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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: This study draws on the ownership-location-internalization (OLI) framework to theorize that domestic and foreign firms leverage IT-SCII differently because of their differing ownership-based advantages in BOP markets, and hypothesize that the influence of IT- SCII on client business collaboration and the influence on firm performance are stronger for domestic firms than for foreign firms.
Abstract: Although attractive to foreign and domestic firms, bottom-of-pyramid (BOP) markets pose unique challenges. Research suggests that IT-enabled supply chain information integration (IT-SCII) helps firms collaborate with suppliers and clients in broad business activities, operate in a unique context, and overcome salient challenges in BOP markets. Anecdotal evidence and research suggest that foreign and domestic firms have differing advantages: While foreign firms have considerable global experience, domestic firms have substantial local market knowledge. We draw on the ownership-location-internalization (OLI) framework to theorize that domestic and foreign firms leverage IT-SCII differently because of their differing ownership-based advantages in BOP markets. We hypothesize that the influence of IT-SCII on client business collaboration and the influence of client business collaboration on firm performance are stronger for domestic firms than for foreign firms. Conversely, we hypothesize that the influence of IT-SCII on supplier business collaboration and the influence of supplier business collaboration on firm performance are stronger for foreign firms than for domestic firms. We test our hypotheses in the automotive parts manufacturing BOP market comprising foreign and domestic firms in India. Partial least squares and econometric analyses of 172 firms reveal broad support for our hypotheses. By incorporating the OLI framework into IT-enabled supply chain literature, our study contributes to theory and practice by highlighting that IT-SCII has differing implications for foreign and domestic firms in BOP markets.
10 citations
Proceedings Article•
01 Jan 2012TL;DR: A revelatory case study of a 7-year-long organizational balancing act of searching for the right information systems (IS) strategy in the pre-deal phase of a bank merger, which proposes three different archetypes of IS ambidextrous strategy.
Abstract: Motivated by the lack of empirical IS strategy research in the M&A problem domain, in this paper we present a revelatory case study of a 7-year-long organizational balancing act of searching for the right information systems (IS) strategy in the pre-deal phase of a bank merger. Our case study is about simultaneous IT-driven organizational transformation and merger-driven integration, providing us with a fertile ground to study the development and evolution of ambidextrous IS strategies, which are underresearched. Based on the theoretical insights that emerge from our case study, we extend Chen et al.’s (2010) IS strategy typology and propose three different archetypes of IS ambidextrous strategy. Further theoretical insights relate to the required organizational capabilities for the successful implementation of IS ambidextrous strategies as well as the co-evolutionary interplay between business and IT units in that process. Future research should empirically test the IS ambidextrous strategy archetypes proposed in this paper as well as the associated findings.
10 citations
Cites background from "Structural Differentiation and Ambi..."
...Literature used for comparisons with our data (Gibson and Birkinshaw 2004; Gilbert 2006; Jansen et al. 2009; Tushman and O'Reilly 1996) (Andriopoulos and Lewis 2009; Brown and Eisenhardt 1997; Puranam et al....
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...separating the two strategy planning work streams from one another (Gibson and Birkinshaw 2004; Gilbert 2006; Jansen et al. 2009; Tushman and O'Reilly 1996)....
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...…IS strategies coexist over time in competition with each other and the resulting tensions are resolved through differentiation tactics, i.e. separating the two strategy planning work streams from one another (Gibson and Birkinshaw 2004; Gilbert 2006; Jansen et al. 2009; Tushman and O'Reilly 1996)....
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TL;DR: In this paper, the authors analyzed the relationship between a firm's exploration strategy and its innovative performance, and whether its absorptive capacity (AC) moderates this relationship using negative binomial regression.
Abstract: Purpose – The main purpose of this paper is to analyze (1) the relationship between a firm’s exploration strategy and its innovative performance, and (2) whether its absorptive capacity (AC) moderates this relationship. Design/methodology/approach – We adopted an econometric approach, using secondary data. We synchronized two databases – Compustat and USPTO –, from which we extracted common data concerning 275 biopharmaceutical firms for the period between 1990 and 2003. We used negative binomial regression to analyze data. Findings – The exploration strategy positively influences firms’ innovative performance. However, excessive emphasis on this strategy can diminish its benefits. Moreover, a firm’s AC will not positively moderate the curvilinear relationship between exploration and the firm’s innovative performance in all contexts, contradicting our theoretical predictions. This is due to the existence of trade-offs between AC characteristics and other organizational factors. Originality/value – This paper extends the understanding of Open Innovation and AC theories. Our results suggest that AC cannot be understood as a one-dimensional and autonomous capacity located exclusively in R&D departments. Aspects such as financial power, the business model and the different dimensions of AC and their respective locations in the firm’s value chain should be considered whenever the influence of AC on exploration strategies is analyzed.
10 citations
01 Jun 2013
TL;DR: In this paper, the authors investigate how the two dimensions of ambidextrous learning (synergy and balance) affect firms? incremental and radical innovation capabilities, and find broad support for their theoretical arguments.
Abstract: The notion that ambidextrous learning will improve firm performance and survival has become prominent in the organizational learning literature. Arguing that innovation capabilities are central to the ambidexterity hypothesis, we investigate how the two dimensions of ambidextrous learning (synergy and balance) affect firms? incremental and radical innovation capabilities. Based on organizational learning theory and the dominant logic literature, we develop the theoretical arguments that the synergy of ambidexterity drives incremental innovation capability and the balance dimension of ambidexterity influences radical innovation capability. We conjecture that also there is an interaction effect between synergy and balance on both radical and incremental innovation capabilities. We base our empirical analysis on a survey of a wide range of high-tech firms in China. We find broad support for our theoretical arguments.
10 citations
Cites background from "Structural Differentiation and Ambi..."
...However, some authors refer to exploration and exploitation as synonymous with “radical innovation” and “incremental innovation” (e.g., Benner and Tushman, 2003; Jansen et al., 2006; Jansen et al., 2009)....
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...Ambidexterity is seen as an emerging research paradigm in organizational theory (Raisch and Birkinshaw, 2008) and is a topic of debate on significant organizational phenomena (Gibson and 22 Birkinshaw, 2004; He and Wong, 2004; Lubatkin, 2006; Cao et al., 2009; Jansen et al., 2009)....
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TL;DR: In this paper, the authors investigated the usefulness of two organizational integration mechanisms (i.e., formal inter-unit communication and informal connectedness and shared values) to effectively transfer knowledge between MNC units and explored how their effectiveness is affected by different dimensions of cross-national distance.
10 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.
46,648 citations
"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. **
31,623 citations
"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.
19,160 citations