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Sebastiaan Mees ten Oever

10514910

The effect of team climate on team

ambidexterity and team performance

The moderating role of political skill

July 2016

Master Thesis

MSc Executive Master in Management

Thesis Coach: Andreas Alexiou

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Preface

This thesis is the last chapter of my academic education. Looking back at the last two and a half years, I have to say that it was a very hectic period. Before starting this enormous challenge, I was told that completing a master’s degree next to a full-time job would have some impact on your life. Writing this preface, I can tell you that not one word of it was a lie. Nevertheless, I also enjoyed this period, especially the last couple of months, in which I was finishing this thesis. With the end in sight this meant that I could become the proud owner of a master’s degree in business studies.

I would like to thank my first thesis coach Pepijn van Neerijnen for helping me to find the right direction towards a good literature gap. Unfortunately, you became ill and I hope you are doing better by now. Special thanks to my second thesis coach Andreas Alexiou, you were incredible helpful. The struggles I had with my literature review, theoretical model and the analyses in SPSS were clearly and productively solved. My employer ENGIE is not to be forgotten, without the support of my colleges this thesis would not have been written. I would also like to thank Imke, who was never too busy to hear me complain in difficult times. She always helped me to get back on track. Lastly, I would like to thank my incredible supporting parents Annemarie and Stephan. This thesis would have never been written without the support and wisdom you have given me in the past.

With humble pride and feeling of accomplishment, I present you this master thesis. The outcome is knowledge accumulated with my ability after following many courses on the Roetereiland.

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Abstract

In the current business environment many companies in technological industries rely on their employees who operate in teams. A popular and returning theme in a lot of organizational literature is that organizations that apply ambidexterity are successful in a dynamic environment. Understanding team performance is for companies crucial to the success of their organization. This thesis contributes to this subject by investigating how team climate in teams can affect team performance. By applying theory from earlier research, I argue that team climate has a positive effect on exploitation and exploration creating team ambidexterity. It is through team ambidexterity that team climate affects performance in teams. For this thesis, data is used from sixty teams at three technology companies. This study did not find evidence for all the relationships described above. It shows that team climate has no effect on team ambidexterity. The positive relationship between team ambidexterity and team performance is demonstrated in this study. A moderating effect of political skill by the team leader on the relation between team climate and team ambidexterity was also hypothesized and no significant effect was found. Avenues for future research and managerial implications of these results are being discussed.

Keywords: team climate, political skill, team ambidexterity, team performance, technology, team leaders

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Table of contents

Preface ... 1

Abstract ... 2

Introduction ... 4

Literature review and hypotheses ... 7

Team ambidexterity ... 7

Team performance ... 10

Team climate ... 11

Political skill ... 15

Methods ... 17

Sample and data collection ... 17

Measurement and reliability of constructs ... 18

Analyses ... 21

Results ... 22

Hypotheses tests ... 22

Discussion ... 25

Managerial implications ... 26

Limitations and future research ... 27

Conclusion ... 28

References ... 29

Appendix ... 36

1. Theoretical model ... 36

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Introduction

Pressure for innovation, globalization and dynamic competition are reasons why the use of teams in organizations has increased over the past decades. A popular and returning theme in today’s literature is that organizations apply ambidexterity in a dynamic environment. Especially, the balance between explorative and exploitative innovation has been given a lot of attention (March, 1991). According to many scholars firms should develop ambidextrous strategies in today’s turbulent and competitive environment. This implies that exploratory and exploitative innovation should develop simultaneous (He & Wong, 2004; Benner and Tushman, 2003). Most of the research on ambidexterity focuses on the organizational level and can be defined as “the routines and processes by which organizations coordinate, mobilize, combine and integrate dispersed exploitative and exploratory efforts, and allocate, reallocate and combine assets and resources across differentiated units” (Jansen, 2009). Thus, ambidexterity is an outcome of a process that involves achieving high levels of exploration and exploitation simultaneously. Its success depends on the ability to integrate knowledge processes for the benefits of synergies. Interesting is that at lower levels of the organization, the tension between exploration and exploitation is found to be resolved (Raisch et al., 2009). Integration of exploration and exploitation takes place in multiple teams throughout the organization, not just in the top management teams. Today, firms increasingly work in teams in which the need for ambidexterity is moving from higher to lower levels.

For high-technology firms the environment has become increasingly dynamic and competitive which creates pressure on team performance and the rate of innovations. In the last years this has resulted in enormous growth in literature on team performance. Team climate is a critical factor in understanding team performance according to Loo (2003). Teams are essential in projects for completing complex work. This requires a variety of skills and knowledge, stimulating innovation and creativity, empowering workers and other positive consequences. A lot of organizational research has been done for effective teams. An important factor and contributor to team effectiveness is team climate. In this thesis, I propose that through team ambidexterity, team climate has a positive effect on team performance. Team climate enhances team ambidexterity, it is a mechanism for the

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5 integration of exploration and exploitation, which has a positive effect on team performance.

That ambidexterity positively effects performance on the organizational level (Tempelaar, 2010 and Jansen, 2009) as well as the team level (Raisch et al., 2009) is widely recognized. According to multiple authors, ambidexterity will contribute to performance because exploitation and exploration interact with each other (Lubatkin et al. 2006; He and Wong, 2004; Birkinshaw, 2004). A lot of research has focused on ambidexterity in an organization. Due to the increased usage of teams several studies have examined ambidexterity at the team level. Haas (2010) proves that team ambidexterity is valuable for understanding the concept at the organizational level.

