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The effects of organizational controls on innovation modes: An ambidexterity perspective

Abstract Some critical limitations of prior research on organizational controls stem from the scant theory identifying the coexistence of contradictions and interrelations between differing organizational controls and exploring how the contradictory but interrelated controls affect innovation modes. To address this gap, this research links Hitt’s internal control system framework and the ambidexterity perspective by building on their focus on the interplay and tensions between different organizational controls. Using survey data from 182 Chinese firms in innovation-intensive industries, the results show that besides the independent use of strategic control, both the combined and balance use of strategic and financial controls are important for internal innovation. For firms specializing in cooperative innovation, however, financial control is more effective, and the combined use of strategic and financial controls has negative effect on cooperative innovation. These findings contribute to our understanding of organizational control itself and its connection to the ambidexterity perspective and innovation theory.