Process ambidexterity driven by environmental uncertainty: balancing flexibility and routine

Abstract

PurposeThis study aims to extend ambidexterity theory from the perspective of organisational learning and examine how process ambidexterity, which comprises operational flexibility and operational routine, responds to environmental uncertainty and ultimately reduces organisational risks.Design/methodology/approachThis study tests the hypotheses by analysing 464 annual reports of 115 listed companies in the Chinese agricultural and food industry using content and secondary data analyses. Four case studies are also provided.FindingsThe results show that (1) environmental uncertainty has a positive effect on either operational flexibility or operational routine; (2) both operational flexibility and operational routine have negative effects on organisational risks, supporting the view that process ambidexterity mediates the relationship between environmental uncertainty and organisational risks; and (3) organisational slack plays the role of “double-edged sword” by negatively moderating the effect of environmental uncertainty on operational flexibility and positively moderating the effect of environmental uncertainty on operational routine.Originality/valueIn an uncertain environment, companies are exposed to greater risk. This study contributes to risk management in three ways: first, it extends ambidexterity theory to process management and proposes how process ambidexterity balances operational flexibility and routines. Second, it distinguishes between the different conditions under which flexibility or routines are superior. Third, it explains the mechanisms related to how organisations can resolve environmental uncertainty into risk through process ambidexterity.