Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence

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Interplay between dual dimensions of knowledge sharing within globalized chaebols: The moderating effects of organization size and global environmental munificence Jeoung Yul Leea,b, Young Soo Yangc,*, Byung Il Parkd a

National Research Base of Intelligent Manufacturing Service, Chongqing Technology and Business University, Chongqing, 400067, China School of Business Management, Hongik University, Sejong, 30016, South Korea c Leeds University Business School, The University of Leeds, Leeds, LS2 9JT, UK d College of Business, Hankuk University of Foreign Studies, 270, Imun-dong, Dongdaemun-gu, Seoul, 130-791, South Korea b

ARTICLE INFO

ABSTRACT

Keywords: Ambidextrous knowledge sharing Balance dimension (BD) Synergistic dimension (SD) Chaebol Group-affiliated company Global performance

Existing literature exploring ambidexterity based on the organizational and network learning perspectives is sparse. In particular, there are few studies dealing with the characteristics of ambidexterity construct in the context of inter-organizational relationships, and existing studies are limited. To date, studies have suggested only vague and inconclusive conceptualizations and empirical findings. Our research tackles this overlooked area of thought by dismantling the mechanisms of ambidextrous knowledge sharing among group-affiliated companies within the large complex Korean business group known as a chaebol and the impact of those mechanisms on the companies’ global performances. An internationalized chaebol is a cradle of transnational knowledge and resource sharing that functions as a business group–level knowledge reservoir. Conceptually, our research employs two dimensions of ambidextrous knowledge sharing, “balance dimension (BD) of ambidextrous knowledge sharing” and “synergistic dimension (SD) of ambidextrous knowledge sharing,” among group-affiliated companies within a chaebol. In this way, we clarify the conceptual issues regarding the degree to which ambidextrous knowledge sharing affects the extent of explorative relative to exploitative knowledge sharing or affects the combined synergistic extent of both activities. We collect survey data from 337 manufacturing multinational group-affiliated companies that belong to 61 internationally diversified chaebols. We analyze this data using ordinary least squares (OLS) regression with the hierarchical method. Our results show that having a balance between explorative and exploitative knowledge sharing among group-affiliated companies (i.e., BD) within a chaebol increases the global performance of that chaebol’s group-affiliated companies. High synergistic levels of ambidextrous knowledge sharing among group-affiliated companies (i.e., SD) also enhance the group-affiliated companies’ global performance. In addition, our study reveals the moderating effects that organization size and environmental munificence have on the interactions of BD and SD.

1. Introduction The organizational ambidexterity construct has allured organizational theorists with increasingly greater attentions. Nevertheless, there has been certain inconsistency and significant inexactness in respect to the construct nature of the organizational ambidexterity. - Junnie et al., 2013. Organizational ambidexterity has been in the limelight following March’s (1991) inaugural paper introducing the ambidextrous balance between exploration and exploitation. Examining diverse fields, a group of scholars have approached ambidexterity as a means of balancing ⁎

organizational exploration and exploitation (He & Wong, 2004; Voss & Voss, 2013), variation-reducing and variation-increasing (Burgelman, 1991, 2002), and exploration and exploitation in alliances (Lavie, Kang, & Rosenkopf, 2011). Through these diverse streams of ambidexterity, some scholars have pursued the concept of a single continuum between exploration and exploitation (Lavie, Stettner, & Tushman, 2010; Uotila, Maula, Keil, & Zahra, 2009), while other scholars have pursued the concept of exploration and exploitation being orthogonal to each other as independent activities (Gupta, Smith, & Shalley, 2006; He & Wong, 2004; Katila & Ahuja, 2002; Nielsen & Gudergan, 2012; Raisch & Birkinshaw, 2008; Rothaermel, 2001).

Corresponding author. E-mail addresses: [email protected] (J.Y. Lee), [email protected] (Y.S. Yang), [email protected] (B.I. Park).

https://doi.org/10.1016/j.ibusrev.2019.101637 Received 12 June 2018; Received in revised form 18 August 2019; Accepted 12 October 2019 0969-5931/ © 2019 Elsevier Ltd. All rights reserved.

Please cite this article as: Jeoung Yul Lee, Young Soo Yang and Byung Il Park, International Business Review, https://doi.org/10.1016/j.ibusrev.2019.101637

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Although organizational ambidexterity research has received considerable scholarly attention, there are still gaps in the literature that need to be addressed. First, regardless of their specific areas of research, these conceptions and empirical studies concerning ambidexterity have predominantly focused on individual firms’ intraorganizational ambidexterity rather than that of inter-organizational relationships. Other than Im and Rai’s (2008) study of knowledge sharing ambidexterity based on the American domestic sample, knowledge sharing ambidexterity in interorganizational relationships has not been comprehensively studied. Second, while ambidexterity has been explored elsewhere, relatively little research on the subject has been conducted in international business literature and in either the global context or in the context of emerging market multinational enterprises (EMNEs) (Bandeira-de-Mello, Fleury, Aveline, & Gama, 2016; Hsu, Lien, & Chen, 2013). Third, previous studies regarding organizational ambidexterity construct have suggested only vague and inconclusive conceptualizations and empirical findings (Birkinshaw & Gupta, 2013; He & Wong, 2004). Finally, prior studies have not been clearly explained how the dimensions of ambidextrous knowledge sharing take into account the special requirements, caused by belonging to a business group. In particular, prior literature has not answered how these dimensions take into account the different levels and directions of knowledge sharing. Given the research gaps described above, we explore the following questions:

integrated organizational structure. These distinguishing features of chaebol organizational structure provide important implications for ambidextrous knowledge sharing embedded in a business group. Within the big picture of business group structure, inter-organizational knowledge sharing is more difficult than intra-organizational knowledge sharing, and, without proper integration mechanisms, knowledge gained from outside the organization is difficult to utilize (Easterby‐Smith, Lyles, & Tsang, 2008). However, members in a business group that are embedded in existing social structures and affiliates share the common norms and values embedded within this social network, which helps to reduce transaction costs and facilitate the transfer of knowledge internally (Chang et al., 2006). Second, our research offers insights into the performance implications of strategic ambidextrous knowledge sharing in the international context of emerging market multinational enterprises (EMNEs). Multinational enterprises (MNEs) in emerging economies have strong motives to pursue strategic ambidexterity in order to offset the disadvantage of being a latecomer and newcomer in the global market, and, in fact, many EMNEs have increasingly become strategically ambidextrous (Luo & Rui, 2009; Hsu et al., 2013). Through an empirical analysis of globalized chaebol, our study shows that it is crucial to establish an ambidextrous knowledge sharing system in order for MNEs in emerging economies to gain meaningful improvements in performance due to global ambidextrous activities. A globalized chaebol can leverage its existing capabilities by excelling at exploitative internationalization and at the same time advance its technological superiority and gain new competitive capabilities by pursuing explorative internationalization. Through an ambidextrous knowledge sharing system nested in the chaebol network, group-affiliated companies gain competitive advantages, which results in superior performance. Examining the high synergistic levels of ambidextrous knowledge sharing among groupaffiliated companies that enhance the companies’ global performance allows us to validate the argument that there are synergies between ambidexterity and the international strategy pursued by EMNEs in order to develop competitive advantages. Third, this study is meant to advance the literature on ambidexterity by proposing two dimensions of ambidextrous knowledge sharing, which allows us to investigate how group-affiliated companies develop different types of capabilities as well as the impact of those capabilities on performance. Our research employs two dimensions of ambidextrous knowledge sharing, “balance dimension (BD) of ambidextrous knowledge sharing” and “synergistic dimension (SD) of ambidextrous knowledge sharing,” among group-affiliated companies within a chaebol. In this way, we clarify the conceptual issues regarding the degree to which ambidextrous knowledge sharing affects the extent of explorative relative to exploitative knowledge sharing or affects the combined synergistic extent of both activities. We collected survey data from 337 multinational manufacturing group-affiliated companies that belong to 61 internationally diversified chaebols. Internationalized chaebols provide a valuable empirical context because they are a cradle of transnational knowledge and resource sharing as a reservoir of business group–level knowledge.