There is an ongoing debate about the mechanisms through which ambidexterity can be achieved at the team level. A promising mechanism is team climate. By facilitating integration within the team between exploitation and exploration, team climate can have a positive effect on team performance. The level of exploitation and exploration through team climate, and its positive effect on team performance, will be studied in this thesis. The aim is to clarify the mediation effect of team ambidexterity between team climate and team performance. In addition, I discuss that the positive effect of team climate on team ambidexterity can be further strengthened when team leaders possess political skills (Ahearn et al., 2004; Zahra, 1985), and through critical discussion and inquiry a shared understanding is created. This will increase high levels of exploration and exploitation having a positive effect on team performance. Therefore, the political skills of a team leader moderate the relationship between team climate and team ambidexterity. Considering all the research that’s done on the subjects, the research question of this paper is:

How does team climate affect team performance through team ambidexterity and what is the role of political skill in this relationship?

The object of this thesis is threefold. Firstly, the aim is to develop a better understanding of the effect of team climate on team performance. Secondly, getting more clarification of the levels of exploration and exploitation to effectuate team ambidexterity. Lastly, this thesis

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6 will increase the understanding of the influencing factors of team performance. As few studies on team performance through teams in high-tech firms exist at the moment, it could be a valuable contribution to the literature. In the manufacturing industry (Edmondson, 1999) a lot of research has been done. This cannot be said of the intensive innovative industries. Whilst some studies (Anderson and West, 2008) have explored the issue of team climate within teams, none of them examined the relationship between team climate and performance of teams. By testing the relationship between the constructs team climate, team ambidexterity, team performance and the moderating effect of political skills of a team leader, this study foresees an understanding of team performance. Figure 1 displays the conceptual model for this research.

Figure 1: Conceptual model

In the next chapter former literature will be analyzed and discussed. This will provide an underlying theory for the constructs and the relationship between them. Next, the formulated hypotheses that operationalize the conceptual model will be discussed. Thereafter, the methods for this study are described. After clarifying the methods, the results will be descripted in a detailed manner. This thesis will round up with the results after which the conclusions will be drawn.

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Literature review and hypotheses

This section includes an extensive review of the literature of the constructs investigated in this thesis. These are team climate, team ambidexterity, political skill and team performance. Also, I will discuss the relationship between the constructs as represented in the theoretical model (appendix 1).

Team ambidexterity

Every firm that searches for long-term success needs to be prepared for tomorrow’s developments while at the same time master dynamic capabilities to satisfy current demands (Gibson & Birkinshaw, 2004). This means that organizations have to deal with exploration and exploitation. Academics have implicitly stated that exploitation and exploration result in contradicting knowledge processes (Simsek, Ling & Veiga, 2006). Exploration implicates the use of knowledge processes, and by combining and externalizing them new technological trajectories can be developed (Nonaka, 1994; Lubatkin et al., 2006). Meanwhile, exploitation utilizes knowledge resources with the intent of refining existing competencies, local search and building upon existing trajectories (He & Wong, 2004; Lubatkin et al., 2006). Organizations build competitive advantages to deal with this contradictory challenge by being ambidextrous. Duncan (1976) was the first to introduce this term derived from Latin to an organizational setting. 15 years later it received more attention in March’s seminal treaty. Ambidexterity has trade-offs in pointing out the simultaneous fulfillment of two unequal (but sometimes competing) ends rather than restraining a selection between two alternatives (Raisch & Birkinshaw, 2008; March, 1991; Eisenhardt & Martin, 2000).

The last 30 years, theorists have been bewildered by adaptive organizations that balance exploitation and exploration which are contradicting (March, 1991). Ambidexterity stresses the orthogonal nature of exploitative and exploratory processes (Tempelaar, 2010; Jansen, 2009; Gupta, Smith & Shally, 2006) contrary to their detachment (Trushman & O’Reilly, 1996; Duncan, 1976) or sequencing (Winter & Szulanski, 2001; Trushman & O’Reilly, 1996). Furthermore, firms have strong incentives to remain flexible towards changes in their environment, and at the same time exploit, select and refine their current capabilities. This

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8 creates the need to embed high levels of both exploitation and exploration. Ambidexterity is defined as “the routines and processes by which organizations coordinate, mobilize, combine and integrate dispersed exploitative and exploratory efforts, and allocate, reallocate and combine assets and resources across differentiated units” (Jansen, 2009). This means that this conceptualization originated from two premises; (1) that the ability to integrate knowledge processes for synergistic benefits depends on the success of ambidextrous pursuits, and (2) that achieving high levels of exploration and exploitation simultaneously is a dynamic process which creates ambidexterity as an outcome.

According to Tempelaar (2010) the synergistic outcomes of the exploitation-exploration paradox depends on integration. By separately integrating exploitative and exploratory knowledge resources, a synergistic and balanced approach may arise within organizations (Tempelaar, 2010; Grant, 1996). Mechanisms for both formal and informal integration has received a lot of attention from researchers (Probst & Trushman, 2009; Raisch et al., 2009; Jansen et al., 2009). Also, longitudinal and cross-sectional studies give support to the synergistic integration of exploitative and explorative activities that provide an increase in performance of the firm (Voss & Voss, 2012; Cao et al., 2009; He & Wong, 2004). These findings make ambidexterity desirable for a firm. The hypotheses in which ambidexterity creates performance is proven in a number of studies (Venkatraman et al., 2006; Atuahene-Gima, 2005).

