Managing technology innovation paradoxes through multi-level ambidexterity capabilities

Abstract

In this study, the authors aim to address the following two research questions: (1) How do technology innovation paradoxes manifest themselves in technological changes? (2) How do incumbent firms manage technology innovation paradoxes through multi-level organizational ambidexterity? To do so, the authors examine technology innovation in cloud computing, which has taken shape and brought about changes to the information technology industry. Specifically, the authors examine how a traditional software company, China Standard Software Co., Ltd. (CS2C), successfully navigated the technological transition to cloud computing from its existing operating systems business by managing innovation paradoxes through multi-level ambidexterity capabilities. This study examines a single exploratory case and conducts an in-depth analysis of how technology innovation paradoxes manifest themselves in technological changes and how incumbent firms manage technology innovation paradoxes through multi-level organizational ambidexterity. The data collection and analysis occurred simultaneously through three phases. In Phase 1, one of the authors who had worked at CS2C for many years enabled the authors to obtain access to the company. The data analysis during this phase provided the authors with the history and current situation of CS2C, enabling them to understand the external circumstances, such as particular historical period, and internal conditions, such as cultural and technological changes, that would be relevant throughout the course of their study. It also helped the authors identify organizational ambidexterity capability as the guiding theoretical concept for their research. In Phase 2, the authors engaged in site visits and conducted detailed interviews with employees working at CS2C. In Phase 3, most of the data analysis was conducted. When the interview data were not sufficient to support the theoretical analysis, additional data were collected via phone calls and emails, to assure data-theory-model alignment. The authors’ findings show that technology innovation paradoxes manifest themselves as contradictory relationships and mutual support relationships between exploitative and exploratory innovation. In addition, the authors identify three integration mechanisms as key to multi-level organizational ambidexterity capabilities in managing technology innovation paradoxes in technological changes. Three important theoretical implications can be drawn from our case analysis. First, this research contributes to the knowledge of innovation paradoxes during technological changes. Second, this research provides a model of multi-level organizational ambidexterity capability in technological changes. Third, this research proposes three integration mechanisms driven by three types of ambidexterity capability at different organizational levels.