The overarching goal of this qualitative review study is not only to review the relevant literature, but also to organize, structure and integrate findings in order to gain a better understanding for what ambidexterity really is and ultimately to give managerial guidance. The following three research questions will be particularly addressed throughout the study:
What is the current state of the art of the ambidexterity concept?
What are the underlying problems that result in stagnation in research progress in this field?
How can managers learn from the ambidexterity research?
The study is divided in three main parts. Part I, Praeludium, gives a basic understanding for the importance of this topic (chapter 1), illustrates the general underlying concepts, and shows a short historical retrospect of the research field’s development (chapter 3). In part II, A comprehensive overview of the current ambidexterity research field, the relevant literature is reviewed and the field’s structure analyzed (chapter 4). Further, the tension of the exploration-exploitation integration will be discussed (chapter 5) and an extensive model that interconnects the most relevant influencing and moderating factors on ambidexterity and firm performance will be developed (Chapter 6).
Based on these executions, dysfunctional underlying concepts and deficits of the literature field will be outlined in chapter 7. Hereafter, in the final part III, Implications of the thesis, at first practical implications for managers (chapter 8) and implications for science (chapter 9) that prevail from the thesis, are given. At the end, limitations as well as avenues for future research (chapter 10) are outlined. These three parts are constitutive and can be logically connected as seen in figure 1.
CONTENT
FIGURES TABLES
ABBREVIATIONS
PART I - PRAELUDIUM. WHY IS THE RESEARCH OBJECTIVE RELEVANT AND WHAT ARE THE UNDERLYING CONCEPTS OF THE FIELD?
1.Relevance of the Research Objective-Organizational Pursuit of Long-Term Success
2.Assertion of the Research Objectives and Outline of the Thesis Structure
2.1.Research Objectives
2.2 Outline of the Thesis
3.The Underlying Concepts and a Historical Approach
3.1 Development of a First Understanding for Ambidexterity
3.1.1 Structural Ambidexterity
3.1.2 Contextual Ambidexterity
3.2. Ambidexterity and Firm Performance
PART II – A COMPREHENSIVE OVERVIEW OF THE CURRENT AMBIDEXTERITY RESEARCH FIELD. WHAT REALLY IS AMBIDEXTERITY?
4.Topology of the Relevant Literature
4.1.Analytical Framework
4.1.1.Paper Selection
4.1.2.Pattern of the Scientific Field
4.2.Definition Dissention
4.3.Multiple Perspectives of Ambidexterity Research
4.4.Different Level Approach of Ambidexterity
5.Tensions in the Integration of Ambidexterity
5.1.Introducing Exploration and Exploitation - Components of Ambidexterity
5.2.Challenge of Achieving a Balance
5.3.Dangers of a Disequilibrium
6.Influencing Factors of Ambidexterity - Painting a Big Picture
6.1.Resource Related Factors
6.1.1.Knowledge
6.1.2.Other Resources
6.2.Contextual Factors
6.3.Structural Factors
6.3.1.Corporate Attributes
6.3.2.Organizational Characteristics
6.4.Environmental Factors
6.5.Interpretation
7.Deficits of the Ambidexterity Research Field
7.1.Missing Definition Unity
7.1.1.Lack of Ambidexterity Definition Unity
7.1.2.Lack of Exploration and Exploitation Definition Unity
7.2.Ambidexterity is Typically Seen as an Organizational Approach
7.3.Structural and Contextual Ambidexterity are Treated Separately
7.4.Ambidexterity is Mostly Seen as a Static Model
7.5.Literature Field Lacks an International Dimension of Research
7.6.Defining Ambidexterity - Towards a Unified Understanding
PART III - IMPLICATIONS OF THE THESIS. HOW CAN THIS KNOWLEDGE BE EMPLOYED?
8.Managerial Implications
9.Scientific Implications
10.Limitations and Avenues for Future Research
BIBLIOGRAPHY
APPENDIX
LIST OF FIGURES
Figure 1: Outline of the Thesis
Figure 2: Punctuated Equilibrium Model and Vacillation
Figure 3: Structural Ambidexterity: Spatial Separation vs. Parallel Structures
Figure 4: Dimensions of Business Contexts
Figure 5: Number of Studies about Ambidexterity over Time
Figure 6: Levels of Research Contemplation
Figure 7: Exploration-Exploitation Integration Tension
Figure 8: Influencing Factors in an Organization's Micro- and Macro Environment
Figure 9: Influencing and Moderating Factors - The Big Picture
Figure 10: Resource Related Factors
Figure 11 Absorptive Capacity, EKA, EKT and Tacit Knowledge
Figure 12: Contextual Factors
Figure 13: Structural Factors
Figure 14: Environmental Factors
Figure 15: Orthogonal vs. Continuum View
Figure 16: Punctuated Equilibrium & Ambidexterity Within the Same Organization
LIST OF TABLES
Table 1: Various Ambidexterity Definitions
Table 2: Ambidexterity Lenses
Table 3: Exploration vs. Exploitation
Table 4: Definition Diversity of Exploration and Exploitation
LIST OF ABBREVIATIONS
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PART I - PRAELUDIUM. WHY IS THE RESEARCH OBJECTIVE RELEVANT AND WHAT ARE THE UNDERLYING CONCEPTS OF THE FIELD?
