SE - 2009 - PENTING BANGET - Organizational Embidexterity (Simsek)

Journal of Management Studies 46:4 June 2009
doi: 10.1111/j.1467-6486.2009.00828.x
Organizational Ambidexterity: Towards a

Multilevel Understanding
Zeki Simsek
University of Connecticut
abstract Although interest in the concept of organizational ambidexterity has increased

during recent years, this line of inquiry remains unfocused and limited due to a lack of more
encompassing conceptual efforts. As a first step, we begin by critically reviewing previous
research on the conceptualization, antecedents, and consequences of ambidexterity. We then
offer a model that specifies a more encompassing, multilevel explanation of ambidexterity.
Finally, we trace research and managerial implications and suggest some potential research
avenues.
INTRODUCTION
Increasingly, organizational researchers are using ambidexterity, the ability of humans to
use both hands with equal skill, as a metaphor for organizations that are equally
dexterous at exploiting and exploring. An ambidextrous organization maintains a high
degree of balance between exploitation (learning via local search, experiential refine-
ment, and reuse of existing knowledge) and exploration (learning gained through pro-
cesses of concerted variation, planned experimentation, and play) (Baum et al., 2000a;
Levinthal and March, 1993; March, 1991). Researchers have used ambidexterity to
analyse numerous significant organizational phenomena. Its importance has been noted
across the fields of strategic management ( Jansen et al., 2008; Lubatkin et al., 2006;
Smith and Tushman, 2005), innovation and technology management (Ambos et al.,
2008; He and Wong, 2004; Markman et al., 2008; Tushman and O’Reilly, 1996),
organizational learning and adaptation (Levinthal and March, 1993), organization
theory (Adler et al., 1999; Benner and Tushman, 2003), and organizational behaviour
(Gibson and Birkinshaw, 2004). Additionally, the managerial importance of ambidex-
terity is evident in the many prescriptions offered for organizational performance
improvement, adaptation, and survival.
Address for reprints: Zeki Simsek, University of Connecticut, School of Business, Management Department,
2100 Hillside Road, Unit 1041, Storrs, CT 06269-1041, USA (Zeki.Simsek@Business.uconn.edu).
© Blackwell Publishing Ltd 2009. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ, UK
and 350 Main Street, Malden, MA 02148, USA.
598 Z. Simsek
Curiously, however, organizational ambidexterity (OA) remains an undertheorized,
underconceptualized, and, therefore, poorly understood phenomenon. Perhaps Gupta
et al. (2006, p. 697) put it best when they noted that, ‘although near consensus exists on
the need for balance [of exploitation and exploration], there is considerably less clarity
on how this balance can be achieved’. Importantly, research to date has typically
employed only one variable to explain OA, such as dual structures (Benner and
Tushman, 2003), behavioural context (Gibson and Birkinshaw, 2004), or top manage-
ment team (TMT) behavioural integration (Lubatkin et al., 2006). Lacking integrative
models spanning multiple levels of analysis (Gupta et al., 2006; Jansen et al., 2005),
previous studies thus far ‘have not generated an overarching theory’ (Adler et al., 1999)
to explain OA. Additionally, comparison, aggregation, and replication of findings have
been difficult because of diverse conceptualizations. Together, these issues highlight the
need for taking stock of the current body of knowledge, further specifying the OA
construct, and an encompassing model of OA.
As a first step, we review extant research and suggest that differentiating the various
input–process–output elements[1] associated with this line of inquiry can help invigorate
the OA concept by both substantiating and extending its conceptual foundations. Then,
we advance a multilevel explanatory model that concurrently extends and synthesizes
research by specifying the dominant relationships between constructs at the organiza-
tional, interfirm, and environmental levels of analysis. By specifying these interactive
influences among these levels, we demonstrate that a thorough examination of such
influences may be critical in gaining a more complete understanding of where OA comes
from and how it matters to performance. In so doing, we respond to the call for more
integrative and multilevel analyses on OA (e.g. Gupta et al., 2006; Jansen et al., 2005;
Raisch and Birkinshaw, 2008). In particular, our theory addressees two neglected issues
that Raisch and Birkinshaw (2008) observe in a comprehensive review of this line of
research: (a) the interrelationships between different antecedents and (b) the complexity
of the ambidexterity–performance relationship. Finally, completing the conceptual
development of our paper, we discuss promising avenues for future inquiries on multi-
level examinations of OA.
ORGANIZATIONAL AMBIDEXTERITY: AN INPUT–PROCESS–OUTPUT

VIEW
In this section, we provide an overview of the OA literature and the core concepts we use
to structure our review. The core construct of this literature is OA but research on OA
also includes studies of its antecedents, as well as its consequences. Nevertheless, as with
many areas of organizational research, these studies exhibit some variation with regard
to the labelling, definition, and measurement of the core concepts. One fruitful way to
examine these differences is to adopt an input–process–output framework (Figure 1),
which helps to distinguish among OA components or processes (e.g. exploration and
exploitation), outcomes or outputs (e.g. firm performance, survival, growth, etc); and
antecedents or inputs (e.g. firm-level, environment-level, interfirm-level, etc). By using
each element to provide a review of previous work (below), we also set the stage for our
multilevel model.
© Blackwell Publishing Ltd 2009

Organizational Ambidexterity 599
Input Process Output

Antecedents of Components of Consequences of
organizational organizational organizational
ambidexterity (e.g. ambidexterity (e.g. ambidexterity
organization-, exploitation and (e.g. financial
interfirm-, and exploration) performance)
environment-level)
Figure 1. An input–process–output view of organizational ambidexterity
Components of Organizational Ambidexterity

The word ‘ambidexterity’ is derived from the Latin ambos, ‘both’, and dexter, ‘right’ (as
opposed to left). Thus, ambidexterity is ‘right on both sides’. Since Duncan (1976),
perhaps the first researcher to coin the term ‘ambidextrous organization’, the concept
has been used to describe a variety of distinctions in organization behaviour and out-
comes. In fact, as Gibson and Birkinshaw (2004) note, it has increasingly been used to
refer to an organization’s ability to do two different things at the same time – for
example, exploitation and exploration, efficiency and flexibility, or alignment and adapt-
ability. Using several dimensions, we summarize these previous definitions in Table I.[2]
While it is clear from Table I that researchers have diversely defined OA, it is possible to
classify these previous definitions into three: structural, behavioural, and realized. Each
entails somewhat different levels of analysis. Behavioural ambidexterity proposes that a
single business unit may be a meaningful level at which to examine OA, while structural
views hold only for higher levels of organizational abstraction. As we discuss below, the
realized view, which we label as such because of its focus on the organization’s exploi-
tation and exploration attainments, is applicable to a single business unit, as well as to
higher levels of organizational abstractions (such as diversified organizations). Impor-
tantly, whereas structural and behavioural approaches emphasize the processes and
mechanisms by which organizations (or business units) strive to achieve ambidexterity,
the realized one describes a state in which the organization has actually achieved high
levels of exploitation and exploration.
Structural ambidexterity refers to an organizational design or form containing not
only separate structural subunits for exploration and exploitation, but also different
competencies, systems, incentives, processes, and cultures for each unit (Benner and
Tushman, 2003). For example, upstream units, such as production, are responsible for
exploitation, while downstream units, such as marketing and sales, are responsible for
exploration. These separate units are held together by a common strategic intent, an
overarching set of values, and targeted structural linking mechanisms that enable a
productive integration of independent efforts.
Recently discussed by Gibson and Birkinshaw (2004), the behavioural view defines
OA as the organization’s or business unit’s behavioural capacity to simultaneously

Table I. Previous definitions of organizational ambidexterity 600
Author(s) Theoretical/empirical Levels/unit of analysis Achieving balance View Definition
Duncan (1976) Theoretical Business unit Sequential Structural Capacity of organizations to facilitate the differentiation of organization structure
that facilitates the innovation process in its two different stages. More specifically,
the ability of the organizational unit to deal with conflict, conduct effective
interpersonal relations, develop switching rules, and institutionalize dual
organizational structures for innovation.
McDonough and Empirical Business unit Separation Structural Capacity of a work unit to employ several different structures simultaneously.

