Overview of Research on Ambidexterity in Strategic Management

Strategic management deals with an organization’s future. It is a continuous and dynamic process of monitoring the company’s environment and resources, as well as building and implementing an effective strategy aimed at long-term development and increasing the company’s competitiveness. Its main task is to translate assumptions concerning the company’s mission into practical actions, to define the scope of its activity, to establish rules of operation, to effectively allocate resources, and to establish cooperation with the environment (Amason & Ward, 2020). Therefore, special attention is given to the strategic orientation of the company, the formulation and implementation of strategies and a constant search for development prospects, while maintaining flexibility and adaptability of the company and the use of its intellectual capital.

The concept of ambidexterity has relatively often been explored and explained on the basis of strategic management theory, with researchers focusing on different issues. Detailed analyses have been carried out on ambidexterity as a dynamic strategic capacity of the company, or on its role in the process of creating and implementing strategies, which were examined primarily in terms of the outcomes obtained. Moreover, the antecedents for ambidexterity have also been explained on the grounds of strategic management, with research carried out at different levels of analysis. An overview of selected research in this area is presented in Table 1.2.

In the area of strategic management, the research to date on ambidexterity is still fragmented—although it has been conducted on a large scale and in various problem areas. Therefore, there is a need to integrate the studies and to provide a more holistic view, especially in the context of basic strategic choices, which have not yet been analyzed deeply and more comprehensively. This monograph attempts to fill this cognitive gap, as illustrated in Figure 1.4.

A strategy is not composed of better actions, as this is related to operational efficiency; a strategy consists in acting differently, hence it is essentially making choices (Porter, 1996; Grant, 2016). Choices on where and how to compete a make-up strategy. Therefore, the next section of the monograph explains the basic strategic choices related to exploration, exploitation, and ambidexterity as strategies of developing modern enterprises.

Autbor(s)

Problem of strategic management

Level of analysis

Description of research

Main conclusions

Ambidexterity as a company’s strategic/ dynamic capability

O’Reilly and Tushman (2008)

Dynamic

capabilities

Organizational

level,

managerial team level

A conceptual paper

Ambidexterity as a dynamic capability refers to a set of actions (routines) undertaken by senior management that enable a company to identify opportunities and threats and to reconfigure resources (people, business architecture, and other resources). The probability of achieving ambidexterity increases the specific strategic intention that takes into account both exploration and exploitation and allows the formulation of a common vision and values that provide a common identity for both activities. There is also a need for consensus among executives about the organization’s strategy, the way it communicates, and the common incentive scheme. An important element is also business architecture, separately designed for exploration and exploitation (organizational structure, business models, competencies, and culture) and their targeted integration, as well as the abilities of senior management, which tolerates contradictions and is able to solve the emerging tensions. An absence of these activities reduces the likelihood of education and development of the dynamic capacity of ambidexterity

Bochvell and Chermack (2010)

Scenario

planning,

dynamic

capabilities

Organizational

level

A conceptual paper

Scenario planning is a tool to support the ability to be ambidextrous through three capabilities, that is, sensing opportunities and threats, seizing opportunities, and reconfiguring/transforming resources along with continued renewal. Ambidexterity requires a consistent alignment of competencies, structures, and cultures for exploration, as well as exploitation and management staff flexible enough to carry out and develop both activities

Birkinshaw, Zimmermann, and Raisch (2016)

Dynamic

capabilities

Multi-level

analysis

Longitudinal studies, comparison of three case studies (Nestle, GlaxoSmithKline, and BMW)—data were collected through partially structured interviews with respondents at various hierarchical levels, including frontline managers and top management; between 8 and 12 interviews were conducted in each company and secondary sources (reports, press releases) were used

It is not possible to identify a universal set of dynamic capabilities for every company.

In the case of structural separation or contextual ambidexterity, sensing and seizing opportunities are typical first-order capabilities at the operational management level, while reconfiguring is a higher-order capability that can provide balance between them and is implemented by top management, In the case of sequential ambidexterity, on the other hand, sensing and seizing opportunities are capabilities at both the operational and strategic management levels, with reconfiguration as a capability reserved exclusively for top managers

Author(s)

Problem of strategic management

Level of analysis

Description of research

Main conclusions

Vahlne and Jo ns son (2017)

Dynamic

capabilities,

globalization

context

Multi-level analysis (organizational level, business unit level, individual/ employee level)

