Abstract
Although innovation is central to a firm's success and a top priority for most technology managers, firms commonly report disappointment that innovation outcomes do not match their original plans. This paper examines the difference in intended innovation and realized innovation using an exploration/exploitation framing. Its focus is on changes to defined innovation plans that occur after planning phases end. Extant literature and field research form the basis for hypotheses that are then tested using a large scale survey of an entire population of small and medium-sized high-technology enterprises (SMEs).
Findings of compromised exploration in favor of exploitation, during the development phase, is quantified. Firms divert resources away from novel emergent exploration and into existing product development, thereby undercutting innovation plans. Intended innovation, established during the planning stages, is found to be compromised.
Our hypotheses, that agency and resource dependence underpin a shifting between explorative and exploitative development, have support. The paper's theoretical contributions include the application of novel agency and resource dependence perspectives onto innovation. It informs ambidexterity research by indicating where, how much, and why erosion in the balance of exploration/exploitation occurs and provides new avenues for research into low innovation outcomes.