Independent Research Fund Denmark (DFF), Sino-Danish Center for Education and Research
Behavioral Foundations of Organizational Ambidexterity
Innovation is crucial and of strategic importance to maintain the competitive advantage of a company and safeguard its future. As a process fraught with uncertainty, efficient and effective innovation requires the innovators to make informed decisions in a changing environment where much of the relevant information is not available or not reliable (Posen and Levinthal 2012). This is especially vital in the post-pandemic era when turbulence and volatility abound. One key feature of innovative companies is their organizational ambidexterity, which refers to the ability to balance the resources allocated between the exploration of new possibilities that generate knowledge and reduce uncertainty, and the exploitation of old knowledge that produce more certain outcomes (Hu et al. 2021, March 1991, 2006). Ambidexterity reflects the ability to cope with uncertainties (McDonough and Leifer 1983). An ambidextrous company is efficient in both managing today's business (exploitation) and coping adaptively with tomorrow's uncertain demand (exploration) (Luger et al. 2018). In terms of innovation activities, it also keeps a good balance between exploitative innovation and explorative innovation.