Exploring the responses of municipalities with the advent of rooftop solar PV using the approaches to ambidexterity

Abstract

Although challenging, successfully combining a dual strategy that simultaneously manages existing operations and supports radical innovation as a means of developing new revenue streams, is crucial for the survival of organisations within rapidly changing environments. Clear guidelines for the achievement of this approach, known as organisational ambidexterity, is not yet apparent from the literature or tacit knowledge systems. This study aimed to explore the extent to which municipalities are aware of the advent of rooftop solar (photovoltaic systems) and their use of ambidexterity, particularly its structural and contextual approaches, in response to the threat which these systems pose to the business models of local authorities. The research was based on individual studies of three metropolitan municipalities. Semi-structured interviews were conducted with the participants and their responses were analysed from a behavioural viewpoint through an inductive approach. The results showed that the respondents considered rooftop solar to be a significant threat to municipal revenues. The findings further indicated that the municipalities within the sample are responding to this threat in an incremental manner by increasing their operational efficiencies. Furthermore, two out three of the sample are implementing structural changes to their organisations. Both of these responses have been classified as following an ‘intrapreneurship’ model as per the proposed typology for ambidexterity. Although the respondents recognised the importance of radical innovation and understood the imperative of ambidexterity, it was apparent that their responses had not yet extended to radical innovation using either a ‘laissez faire’ or ‘solar system’ model. It was concluded that radical innovation should be actively pursued, preferably though external entities operating outside the framework of the daily operations and within an environment which allows for flexible and rapid responses to new opportunities.