1 Relevance of the Research Objective- Organizational Pursuit of Long-Term Success
“ It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. “ (Charles Darwin)
In twentieth century business understanding the dissolution of a company is widely associated with business failure, which is seen as the result of mismanagement, poor leader- ship, adaptive failure or competitive mistakes (Stubbart and Knight, 2006). However, an aver- age survival rate of four to ten years for businesses has been documented, making failure a common phenomenon in business life across industries (Stubbart and Knight, 2006, O'Reilly III and Tushman, 2011). Polaroid is a popular example of a business failure. In the 1970s and 1980s Polaroid became highly successful with the technology of instant cameras, but went bankrupt in 2001. Tripsas and Gavetti (2000) attributed Polaroid’s failure to the inability to enter new markets. On the other hand, companies like IBM, founded in the year of 1896 as a mechanical office equipment supplier, still exist and flourish. Apple Computers, which started out developing and marketing personal computers in 1976, is today one of the leading firms in the cellphone and tablet market and was nominated by Forbes business magazine as the most valuable brand of 2013 (Badenhausen, 2013). Both companies have demonstrated the ability to adapt to and compete in new markets.
A question arising from these examples is why some organizations succeed while oth- ers fail. This can be investigated with the help of various scientific concepts. The field, known as organizational ecology, has successfully linked models of population ecology to the study of organizational survival (e.g. Amburgey and Rao, 1996). Organizational ecology utilizes inter alia biological evolutionary theory, which proposes variation and adaption to be key el- ements for survival. In a consistently changing environment only the best-adapted species will overcome environmental challenges over time. However, the theory addresses a slowly and gradually changing environment, where adaption and alignment occur over a long period. Under conditions of periodic discontinuities species would not have sufficient time to adapt gradually. Hence, those with the abilities to exploit new environments survive (Tushman and O'Reilly III, 1996).
In the modern business world, which is characterized by rapid technological change (e.g. Taylor and Helfat, 2009) and fast turnover of knowledge (e.g. Schreyögg and Sydow, 2010), businesses are confronted with the need to constantly manage their existing product portfolio while simultaneously remaining vigilant to ideas, methods and opportunities in order to satisfy future market demands (e.g. March, 1991, Raisch et al., 2009, Boumgarden et al., 2012). A business’s willingness to innovate fosters the organizational ability to use knowledge management processes for identifying and utilizing concepts to create new prod- ucts or services (Hurley and Hult, 1998, Subramaniam and Youndt, 2005). For instance, in the late 1980s Polaroid misinterpreted digital imaging simply as a new technology and not as a shift of the market (Tripsas and Gavetti, 2000). Therefore, Polaroid kept investing in outdated technology and was soon overtaken by their competitors, who adapted to the new market structures by developing innovative ideas. With a continuous stream of innovation, firms can realize competitive advantages (Rubera and Kirca, 2012), which enable them to prosper in dynamically changing environments.
However, the true challenge for companies is not to constantly innovate, but to man- age a balance of the two antagonistic patterns of refining a firm’s existing business model while simultaneously establishing new products and services through innovation (e.g. March, 1991, Kyriakopoulos and Moorman, 2004, Gupta et al., 2006). Consequently, the ability to meet these challenges, commonly denoted as ambidexterity or organizational ambidexterity1, has received great attention from management and organizational scholars (Raisch et al., 2009, Cao et al., 2009, Jansen et al., 2012). Research has found a positive relationship be- tween ambidexterity and firm performance and therefore long-term success (He and Wong, 2004, Birkinshaw and Gibson, 2004, Jansen et al., 2006, Junni et al., 2013). Organization Science recently published a special issue concerning this topic (4/2009) and O’Reilly III & Tushman (2004) even stated:
“ The failure to achieve breakthrough innovations while also making steady improve ments to an existing business is so commonplace - and so fascinating - that it has become a battleground of management thought ” (O'Reilly III and Tushman, 2004, p.74).