Two case studies (IKEA and Volvo)—data were collected through structured partial interviews with managers and their colleagues responsible for globalization activities (70 interviews in 2003-2008 with complementary ones in 2010 for IKEA and 12 interviews in 2010-2014 with complementary ones in 2015 for Volvo), also based on document analysis and observations

Ambidexterity as a dynamic capability explains the success of globalization. Being proactive in exploration and improving organizational efficiency through exploitation leads to effective globalization activities, with contextual ambidexterity being important here. IKEA has so far been more successful in its efforts to balance exploration and exploitation, while Volvo has been effective in exploring in relation to globalization, but has not yet achieved effectiveness in exploitation

Strategy formation and implementation

Burgelman

(2002)

Strategy

formation

Organizational

level

A longitudinal study covering the period 1987- 1998 at Intel Corporation— interviews with 63 managers on different levels and document analysis

Co-evolutionary lock-in resulting from a strong focus on induced strategic processes affects the balance between exploration and exploitation. Managers responsible for strategy formation should take into account the simultaneity of autonomous and induced strategic processes and make compromises between them as they compete for limited resources

Andersen and Nielsen (2007)

Strategy

formation

Organizational

level

A survey on a sample of 185 industrial companies operating in various sectors in the USA—the respondents were managers responsible for sales and marketing

The study indicates that the better performance of ambidextrous companies is linked to the efficiency resulting from centralized strategic planning and decentralized innovation behavior stemming from participator)' and autonomous actions. Strategy formation should combine both processes, balancing the need for economic efficiency with organizational adaptability

Kouropalatis, Hughes, and Morgan (2012)

Strategic

ambidexterity

Business unit level

A survey on a sample of 141 high-tech companies from the UK—the respondents were marketing managers

Companies with a high degree of strategic ambidexterity (including both strategic flexibility and involvement in product/market strategies) show a significantly higher level of strategic resources, greater decentralization, and greater effectiveness of the product/ market strategy. Strategic ambidexterity therefore shows significant benefits in terms of efficiency

Autbor(s)

Problem of strategic management

Level of analysis

Description of research

Main conclusions

Strategy formation and implementation

Voss and Voss (2013)

Product/market

choices

Organizational

level

Longitudinal studies conducted in 2003-2005 on a sample of 162 theaters in the United States— surveys among theater managers

An effective strategy for exploiting a product occurs when market activities focus either on exploiting existing markets or on finding new ones, whereas an effective strategy for product exploration occurs when complementary market activities focus on market exploration rather than exploitation. Ambidexterity of the product benefits larger and more mature (older) entities, while the ambidexterity of the market benefits larger companies, both young and old

§anal et al. (2013)

Market

orientation

Organizational

level

A survey on a sample of 558 Turkish companies of different sizes— the respondents were top managers

The results indicate that a proactive market orientation is more closely linked to an exploration strategy that enhances the company’s innovation, while a reactive market orientation is more closely linked to an exploitation strategy that promotes the growth of financial performance. Ambidexterity has a greater impact on a company’s organizational efficiency than a pure exploration or exploitation strategy

Wei, Zhao, and Zhang (2014)

Market

orientation

Organizational

level

A survey on a sample of 203 companies from four Chinese provinces—the respondents were senior managers

The outcomes of ambidexterity in an organization vary depending on the market orientation. In companies with reactive market orientation, exploitation has a positive impact on results, while exploration affects them in the form of an inverted parabola. In companies with proactive market orientation, exploitation has little impact on results while exploration is significant. The interaction between exploration and exploitation (ambidexterity) has a negative impact on the company’s performance in a reactive-oriented company, and a positive one in a proactive- oriented one

O’Cass, Heirati, and Ngo (2014)

Strategy

implementation

Multi-level analysis (organizational level, functional level)

A survey

conducted among 132 high-tech companies operating in Iran—the respondents were both top- and middle-level managers (two respondents for each company, a separate questionnaire for top and functional managers)

The capability of high-tech companies to explore and exploit simultaneously on many organizational levels and in different functional areas is the key to their successful development and to introducing new products. Exploration at the operational level and exploitation of product innovation and marketing allows companies to implement an ambidextrous strategy at the corporate level. The simultaneous implementation of exploration and exploitation strategies leads to the success of the new product by creating benefits for the customers resulting from both differentiation and cost efficiency

Author(s)

Problem of strategic management

Level of analysis

Description of research

Main conclusions

Scott (2014)

Ambidextrous

strategy

Business unit level

A conceptual paper

An ambidextrous strategy on a business level, characterized by competitive aggressiveness, effective defense, and balanced analytics, enables the company to effectively pursue exploration, exploitation, and coordination as key strategic innovation priorities

