Abstract: Utilizing and balancing exploration and exploitation are critical challenges that are particularly difficult for smaller, nascent enterprises which lack the resources, capabilities, and experience necessary to successfully implement ambidexterity. This article distinguishes between exploration and exploitation in technology and market domains. As the two most basic business functions, technology development and marketing represent distinct dimensions for exploration and exploitation. This perspective builds on research demonstrating the independence of product- and market-oriented learning. Enterprises can achieve strategic ambidexterity by combining exploration and exploitation across or within functional domains. Within the technology domain, technology exploration emphasizes developing new technologies, skills, and product capabilities, and technology exploitation emphasizes increasing returns from existing technology capabilities. Within the market domain, market exploration emphasizes marketing programs that attract new customers, and market exploitation emphasizes marketing programs designed to retain and increase purchases from current customers. The cross-functional combinations exhibit ambidexterity across product and market domains to exploit current technology capabilities with the goal of attracting new customer markets, which corresponds to a market development growth strategy, or to explore new technology capabilities that target current customers, corresponding to a technology development growth strategy. Within functional domains, technology ambidexterity simultaneously explores new technology capabilities and exploits current technology capabilities, whereas market ambidexterity simultaneously explores new customer markets and exploits current customers.On the other hand, disruptive innovation has been confirmed to be an effective strategy for new entrants and startups to compete with incumbents or larger competitors. The diversities in the incentives, knowledge and capabilities of small and large firms lead to heterogeneities in enterprise innovation activities, and innovation activities in micro- and small-sized enterprises have different characteristics than in larger enterprises has been confirmed in prior literature. Additionally, the complexities of an ambidextrous strategy are particularly problematic for smaller business, prompting calls for additional research linking ambidexterity - especially in small enterprises - to innovation activities. However, to our knowledge, how different strategic ambidextrous combinations affect low-end disruptions and new-market disruptions respectively are still poorly understood in the context of technological micro- and small-sized enterprises. To better understand how technology and market influence the disruptive innovation of technological micro- and small-sized enterprises, this paper classifies six strategic ambidextrous combinations of exploration and exploitation in both technology and market domains and develops theoretical arguments that link low-end disruptive innovation and new-market disruptive innovation to these strategic combinations separately. We conceptualize and measure exploration and exploitation at the functional level, and propose that the implementation of both low-end and new-market disruptive innovation depends on whether strategic emphases complement one another, producing a positive interaction, or conflict with one another, creating tensions and trade-offs.In recent years, micro- and small-sized enterprises have developed rapidly in China since the central government puts emphasis on “mass entrepreneurship and innovation”, which makes China reach highest entrepreneurship rates in the world. Using a sample of 364 technological micro- and small-sized enterprises from Foshan City at Guangdong Province, China, this paper tests the hypotheses and the empirical results show that both the combination of technology exploration and market exploitation, and the combination of technology exploitation and market exploitation have positive effects on low-end disruptive innovation of technological micro- and small-sized enterprises. In addition, both the combination of technology exploration and market exploration, and the combination of technology exploitation and market exploration have positive influences on new-market disruptive innovation.Much of the literature to date has focused on how firms can overcome challenges and barriers to implement organizational ambidexterity and simultaneously pursue exploration and exploitation. The so-called “ambidexterity premise” assumes that organizational ambidexterity is necessary for long-term performance and that all firms should endeavor to achieve ambidexterity. Relatively little research has explicitly examined if and when organizational ambidexterity impacts firm innovation, and empirical research linking ambidexterity to disruptive innovation of technological micro- and small-sized enterprises is especially scarce. This article contributes to the research gap by examining how the combinations of exploration and exploitation across or within technology and market domains influence technological micro- and small-sized enterprises’ disruptive innovations. Linking exploitation and exploration in both technology and market domains to enterprises innovation activities represents new levels of analysis for ambidexterity, especially in the context of technological micro- and small-sized enterprises. More importantly, the results offer new insights with respect to the application of strategic ambidextrous combinations of exploration and exploitation within or across technology and market domains in disruptive innovation activities: (1) both the ambidextrous combinations of market exploitation with technology exploration, and market exploitation with technology exploitation have positive effects on low-end disruptive innovation of technological micro- and small-sized enterprises; (2) both the combinations of market exploration with technology exploration, and market exploration with technology exploitation have positive influences on new-market disruptive innovation of technological micro- and small-sized enterprises. In addition, the results indicate that the disruptive innovation models and activities of micro- and small-sized enterprises differ from their larger counterparts, as small businesses are typically more flexible, less formalized, and quicker to make decisions than larger firms.Moreover, the research results suggest general managerial implications and specific recommendations for managers of technological micro- and small-sized enterprises. The results confirm that specific ambidextrous combinations across or within technology and market domains are suitable strategies for micro- and small-sized enterprises to engage in low-end and new-market innovations. Market exploration especially benefits micro- and small-sized enterprises when they pursue new market segments or niche market through disruptive innovation. By contrast, managers of micro- and small-sized firms achieve better low-end disruptive innovation performance by focusing on market exploitation, along with the exploration and exploitation of technology.

Key words: technology exploration, technology exploitation, market exploration, market exploitation, technological micro- and small-sized enterprises, disruptive innovation