Abstract: BACKGROUND:In order to achieve sustainable and competitive advantages, enterprises must develop mainstream and new stream innovation simultaneously so as to achieve the short-term performance as well as the long-term competitive advantage. However, the funding and time resources owned by enterprises are often restricted, which make the tensions and competitive demands pervasive in the process of developing the mainstream and new stream innovation. Furthermore, the relationship between tensions and organizational innovation remains controversial and related empirical researches are rare. OBJECTIVE:Based on the paradox theory and ambidexterity innovation theory, we divide organizational innovation into mainstream- and new stream innovation, aiming to discuss the different influences of experiencing tensions on the two different types of organizational innovation. In addition, we aimed to explore the role of leaders’ paradox mindset in the relationship of experiencing tension and mainstream- and new stream innovation. METHODS:Our research uses regression analysis to perform hypothesis testing. The survey data of 226 small and medium-sized enterprises are used to conduct empirical tests on the hypothesis proposed in our research. RESULTS:The results display that resource scarcity is the source of organizational tensions, and leaders’ paradox mindset moderate the effects experiencing tensions on mainstream- and new stream innovation and moderate the indirect effect of resource scarcity through tensions on mainstream- and new stream innovation. CONCLUSIONS:Organizations will encounter a lot of contradictions and competitive demands in the process of developing mainstream- and new stream innovation. Effective leaders must learn to get comfort from their discomfort and effectively manage tensions. This study promotes movement in this direction and contributes to the resolution of the paradox of organizational innovation. We hope that our research fuels additional investigations to uncover approaches to tensions.