Leifer (1983)
Tushman and Theoretical Organization Separation Structural The ability to simultaneously pursue both incremental and discontinuous
O’Reilly (1996) innovation and change that result from hosting multiple contradictory structures,
processes, and cultures within the same firm.
Tushman et al. Theoretical Organization Separation Structural Ambidextrous organizations have multiple organizational architectures to
(1997) concurrently nurture diverse innovation requirements that are capable of
simultaneously creating both incremental and discontinuous innovation.
Ambidextrous organizations are capable of operating simultaneously for the
short and the long term, for both incremental and discontinuous innovation.
Such dual organizations build in the experimentation, improvisation, and luck
Z. Simsek
associated with small organizations, along with the efficiency, consistency, and
reliability associated with larger organizations.
Adler et al. (1999) Empirical Business unit Simultaneous Realized Simultaneously pursuing both routine and non-routine tasks.
Benner and Theoretical Organization Separation Structural Ambidextrous or dual organization forms are organizational architectures that
Tushman (2003) build in both tight and loose coupling simultaneously. These organizational
forms are not loosely coupled, nor do they switch between contrasting structures.
Ambidextrous organizations are composed of multiple tightly coupled subunits
that are themselves loosely coupled with each other.
Gibson and Empirical Business unit Simultaneous Behavioural Ambidexterity is the behavioural capacity to simultaneously demonstrate
Birkinshaw (2004) alignment and adaptability across an entire business unit. Alignment refers to
coherence among all the patterns of activities in the business unit; they are
working together towards the same goals. Adaptability refers to the capacity to
reconfigure activities in the business unit quickly to meet changing demands in
the task environment.
He and Wong Empirical Organization Simultaneous Realized The need for an appropriate balance between exploration and exploitation . . .
(2004) the capability to operate in both mature markets (where cost efficiency and
incremental innovation are critical) and develop new products and services for
emerging markets (where experimentation, speed, and flexibility are critical).
Atuahene-Gima Empirical Organization Simultaneous Realized Simultaneous investments in both the exploitation of existing product innovation
(2005) capabilities and the exploration of new ones.
Jansen et al. (2005) Empirical Business unit Simultaneous Realized The ability to pursue exploratory and exploitative innovations simultaneously.
Kaplan and Theoretical Organization Separation Structural Organizations in which one part of the organization continues to operate
Henderson (2005) much as before while another attempts to combine the best aspects of small,
entrepreneurial firms with the advantages derived from being part of a more
established company.
Smith and Theoretical Organization Separation Structural Ambidextrous designs are organizational forms that build internally consistent
Tushman (2005) architectures and cultures into business units so that the firm can both explore
and exploit. These organizational architectures involve highly differentiated units
as well as top management team integration.
Danneels (2006) Theoretical Firm Simultaneous Realized Firms that can develop and market both sustaining and disruptive innovations.
Gupta et al. Theoretical Organization Simultaneous Realized Ambidexterity refers to the synchronous pursuit of both exploration and
(2006) exploitation via loosely coupled and differentiated subunits or individuals, each
of which specializes in either exploration or exploitation.
Lubatkin et al. Empirical Organization Simultaneous Realized Ambidextrous firms are capable of exploiting existing competences as well as
(2006) exploring new opportunities with equal dexterity.
O’Connor and Empirical Business unit Simultaneous Realized The ability of business unit managers to simultaneously advance radical
DeMartino (2006) innovation initiatives while conducting daily operational functions.
Venkatraman et al. Empirical Organization Both Realized The capability of an organization to simultaneously pursue exploration of new
(2006) product markets while exploiting current product markets.
Organizational Ambidexterity
Bierly and Daly Empirical Organization Simultaneous Realized Paradoxical companies that are successful at simultaneous exploration and
(2007) exploitation.
Cegarra-Navarro Empirical Organization Simultaneous Behavioral Ambidexterity is an organization’s context to achieve alignment and adaptability
and Dewhurst simultaneously within the organization learning processes.
(2007)
Sidhu et al. (2007) Empirical Firm Sequential Realized Firms that are able to manage supply and spatial exploration with demand-side
exploitation in fast changing dynamic contexts and to juggle the balance so that
they combine demand and spatial exploration with supply-side exploitation when
the environment settles down.
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602 Z. Simsek
demonstrate alignment and adaptability across the business unit as the organizational
context encourages and supports individuals in their efforts to heed both of these
concerns. Alignment refers to coherence among all patterns of activity, and adaptability
to the capacity to reconfigure activities quickly to meet changing demands in the task
environment. Thus, while the structural definition posits dual structures as the means to
achieve OA, the behavioural definition proposes building a carefully selected set of
systems and processes that collectively define organizational members’ behavioural
context. That is, an organizational context may enable individuals to consider both
exploitative and explorative aspects of their work; when they try to be effective (doing the
right things), they also think about how to be efficient (doing the things right).
Finally, the more prevalent, what we here label as the realized view, defines OA in
terms of the organization’s exploitation and exploration attainments; for example, ambi-
dextrous organizations successfully pursue both incremental and discontinuous innova-
tions (Benner and Tushman, 2003; Smith and Tushman, 2005). What thus distinguishes
this view from the first two is its explicit focus on the organization’s actual exploration
and exploitation performance in defining OA. As can be seen from Table I, several
researchers have conceptualized and tested OA in this manner, including He and Wong
(2004), Lubatkin et al. (2006), and Venkatraman et al. (2006), among others.
The varying conceptualizations shown in Table I suggest that the option for research-
ers to refrain from clearly defining OA in their work is no longer a viable one. In
particular, we would suggest that exploitative and exploratory attainments explain what
OA consists of, while structural and behavioural dimensions refer to an organization’s
orientations and properties that might facilitate OA. Thus, casting a deliberately broad
net, we define OA as the state of attaining exploitation and exploration with dexterity, or
achieving high levels of both. Three key elements of this definition help to specify the OA
construct.
To begin, in keeping with March’s (1991) discussion of exploitation and exploration,
we view OA as an organization-level construct that manifests itself in the organization’s
exploitative and exploratory attainments. This may be an obvious characteristic, but we
explicitly state it here to help further delineate what we do not mean by OA. For example,
there may be individual, team, or functional usages or implications of the concept that
are not related to the organization. As noted, adopting the organization as the unit of
analysis also helps to differentiate OA from constructs such as structural ambidexterity
(Benner and Tushman, 2003) and contextual ambidexterity (Gibson and Birkinshaw,
2004) that refer to the methods, practices, and processes that an organization uses to
attain OA.
Second, as Gupta et al. (2006) discuss, the central ambiguity regarding most previous
definitions of exploitation and exploration lies in the type of learning versus the presence
or the absence of learning. Thus, while some view them in terms of whether new learning
occurs along the same trajectory as previous knowledge or along an entirely different one
(e.g. Benner and Tushman, 2003; He and Wong, 2004), others (e.g. Rosenkopf and
Nerkar, 2001; Vassolo et al., 2004; Vermeulen and Barkema, 2001) invoke them in terms
of using past knowledge versus new learning, rather than the type of path taken. In
defining OA, we build on Gupta et al. (2006) logic to suggest that, because all activity
includes at least some learning, it is more logical to differentiate between exploration and

exploitation by focusing on the type of learning entailed rather than on the presence or
absence of learning.
Finally, our proposed definition of OA highlights the idea of dexterity – achieving
high levels of performance in exploitation and exploration. By so doing, we limit our
focus to a simultaneous approach to OA, thus excluding the sequential or punctuated
equilibrium one (Gupta et al., 2006). Punctuated equilibrium suggests that cycling
between periods of exploration and exploitation is a more viable approach than simul-
taneously pursuing both. Duncan (1976), for example, suggested that an organization
attains ambidexterity when it switches between alternative structural architectures,
depending on where it stands regarding innovation. Similarly, based on his analysis of
Intel Corporation, Burgelman (1991) argued that an organization can successfully
explore at a given point in time and exploit at another point in time. By contrast, we
posit OA as balancing high levels of exploitation and exploration, rather than
periodically/spatially switching between them or balancing them at any level – an
organization with low levels of exploitation and exploration is ‘balanced’, but not
ambidextrous.
Outcomes of Organizational Ambidexterity

