Ambidexterity and Unit Performance: Intellectual Capital Antecedents and Cross‐Level Moderating Effects of Human Resource Practices

• Author: Nikos Bozionelos,Konstantinos C. Kostopoulos,Evangelos Syrigos
• Date: 01 December 2015
• DOI: http://doi.org/10.1002/hrm.21705
• Published date: 01 December 2015

Human Resource Management, December 2015, Vol. 54, No. S1. Pp. S111–S132

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21705

Correspondence to: Konstantinos C. Kostopoulos, University of Piraeus, 80 Karaoli & Dimitriou St., 185 34, Piraeus,

Greece, Phone: +30 2104142152, E-mail: kkostop@unipi.gr

The second and the third author contributed equally and their names appear in alphabetical order.

AMBIDEXTERITY AND UNIT

PERFORMANCE: INTELLECTUAL

CAPITAL ANTECEDENTS AND CROSS-

LEVEL MODERATING EFFECTS OF

HUMAN RESOURCE PRACTICES

KONSTANTINOS C. KOSTOPOULOS,

NIKOS BOZIONELOS, AND EVANGELOS SYRIGOS

This study develops a cross-level model examining the effects of intellectual

capital facets (i.e., human, social, and organizational capital) on unit ambidex-

terity. Further, it proposes that organizational-level high-performance human

resource (HPHR) practices signifi cantly shape these effects as well as the unit

ambidexterity–unit performance relationship. Hierarchical linear modeling on

multisource and lagged data from a sample of 148 business units from 58 US

Fortune 500 fi rms shows that unit human and social capital positively contrib-

utes to unit ambidexterity, unit organizational capital has a negative relationship

with unit ambidexterity, and organizational HPHR practices amplify the former

and mitigate the latter of these unit-level effects. The fi ndings also reveal that the

relationship between ambidexterity and unit performance becomes stronger in

organizational contexts of heightened HPHR practices. This multilevel approach

increases understanding of how units achieve ambidexterity and attain related

performance gains. ©2015Wiley Periodicals, Inc.

Keywords: ambidexterity, intellectual capital, high-performance HR practices,

unit performance, organizational learning, multilevel analysis

With the emergence of unit-based

structures as a primary organizing

norm in contemporary organiza-

tions, scholars are increasingly rec-

ognizing that the ability of a unit to

pursue exploratory and exploitative activities in a

concurrent manner—defined as ambidexterity—is

an important driver of superior performance

and competitive advantage over time (Gibson &

Birkinshaw, 2004; Jansen, Simsek, & Cao, 2012;

Raisch & Birkinshaw, 2008; Tushman & O’Reilly,

1996). Achieving ambidexterity, however, necessi-

tates the hosting of competing demands for explo-

ration and exploitation, and the reconciliation of

related tensions within units (Andriopoulos &

Lewis, 2009; Lavie, Stettner, & Tushman, 2010).

To address these challenges, research has recently

adopted a contextual perspective arguing that

S112 HUMAN RESOURCE MANAGEMENT, DECEMBER 2015

Human Resource Management DOI: 10.1002/hrm

Organizational

contexts that

emphasize HPHR

practices provide

(lower-level) units

with the ability,

motivation, and

opportunity to

better align their

human, social, and

organizational capital

with the seemingly

contradictory

demands of

exploratory and

exploitative learning

activities.

ambidextrous units to gain superior performance

advantages (Prieto & Santana, 2012; Takeuchi,

Lepak, Wang, & Takeuchi, 2007).

The present study is designed to fill these gaps

by adopting a contextual, multilevel perspec-

tive on unit ambidexterity, thus contributing to

extant literature in several ways. First, we synthe-

size and extend insights from prior research that

has examined how various facets of intellectual

capital (i.e., human, social, and organizational

capital) relate with exploration and exploitation

activities by forming specific configurations (Kang

& Snell, 2009; Subramaniam & Youndt, 2005) and

argue that these facets exert distinct, positive and

negative, effects on unit ambidexterity. We con-

ceptualize ambidexterity as a unit’s capacity to

simultaneously pursue two seemingly incompat-

ible learning activities: exploration and exploita-

tion (March, 1991; Raisch & Birkinshaw, 2008).