(1) What impact do the dual dimensions of ambidextrous knowledge sharing among group-affiliated companies within internationalized chaebols have on the global performance of group-affiliated companies? (2) How do organizational and environmental contingencies moderate the impact of dual dimensions of ambidextrous knowledge sharing among an internationalized chaebol’s group-affiliated companies on a group-affiliated company’s global performance? To addresses the four research gaps identified above, in this study we focus on understanding how the mechanisms of ambidextrous knowledge sharing among group-affiliated companies within the large complex Korean business group impact the companies’ global performances. Conceptually and theoretically based on the organizational and network learning perspectives, this research employs two dimensions of ambidextrous knowledge sharing among group-affiliated companies within a chaebol: “balance dimension (BD) of ambidextrous knowledge sharing” and “synergistic dimension (SD) of ambidextrous knowledge sharing.” In addition, this study conceptually and empirically explores the contingency effects of organizational and global environmental munificence with the interactions of BD and SD. Our research goes beyond existing network learning literature and contributes to current knowledge of strategic ambidexterity of emerging economies' firms in three ways. First, the internationalized chaebol can provide theoretical insights into ambidexterity in inter-organizational relationships due to features that distinguish inter-organizational relationships in internationalized chaebols from other inter-organizational relationships. Past research on inter-organizational relationships is based on the quasi-integrated structure between the market and its hierarchies, such as the supplier-buyers relationship (Aoki & Wilhelm, 2017; Im & Rai, 2008). However, a chaebol’s group-affiliated companies are vertically integrated under a single administration and financial controlling entity and share the same values and norms (Chang, Chung, & Mahmood, 2006; Lee & MacMillan, 2008). In fact, chaebols have a distinctive inter-organizational relationship in which group owners have internalized all market transactions through cross-shareholdings, exercising absolute authority over the entire strategic decision of the group, and strictly controlling their group-affiliated companies (Chang & Choi, 1988; Chang et al., 2006; Lee & MacMillan, 2008). That is to say, the chaebol's group-affiliated companies are strongly controlled by the group headquarters and share knowledge through a strongly

2. Theoretical background and hypothesis development In emerging markets, business groups such as Korean conglomerates have arisen as a response to market failures and high transaction costs (Khanna & Rivkin, 2001). Due to institutional voids in emerging economies, these business groups create value by substituting capital markets, labor markets, product markets, and contract enforcement, all of which are taken for granted in developed countries (Chang et al., 2006; Khanna & Palepu, 1997). In particular, the most important value a chaebol creates is the knowledge shared through network learning within the chaebol (Lee, MacMillan, & Choe, 2010). Knowledge sharing among group-affiliated companies in a chaebol plays a crucial role in a group-affiliated company’s performance (Lee & MacMillan, 2008). 2

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Since chaebols are highly diversified in a wide range of industries and have been internationalized in many different countries, organizational learning theory indicates that a chaebol is a useful learning network that can access various types of knowledge from various industrial sectors and countries (Lee et al., 2010). On the other hand, the network learning perspective identifies a chaebol as a network that develops, learns, and shares knowledge among its group-affiliated companies, and network learning through knowledge sharing among the chaebol’s group-affiliated companies is conspicuous. In the context of ambidextrous knowledge sharing by Korean chaebols, Lee and MacMillan (2008) break this stalemate by investigating the synergistic interaction effects of procedural and coordinative managerial knowledge sharing among group-affiliated companies within globally operating chaebols. Lee et al. (2010) further explore the synergistic moderating effects of explorative and exploitative knowledge sharing among group affiliates within internationalized chaebols. In a later study, Lee, Park, Ghauri, and Park (2014) assess the patterns of ambidextrous knowledge sharing among group-affiliated companies within internationalized chaebols. Indeed, these studies by Lee et al. prove that the “synergistic dimension (SD)” (i.e., explorative knowledge sharing x exploitative knowledge sharing) of an internationalized chaebol’s ambidextrous knowledge sharing is critical for a group-affiliated company’s performance, but the studies do not consider the “balance dimension (BD)” (i.e., |explorative knowledge sharing – exploitative knowledge sharing|) of an internationalized chaebol’s ambidextrous knowledge sharing. Furthermore, there have been inconsistencies and noticeable vagueness in terms of the conceptualizations and empirical findings of the ambidexterity construct in even these studies, which are exceptional in the context of ambidextrous knowledge sharing among group-affiliated companies within an emerging market business group that has become the global leader. In particular, this conceptual vagueness has restricted the versatility of ambidextrous knowledge sharing as a construct for academics and managers. Our analyses fill these gaps, spotlighting how both the BD and SD of an internationalized chaebol’s ambidextrous knowledge sharing are integral to the ambidextrous knowledge sharing construct and, thus, in line with both the organizational and network learning perspectives. We distinguish between these BD and SD at the conceptual, operational, and empirical levels. The association with ambidextrous knowledge sharing among group-affiliated companies within the internationalized chaebol is more complicated than previously understood, and both BD and SD contribute to a group-affiliated company’s global performance through clearly delineated processes and mechanisms. Moreover, these processes and mechanisms are both mutually reinforced and dissimilarly affected by organizational and global environmental contingencies. In addition to BD and SD’s idiosyncratic independent influences, this study intends to assess the discreteness of BD and SD of an internationalized chaebol’s ambidextrous knowledge sharing and the theoretical and managerial advantages of distinguishing between the two. To do so, we explore the argument that the link between the ambidextrous knowledge sharing among group-affiliated companies within the internationalized chaebol and the global performance of group-affiliated companies is conditional based on the quantity of resources possessed by the internationalized chaebol firm (as measured by a chaebol firm size) or resources that can be externally accessible worldwide (as measured by global environmental munificence). We propose that BD is greatly advantageous to comparatively resourcerestrained chaebol firms and to chaebol firms operating in less globally munificent environments, whereas SD is greatly advantageous to chaebol firms with greater global access to external sources of resources.

the idiosyncratic technologies in industries related to their historical origins (Chandler, 1990, 2005). Even if these conventional conglomerates are large organizational entities, they do not operate as diversified industrial groups, and they mostly focus on specialized product lines and multidivisional entities (Chandler, 2001). For example, the operating units of conventional U.S. conglomerates could independently evolve their own production capabilities based on separate operations; accordingly, these capabilities could generate exchangeable knowledge for related diversification in the future (Amsden & Hikino, 1994). Unlike the environment for these leading conventional MNEs, operational surroundings for business groups in emerging markets are not conducive to choosing an equivalent strategy due to “institutional voids” and less-evolved economic and financial conditions (Khanna & Palepu, 1997; Khanna & Rivkin, 2001). Thus, these business groups have no choice but to select an unrelated diversification strategy into extremely dissimilar industries, which often were unrelated technological fields (Lee, Park et al., 2014; Lee, Ryu, & Kang, 2014). Hence, emerging market business groups metamorphose into global leaders in a variety of areas at a later time, and these business groups are dissimilar to conventional MNEs, who gain operational powers by reducing the number of industries they are involved in as well as by enhancing the extent of operational relatedness within their industrial boundaries. Leaders of unrelatedly diversified business groups leverage their groups’ amassed, exchangeable knowledge by tactically moving engineering and R&D personnel from one group-affiliated company to a peer group-affiliated company within the business group as well as by utilizing transnational training programs at the group level. This strategy supports knowledge and resource sharing embedded in the business group (Amsden & Hikino, 1994; Chang & Hong, 2000; Guillén, 2000). Additionally, an internationalized group-affiliated company’s knowledge sharing setting is “double-layered, rather than singlelayered” as the setting for the conventional MNE is (Lee, Park et al., 2014; Lee, Ryu et al., 2014). The group-affiliated company is an MNE on its own (the first layer), but above it is a second layer, the verticallyintegrated embeddedness of a central company and peer group-affiliated companies that are unrelatedly diversified to an extreme degree. In this way, knowledge and resource sharing in the emerging market business group are dissimilar to those of a conventional MNE that consists of a legally independent organizational governance (Lee, Ryu et al., 2014). These dissimilarities make knowledge sharing embedded in the emerging market business groups different from conventional MNEs without such embeddedness. 2.2. Chaebol firms’ ambidextrous knowledge sharing within their business group A chaebol can be defined as a large, highly-diversified Korean business group of peer group-affiliated companies clustered under a single administrative and financial controlling entity belonging to an owner family (Lee et al., 2010). Based on the organizational and network learning theories, we explore a chaebol’s knowledge management mechanisms. March’s (1991) inaugural paper about explorative and exploitative learning has inspired many studies to use his theoretical constructs (e.g., Cao, Gedajlovic, & Zhang, 2009; He & Wong, 2004; Tushman & O’Reilly, 1996). His paper also argues that having the appropriate balance between explorative and exploitative learning is crucial for an organization’s long-term performance and survival (March, 1991). Group-affiliated companies within a chaebol can usually make explorative knowledge sharing (explorative learning) possible by facilitating long-term performance and survival through focusing on the group-wide central research and development (R&D) hub of next-generation products or opening up new product markets by jointly launching a major development project with group-affiliated companies (Lee et al., 2010). For example, according to our interviews with senior

2.1. What aspects make knowledge sharing embedded in emerging market business groups different from that of MNEs without such embeddedness? Leading conventional MNEs expand their organizations based on 3

