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The disruptive power of digitalization has called into question how we think and theorize about innovation management in a digital context. To thrive in a digital world, companies need to increasingly follow the dual imperative of constantly reinventing themselves while simultaneously refining current viability, that is, achieve innovation ambidexterity. Complementing research that has theorized digitalization as context or outcome of such ambidexterity, we study how a firm’s digital orientation (DO), a strategic posture aimed at realizing vital gains from digital technologies, can function as a driver for resolving the tensions of this dual imperative. In addition, we analyze the roles of absorptive capacity (ACAP) and market turbulence as contingency factors for this relationship. In deriving our hypotheses, we rely on the resource-based view (RBV) and extend our theorizing by building on the dynamic capabilities view. Our research model is empirically tested through multi- industry survey data obtained from 1,474 German firms.



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