The effect of ambidexterity on market performance: a new perspective and measurement from the dynamic capability framework

Abstract

ABSTRACT Previous research defined ambidexterity as a dynamic capability that allows companies to generate and orchestrate a balance between exploitation and exploration. Following this line of thought, this study delves deeper into the relationships between exploitation, exploration and ambidexterity, as well as into their different natures, functions and utilities. To explore this perspective, we empirically analyse data from 605 organic agro-food processing companies regarding their level of exploitation, exploration, and synergy practices, and investigate their effect on their market performance. This research contributes to the organisational literature by understanding ambidexterity as a higher-order dynamic capability that encompasses both balance and synergies between exploitation and exploration practices. It also provides some advice to managers to develop different ambidexterity configurations to improve their firm market performance.