Drivers of innovation ambidexterity in small-to-medium-sized firms

Balancing explorative and exploitative innovation ambidextrously has emerged as one of the foremost questions in management research. While a firm's ability to jointly pursue both exploitative and explorative innovation has been conceived as having positive performance effects, scholarly efforts to resolve the ambidexterity question have left a disproportionate gap in our understanding of how innovation ambidexterity can be achieved, particularly so in small-to-medium-sized firms (SMEs). The state of the debate is such that SMEs must largely rely on prescriptions tested with large firms to inform their ambidexterity initiatives. This study focuses on the characteristics of top managers and features of organizational structure and context in facilitating the appearance of ambidexterity in SMEs, and the mediation effect of innovation ambidexterity between structural, contextual, and leadership characteristics on SME performance. Results indicated that SMEs could achieve a close balance of explorative and exploitative innovations (BD) through shaping right international organizational structures and adopting appropriate leadership styles. Further, BD mediates the relationship between the structural, contextual, and leadership characteristics on SME performance. SMEs could benefit from BD with relatively resources available.