Left or right?
The effect of pursuing contextual ambidexterity on the relationship between external environment, organizational culture and strategy
Bachelor thesis research by Kayleigh van Doorn
In December 2016, Kayleigh van Doorn graduated from the Tilburg School of Economics and Management at Tilburg University. She followed the BSc International Business Administration and wrote her bachelor thesis about ambidexterity in organizations.
Ambidexterity, the state of being equally adapted in the use of both the left and the right hand, is a characteristic that only 1% of humans are born with (Rightleftrightwrong.com, 2016). This ability has been transposed to the business environment in determining whether an organization is able to pursue two different things simultaneously. Organizations are by all means not born ambidextrous. Like humans, they have to practice in order to achieve organizational ambidexterity. This thesis aims to investigate the effect of the pursuit of contextual ambidexterity on the relationship between the organization’s external environment, organizational culture, and strategy.
Literature suggests that organizational ambidexterity is the ability of an organization to divide its attention between exploration and exploitation (Simsek, 2009), the distinction depending on whether they are aimed at producing new knowledge or applying existing knowledge (Howells, 2008). Contextual ambidexterity is the capability to balance exploration and exploitation within the same business unit (Simsek, 2009). The external organizational environment refers to external stimuli outside the organization, and it influences the organizational culture, consisting of beliefs, values, and behavioural norms (Schein, 1990). Linking the internal and external environment, a business strategy is a pattern of long-term objectives and goals, and the implementation of resources and capabilities to reach these goals (Grant, 2013). This paper sets to investigate: the effect of the pursuit of contextual ambidexterity on the relationship between external organizational environment, organizational culture, and strategy.
A literature review was conducted to determine whether an organization is ambidextrous when it balances conflicting demands for exploration and exploitation.
The findings of this study suggest that pursuing organizational ambidexterity leads to changes in internal organizational culture, external organizational environment, business strategy and the relationship between all of these variables. Ambidexterity is important for balancing the opposite activities of exploration and exploitation, resulting in a higher performance of the organization. Contextual ambidexterity is seen as more useful and successful in achieving organizational ambidexterity. Since organizations receive stimuli from its internal and external environment, the pursuit of ambidexterity affects the organization internally by increasing tension and changing organizational values, and externally by becoming more flexible and better adaptable to changes. As the link between internal and external environment, strategy is also changed by the pursuit of ambidexterity, by putting pressure on the members of the organization, resulting in increased tension and an increased importance for tension management. Useful for organizations in both stable and turbulent environments, the change in strategy makes the relationship between the external environment, organizational culture, and strategy more stable. Additionally, the attention on exploration can shift towards exploration when needed and vice versa, whenever events demand it.
Finally, this study explores the organizational environmental aspects and strategy options that can help facilitate the organizational ambidexterity, which can enable firms to be successful both in their current market and in potential future markets.
Grant, R. (2013). Contemporary strategy analysis (8th ed.) Hoboken, N.J.: Wiley, 4-27
Howells, J. (2008). New directions in R&D: current and prospective challenges. R&D Management, 38(3), 241-252
Rightleftrightwrong.com. (2016). Right, Left, Right, Wrong! - What is Handedness?. [online] Available at: http://www.rightleftrightwrong.com/what.html [Accessed 20 Sep. 2016].
Schein, L. (1990). The road to total quality: Views of industry experts. New York: Conference Board
Simsek, Z. (2009). Organizational ambidexterity: Towards a multilevel understanding. Journal Of Management Studies, 46(4), 597-624