Master Thesis

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Master Thesis

The Relationship Between Teleworking and Managerial Ambidexterity

Student Yorick Vlaar

Student number 12890642

Masters programme Executive Programme in Management Studies – