methodology using a structural equation model to test and investigate the
hypotheses, developing the constructs according to the relevant literature. Thus, the article
contributes to the existing organizational ambidexterity literature, furthering our under-
standing of the factors leveraging the ambidexterity–performance relationship. The article
is structured as follows: first, we provide a literature review on organizational ambidex-
terity and external knowledge sourcing to identify the gap; the research method is sub-
sequently delineated and the findings of the empirical research are presented and discussed;

123
376 D. Vrontis et al.

finally, the conclusions and implications of the study are set out, along with the limitations
of the research.

2 Theoretical framework

2.1 Organizational ambidexterity

For many sectors, innovation constitutes a key strategy in the search for and development
of lasting competitive advantages (Cooper and Kleinschmidt 1993; Bresciani 2010),
especially in the contemporary business context, which is characterized by globalization,
hyper-competition, technological advancement and ever-shifting consumer behaviors
(Vrontis and Thrassou 2013). Innovative firms build and maintain a competitive advantage
by developing products, processes and services (Tidd et al. 2000) that achieve a sustainable
position in internationally competitive markets with increasing customer demands (Santoro
et al. 2016). Consequently, adopting faster, more efficient and less risky innovation pro-
cesses has become the main driver for competitive companies (Drucker 2014).
Towards this aim, organizational theories recognize that firms have to develop both
exploitative and exploratory innovation (Tushman and O’Reilly 1996). These two concepts
explain well the notion of organizational ambidexterity, according to which firms are able
simultaneously to exploit their current capabilities while exploring new competencies and
knowledge (Duncan 1976; Levinthal and March 1993; Gibson and Birkinshaw 2004; He
and Wong 2004; O’Reilly and Tushman 2004; Lubatkin et al. 2006). More specifically,
organizational ambidexterity is defined as the ability of a firm to pursue both exploitative
(incremental) and explorative (radical) innovation (O’Reilly and Tushman 2004). On the
one hand, exploitation is intended to extend the current knowledge, seeking greater effi-
ciency and improvements to enable incremental innovation (Atuahene-Gima 2005). On the
other hand, exploration involves the development of new knowledge, seeking the variation
and novelty needed for more radical innovation (Atuahene-Gima 2005). As Taylor and
Greve (2006) suggest, both strategies require the combination of knowledge: the first
employing existing knowledge in well-understood ways and the second leveraging varied
and dispersed knowledge in new ways. Similarly, exploitation demands efficiency and
convergent thinking to harness the current capabilities and expand product innovation
continuously, while exploration, in contrast, entails search and experimentation efforts to
generate novel knowledge recombination (Wadhwa and Kotha 2006) in the search for new
business territory (Chebbi et al. 2013).
March (1991) assumes that firms must choose between structures that facilitate
exploitation (the use of existing knowledge) and those that facilitate exploration (the search
for new knowledge). In line with this, Ghemawat and Costa (1993) argue that firms must
choose between a strategy of dynamic effectiveness with flexibility and internal efficiency
through more rigid discipline, while Vrontis et al. (2012) put forward the notion of
strategic reflexivity, emphasizing the need for strategic deployment to become an inherent
reflex action of firms seeking fast adaptability to changing external conditions. As many
authors point out, pursuing both goals simultaneously would thus involve mixing orga-
nizational elements appropriately for each strategy and thus losing the benefit of the
complementarities typically obtained between the various elements of each type of orga-
nization (Ghemawat and Costa 1993; Porter 1996). This shows organizational ambidex-
terity from a trade-off perspective. On the one hand, too much effort exerted on the

123
Ambidexterity, external knowledge and performance in knowledge… 377

exploitation of current knowledge and competencies can lead to path dependency, which
prevents firms from adapting to the dynamic environment (Smith and Tushman 2005;
Simsek et al. 2009). On the other hand, too much focus on exploration can starve firms of
core competencies (Andriopoulos and Lewis 2009) or lead to underdeveloped new ideas
(Levinthal and March 1993). As a result, some authors suggest that a balance must be
found between explorative and exploitative activities (Volberda et al. 2001; Cao et al.
2009).

2.2 External knowledge sourcing and organizational ambidexterity

As new technological advances have permeated international markets, increased attention

