Ambidexterity as a Dynamic Capability- Resolving the Innovator's Dilemma

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Research in Organizational Behavior 28 (2008) 185–206

Ambidexterity as a dynamic capability: Resolving the innovator’s dilemma Charles A. O’Reilly IIIa,*, Michael L. Tushman b
a

Graduate School of Business, Stanford University, Stanford, CA 94305, USA b Harvard Business School, Soldiers Field Road, Boston, MA 02163, USA

Abstract How do organizations survive in the face of change? Underlying this question is a rich debate about whether organizations can adapt—and if so how. One perspective, organizational ecology, presents evidence suggesting that most organizations are largely inert and ultimately fail. A second perspective argues that some firms do learn and adapt to shifting environmental contexts. Recently, this latter view has coalesced around two themes. The first, based on research in strategy suggests that dynamic capabilities, the ability of a firm to reconfigure assets and existing capabilities, explains long-term competitive advantage. The second, based on organizational design, argues that ambidexterity, the ability of a firm to simultaneously explore and exploit, enables a firm to adapt over time. In this paper, we review and integrate these comparatively new research streams and identify a set of propositions that suggest how ambidexterity acts as a dynamic capability. We suggest that efficiency and innovation need not be strategic tradeoffs and highlight the substantive role of senior teams in building dynamic capabilities. # 2008 Elsevier Ltd. All rights reserved.

Contents 1. Dynamic capabilities, organizational ambidexterity and competitive advantage . . . . . . . . . . 1.1. Sensing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2. Seizing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3. Reconfiguring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exploration, exploitation, and organizational ambidexterity: dynamic capabilities in practice 2.1. What Is ambidexterity? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2. The determinants and consequences of ambidexterity . . . . . . . . . . . . . . . . . . . . . . . Ambidexterity in action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Future directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189 190 191 191 192 193 194 196 200 201 202

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* Corresponding author. Tel.: +1 650 725 2110. E-mail addresses: oreilly_charles@gsb.stanford.edu (C.A. O’Reilly III), mtushman@hbs.edu (M.L. Tushman). 0191-3085/$ – see front matter # 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.riob.2008.06.002

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C.A. O’Reilly III, M.L. Tushman / Research in Organizational Behavior 28 (2008) 185–206

‘‘It is not the strongest of the species that survive, nor the most intelligent, but the one that is most responsive to change.’’ Charles Darwin How do organizations survive in the face of change? This fundamental question has engaged scholars from disciplines as disparate as management, history, strategy, organizational sociology, psychology, and economics (e.g., Chandler, 1990; Christensen, 1997; Hannan &...
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