Exploration And Exploitation In Rapid Growing Startups: A Theoretic Approach on How Startups Can Become Sustainable and Ambidextrous Businesses

Niklas Frederik Kaden & Jannis Leon Littmann

Student thesis: Master thesis

Abstract

In this thesis, we analyze how startups can grow into ambidextrous organizations. The theoretical concept of ambidextrous organizations that master to exploit their core business, whilst exploring new market opportunities, has gained a lot of attention in the academic world. However, only in relation to legacy firms, which creates a gap in the existing ambidexterity theory, when it comes to startups. This paper seeks to fill this gap, by creating a theoretical framework, focusing on startups.
Our approach is theoretical in its foundation and based on the combination of academic literature and (non-academic) startup literature. Throughout the thesis, we establish a view on ambidexterity and in this process we conclude that startups can follow two paths to grow into ambidextrous organizations. On the first path a startup focuses on an explorative strategy in its early days, where the second path is building on an exploitative early stage strategy. This finding is opposing a general misconception that startups by nature are explorative in their strategy. Correspondingly, to test our hypothesis and framework, the thesis moves from a more theoretical focus to the case study of the organization Heaps.
The findings suggest that long term strategic positioning can be difficult for startups, as their focus will often be set on short term goals to survive. However, the findings also suggest that a path awareness and the knowledge of whether one’s strategy is more explorative or exploitative in its focus, can help the startup make decision that will increase the chances of survival and growth into an ambidextrous company. Furthermore, the thesis sheds light on the fact that startups have to become more aware of exploitative practices in order to balance a current overemphasis on explorative strategies.

EducationsMSc in Business Administration and Information Systems, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2016
Number of pages132