Theoretically, it is possible to conceptualize numerous consequences of OA for the
organization. However, extant work has mainly focused on performance as the key
outcome variable. Levinthal and March (1993) first explained how OA might enhance
performance by proposing that exploitation and exploration are realized in categorically
distinct, yet complementary, changes in performance by differently influencing the size,
timing, and riskiness of the organization’s cash flows. Specifically, exploration, to the
exclusion of exploitation, leads to too many undeveloped ideas and not enough distinc-
tive competence. Conversely, exploitation without exploration creates a ‘competency
trap’ (March, 1991). Thus, their joint pursuit should enhance performance by enabling
an organization to be innovative, flexible, and effective without losing the benefits of
stability, routinization, and efficiency.
Building from this ‘ambidexterity premise’, studies have stressed the need for organi-
zations to pursue OA to improve performance; however, in aggregate, the findings have
been equivocal. Although some researchers have found that OA directly impacts per-
formance (e.g. Gibson and Birkinshaw, 2004; He and Wong, 2004; Lubatkin et al.,
2006), others have found a contingent effect (e.g. Lin et al., 2007), and some a negative
effect (e.g. Atuahene-Gima, 2005). A more recent study ( Yang and Atuahene-Gima,
2007) finds evidence that OA is curvilinearly related to performance while another one
finds no support for the ambidexterity hypothesis (Venkatraman et al., 2006). Moreover,
in the few studies where researchers have considered how environmental factors and
other moderators might condition the impact of OA on performance, they have consid-
ered this in the context of exploitation and exploration, rather than OA per se (e.g. Auh
and Menguc, 2005; Jansen et al., 2006).
There has, to date, been no conceptual attempt at reconciling these inconsistent
findings. Thus, the question of whether and under what conditions OA leads to
improved performance remains poorly developed. In line with some who have suggested

604 Z. Simsek
that the simple, bivariate effects may be inadequate to explain the relationship between
OA and performance (e.g. Jansen et al., 2005, 2006), we will propose that an essential
key to understanding the OA–performance relationship is to analyse the context in
which it occurs.
Antecedents of Organizational Ambidexterity

As noted at the outset, three distinct sets of antecedents of OA have to date been
advanced: dual structures, organizational context, and TMT characteristics. Although
the origins of dual structures may be traced to Duncan (1976), the recent resurgence of
interest in this notion may be largely attributed to Tushman and O’Reilly (1996).
In essence, these scholars posit that OA is achieved when one or more business units in
the organization focus on exploiting and one or more on exploring. Jelinek and
Schoonhoven (1993) also discuss the notion of semi- or quasi-structures, arguing that the
challenge of major innovation requires a dual structure that fosters both discipline and
creativity. They claim that structural independence ensures that the distinctive processes,
structures, and cultures of exploratory units are not overwhelmed by the forces of
exploitative culture. Conversely, established units can simultaneously focus on serving
current customers and engaging in exploitation without the distraction and pressures of
undertaking exploratory initiatives. Dual structures within the same organization,
however, can also lead to isolation and the failure of individual units to productively
couple their efforts. OA is achieved through distinct units ‘held together by a common
strategic intent, an overarching set of values, and targeted structural linking mechanisms
to leverage shared assets’ (O’Reilly and Tushman, 2007, p. 22).
Contrary to the dual structural architecture approach arguing for an organizational
partitioning of exploitation and exploration in distinctive subunits for attaining OA, the
behavioural view posits OA as a function of a high performance context in which
individuals are embedded, a concept borrowed from the strategy process literature
(Ghoshal and Bartlett, 1994). Thus, rather than adopting a dual structural architecture,
managers are expected to create a context that enables and encourages staff members to
use their own judgment on dividing their time between exploration and exploitation
(Birkinshaw and Gibson, 2004). Gibson and Birkinshaw (2004) conceptualize this high
performance context on the basis of Ghoshal and Bartlett’s (1994) behaviour framing
attributes of discipline, stretch, support, and trust. In particular, Gibson and Birkinshaw
(2004) group such mechanisms in two interdependent and complementary behaviour-
framing attributes: performance management and social support. The former (a com-
bination of stretch and discipline), on the one hand, reflects how an organization induces
its employees to voluntarily strive for more ambitious, stretching goals, and outcomes.
Social support (a combination of support and trust), on the other hand, reflects the
necessity of ensuring that individuals establish ambitious goals within a cooperative work
environment, as well as inducing employees to lend assistance and countenance to others
and to rely on each other’s commitments. The interaction of these meta-constructs
(performance management and social support) creates a high performance organiza-
tional context that in turn gives rise to OA.

It is noteworthy to observe that researchers working from both structural and contex-
tual explanations similarly recognize an indirect, yet pivotal, role of senior executives in
the organization’s ability to attain OA.[3] For example, dual structures within the same
organization can lead to isolation and the failure of individual units to productively
couple their efforts. Strategic integration and, as a result, OA, occurs when aspirations
are common and when an ambidextrous senior team coalesces (Tushman and O’Reilly,
1996). Burgelman (2002) describes these complex managerial integration processes and
specifically identifies the need for ‘strategic debate’ – that is, senior leaders who encour-
age dissenters to argue their points. Thus, while organizational members are isolated
from the conflicting demands of OA, upper-echelon executives are ultimately expected
to drive the organization towards ambidexterity. Likewise, establishing a high perfor-
mance behavioural context requires managerial guidance regarding transparency in
access to resources, autonomy to take initiatives, and equity and fairness in decision-
making processes (Gibson and Birkinshaw, 2004).
Enriching these structural and contextual explanations, scholars have recently started
to examine TMT characteristics and processes that can directly enable the organization
to manage and embrace the contradictions that they face. For example, Smith and
Tushman (2005) theorize that establishing paradoxical cognitive frames and processes
among senior executives enables the organization to balance strategic contradictions
between exploration and exploitation. Lubatkin et al. (2006) synthesized these upper-
echelons arguments by focusing on the pivotal role of behavioural integration, an
all-inclusive TMT process construct that captures the level of the senior team’s wholeness
and unity of effort. Because a behaviourally integrated team synchronizes the social and
task processes associated with collaborative behaviour, quality of information exchange,
and joint decision making (Hambrick, 1995; Simsek et al., 2005), they argued that a
behaviourally integrated TMT acts as a forum in which executives openly and freely
exchange differing knowledge, resolve conflicts, and create a set of shared perceptions,
which then can be integrated and acted upon to facilitate OA.
A MULTILEVEL MODEL OF ORGANIZATIONAL AMBIDEXTERITY

As the above review shows, most OA research consists of a single focus (e.g. dual
structures, behavioural contexts, or TMTs). Another common (and probably the most
common) focus in OA research has thus far been examining the ‘bivariate’ or main effect
relationship between OA and performance. Although potentially relevant to one
another, these variables and explanations have been discussed independently with little
conceptual cross-fertilization. Thus, while previous research has established that OA
may not be as difficult or elusive for organizations to achieve as some in the literature
believe, it has remained limited due to the absence of any synthesizing efforts. As a first
step, we offer a multilevel model[4] (Figure 2) that both integrates and extends previous
research.
In essence, the model posits that OA is jointly influenced by factors residing at the
organization, interfirm, and environment levels. The model also illustrates these three
levels by integrating the various insights from prior research while specifying the domi-
nant and novel relationships. While OA has not been related to interfirm-level analysis

