Roles of Board of Directors in Organizational Ambidexterity

Abstract

Organization theory scholars have identified diverse antecedents to organizational ambidexterity including structure, context, and leadership characteristics. Each antecedent has been conceptualized as an alternative solution to organizational ambidexterity. This study argues that these distinct antecedents can have complementary effects on organizational ambidexterity. Differentiation mechanisms can generate new ideas, which are necessary for change and adaptation. Integration mechanisms make it possible to reconcile and address trade-offs and contradictions to achieve organizational ambidexterity. The aim of this research is to examine the interaction effect of these two distinct mechanisms on organizational ambidexterity in restaurant chain industry. Drawing on franchising and corporate governance literature, this paper proposes that the adoption of the franchising system can work as a differentiation mechanism and board of directors can be an integration mechanism. The results show when the number of outside directors and the average tenure of directors are combined with the adoption of the franchising system, chain performance increases.