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The ambidextrous organization.

Charles A O'Reilly1, Michael L Tushman

  • 1Graduate School of Business, Stanford University, California, USA.

Harvard Business Review
|April 14, 2004
PubMed
Summary

Companies can achieve innovation by creating ambidextrous organizations. These structures separate exploratory and exploitative units while maintaining senior executive integration, enabling both radical and incremental advancements.

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Area of Science:

  • Management Science
  • Organizational Behavior
  • Innovation Management

Background:

  • Corporate executives face the dual challenge of managing existing operations while fostering future innovations.
  • Balancing the exploitation of current capabilities with the exploration of new opportunities is a significant managerial hurdle.

Purpose of the Study:

  • To identify the structural and managerial characteristics of organizations that successfully balance innovation and exploitation.
  • To provide a framework for building "ambidextrous organizations" capable of both incremental and radical innovation.

Main Methods:

  • The study identifies characteristics of successful "ambidextrous organizations" through analysis of their structure and management practices.
  • Key elements include separating exploratory and exploitative units while integrating them at the senior executive level.

Main Results:

  • Ambidextrous organizations successfully pursue both disruptive innovations and incremental gains by separating exploratory and exploitative units.
  • These organizations feature distinct processes, structures, and cultures for each unit, linked by integrated senior management.
  • Ambidextrous managers are crucial, possessing skills for both cost-cutting and entrepreneurship.

Conclusions:

  • The "ambidextrous organization" model, combining structural separation with senior team integration, enables companies to innovate effectively without sacrificing existing business.
  • Developing ambidextrous managers is vital for navigating the complexities of dual strategic imperatives.
  • While challenging, the ambidextrous organizational structure is understandable and achievable with executive commitment.

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