How can leaders today design and manage their organisation to make it deliver both efficiency and flexibility? The authors explore the emergence of the ambidextrous organisational form, and propose a new concept called “the Enterprise Ecosystem” as a response to address the challenges facing companies in the 21st century.
Many CEOs we talk to nowadays recognise that their companies need to be more flexible to accommodate fast-changing customer demands. They are also under pressure to maintain a relentless focus on efficiency. The result is an uneasy feeling that their organisations are not up to the challenge of doing both well. This frustration shouldn’t come as a surprise because the still dominant 20th century models of organisation offer only an unpalatable choice: prioritise either efficiency or flexibility.
To maximise efficiency, the tried and tested approach has been to adopt a rigid hierarchical organisation based on top-down decision-making, high division of labour and formal rules, and lastly, policies and procedures optimised for an industrial, mass-production age. For enterprise-wide flexibility, the increasingly popular alternative is to embrace an “internal market” model based on loose networks of empowered experts, few boundaries, high informality, and horizontal interaction across a flat structure that aligns around values. Neither offers a silver bullet. So, companies risk “flip-flopping” between these extremes in endless rounds of re-organisation.
The challenges of the 21st century demand a new approach. A promising avenue of management research is focussed on the emergence of the ambidextrous organisational form – these are organisations that are capable of exploiting existing opportunities efficiently, whilst simultaneously exploring new opportunities and developing capabilities for the future1. Whilst the concept is well established in management literature, how these ambidextrous forms of organisation are designed and managed in practice is much less understood.
About the Authors /p>
Jonathan Trevor is Associate Professor of Management Practice at the University of Oxford, Saïd Business School. He holds a PhD in Management Studies and Economics from Cambridge University. He works extensively with executive leadership teams in all sectors and internationally to apply his research, and teaches on the Oxford MBA, Executive MBA and executive education courses.
Peter Williamson is Professor of International Management at the University of Cambridge, Judge Business School and Fellow of Jesus College, Cambridge. He holds a PhD in Business Economics from Harvard University. He also serves as the non-executive director of several companies spanning digital transformation software through green energy.
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