When Balance Meets Context: How Internal Conditions Shape Organizational Performance

What is it about?

This study explores how firms translate contextual ambidexterity—the ability to balance exploration and exploitation—into better performance. It highlights four factors shaping this conversion: two tied to knowledge exchange (informational justice and task conflict) and two linked to internal competition (resource competition and reward interdependence). The model proposes that fairness, collaboration, and efficient internal dynamics determine how effectively organizations turn ambidexterity into superior outcomes. Using data from Canadian firms, the study shows that contextual ambidexterity enhances performance when employees perceive high informational justice—open and fair information sharing—and when rewards promote interdependence over rivalry. Conversely, high task conflict or resource competition weakens this benefit by creating internal friction. The findings suggest that firms perform best when strategic balance is supported by fairness in communication and cooperation in rewards and resources. For practitioners, the findings highlight the importance of creating systems that sustain both balance and collaboration. Firms should encourage transparent communication and collective reward mechanisms while minimizing destructive internal competition. By managing conflict constructively and ensuring fair access to information, leaders can amplify the performance benefits of contextual ambidexterity and promote innovation without sacrificing cohesion.

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Photo by Vitaly Gariev on Unsplash

Photo by Vitaly Gariev on Unsplash

Why is it important?

This study is unique in identifying four internal contingencies that shape how contextual ambidexterity translates into firm performance. By integrating knowledge exchange and competitive environment dimensions, it presents a more complete view of how internal fairness, cooperation, and competition influence strategic outcomes. It extends prior work by showing that the success of ambidexterity depends as much on organizational climate and fairness as on structural or strategic design. Its timeliness lies in offering guidance to firms in Canada and elsewhere as they navigate increasingly complex and competitive environments. In a world where organizations must innovate while maintaining efficiency, this research shows how balancing internal collaboration with healthy competition can unlock the full potential of ambidexterity and drive sustained performance.