The Dynamics of Ambidextrous Decision Making

Managerial ambidexterity has become an important concept in recent research. However, prior studies fail to provide conclusive theoretical insights on how managers' individual abilities and preferences interact with organizational-level rules and restrictions to develop firm-level ambidexterity and secure superior long-term performance. Based on system dynamics modeling, we simulate this interaction and the underlying feedback processes under different environmental conditions. The simulation experiments suggest that managerial ambidexterity may only lead to firm-level ambidexterity under moderate environmental conditions. Counter-intuitively, we provide insights that, for stable (or dynamic) environments, an individual's inclination biased towards exploration (or exploitation) may be more beneficial for firm-level ambidexterity and long-term performance.