Crisis Favors the Prepared Firm: How Organizational Ambidexterity Relates to Perceptions of Organizational Resilience

Crisis Favors the Prepared Firm: How Organizational Ambidexterity Relates to Perceptions of Organizational Resilience

Laura Bechthold (Zeppelin University, Germany), Maximilian Lude (Technical University Munich, Germany) and Reinhard Prügl (Zeppelin University, Germany)
DOI: 10.4018/978-1-7998-7352-5.ch008
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Abstract

This chapter examines the interplay of the fundamental constructs of perceived organizational resilience and organizational ambidexterity by providing insights from a case study of an integrated service company in the tourism and leisure industry located in the Swiss Alps. The authors theorize that organizational ambidexterity (i.e., the balance between adaptability and alignment) leads to higher levels of resilience by boosting the capability of the firm to mitigate and adapt to major disruptions in its environment. Data from a survey with non-family employees show that establishing structures of alignment and adaptability and imprinting an “and/or”-mindset into the company culture has enabled all employees to constantly navigate new challenges while staying aligned on priorities throughout the hardships of the COVID-19 pandemic. However, the positive effects of alignment and adaptability can only unfold if they are combined with clear communication and transparency by the company's leadership.
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Introduction

The nature, frequency and impact of global risks such as exponentially spreading pandemics have tremendously changed during the past decades. Next to an unsettled geopolitical landscape and cyber-threats, global risks associated with climate change and pandemics pose the greatest danger to people and the planet today, both in terms of likelihood as well as impact (World Economic Forum, 2019). With rising levels of environmental complexity and uncertainty, however, the question of how to achieve organizational resilience as well as understanding the role of ambidexterity (i.e., the balance between adaptability and alignment) becomes increasingly important. Especially the tourism industry as a climate-sensitive and innovation-pressurized industry faces a conundrum of strategic complexity (Martínez-Ros and Orfila-Sintes, 2012).

The current situation illustrates this complexity very well: On the one hand, the recent COVID-19 pandemic and related travel bans have put entire business models at stake and require quick reactions to ensure short-term business survival. On the other hand, long-term sustainability risks, such as climate change, become increasingly tangible and urge the industry to protect, support, and enhance the natural resources that will be needed for sustaining the firm in the long-term future. Hence, developing organizational resilience, i.e., adaptive capabilities to cope with adversity and external shocks, has become a prerequisite for businesses to ensure short-term survival and future viability. A literature review by Annarelli and Nonino (2016) shows, however, that research dealing with the question of how to reach organizational resilience remains scant. In particular, there is a lack of research that explores how small and medium-sized companies (Doern, Williams, and Vorley, 2019; Morgan, Anokhin, Ofstein, and Friske, 2020; Williams, Gruber, Sutcliffe, Shepherd, and Zhao, 2017; Youssef and Luthans, 2007) as well as family-controlled businesses (for a recent exception see Kammerlander, Patzelt, Behrens, and Röhm, 2020) can build organizational resilience and ambidexterity. The term ambidexterity thereby refers to the capacity to exploit and align current business operations while simultaneously enabling the organization as well as the employees to adapt to changes in the environment (Gibson and Birkinshaw, 2004). Investigating organizational ambidexterity in the family firm context is of particular interest because of the unique ownership and management constellations as well as the family involvement in the firms’ top management, both affecting ambidextrous behavior (Hiebl, 2015; Kammerlander et al., 2020; Stubner et al., 2012). For example, family firms are unique due to the relevance of non-economic goals like transgenerational intentions (Kammerlander and Ganter, 2015) and idiosyncratic structures (Duran et al., 2016), which underlines the relevance of furthering our understanding of ambidextrous behavior in that particular context.

Thus far, we lack knowledge about the perception of organizational resilience and ambidexterity by employees in general (e.g., Kim, 2020; Shin, Taylor, and Seo, 2012) and among non-family employees in family firms in particular (Tabor et al., 2018). This is surprising, as family firms are not only particularly prevalent in the tourism industry (Hauck and Prügl, 2015; Zehrer and Leiß, 2019), but employee perceptions may also be particularly relevant in this sector, considering that the service sector is highly dependent on the mindset, motivation, and ability of employees, especially in times of change (e.g., Spiess and Zehrer, 2020).

Prior research on ambidexterity has mainly explored the antecedents of creating ambidextrous behaviors and structures (e.g., Kammerlander et al., 2020) as well as the linkage between ambidexterity and firm performance outcomes (Gibson and Birkinshaw, 2004; Lubatkin et al., 2006). In this chapter, we extend prior literature and investigate a novel outcome of ambidexterity: the perception of organizational resilience by employees. The interplay of organizational ambidexterity and perceived organizational resilience from the perspective of the non-family employees in the tourism industry represents a contemporary linkage which offers several contributions for theory and practice alike. We theorize that establishing ambidextrous organizational structures helps to decrease volatility in family firm resilience stemming from environmental complexity, which is particularly important for coping with sudden external shocks. Furthermore, we argue that adopting ambidextrous thinking as a strategic priority elevates the general level of family firm resilience in the eyes of non-family employees, thus fostering long-term survival of those organizations.

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