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to recent theory, pacifying these apparently unsuited strategies and activities
could resolve this problem. Nevertheless, pacifying two opposing activities
within one company is not an easy task. The study suggests that most
organisations are better at managing their short-term performance than their long-term
performance. In order clarify this seeming imbalance, Wiggins and Ruefli (2002)
analysed 6772 organisations in 40 industries over 25 years. They realised that
many organisations were able to boost their short-term performance.
exploitation-exploration dilemma is based on the aggressive nature of
explorative and exploitative activities. For example, in examining investments,
we find that the return on investments from exploration is less certain and
further away in time than those made in exploitation (Prahalad,1998). Farjaudon
and Soulerot (2006) are of the opinion that concentrating on exploitative
activities can be very risky for an organisation in the long run, as the
resulting inactivity would cause it to fade.
the right balance between explorative and exploitative activities is not an
easy task. Additionally, since these activities can be found at the organisational
level as well as the individual and social level, this task is rendered even
more difficult (March, 1991).
management can take account of these factors and respond accordingly.
Moderators and other external factors are
more or less out of scope for decision-making which can only slightly be
influenced by managers.
concerning the organisational design should be taken by the management to
achieve ambidexterity within the remaining organisation.
Existing measures should be executed
directly at the top management level.
findings presented that management should operate on three different levels:
research paper employed a methodical literature review to show which practical
implications for managers can be found in academic and practitioner literature
to achieve ambidexterity in structural practice. It is presumed that the
management has an important function in employing various instruments which
should enable the accomplishment of ambidexterity.
though several studies show no results for ambidexterity on performance and some
others find results only in specific circumstances, the general conclusion seems
obvious which is that in uncertain environments, organisational ambidexterity
seems to be positively related with improved firm innovation, improved
financial performance, and advanced survival rates.
The evidence is that either the under- or
over-use of ambidexterity comes at a cost (March, 1991).
effects can be contingent on the firm’s environment, with ambidexterity more
beneficial under conditions of uncertainty and when sufficient resources are available,
which is often the case with larger rather than smaller firms.
Ambidexterity is positively associated with
studies suggest three conclusions:
recent study by Geerts, Blindenbach-Driessen, and Gemmel (2012) looked at more
than 500 firms over a 4-year period and found that ambidexterity had a positive
effect on firm growth. Significantly, they also showed variances in how
ambidexterity varies between manufacturing and service firms. Goosen,
Bazzazian, and Phelps (2012) also used a large sample (500 companies) over a
10-year period and showed that firms with greater technological capabilities
benefitted more from ambidexterity. The study by Caspin-Wagner and her
colleagues looked at 605 technology companies and found an inverted U-shaped
relationship between ambidexterity and firm financial performance
(Caspin-Wagner, et al., 2012), a finding corroborated in another large sample
study by Uotila, Maula, Keil and Shaker (2008).
Though some primary research depended on case
studies, a lot of recent studies use big samples with longitudinal data and file
the effects of ambidexterity over time.
Despite the use of various measures of
ambidexterity, a series of result variables, various stages of analysis, and
samples from different businesses, the results relating ambidexterity to
performance are strong.
are numerous remarkable features to this body of research:
most vital enquiry addressed by empirical research is if organisational
ambidexterity is linked to firm performance. Here, a pattern is indicated:
ambidexterity is revealed to be absolutely linked to sales growth. The effects
of ambidexterity at the firm, business unit, project, and individual level have
been documented. While organisational ambidexterity may, in some circumstances,
be duplicative and incompetent, empirical evidence proposes that in circumstances
of market and technological uncertainty, it characteristically has an encouraging
effect on organisations performance.
is therefore a dynamic ability as the simultaneous quest and reconfiguration of
exploration and exploitation processes allows firms to adapt to dynamic
deduction, dynamic abilities allow an organisation to exploit current capabilities
and to concurrently discover new capabilities as well as to reconfigure organisational
resources in order to take hold of current and developing opportunities (O’Reilly
and Tushman, 2008).
and Tushman (2008) defined ambidexterity as an organisation’s essential dynamic
ability due to the simultaneous integration of exploration and exploitation. This
alone does not establish a competitive advantage, but the arrangement of
resources which, in turn, may result in a competitive advantage. The capability
of senior managers to take hold of opportunities through the instrumentation
and integration of both fresh and current assets to overcome inertia and path dependences
is at the central of dynamic abilities (O’Reilly and Tushman, 2008, p. 187).
et al., 1997, p. 516 – dynamic abilities is an organisations ability to integrate,
build, and reconfigure internal and external competences to address rapidly changing
environments. O’Reilly and Tushman (2008) theoretically define the link between
dynamic abilities and ambidexterity based on the results of Teece (2007), who pressures
“orchestration processes” which comprise of knowledge, reconfiguration, coordination,
(1991) claims that organisational achievement can be attained through an equilibrium
amid the two processes of exploration and exploitation. Dynamic abilities of an
organisation are related to the concept of ambidexterity and have origins in
The autonomous strategic process: This
includes the conception of fresh skills and capabilities that can be linked to
second process is:
The induced strategic process:
This emphasises on the use of existing information and can be linked to
are two processes which can be related to either exploration or exploitation.
