Enabling Mechanisms of Top Management team Processes for Organizational Ambidexterity in SMEs

Abstract

Business organizations need to simultaneously exploit existing competencies and explore new opportunities for its long-term effectiveness and to sustain competitiveness in a dynamic environment. Organizational ambidexterity is an organization’s ability to simultaneously pursue both exploration and exploitation activities. Past researchers studying organizational ambidexterity have explored its structural and contextual antecedents and/or its relationship with innovation and firm performance. Irrespective of its structural or contextual genesis, researchers agree that the major decisions and tasks related to ambidexterity are made and implemented by the top management team (TMT) of the organizations. Previous studies have explored the effect of different TMT processes on ambidexterity. Of these, TMT behavioural integration (consisting of collaborative behaviour, information exchange and joint decision making) is an important contributor to ambidexterity. Hence, to nurture ambidexterity in firms, it is essential to understand how TMT behavioural integration is enabled in firms. To the best of our knowledge, no study has explored the enablers of TMT behavioral integration. Hence, in the present study we addressed the following research questions: (1) What are the distinct mechanisms that enable the top management behavioural integration? (2) What are the effects of each of these mechanisms on the different conceptualizations of ambidexterity (combined exploration and exploitation or a mid way balance of exploration and exploitation)? In this study we further explored the relationship of the TMT processes with ambidexterity and with firm financial performance by addressing the following questions: (1) How does top management behavioural integration affect the different conceptualizations of ambidexterity? (2) What are the distinct effects of the different conceptualizations of ambidexterity on firm financial performance? (3) What is the effect of top management behavioural integration on firm financial performance? In contrast to large organizations, the TMT members in Small and Medium Enterprises (SMEs) adorn both strategic and operational roles and hence have a larger role in influencing the ambidexterity of their organizations. Therefore, we conducted this study in the research context of SMEs...