Promoting Strategic Flexibility and Business Performance through Organizational Ambidexterity

Abstract

The purpose of this paper is to develop a comprehensive structural model to understand the outcomes of organizational ambidexterity (OA) within the manufacturing and service sector. It focuses on evaluating the effects of OA on business performance and strategic flexibility while also exploring the under-researched relationship between strategic flexibility and business performance. To accomplish this objective, an empirical survey was carried out among a sample of 370 Greek manufacturing and service firms. Exploratory and confirmatory factor analyses were utilized to extract and validate the latent constructs examined. Finally, the structural relationships among these latent constructs were determined using structural equation modeling (SEM). The study’s findings reveal the significant contributions of OA to both firm performance and strategic flexibility. Additionally, the results demonstrate the positive influence of strategic flexibility on business performance. This research sheds light on the multifaceted impacts of ambidexterity, offering valuable implications for managers, decision-makers, and practitioners. The outcomes underscore the importance of ambidexterity in various dimensions of business performance and highlight its role in fostering strategic flexibility. This study stands out by offering a holistic model that explicates the outcomes of OA within the manufacturing and service sector. It places particular emphasis on the interplay between business performance and strategic flexibility, an area that has received limited attention in prior research. By empirically examining these relationships and providing practical guidelines, the proposed model enriches our understanding of ambidexterity’s significance and supports further research in this domain within organizations.