Juggling Information Technology (IT) Exploration and Exploitation: A Proportional Balance View of IT Ambidexterity

Firms in the digital age often do not know whether they should focus on exploiting their existing information technology (IT) resources or focus on exploring novel IT resources. They are often told to maintain a perfect balance between IT exploitation and IT exploration. In this study, we show that firms do not need to have the same levels of IT exploitation and exploration simultaneously to improve organizational agility. IT ambidexterity can be achieved by proportional balance between IT exploitation and exploration without forcing the perfect balance between the two. With finite resources, the maximal agility is not associated the perfect balance between IT exploitation and exploration; instead, it is associated with the proportional balance between IT exploitation and exploration, and the optimal proportional balance could vary based on the firm’s total resources allocated for IT ambidexterity. Our findings on proportional balance between IT exploitation and exploration could profoundly influence how firms make IT investment decisions. Rather than pursuing a perfect balance between IT exploitation and IT exploration, firms should consider both their organizational characteristics and environmental conditions to identify optimal levels of proportional balance between the two.