JOINT EFFECT OF ORGANIZATIONAL AMBIDEXTERITY, DESIGN AND ENVIRONMENTAL DYNAMISM ON PERFORMANCE OF LARGE MANUFACTURING FIRMS IN KENYA
Abstract
Research Objective: The objective of this research was to examine the difference between the joint effect of organizational ambidexterity, design and environmental dynamism and the individual effect of organizational ambidexterity on the performance of Kenyan Large Manufacturing Firms (LMFs).
Research Methodology: The study was anchored on dynamic capabilities Theory. Positivism provided philosophical foundation. The population of the research was the entire 107 Kenyan LMFS. This was therefore a census survey. Cross-sectional research design was used. Primary data was collected using a structured questionnaire, which incorporated a section where financial performance data as extracted from the firms’ financial statements over a five year period (2014 to 2018) was provided by the respondents. The respondents were the senior managers of the LMFs in Kenya; namely Chief Executive Officers (CEOs)/Managing Directors (MDs) or General Managers (GMs), or Heads of departments (HODs). Multiple regression was applied in the data analysis.
Results and Findings: The research outcomes revealed that the joint effect of organizational ambidexterity, design and environmental dynamism on the performance of large manufacturing firms in Kenya was higher and statistically significant compared to the individual effect of organizational ambidexterity on the performance of Kenyan large manufacturing firms.
Implication of the study: The study findings are useful to practitioners in general and managers from the manufacturing industry in Kenya, policymakers in government as well as scholars and researchers.
Keywords: Organizational ambidexterity, Design, Environmental Dynamism, Performance, Large Manufacturing firms in Kenya
References
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Bedford, D. S. (2015). Management control systems across different modes of innovation: Implications for firm performance. Management Accounting Research, 28, 12–30. https://doi.org/10.1016/j.mar.2015.04.003
Birkinshaw, J. & Gupta, K. (2013). Clarifying the distinctive contribution of ambidexterity to the field of organization studies. The Academy of Management Perspectives, 27(4), 287-298. https://doi.org/10.5465/amp.2012.0167
Blindenbach-Driesen, F. & Ende J. (2014). The Locus of Innovation: The Effect of a Separate Innovation Unit on Exploration, Exploitation, and Ambidexterity in Manufacturing and Service Firms. Journal of Product Innovation Management, 31(5), 1089-1105. https://doi.org/10.1111/jpim.12146
Burns, T. & Stalker, G.M. (1961). The Management of Innovation. London: Tavistock
Dess, G.G. & Beard, D.W. (1984). Dimensions of organizational task environments. Administrative science quarterly, 52-73. https://doi.org/10.2307/2393080
DeWaal, M. (2004). The influence of organizational structure on entrepreneurial orientation and expansion performance. International Journal of Contemporary Hospitality Management, 16(6), 334-344. https://doi.org/10.1108/09596110410550770
Donaldson, L. (2001). The contingency theory of organizations. Sage Publications.
Duncan, R. B. (1976). The ambidextrous organization: Designing dual structures for innovation. The management of organization, 1, 167–188. https://doi.org/10.4135/9781452229249
Eisenhardt, K. M. & Martin, J. A. (2000). Dynamic capabilities: what are they? Strategic management journal, 1105-1121.https://doi.org/10.1002/1097-0266 (200010/11)21:10/11%3C1105::AID-SMJ133%3E3.0.CO;2-E
Eisenhardt, K. M. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management journal, 32(3), 543-576.
Garcia-Zamora, E., Gonzalez-Benito, O. & Munoz-Gallego, P.A. (2014). Organizational and environmental factors as moderators of the relationship between multidimensional innovation and performance. Journal of Innovation, Organization & Management, 15(2), 224-244. https://doi.org/10.5172/impp.2013.15.2.224
Girod, S. J. G. & Whittington, R. (2017). Reconfiguration, Restructuring and Firm Performance: Dynamic Capabilities and Environmental Dynamism. Strategic Management Journal, 38, 1121-1133.
Halevi, M. Y., Carmeli, A. & Brueller, N. N. (2015). Ambidexterity in SBUs: TMT Behavioural Integration and Environmental Dynamism. Human Resource Management, 54(1), 223–238. https://doi.org/10.1002/hrm.21665
Hambrick, D. C. (2007). Upper Echelons Theory: An Update. Academy of Management Review, 32(2), 334-343.
Helfat, C. E. & Peteraf, M. A. (2003). The dynamic resource-based view: Capability lifecycles. Strategic management journal, 24(10), 997-1010. https://doi.org/10.1002/smj.332
Helfat, G.E. and Peteraf, M.A. (2015). Managerial cognitive capabilities and the micro foundations of dynamic capabilities. Strategic Management Journal, 36,831-850.
