Dynamic Balancing of Exploration and Exploitation: The Contingent Benefits of Ambidexterity (original) (raw)
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Exploration vs. Exploitation: An Empirical Test of the Ambidexterity Hypothesis
While exploration and exploitation represent two fundamentally different approaches to organizational learning, recent literature has increasingly indicated the need for firms to achieve a balance between the two. This balanced view is embedded in the concept of ambidextrous organizations. However, there is little direct evidence of the positive effect of ambidexterity on firm performance. This paper seeks to test the ambidexterity hypothesis by examining how exploration and exploitation can jointly influence firm performance in the context of firms’ approach to technological innovation. Based on a sample of 206 manufacturing firms, we find evidence consistent with the ambidexterity hypothesis by showing that (1) the interaction between explorative and exploitative innovation strategies is positively related to sales growth rate, and (2) the relative imbalance between explorative and exploitative innovation strategies is negatively related to sales growth rate. Key words: technological innovation; innovation strategy; ambidextrous organization
Industrial and Corporate Change, 2017
Managerial attention to exploitation and exploration has a strong influence on organizational performance. However, there is hardly any knowledge about whether senior managers need to adjust their distribution of attention to exploitation and exploration in response to major changes in demand patterns in their industry. Drawing on the analysis of a panel data set of 86 firms in the information technology industry exposed to an economic recession and recovery, we find that successfully navigating an economic downturn demands more managerial attention to exploration, while leveraging the subsequent upswing requires more attention to exploitation. As such, this study contributes to the literature by providing a dynamic perspective on ambidexterity: that is, senior managers need to redistribute their attention to exploration and exploitation to effectively meet the changing environmental demands over time.
ResearchGate logo Home More Matthew, is this publication from your current lab? Link this publication to your lab to increase the visibility of your work. Yes No Article Full-text available Learning organizational ambidexterity: A joint-variance synthesis of exploration–exploitation modes on performance June 2018The Learning Organization 6(5) Project: Health-Services Research, Patient-Reported Outcomes, Quality-of-Life Assessment Matthew KerryMatthew KerryJustin A. DeSimone Reads 0 0 new Recommendations 0 0 new Citations 0 0 new Overview Comments Citations References (51) Related research (10+) Abstract Edit Organizational ambidexterity (OA) figures prominently in a variety of organization science phenomena. Introduced as a two-stage model for innovation, theory specifies reciprocal reinforcement between the OA processes of exploration and exploitation. In this study, we argue that previous analyses of OA necessarily neglect this reciprocality in favor of conceptualizations that conform to common statistical techniques. Because reciprocality is theorized, yet absent in current models, existing results represent confounded or biased evidence of the OA’s effect on firm performance. Subsequently, we propose joint-variance (JV) as a soluble estimator of exploration-exploitation reciprocality. An updated systematic literature synthesis yielded K=53 studies (56 independent samples, N = 11,743) for further testing. After observing a significantly stronger relationship between exploration and exploitation than either’s standalone relationship with performance, three primary findings are reported in support of JV’s index of reciprocality. First, JV reduced negative confounding from past operational inconsistencies of exploration-exploitation, explaining 45% of between-study variance. Second, JV quantified the positive confounding in current meta-evidence from doublecounting performance in separate estimates of exploration (53%) and exploitation (55%). Third, JV’s substantive application to hypothesis testing supported theoretical predictions. We discuss practical consideration for eR-eT reciprocality, as well as theoretical contributions for cohering the OA empirical literature. Full-texts (1) Content uploaded by Matthew Kerry Author content (AoM)_Kerry & DeSimone (2018) JV of Explor-Exploit for OrgAmbidex on Performance.pdf 1.36 MB See full-text © 2008-2018 ResearchGate GmbH. All rights reserved.News · About us · Careers · Help Center · Developers · Privacy · Terms · Copyright · Imprint | Advertising · RecruitingApp Store
Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance
Organization Science, 2009
O rganizational ambidexterity has emerged as a new research paradigm in organization theory, yet several issues fundamental to this debate remain controversial. We explore four central tensions here: Should organizations achieve ambidexterity through differentiation or through integration? Does ambidexterity occur at the individual or organizational level? Must organizations take a static or dynamic perspective on ambidexterity? Finally, can ambidexterity arise internally, or do firms have to externalize some processes? We provide an overview of the seven articles included in this special issue and suggest several avenues for future research.