has been paid to the involvement of external knowledge sources within firm innovation
processes (Chesbrough 2003). Indeed, the innovation management literature strongly
agrees that firms are increasingly having to use both internal and external sources of
knowledge to accelerate innovation (Cassiman and Veugelers 2006; Chesbrough 2006).
This is because joining collaborations and innovation networks enable firms to access
external knowledge, and combining different types of knowledge can enhance innovation
(Rosenzweig 2016). In addition, intra- and inter-organizational innovation results from the
capacity to share, combine and create new knowledge in order to act dynamically and
perceive new opportunity in the current competitive environment (Teece 2007; Audretsch
et al. 2016). In this way, a strategically balanced mix of internal and external sources of
knowledge can not only prevent over- or under-investment in R&D but also exploit
business opportunities efficiently (Cohen and Levinthal 1990; Narula 2001). This is in line
with the open innovation paradigm, according to which much of the knowledge that is
useful for developing new products and services lies outside the boundaries of the company
(Gassmann and Enkel 2004). Therefore, innovation strategies exploiting external flows of
knowledge represent a new source of competitive advantage for companies (Gassmann
et al. 2010; Del Giudice et al. 2013). This is further both facilitated and enhanced through
the accelerating global dispersion of knowledge (Bresciani et al. 2015). Thus, firms
increasingly need to collaborate with other actors to enhance their innovativeness and
sustain their international market competitiveness. This ‘‘openness’’ helps firms to access
ideas, knowledge, skills and technologies from their external environment. In particular,
the knowledge and technology transfer is fostered by certain kinds of collaboration, co-
creation processes and ecosystem development within an environment that is commonly
called the quadruple helix (Carayannis and Rakhmatullin 2014). The stakeholders involved
in these ecosystems can be actors such as companies, universities, public and private
research centers and citizens, sharing complementary resources, infrastructures, knowledge
and technologies (Ferraris and Santoro 2014; Carayannis et al. 2015).
Nevertheless, there is a scarcity of empirical studies assessing the relationship between
external knowledge adoption in response to an ambidextrous strategy. A rare exception is
the study by Rothaermel and Alexandre (2009), which develops a theoretical model linking
ambidexterity in technology sourcing to firm performance. Specifically, the authors find an
inverted U-shaped relationship between a firm’s technology sourcing mix and its perfor-
mance, emphasizing that pursuing ambidexterity in technology sourcing enhances firm
performance. From a theoretical point of view, a balanced opening to external sources of
knowledge can enhance the competitiveness of firms both in terms of internal efficiency
(exploitation) and in terms of their ability to recognize opportunities and technological
trajectories (exploration) (Rothaermel and Alexandre 2009). The economics literature,
along with the research on knowledge spillovers, suggests that growth opportunities can

123
378 D. Vrontis et al.

emerge from the joint effort of internal exploitation and external knowledge sourcing
(Nelson and Winter 1982; Cassiman and Veugelers 2002). Superimposing this view on the
previous literature section, we verify that organizational ambidexterity can be considered
to be the ability of a firm to pursue both exploitative (incremental) and explorative (radical)
innovation (O’Reilly and Tushman 2004). Again, exploitation involves the use of explicit
knowledge, such that by internalization and combination, incremental refinements to
existing technological or marketing trajectories can be made (Nonaka 1994). Essentially,
the intention of exploitation is to respond to the current environmental conditions by
adapting the existing knowledge and technologies and thus to meet the needs of the
existing customers further (Harry and Schroeder 2000). In contrast, exploration involves
the use of tacit knowledge bases, such that, by externalizing and combining them, new
technological or marketing trajectories are developed (Nonaka 1994).

3 Hypothesis development

Despite early studies’ description of ambidexterity as a trade-off, recent empirical research

on the field underlines ambidexterity as an important factor in enhancing the overall firm
performance (Junni et al. 2013). In addition, other scholars show that ambidexterity, in
terms of exploitation and exploration, is positively associated with innovation perfor-
mance, specifically with both incremental and radical innovation (Sheremata 2000; Raisch
et al. 2009). Moreover, the literature finds that exploitation and exploration are both
positively associated with firm sales growth (He and Wong 2004). Finally, Gibson and
Birkinshaw (2004) indicate that achieving ambidexterity through contextual support is
positively associated with performance. Following this review, we can predict that firms
involved in both exploitation and exploration are more likely to achieve better perfor-
mance. Hence, our first hypothesis is as follows:
HP 1 Organizational ambidexterity is positively associated with firm performance.
Although the literature provides different definitions of exploitation and exploration,
according to several studies they are both associated with learning and innovation (Baum
et al. 2000; Benner and Tushman 2002; He and Wong 2004), and an expanded knowledge
domain base is required. Thus, both exploitation and exploration involve accessing dif-
ferent knowledge-based sources and establishing different kinds of partnership (Shortell
and Zajac 1990; Del Giudice and Maggioni 2014). In addition, we expect that KIFs with
strong internal capabilities that facilitate the combination of exploitation and exploration
activities are likely to seek external knowledge. In turn, the open innovation paradigm
points out that involving external knowledge sources enhances learning, innovation and
firm performance. For instance, Laursen and Salter (2006) indicate that external search
depth is associated with radical innovation while external search breadth is associated with
incremental innovation. Hung and Chou (2013) find that external knowledge sourcing is
positively associated with the ratio of a firm’s market value to the replacement cost of its
assets (Tobin’s q index).
For these reasons, we can predict that external knowledge is positively associated with
organizational ambidexterity and that external knowledge sourcing enhances the effects of
organizational ambidexterity on firm performance. Hence, our second and third hypotheses
are as follows:

123
Ambidexterity, external knowledge and performance in knowledge… 379

HP 2 External knowledge sourcing is positively associated with organizational

ambidexterity.
HP 3 External knowledge sourcing mediates the relationship between organizational
ambidexterity and firm performance (Fig. 1).

