Link on, Link off: Data-driven management of organizational networks for ambidexterity

Abstract

We examine how firms can intentionally design and manage their organizational networks to balance exploration and exploitation when a new exploration unit is established within an organization. We combine insights from the literature on social networks and structural ambidexterity and make two main arguments. First, a firm needs to ensure that the exploration unit is sufficiently connected to other parts of the organization where key complementary assets reside while minimizing the number of linkages to reduce the influence of the “old” way of thinking on new exploration efforts, to reduce coordination costs, and to increase adaptive ability. Second, the “ideal” level of connectedness for structural ambidexterity ultimately depends on the number of valuable complementary assets in a firm’s possession. We also show how managers can combine analytical methods from the computational literature on network analysis with managerial adjustments to do so in practice.