How Do Firms Adapt to Discontinuous Change? Bridging the Dynamic Capabilities and Ambidexterity Perspectives

Abstract

This article develops a conceptual integration of the dynamic capabilities and ambidexterity perspectives in order to understand how firms adapt to discontinuous change. Based on three illustrative case studies, it demonstrates that it is not possible to identify a universal set of dynamic capabilities. Rather, the distinct set of capabilities required depends on which of three modes of adaptation (structural separation, behavioral integration, or sequential alternation) has been prioritized. This article contributes a contingency perspective to dynamic capability research and offers guidance to managers about the alternative approaches they could take when seeking to adapt to environmental discontinuities.

Introducing conflict as the microfoundation of organizational ambidexterity

“…Core business units are given responsibility for routine work and for exploiting existing 9 capabilities, whereas innovation units are envisioned to keep track of nascent trends (e.g., Gilbert, 2006). To integrate these units and prevent organizational dissolution, firms must rely on the unifying role of an overarching senior management team (e.g., Jansen et al, 2008Jansen et al, , 2009Mom et al, 2007Mom et al, , 2009O'Reilly and Tushman, 2011;Smith and Tushman, 2005) and a common corporate vision with a set of shared core values (e.g., Birkinshaw et al, 2016;O'Reilly and Tushman, 2004). However, as illustrated by the fate of Polaroid and Xerox, integrating these units constitutes a delicate managerial challenge that frequently fails (Chesbrough and Rosenbloom, 2002;Heracleous et al, 2017;Tripsas and Gavetti, 2000).…”

“…Taking into account that "conflict management can require interventions to reduce conflicts if there is too much, or intervention to promote conflict if there is too little" (Brown, 1983: 9, quoted from Rahim, 2002: 211), we highlight the role of conflict management, in contrast to conflict resolution (Rahim, 2002: 207-208 A second promising area for future research is the conceptual integration of the different approaches toward ambidexterity. Most existing literature treats each approach largely independently (Birkinshaw et al, 2016). In contrast, empirical evidence shows that firms (over time) use specific combinations of strategies to achieve and maintain ambidexterity (e.g., House and Price, 2009;Raisch, 2008).…”

“…This helps us to overcome the hierarchical bias in much ambidexterity research, which focuses primarily on the habits, cognitions, and actions of top managers (e.g., Tushman, 2004, 2008;Smith and Tushman, 2005)-thereby disregarding the role of lower-level employees. Third, our paper is one of the few (e.g., Birkinshaw et al, 2016;Papachroni et al, 2016) that contributes to the integration of the different approaches toward organizational ambidexterity. We develop the argument that organizations can steer ambidexterity through conflict management activities within a single approach.…”

The Prime Mover Matrix: A Conversation Piece for Building Strategic Innovative Capacity

“…Describing it theoretically, innovative capacity depends on the company's ability to align its dynamic capabilities in order to meet the innovation challenges it faces (Birkinshaw et al, 2016;Teece et al, 1997). Specifically, of interest for innovation is the absorptive capacity, meaning a company's capacity for organizational learning in absorbing new innovation ideas.…”

Dynamic Capabilities in Automotive Pollutants Reduction Technologies: Case Study

“…The challenge of dynamic capabilities, both in theoretical and empirical terms, is to identify the capabilities required by companies in different contexts, showing how they should be allocated and modified, especially in organizations that are already established in the market and are strongly subject to environmental discontinuities (Birkinshaw, Zimmermann, & Raisch, 2016). Daniel Leite Mesquita, Alex Fernando Borges, Antônio Carlos dos Santos, Joel Yutaka Sugano and Tais Castro Veloso Meireles and Camargo (2014), based on a review of available literature about the subject, propose a conceptual and operational approach to dynamic capabilities based on three fundamental components: skills, routines and processes.…”