The first process is:
adaptation reviews have claimed that for firms to thrive over a long period of
time and face environmental and technological change, they need to change their structural alignments.
and Stalker (1961) stated that organisations functioning in a stable
environment established what they called a “mechanistic management system” that
was categorised by hierarchical relationships, distinct responsibilities, and
clear job descriptions. Alternatively, firms functioning in more dynamic
environment established more “organic” systems with a lack of properly defined tasks,
more lateral coordination mechanisms, and less dependence on formalisation and specialisation.
to (Bradach, 1997; O’Reilly & Tushman, 2004; Tushman & O’Reilly, 1996).
Ambidextrous organisations are complex organisational forms made up of numerous
internally, unpredictable designs that are jointly capable of functioning
simultaneously for short-term efficiency as well as long-term innovation.
ambidexterity is the ability of an organisation to discover and exploit. to
compete technologies and markets where efficiency, control, and recognisable
improvement are prized and also,
to compete in new technologies and markets where flexibility, autonomy, and
experimentation are needed.
refers to an organisations ability to be able to handle management of today and
being able to adapt to the changes of tomorrow.
AN AMBIDEXTROUS ORGANISATION
the purpose of this study, we shall focus on the Bureaucratic and Organic
structures solely because as Burns and Stalker (1961) have claimed, two
abruptly different organisational designs, a mechanistic and organic structure,
are appropriate for either exploitative innovations or exploratory innovations.
These innovations exist in an ambidextrous structure/organisation, which is our
focus of study.
small firm can operate a bureaucratic structure because the CEO can basically stand
in a place and give instructions while a large firm will require an organic
structure because it will have to delegate authority.
dynamic environment will work well with an organic structure because unit heads
will have to take charge when change occurs and also, because an organic
structure is flexible and open to change. A bureaucratic structure would not
work well with a dynamic environment because it is rigid and isn’t open to
change. It will work better in a stable environment where change is less.
high-tech company will use an organic structure because it isn’t expected that
the owner or the CEO will know everything there is to know about technology. So,
he will have to delegate authority to those who specialise in technology and
are experts in the field.
organisation that wishes to expand cannot possibly choose a bureaucratic
structure because expansion requires delegation of authority, he will therefore
have to choose an organic structure
Determinants of organisational
Matrix structure: a
structure in which reporting is done as a grid or matrix instead of in a hierarchical
order. Employees have dual reporting responsibilities to both functional and
Geographic structure: This
is used by organisations that have branches in various geographical locations.
Product structure: Here,
the organisation is divided based on the products they produce.
Functional structure: This
is a common type of structure in which the organisation is divided into smaller
groups based on their functions such as marketing department, financial
department, IT, production department, human resources, etc.
common forms of structures:
organic structure is one that is very flexible and is able to adapt to changes (Burns
Organic structure: authority
in an organic structure is diffused and it is therefore not a command
structure. Here, departmental heads have the power to make decisions without necessarily
consulting the CEO.
structures have many levels of management ranging from top to bottom, and
therefore, decision making has to pass through so many levels before it can be
approved or implemented. Because of the complexity of this type of
organisation, it is quite rigid and not easily adaptable to change.
Bureaucratic/ Mechanistic structures:
bureaucratic structure is type of organisational structure that has a pyramidal
command structure. They have a certain degree of standardisation and are better
suited for large companies. Here, centralisation is at its peak, formalisation
is very high as well as specialisation.
Other common types of structures are:
Bureaucratic / Mechanistic structure
There are two basic types of organisational structures:
refers to the activities involved in running an organisation. Such activities
include controlling, planning, directing, organising and staffing. Every
organisation should have a formal structure. This should be decided based on company’s size, industry
and aims. Organisational structures are basically communication flowcharts.
Ill-conceived organisational structures will lead to slow, inefficient
communication while well-made organisational structures will yield efficient
communication networks and inspire fast and clean decisions.
basic assumption of concepts on ambidextrous organisations is the importance of
balancing and harmonising exploratory and exploitative innovations. Burns and
Stalker (1961), have claimed that two abruptly different organisational designs,
a mechanistic and organic structure, are appropriate for either exploitative
innovations or exploratory innovations. While there are little empirical
evidence how ambidextrous organisations are able to simultaneously carry out
exploratory and exploitative innovations, this is indeed the challenge facing
many organisations (Brown & Eisenhardt, 1997; Bradarch, 1997). Researchers
have yet to realise how ambidextrous organisations can be organic as well as
mechanistic and pursue both types of innovations simultaneously.
customers (Benner & Tushman, 2003: 243).
Exploratory innovations require
new knowledge or departure from existing knowledge and are designed for
emerging customers or markets while Exploitative
innovations build upon existing knowledge and meet the needs of
between exploration and exploitation activities. In this paper, ‘ambidextrous organisation’
is used to refer to the ability of firms to perform exploratory and
exploitative innovations simultaneously. Some other literatures have stated the
fundamental assumption that firms need to enable both opposing elements
literatures have increasingly discussed the need for firms to achieve a
paper identifies, reviews and assesses the structural dilemma in business
management, how they affect business operations in an ambidextrous structure.
Structural dilemma in business management could be seen as a situation where an
organisation is faced with the challenges of having to choose between the
various structures available to be able to practice as an ambidextrous
organisation. This paper seeks to find the implications of an ambidextrous
structure in business management.