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managers of Samsung Electronics and Hyundai Motor, Samsung Advanced Institute of Technology (hereinafter “SAIT”), which is the de facto Samsung Group’s R&D Center responsible for developing fundamental and next-generation technologies, has developed next-generation artificial intelligence (AI) technologies in close cooperation with peer group-affiliated companies, such as Samsung Electronics and Samsung SDI, via joint task force teams. Also, Hyundai Motor Central Research Center has operated as the central knowledge sharing hub for creating group-wide explorative technologies and had the role of the integrated R&D center for Hyundai Motor and Kia Motors. In contrast, exploitative knowledge sharing (exploitative learning) within the chaebol can occur when group-affiliated companies share technological knowledge with other peer group-affiliated companies to incrementally improve a product’s quality or production efficiency. In other word, exploitative knowledge sharing occurs between peer groupaffiliated companies through engineers’ joint works and joint development projects within a business group (Lee et al., 2010). For example, Samsung Electronics jointly worked with Samsung SDI to improve the Samsung Galaxy S7’s touchscreen display and develop the Samsung Galaxy S9’s display. Additionally, exploitative knowledge sharing is leveraged by communication, action, and performance (CAP) meeting, which is a formal forum for sharing engineers and R&D personnel’s ideas as well as experiences particularly in terms of simple joint works and joint development projects from group-affiliated companies within the Hyundai Motor Group. Ambidexterity in this context refers to an organization’s operational ability to pursue exploration and exploitation at the same time (Cao et al., 2009; He & Wong, 2004; Tushman & O’Reilly, 1996), and achieving ambidexterity can lead an organization to superior performance (Tushman & O’Reilly, 1996). Exploration focuses on organizational activities that enhance future competitiveness by developing new capabilities; it is concerned with the creation of new knowledge or technologies, products with uncertain demand, or firm activities that might create new markets. However, exploration requires a significant amount of time in order to realize profits, and it is associated with uncertainty (Garcia, Calantone, & Levine, 2003; Keen & Wu, 2011; March, 1991). Exploitation, on the other hand, includes organizational activities that compete based on current capabilities in existing markets; it is concerned with the use or improvement of existing knowledge, technologies, or products. Exploitation guarantees more definite and earlier profits compared to exploration (Calantone & Levine, 2003; Keen & Wu, 2011; March, 1991). Ambidexterity is defined as an organization being able to compete through exploiting current capabilities and at the same time conducting explorative activities to develop future competitiveness (Tushman & O’Reilly, 1996). A chaebol with ambidextrous knowledge sharing facilitates the appropriate balance between both explorative and exploitative learning activities to create new knowledge and exploit existing knowledge, which has important implications for the global performance of that chaebol’s group-affiliated companies. Fig. 1 shows the knowledge management structure and sharing processes within the Samsung Group. As can been seen in Fig. 1, since its establishment in 1987, SAIT has undertaken the role of central coordinating hub of the explorative knowledge sharing between SAIT and other group-affiliated companies or between group-affiliated companies in the Samsung Group. This knowledge management structure creates and exchanges novel next-generation and fundamental technologies through the explorative knowledge sharing between SAIT and group-affiliated companies, paying the most attention to long-term performance and entering next-generation technological realms and new product markets. In contrast, technological knowledge sharing for exploitative learning is more common among Samsung Group groupaffiliated companies in the same or related industries without SAIT’s involvement. An internationally-diversified chaebol has a dual global knowledge sharing system in which (1) the knowledge sharing network among group-affiliated companies and (2) the knowledge sharing network

between the headquarters of each individual group-affiliated company and its foreign subsidiaries are intertwined (Lee, 2016; Lee, Park et al., 2014; Lee, Ryu et al., 2014). In the case of internationalized chaebol firms, their local subsidiaries, which are subunits of group-affiliated companies in the host countries, share locally accumulated knowledge (e.g., locally developed products and product markets in the host country) with each other through “locally linked and leveraged learning;” in turn, this locally linked and leveraged learning from the host country can evolve into “global linked learning” among group-affiliated companies within their business group. Through this process, locally leveraged learning and globally linked learning may create innovative network learning using the knowledge sharing within the group as a crucial leverage (Bartlett & Ghoshal, 1998; Lee, 2016). For example, internationalized chaebol firms share R&D, operational know-how, procedural knowledge, coordinative knowledge, and overseas market related knowledge with other peer group-affiliated companies, and the knowledge is accordingly accumulated or transferred through grouplevel knowledge sharing mechanisms (Kang & Lee, 2017; Lee & MacMillan, 2008; Lee et al., 2010). This intra-knowledge sharing within chaebols has been identified as a factor that has important effects on the performance of group-affiliated companies (Lee et al., 2010; Lee, 2016). 2.3. Balance dimension of ambidextrous knowledge sharing within the internationalized chaebol In this study, we define “BD” as the case in which a group-affiliated company’s performance is improved because of a close match in the relative magnitude of the explorative and exploitative knowledge sharing activities within a chaebol. We measure the appropriate balance between the explorative and exploitative knowledge sharing within the internationalized chaebol in terms of BD as the value of the absolute difference between explorative knowledge sharing and exploitative knowledge sharing within the business group (He & Wong, 2004; Im & Rai, 2008; Lee et al., 2010). A firm can optimize its performance if it carries out simultaneous, ambidextrous knowledge sharing necessary for exploration and exploitation activities. Previous studies have also shown that a firm’s ambidexterity and ambidextrous knowledge sharing positively affect firm performance and survival (Gibson & Birkinshaw, 2004; He & Wong, 2004; Im & Rai, 2008). When a firm’s level of exploitative activities is higher than that of its explorative activities, the firm is exposed to self-reinforcing attributes due to the “myopia of learning” that may occur because the pursuit of exploitation is rational from a short-term perspective (Levinthal & March, 1993; March, 1991). If the firm overemphasizes exploitation, the firm can fall into a “success trap” that maximizes short-term profit but sacrifices long-term performance (Junni, Sarala, Taras, & Tarba, 2013; Levinthal & March, 1993). Focusing only on the exploitation of a firm’s existing capabilities can create immediate profits and has little uncertainty, resulting in positive effects such as the reinforcement and improvement of existing capabilities, but the firm’s structural inertia will be reinforced, and new technologies and capabilities are unlikely to be secured. As a result, this approach can threaten the long-term survival of firms (Hsu et al., 2013; Levinthal & March, 1993). Therefore, firms that focus too heavily on exploitation may face the risk of obsolescence (Cao et al., 2009), struggle to adapt to changes in business environments, and may undermine their ability to find new opportunities (Prange & Verdier, 2011). On the other hand, when a firm’s level of explorative activities is higher than that of exploitative activities, the firm is likely to fall into a “failure trap” (Junni et al., 2013; Levinthal & March, 1993). When a firm falls into a failure trap, the firm will be placed in a situation of ongoing change without compensation, unceasingly exploring and at risk of becoming unable to receive appropriate compensation for its explorative activities (Cao et al., 2009). In addition, the rate of improvement of existing capabilities decreases, and the actual profits are unlikely to be achieved based on the firm’s existing knowledge and 4

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Fig. 1. Knowledge management structure and sharing processes within the Samsung Group. Note: Based on interviews with senior managers of Samsung global-affiliated companies (GACs), we modified Lee, MacMillan, and Choe’s (2010, p. 593) figure of knowledge management structure within the Samsung Group.

to gradually improved the plastic cases for the Samsung Galaxy smartphone series by targeting short-term competitive advantage; simultaneously, Samsung Electronics’ R&D personnel and engineers targeted longer-term competitive advantage by transforming the simple plastic cases to advanced metal ones with help from other Samsung group-affiliated companies, even though this process took considerably more time than improving the existing plastic cases. Due to the success of this transformation using an appropriate balance between exploitative and explorative knowledge sharing within the Samsung Group, the Samsung Galaxy series could successfully increase sales and operating profits for a long period. This instance clearly indicates that a chaebol group-affiliated company’s global performance is more likely to be optimal when its knowledge sharing maintains an appropriate balance by emphasizing both exploration and exploration simultaneously.

capabilities (March, 1991). Consequently, relatively less profit is generated through exploitation, and only diverse and long-return possibilities are explored so that the profit necessary for short-term survival cannot be generated. When such a discussion is applied to the perspective of internationalized chaebol firms’ ambidextrous knowledge sharing within their business group, it can be seen that individual group-affiliated companies belonging to a chaebol repeatedly use the knowledge accumulated through experience and existing capabilities related to international experience, and the group-affiliated companies begin to develop necessary organizational structures and routines. If firms repeatedly exploit existing capabilities to reduce uncertainty within their host countries, and they engage in international activities centering on exploitation, those firms may eventually fail to create new and innovative products or services due to the characteristics of path dependences and the attribute of core rigidities that prevent firms from achieving long-term competitive advantage (Leonard‐Barton, 1992). Also, these group-affiliated companies may have difficulty recognizing opportunities for new host markets or opportunities for new product markets (Kang & Lee, 2017; Prange & Verdier, 2011). On the other hand, when a group-affiliated company heavily emphasizes exploration activities, it is possible that even when new opportunities, alternatives, or ideas have been found, these new ventures may not lead to actual profits due to the firm’s lack of existing knowledge or capabilities (Kang & Lee, 2017; March, 1991). Eventually, if either exploration or exploitation is overemphasized relative to the other, the firm’s long-term competitive advantage may be damaged due to the organizations’ path dependence or core rigidities (Leonard‐Barton, 1992). Indeed, this can be seen in an example of BD within the Samsung Group. Samsung Electronics’ R&D personnel and engineers had worked with other Samsung group-affiliated companies

H1A. BD of ambidextrous knowledge sharing within the chaebol has a positive impact on a group-affiliated company’s global performance. 2.4. Synergistic dimension of ambidextrous knowledge sharing within the internationalized chaebol We define “SD” as the case in which an internationalized chaebol firm’s knowledge sharing activities simultaneously pursue exploration and exploitation, which adds value by generating synergy effects that lead to improved firm performance. We measure the SD of ambidextrous knowledge sharing among group affiliates within the chaebol by multiplying the explorative knowledge sharing activities and the exploitative knowledge sharing activities within the business group (Cao et al., 2009; Lee et al., 2010). The group-affiliated company’s global performance can be improved by the synergy effects generated by pursuing both explorative and exploitative knowledge sharing 5

