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uthors use for the concept of strategic ambidexterity? 2) What do the authors have to say about organizational capabilities and exploitive strategies?...

1) What is the definition that the authors use for the concept of strategic ambidexterity?

2) What do the authors have to say about organizational capabilities and exploitive strategies?

3) What do the authors have to say about organizational capabilities and exploratory strategies?

4) What do the authors have to say about organizational capabilities and strategic ambidexterity strategies?

5) What do the authors have to say about organizational capacity to change and strategic ambidexterity?

Please read article below by William Q. Judge, "Organizational capacity for change and strategic ambidexterity Flying the plane while rewiring it"

Please help. Thank you very much.

Today's strategic leaders face a daunting challenge.Onone hand, they face theimmediate

pressures of delivering value to increasingly sophisticated and globally diverse

customers while accelerating the return on these efforts for financial stakeholders.On the

other hand, strategic leaders must identify and prepare for disruptive technologies and

emerging market opportunities over the long-term. Put simply, overall organizational

effectiveness requires firms to be efficiently responsive to current markets while

effectively preparing for new markets on the horizon (Naman and Slevin, 1993).

Unfortunately, discussion around these two strategic orientations often focuses on

whether firms ought to pursue the strategic goals of market exploitation or market exploration in a given context. Many assume they are mutually exclusive. This is

perhaps due to the fact that exploitation and exploration strategies are typically

associated with dramatically different organizational structures, cultures and

systems (Kyriakopoulos and Moorman, 2004). Similarly, firms that pursue both

exploitation and exploration are often seen as lacking good external

organization-environment or internal organizational fit (Lawrence and Lorsch,

1967). Despite the longstanding argument that the key functions of business involves

satisfying existing customers while seeking innovative new products and markets, a

key question confronting many organizations today is how an organization can excel

at both, simultaneously. Reconciling strategic tensions

Recently, Aulakh and Sarkar (2005, p. 4) advanced the notion of "strategic

ambidexterity" (SA) which they define as "a firm's ability to combine exploration and

exploitation strategies across product, market, and resource domains". In their

empirical study of international expansion strategies of South American

manufacturing firms, these authors found that certain combinations of exploration

and exploitation strategies were associated with superior firm performance. To our

knowledge, this is the first conceptual and empirical solution to the dilemma posed by

the exploitation and exploration imperatives.

While this development is encouraging, several important questions remain. First,

no known studies have explored potential antecedents of strategic ambidexterity so

little is known about how it might be created. Also, virtually nothing is known about

what kind of contextual factors influence strategic ambidexterity. Finally, the SA

concept is being formally and informally explored in the organizational theory,

strategic management, and marketing literatures with no cross fertilization of ideas.

Clearly, some integration of these literatures is needed to avoid redundancy and

promote cross fertilization of ideas. Consequently, this research seeks to fill this void in

the literature by:

-. elaborating on the concept of SA;

. identifying a potential antecedent and moderators of SA; and

. integrating disparate literatures into a coherent whole. Following Aulakh and Sarkar (2005), we conceptualize SA as the ability to

simultaneously explore and effectively pursue new market opportunities while

efficiently exploiting existing markets. The concept of SA builds on an extensive and

growing marketing literature, which is increasingly interested in understanding the

balance between exploitive and exploratory strategies (Berthon et al., 2004; Bhuian

et al., 2005). In addition, it builds on literature within organizational theory and

strategic management (Gibson and Birkinshaw, 2004; March, 1991; Miller, 1992).

Together, these literatures offer a comprehensive perspective of SA.

Organizational capabilities and strategic orientation

One of the oldest dictums of strategic management is that organizational strategy and

structure should be aligned (Andrews, 1971). However, the strategic landscape now appears to require the pursuit of multiple strategic orientations so that there is a

"loose-tight" fit between strategy and structure (Arogyaswamy and Byles, 1987). While

organizational structure is clearly important, we think that the more current

organizational capabilities research is more likely to reconcile these divergent strategic


Organizational capabilities and exploitive strategies

The notion that customers should occupy a central place in corporate strategy dates

back to Drucker's (1954) discussion on obtaining and retaining customers as the central

purpose of business. The marketing discipline examines these ideas and their many

facets through the core concept of "market orientation" (e.g., Narver and Slater, 1990).

