Article Business & Management

Organizational Ambidexterity and Firm Performance: Effect of Two Types of Exploitation on Japanese Video Game Industry

Recent organizational ambidexterity studies have discussed the importance of achieving a balance between Exploration and Exploitation. However, existing studies have not distinguished the detail of exploitation; this study categorizes exploitation as ‘Repetitive Exploitation’ and ‘Incremental Exploitation.’ Our study contributes to ambidexterity studies by analyzing the impact of a combination of both these types of exploitation and exploration on a firm’s performance. We used 647 observations from Japanese video game industries between 1997 and 2019 for panel data analysis. In line with existing studies, we proved that firm performance increases when a balance between exploration and exploitation is achieved. At the same time, we found that firms with a lower exploration performed better when the rate of incremental exploitation was high. The results of our study suggest that even when the firm's ambidexterity is imbalanced, different results can be expected when both types of exploitation are considered. The Study has implications for organizations to improve their performance.

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