Masters of Both: Balancing the Extremes of Innovation Through Tight–Loose Ambidexterity

Innovation has been traditionally defined by two radically different processes. It involves a trade-off between exploration (characterized by risk-taking, experimentation, variation, and discovery) and exploitation (characterized by refinement, precision, efficiency, implementation, and execution). Both are needed for successful idea generation and implementation. When either of these processes are taken to their extremes, they produce suboptimal outcomes. Overreliance on extreme exploration leads to novel ideas failing to be translated into reality, while extreme exploitation can lead to rigidity and inertia. In this chapter, we advance a theory-driven explanation of how these exploration-exploitation extremes are contingent on culture, focusing on the strength of cultural norms as a key determinant in understanding the conditions facilitating innovation success and failure. Based on data from over 30 nations, collected over multiple years, we show that loose cultures are better at exploration and tight cultures at exploitation on several measures. We also provide evidence for a ‘Goldilocks’ explanation of innovation, in which cultures that have more balance of both cultural tightness and looseness have higher innovation.

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