Organizational Ambidexterity and Firm Performance Before and During the Covid-19: Evidence from European Small and Medium-Sized Firms

Abstract

Despite valuable prior research on organizational ambidexterity, the inter-connectedness of its various acumens and firm performance has remained underexplored. In the context of the Covid-19 crisis and small and medium-sized firms (SMEs), This study examines the individual and concurrent effects of managerial, strategic, and operational acumen of organizational ambidexterity on SMEs performance. We use primary data collected from 271 SMEs in Belgium, Bulgaria, Denmark, Spain, and the United Kingdom (UK) during two periods of 2015 (pre-Covid-19) and 2020-2021 (during Covid-19). First, the distinction between the three acumens is important as managerial and operational acumens were found to excel productivity during the crises. Second, the concurrent implementation of managerial and strategic acumens in SMEs during crises fosters SME performance more than before the crisis. Implications for SME managers and policymakers are discussed.

Keywords: SMEs, firm performance, productivity, Covid-19, organizational ambidexterity, management