Kortmann

(2015)

Strategy formation and implementation

Organizational level, individual/ manager level

A survey on a sample of 83 companies operating in the USA and 78 companies operating in India—the respondents were the chief executives involved in strategic processes

The research indicates complex relationships between the formulation of a strategy and its implementation, including complementary and substitution effects. While ambidexterity- oriented managerial decisions are primarily related to the formulation of strategies, innovation and cost orientation are related to the implementation of strategies. While it is important to consciously implement the previous strategic decisions, managers should use feedback loops between strategy formulation and implementation as an opportunity for strategic learning

Antecedents of

ambidextrous

strategies

Jansen, Volberda, and Van Den Bosch (2005)

Environment and structural attributes

Business unit level

A survey on a sample of 363 managers of different organizational units at a large European provider of financial services

Multi-branch companies strive for ambidexterity of their branches and organizational units in order to stand the competition in a dynamic environment. Decentralized units with a dense network of social relationships are able to achieve ambidexterity and carry out exploitation and exploration activities simultaneously

Rosing, Frese, and Bausch (2011)

Strategic

leadership

Individual and group level

A meta-analysis of 76 scientific studies

Ambidextrous leadership consists of three elements: (1) open leadership behavior to stimulate exploration; (2) closed leadership behavior to stimulate exploitation; and (3) time flexibility to change behavior according to the requirements of the situation

Jansen, Simsek, and Cao (2012)

Structural and resource attributes

Multi-level

analysis

Surveys in 285 organizational units located in 88 autonomous Dutch branches of a large European financial service providers— study carried out in 2004-2005 whose respondents were managers at various levels and employees

The structural and resource attributes of the organizational context significantly shape the relationship between the business unit’s ambidexterity and its performance. This relationship is strengthened when an organization is decentralized, has more resources, and is less interdependent. Structural differentiation does not determine the relationship between ambidexterity and a business unit’s performance

Antecedents of

ambidextrous

strategies

Turner and

Lee-Kelley

(2013)

Intellectual

capital

Group/project

level

A case study of a large, international IT service provider from the UK—field research including in-depth individual and group interviews with 16 respondents (managers and project team members) and analysis of the documents provided

Human, social, and organizational capital (as components of intellectual capital) are coexisting and interdependent resources, and in each of them the fields of exploration and exploitation can be defined orthogonally. This means that ambidexterity can be achieved through a multitude of resources and their interactions with each other, but also by the processes of exploration and exploitation. Managerial human capital influences operational choices; social capital sustains communication and group cohesion; and organizational capital creates a framework for work organization, with all of them being mutually reinforcing

Author(s)

Problem of strategic management

Level of analysis

Description of research

Main conclusions

Cingoz and

Akdogan

(2013)

Strategic

flexibility

Organizational

level

A survey on a sample of 69 companies of different sizes and from different industries operating in Turkey— respondents were representatives of top management

Companies that operate in a dynamic environment must be strategically flexible to gain a competitive advantage. The concept of ambidexterity increases strategic flexibility. Strategic flexibility positively influences the company’s innovative activity, both in terms of exploration and exploitation

Wei, Yi, and Guo (2014)

Strategic

flexibility

Organizational

level

A survey on a sample of 213 companies from China—interviews with top managers or department managers

The optimal relative ratio of exploration to exploitation depends on the level of strategic flexibility, that is, flexibility of resources and flexibility of coordination. Organizations with less strategic flexibility should reduce the relative ratio of exploration to exploitation, while companies with more strategic flexibility should increase it

Kriz, Voola, and Yuksel (2014)

Competitive

environment

Organizational

level

Seven deliberately selected case studies of Australian companies—data were collected through partially structured interviews with top managers, analysis of internal documents, and government statistics

The results indicate that as markets become increasingly hyper-competitive, ambidexterity as a dynamic capacity can be adopted as a temporary rather than a permanent source of competitive advantage. At the same time, depending on the industry in the hyper- competitive environment, ambidexterity may differ in terms of its status as a key success factor

Mihalache et al. (2014)

Strategic

leadership

Group level

A survey on a sample of 202 Dutch companies from 2008 to 2009—the respondents were top executives

Ambidexterity is stimulated by a team of top executives through shared leadership expressed in a cooperative style of conflict management and the versatility of decisions made, as well as structural links and decentralization of the decisions made

Cognitive Gap in the Research on Ambidexterity in Strategic Management

Figure 1.4 Cognitive Gap in the Research on Ambidexterity in Strategic Management

 
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