606 Z. Simsek
Organization Level
• Dual structure (P1B and 2B)
• Behavioural context (P3A and3B)
• Top management team
behavioural integration
(P4A and 4B)
Organizational Organizational performance
ambidexterity
Interfirm Level
• Centrality (P1A)
• Diversity of ties (P2A)
Environment Level
• Dynamism (P5A, 5B and 7)
• Complexity (P6A, 6B and 8)
Figure 2. A multilevel model of organizational ambidexterity
to date, the notion that network ties are a key vehicle for both exploitation and explo-
ration is the basis for an important stream of research (e.g. Powell et al., 1996). A key idea
to this line of research is that organizations are embedded in the structure of their
network relations that constrain and enable their behaviour and economic action. From
this research, we borrow two constructs that, we argue, will particularly impact OA: a
superior structural position in the network and diverse network ties. Being centrally
positioned in a network has been recognized as a particularly important structural
position in alliance network; thus, our model considers centrality (Powell et al., 1996).
Additionally, because an organization’s strategic outcomes are affected by the qualitative
nature of network relations (e.g. Beckman and Haunschild, 2002; Parkhe, 1991; Powell
et al., 1996), our model specifies diversity of the organization’s network as another salient
influence on OA. At the organization level, the model specifies dual structures, behav-
ioural contexts, and TMT behavioural integration.
Next, the model suggests that these variables interact to influence OA. Our underlying
logic here is that organization- and interfirm-level, as well as environmental factors might
combinatorially exert influences on OA. As we demonstrate below, a thorough exami-
nation of these multilevel influences may be critical in understanding where OA come
from and how it matters to performance. For example, as noted earlier, research on the
performance implications of OA has yielded mixed results. Our model suggests that an
improved understanding of this relationship can be gained by considering the combined
significance of OA and environmental uncertainty. This expectation is broadly grounded
in the notion of strategic fit (Hambrick, 1983), which suggests that the appropriateness of
an organization’s strategy can be defined in terms of its fit or congruence with the
environmental contingencies facing the organization. The concept of fit has theoretical
roots in contingency perspectives (e.g. Burns and Stalker, 1961; Lawrence and Lorsch,
1967; Miller and Friesen, 1983), which suggests that congruence or fit among key
variables, such as environment, structure, and strategy, is critical for obtaining higher
performance. For example, the effectiveness of a strategic orientation (Hambrick, 1983),

an entrepreneurial orientation (Lumpkin and Dess, 2001), or innovativeness (Zahra,
1996) depends on environmental uncertainty. Consistently, our model posits that uncer-
tainty is likely to modify the impact of interfirm variables on OA, as well as the impact
of OA on performance. Although there are multiple ways to characterize environmental
uncertainty, following Dess and Beard (1984) the model includes two widely accepted
constructs, dynamism and complexity.
It is our core intention to provide an integrative, multilevel understanding of OA.
However, in the interest of generating sufficient depth, our propositions address what we
see as the most novel theoretical contributions to the literature. Particularly, we advance
and build several multilevel propositions that explain the interactive influences of the
model’s variables on OA, as well as the moderating role of environmental uncertainty in
explaining OA’s relationship to performance. We do not discuss some main effects in our
model (e.g. those coming from organization-level variables or environmental-level vari-
ables), because they have been examined previously. Thus, for example, while environ-
mental factors might directly influence OA (e.g. Floyd and Lane, 2000; Jansen et al.,
2005; Levinthal and March, 1993), we selectively limit our focus to these factors’
moderating role in explaining the relationship between the network variables and OA,
between OA and performance.
SOME SELECTED PROPOSITIONS

The Interaction of Interfirm and Organization Levels
Research suggests that an organization’s central network position affects its access to
valuable knowledge and resources (e.g. Powell et al., 1996). Network centrality generally
denotes the extent to which an organization is well connected to others in a network.
Scholars use a variety of constructs and measures to describe centrality; the most
important are degree, closeness, and betweenness (Wasserman and Faust, 1994). We
have chosen closeness because it is considered a global measure of centrality as it
captures the total impact of direct and indirect ties (Scott, 1991). It is usually computed
for a focal actor as the average distance between that actor and other members of the
network (Freeman, 1979). An actor with high closeness centrality can access other
members of the network with the fewest links. Thus, the actor is fairly close to the
majority of other actors in the network, which is consistent with the intuitive notion of
being in the centre.
Is OA more likely when an organization is most central to the network, or when it is
less central? Taken together, previous research on network centrality suggests something
of a paradox regarding the potential impact of centrality on OA. On the one hand,
research suggests that centrality is likely to confer upon the organization complementary
information and resource advantages that might be beneficial to the attainment of OA.
As discussed, among others, in studies by Powell et al. (1996, 1999), Soh (2003), and Bell
(2005), an organization that is centrally positioned in a network relative to others can
expect greater benefits in terms of knowledge spillovers and information flows than
peripheral actors. Central organizations, because of their more numerous direct and
indirect connections to others, have more relationships to draw upon in obtaining

608 Z. Simsek
resources and so are less dependent on any single organization to explore (Scott, 1991).
In addition, the access facilitated by centrality means a higher likelihood of exposure to
the various disparate social circles within the network and to more clusters, or pockets,
of highly connected organizations (e.g. Powell et al., 1996). As a consequence, exploita-
tion is also enabled because central organizations become better informed about what is
going on in the network. In combination, these benefits should facilitate OA.
On the other hand, there may be a point of diminishing returns to centrality, where
numerous ties are no longer advantageous. Specifically, we expect the positive effect of
centrality to diminish, eventually reversing itself at higher levels when the marginal
benefits are overwhelmed by the marginal costs of centrality. The existence of an
inflection point in the relationship between centrality and OA is related fundamentally to
the allocation of attention and information overload. An organization that is too central
may be pulled in too many directions (Scott, 1991). Since the central organization has to
spread a limited amount of time across a large number of contacts, the amount of time
given to each contact diminishes. As a result, the intensity of each contact decreases, and
helpful information and resources are less likely to surface. Additionally, large quantities
of information emanating from numerous connections might overwhelm the organiza-
tion’s information processing capacity.[5] For the central organization entrenched in the
network, more information will not necessarily be helpful and might, in fact, be dysfunc-
tional, given that any organization’s information and knowledge processing capacity is
limited. It has long been argued that organizations often develop information filters,
procedures, and routines to reduce the costs of information acquisition and utilization
and to cope with bounded rationality (Arrow, 1974; Cyert and March, 1963; Nelson and
Winter, 1982). If information overload occurs due to the organization’s numerous
connections, the central organization may further routinize its filters to focus on certain
information and regard other information as unimportant. Confirming this, researchers
(e.g. Koka and Prescott, 2002) suggest that when information munificence is low, orga-
nizations process low amounts of information; when moderate, organizations process the
highest amount of information; and when high, they exhibit signs of cognitive strain and
revert to processing low amounts of information. Thus, in excess, centrality can become
a source of confusion and information overload.
Taken together, these arguments suggest an inverted U-shaped relationship between
network centrality and OA, such that high levels of centrality might improve the orga-
nization’s ability to attain OA but after some point, centrality hinders this ability. Put
simply, a moderate level of network centrality is ‘optimal’, and will have most positive
consequences for OA.
Proposition 1A: Network centrality has a curvilinear (inverted U-shaped) relationship

with OA.
One variable that is likely to modify the eventual impact of centrality on OA is the
organization’s structural architecture. In particular, we expect that the impact of cen-
trality on OA is likely to be contingent upon whether or not the organization employs a
dual structure, where some business units focus entirely on exploration and others on
exploitation. As noted earlier, this should minimize the need to integrate conflicting

resources and information within a single structural solution and enable exploitative and
exploratory network benefits to be leveraged simultaneously. In particular, we expect
that when a dual structure exists, the organization is more likely to extract from its
network of ties the information and knowledge that OA demands. Consider, for
example, the earlier argument that at relatively high levels, centrality might negatively
impact OA because large quantities of knowledge, resources, and information emanating
from numerous connections might overwhelm the organization’s information processing
ability. In this case, if the organization has a dual structure in place, this negative impact
will be dampened because small and decentralized exploratory units will help to more
effectively extract exploratory information and benefits from network ties, while more
centralized, tight cultures and processes of the exploitation units will help to extract
exploitative ones. Thus, a dual structure should enhance the organization’s ability to
more effectively process large quantities of knowledge and information emanating from
its numerous connections. It then follows that while a moderate level of network cen-
trality is likely to be conducive to OA, this relationship is likely to be strengthened in the
context of a dual structure.
Proposition 1B: A dual structural architecture positively moderates the curvilinear

relationship between network centrality and OA, such that when an organization has
this structure, the apex of the curve will shift to the right and upward, further
increasing OA.
In addition to centrality, we also expect an influence of the organization’s network tie