Hitt, M. A., Ireland, D. R., Camp, M. S. & Sexton, D. L. (2001). Strategic entrepreneurship: entrepreneurial strategies for wealth creation. Strategic Management Journal, 22(6-7) 479–491.
Hubbard G. (2009). Measuring organizational performance: Beyond the triple bottom line. Business Strategy and Environment, 19, 177-191.
Junni, P., Sarala, R. M., Taras, V. & Tarba, S. Y. (2013). Organizational ambidexterity and performance: A` meta-analysis. The Academy of Management Perspectives, 27(4), 299-312.
Kariuki, P. M. (2015). Organizational Structure and Internal Processes of Large Manufacturing Firms in Kenya. Journal for Studies in Management and Planning, 1(7), 613-622.
Keats, B. W. & Hitt, M. A. (1988). A causal model of linkages among environmental dimensions, macro organizational characteristics, and performance. Academy of management journal, 31(3), 570-598. https://doi.org/10.2307/256460
Kenya Association of Manufacturers (2018). Kenya manufacturers and exporters directory. Nairobi: KAM.
Kenya National Bureau of Statistics (2019). Economic Survey Report.
Lawrence, P. R. & Lorsch, J. W. (1967). Differentiation and integration in complex organizations. Administrative Science Quarterly, 1-47.
Li, D. and Liu, J. (2014).Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China. Journal of Business Research, 67, 2793-2799.
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization science, 2(1), 71-87. https://doi.org/10.1287/orsc.2.1.71
Mihalache, O.R., Jansen, Van den Bosch., F. A. J. & Volberda, H.W. (2014). Top Management Team Shared Leadership and Organizational Ambidexterity: A Moderated Mediation Framework. Strategic Entrepreneurship Journal, 8, 128–148.
Miller, D. & Friesen, P. H. (1983). Strategy-making and environment: the third link. Strategic management journal, 4(3), 221-235.
Miller, P. (1987). Strategic Industrial Relations and Human Resource Management-Distinction, Definition and Recognition. Journal of Management Studies, 24,347-361.
Mintzberg, H. (1979). The structuring of organizations. Prentice-Hall Inc., New Jersey, USA.
Morton, N. A. & Hu, Q. (2008). Implications of the fit between organizational structure and ERP: A structural contingency theory perspective. International Journal of Information Management, 28(5), 391-402. https://doi.org/10.1016/j.ijinfomgt.2008.01.008
Mugambi, G. & K’Obonyo, P. (2012). The predictive value of contextual factors on corporate performance in Kenya. Prime Journal of Business Administration and Management, 2(10), 709-725.
Ndegwa, J.W. (2015). Knowledge sharing, Organizational learning, Firm-level institutions and Performance of Top Medium-sized companies in Kenya. Unpublished PhD Thesis. School of Business, University of Nairobi.
Ogollah, K. O. (2012). Organizational configuration, stage of development and performance of Commercial banks in Kenya. An Unpublished PhD Thesis, University of Nairobi.
O'Reilly, C. A. & Tushman, M. L. (2008). Ambidexterity as a Dynamic Capability: Resolving the Innovator’s Dilemma. Research in Organizational Behaviour, 28, 185-206.
O'Reilly, C. A. & Tushman, M. L. (2011). Organizational ambidexterity in action: How managers explore and exploit. California Management Review, 53(4), 5-22. https://doi.org/10.1525/cmr.2011.53.4.5
O’Reilly, C. A. & Tushman, M. L. (2013). Organizational Ambidexterity: Past, Present, and Future. The Academy of Management Perspectives, 27(4), 324–338.
Patel, P.C., Messersmith, J.G. & Lepak, D.P. (2013). Walking the tightrope: An assessment of the relationship between high-performance work systems and organizational ambidexterity. Academy of Management Journal, 56(5), 1420–1442.
Prajogo, D. I. (2016). The Strategic Fit between Innovation Strategies and Business Environment in delivering Business Performance, Int, J, Production Economics, 171,241-249.
Tamayo-Torres, J., Roehrich, J. K. and Lewis, M.A. (2017). Organizational ambidexterity, manufacturing performance and environmental dynamism. International Journal of Operations & Production Management, 37(3), 282-299.
Teece, D.J. Pisano, G. and Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z
Teece, D.J. (2007). Explicating dynamic capabilities: the nature and micro foundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350.
Teece, D. J. (2014). The Foundations of Enterprise Performance: Dynamic and Ordinary Capabilities in an (Economic) Theory of Firms. Academy of Management Perspectives, 28(4), 328-352.