It is no coincidence that a popular and returning theme in a lot of organizational literatures is that organizations that apply ambidexterity are successful in a dynamic environment. Management of companies has to be efficient and aligned but also flexible enough for the constant changing environment where they operate in for them to still exist tomorrow (Tushman & O’Reilly, 2013). The principle and value behind ambidexterity is that the task, environment and demands of an organization will always be, to some degree, in conflict. In other words, companies have to make tradeoffs. This means that for companies to be ambidextrous they must have the capability to engage in explorative and exploitative activities simultaneously (March 1991, Gibson and Birkinshaw 2004). Exploration refers to radical innovation or innovation for emergent markets or customers, whereas exploitation

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9 entails incremental technological and innovations to meet the needs of existing customers (March 1991, Benner and Trushman 2003).

Less consensus in the literature is found at what level organization ambidexterity can be achieved. Duncan (1976) first used the term structural ambidexterity. This means that organizations put dual structures in place to manage tradeoffs between conflicting demands. It ensures that groups or certain business units focus on adaption while others focus on alignment. Pursuing exploitation and exploration simultaneously can be achieved by having different units that focus on an activity. This method is called structural ambidexterity (Jansen, Van Den Bosch and Volberda et al. 2005a) whereby integration takes place at the top management level. By combining insights, Gibson & Birkinshaw (2004) developed the concept of contextual ambidexterity. Contextual ambidexterity is the behavioral capacity across an entire business unit where individuals have conflicting demands and they have to divide their time between exploitation and exploration.

Thus, ambidexterity is an outcome of a process that involves achieving high levels of exploration and exploitation simultaneously. The success depends on the ability to integrate knowledge processes for the benefits of synergies. Many believe that primary success for a firm is ambidexterity. It will lead to increased firm performance and higher sustained competitive advantage (He and Wong 2004, Benner and Tushman 2003, Raisch et al. 2009, Lubatkin et al. 2006). All the scholars agree on the positive effect of ambidexterity on firm performance.

As described above, most of the literature written about ambidexterity focuses on the organizational level. Crossan, Vera and Nanjad (2008) are one of the first to argue that groups and individuals at the lower level of the organization resolve the tension between exploitation and exploration. Also Haas (2010) showed that there is an increasing importance of ambidexterity in teams at lower levels of an organization. Illustrative is the article of Beckman and Christine (2006) in which they conclude that ambidexterity emerges in teams but is dependent on the composition of the team. This is an important antecedent.

Liu and Leitner (2012) also found out that ambidexterity at the team level contributes to performance. Contrary to the organizational literature, in which exploitation and exploration

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10 are mostly separated, structural separation will not positively contribute to team ambidexterity. It can be concluded that in many organizations the innovation activities are performed in teams (Hülsheger et al. 2009, Edmondson 2002), which underlines the importance of group level analysis. By bringing together specialized knowledge in teams, an environment for ambidexterity arises. Cross-functional interfaces mediate the relationship between ambidexterity and structural differentiation according to Jansen et al. (2009). When different employees with an exploitative or exploratory background, gained in their business unit, join forces ambidexterity will emerge. Therefore, it can be argued that the framework of exploitation and exploration can be extended (Kostopoulos and Bozionelos 2011) to the team level.

Team performance

In 1975 Leavitt wrote an article about the creation of value within teams. Until this point, individuals were seen as the building blocks in an organization. Then the use of teams became larger in most industries because they created more value than individuals. Competition in the current turbulent markets means that companies need to be innovative and flexible to stay ahead of their competitors. To cope with this challenge companies create and work in teams. However, Amason and Sapienza (1997) depicted that managers have to cope with a lot of difficulties within groups. The use of attributes may enhance decision making, such as diversity and creativity, but it can also undermine it. Diversity in a group can create conflicts between team members resulting in less communication and information sharing which affects team performance negatively. When effectiveness decreases and the focus on the team goal is lost, creativity can also have a negative influence on performance (Pearsall et al. 2008). As the long-term sustainability and success of the firm depends heavily on these teams, the performance of these groups became a critical research topic and has been studied comprehensively.

Another definition of team performance is given by Hackman (1983). He states that team performance is the outcome of dynamic processes reflected in communication and coordination that teams develop in time. This definition is of interest to firms and their team leaders who operate in a dynamic and fast moving environment. Teams are thought to be effective and creative in this difficult environment (Guzzo and Salas, 1995). However,

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11 expertise in coordination and teamwork by team members enhance effectiveness in difficult environments as demonstrated by Zhang et al. (2007). According to Ulrich and Eppinger (1995) individuals with different specialties should be brought together for the cause of refining and creating new products. Long-term sustainability and success depend on the formation of teams.

