Abstract
Three approaches are developed for assessment of different types of organizational ambidexterity proposed in the relevant literature. The new model for measurement of organizational ambidexterity using data envelopment analysis (DEA) is introduced. The DEA score based on innovation activity inputs and two different performance outputs acts as a proxy for organizational ambidexterity. Sustainability goals and product ambidexterity are also analyzed as the key characteristics of ambidextrous behavior. The introduced three approaches are tested for their aptness to complement each other as well as to support a strategic decision-making. Empirical examples from energy and pharma sectors associate organizational ambidexterity with firms’ performance. We measured the organizational ambidexterity of energy and pharma companies by (1) pursuing long-term versus short-term organizational performance measured as a DEA two-output efficiency score; (2) the share of disruptive products in a company’s activities assessed through the proportion of R&D expenditure or sales; and (3) sustainability versus financial performance of the company, where the Green ranking and participation in innovative financing programs were used as proxies for sustainable development. Positive relation between performance and organizational ambidexterity for energy sector are discovered. At the same time, orientation towards sustainability disrupts performance of pharmaceutical companies. Results of the OA impact on performance are highly industry-sensitive and depend on the methods used in empirical assessment. Our findings suggest that the scarcity of data sources make all three approaches complementary and mainly functional for strategic decision-making.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Green ranking 2015: http://www.newsweek.com/green-2015
GAVI, the Vaccine Alliance website: http://www.gavi.org/, last accessed on June 8th 2018
MMV website: http://www.mmv.org/partnering/product-development-partnership-model, last accessed on June 8th 2018
MPP website: http://www.medicinespatentpool.org/, last accessed on June 8th 2018
References
Antoncic, B., & Hisrich, R. D. (2001). Intrapreneurship: Construct refinement and cross-cultural validation. Journal of Business Venturing, 16(5), 495–527.
Atuahene-Gima, K. (2005). Resolving the capability-rigidity paradox in new product innovation. Journal of Marketing, 69, 61–83.
Bessler, W., & Bittelmeyer, C. (2008). Patents and the performance of technology firms: Evidence from initial public offerings in Germany. Financial Markets and Portfolio Management, 22(4), 323–356.
Carayannis, E. G., & Rakhmatullin, R. (2014). The quadruple/quintuple innovation helixes and smart specialisation strategies for sustainable and inclusive growth in Europe and beyond. Journal of the Knowledge Economy, 5(2), 212–239.
Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European journal of operational research, 2(6), 429–444.
Chen, Y., Chan, C., & Lin, Y. (2014). The determinants of green radical and incremental innovation performance: Green shared vision, green absorptive capacity, and green organizational ambidexterity. Sustainability (Switzerland), 6(11), 7787–7806.
Cook, W. D., & Seiford, L. M. (2009). Data envelopment analysis (DEA)—Thirty years on. European Journal of Operational Research, 192, 1–17.
Coombs, J. E., & Bierly III, P. E. (2006). Measuring technological capability and performance. R&D Management, 36(4), 421–438.
Cooper R.G., Edgett S. J., Kleinschmidt E. J. (2003) Best practices in product innovation: What distinguishes top performers authored by Dr. Robert G. Cooper, Dr. Scott J. Edgett and Dr. Elko J. Kleinschmidt, published by Stage-Gate, Inc.
Dortland, M. V., Voordijk, H., & Dewulf, G. (2014). Making sense of future uncertainties using real options and scenario planning. Futures, 55, 15–31.
Du, W. D., Pan, S. L., & Zuo, M. (2013). How to balance sustainability and profitability in technology organizations: An ambidextrous perspective. IEEE Transactions on Engineering Management, 60(2), 366–385.
Feki, C., & Mnif, S. (2016). Entrepreneurship, technological innovation, and economic growth: Empirical analysis of panel data. Journal of the Knowledge Economy, 7(4), 984–999.
Gibson, C. B., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of organizational ambidexterity. Academy of Management Journal, 47(2), 209–226.
Green ranking 2015, methodology: http://s.newsweek.com/sites/www.newsweek.com/files/newsweek-green-rankings-final-methodology_2015.pdf, last accessed on June 8th 2018
Griliches, Z. (1981). Market value, R&D, and patents. Economics Letters, 7(2), 183–187.
Gupta, A. K., Smith, K. G., & Shalley, C. E. (2006). The interplay between exploration and exploitation. Academy of Management Journal, 49(4), 693–706.
