As the degree of uncertainty and intensity within the complex business environment continues to increase, firms are forced to make timely changes to their product and process technologies. Such environments are often characterized by unpredictable demand patterns, rapid industry clockspeed, and heightened competitive intensity. As a result, firms face many difficulties in realizing sustained and superior performance, and are at risk of realizing decreases in market and financial performance. Firms can alleviate this risk by engaging in innovation practices that enable them to secure current profitability (efficiently serving existing customer segments) alongside future viability (adapting to meet the demand of new customer segments).
Simultaneously serving existing and breakthrough product markets means that organizations must be able to balance paradoxical tensions in their innovation management capabilities. Ambidexterity is one such capability, in which the successful balance of exploration and exploitation promises to offer supernormal business performance. While the performance benefits of ambidexterity have been noted, research has not yet adequately sought to understand whether a firm’s decision to pursue ambidexterity is contingent on certain business environment factors. Likewise, research has also not yet explored the intangible resources a firm must build and/or acquire and manage after deciding to pursue ambidexterity. Additionally, because no single firm can adapt and survive without the same being achieved by its supply chain partners, ambidexterity in supply chain capabilities is vital. However, the literature base examining the importance of ambidexterity in the supply chain is scarce. Lastly, ambidexterity and the process for implementing it within the firm and across the supply chain remains misunderstood amongst practitioners.
To fill the aforementioned research gaps, this study builds a strategic innovation-based and interdisciplinary theoretical framework of ambidexterity that links environmental antecedents, ambidextrous resources, ambidextrous supply chain capabilities, innovation outcomes and firm performance. The central purpose of this research is to explore and advance the scholarly understanding of how organizations within complex business environments can leverage their supply chains to successfully implement ambidexterity, and to empirically validate assertions concerning the antecedents and outcomes of ambidexterity within the supply chain. This research seeks to explore how characteristics of a complex environment influence a firm’s decision to invest in internal (ambidextrous firm resources) and external (ambidextrous alliance portfolio) resources. This study also examines the relationship between ambidextrous supply chain capabilities (ambidextrous supply chain collaboration and supply chain adaptability), innovation outcomes (innovation ambidexterity) and firm performance (market and financial performance). In fulfilling this purpose, this research utilizes and integrates literature from the strategy, organizational management, operations and supply chain management, and innovation management research streams. The hypotheses are based on practitioner and academic rationale, and the rich theoretical premises of ambidexterity theory, paradox theory, environmental determinism, strategic choice theory, contingency theory, resource-based view, and resource dependency theory.
This study makes the following assertions: (1) ambidexterity is a higher-order paradox that is comprised of micro-paradoxes; (2) a way to achieve adaptable and endurable performance is by managing innovation through the ambidexterity paradox; (3) as the business environment becomes more complex, firms will tend to invest more in both internal and external ambidextrous resources; (4) ambidextrous supply chain collaboration and supply chain adaptability are essential capabilities that mediate the association between ambidextrous resources and innovation ambidexterity; (5) realization of innovation ambidexterity enables a firm to achieve greater financial and market performance relative to its competitors.
A primary data collection methodology was employed in this study. Specifically, an online survey was used to facilitate the large-scale data collection process. Data from 215 respondents representing manufacturers across five industries was collected and analyzed. To test the proposed hypotheses, covariance-based structural equation modeling (CB-SEM) was used. The findings indicate that firms do not wait for external environment factors to control their pursuit of ambidexterity. Instead, it is the strategic choice of firm leaders that results in their proactive development of internal and external ambidextrous resources. Also, a firm’s internal ambidextrous resources such as absorptive capacity, ambidextrous leadership and organizational mindfulness are critical for (1) developing an ambidextrous alliance portfolio based on function, structure and attributes, and (2) increasing supply chain adaptability. The study also finds that ambidextrous alliance portfolio is a strong and direct antecedent of ambidextrous supply chain collaboration, while ambidextrous firm resources has a positive and significant indirect impact on ambidextrous supply chain collaboration. Furthermore, ambidextrous supply chain collaboration and supply chain adaptability are found to enhance a firm’s achievement of innovation ambidexterity. Lastly, innovation ambidexterity has a positive and significant association with firm performance (market and financial performance).
This study makes multiple contributions. First, this study has progressed the existing conception of ambidexterity by infusing it with tenets of paradox theory. Secondly, this study employs an interdisciplinary framework of ambidexterity that has been empirically tested. Third, this is the first empirical study to develop ambidextrous firm resources, ambidextrous alliance portfolio and ambidextrous supply chain collaboration constructs and model relationships between them. Fourth, a scale has been developed to measure ambidextrous alliance portfolio. Additionally, this study provides findings that are both expected and counterintuitive. This study ends with a detailed discussion of the aforementioned contributions, research and managerial implications, research limitations and opportunities for future research.