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activities, according to the perspective that regards exploration and exploitation as being complementary (Gupta et al., 2006; He & Wong, 2004). This perspective also states that synergy effects can be generated from the complementary domains of exploration and exploitation, and the effects have significant effects on firm performance, long-term success, and survival (Gibson & Birkinshaw, 2004; He & Wong, 2004; Hsu et al., 2013). When examined from the viewpoint of ambidextrous knowledge sharing, exploration and exploitation mutually reinforce each other, resulting in synergies that can enhance the firm’s competitive advantage (Im & Rai, 2008; Luo & Rui, 2009). Indeed, firms need existing capabilities in order to learn new capabilities, and learning new capabilities reinforces existing capabilities (Katila & Ahuja, 2002). In other words, developing current capabilities often facilitates the exploration of new capabilities, and the exploration of new capabilities improves the current knowledge base. Additionally, due to the formation of absorptive capacity, learning can be enhanced by and competitive advantage can result from the uniqueness of combined knowledge (Cohen & Levinthal, 1990; Tsai, 2001). Therefore, if a firm’s simultaneous pursuit of exploration and exploitation achieves complementary ambidextrous knowledge sharing, synergy effects will be able to occur, which will provide the firm with a variety of choices. Subsequently, the firm can recombine knowledge of existing markets and technologies with its knowledge of new markets and technologies to create new and diverse problem solutions (Nelson & Winter, 1982), or to make novel products or novel knowledge of markets (Fleming, 2001). Existing studies also recognize the synergy effects of exploration and exploitation (Cao et al., 2009; Gupta et al., 2006; He & Wong, 2004; Tushman & O’Reilly, 1996). For instance, scholars have argued that a high level of exploitation can improve the effectiveness of exploring new knowledge, promote innovation, and support new products and markets (Cao et al., 2009; Kang & Lee, 2017). In addition, high levels of exploration can improve the organization’s ability to successfully exploit its capabilities, thereby improving the organization’s ability to get new or innovative ideas so that the organization can successfully commercialize new products (Cao et al., 2009; Kang & Lee, 2017). In the case of chaebols, firms often expand to overseas markets in order to exploit current capabilities and competitive advantages, as well as to explore new global markets (Lee & MacMillan, 2008; Lee et al., 2010; Lee, 2016). By expanding to international markets, chaebol firms recombine the knowledge and capabilities newly acquired from overseas markets with existing competitive advantages to achieve excellent business performance (Hsu et al., 2013). For instance, the group-affiliated companies of chaebols that operate globally can learn countryspecific knowledge such as local culture, institutions, government regulations, and labor environments, as well as knowledge related to consumer preferences of local countries, local marketing, and knowledge related to social capital, and these group-affiliated companies can therefore form knowledge bases through individuals, expatriates, and learning units (Lee, 2016; Lee, Ryu et al., 2014). Furthermore, the knowledge pool acquired and accumulated at the business group level is transferred due to knowledge sharing activities among affiliates through the chaebol’s global networks, and ambidextrous knowledge sharing within the business group can generate synergy effects based on this mechanism to help individual group-affiliated companies develop new capabilities or form new solutions. In addition, whereas internationalization involves high levels of high uncertainty and risk (Johanson & Vahlne, 1977) and radical and destructive changes (Hsu et al., 2013; Prange & Verdier, 2011), globalization allows firms to capture new market opportunities overseas or to develop new capabilities in creative ways. When viewing chaebols in the same light as other internationalized organizations, internationalization can be seen as an explorative activity for them as well (Hsu et al., 2013; Prange & Verdier, 2011). Group-affiliated companies can enhance their global performance if they experiment with new activities linked to synergistic ambidextrous knowledge sharing that can combine with the existing

knowledge and capabilities of affiliates that are conducting exploitative activities. Samsung Electronics Director reflected on Samsung Electronics’ experience with the SD phenomenon, stating that “[s]ome large knowledge sharing portion of Samsung Electronics development divisions in cooperation with other peer Samsung group-affiliated companies tried cost reduction, the improvement of production efficiency, and the simplification of manufacturing process so that it focused on shortterm operation. However, long-term oriented and radically innovated technologies, components, or products, for example, new materials or Artificial Intelligence (AI) chips, should be created based on long-termtargeting learning and knowledge sharing among peer Samsung groupaffiliated companies. Accordingly, based on those innovative technologies, components, or products, Samsung Electronics was able to reduce cost and decrease defect rate or shorten complex process. So, these two different learning and knowledge sharing activities within our Group are completely and intuitively complementary each other.” As this quote illustrates, this complementary form of synergistic ambidextrous knowledge sharing among group-affiliated companies can promote the realization of competitive advantages (Hsu et al., 2013; Kang & Lee, 2017; Lee & MacMillan, 2008). These competitive advantages can be expected to enhance a group-affiliated company’s global performance. H1B. SD of ambidextrous knowledge sharing within the chaebol has a positive impact on a group-affiliated company’s global performance. 2.5. Organizational and environmental contingencies of ambidextrous knowledge sharing within the internationalized chaebol Organization size relates to the quantity of resources possessed by organizations (Cao et al., 2009), and resources are an important basis for explorative activities and exploitative activities (Benner & Tushman, 2003). In addition, the effects of the organization’s ambidexterity on performance can vary depending on the size of the organization (Lin, Yang, & Demirkan, 2007). Since organizations compete for rare resources that can be used in explorative activities and exploitative activities (March, 1991), organization size can play an important moderating role in the relationship between the BD and SD of ambidextrous knowledge sharing within the chaebol and the global performance of group-affiliated companies. Large organizations have significant amounts of available slack resources. Larger organizations can more efficiently distribute the resources necessary for exploration and exploitation without threat to the organization’s survival, compared to smaller organizations (Lin et al., 2007). In addition, large organizations are more likely to have special organizational units for exploration, such as R&D centers, compared to small firms (Vahlne & Jonsson, 2017). For instance, Samsung, which is a representative chaebol in South Korea, has an explorative R&D Center for technology creation and integration for the entire group (Lee et al., 2010). Conversely, small organizations may have difficulty maintaining the balance between exploration and exploitation because the available resources are insufficient (Lin et al., 2007). Indeed, small chaebols in South Korea focus more on exploitation than exploration because they lack sufficient resources to implement both (Lee et al., 2010). Therefore, for smaller and resource-scant organizations, it is especially crucial to attain a high level of BD of ambidextrous knowledge sharing activities to avert potential risks. If a small organization achieves the BD of ambidextrous knowledge sharing at a high level, that organization will experience more significant benefits than a large organization would. H2A. Organization size moderates the association between BD of ambidextrous knowledge sharing and a group-affiliated company’s global performance. High BD is more advantageous to smaller organizations. Organizations that pursue explorative learning or knowledge sharing may need to utilize their own internal knowledge to boost the 6

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efficiency of existing organizational routines, while organizations that focus on exploitative learning or knowledge sharing may need to change their existing organizational routines and look externally to explore radical new ones (Gibson & Birkinshaw, 2004; Jansen, Van den Bosch, & Volberda, 2005; Tushman & O’Reilly, 1996). Hence, attaining a favorable outcome from seeking SD may depend on the degree to which enough resources can be approached and allotted to support a high level of commitment in both explorative and exploitative learning, or both explorative and exploitative knowledge sharing (Cao et al., 2009; Lee & Huang, 2012; Lin et al., 2007). An organization with greater resources can more effectively pursue explorative and exploitative learning activities concurrently, allowing the organization to more likely benefit from seeking SD. As an example, according to Samsung Electronics Director, “Samsung Electronics as one of the largest organizations in global electronics industry has huge resources and personnel as well as abilities to create well-established R&D environments and promote impressive atmospheres of R&D, which are again linked to other peer group-affiliated companies’ knowledge and resource reservoirs within the Samsung Group. So based on them, Samsung Electronics can complement both explorative and exploitative learning advantages in conjunction with synergistic knowledge sharing within the business group.” Therefore, we present the following hypothesis, with the assumption that seeking SD can be a more effective means to improve organizational performance when an organization has a larger stock of internal slack resources available (Cao et al., 2009; Lee & Huang, 2012; Lin et al., 2007).