4 Methodology

4.1 Sample and data collection

This paper aims to analyze the relationship between organizational ambidexterity, external
knowledge sourcing and firm performance. To test the hypotheses, we collected data
through a semi-structured questionnaire that was sent to the CEO and CTO of each firm,
after having explained the purpose of the research. We used multiple respondents, in line
with Cao et al. (2009). The CEO was deemed appropriate to provide details of the firm’s
performance measures, while the CTO was particularly relevant to information on the
firm’s innovation strategy.
The questionnaire itself investigated: (a) general information about the firm, such as
industry, firm values, strategy, age and number of employees; (b) economic/financial data,
such as profit growth, revenues, R&D expenses and share of income from new products;
and (c) innovation process orientation, with a particular emphasis on exploitation, explo-
ration and external knowledge sourcing.
In the first phase, a sample of 500 Italian knowledge-intensive firms was selected from
the Italian database AIDA of Bureau Van Dijk; 189 Italian KIFs answered the question-
naire successfully and satisfactorily (response rate of 37.8 %). In line with other studies in
this field, we analyzed organizational ambidexterity and external knowledge sourcing at
the firm level (Laursen and Salter 2006; Lubatkin et al. 2006; Cao et al. 2009). The firms in
the sample are considered to be knowledge intensive, and global KIFs are considered to be
the major producers of technological knowledge in the new knowledge economy (Blackler
1995; Keller 2004; Del Giudice and Straub 2011). The concept of knowledge-intensive
firms (KIFs) has found widespread usage and acceptance in the organizational science
literature, despite the literature recognizing that it is empirically impossible to establish

External
knowledge
sourcing

Organizational Firm
ambidexterity performance

Solid line=hypothesized direct effect

Dotted line=hypothesized indirect effect

Fig. 1 The conceptual model. Solid line = hypothesized direct effect. Dotted line = hypothesized indirect
effect

123
380 D. Vrontis et al.

which firms can be considered to be ‘‘knowledge intensive’’ (Alvesson 2011). For these
reasons, the concept of KIFs has received substantial attention from researchers. Alvesson
defines a KIF as a company in which the majority of employees are well qualified, while
Bontis (1998) sees the quality of human capital as a source of innovation and strategic
renewal, both essentially denoting employee skills as central to the creation of a com-
petitive advantage and, indeed, to the survival of the organization under harsh market
conditions.
For the above reasons, we adopted a perspective that reflects traditional industrial
classification schemes, whereby organizations are grouped into industries according to
their outputs. To avoid any ambiguity issues, we selected companies from the ICT and
electronics sectors, consistent with Swart and Kinnie (2003) and Bell et al. (2004), and the
definition of Coviello (1994), as provided in the introduction (Table 1).

4.2 Measurement of constructs

All the latent variables were tested and measured using multiple items based on previous
studies (Cao et al. 2009; Laursen and Salter 2006; Aloini et al. 2015). We measured firm
performance in line with Gupta and Govindarajan (1986) and Cao et al. (2009), asking the
CEO of each firm to rate, on a 1–7 Likert scale, the firm performance for the year 2014 in
terms of profit growth, sales growth and market share growth.
We developed a 7-point Likert scale for the organizational ambidexterity second-order
construct on the basis of the recommendations by He and Wong (2004), Lubatkin et al.
(2006) and Cao et al. (2009), which proved to have high reliability. This also ensured
content validity. The construct was measured through two first-order indicators following
the literature on organizational ambidexterity, namely exploitation and exploration
(March 1991; Adler et al. 1999). In line with these studies, we collected data for these
measures by asking the CTO to indicate, on a 1–7 Likert scale (1 = strongly disagree;
7 = strongly agree), the extent to which 8 different statements were true regarding
product development in their firm, over the past 3 years. With regard to firm ‘‘explo-
ration,’’ we asked for an evaluation of statements regarding: ‘‘introduction of new
generations of products’’; ‘‘extension of product range’’; ‘‘opening up of new markets’’;
and ‘‘entering new technological fields.’’ Concerning ‘‘exploitation,’’ we asked for an
evaluation of statements regarding: ‘‘improvement of existing products’’; ‘‘improvement
of product flexibility’’; ‘‘reduction of production cost’’; and ‘‘enhancement of existing
markets.’’ With these questions, the construct thus reflects the extent of the ambidextrous
strategy of the firm.

Table 1 Firms’ industry and

Knowledge-intensive firms’ industry and size %
firms’ size
Electronics 42
ICT 58
Total 100
Size
SMEs (10 B employees B 250) 84
Large firms (C251 employees) 16
Total 100

123
Ambidexterity, external knowledge and performance in knowledge… 381

The main purpose of the paper is to evaluate the mediating effect of external knowledge
sourcing on the relationship between organizational ambidexterity and firm performance.
To measure the external knowledge-sourcing construct, following Aloini et al. (2015), we
employed two first-order measures, namely ‘‘sources of knowledge’’ and the ‘‘innovation
funnel phase.’’ For the sources of knowledge, we asked the respondents to assign a value of
importance (on a 7-point Likert scale) of using 6 external sources according to Laursen and
Salter’s classification (customers, suppliers, competitors, consultants, universities and
research centers). For the innovation funnel phase, we asked the respondents to assign a
value of importance of using external sources in each innovation funnel phase, namely
research, development, manufacturing and marketing (Chesbrough and Bogers 2014).
Finally, R&D intensity (a firm’s expenditures on its research and development divided
by its revenue) was included as a control variable, since it is recognized as measuring
absorptive capacity (Cohen and Levinthal 1990; Tsai 2001; West and Bogers 2014). Here,
internal R&D represents a main source of knowledge creation and absorption, allowing
firms also to manage the relationship with other internal and external departments better,
improving the innovation outcomes and firm performance.

