The innovator's dilemma: the performance consequences of sequential or flexible exploration and exploitation patterns in turbulent environments

We investigate the relationship between firm performance and patterns of exploration and exploitation dynamics under conditions of environmental turbulence. Adopting a contingency perspective, we develop arguments on how environmental turbulence moderates the effects of the simultaneous or sequential engagement in exploration and exploitation. Based on a longitudinal sample of 140 pharmaceutical firms, we find that the effectiveness of sequential or flexible simultaneous engagement in ambidexterity varies depending on the environmental contingency, namely level of technological change, that a company faces.