diversity on OA. Network diversity has been conceptualized in numerous ways (e.g.
Beckman and Haunschild, 2002; Parkhe, 1991). In social network research, it concerns
the flow of information – in particular, the extent to which the information provided by
actors’ (individuals or organizations) networks is similar or redundant (Burt, 1992;
Granovetter, 1973; Krackhardt, 1992). The notion of range, the number of different
social systems the organization’s relationships stems from, captures an organization’s
network diversity (Powell et al., 1996). Such diversity may result from several factors,
including the value chain function of the organization’s alliances (e.g. upstream vs.
downstream partners; Koza and Lewin, 1998), the network position of an organization’s
alliance (e.g. recurrent ties vs. new ties; Beckman et al., 2004), and intertemporal vari-
ance in the organizational attributes of an organization’s partners (e.g. experience, size,
and industry focus; Beckman and Haunschild, 2002). For example, an organization that
spreads its network connections across multiple industries has higher network diversity
than an organization that concentrates its connections within few industries.
Network diversity provides the organization multiple benefits from the perspectives of
attaining OA. First, it provides the organization with the benefit of heterogeneity in its
problem-solving arsenal. An organization that has a homogenous network has little
opportunity to consider multiple perspectives because most network members see the
world similarly. By contrast, diverse ties imply organizations that may differ in their
modes of reasoning and problem formulation and solution. Exposure to these different
approaches adds to the repertoire that the organization can bring to bear on exploitation
and exploration. For example, it may lead to constructive conflict, yielding deeper and

610 Z. Simsek
more comprehensive analysis of design problems, and novel framing of opportunities
(Baum et al., 2000b; Beckman and Haunschild, 2002).
Second, diverse network ties are valuable to OA because they can help the organiza-
tion overcome the familiarity trap, that is, a tendency to favour the familiar over the
unfamiliar (Ahuja and Lampert, 2001). Ties with more than one organization with
similar characteristic do not provide access to new information, whereas organizations
with greater diversity in their interfirm networks obtain more novel information than
those with restricted networks (Burt, 1992; Granovetter, 1973). As new technologies are
observed and studied via diverse ties, the stability of existing cognitive structures and
cause–effect relationship is challenged (Ahuja and Lampert, 2001). New world-views
have to be developed that account for both the known as well as the unfamiliar, and this
process can have beneficial influences on OA. Without exposure to novel technologies
and the novel mode of reasoning, the capacity of the organization for OA might be
hampered.
Third, diverse ties can also promote OA by enabling organizations overcome the
propinquity trap, a tendency to search for solutions that are in the neighbourhood of
existing solutions rather than search for completely de novo solutions (Ahuja and
Lampert, 2001). Diverse ties enable the organization to access a wider circle of infor-
mation about potential markets, new business opportunities, innovations, and sources of
capital, and potential customers. Thus, an organization with heterogeneous partners is
likely to not only have access to more complementary resources but also to know more
about how to productively put these resources into use (Burt, 1992). To the theory of
recombinant invention (Fleming, 2001; Henderson and Clark, 1990), inventions are
commonly the result of combining and recombining elements of old (familiar) and new
(unfamiliar) knowledge into new combinations. The less knowledge alliance partners
hold in common, the greater are their opportunities to combine distinctive knowledge in
a complementary way. Conversely, if the organization extensively searches for or is
limited to solutions in the neighbourhood of existing solutions, then its solution domain
is likely to be too narrow to support OA.
Nonetheless, we should also note that the literature also suggest at least three negative
consequences of tie diversity for the organization. First, diversity might dynamically
increase costs of integrating new knowledge. As the diversity of the firm’s network and
consequently, unfamiliar streams of knowledge to be processed and integrated into a
firm’s knowledge base increases, so do the technological and organizational challenges in
integration (Katila and Ahuja, 2002). Second, to the extent that managing heteroge-
neous partners requires a different set of skills and expertise, procedural differences and
communication barriers will make it harder to exploit synergies across them. Finally, the
organization may also find it difficult to manage and monitor its diverse network of
alliances.
Despite these effects, however, we generally expect a positive linear relationship for
several other reasons. First, given the conflicting and diverse knowledge and resource
inputs that OA demands, we believe that downsides associated with diverse ties might
not be powerful enough to cause a downward slope in the positive impact of tie diversity
on OA. In such a circumstance, although excessive diversity will have significant costs,
these costs may not be eventually reflected in a decline in OA. Second, when an

organization has diverse ties, it is more likely to develop mechanisms to deal with the
diversity. In fact, firms often form alliances to combine their expertise in different
component technologies, and to solve complex problems that require varied scientific
experience (Grant and Baden-Fuller, 1995). Reagans and McEvily (2003) argue that
organizations accustomed to interacting with contacts from diverse communities of
practice have a greater opportunity to learn how to interact with other organizations and
how to extract complex benefits from these relationships than are organizations limited
to interactions within a homogenous network. Finally, there is also the possibility that not
many firms are likely to reach a level of diversity that is sufficiently high for the negative
effects of diversity to significantly decrease OA. This is consistent with evidence reported
in Katila and Ahuja (2002) and Ahuja and Lampert (2001), who suggest that a limited
number of companies are likely to over-search because of the high costs that doing so
entails. While emphasizing that organizations are likely to achieve network diversity
without suffering network overload, we are, however, operating under all else being
equal assumption. Indeed, as we will discuss, the organization’s ability to avoid these
potential downsides as they pursue the advantages of network diversity will be critically
shaped by its own and environmental contingencies. Formally stated:
Proposition 2A: Diversity of the organization’s network of ties is positively related to

OA.
Nonetheless, whether and by how much the organization might capitalize on such
diverse opportunities might be critically dependent upon whether the organization
adopts a dual structure. It is unlikely that a single structure would be capable of
effectively handling the complex array of factors and benefits that diverse contacts entail,
all of which must be dealt with simultaneously to enhance the organization’s OA.
Without a dual structure, problems might arise due to the dynamically increasing costs
of integrating new information and knowledge that arise from diverse ties. As diversity of
ties increases, so do the technological and organizational challenges of integration. The
more diverse the knowledge to be integrated, the more complex become the problems of
creating and managing integration. Dual structural architectures provide the organiza-
tion with enhanced capabilities to handle such diversity, thus boosting the organization’s
ability to identify valuable knowledge, develop connections, and combine information in
ways that promote OA. Thus, we expect that:
Proposition 2B: A dual structural architecture positively moderates the relationship

between network diversity and OA, such that when an organization has this structure,
the relationship will be stronger.
We expect that an organization’s behavioural context will play a similar moderating

role in explaining the relationship between network centrality and diversity and OA.
Gibson and Birkinshaw (2004) showed that OA is enhanced by a behavioural context
that embodies both performance management (a combination of stretch and discipline)
and social support (a combination of support and trust). Performance management and
social support are equally important and mutually reinforcing; the strong presence of

612 Z. Simsek
each will create a high-performance organizational context (Birkinshaw and Gibson,
2004). Thus, high performance contexts are expected to balance the hard elements
(discipline and stretch) and the soft elements (support and trust) in their organizational
contexts.
Enriching Gibson and Birkinshaw (2004), we posit that an organization’s behavioural
context will be an important determinant of whether the organization more fully lever-
ages OA opportunities provided by its network position and diversity. In a high perfor-
mance context, the context is dynamic and flexible enough to allow organizational
members to pursue both exploitative and exploratory initiatives and activities, both of
which are valued and rewarded. Thus, when performance context is high, individuals in
the organization focus on pursuing exploitative initiatives, but at the same time also look
for explorative opportunities. Without a high-performance behavioural context, organi-
zational members’ behaviour might critically hamper the organization’s ability to fully
benefit from its network of relationships. For example, it intuitively makes sense that the
positive impact of centrality and diversity are further enabled in behavioural contexts
because individuals in high-performance contexts might be more prone to engage in
boundary spanning activities, and therefore, more fully utilize all available network
resources. Similarly, we might expect that more extensive and efficient informational
distribution systems in such a context, suggesting that benefits of network centrality and
diversity are likely to be more fully leveraged. As such, we expect that in a high
behavioural context, the negative influences of high centrality and diverse ties on OA are
likely to be dampened and restricted, while their positive influences are likely to be
enhanced.
Proposition 3A: Behavioural context positively moderates the curvilinear relationship

between network centrality and OA, such that in a high-performance context, the
apex of the curve will shift to the right and upward, further increasing OA.
Proposition 3B: Behavioural context positively moderates the relationship between

