Organizational Ambidexterity

Organizational Ambidexterity

• It refers to an organization's capacity to both explore new possibilities and exploit existing competencies

Origins of the Construct

• Firms in stable environments developed "mechanistic management systems" with clear hierarchies, roles, and job descriptions
• Firms in turbulent environments developed "organic" systems with less formalization, more lateral coordination, and less specialization
• Exploitation is about efficiency, control, certainty, and variance reduction
• Exploration is about search, discovery, autonomy, and innovation
• Organizations often favor exploitation due to its short-term success, but exploration is still needed to avoid failure
• Organizations need to explore and exploit simultaneously to be ambidextrous

Ambidexterity and Firm Performance

• Positively correlated with sales growth, innovation, and market valuation
• Links between ambidexterity and performance remain robust, despite varying measures
• The effect is seen over time with longitudinal data
• Ambidexterity is more valuable under conditions of environmental uncertainty
• Ambidexterity is strongly correlated with firm performance, but effects depend on the firm's environment
• Under or overuse comes at a cost
• In uncertain environments, ambidexterity is positively associated with increased firm innovation, financial performance, and survival rates

Achieving Ambidexterity

• Organizations shift structures over time to align with strategies and environments
• Alternating between exploration and exploitation phases is common in firms adapting to technological or market shifts
• Firms can create separate units for exploration and exploitation, with distinct structures and integrating mechanisms
• Organizations develop systems allowing individuals to balance exploratory and exploitative activities within their roles
• Contextual ambidexterity relies on a culture supporting flexibility and efficiency

Challenges

• Understanding the role of leadership

Organizational Networks

• Organizational networks can be analyzed like traditional organizations involving coordinated action
• Networks rely on collaboration and voluntary participation, unlike markets and hierarchies
• Networks address complex problems no single organization can solve alone
• Task division involves breaking down a broad goal into specific tasks
• Task allocation involves assigning tasks to specific entities or individuals
• Reward provision involves ensuring incentives for participants
• Information provision involves facilitating communication and coordination

Key Arguments and Findings

• Organizational networks can be analyzed similarly to traditional organizations
• They involve coordinated action among different entities
• Networks rely on collaboration and voluntary participation, unlike centralized control
• Many networks form to address complex problems no single organization can solve
• The study uses an empirical case of an organizational network in a Dutch municipality called HENW
• HENW aimed to prevent financial distress among social housing tenants
• The network grew from four founding organizations to 40 participants, addressing complex housing issues
• The authors use this case to examine how the four universal organizing problems were addressed

Solving Universal Problems

• Task division is often organic and emergent, unlike pre-planned approaches
• Networks can face a risk of competency-based task division
• Organizations contribute only based on existing competencies rather than actual needs
• Organizations voluntarily take on roles based on expertise, unlike firms where managers assign tasks
• Task allocation follows a "supply logic" rather than a "demand logic
• Gaps can occur when essential tasks go unaddressed because no organization takes responsibility
• Motivation comes from intangible rewards, such as societal good, reputation, and relationships
• Lack of direct financial benefits can make sustaining engagement difficult
• Effective information flow is critical
• HENW relied on face-to-face interactions and informal communication, rather than centralized systems
• Decentralized approaches create challenges with privacy and coordination

Key Ideas for Improving Network Effectiveness

• Task divisions should consider both supply and demand when dividing tasks
• Task allocation needs mechanisms to ensure all critical tasks are covered
• Intangible rewards should be clearly communicated, especially non-financial incentives
• Information sharing needs to be more structured without being overly centralized
• Decentralized communication works with privacy protections and formalized data-sharing agreements
• Networks benefit from a core group of highly active members and a periphery of loosely connected participants

Design Thinking

• A philosophy and a set of tools to help you solve problems creatively
• Uses a human-centered design lens
• Figuring out who you design for, what their needs are, and how to solve the problem

