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Today’s companies in diverse industries perceive increasing competition and an accelerating pace of change. To cope with these challenges, they need to leverage their current competencies and exploit existing products and services, while simultaneously build new capabilities to develop innovative solutions. Therefore, instead of selecting and maintaining a focus on either efficiency or flexibility, these firms balance resource allocation and become so-called ambidextrous organizations. W. Henning Blarr analyzes this balancing act, requiring the ability to simultaneously pursue both incremental and discontinuous change. He shows that compared to organizations focusing on either exploitative or explorative activities, ambidextrous organizations significantly obtain higher levels of financial performance.
In our paper, we introduce the concept of organizational ambidexterity (OA) to family firm research and develop hypotheses regarding the impact family influence has on OA and on subsequent firm performance. We argue that as family influence increases family firms achieve higher degrees of OA and firm performance. We empirically test our hypotheses on a dataset of 104 family firms and show that family influence leads to higher degrees of ambidexterity especially through family power and cultural alignment between family and firm interests. Furthermore, we show that higher levels of OA in family firms also result in better financial performance. We contribute to family firm research by introducing organizational ambidexterity into the discussion about family firm performance and family firm heterogeneity, and thus provide an approach for integrating strategy and family firm research.
SunCoal Industries
(2011)
This case study provides information about energy supply in Germany and the various forms of renewable energies with focus on the utilization and processing of biomass into solid fuels. Since governments have decided to fight global warming the industry sector of renewable energies has grown steadily in many countries, especially in Germany. In this country the growth was promoted by political acts and regulations on the one hand, on the other hand by the awareness of investors that renewable energy companies are advantageous investments. While wind, solar and water power are well known to many people refining of biomass sounds rather unknown. Technologies to refine biomass into fuels are various. Carbonization of biomass shows that solid fuels still will be part of the energy supply chain in future. Major tasks of the case study are to find out whether (1) the sector of renewable energies is promising or just hyped; (2) the market for synthetic coal is attractive; (3) SunCoal Industries is adding value; and (4) SunCoal Industries can master the environmental obstacles. Students are asked to apply general strategic management frameworks to evaluate a start-up company in a fast growing industry.
We introduce a strategic management perspective into the ambidexterity discussion and show that ambidexterity is a much better predictor of organizational performance than traditional strategic management concepts, specifically the concept of fit. Our main contribution lies in the combination of ambidexterity- and strategic management research where we highlight commonalities as well as differences and show that the two research streams lead to opposing findings. While ambidexterity claims that organizations need to build up capabilities for both exploitative and explorative behavior to be successful, strategic management literature, and especially the concept of fit, rather argues that organizations should focus themselves. Only if they manage to create a fit between their strategic orientation and an aligned behavior will they outperform their competition. We address this contradiction with our study and show that the explanatory power of the concept of fit on organizational performance has diminished. Rather, organizations are successful if they show exploitative as well as explorative behavior. Thus we lay the ground for further research that combines ambidexterity and strategic management.