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Establishing a competitive advantage in today's dynamic environment involves optimizing an organization's exploration and exploitation strategy. This paper aims to explore how an open innovation strategy complements the organization's ambidextrous strategy in attaining a competitive advantage. Organizational ambidexterity and dynamic capability theories are also explored to investigate the impact of open innovation on the organization's ambidextrous strategy and competitive advantage – especially inbound and outbound open innovation.

The authors conducted a systematic literature review using Boolean search techniques, which was focused on the research fields of the sub-areas of general management, strategy, innovation, organization studies, information management, entrepreneurship, international business, marketing, and economics, supplemented by the snowball technique.

Organizations that combine their ambidextrous strategy with open innovation attributes achieve a competitive advantage through developing their dynamic capabilities by which organizations change their value proposition. This study also shows that an ambidextrous strategy should no longer be viewed as a structural solution implemented by management, but also as a bottom-up intervention. Additionally, the authors found that the organization's dynamic capabilities establish a feedback loop, which changes the organization's ambidextrous strategy to resolve the efficiency–agility paradox.

Previous research has focused on strategic orientation; however, hardly any research has investigated how the interrelatedness of open innovation, organizational ambidexterity and dynamic capabilities support a competitive advantage. The authors present a conceptual model that inspires new research avenues.

This study aims to contribute to the open innovation (OI) literature by investigating the transitions between three phases in the OI process (i.e. idea generation, idea promotion and idea realization) and how these are moderated by different forms of shared leadership (i.e. transactional, and transformational) as perceived by participants in the OI process.

The authors tested a set of hypotheses using moderated mediation PLS-SEM models on a bootstrapped sample of OI participants (N = 173).

The authors found a direct relationship between idea generation and realization, as well as indirectly through idea promotion. This study implies that the promotion of ideas by participants can be beneficial in inter-organizational OI teams, as promotion of ideas provides a linkage between the generation of ideas and the idea realization phase. However, while shared leadership has been shown to be beneficial in conventional teams, the authors found evidence that this may not be the case in inter-organizational OI teams. Higher levels of shared transformational leadership from colleagues with whom employees do not share the same organizational background may hamper the promotion of ideas.

In contrast to the mainstream view, the authors found significant evidence that transformational shared leadership negatively moderates the direct relationship between idea generation and the promotion of ideas and the indirect relationship between idea generation and realization via idea promotion.