Achieving Temporal Ambidexterity in New Ventures

• DOI: http://doi.org/10.1111/joms.12431
• Date: 01 June 2019
• Published date: 01 June 2019
• Author: Jinyun Sun,Yadong Luo,Nikhil Celly,Stephanie L. Wang,Vladislav Maksimov

© 2018 John Wiley & Sons Ltd a nd Society for the Advance ment of Management Studies

Achieving Temporal Ambidexterity in New Ventures

Stephanie L. Wang a, Yadong Luo b,c, Vladislav Maksimov d,

Jinyun Sun e and Nikhil Celly f

a K e l l e y S c h o o l o f B u s i n e s s , I n d i a n a U n i v e r s i t y ; b S c h o o l o f B u s i n e s s A d m i n i s t r a t i o n , U n i v e r s i t y o f

Miami ; c Sun Yat-Sen Unive rsity Bu siness Scho ol , Sun Yat-Sen Unive rsity ; d Brya n School of Busi ness

a n d E c o n o m i c s , U n i v e r s i t y o f N o r t h C a r o l i n a , G r e e n s b o r o ; eCollege of Managem ent , Fu dan Universi ty ;

f C. T. Bauer C ollege of Business , University of Houst on

A B S T R A C T O rganizations face a common intertemp oral c hoice problem, where act ions

suitable in the shortt erm are different from those th at work in the long term. Building on the

organizat ional a mbidexter ity theory, we argue that organi zations can reconcile their short-

term and long-term tens ions, but th is does necessitate manageria l endeavours t hat orchestrate

this reconci liation. We introduce the concept of temporal ambidex terity and define four

intertemporal ten sions involving an organizat ion’s objectives, resource s, markets, and uncer-

tainty. We examine how f irms can address these tens ions successf ully in the context of new

ventures, and to do so we focus on t hree managerial capabil ities of founder-CEOs: expertise

breadth, externa l connectivity, and empowering leadersh ip. Results from 243 new ventures in

China suggest t hat temporal ambidexterity improves wit h these managerial capabil ities, and

more so for younger ventures. Our f indings shed light on solutions and mechan isms by which

intertemporal ba lance is fulfil led, particularly for new ventures i n a dynamic environment.

K e y w o r d s : intertempora l balance , organizationa l ambidexterit y , managerial capabilities ,

n e w v e n t u r e s

I N T R O D U C T I O N

In today’s increasingly dynamic environments, more scholars are incorporating a tem-

poral perspective to study organ izational capabilities and success (Huy, 20 01 ; Nadkar ni

et al., 2016 ; Shi et al., 2012 ). Organi zations frequently face a trade-off between t he

short term and the long term, commonly recognized a s an intertemporal choice prob-

lem, where the ‘course of action that is best in the short term is not the same course of

Journal of Man agement Studie s 56:4 June 2019

do i: 10 .1111/jo ms. 12431

Address for repr ints : Stepha nie Lu Wang, Kelley School of Business, I ndiana University, Hodge Hal l 3151,

1309 E. 10th St., Bloom ington, IN 47405, USA ( slwang@i ndiana.edu ).

Achieving Temporal Ambidexterity in New Ventures 789

© 2018 John Wiley & Sons Ltd a nd Society for the Advance ment of Management Studies

action that is best over the long run’ (L averty, 1996 , p. 828). This idea underpins vari-

ous developments in the management literature that util ize concepts such as short-term

versus long-term focus (Marg inson and McAulay, 2008 ; Souder and Bromiley, 2012 )

or short-term versus long-term orientation (Lumpkin and Brigham, 2011 ; Mil ler and

Breton-Miller, 2005 ). The general assumption in t hese developments is that this tempo-

ral trade-of f cannot be reconciled and firms ex hibit either a short-term or a long-term

focus.

However, insights from the growing body of literature on organizational ambidex-

terity suggest that seemingly exclusive activities can be reconciled. Scholars in this area

recognize that organizations need to be ambidextrous – engaging in sufficient exploita-

tion to ensure short-term viability, while also devoting enough energy to exploration to

ensure long-term viability (March, 1991 ; O’Reilly and Tushman, 2008 ). The fundamen-

tal idea behind ambidexterity is that seemingly inherent trade-offs between exploitation

and exploration can be reconciled to achieve long-term competitiveness (see Raisch and

Birkinshaw ( 2008 ) for a review). While efforts at exploitation are believed to affect short-

term outcomes and those at exploration affect long-term outcomes, the literature has

focused on the tensions arising from the broader learning and knowledge processes of

exploitation and exploration (Levinthal and March, 1993 ; Simsek et al., 2009 ), rather

than on those stemming from the more specific temporal trade-offs between managerial

decisions with short-term versus long-term organizational implications.

Combining insights from these two streams of literature, we develop the concept of

temporal ambidexterity, which refers to the organizational capability to demonstrate si-

multaneous and strong commitments to actions with short-term and long-term organiza-

tional implications. Our main argument is that the intertemporal choice problem can be

reconciled, and to do so managers need to be aware of the major organizational tensions

that arise with this problem. We describe four types of tensions – in objectives, in man-

aging resources, in serving markets, and in managing uncertainty. In general, managers

tend to avoid these tensions by focusing on the short-term implications of organiza-

tional actions (Laverty, 1996 ; Marginson and McAulay, 2008 ). However, it is possible for

managers to recognize the importance of both short-term and long-term viability and

develop the capacity to accommodate actions supporting each, at the same time, while

minimizing tensions.

In developing the concept of temporal ambidexterity, we specifically address the ques-

tion ‘ How can temporal ambidexterity be achieved ?’ in the context of new ventures. The need

to reconcile intertemporal tensions is salient in new ventures. On the one hand, new ven-

tures have to cope with a much-shortened temporal frame (Bluedorn and Martin, 2008 ).

On the other hand, some means to achieve organizational ambidexterity are not feasi-

ble in new ventures. In general, researchers argue that ambidexterity can be achieved

by adopting structural separation, where different units perform different activities to

avoid tensions (Jansen et al., 2009 ; Tushman and O’Reilly, 1996 ), by engendering a be-

havioural and relational context, where the members of a single unit can address contra-

dictory demands (Gibson and Birkinshaw, 2004 ; Hill and Birkinshaw, 2014 ), or through

the involvement of top managers, who can directly manage tensions and contradictions

arising from ambidexterity (Heavey and Simsek, 2017 ; Lubatkin et al., 2006 ; Mihalache

790 S. L. Wang et al.

© 2018 John Wiley & Sons Ltd a nd Society for the Advance ment of Management Studies

et al., 2014 ; Smith and Tushman, 2005 ). While much of the literature has examined am-

bidexterity in large organizations, the growing body of inquiries in the context of smaller

and younger organizations has emphasized the direct role of top managers because of

constraints in slack resources and hierarchical administrative systems to implement struc-

tural solutions (Gibson and Birkinshaw, 2004 ; Heavey and Simsek, 2017 ; Lubatkin et al.,

2006 ; Rogan and Mors, 2014 ). Accordingly, we focus on the role of founder-CEOs – en-

trepreneurs who founded a venture, individually or collectively with others, and serve as

the key manager of the venture (Boeker and Karichalil, 2002 ).

Specifically, we focus on three core underpinnings of founder-CEO managerial capa-

bilities (Adner and Helfat, 2003 ; Helfat and Martin, 2015 )—human capital in the for m

of expertise breadth (Kehoe and Tzabbar, 2015 ), social capital in the form of external

connectivity (Peng and Luo, 2000 ), and cognition in the for m of empowering leader-

ship (Thomas and Velthouse, 1990 ). These resources provide the basis for managerial

decision making and action in developing temporal ambidexterity to manage inherent

tensions. Additionally, we argue that the effect of these managerial capabilities will be

particularly pronounced at a younger age when the ventures are more likely to suffer

from liability of newness (Stinchcombe, 1965 ). At a younger age, ventures are in the

process of establishing organizational routines and practices and are strongly dependent

on the behaviours and decisions of their founder-CEOs who founded and also manage

the ventures (Johnson, 2007 ).

Overall, we make several contributions to the literature. First, by introducing the

concept of temporal ambidexterity, we relax a long-standing assumption in temporal

perspectives that organizations cannot manage for the short-term and long-term at the

same time. Specifically, we underscore the intertemporal choice problem in the broader

ambidexterity literature and define the specific organizational tensions associated with

it. As a result, our study contributes to a richer and more fine-tuned understanding of

organizational ambidexterity with the incorporation of a temporal perspective. Second,

we examine how temporal ambidexterity can be achieved in the context of new ventures.

In particular, we explain how founder CEO managerial capabilities serve as the base

for temporal ambidexterity of their ventures, thus enriching the growing discussion on

how top managers contribute to organizational level strategies (Lin et al., 2018 ). As new

ventures are becoming an increasingly important engine for economic growth and social

development, our research provides timely managerial implications for entrepreneurs to

reconcile intertemporal tensions and succeed.

THEORIZING TEMPORAL AMBIDEXTERITY

Defin ing Temporal A mbidexterity

We propose that organizations can ach ieve temporal ambidexterity, an organizational

capability to demonstrate simulta neous and strong commitments to actions with short-

term and long-term organizational i mplications. To do so, they need to resolve the

inherent tensions between short-term and long-term activities. First, temporal ambi-

dexterity implies that organizations can coordinate short-term and long-term actions