Scholars have argued that the exploitation-exploration interaction provides a source of competi-tive advantage beyond that provided by each individually. However, we know little about the mutual effects of exploitation and exploration on either incremental or radical innovation per-formance. To address this gap, we examine data from 171 manufacturing firms. We find incre-mental innovation performance is highest when exploitation interacts with an intermediary level of exploration. Radical innovation performance, however, is solely driven by exploration. A coupling with exploitation is not effective. We contribute to the extant literature, first, by disen-tangling the interaction effects of exploitation and exploration on radical and incremental inno-vation performance, respectively. Second, we extend extant literature that agrees that main-taining an appropriate balance of exploitation and exploration is critical for innovation perfor-mance and that has conceptualized this balance as symmetrical presence and magnitude of ex-ploitation and exploration. In particular, we provide evidence in support of an asymmetric rela-tionship.

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Purpose Retailers often challenge manufacturers through aggressive store brand policies and severe listing constraints. This study investigates manufacturer innovativeness as a managerial lever to shift the power balance between manufacturers and retailers. Methodology/Approach Using data from 277 senior managers of Swiss and German consumer goods manufacturers and analysing these data with structural equation modelling, the authors test hypotheses about the impact of manufacturer innovativeness on manufacturer-retailer relationship characteristics (i.e., retailer dependency, store brand aggressiveness, and listing constraints). Findings The study demonstrates that manufacturer innovativeness enhances retailer dependency, which in turn positively affects overall manufacturer performance. This relationship can be explained further: by increasing retailer dependency, manufacturers suppress retailers' store brand aggressiveness and attenuate retailers' listing constraints. Store brand aggressiveness affects overall manufacturer performance through listing constraints. Research Implications Identifying levers such as innovativeness that assist manufacturers in fostering their power over retailers provides a new mode for understanding how manufacturers can influence the balance of power between manufacturers and retailers. The study provides support for the 3 approach/inhibition theory of power on the inter-organizational level. Organizations with increased power are assumed to have approach-related tendencies and act in goal-consistent manner, whereas organizations with reduced power are assumed to develop the tendency to pursue inhibition-related actions, e.g., attending to threats. Furthermore, this study identifies channel relationship characteristics such as retailer dependency as a mediating path between manufacturer innovativeness and performance. Practical Implications Managers need to strengthen the firm's innovative capacity to enhance the performance of their companies. By developing the capability to develop radical innovations, manufacturers are able to enhance their performance not only directly but also indirectly by strengthening the manufacturer's position with regard to retailers. This study underscores the relevance of innovativeness for strengthening the manufacturer's position in its relationship with retailers that even avoids problems with aggressive store brands and constrained listing conditions. Originality/Value/Contribution This study proposes manufacturer innovativeness as a managerial lever to shift the power balance between manufacturers and retailers.

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