The Evolution of Organizational Ambidexterity

Abstract

This study examines how structural and contextual ambidexterity affect an organization’s ability to shape a hypercompetitive environment, and how different hierarchical levels influence this process. Even large, successful global companies tend to fall into the exploitation or exploration trap, and finding the right balance in a hypercompetitive, dynamic environment is even harder. Contemporary literature suggests managing a dynamic environment requires organizations to empower regional headquarters, middle and frontline managers. This, however, increases organizational complexity and inertia, and may therefore have adverse effects on the organization. This study describes the microfoundations of organizational ambidexterity, through a case study of a global IT company’s journey towards cloud computing. The case suggests that contextual ambidexterity generates huge tension, and requires strong social support and performance management. A successful structural separation fosters contextual ambidexterity, and both are needed to enhance organizational resilience. Active top management helped the organization to shape the industry, and active support systems may substitute for active middle management during controlled renewal processes.