5 Analysis and results

5.1 The measurement model

The model is represented by two second-order constructs, specifically ‘‘organizational

ambidexterity’’ and ‘‘external knowledge sourcing.’’ Organizational ambidexterity consists
of two first-order factors (exploitation and exploration). Likewise, external knowledge
sourcing consists of two first-order factors (sources of knowledge and the innovation
funnel phase). We began the data analysis with the use of descriptive statistics to make the
data clearer. The measurement scales were assessed according to accepted practices
(Gerbing and Anderson 1988). The measurement model shows high reliability and validity
of the scales. The reliability was examined using composite reliabilities that show
appropriate values (Table 2) and Cronbach’s alpha, which is above 0.70 for each construct
(Cronbach 1951; Hair et al. 2001). The content validity is assumed to be appropriate since
the scales were developed according to the literature. Overall, the measurement model
shows an acceptable fit, with a non-significant v2 (p [ 0.05), CFI, NFI and NNFI above the
threshold of 0.90 and RMSEA below the threshold of 0.08.

5.2 The structural model

Following previous studies, we used the structural equation model to test our hypotheses
(Aloini et al. 2015). The structural equation model offers the advantage of flexibility in
matching the theoretical model with the data and allows the description of unobservable
latent variables (Shah and Goldstein 2006). Table 3 shows the acceptable fit of the model.
Because of the satisfactory fit of the model, the hypotheses were evaluated by examining
the robust estimated structural path coefficients. For the sake of brevity, only the main
construct (second-order factors) is presented in the model.
The findings presented in Table 3 show that organizational ambidexterity is not directly
associated with firm performance (p [ 0.05); thus, hypothesis 1 does not receive support.
Conversely, the indirect effect of organizational ambidexterity through the mediation of

123
382 D. Vrontis et al.

Table 2 Descriptive statistics and correlation matrix for the first- and second-order constructs and firm
performance
First-order Composite Mean SD 1 2 3 4 5
reliability

1. Exploitation 0.77 4.23 0.936 1

2. Exploration 0.79 4.69 0.836 0.638** 1
3. Source of 0.83 4.98 0.998 0.352** 0.412** 1
knowledge
4. Innovation funnel 0.83 3.98 0.889 0.403** 0.316** 0.594** 1
phase
5. Firm performance 0.87 4.39 0.801 0.271* 0.214* 0.628** 0.567** 1
Second-order Mean SD 1 2 3

1. Organizational ambidexterity 4.46 0.79 1

2. External knowledge sourcing 4.48 0.84 0.61** 1
3. Firm performance 4.39 0.78 0.34* 0.71** 1

* p \ 0.05; ** p \ 0.01

Table 3 Results of the structural equation model

Parameters
Organizational ambidexterity ? firm performance N.S
Organizational ambidexterity ? external knowledge sourcing 0.686**
External knowledge sourcing ? firm performance 0.592**
Indirect effect (OA ? EK ? FP) 0.406**
R&D intensity ? firm performance 0.183*
Model fit
v2 623
df 287
CFI 0.97
NNFI 0.95
RMSEA 0.06
N = 189; * p \ 0.05; ** p \ 0.01

external knowledge sourcing is significant (b = 0.412; p \ 0.01). Thus, hypothesis 3 is

strongly supported by our results. Furthermore, hypothesis 2 is supported, since organi-
zational ambidexterity is positively associated with external knowledge sourcing
(b = 0.686; p \ 0.01). Consistent with previous studies on the open innovation–perfor-
mance relationship, external knowledge sourcing is positively associated with firm per-
formance (b = 0.592; p \ 0.01). Finally, R&D is significantly related to firm performance
(b = 0.18; p \ 0.05).