company does not only choose the current development possibility or availability (exploitation), but also prepare for future uncertainties. Hence, even under the global environmental uncertainties, we also search for high-level or second-generation technologies in order to produce sophisticated high-end products or eco-friendly goods in conjunction with peer group-affiliated companies’ knowledge sharing.” Accordingly, we can expect that a less munificent environment will have a greater impact on the relationship between BD of ambidextrous knowledge sharing and a group-affiliated company's global performance. H3A. Global environmental munificence moderates the relationship between BD of ambidextrous knowledge sharing and a group-affiliated company’s global performance. High BD is more advantageous to organizations operating in less munificent environments. Environmental munificence plays a key role in buffering organizations from global environmental pressure by creating financial slack (Li et al., 2013), thereby increasing an organization’s resource availability (Sahaym et al., 2010). In addition, high munificence reduces the degree of competition for resources and resource dependence (Dess & Beard, 1984). Therefore, if global munificence is high, internationalized organizations can pursue exploration and exploitation activities concurrently because there is no or less resource constraint for explorative and exploitative learning and knowledge sharing activities (Cao et al., 2009; Lee et al., 2010; Li et al., 2013). High levels of global environmental munificence can reduce the risk of failure for explorative and exploitative learning or knowledge sharing (Cao et al., 2009; Lee, Park et al., 2014; Lee, Ryu et al., 2014; Li et al., 2013). In a resource-rich environment, firms can engage in explorative learning activities such as pursuing new technologies and new markets (Lee, Park et al., 2014; Lee, Ryu et al., 2014; Sahaym et al., 2010) and simultaneously exploitative learning activities in order to achieve higher profits by leveraging existing capabilities and resources to take full advantage of market opportunities. Indeed, Samsung SDI Director explains that “[u]nder the condition which environmental munificence is high, we can attain successful results based on our company’s advancement, sophistication, as well as specialization that complement both explorative and exploitative learning and knowledge sharing. For example, under the circumstances that qualified technology developers, who are supported by enough financial resources as well as ample intangible resources such as technology resources, we can develop successful and excellent components or products, targeting both long- and short-term competitive advantages, in the sense of complementarity between explorative and exploitative learning and knowledge sharing. In turn, this virtuous cycle creates synergy between explorative and explorative knowledge sharing with peer group-affiliated companies such as Samsung Electronics and SAIT.” Therefore, a more munificent global environment can be expected to have a greater moderating impact on the relationship between SD of ambidextrous knowledge sharing and the global performance of a group-affiliated company.

H2B. Organization size moderates the association between SD of ambidextrous knowledge sharing and a group-affiliated company’s global performance. High SD is more advantageous to larger organizations. Global environmental munificence can be defined as the degree to which the global environment supports the sustainable growth of an internationally-diversified organization (Li, Wei, Zhao, Zhang, & Liu, 2013; Park & Mezias, 2005), and this variable indicates the accessibility and availability of environmental resources (Kabadayi, Eyuboglu, & Thomas, 2007), industry opportunities (Tang, Kreiser, Marino, Dickson, & Weaver, 2009), and growth opportunities (Dess & Beard, 1984) for the organization. Environmental factors play an important role in moderating the relationship between organizational learning and performance (Li et al., 2013; Park & Mezias, 2005). A high level of munificence means that resources are abundant, and a low level of munificence means that resources are scarce (Kabadayi et al., 2007). As described above, since the availability of resources affects how an organization decides to allocate those resources toward exploration and exploitation (Tang et al., 2009), the global environmental munificence is expected to play a crucial role in moderating the relationship between the global performance of the group-affiliated companies and the ambidextrous knowledge sharing of BD. Since low munificence means a low level of resource availability, organizations in an environment of low munificence need to make great efforts to balance the allocation of resources for both exploration and exploitation (Li et al., 2013). For example, if the availability of resources is low due to resource constraints, firms are likely to focus more on exploitation for immediate competition or survival (Sahaym, Steensma, & Barden, 2010) and there may be no room for exploration (Garcia et al., 2003). Therefore, under the condition of low environmental munificence, firms should be more careful to balance exploration and exploitation in order to reduce the risk derived from either exploration or exploitation (Cao et al., 2009; Li et al., 2013). For instance, Samsung SDI Senior Manager explains that “[e]ven if global environment munificence is in a trouble due to, for instance, a worsening business environment both domestically and internationally, intensification of fierce global competitions, the diminution of global industry business cycles as well as domestic market shrinkages and much stricter regulations for employees’ working hours (a new domestic regulatory limitation to 52 h-working per week in Korea), our

H3B. Global environmental munificence moderates the relationship between SD of ambidextrous knowledge sharing and a group-affiliated company’s global performance. High SD is more advantageous to organizations operating in more munificent environments. 3. Methodology Due to the complicated phenomena of globalized chaebols’ ambidextrous knowledge sharing dimensions and their interaction effects with organization size and global environmental munificence, our study uses an explanatory survey that investigates relationships between variables, complemented by secondary data. We attempt to account for these main and interaction effects in our research model (see Fig. 2). In the following sections, we discuss our sample, data collection, and 7

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Fig. 2. Research model. Note: KS refers to ‘knowledge sharing’, and GAC refers to a ‘group-affiliated company’.

with respondents, and 3) collecting questionnaires. We visited 385 firms for our survey because we believed that personal visits to our sample firms could increase the response rate and reduce missing values. Altogether, we received 337 questionnaires in completed form, representing an 87.5 percent response rate. All respondents were members of top management teams, including Chief Executive Officers (CEOs), Chief Operating Officers (COOs), Chief Technology Officers (CTOs), representative directors, managing directors, and directors in their respective group-affiliated companies. We checked potential nonresponse bias by confirming the differences between early and late respondents (Rogelberg et al., 2003). We recorded the sequence of responses to the survey and recognized it to be insignificantly correlated with firm size, R&D intensity, and advertising intensity, suggesting that nonresponse bias concern is minimal. We also found no significant differences related to firm size, R&D intensity, and advertising intensity across industries. In order to nullify the potential common method bias, we based data for the dependent variable and moderating variables on archival data, and we based data for independent variables (i.e., ambidextrous knowledge sharing) on our survey. Table 1 exhibits a description of sample group-affiliated companies by industry, and Table 2 presents a description of sample group-affiliated companies by R&D intensity and age (year).

variables and their measurements. 3.1. Sample and data collection Our population consists of 337 Korean multinational manufacturing group-affiliated companies in 61 chaebols as of 2014. Previous empirical research on chaebols (Chang & Hong, 2000; Guillén, 2000; Khanna & Rivkin, 2001; Lee et al., 2010; Lee, Park et al., 2014) includes differing sample selections; to date, there has been no consistency among existing chaebol studies. Nevertheless, the Korea Fair Trade Commission (KFTC) list of the largest business groups is important for the representation of business groups in the Korean context, especially in recent decades, because the KFTC regulates the cross-subsidization of business groups it lists and publicizes. In 2014, the KFTC was authorized to audit Korean business groups that have more than ten trillion KRW in domestic assets. Our list of 61 chaebols includes all familyowned Korean business groups possessing more than ten trillion won in domestic assets. Thus, our population is likely to represent the real-time business circumstances of Korean chaebols. Further, the analytical periods of recent chaebol studies (Lee & MacMillan, 2008; Lee et al., 2010, 2014) are limited to the timetable before the end of 2009 — before or during the extreme period of the global financial crisis. Therefore, these studies’ empirical results have different implications than do our results, which follow the global financial crisis, because the financial crisis has been an organizational shock for some internationalized group-affiliated companies that requires both short-term crisis management and long-term structural changes (Bruno & Shin, 2014; Chung, Lee, & Lee, 2013; Fernandes, 2011). Building on the previous literature (Lee et al., 2010; Lee, Park et al., 2014; Lee, Ryu et al., 2014), our study includes a survey questionnaire developed in English, using the traditional back-translation method to qualify the validity of the translation (Chidlow, Plakoyiannaki, & Welch, 2014). A bilingual professor, who is a Korean American at a prestigious university in Korea, translated the English questionnaire into Korean, and then, in turn, another bilingual Korean Canadian professor translated the Korean version back into English. The questionnaire was then pretested for face and construct validity with 30 executives and high-ranking managers of multinational group-affiliated companies within the 30 largest business groups. In order to increase the objectivity of our survey, we interviewed these executives and managers and asked them to report the decisions that they considered important influential factors associated with their multinational groupaffiliated companies’ global performance. The results reveal a good correspondence between their perceptions and the conceptions in the literature and our study. To collect our data on ambidextrous knowledge sharing within the internationalized chaebols, we conducted our surveys using three processes: 1) a person-to-person visit to a company; 2) brief interviews

3.2. Variables and measurements 3.2.1. Dependent variable Recent organizational ambidexterity studies have depended on subjective, self-reported measures of firm performance (Cao et al., 2009; Lee et al., 2010; Lee, Park et al., 2014; Lee, Ryu et al., 2014). These studies are likely to feature common method bias since both independent and dependent variables are based on subjectivity. In order to overcome this limitation of self-reported measures, we use a groupaffiliated company’s objective financial performance, measured by the group-affiliated company’s global return on assets (ROA). In addition, we use three-year average estimates for this global ROA to minimize the influence of short-term performance variations (Faccio, Lang, & Young, 2010) and to demonstrate the years-long effects of ambidextrous knowledge sharing within internationalized business groups.1 The data sources for the group-affiliated company’s financial performance are KISValue and KISLINE, which are often used in chaebol studies (Chang 1

When we made our questionnaire, we asked the respondents for the items of ambidextrous knowledge sharing within the globalized chaebol “in the last five years” with one year lagged by the dependent variable in order to capture the years-long effects of ambidextrous knowledge sharing among group-affiliated companies within the chaebol. 8

