Organizing for Continuous Innovation: On the Sustainability of Ambidextrous Organizations

Abstract

Organizing for innovation does not present itself as a straightforward exercise. The complexities entailed when implementing an innovation strategy can be related directly to the multitude of objectives it comprises. Recently, several scholars have advanced the notions of semi‐ or quasi‐structures and ambidextrous organizations to handle these multiple requirements. These organizational forms imply the simultaneous presence of different activities, exhibiting differences in technology and market maturation. As a consequence, financial returns will reflect this diversified resource allocation pattern. Moreover, as higher levels of complexity are being introduced; ambidextrous organizations will encounter additional, organizational, costs. Compared to organizations that focus on the most profitable part of the portfolio, ambidextrous organizations – ceteris paribus – tend to be inferior in terms of financial returns. Within this contribution we explore under which conditions ambidextrous organizations can outperform focused firms; considered a prerequisite for their sustainability. In order to do so, we develop an analytical framework depicting the differential value dynamics, focused and ambidextrous firms can enact. Our findings reveal the relevancy of adopting extended time frames as well as introducing interface management practices aimed at cross‐fertilization. Finally, the synergetic potential of (underlying) technologies comes to the forefront as necessary in order for ambidextrous organizations to become sustainable.

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