The metaphor of ambidexterity has been used by researchers to refer to
the ability of the organization to maintain dual attention on exploration and
exploitation activities in order to survive and excel the present, and secure
the future, by creating potential for sustainable growth in future.
Managing this duality is a challenge as often the needs of both these
activities are contradictory. With business environment becoming increasingly
dynamic, it is becoming more essential for start-up firms to balance their
attention and resource allocation for exploration and exploitation activities.
In our interaction with several start-up founders for another research,
we found that at times start-ups were too focused on exploring the new, and
engaged in too much experimentation, and in the process lost the scope of
exploiting the outputs of their exploration activities. At the same time, we
found start-up firms which seemed to be getting over-engaged in exploitation.
However, it is unclear how start-ups cope with the dilemma of exploration and
exploitation. In this article, we raise the need for investigating the
mechanisms of how ambidexterity is managed in the growth phase of start-up
The article starts with the discussion on why focusing on exploration and
exploitation at the same time in the organization is so challenging.
Thereafter, the discussion extends to how the theme of ambidexterity has
developed drawing from different streams of literature and the mechanisms of
managing ambidexterity. The article then looks into how this dilemma operates
in the case of start-up firms in their growth phase, the role of top management
teams (TMTs) in the process of managing ambidexterity and the effect of
ambidexterity on firm performance.
THE CONFLICT BETWEEN EXPLORATION AND EXPLOITATION ACTIVITIES
Exploration refers to the discovery of new products, resources,
knowledge and opportunities, and it is associated with radical changes and
learning through experimentation. Exploitation refers to the refinement of
existing products, resources, knowledge and competencies, and is associated
with incremental changes and learning through local search (Benner &
Tushman, 2003; March, 1991).
The unknown needs to be discovered or explored, and the known needs to
be exploited, to generate more rents for the organization. Exploration involves
activities such as search, variation, risk taking, experimentation, discovery,
and innovation. Exploitation involves activities such as refinement,
efficiency, selection, implementation, and execution (March, 1991). The
activities of exploration and exploitation are also different in terms of their
organizational structures, processes, cultures, and capabilities (Ghemawat
& RicartCosta, 1993).
In the case of exploration, returns are less certain and more distant in time, whereas in the case of exploitation, the returns are more certain and achievable in a shorter timeframe. Thus, as described by March (1991), exploration and exploitation place essentially conflicting demands on organizational resources, and so trade-offs between exploration and exploitation are seen as unavoidable.