123
Ambidexterity, external knowledge and performance in knowledge… 383

6 Discussion and conclusions

This research examined the relationship between organizational ambidexterity and firm
performance, hypothesizing a mediating effect of external knowledge sourcing. Two out of
three of the hypotheses are supported by the empirical analysis. The results show no
evidence of a direct effect of organizational ambidexterity on firm performance. This result
is inconsistent with some of the previous empirical studies on organizational ambidexterity
(Gibson and Birkinshaw 2004; He and Wong 2004; Junni et al. 2013). One possible
explanation is that the previous studies analyze ambidexterity performance in different
industries and different contexts (Sidhu et al. 2007) and employ different statistical
methods. Rather, our results seem similar to those of Venkatraman et al. (2007), who find
no significant relationship between organizational ambidexterity and performance.
The findings, however, do outline the key role of external knowledge sourcing for KIFs
and a positive effect on firm performance, consistent with open innovation studies (Laursen
and Salter 2006; Van de Vrande et al. 2009; Ahn et al. 2015). In fact, thise specific type of
firms (KIFs) gains competitive advantage by converting the existing knowledge and skills
into new intellectual capital through explorative activities; because they usually follow a
growth strategy which forces them to steadily develop new ideas and to look for new
business opportunities. Here, external knowledge sourcing is found not only to be an
important driver of KIF performance but also to be a mediator of the relationship between
organizational ambidexterity and firm performance. As a consequence, with higher
investment in external knowledge, the effects of pursuing both exploitation and exploration
on KIF performance are greater.
From a managerial point of view, our results suggest that open innovation should be
integrated with the firm strategy. An ambidextrous KIF, which constantly manages and
balances exploitation and exploration activities, performs better when exploring external
sources of knowledge that are incorporated into the various phases of the innovation
funnel. Therefore, a KIF that aims at jointly exploiting existing knowledge and exploring
new knowledge should adopt an open approach, considering ideas and knowledge from
customers, suppliers, competitors, consultants, universities and research centers and
evaluating potential partnerships (Del Giudice and Straub 2011). In this context, as several
studies emphasize, openness towards external sources helps in reducing the risks associated
with the innovation process and the exploration of new opportunities (Gassmann and Enkel
2004).
In addition, the control variable of R&D intensity is positively related to firm perfor-
mance. One reason could be that, with more capable R&D employees, KIFs are better able
to recognize and integrate external information with internally developed knowledge and
technologies. In the given contemporary dynamic and competitive environment, firms have
to recognize the complementary role of internally developed knowledge with external
knowledge, overcoming the not-invented-here (NIH) syndrome (Katz and Allen 1982).
Furthermore, the power of internal R&D enhances firms’ capacity to predict more accu-
rately the nature and commercial potential of new technologies and to choose the right
external paths to sources and markets (Chesbrough 2006).
Our study substantially contributes to both external knowledge sourcing and organi-
zational ambidexterity knowledge. First, although the construct of organizational
ambidexterity has been widely investigated, and despite many different interpretations of
the exploitation and exploration concepts having been provided, actual empirical studies on
the ambidexterity–performance relationship remain scarce and show mixed results. Our

123
384 D. Vrontis et al.

research thus provides new and valuable empirical evidence on a subject that demands it
more than ever, in both the scholarly and the managerial context, and it does so through the
employment of a powerful quantitative method within a specific industry context, namely
KIFs. In addition, the existing literature does not deeply (or satisfactorily) investigate the
contingent factors regulating the ambidexterity–performance relationship (Raisch and
Birkinshaw 2008); this research fills part of this gap as well. Moreover, though the open
innovation literature thoroughly investigates the effects of firms’ external knowledge-
sourcing strategy on their financial and innovation performance, it rarely addresses this
relationship within several organizational situations and strategic decisions. Accordingly,
we find that firms with higher levels of incorporated external knowledge obtain greater
benefits from ambidexterity. This is because external knowledge helps in finding knowl-
edge that is useful to enhance internal efficiency and new knowledge to develop new
technological opportunities (Chesbrough 2006; Terwiesch and Xu 2008). One explanation
could be that external knowledge helps in managing the internal tension deriving from joint
efforts in exploitation and exploration activities (March 1991).
Our work, nonetheless, also presents some limitations. First, we employ the Cao et al.
(2009) ambidexterity perspective, which is not in line with some other ambidexterity
views. Second, the sample used in this study is represented by firms of different sizes and
may not fully represent the population. Third, though we find that openness leads to higher
firm performance, our model does not consider the costs of acquiring external knowledge.
In fact, the open innovation literature posits that over-searching can lead to negative firm
performance due to the increasing transaction costs or the organizational/human resources
needed to manage and integrate knowledge coming from several sources (Mintzberg 1983;
Williamson 1985; Laursen and Salter 2006; Berchicci 2013). In the above contexts, further
research is called for to deploy differing ambidexterity perspectives, further and different
sampling techniques and cost factors to enhance and/or validate this research’s findings.
Naturally, the academic and industrial relative weight of this research’s findings also
demand further research into the wider subject through multiple perspectives and industry
contexts towards refinement and practicable adoption.
Compliance with ethical standards

Conflict of interest The authors declare that they have no competing interests.

Research involving human participants The authors declare that the surveyed have been correctly
informed about the purpose of this study. The authors also declare that data have been collected in an
anonymous way and in aggregated form.

References
Adler, P. S., Goldoftas, B., & Levine, D. I. (1999). Flexibility versus efficiency? A case study of model
changeovers in the Toyota production system. Organization Science, 10(1), 43–68.
Ahn, J. M., Minshall, T., & Mortara, L. (2015). Open innovation: A new classification and its impact on firm
performance in innovative SMEs. Journal of Innovation Management, 3(2), 33–54.
Aloini, D., Pellegrini, L., Lazzarotti, V., & Manzini, R. (2015). Technological strategy, open innovation and
innovation performance: Evidences on the basis of a structural-equation-model approach. Measuring
Business Excellence, 19(3), 22–41.
Alvesson, M. (2011). De-essentializing the knowledge intensive firm: Reflections on sceptical research
going against the mainstream. Journal of Management Studies, 48(7), 1640–1661.
Andriopoulos, C., & Lewis, M. W. (2009). Exploitation-exploration tensions and organizational ambidex-
terity: Managing paradoxes of innovation. Organization Science, 20(4), 696–717.