In this paper, for the purposes of integrating discussion of SA from several literature

bases, we refer to market orientation as an "exploitive" strategy. An exploitive strategy

can be conceptualized as:

. a unifying frame of reference that emphasizes serving the customer through

understanding their needs and creating value for them (Slater and Narver, 1999);

. a set of organization-wide processes involving the generation, dissemination, and

responsiveness to market intelligence (Jaworski and Kohli, 1993); and

. an organizational capability that enables the firm to compete through

understanding market requirements and forging relationships with customers,

channel members, and suppliers (Day, 1994). Several studies have identified marketing-related capabilities as keys to competitive

advantage. Capabilities previously identified include: customer service, product

branding, new product development, relational assets (e.g. customers, networks,

supply-chain), and intellectual assets (e.g., Ray et al., 2004). A key idea throughout this

research is that firms with exploitive strategies seek a tight alignment with customers

and expect this alignment to lead to valuable and rare competitive advantages.

However, some marketing and strategy scholars argue that there are considerable

strategic risks to an exclusive focus on market exploitation. Evidence shows a firm's

over-emphasis on this strategic orientation can lead to an unhealthy, escalating

commitment, described by Hamel and Prahalad (1994) as the "tyranny of the served

market". Their argument is that firms can be rightfully preoccupied with exploiting

core capabilities to serve customers profitably. Yet, in the process, they can get so

focused on tightly aligning with served markets that its core capabilities become "core

rigidities", that limit visibility of the market's periphery, where major opportunities

and threats emerge (Leonard-Barton, 1992).

Similarly, some evidence shows the influence of current customers can adversely

shape the trajectory of competence renewal (Danneels, 2002), lead to myopic R&D

efforts (Frosch, 1996), or possibly cause firms to get stuck in a loop of developing

incremental new products to serve existing customer needs (Christensen and Bower,

1996). Overall, the literature suggests that an exploitive strategy often leads to superior

value delivery and performance in the short-term. However, recent evidence regarding

an over-emphasis on served markets suggests its viability for long-term performance is questionable. This research suggests that firms need capabilities to do more than just

exploit existing markets.

Organizational capabilities and exploratory strategies

An exploratory strategy takes a different approach to creating value whereby

managers devote their energy to innovation through experimentation, taking creative

risks, and being proactive in identifying and serving new markets (Covin and Slevin,

1989). Discussion of this strategic orientation usually focuses on issues such as

developing innovative products, discovering new technologies, and finding untapped

markets. Unlike an exploitation strategy, an exploratory strategy advocates

maintaining loose linkages with current customers and pursuing market

adaptability. The key idea is that by maintaining loose linkages, firms can remain

flexible and adapt to a dynamic environment, as well as seize opportunities or avoid

distant threats that lie on the market's periphery (Danneels, 2003).

Despite the apparent long-term benefits of an exploratory strategy, a significant

obstacle to innovation is that firms are often unable to effectively financially

appropriate the value they create. In these cases, firms fail to erect isolating

mechanisms, and the value created through innovation is claimed by customers and

competitors before any profit is realized (Ghemawat, 1991). Similarly, firms can get

caught in a cycle of cannibalizing their previous products with new product introductions. Also, having loose linkages with customers is inherently less efficient

than an exploitive strategy, and recent research suggests that financial markets reward

firms for shifting away from long-term value creation to short-term value

appropriation (Mizik and Jacobson, 2003).

Finally, firms that overemphasize the technology aspects of an exploratory strategy

to the exclusion of market feedback can fall into a "product orientation", whereby its

products and services fail to match up with the actual benefits sought in the

marketplace (Kotler and Armstrong, 1996). So, while an exploratory strategy seems

critical for firms hoping to survive long-term, strategic leaders enacting this strategy

may struggle to compete today given the inefficiencies of this approach and pressure

for short-term results from financial institutions. Organizational capabilities and strategic ambidexterity

Within the strategic management and organizational theory literatures, significant

attention has been given to managing the trade-offs of conflicting demands (March,

1991; March and Simon, 1958). For example, Gibson and Birkinshaw (2004) explored an

overarching tension between the goals of organizational alignment and organizational

adaptability, and theorized that successful organizations are ambidextrous to the

extent they can effectively reconcile the two. Others characterize this tension as a

balance between incremental and radical organizational change and reason that the

tension lies in the fact that a firm's productivity gains can inhibit its flexibility to

innovate (Benner and Tushman, 2003).

