Environmental dynamism as a moderator of the relationship between complexity leadership and contextual ambidexterity

Abstract

Organisations need to implement both incremental innovation (exploitation), and radical innovation (exploration) to ensure success and survival. Exploitation improves the efficiency of current operations, whereas exploration develops new entrepreneurial ideas for future viability. Two emerging concepts in literature, complexity leadership and contextual ambidexterity, aim to enable simultaneous exploitation and exploration. Regardless of the similar objectives, available literature has not yet established an association between the concepts. Consequently, the first objective of this research investigated whether complexity leadership could promote an organisationÕs ability to enable both exploitative and exploratory innovation, simultaneously (contextual ambidexterity). Additionally, both complexity leadership and contextual ambidexterity acknowledge the importance of the context within which organisations operate, and the accelerated rate of change in todayÕs organisational environments (environmental dynamism). The rate of change would influence the effectiveness of leadershipÕs innovation efforts. Accordingly, the second objective of this research hypothesised that environmental dynamism would moderate the relationship between these constructs. A sample of 1 204 secondary survey responses was statistically analysed. The researcher confirmed that complexity leadership has a significant, positive, linear relationship with exploitation, exploration, and the combined construct contextual ambidexterity. However, the moderator effect of environmental dynamism on these relationships, was found not to be significant. Therefore, complexity leadership promotes both exploitation and exploration, as well as contextual ambidexterity. This particular leadership approach creates the supportive context that promotes both types of innovation, simultaneously. Leadership can promote contextual ambidexterity through activities associated with this approach, including patterning of attention, developing networks, and contextual intelligence.