Ambidexterity

Author: Marius Kahlert, UTwente

Ambidexterity in a general sense, is the ability to use the right and the left hand equally well. Translated into the organizational context, an ambidextrous organization is able to pursue both exploration and exploitation simultaneously. In this regard, exploration is the experimentation with new alternatives or the search, discovery and innovation of discontinuous technologies. On the other hand, exploitation refers to the refinement and extension of existing competencies, technologies and incremental innovation in order to increase the efficiency (and productivity). Literature (e.g. O'Reilly & Tushman, 2008; etc.) differentiates between sequential ambidexterity (as innovation evolves organizations adapt their structure towards either exploration or exploitation) and simultaneous ambidexterity (exploration and exploitation are pursued orthogonally across different divisions or sub-units). Teece (2006) defines three essential capabilities to create a successful ambidextrous organization: (1) sensing, as the ability to scan, search and explore opportunities and threats, (2) seizing, as the ability to make the right decision and execute, and (3) reconfiguring, as the ability to reallocate resources away from stagnating businesses to emerging growth businesses.

Dynamic capabilities are considered as key factors for organizations to be ambidextrous. Relating to this, the company's competencies, systems and structures need to be well-aligned in order to be able to adopt to changing environments. O'Reilly and Tushman (2008) argue that organizations need to consider ambidexterity if a new opportunity is strategically important for the firm (strategic importance) and the company can make use from it's existing assets and capabilities (operational leverage) in order to aspire after the opportunity.

Gupta, A. K., Smith, K. G., & Shalley, C. E. (2006). The Interplay between Exploration and Exploitation. Academy of Management Journal, 49(4), 693-706. doi:10.5465/amj.2006.22083026

O’Reilly, C. A., & Tushman, M. L. (2008). Ambidexterity as a dynamic capability: Resolving the innovator's dilemma. Research in Organizational Behaviour, 28, 185-206. doi:10.1016/j.riob.2008.06.002

Oxford University Press. (2015). Ambidextrous - definition of ambidextrous in English from the Oxford dictionary. Retrieved November 24, 2015, from http://www.oxforddictionaries.com/definition/english/ambidextrous

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18, 509–533.

Teece, D. J. (2006). Explicating dynamic capabilities: The nature and micro foundations of (sustainable) enterprise performance. In Haas School of Business Working Paper.

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