Adler et al. (1999) explored the trade-offs between organizational efficiency and

effectiveness through an in-depth case study of the Toyota Production System within

the NUMMI automobile manufacturing facility in California. They discovered that the

keys to successfully balancing these two imperatives are extensive investments in training, the continuous enhancement of organizational trust, leadership and

management skill, and an innovative culture that contains accountability checks.

Mayrhofer (1997) argued that that best way to be both efficient and effective is by

maintaining a dynamic balance of organizational polarities - having structured and

unstructured activities; seeking diversity and coherence; and emphasizing the presence

of tight fits while allowing for organizational slack when necessary. We think that

Mayrhofer is pointing out something important that has been neglected in the

literature, and we build upon this insight in the following section. Organizational capacity for change and strategic ambidexterity

The central tenet behind the resource based view is that a firm's bundle of resources

can yield one or more capabilities to serve as the driving force behind competitive

advantage(s) and superior performance (Wernerfelt, 1984). Current resource-based

research reveals that some of the most valuable resources are dynamic capabilities.

Dynamic capabilities foster congruence between the firm's strategy and the changing

business environment and enable a firm to alter its capability base through the:

integration, adaptation, reconfiguration, gaining, and shedding of resources to

generate new value-creating strategies (Teece et al., 1997). More pertinent to this

discussion, dynamic capabilities have been linked to discussions of balancing strategic

exploitation and exploration (Benner and Tushman, 2003). For example, Brown and

Eisenhardt (1998) propose that dynamic capabilities can enable a firm to rhythmically

switch between exploratory and exploitive organizational strategies. However, we are

interested in discovering what organizational capability allows simultaneous pursuit

of both strategic orientations. Organizational capacity for change (OCC) - precursor to strategic ambidexterity?

OCC has been defined as "a dynamic organizational capability that allows the

enterprise to adapt old capabilities to new threats and opportunities as well as create

new capabilities" (Judge and Elenkov, 2005, p. 893). OCC is a new and relatively

comprehensive organizational construct emerging from the resource based perspective

that addresses many organizational issues confronting strategic leaders today.

OCC is related to several other organizational change constructs, but it is distinct in

its overall scope and implications. For example, it is similar to "readiness for change"

(Weeks et al., 2004) in that it proposes key dimensions for change preparation and

assists in diagnosing a change situation. However, it goes beyond an individual level of

analysis to describe an organizational unit's collective capacity for change. Also, the

OCC construct is comparable to "organizational adaptive capacity" (Staber and Sydow,

2002) and "capacity for change" (Meyer and Stensaker, 2006), however, OCC has been

operationalized and tested empirically.

OCC integrates eight key dimensions of organizational change key into four

organizational polarities:

(1) a leader and follower polarity;

(2) an innovation and accountability polarity;

(3) a unitary and distributed leadership polarity; and

(4) a thinking and action polarity.

Opposing poles along OCC dimensions represent corresponding concepts that serve as

the "other side of the coin". For example, an accountable culture complements one that

values innovation. That is, each dimension calls for a complementary dimension,

without which it can not be effective in supporting organizational learning and change


Given the nascent nature of OCC research, there is limited evidence about how these

dimensions interact and the resulting outcomes and interactions that occur when

various levels are achieved. However, based on their use in the literature, it is theorized

here that in reconciling internal organizational polarities that the polarity of

exploitation and exploration will be reconciled as well.

Theoretical propositions

As discussed previously, strategic leaders in the 21st century are exhorted to

simultaneously exploit market opportunities while exploring new market

opportunities. This complex but undeniable challenge requires the ability to manage

polarities within the organization and across the organization-environment interface

(Johnson, 1992). The following discussion investigates how these polarities might be

managed and what some moderating influences might be.

Organizational capacity for change and strategic ambidexterity

As previously discussed, OCC is a dynamic organizational capability that may allow

firms to both explore and exploit market opportunities. While sensing the need to

change is undeniably the first step, recent authors have highlighted the dilemma that

simply knowing "what to do" can fall painfully short of actually following through and

experiencing success (Pfeffer and Sutton, 2000). Thus, actually implementing change

efforts to reconfigure and renew exploitive and exploratory strategies is likely the

biggest hurdle in a firm's pursuit of strategic ambidexterity. In fact, this stage is likely

where most change efforts fall short and firms end up as using the more common

"either/or" approach as opposed to the "genius of the and" approach (Collins and

Porras, 1994).

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