Apart from managerial insights, this thesis also addresses a number of scientific inter- ests. The ambidexterity literature field is fragmented, inconsistent and lacks a universally ac- cepted understanding for the basic constructs. Ambidexterity can be investigated on several levels of analysis or can be approached from different perspectives, making existing studies hard to compare and relate to each other. Scientific progress is inert and suffers from its ob- scurity.
Although an extensive amount of literature is published, relatively scant attention was given to uncovering how organizations achieve ambidexterity (Gupta et al., 2006, Jansen et al., 2009). In order for managers to be able to draw knowledge from the ambidexterity re- search field and thereby make the scientific field generally more significant, managers need explicit guidance on how to implement business practices in their management strategic. This thesis will give an overarching overview of the current literature and its most significant sci- entific and management related findings. It will compile and highlight the emerged knowledge from past research in such way, that information is easily feasibly and quickly accessible for readers. Thus, it fosters the science field’s overall applicability for practitioners. Further, a model will be developed that highlights influencing and moderating factors on am- bidexterity and firm performance and explains for each factor its significance and the mana- gerial prospects on how to implement or adjust these components in an performance enhanc- ing way. Concurrently, this model can be seen as an approach to solve the obscurity of the scientific field. It thereby helps researchers to gain an overview of scientific findings and managers to be more sensitive for key coherences of the ambidexterity construct.
2 Assertion of the Research Objectives and Outline of the Thesis Structure
This Chapter will outline the structure of this bachelor thesis. First the general underlying research questions, which are to be answered in the course of the study, are stated. Hereafter the thesis’s structure will be displayed.
2.1 Research Objectives
The overarching goal of this qualitative review study is not only to review the relevant literature, but also to organize, structure and integrate findings in order to gain a better understanding for what ambidexterity really is and ultimately to give managerial guidance.
The following three research questions will be particularly addressed throughout the study:
- What is the current state of the art of the ambidexterity concept?
- What are the underlying problems that result in stagnation in research progress in this field?
- How can managers learn from the ambidexterity research?
2.2 Outline of the Thesis
The study is divided in three main parts. Part I, Praeludium, gives a basic understanding for the importance of this topic (chapter 1), illustrates the general underlying concepts, and shows a short historical retrospect of the research field’s development (chapter 3). In part II, A comprehensive overview of the current ambidexterity research field, the relevant literature is reviewed and the field’s structure analyzed (chapter 4). Further, the tension of the explora- tion-exploitation integration will be discussed (chapter 5) and an extensive model that inter- connects the most relevant influencing and moderating factors on ambidexterity and firm per- formance will be developed (Chapter 6). Based on these executions, dysfunctional underlying concepts and deficits of the literature field will be outlined in chapter 7. Hereafter, in the final part III, Implications of the thesis, at first practical implications for managers (chapter 8) and implications for science (chapter 9) that prevail from the thesis, are given. At the end, limita- tions as well as avenues for future research (chapter 10) are outlined. These three parts are constitutive and can be logically connected as seen in figure 1.
illustration not visible in this excerpt
Figure 1: Outline of the Thesis
(Source: Complied by the author)
3 The Underlying Concepts and a Historical Approach
3.1 Development of a First Understanding for Ambidexterity
The term ambidexterity can be understood in a wide variety of scientific coherences. In a medical neuroscience context ambidexterity refers to “ an individual ’ s ability to use both hands with equal ease ” (Rothaermel and Alexandre, 2009, p.759). Obviously ambidextrous individuals have physical advantages, however recent studies show that this gift possibly comes with lower cognitive capabilities (Isaacs et al., 2006). In the literal sense, an ambidex- trous character is able to perform contradictory actions for the purpose of misleading others and making it difficult to perceive his or her true intensions. In law practice, an ambidextrous lawyer is one who does not represent a client with his or her full spectrum of abilities due to materiel or reputational conflicts that affect the lawyer’s personal or professional interests (Rose, 2000). Although ambidextrous individuals are able to accomplish objectives that their single-sided opponents cannot, they face trade-off situations, which can lead to uncertainty or increased coordination efforts.
