Developing capacity for continuous renewal of the established firm : a process perspective

This thesis explores how innovation units within structurally ambidextrous established firms evolve over time. The case study is performed in the setting of a large Scandinavian media firm; more specifically in the innovation unit tasked with exploring video content for its parent brand newspaper. I further draw on my informants’ experiences with historical innovation units that emerged from within the newspaper department. I inductively develop a process model that reveals the different structural configurations an exploratory unit traverses as time goes by. I ascertain that the innovation process consists of four distinct, yet interrelated phases: scouting, separating, maturing, and reintegrating. While the main focus of this thesis lies on the exploratory unit, my analysis also reveals several implications for structural ambidexterity on the corporate level. By taking a process approach, my study enriches the currently prevailing static approach and shows that established firms ought to engage in iterative innovation processes to realize the full potential of structural ambidexterity. This enables them to stay innovative and continuously renew themselves. My findings contribute to extant research by offering a process view of how innovation units evolve over time. I propose that the paradox stemming from the innovation division’s need to explore new opportunities while simultaneously maintaining previously explored technologies can be handled by becoming contextually ambidextrous. This finding dilutes the lines between the two organizational ambidexterity modes that are presented in traditional literature as distinct. My research further suggests that structural ambidexterity is not a one-time decision, but rather an iterative process. This study also has practical implications for managers tasked with innovation. From the exploratory unit’s perspective, managers should see the bigger picture (i.e. their contribution to the focal firm’s strategic renewal) and internalize the natural progression of the relationship with the established firm over time. Further, it highlights the necessity to train generalists and create a context that enables employees to handle the emerging exploration-exploitation dilemma. On the corporate level, this study reveals that top managers need to constantly manage several innovation processes to ensure sustained innovativeness. It thus highlights the value of managers who have experience with the innovation process for building the required change capacity. Moreover, it requires managers from the established firm to continuously assess how mature an innovation is and to adapt the organizational structure accordingly