As part of teams, team ambidexterity implies collaboration and simultaneous involvement in both exploitative and exploratory activities. When people with specialized knowledge are brought together in a team, it will create an environment in which team ambidexterity will arise. That ambidexterity positively creates performance on the organizational level (Jansen, 2009) as well as the team level (Raisch et al., 2009) is known. Based on the above, we would expect the following relationships to hold true:

Hypothesis 1 (H1): Team ambidexterity has a positively influence on team performance.

Team climate

One particular area that had a lot of academic interest is organizational climate (Patterson et al., 2005; James, 1982). This construct has been related to, and articulated as shared believes, practices and value systems that an organization follows and that influences the behavior of its members (Janz et al, 1997; Chen & Huang, 2006). An important factor and contributor to team effectiveness is climate. Anderson and West (2008) created the concepts of organizational climate and shared perceptions to grasp the climate of work groups. They explained that three conditions need to exist for a shared climate and shared perceptions at the group level. There must be task interdependence to create shared understandings, interaction between individuals, and team members must have a goal which disposition individuals towards collective action. Organizational theory also posited that climate mediates between work related attitudes, behaviors, and the work environment (Campbell 1970). The level of team climate will provide a shared idea within the work team. This enables the members of a team to have shared meanings of events, which are important for the team. It will determine the actions toward hoped-for outcomes. Therefore, researchers posit that team performance is related to team climate. Many researchers concluded that in organizations the innovation activities are performed in teams

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12 (Hülsheger et al. 2009, Edmondson 2002), it underlines the importance of team level analysis. Important is that Beckman and Christine (2006) conclude that ambidexterity emerges in teams but is dependent on the composition of the team. Thus, ambidexterity is an outcome of a process that involves achieving high levels of exploration and exploitation simultaneously. Its success depends on the ability to integrate knowledge processes for the benefits of synergies. Interesting is that at lower levels of the organization, the tension between exploration and exploitation is found to be resolved (Raisch et al., 2009). Integration of exploration and exploitation takes place in multiple teams throughout the organization, not just in the top management teams. Today, firms increasingly work in teams in which the need for ambidexterity is moving from higher to lower levels.

Earlier studies on the relationship between team climate and team ambidexterity are limited. The principle and value behind team ambidexterity is that the tasks and demands of a team will always be in conflict. Members of teams within a company have to make all kind of tradeoffs. Team climate in an organization captures information that outlines for members how to act ambidextrous and carry out their tasks. We can conclude that team climate shapes organizational events for members, its routines and processes (Kuenzi & Schminke, 2009). So, an important factor and contributor to team effectiveness is team climate. Teams are essential in projects for completing complex work. This requires a variety of skills and knowledge, stimulating innovation and creativity, empowering workers and other positive consequences.

The study of Koys & DeCotiis (1991) and Gonzalez-Roma (2009) considered that four facets are important for team climate. These consists of support from the organization, innovation, goal achievement and enabling formalization. This empowers members to have shared meanings of events, which are important for a team. Because team climate can influence the behavior of its members (Janz et al, 1997; Chen & Huang, 2006), the four facets are brought to attention in this study. Moreover, the facets can be found in the nature of exploitative and exploratory activities which are important for the level of team ambidexterity.

First, the exploitation activity utilizes knowledge resources with the intent of refining existing competencies, local search and building upon existing trajectories (He & Wong,

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13 2004; Lubatkin et al., 2006). March (1991) describes this activity as involvement of incremental technological and innovations to meet the needs of existing customers. We can conclude that the facets goals achievement and support from the organization (Gonzalez-Roma 2009, Koys and DeCotiis 1991), which are important for team climate, can be found in the exploitation activity. Support from the organization can be found in utilizing knowledge recourses. Team members must believe in the support of the organization and their managers. Also goal achievement is important for team members in the pursue of a good team climate. Team members have to put a lot of effort in achieving team goals. This refers to building upon existing trajectories.

Second, the exploration activity refers to the use of knowledge processes, and by combining and externalizing them new technological trajectories can be developed (Nonaka, 1994; Lubatkin et al., 2006). According to Benner and Trushman (2003) exploration refers to radical innovation or innovation for emergent markets or customers. In this activity we find the last two facets of team climate (Gonzalez-Roma 2009, Koys and DeCotiis 1991); Innovation and enabling formalization. The facet innovation in team climate means that new ideas related to work are implemented in teams. This activity can be found in the development of new technological trajectories. The last one is enabling formalization. This is the extent to which procedures and norms are designed. The use of knowledge processes enables team members to improve team functionality and master their tasks.

Last, we can conclude that team climate shapes organizational events for members, its routines and processes (Kuenzi & Schminke, 2009). Because team climate can influence the behavior of its members (Janz et al, 1997; Chen & Huang, 2006) we would expect that if the level of team climate is high it will result in higher levels of exploration and exploitation activities. Thereby, team climate enhances team ambidexterity, it is a mechanism for the output of exploration and exploitation. Given the above we would expect the following relationship to hold true:

Hypothesis 2 (H2): There is a positive relation between team climate and team

ambidexterity.

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14 Thus, all the scholars agree on the positive effect of ambidexterity on firm performance. As part of teams, team ambidexterity implies collaboration and simultaneous involvement in both exploitative and exploratory activities. That ambidexterity positively creates performance on the organizational level (Jansen, 2009) as well as the team level (Raisch et al., 2009) is known. The performance of these teams is a critical research topic and has not been studied comprehensively. Because organizations depend heavily on these teams, this thesis will study the mediating effect of team ambidexterity between team climate and team performance.