In a managerial application, ambidexterity was first used in the year of 1976 by Dun- can (1976) to describe an organization’s demand for dual structures in trade-off situations (Duncan, 1976). He stated that companies are required to establish dual, ambidextrous struc- tures in order to prevail not only in current, but also in future markets. March (1991) analyzed bilateral organizational tensions from an organizational learning perspective and coined both terms exploration and exploitation. Maintaining an appropriate balance between exploitation of the organization’s unique capabilities and exploration of new products or services is a pri- mary factor in system survival and therefore a major management task, as both elements compete for the same, scarce resources (March, 1991). Together with Levinthal in 1993 they proposed: “ The basic problem confronting an organization is to engage in sufficient exploita- tion to ensure its current viability and, at the same time, to devote enough energy to explora- tion to ensure its future viability ” (Levinthal and March, 1993, p. 105). Three years later, in 1996, Tushman and O’Reilly (1996) combined these ideas in their seminal work Ambidex- trous Organizations: Managing Evolutionary and Revolutionary Change and proposed that organizations need to simultaneously pursue exploration and exploitation to be ambidextrous. This statement has led to a variety of studies that empirically or theoretically investigate how exploration and exploitation can be linked for achieving an ambidextrous state, whether and how ambidexterity ultimately leads to enhanced firm performance and which factors influence and moderate ambidexterity (e.g. He and Wong, 2004, Gibson and Birkinshaw, 2004, Jansen et al., 2006, Gupta et al., 2006, Raisch et al., 2009, Andriopoulos and Lewis, 2009, Uotila et al., 2009, Fang et al., 2010, Jansen et al., 2012, Boumgarden et al., 2012). Despite finding scientifically relevant insights for the research, this proliferation of interest has also blurred some of the initial clarity about the concept.
The punctuated equilibrium model, for instance, also utilizes the exploration- exploitation construct to pronounce a possible solution for the above-mentioned organization- al trade-off situation. In this model the achievement of refining a firm’s existing business while also innovating new products and services is accomplished through temporal cycling between long periods of exploitation (equilibrium periods) and short impulses of exploitation (revolutionary periods) (see figure 2). Revolutionary periods constitute the basis for later equilibrium periods (Romanelli and Tushman, 1994, Gupta et al., 2006). In figure 2, the black dots represent an organization’s exploration-exploitation status at time !. For example, at time !! this fictional organization would exclusively pursue exploration, whereas at time !! it would pursue exploitation. A similar approach to ultimately combine exploration and exploi- tation tasks is organizational vacillation. Unlike the punctuated equilibrium model, organiza- tional vacillation does not suggest a strict temporal separation of exploration and exploitation periods, it rather distinguishes exploration and exploitation orientation of the organization (Brown and Eisenhardt, 1997, Boumgarden et al., 2012). Accordingly, in figure 2, a fictional organization would be in a state of exploration orientation over period !"!.
illustration not visible in this excerpt
Figure 2: Punctuated Equilibrium Model and Vacillation (Source: Compiled by the author)
Although both the punctuated equilibrium and the organizational vacillation model are based on similar underlying concepts, they can be classified as entirely distinct analytical frameworks. Unlike the ambidexterity construct with its simultaneous focus on exploration and exploitation activities, both the punctuated equilibrium model and the vacillation model, utilize temporal separation between exploration and exploitation activities. Temporal separation may be a suitable solution to achieve a long-term balance, however, the prospects of success of the concept are highly dependent on the speed of market fluctuations. In case the organization’s environment changes too rapidly, since switching between orientations requires a certain amount of assimilation time, an organization is usually not capable of adequately altering between both periods (O'Reilly and Tushman, 2008).
Ambidexterity is more than the simple presence of exploration and exploitation activi- ties within an organization, rather, exploration and exploitation should be treated as two in- separable faces of organizational learning (March, 1991). Therefore, following the definitions of Tushman and O’Reilly (1996, p. 24), as well as Gibson and Birkinshaw (2004, p. 209), this thesis will be based on the assumption that ambidexterity entails the simultaneous implemen- tation of explorative and exploitative operations. However, managing two inconsistent and independent strategies that compete for the same, scarce resources, is a much more complex and challenging managerial task than managing one consistent strategy after the other (Gupta et al., 2006, Raisch and Birkinshaw, 2008). Consequently, two main approaches in literature that address this managerial act of balance, have been established: Structural ambidexterity, which allows organizations to implement exploration and exploitation in spatially separated organizational units and contextual ambidexterity, which proposes the pursuit of exploration and exploitation activities within the same unit (chapter 3.1.1 and 3.1.2).
