IT Enabled Agility in Organizational Ambidexterity
Publication Year: 2014
Through an in-depth case study on the car manufacturer AUTO, this research focused on the difficulty of capturing value from IT enabled agility as well as dealing with organizational ambidexterity.
- Through apply an ambidextrous structure a company can successfully explore new competences (long-term success) and exploit existing competences (short-term success) at the same time. Normally it leads to a paradoxon in which it is argued that both concepts; compete for the scarce organizational resources, both are iteratively self-reinforcing, and the mind-sets and organizational routines needed are radically different from each other.
- IT enabled agility: ability to detect and respond to opportunities and threats, in which IT is an enabler. IT enabled predictability can be defined in two ways. Firstly as entrepreneurial agility (where organizations anticipate on environmental changes and conduct strategic experiments with new business approaches and model), and secondly as adaptive agility (capability to cope with uncertainty and rapid recovering without fundamentally changing products and processes).
This research main finding that IT enabled agility mechanisms need to be reconsidered when organizing for ambidexterity to achieve competitive advantage
The research has several additional findings:
(1) entrepreneurial agility impedes exploitative concepts, this leads to a improvement trap or, (2) adaptive agility impedes exploratory concepts which leads to the disruption trap
(3) in addition, success trap arises with adaptive agility and exploitative concepts both keep reinforcing exploitation,
(4) failure trap arises when combining entrepreneurial agility and exploratory concepts and promotes the search for even newer ideas and thus more exploration
(5) ambidextrous organizations exhibit structures that allow them to transfer results from exploratory to exploitative activities through IT enabled agility.
The relevance to the adaptive cycle is high, since it combines two aspects (or techniques) that are used by companies to stimulate innovativeness of the company; ambidexterity and organizational agility enabled IT.
The concept of ambidexterity is relevant to the adaptive cycle in the following ways. Simultaneously dealing with these two contradictory elements often leads to an exploration and exploitation First, the explorative activities relate to the left loop; in which power, capital, stability and conservation are important. Both focus on short-term improvements. Second, the exploitative activities relate to the right loop, which is about uncertainty, novelty and experimentation. Both focus on long-term improvements. Normally, it is considered to be very difficult to deal simultaneously with these two contradictory elements. However, ambidexterity is an organisational structure, which enables organizations to deal with this issue. Also the concept of IT enabled agility is considered to be relevant to the adaptive cycle as it describes how companies react to change; this is done either actively (entrepreneurial agility) or more passively (adaptive agility). This view contributes to the adaptive cycle, since the adaptive cycle does not state anything about different possibilities to react to change.