Main Steps

• Empathize: understanding the people you design the solution for, and what they do
• Define: identifying needs, problems, and insights from the empathizing step
• Ideate: developing solutions, ideas, and potential matches
• Prototype: turning develop ideas into simple, testable prototypes
• Test: testing the prototype with the people you design it for

Ideation

• Working with ideas in three stages: generating, analyzing, discussing, categorizing, and evaluating them

Scamper Model

• S = substitute, replacing something with other things
• C = combine, combining unrelated ideas to create something new
• A = adapt
• M = modify
• P = put to other uses
• E = Eliminate
• R = Rearrange

Creativity

• Generating new ideas and concepts; while also being able to think outside of the box
• Not an innate skill that can be learned and strengthened
• Can be practiced using techniques like brainstorming and mind mapping

Adaption Innovation Theory

• When we solve problems people are either more adaptive or innovative
• Adaptive: try to do thing better & look for solutions inside the box
• Innovative: try to do thing differently & think outside the box

Divergent and Convergent

• Divergent: can better come up with many ideas when they see a problem
• Convergent: see all the details and narrowing down the ideas

Design Thinking

• A methodology that imbues the full spectrum of innovation activities with a human-centered
• Innovation is powered by a thorough understanding, through direct observation, of what people want and need

Steps

• Inspiration
• Ideation
• Implementation

Making Design Thinking Part of the Innovation Drill

• Design thinkers should be involved at the very start of the innovation process
• Innovation should factor in human behavior, needs, and preferences
• Expect rapid experimentation and prototyping, encouraging teams to create a prototype in the first week of a project
• Expand the innovation ecosystem by co-creating with consumers and customers
• Manage a portfolio of innovation that stretches from shorter-term incremental ideas to longer-term revolutionary ones
• Be prepared to rethink your funding approach as projects proceed and teams learn more about opportunities
• Hiring talent from interdisciplinary programs
• Plan assignments so that design thinkers go from inspiration to ideation to implementation

Agile Innovation

• Transforming healthcare by innovating in complex adaptive systems
• It is an everyday process, not a light bulb event
• Focused on adaptability, cost centeredness, and collaboration
• The cycle is known as sprints

Socio-Technical Systems Thinking

• Designing the division of labor, ranging from maximum to minimum
• STS inspires different whey of thinking, which create value
• Values include being humane, productive, and innovative
• Recognizes the internal functioning of an organizational design in relation to its environmental context
• Social: the ‘human part', cultures, routines, etc
• Technical: the technology, procedures, management systems, etc
• Integral also addresses that interrelatedness
• Explanatory powers: why an organization performs good or bad

Grounding STS Principles

• Joint optimization
• Organizational choice
• Minimum critical specification
• Redundancy of Functions
• Incomplete Designs

Emerging STS Principles

• Responsible autonomy
• Self-organization
• Human scale/technology for and with people
• Mutual turst
• Shared puporse
• Diversity
• Customer centricity
• Core transformation process
• Simplicity
• Learning

Lecture 3

• Back to basics and the question of how social-technical systems work in practice

Lecture 4

• Discusses organizations and people in stress, particularly the organizational stress loop caused by bureaucratization
• Notes the increasing business needs and the complexities of managing a division of labor
• People desire high psychological demands and the power to regulate their work

Lecture 5

• Explores STS logic behind De Sitter's organizational sustainability loop
• Suggesting a desire for human productive and innovative organization
• De Sitter was inspired by Ashby – law of requisity variety

Disturbances

• Stem from planning, private matters, clients, delivery, supply, and other factors
• Workplace interactions must be considered, as disturbances can disrupt the system
• Probability and sensitivity

Disturbances

• Probability: a function of organizational complexity
• The more complex the network, the higher the probability
• The division of labor determines the number of parts or jobs within an organization.
• Sensitivity: regulation capacity to deal with disturbances
• The ability to regulate internally, if not external control is required"
• Terms the Probability of Regulation
• Ashby's law of requisite variety disturbance
• V1 = disturbance to deal with
• V2 = requited regulation

