The Performance Consequences of Ambidexterity in Strategic Alliance Formations: Empirical Investigation and Computational Theorizing

Management Science, October 2007, Vol. 53 No. 10: 1645-1658

Posted: 9 Sep 2012

See all articles by Zhiang (John) Lin

Zhiang (John) Lin

The University of Texas at Dallas

Haibin Yang

City University of Hong Kong (CityUHK) - Department of Management Sciences

Irem Demirkan

Sawyer School of Business

Date Written: October 1, 2007

Abstract

Although alliance studies have generally favored an ambidextrous approach between exploration and exploitation, they tend to overlook a firm's characteristics, its industry constraints, or the dynamic network in which the firm is embedded. This study examines the ambidexterity hypothesis and its boundary conditions with a unique research method. We not only analyze empirical data from five U.S. industries spanning eight years, but also expand theoretical insights to the network level by building a computer simulation model. Both our empirical and simulation results reveal the contingencies of the ambidexterity hypothesis in alliance formation. Our findings show that although an ambidextrous formation of alliances benefits large firms, a focused formation of either exploratory or exploitative alliances benefits small firms. In an uncertain environment an ambidextrous formation enhances firm performance but so does a focused formation in a stable environment. Finally, the simulation model demonstrates that a firm's centrality and structural hole positions in network relations can moderate the relationships between alliance formation choices and firm performance, and that the ambidexterity hypothesis may be limited to the earlier stage of the network. Our study provides critical evidence into the viability of adopting a dynamic network perspective in understanding the ambidexterity hypothesis and advancing strategic alliance research beyond static and dyadic levels.

Keywords: alliance formation, ambidexterity hypothesis, social networks, empirical analysis, computer simulation

Suggested Citation

Lin, Zhiang (John) and Yang, Haibin and Demirkan, Irem, The Performance Consequences of Ambidexterity in Strategic Alliance Formations: Empirical Investigation and Computational Theorizing (October 1, 2007). Management Science, October 2007, Vol. 53 No. 10: 1645-1658, Available at SSRN: https://ssrn.com/abstract=2143796

Zhiang (John) Lin (Contact Author)

The University of Texas at Dallas ( email )

Haibin Yang

City University of Hong Kong (CityUHK) - Department of Management Sciences ( email )

Tat Chee Avenue
Kowloon Tong
Kowloon
Hong Kong

Irem Demirkan

Sawyer School of Business ( email )

Boston, MA 02108
United States
617-305-1799 (Phone)

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