3.1.1 Structural Ambidexterity
In the literary field, authors usually refer to ambidexterity in structural terms (Birkinshaw and Gibson, 2004, also see chapter 4). Organizations that pursue structural am- bidexterity (or “architectural ambidexterity ” (Andriopoulos and Lewis, 2009, e.g. p. 696)) address the trade-off in establishing dual structures, in which certain business units focus on the execution of exploration while others focus on the execution of exploitation tasks concur- rently (Duncan, 1976, Birkinshaw and Gibson, 2004, Raisch and Birkinshaw, 2008). Accord- ing to the concept of structural ambidexterity, there are two different approaches to accom- plish a business unit separation: Spatial separation and parallel structures.
illustration not visible in this excerpt
Figure 3: Structural Ambidexterity: Spatial Separation vs. Parallel Structures (Source: Compiled by the author)
In the spatial separation model (see figure 3), units are spatially divided into explora- tion and exploitation tasks by either location or function. The advantage of this concept is that every unit can be configured according to its specific requirements (Raisch and Birkinshaw, 2008). Hence, Benner and Tushman (2003) distinguish between exploratory and exploitation units as follows: “ While the exploratory units are small and decentralized, with loose cultures and processes, the exploitation units are larger and more centralized, with tight cultures and processes “ (Benner and Tushman, 2003, p. 247). Although these “ loosely coupled ” units (Benner and Tushman, 2003, p. 247) work entirely independently, they are integrated via a mutual strategic objective, shared assets and a common set of values (Tushman and O'Reilly III, 1996, Smith and Tushman, 2005, O'Reilly and Tushman, 2008). Moreover, within subu- nits (See Fig 3, subunits A&B / C&D) organizational structures, business cultures or opera- tional procedures are consistent.
In contrast, the parallel structure model provides a slightly different approach. De- pending on the requirements of a specific job, the top management team (TMT) is able to switch between structures (See Figure 3). Temporary forms of organization, such as projects and teams, can be utilized and formed within one unit, pursuing an alternate structure from the remaining part of the organization (McDonough III and Leifer, 1983, Raisch and Birkinshaw, 2008). Therefore, within a single business unit, competing demands can be ad- dressed temporarily (McDonough III and Leifer, 1983, Raisch and Birkinshaw, 2008). Alt- hough the parallel structure model can lead to an effective organizational architecture to pro- vide a balanced situation of the exploration-exploitation tension, the spatial separation model dominates research.
Regardless of the implemented model, structural ambidexterity inherently creates ma- jor challenges for the TMT. For one, managers need to transmit new, progressive impulses to exploration units, while concurrently advising exploitation units based on past experiences (Gavetti and Levinthal, 2000). Managers of a structural orientated organization need “ to be consistently inconsistent as they steer a balance between the need to be small and large, cen- tralized and decentralized, and focused both on the short term and long term, simultaneous- ly ” (Benner and Tushman, 2003, p. 248). Hence , the critical task of structurally ambidextrous organizations is not the simple structural separation of exploration and exploitation business units, but the managerial process of integrating these subunits in a value-enhancing way (O'Reilly and Tushman, 2008).
3.1.2 Contextual Ambidexterity
Another approach to solve the exploration-exploitation tension was introduced in 2004 by Gibson and Birkinshaw. Instead of structural means on the organizational level, Gibson and Birkinshaw proposed that tensions could be resolved on the individual level. They de- fined contextual ambidexterity as “ the behavioral capacity to simultaneously demonstrate alignment and adaptability across an entire business unit ” (Birkinshaw and Gibson, 2004, p. 209). Hence, in the contextual ambidexterity model, social means (such as socialization, hu- man resource, and team-building practices) are much more prominent than in the structural ambidexterity model. Leaders are expected to realize a supportive organization context, which enables individuals to independently recognize possibilities to better execute explora- tion and exploitation tasks simultaneously (Birkinshaw and Gibson, 2004, Raisch and Birkinshaw, 2008). Organization context is broadly referred to as a business unit-shaping number of attributes (Gibson and Birkinshaw, 2004). Ghoshal and Bartlett (1994) identified discipline, stretch, support and trust as fundamentally influential attributes, which can be re- inforced by a variety of management procedures. Discipline is defined as the business mem- bers’ voluntary effort to satisfy expectations. The attribute Stretch can be classified as the consistent ambition to achieve higher goals or standards. Support induces business members to establish a working environment characterized by assistance, tolerance and sense of com- munity. Lastly, trust is a contextual attribute, which gives members the confidence to rely on each other’s merits (Ghoshal and Bartlett, 1994, Gibson and Birkinshaw, 2004). According to Gibson and Birkinshaw (2004), these attributes can be combined to two dimensions of organ- izational context: Performance management (combination of stretch and discipline) and so- cial support (combination of support and trust) (see figure 4).