Unpacking Organizational Ambidexterity: Dimensions, Contingencies, and Synergistic Effects
Organization Science, 2009
Significant ambiguity remains in the literature regarding the conceptualization of organizational ambidexterity. We unpack this construct into one with two dimensions we term the Balance Dimension of Ambidexterity (BD) and the Combined Dimension of Ambidexterity (CD). BD corresponds to a firm's orientation to maintain a close relative balance between exploratory and exploitative activities, while CD corresponds to their combined magnitude. We reason that these dimensions are conceptually distinct, and rely on different causal mechanisms to enhance firm performance. We find that over and above their independent effects, concurrent high levels of BD and CD yield synergistic benefits. We also find that BD is more beneficial to resource constrained firms, while CD is more beneficial to firms having greater access to internal and / or external sources of resources. These results indicate that managers in resource constrained contexts may benefit from a focus on managing tradeoffs between exploration and exploitation demands, but for firms that have access to sufficient resources, the simultaneous pursuit of exploration and exploitation is both possible and desirable.
Banking on Ambidexterity: A Longitudinal Study of Ambidexterity, Volatility and Performance
Handbook of Research on Strategy Process, 2010
While some argue that organizations should concentrate on only one direction in order to avoid risking mediocrity in their exploration and exploitation activities, recent literature has indicated that ambidexterity can positively affect organizational performance. The scant respondent-dependent and cross-sectional studies advanced in support of the relationship between organizational ambidexterity and performance render inconclusive the actual value of ambidexterity. Further uncertainty stems from the lack of knowledge of the antecedents of ambidexterity. In this paper, we address both the theoretical and the empirical uncertainties surrounding ambidexterity. We provide a theoretical framework that links volatility in organizational engagement in exploration and exploitation, ambidexterity and firm performance. We argue that such volatility hampers the learning required for the attainment of ambidexterity, rendering the organization unable to reap the benefits of simultaneously executing exploration and exploitation. We further argue that ambidexterity in turn mediates the relationship between volatility and firm performance. A longitudinal analysis of 467 bankyear observations collected from the Norwegian banking industry over the period 1995 to 2003 provides strong empirical support for our theoretical model.
Disentangling the antecedents of ambidexterity: Exploration and exploitation
Research Policy, 2018
We view ambidexterity as a paradox whereby its components, exploration and exploitation, generate persistent and conflicting demands on an organization. Drawing on the attention based view of the firm (ABV), we examine three antecedents of organizational ambidexterity that reflect ABV's three principles − the principle of focus of attention; the principle of situated attention; and the principle of structural distribution of attention. Specifically, we examine the influence of top management team (TMT) composition, whether or not the firm has a clear written vision, and the extent to which organizational attention is focused on investments in R&D, and continuous improvement. We empirically validate our model on a sample of 422 small and medium-sized enterprises in the UK and find that ambidexterity is supported by a blend of integration and differentiation approaches.
Strategic Management Journal, 2013
Prior research on ambidexterity has limited its concern to balancing exploration and exploitation via particular modes of operation. Acknowledging the interplay of tendencies to explore versus exploit via the internal organization, alliance, and acquisition modes, we claim that balancing these tendencies within each mode undermines firm performance because of conflicting routines, negative transfer, and limited specialization. Nevertheless, by exploring in one mode and exploiting in another, i.e., balancing across modes, a firm can avoid some of these impediments.
Managing Organizational Ambidexterity
2023
We define organizational ambidexterity as a high order dynamic capability governing the continuous enhancement of the interaction between exploration and exploitation. Managing this interaction implies resolving the firm’s permanent struggle to overcome perceived barriers in realising the right resource configuration between exploration and exploitation. Since organizations learn to manage ambidexterity through iteration and experience, fostering path dependencies, we expect that the type of capabilities deployed to overcome these barriers will be contingent on the strategic orientation of the firm. Thus ambidexterity can be seen as a theory of adaptability and innovativeness.