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knowledge sharing. Thus, the measures for BD and SD of internationalized chaebols’ ambidextrous knowledge sharing are based on the measures of explorative and exploitative innovation knowledge sharing. We use Lee et al.’s (2010) measure of explorative and exploitative innovation knowledge sharing by a group-affiliated company with peer group-affiliated companies, which extends the scale of He and Wong (2004) to the business group level for explorative and exploitative innovation knowledge sharing. Lee et al.’s (2010) scale features high reliability and is the basis for other research (Lee, Park et al., 2014; Lee, Ryu et al., 2014). In order to gather data for explorative and exploitative innovation knowledge sharing at the business group level, using a 7-point Likert scale, we asked respondents to identify the degree to which the following statements were important for “To what extent has your company given or taken (explorative) technology/know-how to/from other manufacturing (or manufacturing-related) group-affiliated companies within your business group (e.g., C Electronics with C Group R&D Center within C Group) in the last 3 years for the items below?”. Four items were scaled: (1) introducing the next generation of products (Explore_GKS1); (2) opening up new product markets (Explore_GKS2); (3) entering new technology fields with a long-term perspective (Explore_GKS3); and (4) extending product range (for example, through researching basic or fundamental technologies) (Explore_GKS4). Next, we asked respondents to indicate the degree to which statements were important regarding “To what extent has your company given or taken (exploitative) technology/know-how to/from other manufacturing (or manufacturing-related) group-affiliated companies within your business group (e.g. C Electronics with C Electro-Mechanics within C Group) in the last 3 years for the items below?”. Five items were scaled: (1) improving existing product quality (Exploit_GKS1); (2) improving production flexibility (Exploit_GKS2); (3) reducing production cost (Exploit_GKS3); (4) improving yield (Exploit_GKS4); and (5) reducing material consumption (Exploit_GKS5). In order to check the unidimensionality of operationalized measures for explorative and exploitative innovation knowledge sharing among group-affiliated companies, we conduct an exploratory factor analysis, shown in Table 3. Each item designed in the main survey is grouped intentionally so that no item was deleted, and we deduct a total of two dimensional factors due to an eigenvalue greater than one. To verify our internal consistency, we calculate Cronbach’s alpha coefficients for these two types of innovation knowledge sharing, and we confirm that explorative knowledge sharing (0.943) and exploitative knowledge sharing (0.871) demonstrate adequate Cronbach’s alpha coefficients. Also, during the purification process of the scales, no item shows low factor loading that would affect the reliability of variables; thus, we have not deleted any item. We also conduct confirmatory factor analysis to examine the

Table 1 Description of sample firms by industry. Industry

Number of sample firms

Percentage (%)

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

25 4 4 7 82 7 20 35 4 26 3 9

7.42 1.19 1.19 2.08 24.33 2.08 5.93 10.39 1.19 7.72 0.89 2.67

47

13.95

4

1.19

29 10 21

8.61 2.97 6.23

337

100

13. 14. 15. 16. 17.

Food and beverage Apparel and leather Pulp and paper Petroleum and coal products Chemical Plastics and rubber Non-metallic mineral products Primary metal Fabricated metal products Machinery and equipment Computer and office supplies Electrical equipment, appliance, and components Electronic products and communications equipment Medical/optical instruments and precision machinery Automobiles and trailers Other transportation equipment Others

Total

Table 2 Description of sample firms by R&D intensity and age. Variable

Scale

Number of sample firms

Percentage (%)

R&D intensity (%) More than 3% 3% – 1% 1% – 0.01% Less than 0.01%

63 78 74 122

19.29 23.44 21.96 35.31

Age (year)

77 81 99 80

22.85 24.04 29.38 23.74

337

100

More than 50 years 50 – 40 years 39 – 20 years Less than 20 years

Total

& Hong, 2000; Lee, Park et al., 2014; Lee, Ryu et al., 2014). 3.2.2. Independent variables 3.2.2.1. Explorative versus exploitative innovation knowledge sharing. Internationalized chaebols’ ambidextrous knowledge sharing is a construct that combines explorative and exploitative innovation Table 3 Exploratory factor analysisa.

Objectives for your firm’s technological innovation knowledge exchange with peer multinational GACs within the business group in the last 3 years (1 = not important to 7 = very important) Reducing production cost Improving yield Improving existing product quality Reducing material consumption Improving production flexibility Introducing next generation of products Entering new technology fields with a long-term perspective Opening up new product markets Extending product range (for example, through researching basic or fundamental technologies) Cronbach's α

Measurement b

items Exploit_GKS3 Exploit_GKS4 Exploit_GKS1 Exploit_GKS5 Exploit_GKS2 Explore_GKS1 Explore_GKS3 Explore_GKS2 Explore_GKS4

Exploitative

Explorative

innovation KS 0.834 0.828 0.819 0.813 0.809 0.257 0.135 0.222 0.108 0.871

innovation KS 0.179 0.198 0.245 0.168 0.128 0.799 0.755 0.752 0.731 0.943

GAC refers to a 'group-affiliated company', and KS refers to 'knowledge sharing'. a Extraction method: Principal component analysis. Rotation method: Varimax with Kaiser normalization. Explained variance: 72 %. b See the measurement items in the section of variables. 9

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Table 4 Confirmatory factor analysisa,b. Constructs

Itemsa

Standardized estimates

P value

AVE

CR

Cronbach's α

Explorative innovation KS

Explore_GKS1 Explore_GKS2 Explore_GKS3 Explore_GKS4

0.799 0.752 0.755 0.731

0.000*** 0.000*** 0.000*** 0.000***

0.717

0.885

0.943

Exploitative innovation KS

Exploit_GKS1 Exploit_GKS2 Exploit_GKS3 Exploit_GKS4 Exploit_GKS5

0.819 0.809 0.834 0.828 0.813

0.000*** 0.000*** 0.000*** 0.000*** 0.000***

0.736

0.914

0.871

a b

See the items in the section of variables. KS refers to ‘knowledge sharing’.

validity of two independent variables, shown in Table 4. The fit indices demonstrate that the measurement model fits the data quite well (χ2(df) = 106.235(28), p < 0.05; GFI = 0.919; AGFI = 0.907; NFI = 0.941; RMR = 0.038; RMSEA = 0.046), and all items in these constructs feature significant standardized loadings. In addition, we assess convergent validity (CR) and average variance extracted (AVE) of study constructs (CR > 0.5, AVE > 0.7), indicating that our measurement model exhibits good convergent validity and reliability (Hair, Anderson, Tahtam, & Black, 2005). Moreover, we test the discriminant validity of these constructs using confirmatory factor analyses to determine whether a two-factor model fits the data better than a one-factor model for each pair of constructs (Anderson & Gerbing, 1988). The χ2 difference for all related constructs is significantly larger for the constrained model compared to the unconstrained model. All χ2 dissimilarities are significant, showing high discriminant validity.

the past three years. We obtain data from various sources, such as the National Statistics Offices, the Organisation for Economic Co-operation and Development (OECD) database, statistics portals (e.g., Statista), and industry associations. 3.2.4. Control variables In this study, we also control for other variables in our estimated models. We control for R&D intensity and advertising intensity because these types of intangible resources and capabilities can enhance the focal multinational group-affiliated company’s performance. We operationalize R&D intensity by the firm’s R&D expenses divided by total sales, and we operationalize advertising intensity by the firm’s advertising expenses divided by total sales (Chang & Rhee, 2011; Chung, Park, Lee, & Kim, 2015). In addition, firm- and industry-fixed effects have been included in the estimated models. For industry-fixed effects, we estimate the effects of two-digit industry dummies based on Korean Standard Industrial Classification (KSIC), which is derived from the International Standard Industrial Classification (ISIC) adopted by the United Nations (UN).

3.2.2.2. BD of ambidextrous knowledge sharing within the internationalized chaebols. BD refers to the relative balance between explorative and exploitative innovation knowledge sharing, which is operationalized by the absolute difference between explorative and exploitative innovation knowledge sharing, following prior studies (Cao et al., 2009; He & Wong, 2004). To make our results more easily understandable, we reverse this measure by subtracting the difference score from 6 — that is, a higher value suggests greater BD.

4. Results 4.1. Main results Table 5 reports the descriptive statistics and correlation matrix for all variables. The highest correlation coefficient is 0.465, which is between R&D intensity and advertising intensity and lower than the threshold of 0.650 (Tabachnick & Fidell, 1996). Also, the correlation between BD and SD of internationalized chaebols’ ambidextrous knowledge sharing is insignificant (r = 0.087), suggesting that BD and SD are separate dimensions of internationalized chaebols’ ambidextrous knowledge sharing. We conduct ordinary least squares (OLS) regression analyses to investigate all hypotheses and the hierarchical method to assess the hypotheses about interaction terms. All variance inflation factor (VIF) values are found to be far below the recommended threshold of 10, which indicates a multicollinearity problem (Menard, 1995). Our results reveal that the VIFs associated with our variables do not exceed 1.902; hence, we conclude our sample is devoid of multicollinearity. As can be seen in Table 6, Model 1 is the base model with control and moderating variables. Extending the empirical approach used in prior studies (Cao et al., 2009; He & Wong, 2004), we include explorative and exploitative knowledge sharing in all models (Models 1–5). In Model 1, explorative innovation knowledge sharing is positively and significantly associated with the group-affiliated company’s global ROA (Beta = 0.179, p < 0.05), and exploitative innovation knowledge sharing is also positively and significantly associated with the group-affiliated company’s global ROA (Beta = 0.133, p < 0.10). The results for explorative and exploitative innovation knowledge sharing are consistently positive and significant for Models 2–5.