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Figure 4: Dimensions of Business Contexts
(Source: Adapted from Gibson & Birkinshaw (2004) p.51)
Following their study, performance management practices foster business members to strive to create high quality results, whereas social support management procedures provide people with the confidence and security to pursue their tasks. Both dimensions are contermi- nous and should therefore be mutually reinforced by the TMT. As seen in figure 4, a high performance context consists of a simultaneously high composition of social support and per- formance management - a characterization of a truly ambidextrous organization. However, if one dimension is neglected, organizational context will create not only a less profitable envi- ronment, but also a detrimental environment in which an ambidextrous strategy cannot suc- ceed. For instance, in a country club context social support is overemphasized. Therefore, the organizational environment will comfort employees with collegial community, but it will not stimulate members to achieve their maximal potential. Conversely, a burnout context com- monly overemphasizes performance management. Although, a burnout context might tempo- rarily lead to a high performance outcome, it will ultimately increase the employee turnover rate, making contextual ambidexterity difficult to achieve (Birkinshaw and Gibson, 2004). Although the organizational context does not dictate a certain structural outcome, it highly influences the self-driven engagement in the simultaneous pursuit of exploration-orientated and exploitation-orientated actions by the business members and therefore positively influ- ences performance outcomes (Gibson and Birkinshaw, 2004).
In Adler, Goldoftas and Lavine’s (1999) case study: Flexibility Versus Efficiency? A Case Study of Model Changeovers in the Toyota Production System the authors give a com- prehensive insight into the contextually ambidextrous managed Toyota production system. In addition to executing the automotive assembly, employees are also expected to alter their jobs utilizing metaroutines, in which the management system supports employees to pursue exploration and exploitation tasks (Adler et al., 1999).
In conclusion, contextual ambidexterity can be differentiated from structural ambidex- terity in several ways. As noted above, compared to structural ambidexterity, contextual am- bidexterity clearly focuses on the individual level in order to solve the exploration- exploitation tension. Therefore, in the structural ambidexterity model a relatively precise pic- ture of possible ambidexterity-enhancing organizational structures can be drawn. Whereas in the contextual ambidexterity model, aside from describing key attributes (discipline, trust, stretch and support), organizational context cannot be clearly specified and translated into universal managerial guidelines. The contextual ambidexterity concept is based on interper- sonal relationships, thus making it difficult to put into measurable dimensions. An contextual- ly ambidextrous state is achieved when business members agree on a level of alignment and adaptability (O'Reilly III and Tushman, 2013).
3.2 Ambidexterity and Firm Performance
A major question of the ambidexterity research is whether ambidextrous organizations obtain higher financial performance than their non-ambidextrous competitors and therefore obtain long-term survival. In literature, ambidexterity has been positively associated with a number of performance-enhancing attributes, such as innovation capabilities (Adler et al., 1999, Katila and Ahuja, 2002, e.g. Jansen et al., 2006, Rothaermel and Alexandre, 2009) or sales growth (He and Wong, 2004, Auh and Menguc, 2005). In part II of this study, a number of ambidexterity influencing and moderating factors will be displayed, combined and partly related to firm performance.
Gibson and Birkinshaw (2004) were the first to empirically examine the relationship be- tween contextual ambidexterity and firm performance. Based on a five-year case study, firm performance was measured in 41 business units with the help of a four-item questionnaire2. The authors discovered simultaneously aligned and adapted business units to report higher firm performance than their non-ambidextrous competitors. In the same year, He and Wong (2004) drew and investigated self-reported data in a three year time period from 563 Asian manufacturing firms and found a positive correlation between ambidexterity, sales growth and firm performance. In 2008 J. Uotila et al. used the market-based measure Tobin’s Q3 in their case study, consisting of 279 manufacturing firms in the 1989 Standard & Poor’s 500 index, in order to concurrently associate short-term performance and long term perspectives to ex- ploration and exploitation activities. Depending on environmental conditions, they found a curvilinear relationship between an ambidextrous business strategy and firm performance. Recently, Jansen et al. (2012) revealed how firm performance is influenced through his com- prehensive study of ambidexterity-moderating effects. Concluding from 285 responses, they found ambidexterity to positively contribute to financial performance, especially for organiza- tions operating in environments characterized by low centralization and for those companies with less resource interdependency. Voss & Voss (2013) compared small and medium-sized enterprises (SMEs) to larger firms on the basis of a sample of 214 theatres in the USA, and stated that for larger firms ambidexterity leads to significantly higher financial performance. Among others, these studies have quantified the positive effects of ambidexterity on firm per- formance. However, some studies also note that under certain conditions ambidexterity can be inefficient, or even detrimental. For instance, Ebben & Johnson (2005) as well as Voss & Voss (2013) propose that SMEs usually lack resources, experience or capabilities to imple- ment an ambidextrous strategy. Therefore, SMEs that do not implement dual structures out- perform their ambidextrous competitors (Ebben and Johnson, 2005, Voss and Voss, 2013). Self-evident, resource availability constrains an business unit’s ambidexterity pursuit (March, 1991). Accordingly, firm units may acquire supplementary financial resources from their or- ganization to realize an ambidextrous strategy. However, if additional resources are not avail- able, concentration on either exploration or exploitation might be desirable (Gupta et al., 2006, Jansen et al., 2012). In a recent meta-analysis Junni et al. (2013) confirmed the argu- mentation that the ambidexterity-performance relationship is highly influenced and moderated by contextual and environmental factors. Specifically, they stressed the importance of an am- bidextrous strategy for nonmanufacturing industries (Junni et al., 2013).