123
Ambidexterity, external knowledge and performance in knowledge… 385

Atuahene-Gima, K. (2005). Resolving the capability—rigidity paradox in new product innovation. Journal
of Marketing, 69(4), 61–83.
Audretsch, D. B., Kuratko, D. F., & Link, A. N. (2016). Dynamic entrepreneurship and technology-based
innovation. Journal of Evolutionary Economics, 26(3), 603–620. doi:10.1007/s00191-016-0458-4.
Baum, J. A., Calabrese, T., & Silverman, B. S. (2000). Don’t go it alone: Alliance network composition and
startups’ performance in Canadian biotechnology. Strategic Management Journal, 21(3), 267–294.
Bell, J., Crick, D., & Young, S. (2004). Small firm internationalization and business strategy an exploratory
study of ‘knowledge-intensive’ and ‘traditional’ manufacturing firms in the UK. International Small
Business Journal, 22(1), 23–56.
Benner, M. J., & Tushman, M. (2002). Process management and technological innovation: A longitudinal
study of the photography and paint industries. Administrative Science Quarterly, 47(4), 676–707.
Berchicci, L. (2013). Towards an open R&D system: Internal R&D investment, external knowledge
acquisition and innovative performance. Research Policy, 42(1), 117–127.
Blackler, F. (1995). Knowledge, knowledge work and organizations: An overview and interpretation. Or-
ganization Studies, 16(6), 1021–1046.
Bontis, N. (1998). Intellectual capital: An exploratory study that develops measures and models. Man-
agement Decision, 36(2), 63–76.
Bresciani, S. (2010). Innovation within firms: A survey in the Piedmont area. International Journal of
Quality and Innovation, 1(2), 138–152.
Bresciani, S., & Ferraris, A. (2014). The localization choice of multinational firms’ R&D Centers: A survey
in the Piedmont area. Journal of Promotion Management, 20(4), 481–499.
Bresciani, S., Thrassou, A., & Vrontis, D. (2015). Strategic R&D internationalisation in developing Asian
countries—the Italian experience. World Review of Entrepreneurship, Management and Sustainable
Development, 11(2–3), 200–216.
Cao, Q., Gedajlovic, E., & Zhang, H. (2009). Unpacking organizational ambidexterity: Dimensions, con-
tingencies, and synergistic effects. Organization Science, 20(4), 781–796.
Carayannis, E. G., & Rakhmatullin, R. (2014). The quadruple/quintuple innovation helixes and smart
specialisation strategies for sustainable and inclusive growth in Europe and beyond. Journal of the
Knowledge Economy, 5(2), 212–239.
Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of organizational
sustainability. The Journal of Technology Transfer, 40(1), 85–104.
Cassiman, B., & Veugelers, R. (2002). R&D cooperation and spillovers: Some empirical evidence from
Belgium. The American Economic Review, 92(4), 1169–1184.
Cassiman, B., & Veugelers, R. (2006). In search of complementarity in innovation strategy: Internal R&D
and external knowledge acquisition. Management Science, 52(1), 68–82.
Chebbi, H., Yahiaoui, D., Thrassou, A., & Vrontis, D. (2013). The exploration activity’s added value into
the innovation process. Global Business and Economics Review, 15(2–3), 265–278.
Chebbi, H., Yahiaoui, D., Vrontis, D., & Thrassou, A. (2015). Building multiunit ambidextrous organiza-
tions: A transformative framework. Human Resource Management, Special Issue on Ambidexterity of
Human Resource Management. doi:10.1002/hrm.21662.
Chesbrough, H. (2003). The logic of open innovation: Managing intellectual property. California Man-
agement Review, 45(3), 33–58.
Chesbrough, H. W. (2006). The era of open innovation. Managing Innovation and Change, 127(3), 34–41.
Chesbrough, H., & Bogers, M. (2014). Explicating open innovation: Clarifying an emerging paradigm for
understanding innovation. In H. Chesbrough, W. Vanhaverbeke, & J. West (Eds.), New Frontiers in
open innovation (pp. 3–28).
Chesbrough, H., Vanhaverbeke, W., & West, J. (Eds.). (2006). Open innovation: Researching a new
paradigm. Oxford: OUP Oxford.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and inno-
vation. Administrative Science Quarterly, 35, 128–152.
Cooper, R. G., & Kleinschmidt, E. J. (1993). Major new products: What distinguishes the winners in the
chemical industry? Journal of Product Innovation Management, 10(2), 90–111.
Coviello, N. E. (1994). Internationalizing the entrepreneurial high technology, knowledge-intensive firm,
Ph.D. thesis, Department of Marketing, University of Auckland, New Zealand.
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16(3), 297–334.
Danneels, E. (2002). The dynamics of product innovation and firm competences. Strategic Management
Journal, 23(12), 1095–1121.
Del Giudice, M., Della Peruta, M. R., & Maggioni, V. (2013). Collective knowledge and organizational
routines within academic communities of practice: an empirical research on science–entrepreneurs.
Journal of the Knowledge Economy, 4(3), 260–278.

123
386 D. Vrontis et al.

