Summary Strategy and technology management topic 1 + 2

Table of contents
Exploitation – Exploration......................................................................................................................1
Building ambidexterity into an organization......................................................................................1
Exploration and Exploitation within and across organisations...........................................................4
Exploitation-Exploration tensions and organizational ambidexterity: Managing paradoxes and
innovation........................................................................................................................................10
Organizational ambidexterity: IBM and Emerging business opportunities......................................15
Corporate entrepreneurship................................................................................................................19
Improving firm performance through entrepreneurial actions: Acordia's corporate
entrepreneurship strategy...............................................................................................................19
A STORY OF BREAKTHROUGH VERSUS INCREMENTAL INNOVATION: CORPORATE
ENTREPRENEURSHIP IN THE GLOBAL PHARMACEUTICAL INDUSTRY...............................................21
Meeting the Challenge of Corporate Entrepreneurship...................................................................27
Corporate Entrepreneurship and the Pursuit of Competitive Advantage.........................................29




Exploitation – Exploration
Building ambidexterity into an organization
Adaptability vs. Alignment: The article highlights the challenge of striking a balance between
adaptability and alignment in organizational strategy.

Case Example: Ericsson: The case of Ericsson exemplifies the potential pitfalls of overemphasizing
adaptability. Despite its technological advancements, Ericsson faced organizational challenges,
leading to significant layoffs and restructuring.

Two Forms of Ambidexterity:

,  Structural Ambidexterity: Traditional approach involves creating separate structures for
different activities, such as core business units and R&D departments. However, this can lead
to isolation and lack of acceptance for new ideas.
 Contextual Ambidexterity: Proposes individual employees make choices between alignment-
oriented and adaptation-oriented activities in their day-to-day work. This approach provides
flexibility for employees to decide how to divide their time between different activities.

Challenges with Structural Ambidexterity:

 Isolation and lack of acceptance for ideas in R&D and business development groups.
 Top-down nature, relying on business-unit managers to allocate employees' time.

Contextual Ambidexterity:

 Focuses on individual employees making choices based on the context of their work.
 Requires a more flexible organizational structure, emphasizing the human side of the
organization.

Complementary Approaches: Contextual ambidexterity is presented as complementary to structural
ambidexterity. Successful companies like Hewlett-Packard, 3M, and Intel use a combination of both
approaches.

Conclusion: Achieving the right balance between adaptability and alignment is crucial for
organizational success. The contextual ambidexterity model emphasizes individual decision-making
within a flexible structure, offering a nuanced perspective on organizational ambidexterity.

Contextual Ambidexterity Behaviors:

1. Taking Initiative: Ambidextrous individuals go beyond their job roles, identifying and seizing
opportunities. Example: A sales manager develops a new software module based on a
client's needs.
2. Cooperative Nature: They actively seek collaboration with others. Example: A marketing
manager initiates a European marketing forum to foster collaboration among peers from
different countries.
3. Building Internal Linkages: Ambidextrous individuals act as brokers, creating internal
connections. Example: A plant manager facilitates a $10 million investment opportunity by
connecting regional managers.
4. Multitasking Ability: They comfortably handle multiple roles. Example: An operations
manager manages daily operations while concurrently developing an electronic module for a
coffee vending machine.



Attributes of Ambidextrous Individuals:

 Acting beyond job confines for the organization's broader interest.
 Acting spontaneously with motivation and information, without seeking superiors'
permission.
 Engaging in actions aligned with the business's overall strategy.

Contextual Ambidexterity at Organizational Level:

 Defined as the collective orientation of employees toward simultaneous alignment and
adaptability pursuit.

,  Manifested in individual behaviors and unwritten routines within organizations.
 Analogous to the concept of market orientation, contributing to long-term performance.