In conclusion, although there is evidence that under certain conditions ambidexterity is not desirable, most studies suggest that ambidexterity is positively associated with firm performance, especially in highly dynamic markets.
PART II - A COMPREHENSIVE OVERVIEW OF THE CURRENT AMBIDEXTER-
ITY RESEARCH FIELD. WHAT REALLY IS AMBIDEXTERITY?
4 Topology of the Relevant Literature
4.1 Analytical Framework
4.1.1 Paper Selection
To make this review study as comprehensive and useful as possible, efforts were first undertaken to select the most relevant and suitable scientific studies in literature. Initially, various databases (Business Source Premier, JSTOR, Emerald Insight, ScienceDirect or Econ Lit) were searched with keywords, such as ambidexterity or ambidextrous, in order to find ambidexterity-related papers. Special emphasize was placed on those papers that were pub- lished in scientific journals with an A+ or A ranking (e.g. Administrative Science Quarterly, Journal of Marketing, Journal of Marketing Research, Management Science, Academy of management Journal, Academy of Management Review, Organization Science, Strategic Management Journal, Journal of Management Information Systems). Additionally, Google scholar, SSRN or Ebsco Host search engines were utilized to search for frequently quoted papers or papers that cited key literature (e.g. March (1991), Levinthal & March (1993) or Gibson & Birkinshaw (2004)). Subsequently, abstracts and titles, as well as introductory chapters of selected papers were scanned, in order to determine whether these fit the purpose of this study. Papers that studied the concept of ambidexterity in an entirely different context (like a medical context) were omitted from this analysis. Since ambidexterity is a multidisci- plinary model that comprises both, the concept of exploration and the concept of exploitation of organizations, some of the reviewed papers solely addressed one of the mentioned con- cepts. Due to the restricted scope of a bachelor thesis, such papers, if they were not necessary for certain contemplations, were usually also omitted from this analysis.
In total, 58 key papers that directly address the ambidexterity topic were selected and thoroughly investigated. In the appendix, a detailed summary table for each paper containing its key assumptions and underlying concepts, its publication date, the study type and final conclusions are given. Only nine percent of the papers exclusively utilized the contextual- ambidexterity concept, whereas 67 percent solely focused on structural ambidexterity, show- ing the underrepresentation of the contextual ambidexterity concept in the literature field. Further, as seen in figure 4, interest in the ambidexterity concept in general was continuously rising.
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Figure 5: Number of Studies about Ambidexterity over Time (Source: Compiled by the author)
4.1.2 Pattern of the Scientific Field
As discussed, in the past twenty-three years, since March’s seminal work in 1991, the interest in the managerial ambidexterity dichotomy has consistently increased. The extensive amount of research that has been published since can be classified in four distinct groups: Literature that investigated the construct in terms of A) antecedents, influencers and modera- tors, B) the relationship between an organization’s ambidexterity level and its firm perfor- mance, C) analytically substantiated general core constructs of the field or D) review papers of existing literature.
Group A: Antecedents, influencers and moderators
Group A links a variety of environmental, structural, contextual, organizational or re- source related factors to the concept of organizational ambidexterity. Within this large group, a majority exclusively focuses on the concept of absorptive capacity (see chapter 6.1) (Cohen and Levinthal, 1989, Nahapiet and Ghoshal, 1998, Jansen et al., 2005b, Rothaermel and Alexandre, 2009, Bierly et al., 2009, Fernhaber and Patel, 2012, Cohen and Levinthal, 1990, Lane and Lubatkin, 1998) or environmental dynamism as a moderating effect (see chapter 6.4) (Auh and Menguc, 2005, Jansen et al., 2005b, Jansen et al., 2006, Uotila et al., 2009, Eisenhardt et al., 2010).
