Ambidexterity innovation resource allocation strategies for resource-poor enterprises and resource-rich enterprises in different competitive environments

Previous research has emphasized the importance of balancing exploitation and exploration in organizational learning and adaptation for achieving sustainable success. However, only a few researchers have discussed the mechanisms or criteria for resource allocation that would establish a balance between exploitation and exploration. So, this study explores the resource allocation strategies of firms engaging in exploitative and exploratory innovation, analyzing the effects of internal resource conditions and external competitive environments. We categorize firms into resource-rich and resource-poor groups and employ a mathematical model to simulate innovation production and market behavior. Through computer simulations, we demonstrate that resource-poor firms should increasingly allocate fewer resources to exploratory innovation as external competition intensifies. Resource-rich firms display a U-shaped relationship between the proportion of resources dedicated to exploratory innovation and competitive intensity. At the firm resource aspect, we identify both a compensatory and an occupancy effect between exploratory and exploitative innovations. These effects illustrate the complementarity and contradiction between the two types of innovation activities in terms of resource utilization, occurring simultaneously. The overall relationship between these innovation activities—whether contradictory or complementary—depends on the dominance of either the compensatory or the occupancy effect. If the compensatory effect predominates, the innovations show complementarity at the firm resource level; if the occupancy effect predominates, a contradiction emerges.