Del Giudice, M., & Maggioni, V. (2014). Managerial practices and operative directions of knowledge
management within inter-firm networks: A global view. Journal of Knowledge Management, 18(5),
841–846.
Del Giudice, M., & Straub, D. (2011). Editor’s comments: IT and entrepreneurism: An on-again, off-again
love affair or a marriage? MIS Quarterly, 35(4), iii–viii.
Drucker, P. (2014). Innovation and entrepreneurship. Abingdon-on-Thames: Routledge.
Duncan, R. B. (1976). The ambidextrous organization: Designing dual structures for innovation. The
Management of Organization, 1, 167–188.
Enkel, E., Gassmann, O., & Chesbrough, H. (2009). Open R&D and open innovation: Exploring the
phenomenon. R&D Management, 39(4), 311–316.
Ferraris, A., & Santoro, G. (2014). Come dovrebbero essere sviluppati i progetti di social innovation nelle
smart city? Un’analisi comparativa. Impresa Progetto-Electronic Journal of Management, 4, 1–15.
Floyd, S. W., & Lane, P. J. (2000). Strategizing throughout the organization: Managing role conflict in
strategic renewal. Academy of Management Review, 25(1), 154–177.
Gassmann, O., & Enkel, E. (2004). Towards a theory of open innovation: Three core process archetypes. In
R&D management conference (Vol. 6, No. 0, pp. 1–18).
Gassmann, O., Enkel, E., & Chesbrough, H. (2010). The future of open innovation. R&D Management,
40(3), 213–221.
Gerbing, D. W., & Anderson, J. C. (1988). An updated paradigm for scale development incorporating
unidimensionality and its assessment. Journal of Marketing Research, 25, 186–192.
Ghemawat, P., & Ricart Costa, J. E. (1993). The organizational tension between static and dynamic effi-
ciency. Strategic Management Journal, 14(S2), 59–73.
Ghoshal, S., & Bartlett, C. A. (1994). Linking organizational context and managerial action: The dimensions
of quality of management. Strategic Management Journal, 15(S2), 91–112.
Gibson, C. B., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of organiza-
tional ambidexterity. Academy of Management Journal, 47(2), 209–226.
Gorman, M. E. (2002). Types of knowledge and their roles in technology transfer. The Journal of Tech-
nology Transfer, 27(3), 219–231.
Gupta, A. K., & Govindarajan, V. (1986). Resource sharing among SBUs: Strategic antecedents and
administrative implications. Academy of Management Journal, 29(4), 695–714.
Hair, J., Anderson, R., Tatham, R., & Black, W. (2001). Análisis multivariante (5a ed.). Madrid: Prentice
Hall.
Harry, M., & Schroeder, R. (2000). Six sigma: The breakthrough management strategy revolutionizing the
world’s top corporations. New York: Currency.
He, Z. L., & Wong, P. K. (2004). Exploration versus exploitation: An empirical test of the ambidexterity
hypothesis. Organization Science, 15(4), 481–494.
Hung, K. P., & Chou, C. (2013). The impact of open innovation on firm performance: The moderating
effects of internal R&D and environmental turbulence. Technovation, 33(10), 368–380.
Junni, P., Sarala, R. M., Taras, V., & Tarba, S. Y. (2013). Organizational ambidexterity and performance: A
meta-analysis. The Academy of Management Perspectives, 27(4), 299–312.
Katz, R., & Allen, T. J. (1982). Investigating the not invented here (NIH) syndrome: A look at the
performance, tenure, and communication patterns of 50 R&D Project Groups. R&D Management,
12(1), 7–20.
Keller, W. (2004). International technology diffusion. Journal of Economic Literature, 42(3), 752–782.
Laursen, K., & Salter, A. (2006). Open for innovation: The role of openness in explaining innovation
performance among UK manufacturing firms. Strategic Management Journal, 27(2), 131–150.
Levinthal, D. A., & March, J. G. (1993). The myopia of learning. Strategic Management Journal, 14(S2),
95–112.
Lubatkin, M. H., Simsek, Z., Ling, Y., & Veiga, J. F. (2006). Ambidexterity and performance in small-to
medium-sized firms: The pivotal role of top management team behavioral integration. Journal of
Management, 32(5), 646–672.
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1),
71–87.
Mintzberg, H. (1983). Structures in fives. Engelwood-Cliffs, CA: Prentice-Hall.
Narula, R. (2001). Choosing between internal and non-internal R&D activities: Some technological and
economic factors. Technology Analysis & Strategic Management, 13(3), 365–387.
Nelson, R. R., & Winter, S. G. (1982). The schumpeterian tradeoff revisited. The American Economic
Review, 72(1), 114–132.
Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1),
14–37.