Exploratory learning denotes search, variation,

experimentation and discovery of new knowledge,

whereas exploitative learning is associated with

the refinement, efficient use, and implementation

of current knowledge and skills (March, 1991;

Kostopoulos & Bozionelos, 2011). We argue that

ambidextrous units need the unique knowledge,

skills, and abilities of individual members (i.e.,

human capital) as well as the knowledge residing

in and available through members’ interpersonal

networks (i.e., social capital) to realize synergies

between divergent learning activities. By con-

trast, we posit that codified knowledge embedded

in units’ structures, systems, and processes (i.e.,

organizational capital) may bias problem solving

and render learning activities myopic and locally

bounded (Cyert & March, 1963; Subramaniam

& Youndt, 2005), hence limiting units’ ability to

accomplish ambidextrous goals.

Second, we extend recent work that has

adopted a multilevel approach to understanding

ambidexterity (Jansen etal., 2012) and posit that

the relationships between facets of unit’s intellec-

tual capital and ambidexterity are contingent on

key organizational-level HPHR systems. In partic-

ular, we suggest that organizational contexts that

emphasize HPHR practices provide (lower-level)

units with the ability, motivation, and opportu-

nity (Appelbaum, Bailey, Berg, & Kalleberg, 2000)

to better align their human, social, and organiza-

tional capital with the seemingly contradictory

demands of exploratory and exploitative learning

activities. Furthermore, we propose that HPHR

practices may offer a richer understanding of the

beneficial role of ambidexterity in enhancing unit

performance (Gibson & Birkinshaw, 2004; Jansen

et al., 2012). By implementing HPHR practices,

certain features of units such as stretch, discipline,

and trust (Gibson & Birkinshaw, 2004); shared

vision and social integration (Jansen, George, Van

den Bosch, & Volberda, 2008); or internal and

external relational ties (Hill & Birkinshaw, 2012)

can help units become ambidextrous. Although

these studies offer important insights on the

emergence of unit ambidexterity, they fall short

in providing a finer understanding of how units

adopt different mechanisms to appropriate and

use knowledge stocks for managing conflicting

exploratory and exploitative learn-

ing demands (Kang & Snell, 2009).

Such knowledge stocks manifested

in a unit’s intellectual capital—

referring to the sum of all knowl-

edge assets that a unit possesses

(Nahapiet & Ghoshal, 1998)—have

been shown to foster exploratory

and exploitative capabilities and

goals (Subramaniam & Youndt,

2005). Yet theory and testing of

how different facets of units’ intel-

lectual capital operate to facilitate

(or impede) the simultaneous pur-

suit of exploration and exploitation

remains impoverished.

Furthermore, it is widely

accepted that work conditions

within units as well as unit perfor-

mance outcomes depend substan-

tially upon practices and systems

of the wider organizational con-

text in which units operate (Brown

& Eisenhardt, 1997; Gupta, 1987).

Units have to interact regularly

with organizational headquar-

ters, receive performance feedback

from top management, and utilize

support from organizational-level

human resource systems to cre-

ate an internal environment that

enables them to employ resources and knowledge

assets for reconciling paradoxical activities or

attaining contradictory goals (Jansen etal., 2012;

Patel, Messersmith, & Lepak, 2013). Despite ini-

tial attempts to understand how structural and

resource attributes of the organization influence

the performance outcomes of unit ambidexterity

(Jansen etal., 2012), research has yet to develop

cross-level explanations of how key organiza-

tional systems, such as high-performance human

resource (HPHR) practices, shape the relationship

between various unit-level social and knowledge

features (e.g., intellectual capital) and ambidex-

terity and how, in turn, these practices enable