Effectiveness of Ambidextrous Strategy Over the Company's Life Cycle: Evidence From Korean SMEs

Abstract

In today's business environment, companies face the dual challenge of improving customer satisfaction through continuous innovation while enhancing efficiency. The ambidextrous strategy has emerged as a promising approach to address such a challenge. This study investigates whether the ambidextrous strategy enhances firm performance and capabilities compared to efficiency-oriented or innovation-oriented strategies in the context of small and medium-sized manufacturing companies in Korea. To achieve this objective, companies were categorized within a 2×2 matrix, with quadrants determined based on mean values of efficiency scores and the level of innovation. Notably, this research differs from prior studies by placing a specific emphasis on quantifying operational efficiency through the input-oriented BCC data envelopment analysis model. Subsequently, it empirically identifies the most effective strategy both in a general sense and at each life cycle stage. The findings of this study are twofold: First, companies in the mature growth and maturity stages achieve the highest sales profits when actively pursuing an ambidextrous strategy. Second, companies prioritizing innovation generally demonstrate higher capabilities across all stages. These results offer valuable insights and strategic guidance for business practitioners seeking strategic approaches that balance innovation and efficiency.