3.2.2.3. SD of ambidextrous knowledge sharing within the internationalized chaebols. SD refers to the combined degree of explorative and exploitative innovation knowledge sharing. Following prior studies (Cao et al., 2009; He & Wong, 2004), we multiply explorative and exploitative innovation knowledge sharing, suggesting that high levels of explorative and exploitative innovation knowledge sharing may complement and augment the output-increase impact of the other. The scales of explorative and exploitative innovation knowledge sharing have been mean-centered to lessen the potential problem of multicollinearity. 3.2.3. Moderating variables 3.2.3.1. Organization size. Following previous research (Flores, Aguilera, Mahdian, & Vaaler, 2013), we measure a multinational group-affiliated company’s size by the national logarithm of the firm’s total assets. 3.2.3.2. Global environmental munificence. Extending previous studies of environmental munificence in which researchers have operationalized environmental munificence with secondary data (Park & Mezias, 2005), such as industry growth rate, sales, price–cost margin, and total employment (Dess & Beard, 1984; Goll & Rasheed, 1997; Keats & Hitt, 1988), we measure global environmental munificence as the average sales growth of firms in the same industry worldwide over 10

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Table 5 Means, standard deviations, and correlationsa,b. Variable

Mean

Std. Dev.

1

2

3

4

5

6

7

8

1. 2. 3. 4. 5. 6. 7. 8. 9.

5.575 4.932 0.448 4.424 4.786 19.658 24.326 0.021 0.014

18.973 0.921 1.237 1.663 1.416 2.293 20.350 0.075 0.039

0.134* 0.197* 0.235* 0.191* 0.168* 0.174* 0.044 0.005

0.087 0.166* 0.088 −0.079 −0.142* 0.011 0.042

0.130* 0.138* −0.025 0.020 −0.005 0.038

0.373* 0.136* 0.180* 0.070 0.032

0.133* 0.191* 0.077 0.036

0.145* 0.042 −0.101

−0.013 0.074

0.465*

a b

GAC's global ROA BD of ambidextrous KS SD of ambidextrous KS Explorative global innovation KS Exploitative global innovation KS Organization size (log) Global environmental munificence GAC R&D intensity GAC advertising intensity

GAC refers to a 'group-affiliated company, and KS refers to 'knowledge sharing'. *p < 0.05; two-tailed significance levels.

Next, consistent with the approach used in prior studies (Cao et al., 2009; He & Wong, 2004), we test models in which just one out of the two dimensions of internationalized chaebols’ ambidextrous knowledge sharing is entered. Only BD of internationalized chaebols’ ambidextrous knowledge sharing is entered in Model 2, while only SD of internationalized chaebols’ ambidextrous knowledge sharing is entered in Model 3. In Model 2 and 3, the dimensions of both BD (Beta = 0.109, p < 0.05) and SD (Beta = 0.250, p < 0.01) are positively and significantly associated with the group-affiliated company’s global ROA. In Model 4, we include the main effects of both BD and SD of ambidextrous knowledge sharing, and the results show that the coefficients of the dimensions of both BD (Beta = 0.198, p < 0.001) and SD (Beta = 0.346, p < 0.001) are positive and highly significant. These results are consistent for both BD and SD in Model 5, suggesting strong support for H1A and H1B. In Model 5, we include all interaction terms. In line with our prediction in H2A, we find that organization size moderates the effect of BD on a group-affiliated company’s global performance. The graph of the BD x Organization Size interaction (Fig. 3A) demonstrates that smaller organizations have advantages whereas larger organizations have disadvantages (Beta = -1.761, p < 0.05), supporting H2A. However, contrary to our prediction in

Fig. 3. A. Moderating effect of firm size on BD of internationalized chaebols’ ambidextrous KS.

H2B, the SD x Organization Size interaction is non-significant although the sign is positive, so we must reject H2B. We interpret these results for H2A and H2B to indicate that larger organizations may accrue benefits not from the relative balance between explorative and exploitative

Table 6 Regression for GAC's global ROAa,b,c. Variables; DV = GAC's global ROA

GAC R&D intensity GAC advertising intensity Organization size (log) Global environmental munificence Explorative innovation KS Exploitative innovation KS

Model 1

Model 3

Model 4

Model 5

Beta

SE

Beta

SE

Beta

SE

Beta

SE

Beta

SE

0.046 0.027 0.119* 0.127† 0.179* 0.133†

(20.214) (39.244) (0.466) (0.063) (0.892) (0.978)

0.047 0.031 0.115* 0.125† 0.175* 0.137†

(20.159) (39.151) (0.465) (0.064) (0.891) (0.978)

0.048 0.038 0.121* 0.120† 0.165* 0.141†

(19.61) (38.091) (0.453) (0.062) (0.866) (0.975)

0.046 0.037 0.110* 0.116† 0.198** 0.165*

(19.306) (37.499) (0.446) (0.061) (0.860) (0.979)

0.039 0.037 0.133* 0.171* 0.227** 0.187*

(19.297) (37.573) (0.544) (0.076) (0.888) (1.045)

0.109*

(1.126)

0.250***

(0.824)

0.198*** 0.346***

(1.204) (0.957)

0.117† 0.123†

(1.279) (0.992)

−1.761* 0.222 −1.154* 0.299* 337 0.536 0.472 0.368 11.432***

(0.753) (0.513) (0.098) (0.086)

Internationalized chaebol's ambidextrous KS BD of internationalized chaebol's ambidextrous KS SD of internationalized chaebol's ambidextrous KS Interactions　 BD x Organization size SD x Organization size BD x Global environmental munificence SD x Global environmental munificence n R2 Adjusted R2 ΔR2 Model F

Model 2

337 0.372 0.335 0.372 5.248***

337 0.390 0.350 0.390 5.868***

337 0.439 0.400 0.439 7.960***

337 0.468 0.421 0.397 9.717***

Firm- and industry-fixed effects are estimated, but not reported here. a Standardized beta coefficients reported, and standard errors and t-statistics corrected by White's heteroskedastic consistent covariance matrix. All tests are twotailed. b GAC refers to a ‘group-affiliated company’, and KS refers to ‘knowledge sharing’. c †p < .10; *p < .05; **p < .01; ***p < .001. 11

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(ROIC), return on sales (ROS), and sales growth rate to evaluate a multinational organization’s financial performance (see Kim, Park, & Prescott, 2003; Tong & Reuer, 2007; among others). As robustness checks, we analyze our research model using these alternative financial performance measures as alternative dependent variables; our results did not qualitatively change. 5. Discussion As discussed in the introduction section, this study is unique in its contributions to five issues concerning organizational ambidexterity. First, ambidexterity has had limited representation in existing literature, and our study seeks to remedy that; specifically, our study deals with ambidextrous knowledge sharing in inter-organizational relationships within very large, complex organizations. Second, this study examines the context of emerging market business groups (i.e., Korean chaebols), which previous studies have overlooked. Third, based on organizational and network learning perspectives, this study conceptually and empirically explores the contingency effects of organizational and global environmental munificence with the interactions between BD and SD. By exploring these issues, our study contributes to the literature by analyzing a group-affiliated company’s dual ambidextrous knowledge sharing within internationalized chaebol and the impact of that knowledge sharing on the group-affiliated company’s global performance, and by developing theoretical insights into ambidexterity in inter-organizational relationships. Fourth, in this study, we try to answer how the dual dimensions of ambidextrous knowledge sharing account for the special requirements of an emerging market business group like a chaebol. For explorative (technological) knowledge sharing, manufacturing-focused chaebols (e.g. Samsung, Hyundai Motor, etc.) generally consist of group-level central R&D hubs to coordinate joint taskforce teams with other peer group-affiliated companies in order to develop next-generation technologies and to open new product markets. We refer to this as an explorative knowledge management system of “hub-and-spokes” which means a series of “spokes” (peer group-affiliated companies) that connect outlying points to a central “hub” (group-level R&D center). In contrast, exploitative (technological) knowledge sharing generally occurs between/among peer group-affiliated companies through simple joint development projects or joint works led by engineers. In other words, unlike explorative knowledge sharing, exploitative knowledge sharing only requires interaction between/among multiple peer groupaffiliated companies. We refer to this as an exploitative knowledge management system of “interactive embeddedness.” Since the distinction between our two types of ambidextrous knowledge sharing are essentially based on the knowledge management distinction between these “hub-and-spokes” and “interactive embeddedness,” we can say identifying these two dimensions allows us to recognize the different levels and directions of knowledge sharing that can occur within a chaebol. Finally, this study embraces a global perspective because it relates to emerging market business groups, which are often overlooked in favor of established markets. Our study focuses on an internationalized chaebol’s ambidextrous knowledge sharing. The internationalized chaebol benefits from dual networks that include a network of fellow group-affiliated companies under a group head office as well as these group-affiliated companies’ international networks including headquarters, regional headquarters, and foreign subsidiaries across the globe, which are the “cradle of transnational knowledge and resource sharing” (Lee, 2016; Lee, Ryu et al., 2014). This paper establishes the potential implications that such extensive networks could have for the emerging market firms’ internationalization and post-entry behavior. As EMNEs expand further geographically, their globally dispersed subsidiaries transfer increasingly diverse knowledge back to headquarters; at the same time, knowledge exchange among peer subsidiaries becomes more active. Knowledge sharing among peer

