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- TitleOptimal ambidexterity and exploration valuableness : balancing short-term and long-term trade-off in pharmaceutical products development
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- Is part ofJournal of Business Chemistry, Issue Journal of Business Chemistry, page 49-63
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- AnnotationSection "Research Paper"
- LanguageEnglish
- Document typeJournal Article
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Abstract
One of the most challenging resource allocation tasks for managers is to balance short-termand long-termproducts development initiatives, since exploitative (i.e., short-termfocused) resource allocation patterns prevent managers from recognizing the existence or significance of exploratory (i.e., long-termfocused) opportunities. Recent research on organizational ambidexterity promises the potential to overcome this trade-off relationship, but they lack clear indications concerning the mix of exploitation and exploration that would result in an optimal degree of ambidexterity. Through the analysis of a unique data set on development resource allocation patterns for 231 new pharmaceutical products, as well as on the economic value of those products, we show that pharmaceutical companies realize a higher exploration degree of valuableness and hence an optimal level of ambidexterity by allocating roughly 1.5 times more development resources to exploitative products than to exploratory ones.