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Structural Differentiation and Ambidexterity: The Mediating Role of Integration Mechanisms
05 Nov 2008-ERIM report series research in management Erasmus Research Institute of Management (Erasmus Research Institute of Management)-
TL;DR: The findings suggest that the previously asserted direct effect of structural differentiation on ambidexterity operates through informal senior team and formal organizational integration mechanisms, and contributes to a greater clarity and better understanding of how organizations may effectively pursue exploration and exploitation simultaneously to achieve ambideXterity.
Abstract: textPrior studies have emphasized that structural attributes are crucial to simultaneously pursuing exploration and exploitation, yet our understanding of antecedents of ambidexterity is still limited. Structural differentiation can help ambidextrous organizations to maintain multiple inconsistent and conflicting demands; however, differentiated exploratory and exploitative activities need to mobilized, coordinated, integrated, and applied. Based on this idea, we delineate formal and informal senior team integration mechanisms (i.e. contingency rewards and social integration) and formal and informal organizational integration mechanisms (i.e. cross-functional interfaces and connectedness) and examine how they mediate the relationship between structural differentiation and ambidexterity. Overall, our findings suggest that the previously asserted direct effect of structural differentiation on ambidexterity operates through informal senior team (i.e. senior team social integration) and formal organizational (i.e. cross-functional interfaces) integration mechanisms. Through this richer explanation and empirical assessment, we contribute to a greater clarity and better understanding of how organizations may effectively pursue exploration and exploitation simultaneously to achieve ambidexterity.
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TL;DR: In this paper, a conceptualisation of capability development processes through internal and external strategic fit and emphasise the role of knowledge and innovation processes is proposed, and a critical realism approach is used to research such an integrative view.
Abstract: The literature on capability development has focussed on either the content or process of capability development. Such a partial explanation of the capability development phenomenon has created some flaws in the literature. This paper argues that integrating the content and process of capability development is the way ahead in theorising in this field. Analysis of the methodological development in parallel to theory development reveals the critical role of microprocesses in such integration. To develop an integrative view of capability development we propose a conceptualisation of capability development processes through internal and external strategic fit and emphasise the role of knowledge and innovation processes. We also argue that a critical realism approach is of high relevance to researching such an integrative view.
5 citations
TL;DR: It is argued that by specifying one mode of decision making or the other, firm-level management can deliberately steer important strategic decisions into either exploitation or exploration and strategy renewal, creating a new form of ambidexterity at the macro level.
Abstract: It is difficult to make large, complex organizations like MNCs ambidextrous—to make them efficient so that they succeed in the short run and in sync with their changing environments so that they succeed and survive in the long run The two types of learning activity that support ambidexterity, exploitation and exploration, are fundamentally different (March 1991) The well-known structural approach to creating organizational ambidexterity employs separate subunits for exploitation and exploration (O’Reilly and Tushman 2011) We argue that this approach cannot take full advantage of the high levels of product, geographic, and functional diversity that exist in large, complex firms to create ambidexterity at a more macro level Firms facing this kind of complexity often address it by using a matrix structure For such firms, we argue that a more flexible form of matrix structure can facilitate the creation of a new form of ambidexterity at the macro level of such firms As developed in Egelhoff and Wolf (Egelhoff and Wolf 2017), a flexible matrix structure is one which can vary its mode of decision making between balanced decision making, where decisions are jointly made by both dimensions of a matrix, and rule-based decision making, where it is pre-specified which dimension of a matrix will unilaterally make certain types of decision We argue that rule-based decision making tends to facilitate exploitation and the refinement of existing knowledge while balanced decision making tends to facilitate exploration and the development of new knowledge By specifying one mode of decision making or the other, firm-level management can deliberately steer important strategic decisions (eg, new product technology development) into either exploitation or exploration and strategy renewal, creating a new form of ambidexterity at the macro level
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01 Jan 2009
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Cites background from "Structural Differentiation and Ambi..."
...…level the research has focused, along with the financial performance, on issues such as effective direction of attention (see e.g. Simons, 1990; Kaplan & Norton, 1992 and Widener, 2007), organisational learning (see e.g. Simons, 1990, 1995, 2000; Kloot, 1999, Chenhall, 2005; Henri, 2006 and…...
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...Malmi & Brown (2008) emphasise that as the design and structure of an organisation are alterable from 4 For a more comprehensive view on BSC and the effectiveness of BSC, please see e.g. Davis & Albright, 2004; Ittner et al, 2003; Kaplan & Norton, 1992, 1993, 1996a, 1996b and Malina & Selto, 2001....
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DOI•
01 Jan 2020
TL;DR: In this article, the authors explore the emergence of platform firms and develop a theory and a process model showing how platform firms come into existence over four consecutive stages: (1) Inefficient Markets and Incumbents, (2) Entrepreneurial Motivation and Enabling Factors, (3) Efficiency-Enhancing Means, and (4) Platform Firms.
Abstract: In recent years, platform firms have become an essential component of the business world. With the increasing number of studies, the impacts of platform firms on the traditional business environment are visible in many industry settings. Yet, little attention has been paid to the origin of these organizations. Analyzing 52 publicly available interviews with platform entrepreneurs, managers, and venture capitalists, I explore the emergence of platform firms. In a rigorous grounded theory-building study, I develop a theory and a process model showing how platform firms come into existence over four consecutive stages: (1) Inefficient Markets and Incumbents, (2) Entrepreneurial Motivation and Enabling Factors, (3) Efficiency-Enhancing Means, and (4) Platform Firms. The model illustrates that platform organizations’ impact on the traditional business environment results from developing efficiency-enhancing means. It also highlights the differences between platform firms and traditional firms, and yields important implications for existing theories of the firm.