Ambidextrous Organizations Examples:

1. Renault: Transformed from a state-owned, struggling company to a profitable industry
leader. Balanced alignment and adaptability through consistent strategy and fostering a deep
desire to adapt.
2. Oracle Corp.: Leading enterprise software company with a focus on adaptability. Maintains
aggressive performance expectations but aligns around adaptability, allowing for quick shifts
in business strategies.



Building Contextual Ambidexterity:

 Managers can shape organizational context through systems, incentives, and controls.
 Four attributes (stretch, discipline, support, trust) define an organization's context, creating
dimensions of performance management and social support.
 High-performance context is essential for achieving ambidexterity and superior performance.

Escaping Suboptimal Contexts:

 Burnout Context: Overemphasis on performance management without social support can
lead to exhaustion and performance decline.
 Country-Club Context: Excessive social support without high-performance expectations can
result in satisfactory but lackluster results.
 Companies must engineer shifts in behaviors to escape suboptimal contexts and foster
ambidexterity.

Pathways to Ambidexterity:

1. No Single Pathway: Organizations can achieve ambidexterity by either building performance
context around existing social support or vice versa.
2. Leadership Models: No single leadership model exists; different styles, such as charismatic or
collegial, can foster ambidextrous organizations.
3. Clear and Simple Priorities: Consistent application of chosen focal elements is crucial for
ambidexterity success.

Conclusion: Executives seeking to build ambidextrous organizations can learn valuable lessons from
individual behaviors, organizational contexts, and successful examples, ultimately contributing to
long-term performance.

Diagnosing Organizational Context:

 Organizations must evaluate their current state in terms of performance management, social
support, and the balance between the two.
 A diagnostic tool involving responses from a diverse group within the organization provides a
quantitative analysis.
 Supplementing quantitative analysis with qualitative discussions reinforces a reliable
understanding of necessary changes for high performance.

Focus on Levers and Consistency:

,  No specific organizational levers consistently linked to success were found.
 Higher-performing companies focus consistently on a few levers, such as Scotch's emphasis
on professional development, knowledge transfer, and a participative strategic-planning
process.
 Consistency is crucial to enable individual-level ambidexterity, contributing to high
performance over time.

Building Understanding at All Levels:

 The "erosion effect" indicates that lower-level employees rate organizational ambidextrous
characteristics lower than top-management counterparts.
 Effective organizational context relies on clear and consistent communication at all levels.
 Understanding top management initiatives is essential for impacting individuals' capacity for
ambidexterity.

Complementing Contextual and Structural Ambidexterity:

 Contextual ambidexterity complements structural ambidexterity.
 Structural separation can be essential but should be temporary, allowing new initiatives
space and resources before reintegration.
 Contextual ambidexterity enhances both separation and reintegration processes.

Viewing Contextual Ambidexterity Initiatives:

 Ambidexterity arises through the creation of a supportive context where individuals make
their choices.
 Leadership is displayed by everyone in the organization, not just through formal structures or
charismatic leaders.
 Ambidextrous leadership should emerge at all levels, driven by initiatives but allowing
leadership to be inherently ambidextrous.

Exploration and Exploitation within and across organisations
Introduction:

 March (1991) distinguished between two organizational behavior gestalts: exploration and
exploitation.
 Exploration involves search, experimentation, and variation, while exploitation enhances
productivity and efficiency through choice, execution, and variance reduction.
 Both are vital for organizational learning but entail inherent contradictions.
 Scholars initially focused on knowledge development versus refinement, but the framework
broadened to encompass specialization, experience, diversity, and experimentation.
 Debates arose on fundamental assumptions: narrow versus broad application, coexistence,
complementarity or contradiction, continuum versus discrete choices, specialization versus
balance, and the impact on organizational performance.

Discussion Overview:

 Origin and evolution of exploration and exploitation concepts are discussed.
 Examination of their environmental, organizational, and managerial antecedents follows.
 Trade-offs and tensions in balancing these activities are considered.
 Modes of balance involve contextual ambidexterity, organizational, temporal, or domain
separation.