Hagedoorn, J., & Cloodt, M. (2003). Measuring innovative performance: Is there an advantage in using multiple indicators? Research Policy, 32, 1365–1379.
He, Z., & Wong, P. (2004). Exploration vs. exploitation: An empirical test of the ambidexterity hypothesis. Organization Science, 15, 481–495.
Hoff, A. (2007). Second stage DEA: Comparison of approaches for modelling the DEA score. European Journal of Operational Research, 181, 425–435.
Iversen, J., Jørgensen, R., & Malchow-Møller, N. (2007). Defining and measuring entrepreneurship. Foundations and Trends in Entrepreneurship, 4(1), 1–63.
Junni, P., Sarala, R. M., Taras, V., & Tarba, S. Y. (2013). Organizational ambidexterity and performance: A meta-analysis. Academy of Management Perspectives, 27(4), 299–312.
Lavie, D., Kang, J., & Rosenkopf, L. (2011). Balance within and across domains: The performance implications of exploration and exploitation in alliances. Organization Science, 22(6), 1517–1538.
Lubatkin, M. H., Simsek, Z., Ling, Y., & Veiga, J. F. (2006). Ambidexterity and performance in small-to medium-sized firms: The pivotal role of top management team behavioral integration. Journal of Management, 32(5), 646–672.
Maditinos, D., Chatzoudes, D., Tsairidis, C., & Theriou, G. (2011). The impact of intellectual capital on firms’ market value and financial performance. Journal of Intellectual Capital, 12(1), 132–151.
Maletič, M., Maletič, D., & Gomišček, B. (2016). The impact of sustainability exploration and sustainability exploitation practices on the organisational performance: A cross-country comparison. Journal of Cleaner Production, 138, 158–169.
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87.
Murphy, G. B., Trailer, J. W., & Hill, R. C. (1996). Measuring performance in enterpreneurship research. Journal of Business Research, 36, 15–23.
Narin, F., Noma, E., & Perry, R. (1987). Patents as indicators of corporate technological strength. Research Policy, 16, 143–155.
O'Reilly III, C. A., & Tushman, M. L. (2008). Ambidexterity as a dynamic capability: Resolving the innovator’s dilemma. Research in Organizational Behavior, 28, 185–206.
Raisch, S., Birkinshaw, J., Probst, G., & Tushman, M. L. (2009). Organizational ambidexterity: Balancing exploitation and exploration for sustained performance. Organization Science, 20(4), 685–695.
Richard, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2009). Measuring organizational performance: Towards methodological best practice. Journal of Management, 35(3), 718–804.
Shuen, A., Feiler, P. F., & Teece, D. J. (2014). Dynamic capabilities in the upstream oil and gas sector: Managing next generation competition. Energy Strategy Reviews, 3, 5–13. https://doi.org/10.1016/j.esr.2014.05.002.
Simsek, Z. (2009). Organizational ambidexterity: Towards a multilevel understanding. Journal of Management Studies, 46(4), 597–624.
The Organization for Economic Co-operation and Development. (2014). Development co-operation report 2015: Mobilising resources for sustainable development. Paris: OECD Publishing.
United Nations. (2015). Transforming our world: The 2030 agenda for sustainable development. New York: United Nations.
Uotila, J., Maula, M., Keil, T., & Zahra, S. A. (2009). Exploration, exploitation, and financial performance: Analysis of S&P 500 corporations. Strategic Management Journal, 30(2), 221–231.
Vagnani, G. (2015). Exploration and long-run organizational performance: The moderating role of technological interdependence. Journal of Management, 41, 1651–1676.
Voss, G. B., & Voss, Z. G. (2013). Strategic ambidexterity in small and medium-sized enterprises: Implementing exploration and exploitation in product and market domains. Organization Science, 24(5), 1459–1477.
World Bank. (2010). Innovative finance for development solutions: Initiatives of the World Bank Group. Washington, D.C.: World Bank Group.
Acknowledgements
The research leading to results presented in this paper has received funding from the Ministry of Science and Higher Education of the Russian Federation in 2017-2018 (project ID: RFMEFI60117X0015)
Author information
Authors and Affiliations
Corresponding author
Electronic supplementary material
ESM 1
(XLSX 92 kb)
Appendix
Appendix
Rights and permissions
About this article
Cite this article
Dranev, Y., Izosimova, A. & Meissner, D. Organizational Ambidexterity and Performance: Assessment Approaches and Empirical Evidence. J Knowl Econ 11, 676–691 (2020). https://doi.org/10.1007/s13132-018-0560-y
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13132-018-0560-y