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The Paradox of Static and Dynamic Ambidexterity

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abstract This paper introduces the concept of dynamic ambidexterity, which arises from a firm’s ability to adapt its exploitation-exploration balance over time. Building on the strategy-environment coalignment literature, we argue that dynamic ambidexterity leads to higher firm performance than the more static forms of ambidexterity described in previous studies. While we introduce the concept of dynamic ambidexterity, we highlight a novel paradox for ambidextrous firms. We show that static ambidexterity has a self-reinforcing effect: while firms become increasingly adept at balancing exploitation and exploration over time, their ability to adapt this balance to changing environmental conditions declines. Ultimately, static ambidexterity crowds out dynamic ambidexterity, which harms firm performance. Based on a longitudinal sample of the global insurance industry, we find empirical support for our arguments. We contribute to the organizational literature by developing a more dynamic understanding of ambidexterity and reveal how some of the previously described practices to promote ambidexterity can trap firms in downward spirals rather than preventing them.
   
type conference paper (English)
   
keywords Exploitation; Exploration; Organizational Ambidexterity; Organizational Paradox; Organizational Routines; Time
   
name of conference SMS 32nd Annual International Conference (Prague CZ. Winner of the Best Conference PhD Paper Prize; Finalist for the Best Conference Paper Prize for Practice Implications; Nominee for the Best Conference Paper Prize)
date of conference 6-10-2012
title of proceedings Strategy in Transition
publisher SMS Strategic Management Society (Chicago)
review blind review
   
citation Luger, J., & Raisch, S. (2012). The Paradox of Static and Dynamic Ambidexterity. In Strategy in Transition. Chicago: SMS Strategic Management Society.