Contingency perspective to bridge human capital perception to achieve ambidexterity in environmental dynamism

Abstract

Environmental change and technological disruption are expanding phenomena impacting today's economic world. A dynamic business environment can inspire companies to engage in both exploitative and exploratory innovation at the same time. Traditional financial technologies have evolved substantially over the past decade. Although the environment challenges technology to adapt to business sustainability, artificial intelligence has not replaced human bankers. There is, however, a scarcity of research on the relationship between ambidextrous work and human capital, indicating that few studies have been undertaken. To better understand how banks can achieve such organizational ambidexterity, we develop a framework that investigates the combined effects of organizational human capital (O-HC), environmental dynamism (END), and technological capacity (TEC) on organizational ambidexterity (ORA). The theory of contingency is the theoretical foundation of the subject. This quantitative analysis used a sample size of sixty-three executives from Indonesia's banking industry and was analyzed using PLS-SEM and SPSS to determine the measurement and structural models. The results show that TEC and O-HC directly affected ORA, but END did not. We also found that firms with O-HC are more likely to utilize high TEC to promote ORA. The findings of this study provide practitioners with insight into how they can promote human capital and TEC as pillars of ambidextrous banking. This research contributes to the literature on ORA and offers managers insights on aligning their knowledge practices to develop TEC when pursuing ORA.