Fig. 4. A. Moderating effect of global environmental munificence on BD of internationalized chaebols’ ambidextrous KS. B. Moderating effect of global environmental munificence on SD of internationalized chaebols’ ambidextrous KS.

innovation knowledge sharing but from one-sided knowledge sharing strategies, such as preferring explorative innovation knowledge sharing, rather than pursuing an equal balance. As an example, we consider Samsung Electronics’ focus on explorative global innovation knowledge sharing with other multinational manufacturing group-affiliated companies within the Samsung Group. Another possible interpretation is that an organization’s size is not a significantly important factor in the combined synergistic activities of an internationalized chaebol’s ambidextrous knowledge sharing. Fig. 4 supports these claims. In H3A and H3B, we investigate the effects of BD and SD under different global environmental munificence conditions. H3A assumes that the positive effect of BD on group-affiliated company performance will more likely be evident when firms operate in less munificent global environments. Our evaluation of H3A and the related graph of BD x global environmental munificence (Fig. 4A) indicates that BD of internationalized chaebols’ ambidextrous knowledge sharing is more beneficial to firms operating in less munificent global environments (Beta = -1.154, p < 0.05), whereas the combination of the pursuit of high BD and high global environmental munificence is found to be detrimental, supporting H3A. Next, we find support for H3B because the SD x global environmental munificence interaction is positive and significant (Beta = 0.299, p < 0.05). The graph of this interaction term (Fig. 4B) demonstrates that organizations operating in global surroundings with greater munificence will be more efficient in pursuing SD, whereas seeking a high level of SD has a negative effect on group-affiliated company global performance for organizations engaging in low munificence environments. 4.2. Robustness test We also conduct a robustness test on our dependent variable. Prior studies regarding international business have used measures such as a multinational firm’s return on equity (ROE), return on invested capital 12

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subsidiaries helps to develop competencies by expanding the knowledge pool possessed by individual subsidiaries. However, due to differences between countries, the knowledge exchanged among peer subsidiaries has a location-bound nature specific to the particular country where the knowledge-transferring subsidiary is located (Li & Lee, 2015; Rugman & Verbeke, 2001); thus, group-level ambidextrous knowledge sharing is necessary to understand and utilize this knowledge. The headquarters, as a network hub, has to assimilate the diverse inflow of exploratory knowledge transmitted from globally located subsidiaries, transform this knowledge into less location-bounded information, and share it with all subsidiaries so that each subsidiary can effectively exploit it (Li & Lee, 2015). Therefore, ambidextrous knowledge sharing helps EMNEs tap into the knowledge pool of peer subsidiaries located all over the world and be able to exploit the benefits from that knowledge sharing. Another recent, important factor that EMNEs face is increased uncertainty in the global environment due to rapid technological and market changes. Additionally, competition in the global market has intensified, further contributing to high levels of uncertainty that firms are facing. In a world of unprecedented uncertainty, what EMNEs need is strategic flexibility so they can withstand uncertainty and use it as a source of positive opportunity. It is important to remember that in order to achieve superior corporate performance through ambidexterity and strategic flexibility, an organization must engage in strategic ambidextrous knowledge sharing. In addition, EMNEs have to catch up to conventional MNEs and survive while competing in the global market. To achieve both tasks simultaneously, EMNEs should use ambidextrous knowledge sharing as a tool to develop superior capabilities. Based on our research, which makes conceptual, theoretical and empirical contributions to the literature, we have found that the appropriate balance between explorative and exploitative knowledge sharing among group-affiliated companies within an internationalized chaebol (i.e., BD) increases the group-affiliated companies’ global performance by alleviating potential risks that can be caused by overemphasizing one or the other type of knowledge sharing (H1A, H2A, and H3A). Simultaneously, high synergistic levels of explorative and exploitative knowledge sharing among group-affiliated companies within internationalized chaebols (i.e., high level of SD) have been found to increase those group-affiliated companies’ global performance through dissimilar causal processes, which include the augmentation and edging of complementary knowledge and resources between the knowledge sharing mechanisms of explorative and exploitative activities (H1B and H3B). The above conceptual and empirical implications may have significant managerial implications for managers working not only at domestic and multinational firms affiliated with emerging market business groups but also at local and multinational competitors in advanced economies. Managers from both developed and developing markets may learn that balanced and synergistic activities for explorative and exploitative knowledge sharing within their organizations, or in inter-organizational relationships both domestically and globally, are critical means of enhancing organizational performance. According to the results of our study, these managers should encourage their firms to strategically pursue balanced, synergistic activities for both explorative and exploitative knowledge sharing in inter-organizational relationships. In reality, most firms tend to focus on knowledge sharing for exploitative learning that is guaranteed an immediate profit return, so the direct involvement of managers is required to ensure that emphasis is also placed on ambidextrous knowledge sharing. As an example, managers at both headquarters and subsidiaries should design knowledge sharing systems, supervise and support the process of knowledge transfer for ambidextrous knowledge sharing, and provide guidance on ambidextrous knowledge sharing routines and processes. Indeed, the existing case study has shown that in successful chaebol firms in Korea, such as Samsung, LG, and Hyundai Motor, top managers closely supervise knowledge sharing and the integration of explorative

knowledge with exploitative knowledge that enables a balance between explorative and exploitative learning (Lee et al., 2010). In order to gain a competitive advantage and be better equipped for longer survival, managers should focus on the contingency effects of organizational and global environmental munificence and encourage balanced and synergistic activities for explorative and exploitative knowledge sharing within their organizations or in inter-organizational relationships both domestically and globally. 5.1. Limitations and future research Although our study overcomes multiple shortcomings of previous studies, it has limitations that should be considered in future research. First, our findings may not necessarily be generalized effectively across all markets, since this study used a sample of group-affiliated companies of internationalized Korean chaebols, which do not have equivalents in advanced economies. Business groups are ubiquitous in emerging markets, and Korean chaebols can be considered as a potential indicator of other emerging market business groups (Chang & Hong, 2000); thus, our results can be at least somewhat generalized. Nevertheless, there may be heterogeneous and/or homogeneous characteristics shared by internationalized Korean chaebols and other business groups or local firms and multinationals from advanced economies. Future research should include the comparison between internationalized chaebol firms and other countries’ local firms or multinationals. Second, this empirical study is based on cross-sectional data, which cannot examine the years-long evolution of ambidextrous knowledge sharing among group-affiliated companies within the internationalized chaebol. In particular, explorative knowledge sharing within the internationalized chaebol occurs over a longer time span, so analyses of longitudinal data would be better able to show a clearer picture of ambidextrous knowledge sharing within the internationalized chaebol. Thus, future research should include longitudinal data in order to assess this phenomenon. Third, ambidexterity can be achieved through structural ambidexterity, contextual ambidexterity, and temporally and sequentially alternating between organizational structures (Aoki & Wilhelm, 2017; Birkinshaw & Gupta, 2013; Luger, Raisch, & Schimmer, 2018). Recently, Luger et al. (2018) point out that this type of ambidexterity provides insight into organizational solutions to achieve ambidexterity; however, it is a static perspective. Accordingly, Luger et al. (2018) investigate the evolution of firms’ exploration-exploitation allocations and their long-term performance based on dynamic perspectives in order to elucidate how ambidexterity evolves over time and how this evolution affects the firms’ long-term performance. Therefore, future research should be conducted based on this dynamic perspective in terms of balancing between exploration and exploitation as well as balancing between explorative and exploitative knowledge sharing. Fourth, regarding a unit of analysis, we propose that the better a chaebol’s BD and SD, the better that chaebol’s group-affiliated companies will perform; thus, we acknowledge this issue as a limitation of this study since there is a mismatch of units of analysis between independent and dependent variables. Nevertheless, our measures are based on explorative and exploitative innovation knowledge sharing by a focal group-affiliated company with peer group-affiliated companies, so we use the level of a focal firm when we measure knowledge sharing. Doing so may eliminate this mismatch issue of units of analysis between independent and dependent variables. Moreover, previous literature (e.g. Chang & Hong, 2000) also proposes that the more a chaebol engages in resource sharing, the better its group-affiliated companies will perform. Thus, our measures follow a common convention of chaebol studies. Finally, this study deals with globalized organization-level ambidextrous knowledge sharing in the inter-organizational relationships 13

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within complex large business groups. Future research should empirically explore individual-level ambidextrous knowledge sharing in inter-organizational relationships within the business group or outside of the business group. Individual-level exploration and exploitation have largely been ignored, with rare exceptions (Hong, Yu, & Hyun, 2018), but it would be worthwhile to test individuallevel ambidexterity or ambidextrous knowledge sharing in an international context.

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