You are on page 1of 4

Successful companies are defined by their superior organisational design (Raisch &

Birkinshaw, 2008), in particular, their ability to be ambidextrous - current business demands


are simultaneously balanced with future environmental changes and demands (Tushman &
OReilly, 1996; Gibson & Birkinshaw, 2004). However, the extent to which organisations can
implement an ambidextrous organisational design into their firm is highly dependent on the
form of ambidexterity they decide to implement. Most importantly, for a firm to be
successfully ambidextrous regardless of the type of ambidexterity they implement, it must
possess an aligned organisational structure that is flexible enough to adapt to incremental and
revolutionary change simultaneously.
Tushman & OReilly (1996) argue that in order for organisations to remain successful, they
must be ambidextrous by implementing both incremental and revolutionary change.
Incremental change is small and gradual whereas revolutionary change involves significant
changes in environmental conditions that require a major shift in an organisations structure,
strategy, people and culture. Incremental change can involve improving the features on an
existing product or service; for example, Apple creating a new iteration of their iPhone line.
One example of revolutionary change can involve a complete restructuring of a company as a
result of a new product being introduced by a competitor that makes existing products
obsolete. O'Reilly & Tushman (2011) argue that implementing this concept of simultaneous
incremental and revolutionary change requires an organisation to develop an exploratory and
exploitative organisational structure where exploratory refers to discovering new markets and
implementing new technologies and exploitative refers to utilising a firms existing assets and
resources to make a profit. As ambidextrous organisations implement incremental and
revolutionary change, an exploratory and exploitative structure will allow a firm to balance
between the short-term and the long-term opportunities and challenges that arise. But through
what methods can a firm implement an exploratory and exploitative organisational structure?
To implement an exploratory and exploitative organisational structure, a business will need to
decide out of three types of ambidextrous structures: structured ambidexterity, contextual
ambidexterity, and leadership-based ambidexterity.
Structured ambidexterity refers to the creation of separate structures and processes to
distinguish between exploratory and exploitative activities (de Visser et al., 2010; Tushman &
OReilly, 1996). As such, each activity receives its own space which can be managed
distinctly from the other making spatial separation and parallel structures the defining

elements of structured ambidexterity (Raisch & Birkinshaw, 2008). Contextual ambidexterity


differs greatly by integrating the exploratory and exploitative activities together as opposed to
dividing them into separate business units. In this structure, employees are given the
autonomy to decide how to best utilise their time between the conflicting demands of
exploration and exploitation (Gibson & Birkinshaw, 2004). Leadership-based ambidexterity is
highly dependent on leaders managing tensions and demands between the exploratory and
exploitative activities. They do this by managing the utilisation of resources and sharing of
information across the organisational hierarchy (Nemanich & Vera, 2009; Jansen, Vera &
Crossan, 2009). Floyd and Lane (2000) suggest that exploratory activities take place lower in
the hierarchy, until certain novel ideas are elevated through the hierarchy to be exploited by
top management. However, for the purposes of this text, leadership-based ambidexterity will
be excluded for further evaluation due to the lack of research surrounding it and the
prominence of structured and contextual ambidexterity. Overall, what ties the different types
of ambidexterity together is their focus on simultaneous exploratory and exploitative
activities; providing firms a significant competitive advantage should they decide to use an
ambidextrous structure.
In the current economic climate, it is unlikely that many firms will survive unless they can
employ an ambidextrous structure successfully (O'Reilly & Tushman, 2011). There are
numerous competitive advantages that can be attained through ambidexterity. Businesses that
are ambidextrous will usually see higher financial performance as firms that only pursue
exploitation may become complacent and fail to seize opportunities that arise and firms that
pursue exploration only will risk wasting valuable resources on unproven ideas whereas a
firm that does both can outperform these specialised firms (Gibson & Birkinshaw, 2004;
O'Reilly & Tushman, 2011). Additionally, companies can leverage their resources across the
exploratory and exploitative units in a structured ambidexterity structure, allowing for
concurrent growth across divisions Tushman & OReilly (1996). Firms can benefit from
greater autonomy in staff, giving employees a sense of ownership and responsibility towards
their job while increasing the possibility of innovative solutions to company problems
(Gibson & Birkinshaw, 2004; Tushman & OReilly, 1996). However, there are some
limitations of ambidexterity, as the benefits above all relate to medium to large firms. For
smaller organisations, focusing on an exploration only or exploitation only business
structure allows them to outperform smaller firms that implement both exploration and
exploitation into their business structure, due to small firms having inadequate resources to

