Supply chain management ambidexterity and incumbent-startup collaborations

Abstract

Today’s digital age has created the need for the transformation of incumbent firms. It requires them to explore novel opportunities, while continuing to exploit their existing ones. One way is to open the innovation path to outside firms. The automotive industry is already well known for its use of suppliers as a source of innovation. But, while maintaining their traditional partnerships with tier-1 suppliers, many automotive firms have implemented startup programs to gain access to and collaborate with small and innovative firms. As part of a 30-month participant-observation study in an incumbent automotive company we conducted a multiple case study research of 5 startup cooperations of the incumbent. In this study, we observed the use of different forms of ambidexterity within the incumbent and across its divisions in an attempt to balance their exploration and exploitation activities. The organizational structure suggests that the research and development (R&D) division uses structural ambidexterity to leverage the innovations coming from their startup collaborations. The purchasing and supply chain management (PSM) division on the other hand, as an important facilitator for all R&D cooperations, is characterized by contextual ambidexterity. Our case studies however show, that each startup project is characterized by a different combination of ambidexterity approaches by the R&D and PSM Division. We extend the ambidexterity literature by showing the different effects and challenges of combining structural and contextual ambidexterity have on startup-incumbent collaborations.