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Business model configuration and dynamics for technology commercialization in mature markets

The generation phase is closely linked to explorative activities while the implementation phase is highly linked to exploitative activities. In addition, ambidexterity can promote some other positive organizational outcomes besides innovation. Various organizations have been able to overcome organizational challenges and become more innovative because of ambidexterity.

A study looking at 41 businesses found that ambidexterity was highly correlated with performance. Companies such as Apple , General Radio , Nordstrom and British Airways have all had continued success throughout the years because of their capacity for ambidexterity. From to , British Airways experienced increased profits and customer satisfaction. The top executives of British Airways credited the formation of a more ambidextrous culture and leadership with the company's improved performance.

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Moderators exist in the relationship between organizational ambidexterity and organizational outcomes. Although they were not directly testing an ambidextrous orientation, results indicated a positive performance effect of simultaneously pursuing exploitative and exploratory innovation under high dynamic and competitive environments. The construct of "environmental munificence" was developed to reflect an organization's opportunities and dynamism Zahra, A longitudinal study by Kyriakopoulos and Moorman showed that market orientation positively moderates the impact of pursuing high levels of exploitative and exploratory marketing strategies on new product performance; however, firms that pursue an ambidextrous orientation without strong market orientation display a significant reduction in new product financial performance.

Similarly, Lubatkin et al. Boundary conditions were also addressed on choosing between structural and contextual ambidexterity. For example, spatial separation was suggested as an appropriate solution for environments characterized by long periods of stability, disrupted by rare events of discontinuous change. The functional definition of ambidexterity was originally used to describe organizations, but recently this concept was extended to multiple organizational levels, including individuals, teams, and leaders.

On the most general level, the concept of ambidexterity implies successfully managing the dichotomy of explorative variability creation and exploitative variability reduction. That's when ambidexterity is necessary. Actually, regulating the conflicting demands of innovation is not only a challenge for the upper echelon of an organization but also a phenomenon that spans all levels of an organization. Employees as individuals, collectives of employees such as work teams, and the organization as a whole all have to find strategies to deal with conflicting demands in order to succeed in innovation and adaption to changing markets.

Some examples of strategies and tactics that could be implemented at all three levels of analysis were also listed out Bledow et al. These examples are presented in Table 1, including a separation strategy in the Separation column or an integration strategy in the last two columns. Recently the focus on organizational ambidexterity has become more concentrated on how leaders act ambidextrously to achieve organizational ambidexterity. Senior managers may be the key for facilitating the context and social base for ambidexterity. The model suggests TMTs are where processes such as information sharing and knowledge processing, which influence ambidexterity, are likely to occur.

Furthermore, it is the CEO who has the ability to access the most valuable and diverse information needed to avoid separation of explorative and exploitative behaviors. The greater the interface between TMTs and CEOs in small-to-medium-sized organizations, the greater the amount of ambidexterity. The construct of ambidextrous leadership has also been linked to the combination of leadership styles Jansen et al. Leaders who are transformational encourage "out of the box thinking", information sharing and question assumptions.

Transformational leaders promote exploration and innovative thinking. Transactional leaders focus on making incremental improvements and making the best use of existing process. The transactional leadership style promotes exploitative behaviors. Ambidextrous leadership consists of three elements 1 opening leader behaviors to foster exploration, 2 closing leader behaviors to foster exploitation, 3 and the temporal flexibility to switch between both as the situation requires Rosing et al.

Opening leadership behaviors include: allowing for multiple ways to accomplish a task, experimentation and errors, whereas closing behaviors include; monitoring routines, sticking to plans and minimizing errors. The Rosing et al. Some scholars as well as practitioners have argued that established companies simply lack the flexibility to explore new territories.

A possible solution for big companies is to adopt a venture capital model — funding exploratory expeditions but otherwise not interfering too much with their operations. Another suggestion is for the use of cross-functional teams to achieve breakthrough innovations.