Venkatraman, N. & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of management review, 11(4), 801-814. https://doi.org/10.2307/258398
Vorhies, D. W. & Morgan, N. A. (2003). A configuration theory assessment of marketing organization fit with business strategy and its relationship with marketing performance. Journal of marketing, 67(1), 100-115. https://doi.org/10.1509/jmkg.67.1.100.18588
Zhou, K.Z. & Wu, Z. (2010). Technological Capability, Strategic Flexibility, and Product Innovation. Strategic Management Journal, 31,547-561. https://doi.org/10.1002/smj.830
Bedford, D. S. (2015). Management control systems across different modes of innovation: Implications for firm performance. Management Accounting Research, 28, 12–30. https://doi.org/10.1016/j.mar.2015.04.003
Birkinshaw, J. & Gupta, K. (2013). Clarifying the distinctive contribution of ambidexterity to the field of organization studies. The Academy of Management Perspectives, 27(4), 287-298. https://doi.org/10.5465/amp.2012.0167
Blindenbach-Driesen, F. & Ende J. (2014). The Locus of Innovation: The Effect of a Separate Innovation Unit on Exploration, Exploitation, and Ambidexterity in Manufacturing and Service Firms. Journal of Product Innovation Management, 31(5), 1089-1105. https://doi.org/10.1111/jpim.12146
Burns, T. & Stalker, G.M. (1961). The Management of Innovation. London: Tavistock
Dess, G.G. & Beard, D.W. (1984). Dimensions of organizational task environments. Administrative science quarterly, 52-73. https://doi.org/10.2307/2393080
DeWaal, M. (2004). The influence of organizational structure on entrepreneurial orientation and expansion performance. International Journal of Contemporary Hospitality Management, 16(6), 334-344. https://doi.org/10.1108/09596110410550770
Donaldson, L. (2001). The contingency theory of organizations. Sage Publications.
Duncan, R. B. (1976). The ambidextrous organization: Designing dual structures for innovation. The management of organization, 1, 167–188. https://doi.org/10.4135/9781452229249
Eisenhardt, K. M. & Martin, J. A. (2000). Dynamic capabilities: what are they? Strategic management journal, 1105-1121.https://doi.org/10.1002/1097-0266 (200010/11)21:10/11%3C1105::AID-SMJ133%3E3.0.CO;2-E
Eisenhardt, K. M. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management journal, 32(3), 543-576.
Garcia-Zamora, E., Gonzalez-Benito, O. & Munoz-Gallego, P.A. (2014). Organizational and environmental factors as moderators of the relationship between multidimensional innovation and performance. Journal of Innovation, Organization & Management, 15(2), 224-244. https://doi.org/10.5172/impp.2013.15.2.224
Girod, S. J. G. & Whittington, R. (2017). Reconfiguration, Restructuring and Firm Performance: Dynamic Capabilities and Environmental Dynamism. Strategic Management Journal, 38, 1121-1133.
Halevi, M. Y., Carmeli, A. & Brueller, N. N. (2015). Ambidexterity in SBUs: TMT Behavioural Integration and Environmental Dynamism. Human Resource Management, 54(1), 223–238. https://doi.org/10.1002/hrm.21665
Hambrick, D. C. (2007). Upper Echelons Theory: An Update. Academy of Management Review, 32(2), 334-343.
Helfat, C. E. & Peteraf, M. A. (2003). The dynamic resource-based view: Capability lifecycles. Strategic management journal, 24(10), 997-1010. https://doi.org/10.1002/smj.332
Helfat, G.E. and Peteraf, M.A. (2015). Managerial cognitive capabilities and the micro foundations of dynamic capabilities. Strategic Management Journal, 36,831-850.
Hitt, M. A., Ireland, D. R., Camp, M. S. & Sexton, D. L. (2001). Strategic entrepreneurship: entrepreneurial strategies for wealth creation. Strategic Management Journal, 22(6-7) 479–491.
Hubbard G. (2009). Measuring organizational performance: Beyond the triple bottom line. Business Strategy and Environment, 19, 177-191.
Junni, P., Sarala, R. M., Taras, V. & Tarba, S. Y. (2013). Organizational ambidexterity and performance: A` meta-analysis. The Academy of Management Perspectives, 27(4), 299-312.
Kariuki, P. M. (2015). Organizational Structure and Internal Processes of Large Manufacturing Firms in Kenya. Journal for Studies in Management and Planning, 1(7), 613-622.
Keats, B. W. & Hitt, M. A. (1988). A causal model of linkages among environmental dimensions, macro organizational characteristics, and performance. Academy of management journal, 31(3), 570-598. https://doi.org/10.2307/256460
Kenya Association of Manufacturers (2018). Kenya manufacturers and exporters directory. Nairobi: KAM.
