Clarifying the Relationship between Performance and the Reconciliation of the Dual Tensions of Exploitation and Exploration: A Case of Ambidextrous Innovation in the Fashion Industry

Heidi Birk Westermann & Laura Westergaard Jensen

Student thesis: Master thesis

Abstract

Stemming from the idea of an individual’s capacity to use both hands with equal skill, ease and dexterity, Organizational Ambidexterity refers to the dual tensions of exploiting existing resources while simultaneously exploring emergent opportunities. The academic concept has experienced growing appeal and interest, from both practitioners and scholars, as a reflection of its versatility and association with sustained firm performance in competitive business environments. During the past decade, an immense increase in empirical literature has emerged to explain and advance insight to the meaning, antecedents and measurement of the construct. While the concurrent academic emphasis is dense, the conceptstill lacks clarity and is widely fragmented in terms of understanding its operation and associated outcomes. Significant ambiguity remains in the literature as few attempts have been made to investigate the facilitation of sustained firm performance through ambidextrous innovation in the context of disruption. Considering the principle of the dual tensions of exploitation and exploration, this thesis attempts to extend current ambidexterity literature by applying the concept to the fashion industry, which is marked by a paradigm shift of volatility, complexity and uncertainty. Considering the disruptive state of the industry, this thesis employed a two-staged explanatory study to grasp the significance of organizational ambidexterity. Firstly, a quantitative study uncovered the relationship between organizational ambidexterity and firm financial performance. Based on a sample of 98 firms operating in the global fashion industry, the ambidexterity premise was thus confirmed, ultimately supporting existing empirical literature. Secondly, a qualitative study elucidated a multilevel perspective to how innovation is facilitated by ambidextrous firms operating in the fashion industry. The findings support and extend existing research by shedding light on outcomes of organizational ambidexterity and how the exploitation-exploration trade-off is managed in the industry. Managerial implications include the imperative role of customer retention and acquisition through supercustomization facilitated by digitalization and machine learning and entrepreneurial corporate cultures.

EducationsCand.merc.smc Strategic Market Creation, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages170
SupervisorsHenrik Johannsen Duus