123
Ambidexterity, external knowledge and performance in knowledge… 387

O Reilly, C. A., & Tushman, M. L. (2004). The ambidextrous organization. Harvard Business Review,
82(4), 74–83.
Porter, M. E. (1996). What is strategy? Harvard Business Review, 74(6), 61–81.
Raisch, S., & Birkinshaw, J. (2008). Organizational ambidexterity: Antecedents, outcomes, and moderators.
Journal of Management, 34(3), 375–409.
Raisch, S., Birkinshaw, J., Probst, G., & Tushman, M. L. (2009). Organizational ambidexterity: Balancing
exploitation and exploration for sustained performance. Organization Science, 20(4), 685–695.
Rosenzweig, S. (2016). The effects of diversified technology and country knowledge on the impact of
technological innovation. The Journal of Technology Transfer. doi:10.1007/s10961-016-9492-5.
Rothaermel, F. T., & Alexandre, M. T. (2009). Ambidexterity in technology sourcing: The moderating role
of absorptive capacity. Organization Science, 20(4), 759–780.
Santoro, G., Ferraris, A., Giacosa, E., & Giovando, G. (2016). How SMEs engage in open innovation: A
survey. Journal of the Knowledge Economy. doi:10.1007/s13132-015-0350-8.
Shah, R., & Goldstein, S. M. (2006). Use of structural equation modeling in operations management
research: Looking back and forward. Journal of Operations Management, 24(2), 148–169.
Sheremata, W. A. (2000). Centrifugal and centripetal forces in radical new product development under time
pressure. Academy of Management Review, 25(2), 389–408.
Shortell, S. M., & Zajac, E. J. (1990). Perceptual and archival measures of Miles and Snow’s strategic types:
A comprehensive assessment of reliability and validity. Academy of Management Journal, 33(4),
817–832.
Sidhu, J., Commandeur, H. R., & Volberda, H. W. (2007). The multifaceted nature of exploration and
exploitation: Value of supply, demand, and spatial search for innovation. Organization Science, 18,
20–38.
Simsek, Z., Heavey, C., Veiga, J. F., & Souder, D. (2009). A typology for aligning organizational
ambidexterity’s conceptualizations, antecedents, and outcomes. Journal of Management Studies, 46(5),
864–894.
Smith, W. K., & Tushman, M. L. (2005). Managing strategic contradictions: A top management model for
managing innovation streams. Organization Science, 16(5), 522–536.
Swart, J., & Kinnie, N. (2003). Knowledge-intensive firms: The influence of the client on HR systems.
Human Resource Management Journal, 13(3), 37–55.
Taylor, A., & Greve, H. R. (2006). Superman or the fantastic four? Knowledge combination and experience
in innovative teams. Academy of Management Journal, 49(4), 723–740.
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable)
enterprise performance. Strategic Management Journal, 28(13), 1319–1350.
Terwiesch, C., & Xu, Y. (2008). Innovation contests, open innovation, and multiagent problem solving.
Management Science, 54(9), 1529–1543.
Thrassou, A. (2007). Doing business in the industrialised countries, Chapter 13. In M. Katsioloudes & S.
Hadjidakis (Eds.), International business—a global perspective. Oxford: Butterworth-Heinemann.
ISBN 978-0-7506-7983-1.
Thrassou, A., Vrontis, D., & Bresciani, S. (2014). Strategic reflexivity in the hotel industry—a value-based
analysis. World Review of Entrepreneurship, Management and Sustainable Development, 10(1–2),
352–371.
Tidd, J., Bessant, J., & Pavitt, K. L. R. (2000). Managing innovation: Integrating technological, market and
organizational change (2nd ed.). Wiley: Chichester.
Tsai, W. (2001). Knowledge transfer in intraorganizational networks: Effects of network position and
absorptive capacity on business unit innovation and performance. Academy of Management Journal,
44(5), 996–1004.
Tushman, M. L., & O’Reilly, C. A. (1996). The ambidextrous organizations: Managing evolutionary and
revolutionary change. California Management Review, 38(4), 8–30.
Van de Vrande, V., De Jong, J. P., Vanhaverbeke, W., & De Rochemont, M. (2009). Open innovation in
SMEs: Trends, motives and management challenges. Technovation, 29(6), 423–437.
Venkatraman, N., Lee, C. H., & Iyer, B. (2007). Strategic ambidexterity and sales growth: A longitudinal
test in the software sector. In Unpublished manuscript (earlier version presented at the Academy of
Management Meetings, 2005).
Volberda, H., Baden-Fuller, C., & Van den Bosch, F. A. J. (2001). Mastering strategic renewal: Mobilizing
renewal journeys in multi-unit fi rms. Long Range Planning, 34, 159–178.
Vrontis, D., & Thrassou, A. (Eds.). (2013). Innovative business practices: Prevailing a Turbulent Era.
Cambridge: Cambridge Scholars Publishing.

123
388 D. Vrontis et al.

Vrontis, D., Thrassou, A., Chebbi, H., & Yahiaoui, D. (2012). Transcending innovativeness towards
strategic reflexivity. Qualitative Market Research: An International Journal, 15(4), 420–437. doi:10.
1108/13522751211257097.
Wadhwa, A., & Kotha, S. (2006). Knowledge creation through external venturing: Evidence from the
telecommunications equipment manufacturing industry. Academy of Management Journal, 49(4),
819–835.
West, J., & Bogers, M. (2014). Leveraging external sources of innovation: A review of research on open
innovation. Journal of Product Innovation Management, 31(4), 814–831.
Williamson, O. E. (1985). The economic intstitutions of capitalism. NewYork: Simon and Schuster.

123