1) What are the authors\' theoretical proposition 1 (P1)? 2) What are the author
ID: 396544 • Letter: 1
Question
1) What are the authors' theoretical proposition 1 (P1)?
2) What are the authors' theoretical proposition 2 (P2)?
3) What are the authors' theoretical proposition 3 (P3)?
4) What were the authors' conclusions?
Please help and thank you very much =)
P1. An organization’s capacity for change is positively related to its strategic
ambidexterity.
Moderating impact of environmental uncertainty An organization and its environment are constantly changing. As a result, the organization-environment interface must change. Often, the environment changes more quickly and less predictably than the organization does, so the organization must “catch up” to its environment. During this catch-up phase, the organization sometimes attempts to fit more closely with its environment. However, the organization may neglect its internal fit as it searches for better external fit, as
suggested in the organizational ambidexterity literature (Gibson and Birkinshaw,
2004). The same can be true as firms seek improved internal fit between structures and processes, often at the expense of external fit (Miller, 1992). This external-internal fit paradox implies that environmental uncertainty may moderate the relationship between OCC and SA.
Volberda (1996) argued that to maintain “functional” flexibility, the firm must
resolve paradoxes and balance dualities. He asserted that tensions created by this
paradox increase when the environment becomes less predictable and hypercompetitive. In addition, Jansen et al. (2005) recently found that environmental dynamism, a similar concept to environmental uncertainty, was positive related to an organizational unit’s ambidexterity. This suggests that firms confronted by increasing environmental uncertainty might focus more on short-term performance needs via
exploitive strategies and abandon efforts to explore new product-markets as a way of
buffering the unit from an uncertain future (Thompson, 1967).
However, organizations with relatively high levels of change capacity might be able
to dynamically respond to the increasing pressure for an exploitive strategy while
simultaneously protecting initiatives to seek out and explore new product-markets. In
other words, they could handle the tension of these seemingly conflicting imperatives
and retain the ability to not only function, but thrive. We believe that the concept of
“organizational resilience capacity” is quite similar to the OCC concept, and
organizational resilience capacity has been posited to be critical to organizational
effectiveness in high uncertainty environments (Lengnick-Hall and Beck, 2005).
Overall, this suggests the following moderated relationship:
P2. The relationship between an organization’s capacity for change and strategic
ambidexterity will strengthen during periods of high environmental
uncertainty and weaken during periods of low environmental uncertainty.
Moderating impact of organizational slack
One of the keys to organization effectiveness is an organization’s capacity to absorb
environmental variation (Thompson, 1967). This ability to adapt to dramatic shifts in
the environment is frequently called organization slack (Bourgeois, 1981). Cyert and
March (1963) considered all organizations as coalitions of individuals, and these
individual’s and coalition’s behaviors are highly influenced by the presence or absence
of organizational slack.
Organization slack has been shown to be empirically related to a wide variety of
organizational processes and outcomes. With respect to processes, slack has been
found to be negatively associated with political behavior within top management
teams (Bourgeois and Singh, 1983), positively related to organizational responsiveness
to the environment (Cheng and Kesner, 1997), and curvilinearly related with organizational innovation (Nohria and Gulati, 1996). Also, slack has been found to both facilitate and inhibit firm growth (Mishina et al., 2004), as well as influence firm risk and return (Wiseman and Bromiley, 1996). A relentless pressure has been imposed on all organizations over the last two decades to become more efficient by eliminating all waste. Consequently, many organizations are quite “lean” compared to organizations of the past. One of
unanticipated outcomes of this lean state is the elimination of slack resources necessary to cope with environmental change and innovate for the future. Thus, organizations often lack the time to think and the discretionary financial and human resources to experiment (Lawson, 2001).
This theory and research suggests that organizational slack might be an important
moderator of the relationship between an organization’s capacity for change and its
strategic ambidexterity. For example, in high slack conditions, it might be easier to
engage the organization in the pursuit of both the exploitation and exploration of
existing and new product-markets even during a recession, as recent research by
Srinivasan et al. (2005) suggests. In sum, slack resources might provide the
wherewithal by which political behavior is minimized, training is provided to
employees to learn new skills, trust is more freely given to organizational leaders, high
performers are rewarded for taking risks and going the extra mile, and the subtle but
important system interdependencies are all addressed adequately. This suggests our
third and final theoretical proposition:
P3. The relationship between an organization’s capacity for change and strategic
ambidexterity will be stronger for relatively high levels of organizational
slack, and weaker for relatively low levels of organizational slack.
Discussion and conclusions
Barney and associates (2001, p. 631) suggest that “to the extent some firms in a rapidly
changing environment are more nimble, more able to change quickly, and more alert to
changes in their competitive environment, they will be able to adapt to changing
market conditions more rapidly than competitors, and thus can gain competitive
advantage”. Capturing the dimensions that allow firms to approach this goal is what
the OCC dynamic capability endeavors to provide. Yet, research in this regard is in its
infancy, and there is much work to do to understand how firms might go through rapid
and effective change to keep up with dynamic markets.
This study offers at least three contributions to the strategic marketing literature.
First, it represents a unique perspective on how to resolve the dilemma to both exploit
existing markets while simultaneously exploring new markets. As such, we build on
the emerging concept of “strategic ambidexterity” to capture this approach.
Second, we argue that the key means by which an organization becomes
strategically ambidextrous is by cultivating organizational capacity for change. This
new construct allows a firm to transcend the many dualities that it confronts (Graetz
and Smith, 2005). While it may be possible to sequentially pursue these conflicting
strategic imperatives, as suggested by the simulation study by Siggelkow and
Levinthal (2003), we think that simultaneous pursuit of these diametrically different
strategic imperatives will prove more effective. As such, we build upon the dynamic
capabilities perspective and couple it with Ashby’s (1963) law of requisite variety to
advance three novel, empirically-testable, and managerially-useful propositions.
Finally, we discuss some potential moderating conditions external to and internal
to the organization which may influence the capacity for change-strategic
ambidexterity relationship. All of this theory is advanced by considering and
integrating literature from the marketing, strategic management, and organization
theory perspectives. It is said that “the ability to hold two competing thoughts in one’s mind and still be
able to function is the mark of a superior mind” (Fitzgerald, 1956). We believe that this
ability for organizations to manage seemingly contradictory polarities in a productive
fashion is the hallmark of good marketing and strategic management, and the key to
sustained competitive advantages in the 21st century. This study offers new insights
into how those organizational polarities might be managed and what contextual
factors might affect the situation. We encourage other scholars to empirically test our
ideas so that these ideas can be refined and extended.
Explanation / Answer
Answer: 1
The author’s theoretical proposition 1 (P1) is as below: The author’s proposition here is that there is a impact of environmental uncertaininty on the organization. The environmental uncertainty relevant for the organization and it has significant impacts on the organization in terms of the performance of the organization. The author wants to explain the process of change for organization as well as environmental. He says that organization and environment both changes constantly and influences each other. He enforced that the change sin environment are more often than the changes in the organization.
This change of environment needs to be matched with the internal process and structure so that organization is fit with the environmental changes. The organization’s functional flexibility helps the organization to manage the environmental uncertainty forces and keep focus on their short term objectives and meet their desired performances.
Author wants to show the significance of the environment on the organization and how the uncertainty in the environment impacts the organization and accordingly how the organization can behave to respond to this changes in environmental and its uncertainty.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.