First, we expect that, despite the limited research available on this topic, there will be a positive effect of team climate on team ambidexterity. Team climate shapes organizational events for members, its routines and processes (Kuenzi & Schminke, 2009). Illustrative is the article of Beckman and Christine (2006) in which they conclude that ambidexterity emerges in teams but is dependent on the composition of the team. Because team climate can influence the behavior of its members (Janz et al, 1997; Chen & Huang, 2006) we would expect team climate enhances team ambidexterity.

Second, the hypothesis in which ambidexterity creates performance is proven in a number of studies (Venkatraman et al., 2006; Atuahene-Gima, 2005). Liu and Leitner (2012) found out that ambidexterity at the team level contributes to performance. This enables members of a team to have shared meanings of events, which are important for team climate. When people with specialized knowledge are brought together in a team, it will create an environment in which ambidexterity will arise. Moreover, academics have implicitly stated that climate is related to team performance (Gonzalez-Roma 2009, Koys and DeCotiis 1991). Based on the above, we would expect that team ambidexterity will mediate the positive effect of team climate and team performance. Formally:

Hypothesis 3 (H3): Team ambidexterity mediates the positive effect of team climate and

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Political skill

Many researchers have written about the role and work environment of managers or team leaders. According to Tushman and O’Reilly (1996), one of the key sources of ambidexterity are flexible managers. Also Ghoshal and Bartlett (1994) assume that ambidexterity emerges through leaders in a business unit. It is well known that leaders have to operate in harsh environments. It is shared by many academic researchers that organizations or business units are inherently political arenas (Mintzberg 1985).

Pfeffer (1981) was one of the first to use the term political skill in organizational literature. He initiated research that would create more understanding of the construct. He suggested that a person needs to have political skills to be successful. On the other hand, Mintzberg (1983) wrote that possessing political skill means that a person has the ability to negotiate, manipulate and pursue people within organizations. Several years later, Luthans, Hodgetts & Rosenkrantz (1988) assume that, although career success, effectiveness and performance are determined in part by hard work and intelligence there are also other factors such as savvy, positioning and social astuteness that play important roles. To sum it all up, Ahearn, Ferris, Hochwarter, Douglas & Ammeter (2004) combined the efforts to come to the following definition: “The ability to effectively understand others at work, and to use such knowledge to influence others to act in ways that enhance one’s personal and/or organizational objectives”. Therefore, individuals who are politically skilled combine their behavior to different situational demands with social astuteness in a manner that inspires trust and support. They control the responses of others and effectively influence them. Individuals that are politically skilled are calm and have self-confidence that attracts others and give them a feeling of comfort.

Smith et al. (2009) state that political behavior and organizational politics have a less negative reputation than before. Now organizational politics are seen as activities used to reconcile multiple interests and advocate for goals. Political behaviors are tactics or maneuvers employed in organizational politics (Doldor and Singh, 2008). Accepting political behavior says nothing about efficacy or effectiveness of those behaviors. This means that different managers are less or more effective in there behaviors and skills. Ferris et al. (2007)

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16 examined the political skill and organizational politics literature and indicated several aspects that should be included in the conceptualization of the political skill construct. Four critical dimensions of political skill were indicated: apparent sincerity, networking ability, interpersonal influence and social astuteness. The (four) dimensions of political skill are assumed to be related to one another. All the research done on this topic clearly shows that political skill is useful to team leaders.

Strategic management literature shows us that the skills usually are associated with higher management who lobby for resources and power (Zahra, 1985). These managers apply their political skill “upward”. Nobody has looked at managers or team leaders applying their skills “downward”. One topic in this study will be to address this literature gap and look at what team leaders can do to become successful in their job.

Political skills of a team leader are seen as a facilitator to assess team context (Ferris 2007). This is an important precondition before affecting the team climate. Ferris and his colleagues (2007) argue that the political skills of a team leader can ease interaction between team members. This is a meaningful factor and contributor to creativity. Ahearn et al. (2004) states that the political skill of a team leader helps to encourage team members to participate more in their teams. As such, it will increase team performance according to Batt and Applebaum (1995). Also Jawahar and colleagues (2008) conclude that the effect of political skill and self-efficacy on contextual and task performance have a great impact on team performance. It suggests that a team leader with political skills has an impact on the team context. This can be made possible through the leader’s influence on others, his social astuteness and the sincerity of the employees. Based on this proceeding argumentation we argue that:

Hypothesis 4 (H4): Political skill moderates the positive relationship between team climate

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Methods

Sample and data collection

In order to test my hypotheses formulated in the previous section, a cross-sectional study was conducted using the online survey program Qualtrics. Data was gathered from three Dutch technologic organizations who work in teams. Every team consists of at least two members and a team leader. The organizations work and operate in different industries but share similarities. The three organizations are considered high-tech firms and have simultaneous demands for explorative and exploitative tasks in their teams, making the organizations an ideal research setting for the topic of this thesis. The respondents include team leaders and team members. The team leaders had a different survey than the team members. Some variables had identical questions which include team performance and ambidexterity (exploration and exploitation).

