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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, the authors use a systematic review to develop a research framework which integrates intellectual capital resources (organizational, social and human capital) across various levels of analysis (organization, group and individual).
Abstract: Ambidexterity is of central importance to the competitive advantage of the firm, yet to date there is limited understanding of how it is managed. The theorization of ambidexterity is inadequate for complex, practical realities and, in turn, this hinders the way in which it can aid the management of ambidexterity in practice. This paper asks: What are the mechanisms for achieving ambidexterity? The authors use a systematic review to develop a research framework which integrates intellectual capital resources (organizational, social and human capital) across various levels of analysis (organization, group and individual). This review extends understanding of the generic mechanisms (i.e. temporal, structural and contextual ambidexterity) that dominate the literature. This allows for a more fine-grained understanding of how ambidexterity is achieved and enables avenues for further research to be identified.
403 citations
Cites background from "Structural Differentiation and Ambi..."
...The use of both formal and informal managerial integration and control mechanisms (processes), including cross-functional interfaces, also contribute to improved performance (Jansen et al. 2009; Tiwana 2010)....
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TL;DR: In this article, a theoretical model that explains how dynamic capability mediates the impact of intellectual capital on performance was developed and tested for analyzing the relationship between intellectual capital and dynamic capability in high-technology firms.
Abstract: Recent studies suggest a potential relationship between intellectual capital and dynamic capability in achieving performance. This is unsettling for managers because these studies contain little effort to develop a framework for understanding the relationship. To examine this unnerving potential, we develop and test a theoretical model that explains how dynamic capability mediates the impact of intellectual capital on performance. In this study, the scope of intellectual capital includes human capital, relational capital and structural capital. This study examines the pooled data of 242 high-technology firms from 2001 to 2008. Results from Bayesian regression analysis suggest that the effect of structural capital on performance is completely mediated by dynamic capability. Furthermore, the findings show that dynamic capability does not completely mediate the respective effects of human capital and relational capital on performance, but does so only partially. These results provide convincing support for the importance of dynamic capability through accumulating R&D and marketing capability over time, thereby enhancing firm performance. The empirical findings and the ensuing discussion will be of interest to managers and practitioners.
363 citations
Cites background from "Structural Differentiation and Ambi..."
...SC is the knowledge that has been captured by the firm and embedded in the organization through organizational routines, practices and processes (Jansen et al., 2009)....
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TL;DR: The empirical results offer new insights with respect to several tensions at the heart of the ambidexterity challenge, and theoretical arguments that link organizational performance to strategic combinations of exploration and exploitation in both product and market domains are developed.
Abstract: Balancing exploration and exploitation is a critical challenge that is particularly difficult for smaller, nascent organizations that lack the resources, capabilities, and experience necessary to successfully implement ambidexterity. To better understand how small and medium-sized enterprises achieve ambidexterity, we develop theoretical arguments that link organizational performance to strategic combinations of exploration and exploitation in both product and market domains. We test the hypotheses with a longitudinal study in a dynamic industry that combines objective measures of competition, firm size, age, and revenue performance with self-reported measures of product and market exploration and exploitation. The empirical results offer new insights with respect to several tensions at the heart of the ambidexterity challenge: (1) pure strategies that combine product exploration with market exploration or product exploitation with market exploitation have complementary interaction effects on revenue, (2)...
327 citations
Cites background from "Structural Differentiation and Ambi..."
...…(Ebben and Johnson 2005), but they are also consistent with recommendations for organizational units that are dedicated to pure exploitation or pure exploration, with the integration challenge focusing on sharing experiences and knowledge across differentiated units (e.g., Jansen et al. 2009)....
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TL;DR: In this paper, the authors investigated the impact of knowledge sourcing on the environmental innovations of firms and found that knowledge sourcing has a positive impact on both types of EI-performance, however, a broad sourcing strategy reveals a threshold above which the propensity to introduce an EI diminishes.
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TL;DR: In this paper, the authors examine the pervasiveness of entrepreneurial orientation in organizations and present three models for how EO can dynamically pervade organizations and discuss how examining the perviveness of entrepreneurship can further our understanding of entrepreneurship as an organizational phenomenon.
Abstract: While 30 years of entrepreneurial orientation (EO) research has demonstrated that EO provides critical insights into questions of organizational-level strategy and performance, how EO manifests inside organizations has received little attention. Instead of assuming that EO is homogenous, we examine the questions of how and why EO might pervade organizations heterogeneously along three dimensions: vertically across hierarchy levels, horizontally across business units, and temporally as an organization develops. We then present three models for how EO can dynamically pervade organizations and discuss how examining the pervasiveness of EO can further our understanding of entrepreneurship as an organizational phenomenon.
324 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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