Reduced to the max: firm performance and organizational ambidexterity research

Abstract

PurposeFor nearly three decades, numerous scholars have searched for a robust relationship between firm performance and organizational ambidexterity—so far with questionable results. The aim of this short essay is thus to critically examine the performance of applied performance measurements.Design/methodology/approachAfter discussing methodological issues and revealing a conceptually neglected “level” distinction in organizational ambidexterity studies, we contribute to conceptual clarity as to whether exploration and exploitation ought to be conceived as continuous or orthogonal.FindingsFirst, even if the dichotomy of exploration and exploitation is orthogonally conceptualized, at least one trade-off, either on the level of the explanans or the level of the explanandum, can be bypassed but cannot conceptually be denied. Second, we conclude that explaining overall firm performance with the relation of just two variables (exploration and exploitation)—referring to the inherently conflicting title of this paper, “Reduced to the Max”—is a hazardous endeavor.Research limitations/implicationsBased on these insights, future research may benefit from studying organizational ambidexterity and firm performance more qualitatively and paying more attention to the declared level distinction.Originality/valueThe paper reveals a crucial neglect of level and provides an answer to one of the core questions of organizational ambidexterity research: that of continuity vs orthogonality.