Developing Innovation Capability of SME through Contextual Ambidexterity

The word "ambidexterity" can be interpreted as the capability of an organization that simultaneously implement innovation activities both in exploratory and exploitative manner. The organization that implement these two types of innovation activity is called ambidextrous organization. The contextual ambidexterity can be achieved through the provision of context that allow employees to implement both activities on exploration and exploitation. The Depok City in West Java was one of the municipalities that see a growing number of small and medium enterprises (SME). The aim of this research paper was to elaborate on how far the SMEs in Depok could adopt the study of contextual ambidexterity. The research results indicated the capability of an organization to innovate was created through the context of organization in the form of performance management and social support. The designs of both performance management and social support from the organization could provide the context that would support the employees to perform innovative acts both in exploitative and exploratory sense.