The surveys were distributed electronically through work email to get a high respond rate. Non-respondents received a reminder by email after two weeks. In order to increase the response rates after the reminder, non-respondent were called and kindly asked to fill in the survey. In total 347 employees responded to the online survey. This consisted of 64 teams, 280 team members and 64 team leaders for each team. The data was checked for outliers and missing data. In total 6 teams were deleted, 2 teams that consisted of 1 member, three teams of 0 members and one team of 75 members. Of all the participants, 19 team member and 4 team leader surveys were incomplete. Because the data base was large enough, incomplete data of participants was taken out.

The final sample consists of 60 teams and 261 team members. The size of the teams range from 2 to 50 team members (M = 9,95). The distribution of team members between the three organizations is 23,4 %, 24,1 % and 52,5 %. Among all the participants 15,7 % hold a vocational training, 41 % graduated with a bachelor degree, and 43,3 % hold a master degree.

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Measurement and reliability of constructs

The constructs were measured using validated and existing scales from different studies. All the variables were measured in questions on a seven point Likert-scale ranging from 1 = “Fully disagree” to 7 = “Fully agree”. The survey was translated to Dutch for a better understanding among participants. The questions were translated back and forth to English in order to check the quality of the translation. Both team leaders and team members completed two of the measures. One measure was completed by team leaders and team members only. All the questions answered by the respondents referred to the current team they are working in. The following constructs are part of this study: team performance, team climate, team ambidexterity and political skill.

Dependent variable: Team performance

The construct team performance is a dependent variable that is measured in two ways. One being a self-rated measure of team performance by team leaders, the other a team member rated measure. The team leader and team members were combined because that will improve the construct reliability. Both variables were divided equally. Combining the two is a more objective measure of performance. A four-item scale was used to measure this construct, which has been validated and deployed successfully in the past (Shaw et al. 2011). The four items are an adaptation of Sparrowe, Liden, Wayne and Kraimer’s (2001) team performance measurements. The construct is measured on a four-item Likert scale (α = 0,881), ranging from fully disagree to fully agree, each item consisting of seven points. The four items are ”the flexibility in dealing with unexpected changes”, “the efficiency with which work is conducted”, “the quality of work” and “overall performance” (see appendix 2).

Mediating variable: Team ambidexterity

For this variable a two-step approach was used to measure the construct, compared to earlier studies on this topic. Ambidexterity consists of exploratory and exploitative activities and these elements are considered orthogonal (Gibson and Birkinshaw 2004, He and Wong 2004, Jansen et al. 2009). Team leaders and team members had to provide information on their levels of exploitative and exploratory capabilities. Items were designed to capture if a product opens up new markets or if a project extends a product range for the exploration

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19 construct. Exploitation items respectively captured to which a project improves existing quality and to which extent a project refines a product. This is according to previous studies that operationalized exploration and exploitation (e.g. March 1991, Janssen et al. 2006, Benner and Tushman 2003). The exploratory measure consists of a four-item scale and was adapted from Jansen et al. (2006). Respondents were asked to rate the questions using a seven-point Likert scale which consisted of the following to examples: “this project opens up new markets” and “this project extends a product range”. Exploitative innovation was measured with a five-item scale and adapted from Jansen et al. (2006). The extent to which projects “improve existing product quality” and “refine an existing product range” are two examples and were captured according to an seven-point Likert scale (see appendix 2). Both measurements (exploratory and exploitative activities) were combined to create one variable(α = 0,760), team ambidexterity. Team ambidexterity was calculated by using an additive of exploitation and exploration as followed by previous studies. This is according to the balanced dimension of ambidexterity of Coa et al. (2009). By adopting the measures it will reflect arguments that both types are interdependent and non-substitutable (Lubatkin et al. 2006). In the results section the larger concept of team ambidexterity will be investigated.

Independent variable: Team climate

The construct team climate is an independent variable that is measured in one way. The questions are a self-rated measure of team climate by team members. The scales for measuring team climate were extracted from Patterson et al (2005) and adapted for this study. During the analysis, question 1 and 3 were recoded because of opposite scale outcomes in the answers. To measure team climate respondents were asked to indicate on a five-item Likert scale. The second analysis gave a Cronbach’s Alpha of 0,766. The five-items are: “people can ignore formal procedures and rules if it helps get the job done”, “everything has to be done by the book”, “it is considered extremely important here to follow the rules”, “nobody gets too upset if people break the rules around here” and “it’s not necessary to follow procedures to the letter around here” (see appendix 2).

Moderating variable: Political skill

The variable political skill (α = 0,935) of the team leader was measured on a nine-item scale. It is based on Ferris, Davidson and Perrewé (2005) and modified to the needs of this thesis.

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20 This scale has proven to be a consistent construct validity (Ferris, Treadway et al., 2005) and an important tool for measurement in the political skills literature (e.g. Lui et al., 2007; Ahearn et al., 2004; Blickle et al., 2008). The political skill questions in the survey were labeled “Skills and Competences” to counteract possible response bias because supervisors had to respond on their own political skill. For this variable a dummy was made to divide the skills of team leaders in low political skill and high political skill. The median (4,8889) was used to divide the skills. For this variable Items include “I understand people well”, “I am able to make most people feel comfortable and at ease around me”, “I am good at getting others to respond positively to me” and “I have good intuition or savvy about how to present myself to others” (see appendix 2).

