Tackling pandemic-related health grand challenges: The role of organizational ambidexterity, social equality, and innovation performance
Michael Christofi, Ioanna Stylianou, Elias Hadjielias, Alfredo De Massis, Minas N. Kastanakis
kHUB post date: May 23, 2024
Originally published: January 27, 2023 (PDMA JPIM • Vol. 41, Issue 2 • March 2024)
Read time: 65 minutes
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The outbreak of COVID-19 has brought the world to a standstill, with severe consequences on economic and health systems, requiring the identification and implementation of innovative solutions. This study's aims are threefold: first, to examine the impact of balanced and combined dimensions of ambidexterity on for-profit organizations' innovation performance related to pandemics; second, to uncover whether and to what extent such innovation performance contributes to tackling global health grand challenges (i.e., mortality rate, risk of infection, and life expectancy) associated with pandemics; and, third, to investigate the moderating role of social equalities in health in the relationships between innovation performance and health-related outcomes associated with pandemics. To uncover how for-profit firms tackle the health-related consequences of pandemics, we examine whether they have introduced product innovations to the health sector, defined as the market introduction of a new or significantly improved good, that have helped address the health challenges associated with the COVID-19 pandemic. Using a panel dataset (1974–2020) with 15,062 firm-year observations from the United States, we show that both the separate and the synchronous implementation of the balanced and combined dimensions of ambidexterity have a strong positive effect on firms' innovation performance and, particularly, innovation initiatives related to the pandemic. The results also reveal that innovation activities (i.e., granted patents and citations focused on COVID-19) negatively affect mortality rate and risk of infection, as well as the positive impact of innovation on increasing life expectancy, with social equalities in health moderating this relationship. Taken together, we make novel contributions to the literature on how to tackle the health-related consequences of pandemics through innovation and provide actionable managerial guidance on how firms can enhance innovation performance.
Practitioner Points
- Managers of for-profit organizations commercializing innovations in the health sector should be less concerned about the trade-offs between exploration and exploitation if they want their organizations to achieve or sustain high innovation performance during pandemics and other health-related crises. Instead, they should focus on pursuing strategies based on balanced or combined ambidexterity.
- Managers can improve their organizations' innovation performance related to pandemics by (1) making decisions based on the structural separation between exploration and exploitation units, (2) establishing long-term plans encompassing procedures to alternate between exploration and exploitation, or (3) taking a holistic approach that adds flexibility and an optimization logic behind the joint consideration of exploration and exploitation practices.
- For-profit organizations in the health sector should pursue inter-organizational collaborations to develop or commercialize new innovations, as these can help accelerate the diffusion of innovations in the sector. Accelerated diffusion is particularly relevant during pandemics, when the success of rapid diffusion can bring about broader population health gains. Thus, managers should consider innovation strategies that draw on open innovation models, as open innovation can provide a win–win scenario for both for-profit organizations and society as a whole.