5 citations
Cites background from "Structural Differentiation and Ambi..."
...…exploration and exploitation activities in the same unit by simultaneously combining stretch, discipline, support, and trust (Cao, Gedajlovic, and Zhang 2009, Gibson and Birkinshaw 2004, He and Wong 2004, Jansen et al. 2009, Jansen, Volberda, and Van Den Bosch 2005, Tushman and O’Reilly 1997)....
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TL;DR: In this article, the authors investigated the relationship between knowledge management and ambidextrous innovation in Chinese subsidiaries of Korean MNCs and found that knowledge transfer and knowledge sharing have positive effects on dynamic capabilities and ambidesxterity innovation.
Abstract: Purpose – With the increasing uncertainty of China's domestic political and economic environment in recent years, Korean MNC subsidiaries in the Chinese market face greater challenges and competition. Based on the insufficiency of existing research and the need for enterprise management practices, this paper uses the Chinese subsidiaries of Korean MNCs as an example to study and explore how knowledge management and dynamic capabilities affect ambidextrous innovation and the relationship between ambidextrous innovation and subsidiary performance.
Design/methodology – From January to March 2019, this study collected 341 valid questionnaires using a survey company specializing in China for the members of the Chinese subsidiaries of Korean MNCs to verify the hypotheses. Using the collected data, the study model was verified using the Smart PLS 3.0 statistical package.
Findings – Knowledge transfer and knowledge sharing have positive effects on dynamic capabilities and ambidextrous innovation, and dynamic capabilities have a positive impact on ambidextrous innovation. Ambidextrous innovation has been shown to have a significant effect on subsidiary performance. In addition, a partial mediating effect of dynamic capabilities on the relationship between knowledge management and ambidexterity innovation was found.
Originality/value – In the academic context, this paper contributes theoretically to the relationship between knowledge management and ambidextrous innovation, as well as the mechanism of dynamic capability, and to verify the relationship between ambidextrous innovation and corporate performance. Against the background of MNC management, the results of this study provide further enlightenment for managers of subsidiaries.
5 citations
References
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TL;DR: This article seeks to make theorists and researchers aware of the importance of not using the terms moderator and mediator interchangeably by carefully elaborating the many ways in which moderators and mediators differ, and delineates the conceptual and strategic implications of making use of such distinctions with regard to a wide range of phenomena.
Abstract: In this article, we attempt to distinguish between the properties of moderator and mediator variables at a number of levels. First, we seek to make theorists and researchers aware of the importance of not using the terms moderator and mediator interchangeably by carefully elaborating, both conceptually and strategically, the many ways in which moderators and mediators differ. We then go beyond this largely pedagogical function and delineate the conceptual and strategic implications of making use of such distinctions with regard to a wide range of phenomena, including control and stress, attitudes, and personality traits. We also provide a specific compendium of analytic procedures appropriate for making the most effective use of the moderator and mediator distinction, both separately and in terms of a broader causal system that includes both moderators and mediators.
80,095 citations
"Structural Differentiation and Ambi..." refers background in this paper
...A four-item scale ( = 0 70) measures firmlevel exploitative innovation (Jansen et al. 2006) and captures the extent to which organizations build on existing knowledge and pursue incremental innovations that meet the needs of existing customers (Abernathy and Clark 1985, Benner and Tushman 2003,…...
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TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.
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"Structural Differentiation and Ambi..." refers background in this paper
...provides organizations with competitive advantages over time (Barney 1991)....
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...Our study broadens the conceptual interpretation of organizational ambidexterity and suggests that it is difficult to achieve yet rare and not easily imitated, and 797 provides organizations with competitive advantages over time (Barney 1991)....
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TL;DR: In this paper, the authors argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **
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"Structural Differentiation and Ambi..." refers background in this paper
...Organizational integration mechanisms not only facilitate new value creation through linking previously unconnected knowledge sources (Cohen and Levinthal 1990), but also through providing opportunities to leverage common resources and obtaining synergies across exploratory and exploitative units…...
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TL;DR: The dynamic capabilities framework as mentioned in this paper analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change, and suggests that private wealth creation in regimes of rapid technology change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm.
Abstract: The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
27,902 citations
"Structural Differentiation and Ambi..." refers background in this paper
...…capabilities, which are embedded in the distinct ways that organizations integrate, build, and recombine competences flexibly across boundaries, are fundamental to long-term strategic advantage (Eisenhardt and Martin 2000, Henderson and Cockburn 1994, Kogut and Zander 1992, Teece et al. 1997)....
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TL;DR: In this article, structural equation models with latent variables are defined, critiqued, and illustrated, and an overall program for model evaluation is proposed based upon an interpretation of converging and diverging evidence.
Abstract: Criteria for evaluating structural equation models with latent variables are defined, critiqued, and illustrated. An overall program for model evaluation is proposed based upon an interpretation of converging and diverging evidence. Model assessment is considered to be a complex process mixing statistical criteria with philosophical, historical, and theoretical elements. Inevitably the process entails some attempt at a reconcilation between so-called objective and subjective norms.
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