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Still others have suggested that a company may be able to alternate between different organizational models, focusing on exploitation and exploration at different time periods. For example, in a study of biotechnology firms it is shown how an organization's management control system can be adjusted periodically to achieve this changing focus on exploitation and exploration.

Family Businesses and Adaptation: A Dynamic Capabilities Approach

High firm performance may however need to be sustained through continuous exploitation both on the market side, through business model innovation and technology innovation. Ambidexterity can also be hampered by employee desire to receive organizational rewards.

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If organizations base their evaluation and reward systems on the completion of routine tasks, employees will be more likely to conform to standardized procedures. Despite the controversy surrounding the possibility of organizational ambidexterity, it is likely to continue to be a highly researched concept in the future.

Future research is likely to focus on the role of ambidextrous leaders, ambidextrous teams and the social context of organizational ambidexterity. Rosing et al. From Wikipedia, the free encyclopedia. This narrow focus is limiting as dynamic capability theory is inherently concerned with human behaviour and motivation, for example, routines, path dependencies and organisational learning Barney and Felin, ; Barreto, A fundamental challenge in building dynamic change capability relates to changing the collective behaviour of employees together with their associated routines, work patterns and daily activities Eisenhardt and Martin, ; Zollo and Winter, Changing behaviour on this scale and changing collective behaviour require resolute human action and endeavour on the part of management and employees.

Where reference is made to employees within a dynamic capabilities argument, it is from a very narrow, ideological standpoint. For example, Teece suggest that curtailing the influence of collective bargaining on wages could be seen as an element of dynamic capability in itself. Yet if knowledge is understood to be socially constructed and distributed it is important to understand how organisations can tap into the tacit energy that resides in employees throughout the organisation McAdam and McCreedy, ; Wang and Ahmed, Indeed elsewhere Teece acknowledges that capabilities are built not just on individual skills but also on the collective learning derived from how employees have worked together.

Notwithstanding more recent attention to the microfoundations of dynamic capability, there remains a considerable gap in understanding the links and interactions between macro and micro levels, including an under appreciation of the significance of employee innovative behaviours Montag et al. Advancing greater understanding of the microfoundations of dynamic capabilities for innovation requires cross-fertilisation with domains which have valuable insights in this area; this includes human resource management and the organisational innovation literatures.

In an effort to better appreciate the internal dynamics of innovation, research from these related literatures emphasises the role of both managerial strategies and employee behaviour in fostering innovation Wendelken et al. The architecture of HRM Becker and Gerhart, may serve as a central means of capturing the managerial intent informing how dynamic capabilities can be built and innovation outcomes realised Barney and Felin, ; Ployhart and Hale, An indicative review of the literature identifies that organisational interventions in the form of communication and consultation, positive social interaction and learning strategies are particularly significant determinants of innovation.

Enabling and encouraging employee communication and consultation is an important empowerment-enhancing strategy for innovation Lynch, ; Subramony, Read emphasizes how flexible structures and empowered employees are supportive of innovation, while Ramstad notes that employee involvement and participation are organisational planning and implementation is related to improved organisational outcomes. Employee involvement is also an important innovation strategy in a number of studies undertaken by Black et al.

It therefore seems that there is an important link between the levels of communication and consultation and innovation outcomes. A second key strategy concerns relational capital and positive social interaction Harney and Jordan, ; Lee and Kelley, Building relational capital and fostering positive relationships both with customers and internally with staff and managers are notable strategies linked to innovation in the literature on organisational innovation Read, ; Slappendel, Related to the development of good relationships are reward and appraisal systems which are seen to be beneficial and supportive of innovation efforts Shipton et al.

Relational capital has been identified as one of the important underlying processes in dynamic capability for innovation and one that aligns closely with requirements for knowledge creation and exchange Bowman and Ambrosini, ; Mossholder et al. These studies would therefore suggest that there is a strong link between relational capital and innovation outcomes.

Third, purposeful learning opportunities are seen as important underlying processes in developing dynamic capability for innovation Eisenhardt and Martin, ; Teece, Human capital development through workforce training and employer-guided training is also an important organisational innovation strategy Appelbaum et al.

