The Performance Consequences of Ambidexterity in Strategic Alliance Formations: Empirical Investigation and Computational Theorizing

Abstract

Although alliance studies have generally favored an ambidextrous approach between exploration and exploitation, they tend to overlook a firm's characteristics, its industry constraints, or the dynamic network in which the firm is embedded. This study examines the ambidexterity hypothesis and its boundary conditions with a unique research method. We not only analyze empirical data from five U.S. industries spanning eight years, but also expand theoretical insights to the network level by building a computer simulation model. Both our empirical and simulation results reveal the contingencies of the ambidexterity hypothesis in alliance formation. Our findings show that although an ambidextrous formation of alliances benefits large firms, a focused formation of either exploratory or exploitative alliances benefits small firms. In an uncertain environment an ambidextrous formation enhances firm performance but so does a focused formation in a stable environment. Finally, the simulation model demonstrates that a firm's centrality and structural hole positions in network relations can moderate the relationships between alliance formation choices and firm performance, and that the ambidexterity hypothesis may be limited to the earlier stage of the network. Our study provides critical evidence into the viability of adopting a dynamic network perspective in understanding the ambidexterity hypothesis and advancing strategic alliance research beyond static and dyadic levels.alliance formation, ambidexterity hypothesis, social networks, empirical analysis, computer simulation

Alliance partners and firm performance: resource complementarity and status association

“…Imagine that there are two firms: one is in the central position of the network, and the other is in a peripheral position of the network. An alliance between these firms will enable access to a wide spectrum of information, including both the central and the peripheral channels, capturing rather complete information in the network and helping firms to better deal with a dynamic environment (Gnyawali and Madhavan, 2001;Lin et al, 2007). Conversely, if two firms are both in a similar position in the network, their information access may be constrained or overlap, offering little help to face a dynamic environment (Gulati, 1999;Stuart, 2000).…”

Can a governance structure foster cluster ambidexterity through knowledge management? An empirical study of two French SME clusters

“…The knowledge-based view of clusters (KBVC; Malmberg & Maskell, 1997Maskell, 2001;Bathelt et al, 2004;Bahlmann & Huysman, 2008) suggests the need to identify the role of cluster governance with respect to knowledge, especially for clusters composed of small and medium-sized enterprises (SMEs). Some prior research asserts that ambidexterity benefits small firms (Lubatkin et al, 2006;Bierly & Daly, 2007;Lee et al, 2010), whereas other studies highlight the difficulties of achieving ambidexterity for SMEs because of their limited resources (March, 1991;Lin et al, 2007). Small firms may procure ambidexterity externally, through inter-organisational ties (Rothaermel & Deeds, 2004), in which case SMEs in search of ambidexterity might compensate for their lack of internal resources by developing relations with other organisations (e.g., research labs, startups, competitors, suppliers, clients).…”

Organizational Ambidexterity: An Empirical Examination of Organizational Factors as Antecedents of Organizational Ambidexterity

“…Traditionally, in organizational literature ambidexterity broadly refers to an organization's ability to pursue two disparate things at the same time-such as manufacturing efficiency and flexibility, standardization and innovation, differentiation and low-cost strategic positioning, or global integration and local responsiveness (Gibson and Birkinshaw, 2004: 210;Lin et al, 2007Lin et al, : 1646Han and Celly, 2008: 335). One of good examples which had this ability is Seiko.…”

“…Ambidextrous firms are capable of exploiting existing competencies as well as exploring new opportunities with equal dexterity (Lubatkin et al, 2006: 647). Exploitation includes such things as refinement, choice, production, efficiency, selection, implementation, execution (March, 1991: 71, He andWong, 2004: 481;Lin et al, 2007Lin et al, : 1645. The intent of exploitation is to respond to current environmental conditions by adapting existing technologies and further meeting the needs of existing customers (Lubatkin et al, 2006: 647).…”

“…Ambidexterity broadly refers to an organization's ability to pursue two disparate things at the same time (Gibson and Birkinshaw, 2004: 210;Lin et al, 2007Lin et al, : 1646. Ambidextrous firms are capable of exploiting existing competencies as well as exploring new opportunities with equal dexterity (Lubatkin et al, 2006: 647).…”