Drivers of Innovation Ambidexterity on Small Medium Enterprises (SMEs) Performance

The development of the broiler poultry industry has experienced a significant increase along with the increasing public demand for meat consumption. However, in 2019, many broiler poultry farmers are forced to close down their businesses because the price of broilers in living conditions continues to be below the Production Cost. Further, broiler poultry farmers also experience obstacles including unpredictable price fluctuations and intense competition. Innovation ambidexterity is the innovation capability in managing exploration and exploitation simultaneously to improve firm performance. Several influential factors in increasing innovation ambidexterity include technological capability, owner-manager characteristic, and environmental dynamism. This study aims to develop a model that describes innovation ambidexterity in broiler poultry farmers to improve firm performance. This study also analyzes the factors that can influence innovation ambidexterity and its effect on firm performance. This research mainly uses quantitative methods for its analysis. The sampling technique uses non-probability sampling with convenience sampling technique. Data collection was conducted by distributing 223 questionnaires to broiler poultry farmers in West Java. The analysis technique uses Partial Least Square - Structural Equation Modeling (PLS-SEM) which includes measurement model analysis and structural model analysis. The results of this study indicate that innovation ambidexterity has a direct influence on firm performance, while the influence of environmental dynamism on firm performance is partly mediated by innovation ambidexterity. In addition, technological capability and owner-manager characteristics have a positive influence on innovation ambidexterity and have an indirect influence on firm performance. In the near future, implications of this study will be discussed in a separate manuscript.