network diversity and OA, such that in a high-performance context, this relationship
will be stronger.
Several researchers have suggested that the TMT can alleviate the conflicts and
trade-offs associated with the organization’s pursuit of OA. For example, Smith and
Tushman (2005) argue that the TMT makes decisions regarding organizational forms,
cultures, and resource allocation processes such that their organizations can both explore
and exploit. Such potential notwithstanding, however, the ability of senior managers to
guide the organization in ways that promote OA is not a given. Tushman and O’Reilly
(1997) have suggested that OA is particularly facilitated by top teams’ internal processes
‘that enable them to handle large amounts of information and decision alternatives and
deal with conflict and ambiguity’ (Tushman and O’Reilly, 1997, p. 23). Drawing from
this insight, Lubatkin et al. (2006) singled out a top team’s level of behavioural integra-
tion as a key contributor to the organization’s ability to attain OA.
Hambrick (1994) originally proposed the concept of TMT behavioural integration as
a metaconstruct intended to capture three key interrelated and reinforcing elements of

the TMT process: (1) level of collaborative behaviour; (2) quantity and quality of
information exchanged; and (3) emphasis on joint decision making. Hambrick contends
that behavioural integration is a more comprehensive attribute of a team’s integrative
ability, whereby interrelated social and task-related processes collectively capture ‘the
degree to which the group engages in mutual and collective interaction’ (1994, p. 188).
Recent research has advanced behavioural integration’s authenticity by developing a
reliable measure of it and confirming its multilevel origin (Simsek et al., 2005). In
addition, there has also been work on behavioural integration’s consequences. For
example, Hambrick (1995) noted that organizations that have difficulty adapting to
external challenges in a timely manner have the least integrated TMTs. Siegel and
Hambrick (1996) argued that behaviourally integrated teams make better use of knowl-
edge alternatives because cognitive conflict in such teams affords them more opportu-
nities to debate and discuss strategic issues. Similarly, Hambrick (1998) concluded that
behavioural integration enables the TMT to combine knowledge and insights to respond
well to the increasing needs of the market, create core competencies, and develop global
strategies. Li and Zhang (2002) found that behavioural integration facilitated product
innovation intensity. Extending this line of research into the domain of OA, Lubatkin
et al. (2006) argued that behavioural integration directly influences how a TMT deals
with the contradictory knowledge processes that underpin the attainment of an exploit-
ative and exploratory orientation, such that greater integration enhances the likelihood
of jointly pursuing both.
We reason from this line of research that the level of TMT behavioural integration will
also play a pivotal role in modifying the impact of network centrality and diversity on
OA. Specifically, we expect that when a TMT is behaviourally integrated, the resultant
synchronization of the social and task processes associated with collaborative behaviour,
quality of information exchange and joint decision making among senior executives can
promote a deeper understanding and utilization of exploratory and exploitative oppor-
tunities provided by network centrality and diversity. Or, as Hambrick (1998) observed,
behavioural integration enables the TMT to combine knowledge and information
resources in ways that can create new insights and competencies regarding the organi-
zation’s strategic options. Additionally, we expect that behavioural integration will
enable the organization to better reconcile and manage the contradictory information
and resource benefits associated with centrality and diversity. Conversely, absent behav-
ioural integration and the associated interaction and collaboration, team members are
more likely to resolve any dissonance they face by focusing ‘on their own piece of the
enterprise’ (Hambrick, 1998, p. 123). At this extreme, TMT coordination is more likely
to be limited to bilateral exchanges coupled with infrequent and highly distilled com-
munication (Hambrick et al., 2001). Thus, less behaviourally integrated TMTs are more
prone to divert their attention to team maintenance, as well as require costly formal rules
to function (Smith et al., 1994); all of which might detract attaining OA. Thus, we predict
that:
Proposition 4A: The level of TMT behavioural integration positively moderates the
curvilinear relationship between network centrality and OA, such that when it is high,
the apex of the curve will shift to the right and upward, further increasing OA.

614 Z. Simsek
Proposition 4B: The level of TMT behavioural integration positively moderates the
relationship between network diversity and OA, such that when it is high, this rela-
tionship will be stronger.
The Interaction of Interfirm and Competitive Environment Levels

Dynamism refers to both the rate of change and unpredictability of change in an
organization’s environment; it ranges from highly stable to highly dynamic (Dess and
Beard, 1984). In highly dynamic environments, there is rapid and discontinuous change
in demand, competitors, technology, and/or regulations such that information is often
inaccurate, unavailable, or obsolete (Eisenhardt and Bourgeois, 1988). Dynamic envi-
ronments thus demand that the organization develop adaptive responses quickly and
expand the scope of information acquisition and gathering (Sidhu et al., 2004). In so
doing, dynamism imposes a challenge to the organization by demanding flexibility and
agile actions ranging from information scanning, selection, and processing to interpre-
tation (Miller and Friesen, 1983).
Given this, we posit that overreliance on existing interfirm relations in a highly
dynamic environment may prevent the centrally positioned organization from register-
ing and/or responding to environmental dynamism in timely manner and as a result, its
ability to pursue OA might suffer. The key reason is that given the aforementioned
requirements of dynamism, the marginal costs of centrality are likely to increase at a
faster rate than they do in stable environments. Specifically, coordination, information
processing, collaboration and so forth become more costly and difficult to manage in a
dynamic environment because of rapidly unfolding conditions and contingencies. We
thus expect that when an organization is central to the network, it is likely to experience
delayed or inadequate responses to increasing dynamism; hence, its level of OA will be
reduced. Accordingly, we predict that:
Proposition 5A: Environmental dynamism negatively moderates the curvilinear rela-

tionship between network centrality and OA, such that when dynamism is high, the
apex of the curve will shift to the left and downward, thereby decreasing OA.
We similarly propose that although diverse ties may have beneficial influences on OA,
these beneficial influences are likely to be dampened in dynamic environments. As was
argued earlier, for organizations to be able to improve their OA from diverse network
ties, they must first sufficiently access, process, and utilize diverse information and
knowledge benefits that these ties enable. Yet, in dynamic environments where a high
frequency of unexpected and novel changes are occurring, the organization is likely to
find it difficult to respond with such objective and formal procedures. Put in slightly
different words, dynamism may force the organization to develop solutions by taking
actions quickly without less integration and utilization of various benefits that network
ties entail. In addition to reducing the benefits that can be attained from diverse ties,
environmental dynamism can also simultaneously exacerbate potential costs associated
with diverse ties, which involve organizations that have different knowledge bases,
organizational structures, and dominant logics. Accordingly, we posit that while network

diversity is fundamentally beneficial to OA, this beneficial impact may be undermined in
dynamic environments due to increasing communication problems, conflict, and inte-
gration issues among network members. Specifically:
Proposition 5B: Environmental dynamism negatively moderates the relationship

between network diversity and OA, such that when dynamism is high, this relationship
will be weaker.
Complexity (Figure 2) refers to the dissimilarity of environmental elements and the

extent of their interconnectedness, ranging from highly simple to highly complex (Dess
and Beard, 1984; Miller and Friesen, 1983). An organization’s environment is more
complex to the extent that the organization needs to consider heterogeneous actors and
a range of activities, linkages, and interactions outside its boundaries in strategic decision
making. A complex environment will be perceived as more uncertain and requiring
more information processing than a simple environment (Dess and Beard, 1984). For
example, an industry composed of many direct and indirect competitors, in which the
product is sold through a large number of channels and where technology changes
rapidly, is complex and poses considerable demands on the organization, compared to a
more simple and homogeneous environment.
Given these influences and demands of complex environments, we envision that
network centrality and diversity might lead to greater OA in complex than simple
environments by helping the organization reduce and/or absorb complexity (Boisot and
Child, 1999). Particularly, while complex environment demands greater levels of OA,
centrality and diversity enhance the organization’s ability to develop ambidextrous
responses to maintain an appropriate level of fit with the environment (complexity
reduction), as well as strategic flexibility such that complexity does not mitigate its ability
to develop appropriate actions (i.e. complexity absorption) (Boisot and Child, 1999). Put
differently, because complex environments place a premium on differing knowledge and
perspectives necessary to develop and evaluate solutions to complex and multifaceted
problems, complexity is likely to increase the beneficial influences of network centrality
and diversity on OA. For example, the organization needs to generate greater and more
diverse information pertaining to various aspects of the environment to reduce the
complexity it faces. Because, like individuals, organizations have limited information
processing capacity (i.e. ‘bounded rationality’), network centrality and diverse ties might
help the organization access quality information to recognize opportunities and/or
threats hidden in a complex environment. Indeed, research by Powell et al. (1996)
suggests that in industries that are complex and expanding, with sources of expertise that
are widely dispersed, network ties tend to become salient predictors of the organization’s
innovation performance. Similarly, through central and diverse network connections,
the organization is better positioned for developing the more complex responses that
may be needed to attain OA in a complex environment.
To recap, complexity, like dynamism, implies imperfect and uncertain competitive
markets; however, we expect differing moderating implications for OA. Whereas the
imperfections associated with complexity are potentially subject to discovery, evaluation,
and exploitation, those associated with dynamism cannot be so readily dealt with because

