This study investigates whether balanced forms of organizational cultures moderate the effects of potential and realized absorptive capacities (ACs) to simultaneously generate exploratory and exploitative innovations. Using empirical survey data collected from 138 small to medium-sized enterprises (SMEs), we applied partial least squares (PLS) structural equation modeling (SEM) combined with mediation and moderation analyses to test our hypotheses. Our results show that the effects of potential AC on organizations' exploratory and exploitative innovations are fully mediated by the organizations' realized AC. The positive effects of realized AC on innovation are contingent on the overall cultural balance of the organization, which, however, does not affect the strong link between potential AC and realized AC. We thus provide novel empirical insights into the multi-dimensional nature of AC and the importance of cultural equilibrium for both exploratory and exploitative innovation, which is of particular importance for ambidextrous SMEs facing dynamic markets.

In this highly competitive environment, innovation seems to be the inevitable challenge to every company. The employees within the companies have become the key point for the companies to be innovative. So how do these companies use human resource management practices to promote innovation capabilities? In this thesis, the study will explore the relationship between human resource management practices and innovation capabilities and as well as the relationship between innovation capabilities and organizational performance. In addition, the business strategy as the moderator is also discussed. This thesis is conducted through opinion survey. This study gathered 86 valid questionnaires replied by the directors of research and development department in each company and the findings of this thesis can be summarized as follows: 1.Training and teamwork impact the exploratory innovation positively. 2.Recruitment, career system and employee participation impact the exploratory innovation positively. 3.Performance reward impacts the exploitative innovation positively. Performance appraisal does not have evident impact on exploitative innovation. 4.Recruitment, career system and employee participation impact the exploitative innovation positively. 5.Exploratory and exploitative innovations impact the organizational performance positively. 6.Business strategy does not have evident moderating effect.

The impact that economic crises have on firms is profound. Such events affect the extent to which firms invest in innovation. This exploratory study aims to investigate to what extentfirms emphasize exploratory and exploitative innovation as a result of economic crises. The study further aims to examine the presence of a rigid or risk-seeking response, in terms of innovation, as a result of the crisis. Through analysis of the contents of the CEOs’ letters to theshareholders, I captured the firms’ emphasis on exploratory and exploitative innovation in a sample of 14 large Swedish firms, three years before and after the crisis and examined the presence of a rigid or risk-seeking response, by comparing both periods. The findings indicate a short-term rigid response as well as no indication of a risk-seeking response. The study contributes to the body of knowledge about how economic crises impact the firms’ emphasis on investing in innovation, a field lacking a consensus among authors.

This dissertation consists of two empirical essays. The first chapter titled: “Hedge Fund Activism and Dual Ownership of U.S. Multinationals”. Harford, Wang & Zhang (2017) conclude that holding high cash balances abroad to avoid US taxes causes internal capital markets and investments distortions. We posit that hedge funds target MNCs with more severe internal capital and agency problems. We demonstrate that upon acquiring dual ownership in these firms, hedge funds reduce internal capital problems and improve investment, especially innovation, efficiencies. To further reduce agency costs of foreign cash holdings, hedge funds engage dual firms in focused acquisitions. These improvements are reflected in superior performances of dual firms relative to non-dual firms. Chapter 2 titled as “Innovation Strategies & IPO Underpricing”. In this chapter, we investigate how a firms’ choice of pre-IPO innovation strategies affect IPO pricing. We differentiate the orientation of the issuing firm’s innovation portfolio in terms of exploitative orientation versus explorative orientation based on citations of patents across technology classes. We introduce a measure of innovation power to generate breakthrough innovations. We show that the issuing firms with greater innovation power, especially firms with exploratory orientation of a patent, significantly decrease underpricing and have the power to bargain a higher offer price. Our results suggest that a higher exploration strategy requires more time to negotiate a higher offer price while more valuable innovation requires less time to bargain at the higher offer price.