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This study aims to explore how innovation performance feedback influences a firm’s ability to balance exploration and exploitation.

The Perils of Progress and Pitfalls of Decline: How Innovation Performance Feedback Impacts Innovation Ambidexterity

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Randomized trial examines feedback effects on innovation ambidexterity in US manufacturing firms, suggesting size matters.

This study aims to explore how innovation performance feedback influences a firm’s ability to balance exploration and exploitation.
Analyzed patent data from 1682 US manufacturing firms between 1980 and 2003.
Examined effects of performance feedback above and below aspiration levels on innovation ambidexterity.
Investigated moderation effects of organizational size and innovation orientation on feedback responses.
Both positive and negative performance gaps reduce innovation ambidexterity.
Larger firms exhibit dampened negative effects from performance shortfalls, while benefits of positive feedback are amplified for the largest firms.
Firms with an exploration-oriented profile maintain stable ambidexterity in response to positive feedback, unlike exploitation-oriented firms that reduce ambidexterity.

Pouya Derayati (2026) studied this question.

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