616 Z. Simsek
they are largely unpredictable. Put differently, while dynamism gives rise to the inability
to predict or foresee, complexity is primarily associated with difficulties in monitoring
and understanding environmental implications for strategic actions. And given that a
moderate level of centrality and network diversity provide the organization with rich
information and resource benefits that help it reduce and/or absorb complexity, we
expect that network centrality and diverse ties will be more conducive to OA in a
complex than in a simple environment.
Proposition 6A: Environmental complexity positively moderates the curvilinear rela-

tionship between network centrality and OA, such that when complexity is high, the
apex of the curve will shift to the right and upward, further increasing OA.
Proposition 6B: Environmental complexity positively moderates the relationship

between network diversity and OA, such that when complexity is high, this relation-
ship will be stronger.
Organizational Ambidexterity, Competitive Environment and Performance

As discussed, stable environments enable organizations to manage by established rou-
tines, as learning requirements are minimal due to slowly changing customer prefer-
ences, technologies, and competition (Miller and Friesen, 1983). A stable environment
increases the likelihood that the critical variables can be identified, and it allows more
precise understanding to be developed regarding the potential impact of those variables
on the organization. Senior executives in such a context have the luxury of added
stability and predictability of change, as well as greater ability to react and adapt to the
environment. Thus, it can be argued that in environments with little dynamism, the need
to continually introduce new innovations is not necessary for enhancing performance
because the organization might benefit more by being exploitative. Conversely, organi-
zations competing in dynamic environments must be strategically flexible and efficient
because customer needs and competitor activities demand immediate action (Sidhu
et al., 2004). Indeed, researchers working from a population ecology view of the orga-
nization (e.g. Hannan and Freeman, 1977, 1989) have long suggested that specialists
(those that practice only exploitation or exploration) function better in a non-turbulent
environment, while generalists (those who have OA) are more likely to flourish in a
turbulent one.[6] Similarly, strategy researchers, such as Lumpkin and Dess (1995), have
argued that dynamism may create performance problems for organizations using a
simple strategy-making process. That is, a strategy-making process that relies on estab-
lished routines and practices, or one that draws on a restricted competitive arsenal or a
small assortment of decision-making tools, may be ineffective in an environment that
requires responsiveness and flexibility.
Consequently, we expect that when the organization successfully pursues OA in a
dynamic environment, this should enhance its performance, because while exploration
helps encounter rapid obsolescence of products and services, exploitation ensures system
efficiency and a steady stream of cash flows ( Jansen et al., 2005). In such a context, it will
be risky for the organization to focus exclusively on either exploration or exploitation

because dynamic environments make current products and services obsolete while
instantaneously requiring that new ones be developed ( Jansen et al., 2006). Over-
exploitation in dynamic environments may result in competence trap (Levinthal and
March, 1993). At the same time, over-exploration for the purpose of flexibility can result
in chaotic organization, which makes it difficult to develop core competencies. Thus, in
dynamic environments OA should lead to increased performance because without an
appropriate level of OA, the organization would be neither dynamic nor adaptive.
Conversely, in stable environments it might be more beneficial for organizations to fully
exploit their competitive advantage in either exploitation or exploration. As such:
Proposition 7: Environmental dynamism positively moderates the relationship between

OA and organizational performance, such that when dynamism is high, this relation-
ship will be stronger.
As noted, environmental complexity is characterized by a wide array of customers,

competitors, and diversity in the type of marketing and production methods needed to
cater to the different segments of a market. When complexity is low, organizations can
operate within their existing systems to improve their efficiency (e.g. maintaining the
same product line, manufacturing process, and market practices year after year). Con-
versely, under conditions of high complexity, a simplistic strategic pursuit that concen-
trates on ‘a single way of conducting business or in one dominant element of strategy’
(Miller, 1993, p. 121) may lack the variety needed for effectiveness in the environment.
Confirming this, Miller and Chen (1993) found that simplicity of competitive repertoires
is especially harmful for organizations in a complex environment, and Lumpkin and
Dess (1995) found that organizational performance suffers if an overly simple strategy-
making process is used in complex environments. Similarly, Jansen et al. (2006) reported
evidence indicating that organizations can successfully operate in a highly competitive
environment by both exploring (expanding current products and services) and exploiting
(defending existing markets). Although these studies were not explicitly testing OA, they
suggest that the pursuit of OA can lead to increased performance as environmental
complexity increases because OA represents a wider-scope strategy that organizations
can use to cope with increased exploitation and exploration demands of complex envi-
ronments. Thus:
Proposition 8: Environmental complexity positively moderates the relationship between

OA and organizational performance, such that when complexity is high, this influence
will be stronger.
DISCUSSION
Our intent was to take stock of the current body of knowledge, further specify the OA
construct, and develop a more encompassing model of OA. To that end, we first
reviewed extant research using an input–process–output framework. We then elaborated
upon a simple, yet coherent, multilevel model that not only discerns the key
organization-level determinants of OA suggested in previous research, but also specifies

618 Z. Simsek
the shaping influences of interfirm networks and competitive environments on OA.
Below, we discuss some additional research implications that emerge from our work and
offer several suggestions for future inquiries on OA.
Future Research Implications

Although our propositions hold promise for future research, we see the need and
opportunity for other inquiries on OA. First, we focused on selected constructs to develop
our arguments and propositions. While this strategy helped us to maintain conceptual
clarity and parsimony, we may have overlooked other variables. Thus, we encourage
more research on the organization, interfirm, and environmental determinants of OA.
Second, although some of our model’s variables from each level might be related, we
discussed them separately to more fully examine their interactive, cross-level influences
on OA. For example, Birkinshaw and Gibson (2004) suggest that structural and behav-
ioural contexts complement each other in shaping OA, and that many successful com-
panies use a combination of both to attain OA. Likewise, it is possible that network
centrality and diversity will interact to impact OA. Indeed, our arguments suggest that an
organization connected to a heterogeneous partner will gain more information advan-
tage if it also possesses a moderate amount of network centrality. In short, more research
that examines how variables from each level of analysis reinforce or undermine one
another to shape OA is needed.
Third, in extending the OA–performance link, we explored the moderating effects of
environmental complexity and dynamism; however, several other environmental and
organizational characteristics might moderate this link as well. Research that examines
such factors will be helpful not only for building a more complete theory of OA, but also
for identifying factors that might need managerial attention in pursuing OA to enhance
performance.
Fourth, we see real promise in research that more comprehensively examines alter-
native conceptualizations of OA. In particular, we recommend that future researchers
take a temporally sensitive perspective, capturing differing combinations of exploitation
and exploration depending upon the specifics of the organization’s environment and
strategies. The literature on dynamic capabilities might provide a good starting point.
Teece et al. (1997) discuss how capabilities and routines might enable the organization to
dynamically integrate, build, and reconfigure their resources in rapidly changing envi-
ronments. Thus, a dynamic capability perspective suggests that OA is not necessarily
concerned with simultaneously pursuing exploitation and exploration to their maximum
per se, but rather involves a dynamic balance that stems from purposefully steering and
prioritizing each dimension to its inherent optimum as conditions demand. Because new
opportunities (and threats) are constantly created by the organization’s internal and
external dynamics, an organization might constantly attempt to balance exploitation and
exploration, but may never achieve a lasting balance.
Fifth, it intuitively makes sense that an ambidextrous organization should enjoy a
certain degree of prestige and status, which may entice other organizations to form ties
with it. Thus, while our model and propositions focused on the effects of interfirm ties on
OA, OA may, in turn, influence the organization’s interfirm ties. We did not consider