split into distinct business units (Ebben & Johnson, 2005). Thus, if an organisation is of
medium to large sized, it will benefit from an ambidextrous structure. However, the culture of
an organisation will affect the extent to which ambidexterity will benefit the firm.
Structured ambidexterity will produce firms that possess multiple cultures. This arises as a
result of the multiple business units that operate with different tasks. Tushman & OReilly
(1996) identify that these subcultures are both simultaneously tight and loose. They are tight
since the corporate culture encourages innovation through openness, autonomy, initiative and
risk taking while also being loose through the variation in the expression of these values.
While companies encourage autonomy in their employees to boost innovation, this subculture
model allows businesses to centralise any business unit in order to achieve business goals
when required (Tushman & OReilly, 1996). Successful structurally ambidextrous firms will
also possess a common culture that links the multiple business units together. The common
culture is crucial to integrate the various business units and to encourage information and
resource sharing. O'Reilly & Tushman (2011) also highlight the importance of a common
culture as leaders who developed a clear vision and a common identity in an organisation
were more likely to have a successful ambidextrous organisational structure.
In contrast, contextual ambidexterity will produce firms that have a single culture. This is due
to exploratory and exploitative activities being integrated into an employees job and
responsibilities, which removes the need for multiple business units which would segment the
common culture (Wang & Rafiq, 2012). Gibson & Birkinshaw (2004) note that the attributes
of context influence performance through the development of ambidexterity (p. 214) where
culture is a component of context. As contextual ambidexterity is a more integrated model of
ambidexterity in comparison to structured ambidexterity, developing contextual ambidexterity
will require a significantly longer time period (Ghoshal and Bartlett, 1994) as the
development of the contextually ambidextrous structure is more organic and individually
motivated as opposed to being implemented by top management and more formal which are
associated with a structured ambidextrous model (Gibson & Birkinshaw, 2004).
For an organisation to be successful in implementing ambidexterity, it must first decide which
form of ambidexterity would like to implement. Contextual ambidexterity is regarded as
superior to structural ambidexterity as it prevents fragmentation of an organisations culture,
strategy and processes and has no communication lag in comparison to structured
ambidexterity, but takes longer and is more challenging to implement (Wang & Rafiq, 2012).

If a company is in critical need of restructuring, structural ambidexterity is the recommended


option but ideally, a firm acting proactively will benefit greatly from contextual ambidexterity
(Gibson & Birkinshaw, 2004; de Visser et al., 2010; Wang & Rafiq, 2012).
Secondly, the organisation must ensure that leaders and top management are ready to handle
tensions that may arise as a result of changes to business structure, strategy, people and
culture. Leadership styles may need to change in order for change to be implemented, senior
staff that are resistant to change may need to be removed, and developing a forum with senior
managers to resolve conflicts as they happen are all methods of ensuring leaders and top
management are ready to implement an ambidextrous business structure (Tushman &
O'Reilly, 1996; McDonough & Leifer, 1983).
Thirdly, when implementing the new contextual structure: ensure that processes and strategies
encourage ambidexterity within the organisation. For example, reward systems should
provide incentives for exploratory and exploitative activities in order to ensure both are
prioritised by employees. Top managers should also be made responsible for implementing
systems and developing the culture to support and encourage ambidexterity at an individual
level. For example, senior managers can intervene when they recognise a new idea with
potential and develop momentum within the business for the idea (Gibson & Birkinshaw,
2004). Thus, the firm can align its organisational structure with company goals, processes,
strategy, people and culture while providing it the flexibility to adapt to changes in the
business environment to successfully becoming ambidextrous.
In conclusion, ambidexterity is crucial for an organisation to attain a competitive advantage
and align its business structure to achieve incremental and revolutionary change successfully.
Successfully implementing ambidexterity within an organisation is highly dependent on the
type of ambidexterity being implemented and whether the aforementioned methods have been
followed. By implementing an ambidextrous business structure, a firm can both explore and
exploit simultaneously.

You might also like