Kenya National Bureau of Statistics (2019). Economic Survey Report.
Lawrence, P. R. & Lorsch, J. W. (1967). Differentiation and integration in complex organizations. Administrative Science Quarterly, 1-47.
Li, D. and Liu, J. (2014).Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China. Journal of Business Research, 67, 2793-2799.
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization science, 2(1), 71-87. https://doi.org/10.1287/orsc.2.1.71
Mihalache, O.R., Jansen, Van den Bosch., F. A. J. & Volberda, H.W. (2014). Top Management Team Shared Leadership and Organizational Ambidexterity: A Moderated Mediation Framework. Strategic Entrepreneurship Journal, 8, 128–148.
Miller, D. & Friesen, P. H. (1983). Strategy-making and environment: the third link. Strategic management journal, 4(3), 221-235.
Miller, P. (1987). Strategic Industrial Relations and Human Resource Management-Distinction, Definition and Recognition. Journal of Management Studies, 24,347-361.
Mintzberg, H. (1979). The structuring of organizations. Prentice-Hall Inc., New Jersey, USA.
Morton, N. A. & Hu, Q. (2008). Implications of the fit between organizational structure and ERP: A structural contingency theory perspective. International Journal of Information Management, 28(5), 391-402. https://doi.org/10.1016/j.ijinfomgt.2008.01.008
Mugambi, G. & K’Obonyo, P. (2012). The predictive value of contextual factors on corporate performance in Kenya. Prime Journal of Business Administration and Management, 2(10), 709-725.
Ndegwa, J.W. (2015). Knowledge sharing, Organizational learning, Firm-level institutions and Performance of Top Medium-sized companies in Kenya. Unpublished PhD Thesis. School of Business, University of Nairobi.
Ogollah, K. O. (2012). Organizational configuration, stage of development and performance of Commercial banks in Kenya. An Unpublished PhD Thesis, University of Nairobi.
O'Reilly, C. A. & Tushman, M. L. (2008). Ambidexterity as a Dynamic Capability: Resolving the Innovator’s Dilemma. Research in Organizational Behaviour, 28, 185-206.
O'Reilly, C. A. & Tushman, M. L. (2011). Organizational ambidexterity in action: How managers explore and exploit. California Management Review, 53(4), 5-22. https://doi.org/10.1525/cmr.2011.53.4.5
O’Reilly, C. A. & Tushman, M. L. (2013). Organizational Ambidexterity: Past, Present, and Future. The Academy of Management Perspectives, 27(4), 324–338.
Patel, P.C., Messersmith, J.G. & Lepak, D.P. (2013). Walking the tightrope: An assessment of the relationship between high-performance work systems and organizational ambidexterity. Academy of Management Journal, 56(5), 1420–1442.
Prajogo, D. I. (2016). The Strategic Fit between Innovation Strategies and Business Environment in delivering Business Performance, Int, J, Production Economics, 171,241-249.
Tamayo-Torres, J., Roehrich, J. K. and Lewis, M.A. (2017). Organizational ambidexterity, manufacturing performance and environmental dynamism. International Journal of Operations & Production Management, 37(3), 282-299.
Teece, D.J. Pisano, G. and Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7%3C509::AID-SMJ882%3E3.0.CO;2-Z
Teece, D.J. (2007). Explicating dynamic capabilities: the nature and micro foundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350.
Teece, D. J. (2014). The Foundations of Enterprise Performance: Dynamic and Ordinary Capabilities in an (Economic) Theory of Firms. Academy of Management Perspectives, 28(4), 328-352.
Venkatraman, N. & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of management review, 11(4), 801-814. https://doi.org/10.2307/258398
Vorhies, D. W. & Morgan, N. A. (2003). A configuration theory assessment of marketing organization fit with business strategy and its relationship with marketing performance. Journal of marketing, 67(1), 100-115. https://doi.org/10.1509/jmkg.67.1.100.18588
Zhou, K.Z. & Wu, Z. (2010). Technological Capability, Strategic Flexibility, and Product Innovation. Strategic Management Journal, 31,547-561. https://doi.org/10.1002/smj.830
Published
2023-04-28
How to Cite
Mutisya, P. M., & K’Obonyo, P. (2023). JOINT EFFECT OF ORGANIZATIONAL AMBIDEXTERITY, DESIGN AND ENVIRONMENTAL DYNAMISM ON PERFORMANCE OF LARGE MANUFACTURING FIRMS IN KENYA. African Journal of Emerging Issues, 5(2), 89 - 102. Retrieved from https://ajoeijournals.org/sys/index.php/ajoei/article/view/382
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