Managing tensions

As mentioned, the previous literature is quite consistent that there is a need for tension management in conjunction with ambidexterity. It seems that the importance of tension management is widely recognized as a vital part of achieving ambidexterity (Hughes, 2018;

Andriopoulos & Lewis, 2009; Nosella et al., 2012; Úbeda-García, et al., 2020). These studies suggest that tensions should be handled and resolved at different levels of the organization.

Smith and Lewis (2011) suggest that researchers approaching ambidexterity should focus on tensions, tension management, and implications of tension management. The literature is, however, inconsistent about the methods for handling tension management.

2.3.1 Organizational design to manage tensions

Some scholars suggest that managing tensions should be done on an organizational level by having structures between exploitation and exploration activities and separating these activities from each other. Tensions should be transformed to a competitive advantage by creating an organizational design that supports working with conflicting forces (Zimmermann et al., 2018).

According to Tushman and O’Reilly (1996), tension management should be done by structural separation, which separates exploration and exploitation into different business units. Tensions can be managed by building parallel structures, creating, for example, teams that allow switching between different structures according to the needs for exploration or exploitation (Raisch & Birkinshaw, 2008), or temporal balancing or temporal separation by separating different units focusing on exploration and exploitation on a temporal basis (Jansen et al., 2005). Zimmermann et al. 2018 did not find evidence in their empirical research that organizational design solves the exploration-exploitation tension.

2.3.2 Individual level tension management

The other level of tension management is the individual level, which focuses on managing tensions on the employee level rather than creating or building structures. The individual-level research is limited, and the majority of recent individual-level research focuses on the paradox approach, as explained later in this section. Individual-level tension management emphasizes the need to understand, within the organization, the demands and characteristics of both exploration and exploitation (O’Reilly & Tushman, 2004), which is supported by Mom et al.

(2007) argued that a manager’s role in mediating knowledge inflows is important.

Previous literature is inconsistent regarding which managerial level should focus on tension management. Jansen et al. (2009) and Zimmermann et al. (2018) argue that top management has an important role in managing tensions. Montealegre et al. (2019) state that different management levels (top managers, middle managers, and operational managers) have to address tensions arising at different phases. Further, there is inconsistency on which managerial levels are affected by the tensions. Andriopoulos and Lewis (2009) and Smith and Tushman (2005) argue that managers in product development organizations experience tensions, given that they need to constantly develop their current products and at the same time create innovations that may cannibalize those. Voss and Voss (2013) state that tensions related to product and market functions occur more with frontline managers. Zimmermann et al. (2018) states that frontline managers experience tensions on a daily basis. He and Wong (2004) have a practical suggestion; tensions between exploration and exploitation should be addressed on a continuous basis by managers.

2.3.3 Paradox perspective as solution to manage tensions

To manage tensions efficiently while balancing ambidexterity, it is necessary to understand the characteristics of tensions related to exploitation and exploration. Managers experience tensions as a dilemma when they balance exploration and exploitation activities without being able to choose between competing activities. Smith and Lewis (2011) offer contingency theory as one response to tensions. Contingency theory focuses on favorable conditions for selecting among competing demands, which means that if a certain condition is true, then the selection will be made, indicating a choice among competing tensions. On the contrary, the paradox perspective relies on choosing both alternatives of competing and often conflicting options.

Based on Lüscher and Lewis (2008), managers would benefit from understanding the paradoxical nature of tensions to appropriately manage them. They found that even when managers initially experienced tensions as dilemmas, helping them to accept tensions as an inherent part of ambidexterity enabled their sensemaking. When managers realized that they were not able to choose between competing tensions, they began to adopt paradoxical thinking, meaning that they were open to discussion considering all possibilities rather than choosing one to consider. Smith and Lewis (2011) distinguish paradoxes from similar organizational tensions, such as dilemmas and dialectics, highlighting the core characteristics of paradox (Cornforth, 2004; Lewis, 2000). They state that paradox approach presumes tensions to be natural and permanent part of the dynamics and if the organization is able to response to these, long-term sustainability is enabled. From a management perspective, it is valuable if individuals are able to judge the meaning and value between these conflicting and opposing options and can identify potential synergies; individuals seem to accept paradox more likely in this way They argue that tensions between exploration and exploitation illustrate the nature of paradox and its contrast with dilemmas and dialectics; to be able to measure valued differences between competing forces and understand potential underlying synergies, managers are more likely to embrace paradoxical ways of thinking. The paradox perspective managing tensions relies on long-term sustainability and continuous efforts to meet multiple, divergent demands (Lewis, 2000; Miron-Spektor, 2018).

Miron-Spektor et al. (2018) highlights the necessity of having a paradox mindset within the organization as a key to unlocking the potential of everyday tensions. Their research contributes to the work of Smith and Lewis (2011) by providing a new explanation for the relationship between tensions and paradox mindset. They argue that people with limited time and funding and such resources experience tensions, and some individuals are able to leverage tensions and competing demands to their benefit, whereas others are unable to do so. Some employees can cope and even thrive with everyday tensions. They argue that paradox mindset has an effect on the relationship between experiencing tensions and in-role performance, stating that high paradox mindset leads to higher in-role job performance. A higher scarcity of resources leads to a higher level of experienced tension.

Jarzabkowski et al. (2013) describes four different ways to manage paradoxical tensions: 1) suppressing—one element is prioritized and allowed to dominate or overrule the other

element; 2) opposing—response involves parties supporting contradictory elements of paradox engaging in active confrontation and conflict that polarize paradoxical elements; 3) splitting—separation of contradictory elements either temporally or spatially; and 4) adjusting—recognizing that both poles are important, interdependent, and both need to be accommodated.

Smith and Lewis (2011) introduce the dynamic equilibrium model as a solution to manage tensions, stating that by understanding the permanent nature of tensions and having awareness of tensions, it is possible to achieve acceptance and paradoxical thinking instead of defensiveness. They argue that tensions can be seen as opportunity. If the individuals are able to look at the value between exploitation and exploration and identify possible synergies, the acceptance is higher than the rejection. They also suggest approaching tensions with different management strategies and consider the impact of these strategies on sustainability.

According to them, the virtuous cycle of managing tensions helps to achieve short-term excellence while ensuring long-term success. They state that dynamic equilibrium enables sustainability by stimulating learning, creativity, flexibility and resilience, and by unleashing human potential.

Zimmermann et al. (2018) argue that managing tensions can be done by collective systems and processes. As a practical example, frontline managers could configure the message from the top to match the informal culture of manufacturing or production. This differs from previous literature (Smith & Lewis, 2011; Andriopoulos & Lewis, 2009) and does not suggest that managers carry tensions or that organizational structure is a solution to overcome the mentioned tensions.

The various ways and methods by which tensions can be managed while balancing ambidexterity based on the literature are listed in Table 2.

Table 2. Tension management suggested by previous literature Method to manage tensions Researchers

Solved at different levels of organization Hughes (2018), Andriopoulos & Lewis (2009), Nosella et al. (2012), Úbeda-García, et al. (2020)

Focusing on organizational design Tushman & O’Reilly (1996), Raisch &

Birkinshaw (2008), Jansen et al. (2005).

Managing tensions at individual level Mom et al. (2007), Zimmermann et al.

(2018), Montealegre et al. (2019), He &

Wong (2004)

Paradoxical approach Lüscher and Lewis (2008), Smith and Lewis (2011), Lewis (2000), Miron-Spektor (2018), Jarzabkowski et al. (2013)

2.4 Ambidexterity and tension management in small and medium-sized enterprises