Control variables

Various relevant control variables are included in this study for possible alternative explanations. The number of team members can have significant influence on team ambidexterity, team learning and performance as demonstrated in earlier studies (Ancona and Caldwell, 1992). Education was measured as the highest level of training; ranging from “Vocational training”, “Bachelor” to “Master” degree. According to Hambrick et al. (1984), strategic choices and performance levels are predicted by the background of managers. An important characteristic of a manager’s background is the level of training, where a high education level could increase performance. The variable organization is included because of the difference found in the raw data between the three companies. The companies have the same background but the data showed differences in education level between team leaders en team members. The total number of working years of a team leader or team member was measured in total years of work in this industry, total years of work in this organization and years of work in the current team. According to Stasson & Bradshaw (1995), if the last three control variables are high it means that an employee has a wider range of expertise resulting in higher output.

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21

Analyses

The hypotheses were tested by using the “Process” tool for SPSS 23 developed by Hayes (2003). A standard bootstrapped test (10.000 samples) was used to confirm the results. The regression analyses, model 7 in Process, was used to test two models. Hypotheses one and four were tested by model 1 in order to find evidence for the presence of political skill and it’s moderating effect between team climate and team ambidexterity. The second model consisted of hypotheses two and three. This analyses will show the direct effect of team climate on team performance. It will also demonstrate the mediating effect of team ambidexterity between team climate and team performance. The control variables are specified for both tests to co-vary with the dependent variable and the mediator.

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22

Results

The correlation and descriptive statistics between variables are displayed in table 1. In this table the control variables are included and the Pearson correlation was used to create this output. The assumptions were checked including the Tolerance statistics and variance inflation factors (VIF). The score of VIF is well below the rule of thumb of five. For the Tolerance statistics every variable scored above .2 as it should. What followed was the check on residuals. Every variable in this analyses was divided equally. The homoscedastic test was positive and came out random, however, with some imagination it is possible to see a small formation of two groups. At last, the linearity plots between the predictors and the dependent variable, were inspected, which came out positive. The only test that came out moderate was the assumption of autocorrelation as the Durbin-Watson (.407) was low. The analyses were pursued despite this last outcome.

Table 1: Descriptive statistics

Hypotheses tests

This study hypothesized that team ambidexterity mediates the relationship between team climate and team performance, as well as a moderating effect of political skill on the relationship between team climate and team ambidexterity. The hypotheses in this study were tested employing two models that are depicted in table 2.

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23

Table 2: Results of Regression Analyses

As a first step, the direct effect of the independent variable team climate on the mediator team ambidexterity was regressed in model 1. The standardized regression coefficient illustrates that the effect is positive and not significant (β = .0155, p > 0.05), hereby hypothesis one is rejected. The second step involved testing the moderating role of political skill between the independent variable team climate and the mediator team ambidexterity. Model 1 shows that this effect is positive and not significant (β = .0891, p > 0.05). The interaction output (team climate multiplied by political skill) for this moderator is also negative and not significant (β = -.0622, p > 0.05). This moderated regression analyses has no support for hypothesis four, therefore, it is also rejected.

For model two the first regression analysis is done between the direct effect of the independent variable team climate and the dependent variable team performance. As

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24 shown by the standardized regression coefficient in model 2, this effect is negative and not supported (β = -.0395, p > 0.05), therefore, rejecting hypothesis three. Testing the last hypothesis involved the mediating role of team ambidexterity. This was done by an examination of the direct effect of team ambidexterity on team performance. Model 2 shows that this effect is positive and significant (β = .2054, p < 0.01), hereby supporting hypothesis two.

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25

Discussion

Ambidexterity is a popular theme in a lot of organizational literature due to its performance benefits for firms. The objective of this study was to find more evidence regarding the relationship between team climate and team ambidexterity. It was hypothesized that team ambidexterity mediates the relationship between team climate and team performance, as well that political skill has a moderating effect on the relationship between team climate and team ambidexterity. This meant positioning team ambidexterity in a role with a mediating mechanism.

In this thesis the variable team climate was introduced to study its effect on team ambidexterity. According to Loo (2003), teams are essential in projects for completing complex work. This requires a variety of skills and knowledge that stimulate innovation and creativity, empower workers and has other positive consequences. A lot of organizational research has been conducted into effective teams. An important factor and contributor to team effectiveness is team climate. Anderson and West (2008) created the concepts of organizational climate and shared perceptions to grasp the climate of work groups. This study has hypothesized that team climate functions as an antecedent to team ambidexterity, and that team ambidexterity mediates the relation between team climate and team performance. It showed what the effect of a climate in a team has on the level of team ambidexterity and team performance in a firm. Rather than assuming that team ambidexterity is important for team performance, the findings emphasize a positive but unsupported relation between team climate and team ambidexterity. The direct relationship between team climate and team performance was also positive and unsupported.

