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Article

Organizational Ambidexterity and Performance: Assessment Approaches and Empirical Evidence

Dranev Y., Izosimova A., Meissner D.

Three approaches are developed for assessment of different types of organizational
ambidexterity proposed in the relevant literature. The new model for measurement of
organizational ambidexterity using data envelopment analysis (DEA) is introduced.
The DEA score based on innovation activity inputs and two different performance
outputs acts as a proxy for organizational ambidexterity. Sustainability goals and
product ambidexterity are also analyzed as the key characteristics of ambidextrous
behavior. The introduced three approaches are tested for their aptness to complement
each other as well as to support a strategic decision-making. Empirical examples from
energy and pharma sectors associate organizational ambidexterity with firms’ performance.
We measured the organizational ambidexterity of energy and pharma companies
by (1) pursuing long-term versus short-term organizational performance measured
as a DEA two-output efficiency score; (2) the share of disruptive products in a
company’s activities assessed through the proportion of R&D expenditure or sales;
and (3) sustainability versus financial performance of the company, where the Green
ranking and participation in innovative financing programs were used as proxies for
sustainable development. Positive relation between performance and organizational
ambidexterity for energy sector are discovered. At the same time, orientation towards
sustainability disrupts performance of pharmaceutical companies. Results of the OA
impact on performance are highly industry-sensitive and depend on the methods used
in empirical assessment. Our findings suggest that the scarcity of data sources make all
three approaches complementary and mainly functional for strategic decision-making.