Improvising for Learning: How and When Firm-level HRM Systems Drive Team Exploratory and Exploitative Learning

Firms increasingly rely on teams to balance innovation and efficiency by simultaneously engaging in exploratory and exploitative learning. However, the cross-level mechanisms through which firm-level systems enable such ambidextrous capabilities at the team level remain insufficiently understood. This study develops and tests a multilevel contingency framework that explains how change-oriented human resource management (HRM) systems foster both forms of team learning through team improvisation—a dual-purpose capability that integrates real-time responsiveness with adaptive refinement. Drawing on multisource, time-lagged data from 205 new product development (NPD) teams nested within 75 pharmaceutical firms, we find that team improvisation mediates the cross-level relationship between change-oriented HRM systems and both exploratory and exploitative learning. Furthermore, this mediating effect is contingent upon the nature of intra-team knowledge sharing: tacit knowledge sharing amplifies the relationship between improvisation and exploratory learning, while explicit knowledge sharing enhances its link with exploitative learning. Our findings offer theoretical insight into how HRM systems cascade across organizational levels to shape team capabilities, advancing perspectives that conceptualize ambidexterity as an emergent property of behavioral routines rather than structural design. Situated within a politically and economically constrained environment, this study also underscores the heightened strategic value of HRM systems in enabling adaptability and innovation under institutional adversity.