The second part of this thesis is about the degree of political skill that a team leader possesses. This study enriched the role of political skill by studying its’ indirect effect as a moderator to the team ambidexterity hypotheses. Ahearn et al. (2004) states that the political skill of a team leader helps to encourage team members to participate more in their teams. This will also increase team performance according to Batt and Applebaum (1995). Jawahar and colleagues (2008) concluded that the effect of political skill and self-efficacy on contextual and task performance has a great impact on contextual performance. We

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26 presumed that the political skill of a team leader in an organization alters the strength of the relation between team climate and team ambidexterity. Furthermore, in the presence of high political skill by a team leader, a team climate is established that inclines exploitation or exploration dominance with a more optimal state of team ambidexterity. This scenario was hypothesized and the result is a negative relation resulting in an unsupported hypothesis. Finally this study makes a presumption that higher levels of team ambidexterity lead to better team performance. In pursue of higher exploitation and exploration, employees need to cooperate and combine their efforts while sharing knowledge. Many believe that the primary success of a firm is ambidexterity. It will lead to increased firm performance and higher sustained competitive advantage (He and Wong 2004, Benner and Tushman 2003, Raisch et al. 2009, Lubatkin et al. 2006). All the scholars agree on the positive effect of ambidexterity on firm performance. This study confirms the positive relation between team ambidexterity and team performance. The results are positive and supported.

Managerial implications

The findings that are presented in this study have a number of practical implications. The first and most obvious one is the importance of ambidexterity within teams. For team leaders and their political skill it implies that they should create a team climate that stimulates team members. With regards to organizations as a whole this means that for team members to be ambidextrous, they must have the capability to engage in explorative and exploitative activities simultaneously (March 1991, Gibson and Birkinshaw 2004). This study implies that the organization must facilitate team leaders to motivate team members, and that, if the level of team ambidexterity is maximized, it will have a positive influence on team performance.

Nevertheless, it is recommended that team leaders work closely with team members to monitor team climate. The level of political skill that a team leader possesses can have an influence on the team members. It is, therefore, of great importance that a team leader has this ability. Overcoming this challenge can benefit the organization for it creates a higher team ambidexterity enabling an enhanced team performance.

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27

Limitations and future research

There are several limitations in this study that open up possibilities for future research. The first concerns the surveys that were distributed electronically through work email. These consisted of 64 teams, 280 team members and 64 team leaders. The team leaders and team members filled in different surveys with questions considering the topic of this research. In the survey of the team members there were no questions that evaluated team leaders on their political skill. Team leaders only assessed themselves in the team leader survey. The political skill questions in the survey were labeled “Skills and Competences” to counteract possible response bias because supervisors had to respond on their own political skill. This variable could have been more reliable if team members had judged the political skill of their team leader. As mentioned earlier, a higher or lower political skill of a team leader affects the relationship between team climate and team ambidexterity.

A second limitation involves the normality test of the variable political skill. The outcome was skewed to the left because the political skill of the team leader was coupled to his team members in the analyses. In future research a survey in which team members evaluate team leaders on their political skill could provide a better insight into its moderating effect.

Furthermore, three control variables showing the years worked in their industry, organization, and team were used in the analyses. The outcome from this normality showed data that was skewed to the left. The reason for this was that a lot of young people work for technology companies. As a result, the few older employees that participated in the teams influenced the normality test.

A fourth limitation in this research involves a self-reporting issue. Team performance was measured through the input of team members and team leaders. There were no issues with reliability and validity in the exploratory factor analyses, but it would be useful for future studies to use other measures that are more objective.

Last, future studies on this topic could include other outcomes or control variables such as completion time of a project, quality of a completed project, or type of education instead of degree. Such outcomes could be very important in the current business environment where low costs, fast innovation and high quality are necessary to keep up with competitors.

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28

Conclusion

In this study many factors have been shown that affect team performance, both directly or indirectly. The relation between team climate and team performance has not received a lot of attention amongst scholars and its effect has never been demonstrated. In this research its effect on team performance is not supported. This study illustrates that teams with high team climate have no significant impact on the level of team ambidexterity. According to many scholars, team ambidexterity has a positive influence on team performance; this study acknowledges this effect. In addition, a moderating effect of political skill on the relation between team climate and team ambidexterity was suggested, but no significant result was found. Consequently, this thesis showed that team climate and political skill as a moderator do not have a significant effect on the outcomes of team ambidexterity and team performance.

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Appendix

1. Theoretical model

2. Survey questions

All items are rated on a seven-point Likert scale (Fully disagree – Fully agree)

Team performance (survey team members and team leader) The quality of the work

The efficiency with which work is conducted The flexibility in dealing with unexpected changes Overall performance

Ambidexterity (survey team members) Exploration

The project extends a product range The project opens up new markets

With this project we enter new technological fields

This project can be regarded as an experiment in our local market

Fully disagree Fully agree

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37 Exploitation

This project refines an existing product range This project improves existing product quality

This project introduces an improved, but existing project to an existing market. This project reduces production costs

This project improves yield or reduces material consumption

Team climate (survey team members)

In this team it is considered extremely important to follow the rules

In this team people can ignore formal procedures and rules if it helps get the job done Everything has to be done by the book in this team.

It’s not necessary to follow procedures to the letter in this team Nobody gets too upset if people break the rules in this team.

Political skill (survey team leader)

I find it easy to envision myself in the position of others.

I am able to make most people feel comfortable and at ease around me. It is easy for me to develop good rapport with most people.

I understand people well.

I am good at getting others to respond positively to me. I usually try to find common ground with others.

I always seem to instinctively know the right thing to say or do to influence others. I have good intuition or savvy about how to present myself to others.

I am particularly good at sensing the motivations and hidden agendas of others.

Fully agree Fully disagree

Fully agree Fully disagree

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