Design Organization Infrastructures

• First Actuate and reduce the disturbance.
• Second amplify allocate regulation capacity
• Get rid of organizational structure to be able to deal with variety
• There are two solutions: cut the process is functional sections or to cut along orders
• Summarize 2-5

Maximum Division of Labor

• Leads to more complex interaction network that requires more coordination
• This creates structures with high probability of sensitivity for disturbances
• Network with more parts is subject to a higher probability of disturbances
• Smaller parts create more disturbances, there for they must pass it to another part
• External environment becomes more dynamic & organization have troubles coping with disturbances
• Which leads to poor quality, inflexibility etc for the organization and relations
• The first De Sitter s goal is business needs increase/become higher, and the second incoming variety is to slit up through different people

Allocated People

• Allocating with regulation so they can deal with the increased variety
• Coordinate flows and make it humane
• Logic behind agile regime and networks in eco-systems; if parallel flows are changing due to lifecycle of product the you need to temporary flow agile teams to do design
• It needs processes, globally known required capacity and dynamic processes

Structure Comparison

• Functional regime, flow regime and agile regime
• Eco-system gives contact for organizations and helps actors to work better.

Organizational Design

• De Sitters has 3 structures to design for digital age: production, control and information.

In lowlands technology and work needs to have strategic choices

• Integrated well and designers think with technology and the regulation as well as to not remain in obsolete ideals
• Technical system society needs to be jointly optimalized/division of labor.

New Machine Paradigm

• Organizational challenges due to digital revolution in the world economy and industries.

• Digital transformation expresses these trends.

  • Fast evolution.
  • Constant disruption.
  • Increase in digitalization and democratization.
  • New war for talents.

Characteristics of an Agile Organization

• Has a north start embedded in the whole organization; strategy
• Empowered by teams and networks; structure
• Uses rapid decision making and learning cycles; process for making the organization better
• Has a dynamic people model that ignites passion; people
• Uses next gen technology; technology
• Needs to do a absurd reverse thinking: think big, small, then revers things according to the B & O business models.

Three Kinds of Agile Blocks

• Cross-Functional (team coordinated); Product design
• Self-Managing (team based); Sales Support
• Flow to Work (individual); Client services

Digital Transformation

• Try to create a new business model
• This results in cultural changed
• Needs to have technological evolution
• Requires Work innovation
• Creates a new look on design

Digital Transformation Part 2

• To create an innovative environment which helps create General Purpose technologies
• To have real time data
• Which requires a good understanding of scalability of data
• This will help with the human capabilities decision making and can effect negatively and positively the work environment in general. - This requires new work, customers and business

In short, data will help with:

• Co-Sourcing; clients are more involved in businesses
• Direct Feedback
• Horizontal business methods, less focus on the vertical
• Decision making becoming more automated.
• Business expanding in blurred areas with more competition due to ecosystems
• Disruptive new companies that come due too “constant Flux”

Digital Transformation Part 3

• Put simply- is a business model which relays on data and processing
• To have this you need-
  • Quality Data
  • Data in the correct contest
  • Sensitivity
• If wanting create the data you need a full understanding of organisation and that it needs to be used.
• Organisation can not succeed in the new environment it will fall or is easy to start a new one

Digital Transformation Part 4

• Needs a platform and good data handling
• Which leads to collaboration and value increase
• To avoid these pitfalls one must be collaborative with tech, start small and not be quick too overturn the current methods or have a set way.

Key things to note is:

• Need for technology to improve social interactions

Summary

• Is data in which is used inside digital revolution
• Is Strategy: Data-Driven

Sustainability

• Healthcare (general):
  • Has a High Carbon Footprint
  • Single use products
  • Pharma Waste
  • Heavy energy
  • Poor waste methods
• Needs to do something to promote sustainability
• Needs a process that is helpful to all future things
• Can be avoided via greenwashing
• Requires long timelines with goals

Sustainability In short

• Needs to meet needs and not over power
• Three dimensions; enviro, socio and eco.
• “System Thinking" to make the challenge
• Requires new thinking with all future issues in mind.