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Article
How Do Young Firms Manage Product Portfolio Complexity? The Role of Absorptive Capacity and Ambidexterity
Stategic Management Journal
  • Stephanie A. Fernhaber, Butler University
  • Pankaj C. Patel
Document Type
Article
Publication Date
1-1-2012
DOI
http://dx.doi.org/10.1002/smj.1994
Abstract
Building a complex portfolio of products can be beneficial for young firms due to increased sales growth and competitiveness. Yet, the benefits from product portfolio complexity (PPC) are often outweighed by rising costs, leading to an inverted U-shaped relationship between PPC and performance. Recent research has called for an increased understanding of how firms are able to better manage higher levels of PPC. We suggest that absorptive capacity and ambidexterity are vital to enhancing the benefits and mitigating the costs of increasing PPC. Using a sample of 215 young high technology firms, we find support for positive moderating effects of absorptive capacity and ambidexterity on the inverted U-shaped relationship between PPC and firm performance.
Rights

‘This is a peer reviewed version of the following article:

Fernhaber, S. A. and Patel, P. C. (2012), How do young firms manage product portfolio complexity? The role of absorptive capacity and ambidexterity. Strat. Mgmt. J., 33: 1516–1539.,

which has been published in final form at: 10.1002/smj.1994. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving'.

Citation Information
Stephanie A. Fernhaber and Pankaj C. Patel. "How Do Young Firms Manage Product Portfolio Complexity? The Role of Absorptive Capacity and Ambidexterity" Stategic Management Journal Vol. 33 Iss. 13 (2012) p. 1516 - 1539
Available at: http://works.bepress.com/stephanie_fernhaber/16/