such potential feedback loops given our focus and for reasons for parsimony. As such,
another fruitful research area may involve the complex reciprocal and coevolutionary
linkages between OA and its antecedents.
Finally, our discussion, using specific variables from the proposed model (Figure 2),
focused on either main or two-way interactive effects on OA and OA’s relationship to
performance. We also believe that additional insights can be gained by exploring con-
figurations, specifically three-way interactions among antecedents in our model. Such an
expectation is consistent with some who have argued that because exploitation and
exploration require fundamentally different organizational structures, strategies, and
contexts, the pursuance of OA might require hosting multiple elements (Benner and
Tushman, 2003; Floyd and Lane, 2000; Levinthal and March, 1993; March, 1991).
Similarly, we expect a multivariate influence among complexity, dynamism, and OA in
predicting organizational performance. The joint presence of high dynamism and com-
plexity gives rise to ‘dynamically competitive environments’ ( Jansen et al., 2005) or
‘hypercompetition’ (D’Aveni, 1994) where competition is intense in both factor and
product markets. Hypercompetition characteristically poses intense demands on orga-
nizations to actively interpret and seize a changing list of opportunities and threats that
defy thorough understanding (Floyd and Lane, 2000). Thus, a single focus under hyper-
competition on either exploitation or exploration might often lead to deteriorating
performance because bases for competitive advantage, industry structure, and product
performance standards are generally short-lived or in a constant state of flux.
Contributions
This paper makes two distinct contributions to research. First, we suggested that differ-
entiating the various input–process–output elements associated with this line of inquiry
can help invigorate the OA concept by both substantiating and extending its conceptual
foundations. To that end, we reviewed the literature and surfaced underlying definitions
including structural, behavioural, and what we labelled as realized. Then using the
input–process–output framework in Figure 1, we offered a conceptualization of realized
OA, separating it from structural and behavioural ones. We suggested that whereas
exploitative and exploratory attainments explain what OA consists of, structural and
behavioural ambidexterity refer to an organization’s orientations and properties that
might help it attain OA. Accordingly, we proposed that OA should be understood as the
synchronous attainment of exploitation and exploration.
Second, while OA has traditionally been studied from a single perspective using
individual variables, and because a model that integrates prior findings on the various
variables associated with OA has been lacking, we advocated that a multilevel model
may encourage a more complete theorizing and understanding. Reflecting a complexity
of factors that might potentially impact OA, we advanced a mode that suggests that OA
is determined at the organization, interfirm, and contextual levels and that these levels
can mutually interact to shape OA. By so doing, our model is potentially better specified
compared to alternative models that could have been developed from a purely organi-
zation, interfirm, or contextual perspective because it also includes cross-level predictions
that are important to OA, but that would have been omitted otherwise. Indeed, directly

620 Z. Simsek
addressing the call in Raisch and Birkinshaw (2008), we have shown that propositions on
how different antecedents interact and complement one another in explaining OA are
not only possible, but also that our theory is impoverished without an examination of
such influences. We have also suggested that the attainment of OA is not necessarily
associated with higher performance and emphasized that the role of environmental
uncertainty plays in this association. Taken together, our multilevel model thus helps to
pave the way for the development of OA research and theory that are cumulative and
integrative.
CONCLUSIONS
The challenge of OA is a crucial one for managers and scholars. However, even as
research accumulates, OA still remains an undertheorized, underconceptualized, and,
therefore, poorly understood phenomenon. Even though we here have drawn upon
theories from various disciplines and traditions to integrate and extend current under-
standing about OA, much remains to be understood. Thus, further dialogue on OA
promises to be interesting and valuable for both descriptive and normative theory.
ACKNOWLEDGMENTS
We would like to thank the editor, Colin Hales, and three anonymous reviewers, who helped make the paper
better as a result of the revision process. Any errors remain our own.
NOTES
[1] We are grateful to a reviewer for this suggestion, which played a key role in this paper’s conceptual
development.
[2] We identified these definitions by searching several databases, including ‘Web of Science’, ‘ABI/Inform
Global’, ‘Academic OneFile’, and ‘Google scholar’, using key words ‘organizational ambidexterity’,
‘ambidextrous organizations’, ‘firm ambidexterity’, and ‘ambidextrous firms’, as well as by examining
papers cited in these sources. Thus, while we do not make the claim that this is a complete review, we
were convinced that Table I had no systematic omissions or biases.
[3] We appreciate this observation from an anonymous reviewer.
[4] Because the literature on multilevel theories and phenomena includes several research streams (e.g. Hitt
et al., 2007; Klein et al., 1994), a clarification is in order as to our usage of this term. Consistent with Hitt
et al. (2007), we loosely use ‘multilevel’ to highlight two aspects of our model: (a) there exists multilevel
nesting arrangement between levels and hence, variables in our model – that is, organizations are nested
in interfirm networks, which are themselves nested in multiple environments; and (b) OA is the result
of direct and ‘cross-level’ (Rousseau, 1985) influences emanating from the firm-, interfirm- and
environmental-level. We also recognize that what makes a particular paper multilevel rests not only on
theory but also on multilevel empirical design (Hitt et al., 2007).
[5] We are grateful to an anonymous reviewer for suggesting this point.
[6] We thank an anonymous reviewer for this insight.
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Journal of Management Studies 46:4 June 2009

Organizational Ambidexterity: Towards a

abstract Although interest in the concept of organizational ambidexterity has increased

ORGANIZATIONAL AMBIDEXTERITY: AN INPUT–PROCESS–OUTPUT

© Blackwell Publishing Ltd 2009

Input Process Output

Figure 1. An input–process–output view of organizational ambidexterity

Components of Organizational Ambidexterity

© Blackwell Publishing Ltd 2009

Author(s) Theoretical/empirical Levels/unit of analysis Achieving balance View Definition

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

Outcomes of Organizational Ambidexterity

© Blackwell Publishing Ltd 2009

Antecedents of Organizational Ambidexterity

© Blackwell Publishing Ltd 2009

A MULTILEVEL MODEL OF ORGANIZATIONAL AMBIDEXTERITY

© Blackwell Publishing Ltd 2009

Figure 2. A multilevel model of organizational ambidexterity

© Blackwell Publishing Ltd 2009

SOME SELECTED PROPOSITIONS

© Blackwell Publishing Ltd 2009

Proposition 1A: Network centrality has a curvilinear (inverted U-shaped) relationship

© Blackwell Publishing Ltd 2009

Proposition 1B: A dual structural architecture positively moderates the curvilinear

In addition to centrality, we also expect an influence of the organization’s network tie

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

Proposition 2A: Diversity of the organization’s network of ties is positively related to

Proposition 2B: A dual structural architecture positively moderates the relationship

We expect that an organization’s behavioural context will play a similar moderating

© Blackwell Publishing Ltd 2009

Proposition 3A: Behavioural context positively moderates the curvilinear relationship

Proposition 3B: Behavioural context positively moderates the relationship between

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

The Interaction of Interfirm and Competitive Environment Levels

Proposition 5A: Environmental dynamism negatively moderates the curvilinear rela-

© Blackwell Publishing Ltd 2009

Proposition 5B: Environmental dynamism negatively moderates the relationship

Complexity (Figure 2) refers to the dissimilarity of environmental elements and the

© Blackwell Publishing Ltd 2009

Proposition 6A: Environmental complexity positively moderates the curvilinear rela-

Proposition 6B: Environmental complexity positively moderates the relationship

Organizational Ambidexterity, Competitive Environment and Performance

© Blackwell Publishing Ltd 2009

Proposition 7: Environmental dynamism positively moderates the relationship between

As noted, environmental complexity is characterized by a wide array of customers,

Proposition 8: Environmental complexity positively moderates the relationship between

© Blackwell Publishing Ltd 2009

Future Research Implications

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009

© Blackwell Publishing Ltd 2009