For a better understanding of ambidexterity and describing the internal structure of ambidextrous organizations and how they manage to balance ambidexterity, in this section, the following two dimensions are used: time and space. Time dimension captures the extent to which ambidexterity is pursued simultaneously or sequentially over time, whereas space dimension captures whether ambidexterity takes place within independent or interdependent organizational units (Simsek et al., 2009). An illustration of the above concept is presented in Figure 2.2 below:
Figure 2.2: A typology of organizational ambidexterity (developed from Simsek et al., 2009, p. 868).
Harmonic/contextual ambidexterity is inherently challenging, as it includes the simultaneous pursuit of exploration and exploitation within the same business unit. This involves building a set of processes or systems so that individuals could make their own judgments on how to divide their time between conflicting demands
to have complex, ambidextrous behaviors in the organizational roles that they encounter (Andriopoulos & Lewis, 2009; Raisch & Birkinshaw, 2008). From a resource-based view, harmonic ambidexterity is a potential source of competitive advantage, as it is valuable, rare, and costly to imitate. It is also positively associated
with stakeholder satisfaction, middle and senior level managers’ performance, as
well as strategic performance. The difficulty, however, of such an approach lies in that the implementation of ambidexterity in systems and processes is costly to achieve (Gibson & Birkinshaw, 2004; Simsek et al., 2009).
Partitional/structural ambidexterity includes a dual structure composition, where exploration and exploitation are pursued in structurally independent units (Huang & Kim, 2013), with each one having its own strategies, structures, cultures, and incentive systems. It is an interdependent, simultaneous phenomenon that involves ambidexterity within different structural units or divisions of one or more organizations. Each unit houses its own distinct management team, organization structure, culture, control systems, and incentive structures that have an independent or organizationally interdependent operation, coordinated by actions of a senior management team (Figure 2.3) (Tushman & O’Reilly, 1996). It is used in financial services firms or firms with strategic alliances and inter-firm networks. The integration of exploration and exploitation across separate domains constitutes a major challenge that can be addressed through a shared vision (Jansen et al., 2008;
O’Reilly & Tushman, 2004), senior management team coordination (Lubatkin et al., 2006), and systems for knowledge integration. It can, then, be closely associated with increased innovation and high financial performance (Simsek et al., 2009).
Figure 2.3: Partitional or structural ambidexterity (developed from Blarr, 2012, p. 78)
Cyclical ambidexterity or punctuated equilibrium (Lant & Mezias, 1992; Papachroni et al., 2015; Smith et al., 2017; Wang & Rafiq, 2014) includes long periods of exploitation (relative stability) interrupted by short bursts of exploration within the same business unit (Figure 2.4) (Gersick, 1991; Gupta et al., 2006; Romanelli &
Tushman, 1994; Siggelkow & Levinthal, 2003; Tushman & O’Reilly, 1996). As a result, it requires changes in the formal structure and routines, practices and procedures of reward and control, and resource allocation. For this reason, mechanisms for management conflict, effective interpersonal relations, flexibility, and switching rules constitute the primary feature of this ambidexterity. It is mostly used in firms with strong technological and R&D orientation, such as biotechnology or software firms (Simsek et al., 2009). These firms follow an S-shaped curve, where they first engage in exploration to discover new knowledge, and then, they focus on exploitation to develop and commercialize that knowledge. Hence, they are strongly
associated with innovative outcomes and increased performance through innovation (Simsek et al., 2009).
Figure 2.4: Cyclical ambidexterity or punctuated equilibrium (developed from Blarr, 2012, p. 68)
Reciprocal ambidexterity includes the sequential pursuit of ambidexterity across separate units. In this type, the outputs from exploration from unit B become the inputs for exploitation by unit A, and the outputs from unit A cycle back to become the inputs of unit B (Figure 2.5) (Simsek et al., 2009). This type of ambidexterity requires an ongoing information exchange, collaborative problem solving, joint decision-making, and resource flows between managers of different units. Reciprocal ambidexterity is used between organizations that engage in formal strategic alliances or processes of internationalization, as they operate in complex environments that require proper knowledge integration among the alliance partners. Most importantly, a proper exploratory and exploitative knowledge sharing in long-term inter- organizational relationship could be positively associated with increased relationship performance (Simsek et al., 2009).
Figure 2.5: Reciprocal ambidexterity
All the above approaches are not seen strictly as alternatives (Kauppila, 2010; Papachroni et al., 2015). Firms are expected to utilize various combinations while seeking to better employ ambidexterity in their organizational context (Hill & Birkinshaw, 2014; Turner, Swart, & Maylor, 2013). They are, therefore, expected to pursue hybrid forms of organizational ambidexterity or hybrid ambidexterity. However, firms are expected to mostly focus on simultaneous use of exploration and exploitation that results in supreme corporate performance. In this regard, high-tech companies, for instance, are expected to pursue organizational ambidexterity in the same unit, as well as in different units. At the same time, as the external environment changes, it is possible that they initially pursue innovation and then try to achieve cost efficiency. Thus, a few or all the four types of organizational ambidexterity are likely to occur in both high-tech oriented units, as well as in non-technologically oriented units (Boumgarden et al., 2012; Nickerson & Zenger, 2002).