Those studies that investigate leadership related antecedents, either apply the idea of the managerial contradictory task to alter between exploration and exploitation thinking (Birkinshaw and Gibson, 2004, Jansen et al., 2009, O'Reilly III and Tushman, 2011), or, more broadly describe the specific leadership task to manage an ambidextrous organization (Tushman and O'Reilly III, 1996, Smith and Tushman, 2005, Mom et al., 2009, Andriopoulos and Lewis, 2009, Tushman et al., 2011, Boumgarden et al., 2012).
Group B: Performance Outcomes
A rather small group of studies focuses on the investigation of ambidexterity related performance outcomes. While some papers directly test the relationship between an organization’s pursuit of ambidexterity and its performance outcomes (He and Wong, 2004, Lubatkin et al., 2006, Uotila et al., 2009, Cao et al., 2009), other papers investigate more theoretically how ambidexterity influences firm performance under certain external environmental or internal organizational circumstances (Auh and Menguc, 2005, Jansen et al., 2006, Mom et al., 2007, Voss et al., 2008, Jansen et al., 2012).
Group C: Analysis of core constructs
This group generally addresses the question of how organizations or managers can achieve a balance between the two antagonistic necessities of change and continuity. The two major approaches to resolve this dilemma are structural (Tushman and O'Reilly III, 1996, Benner and Tushman, 2003, Smith and Tushman, 2005, O'Reilly and Tushman, 2008) and contextual ambidexterity (Gibson and Birkinshaw, 2004, Birkinshaw and Gibson, 2004, Raisch and Birkinshaw, 2008). While some papers broaden the understanding for these con- structs (Duncan, 1976, March, 1991, Gupta et al., 2006), others extend the idea by giving deeper insights in the forms and manifestations of ambidexterity (Bradach, 1997, Adler et al., 1999, Danneels, 2002, Lazer and Friedman, 2007, Groysberg and Lee, 2009, Fang et al., 2010).
Group D: Review Studies
A very small group, consisting of four papers, Raisch & Birkinshaw (2008), Simsek et al. (2009), Raisch (2009) and Tushman & O’Reilly (2013), whereas Simsek et al. was mostly neglected due to its journal’s ranking, synthesized existing knowledge and findings about the research field and gave an outlook for future research.
4.2 Definition Dissention
The analysis of the relevant literature reveals that while most scholars establish their own definition for ambidexterity, three general patterns of defining the phenomenon can be constituted: Ambidexterity is either construed as the simultaneous pursuit of exploration and exploitation (Jansen et al., 2005b, O'Reilly and Tushman, 2008, e.g. Cao et al., 2009), the reconciliation of alignment and adaptability (e.g. Birkinshaw and Gibson, 2004) or, more easily understood, simply as the balance of diverse activities in a trade-off situation (e.g. Rothaermel and Alexandre, 2009, Patel et al., 2013). However, the most commonly applied understanding is the exploration-exploitation construct, which will be explained in detail in chapter 5.
Initially, the difference between the first two views might not be self-evident. Explora- tion could easily be confused with adaption and exploitation with alignment and therefore be used synonymously. However, these approaches become completely conceptually different if the underlying organizational role is taken into account. While the exploration-exploitation model prompts the organization to action, in the adaptability-alignment model the organiza- tion rather passively attempts to overcome short- and long-term managerial challenges. An overview of the given definitions to describe ambidexterity in a representative selection of papers is shown in table 1.
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Table 1: Various Ambidexterity Definitions (Source: Compiled by the author)
4.3 Multiple Perspectives of Ambidexterity Research
Literature is not only vague in terms of uniform definitions but also in terms of perspec- tive unity on the construct. Multiple, partly overlapping perspectives emerged over time.
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1 In literature, both terms are commonly used in an equal coherence. In the following, due to convenience, this thesis will concentrate on the term “ ambidexterity ” .
2 The following statements comprised the questionnaire:[1] “ This business unit is achieving its full potential. ” [2] “ People at my level are satisfied with the level of business unit performance. ” [3] “ This business unit does a good job satisfying out customers. ” [3] ” This business unit gives me the opportunity and encour- agement to do the best work I am capable of ” (Gibson and Birkinshaw, 2004, p. 216).
3 The Tobin ’ s Q is a business valuation measurement. Introduced in 1969 and developed by James Tobin, the Tobin ’ s Q provides a ratio, which determines the corporate net worth relatively to its current value in the stock market. Q greater than 1 indicates that the firm value in the stock market exceeds its real net worth and vice versa (Tobin, 1969).
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