Linking Organizational Ambidexterity and Performance: The Drivers of Sustainability in High-Tech Firms

Abstract

To strengthen national competitiveness and sustainability, the high-tech industry has been developed as the center of gravity of industrial development in each country, covering the development of new products and the expansion to new customers and markets. Although both aspects are indispensable to high-tech firms’ growth momentum and competitive advantages, it is difficult to develop them at the same time. In recent years, scholars have been paying an increasing amount of attention to the significance of organizational ambidexterity in different management fields. Importantly, transformed high-tech firms are obliged to manage the tensions and conflicts that arise from the exploration of new knowledge and the exploitation of existing knowledge to find an appropriate balance between the two to yield synergistic effects. In this study, an original method was used to measure differences in the degree of ambidexterity. The method establishes a multiplicative term of exploration and exploitation to represent the degree of effect of ambidexterity. The higher the exploration and exploitation are, the higher the degree of ambidexterity will be. This study takes as its objects electronics manufacturing firms in Taiwan that engage in the development of new high-tech products. We issued a total of 1000 questionnaires to electronics manufacturing firms in Taiwan and received 228 valid ones. The results indicate that exploitation has a positive effect on performance, and there is an inverse U-shaped correlation between exploration/exploitation and performance. Ambidexterity and its interaction with the market orientation were found to have a positive influence on organizational performance. We also investigated the extent to which an organization places emphasis on resources and the influence of resource allocation on organizational performance. We suggest that the co-existence of exploration and exploitation is important to organizational performance. Accordingly, developing the two capabilities at the same time conforms to the concept of ambidexterity.

The Effect of Relational Embeddedness, Absorptive Capacity, and Learning Orientation on SMEs’ Competitive Advantage

“… Gibson and Birkinshaw (2004) refer to Tushman and O’Reilly’s (1996) findings on the concept of ambidexterity, using the “juggler” metaphor to depict an ambidextrous organization’s goal of efficiency and innovation in primary markets on the one hand ( Peng et al, 2019 ), whereas on the other hand, such companies can carry out rapid and flexible explorations of emerging markets by developing new goods ( Andriopoulos and Lewis, 2010 ). The concept of ambidexterity represents the combination of both PAC and RAC via differentiated groups, units, or functions ( Zhang and Chen, 2013 ; Peng et al, 2019 ; Peng and Lin, 2019 ). However, ambidextrous organizations implement inspection activities in a fast and flexible way to provide new goods in global markets ( Andriopoulos and Lewis, 2010 ; Vahlne and Jonsson, 2017 ; Peng and Lin, 2019 ).…”

“…The ambidexterity formed by the PAC and RAC will help firms focus on the development of knowledge acquisition and knowledge creation simultaneously and reduce the allocation risk from overfocusing on PAC and RAC ( Heavey et al, 2015 ; Broersma et al, 2016 ; Vahlne and Jonsson, 2017 ; Luca et al, 2018 ). Furthermore, several scholars claimed that the ambidexterity is referred to as a structural mode ( Tushman and O’Reilly, 1996 ; Andriopoulos and Lewis, 2010 ; Peng and Lin, 2019 ; Peng et al, 2019 ), which promotes structural equation modeling (SEM) to establish various organizational structures to deal with contradictions and opposites through the differentiation ( Peng and Lin, 2019 ). By using both PAC and RAC and thus making utilization of existed knowledge and resources, internationalized SMEs can detect relevant knowledge/resources more easily and understand the situation more thoroughly ( Rafailidis et al, 2017 ), thus leading to the more effective reconfiguration of existing knowledge/resources while promoting PAC and RAC to leverage existing valuable resources and overcome boundaries to drive future market opportunities ( Spyropoulou et al, 2018 ).…”

Impact of strategic capabilities on organizational ambidexterity in the commercial banks in Jordan: The mediating role of knowledge management

“…Accordingly, Rothaermel and Deeds (2004) indicated to this concept as "a dynamic capability by which organizations mobilize, coordinate, and integrate dispersed contradictory efforts, and allocate, combine and recombine resources and assets across differentiated exploratory and exploitive units". Also, Peng et al (2019) referred to organisational ambidexterity as the capacity to follow exploration and exploitation in the business environments. Thus, most researchers adopted two dimensions to measure organisational ambidexterity, these dimensions are exploration and exploitation (Fu et al, 2016;Lee et al, 2017;O'Reilly & Tushman, 2013;Panagopoulos, 2016;Peng et al, 2019;Sulphey, 2019).…”

“…Also, Peng et al (2019) referred to organisational ambidexterity as the capacity to follow exploration and exploitation in the business environments. Thus, most researchers adopted two dimensions to measure organisational ambidexterity, these dimensions are exploration and exploitation (Fu et al, 2016;Lee et al, 2017;O'Reilly & Tushman, 2013;Panagopoulos, 2016;Peng et al, 2019;Sulphey, 2019). Exploration is the organisation orientation to discover new ideas and optimal opportunities that can enhance the ability to innovate (Sulphey, 2019).…”

“…While, exploitation is reconfiguring the organisation's resources and knowledge that can improve their efficiency (Sulphey, 2019). Exploitation also presents a dynamic capability depending on path-based learning and knowledge accumulation, where the organisations seek for development of the existing skills and expand into new markets (Peng et al, 2019).…”