Snell and Morris argue that dynamic capabilities by definition are underpinned by various modes of organisational learning. Learning is a central theme in the literature on organisational innovation where innovative organisations are viewed as dynamic living learning organisations. In determining the key capabilities required for innovation, Hage highlights learning or absorptive capacity and contends that, in essence, the learning organisation is the innovative organisation and both internal and external networks are critical in sustaining this learning capacity.

While far from exhaustive, it is clear from this indicative review that various organisational strategies may foster innovative behaviour amongst employees and have a significant impact in yielding innovation outcomes. Notably, while there is a strong emphasis on empowerment in the organisational innovation literature through employee involvement and flexible structures Appelbaum et al.

A focus on these managerial interventions also finds support from the national survey of employers in Ireland Watson et al. This highlighted that organisational interventions in the form of empowerment, relational capital and learning had a significant positive effect on innovation outcomes. Yet while these strategies reflect the intention of management, equally important is the impact of such practices in terms of how they are perceived and experienced by employees Liao et al. Here, organisational climate can be viewed as critical mediating influence between organisational practices as intended by management and subsequent employee behaviours.

This logic helps in further tracing the productivity pathway underpinning dynamic capabilities for innovation.

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An appreciation of innovation efforts at an employee level has been notably absent from research on dynamic capabilities Allen et al. Human resource strategies influence employee climate perceptions by symbolically framing and communicating key organisational values and behaviours Rousseau, Climate is therefore a powerful social mechanism through which HR systems influence employee perceptions, behaviours and values, and it is an important element in understanding the impact of organisational innovation strategies on employees Mossholder et al. As innovation climate reflects the views and perceptions of employees e.

Asmawi and Mohan, ; Sundgren et al. In other words, a strong innovation climate demonstrates that the strategies articulated and designed by managers are actually being enacted Anderson and West, It would be expected that innovation climate would be strongly linked with other organisational innovation strategies reflecting the presence of an innovation dynamic where there is a synergy between different policies and inputs from managers and employee perceptions and awareness of these inputs cf Boxall, Creativity is seen as a vital means for organisations to thrive in dynamic environments, respond to unforeseen challenges and proactively develop new capabilities Zhou and Hoever, A review of the literature indicates that key elements of an innovation climate include positive relationships and affective tone Ford, ; Hunter et al.

In their recent treatise on microfoundations, Barney and Felin highlight the importance of aligning individual and collective phenomenon to examine their impact on organisational level outcomes. This sentiment is evidenced in more behavioural definitions of dynamic capabilities e. In exploring the prospective alignment of macro and micro insights, Figure 1 offers a visual representation of the microfoundations of dynamic capabilities for innovation.

This illustrates a strong degree of convergence in the organisational elements which foster and sustain innovation and highlights the value of a more inclusive and holistic perspective to understanding the microfoundations of dynamic capabilities for innovation Felin et al. Whereas dynamic capabilities reflect strategic macrolevel processes such as sensing, seizing and reconfiguration Teece, organisational innovation strategies represent the human resource management strategies that are designed to develop these higher-order capabilities.

The critical intermediary between managerial intent as reflected in innovation strategies and the manifestation of dynamic capabilities is innovative climate which captures the perceptions and feelings of employees Dawson et al. Innovative climate denotes the degree to which organisational innovation strategies have penetrated the minds and experiences of employees to foster innovative work behaviour Montag et al.

Figure 1 Download Figure Download figure as PowerPoint slide From microfoundations to dynamic capabilities organisational innovation strategies climate: innovation and affective behaviours dynamic capabilities outcomes microfoundations dynamic capabilities innovation outcomes. Citation: The Irish Journal of Management 36, 1; The evidence from the integration of the dynamic capabilities and human resource management literatures contribute to an understanding of the association between organisational innovation strategies, innovation climate and both employee and organisational innovation outcomes.

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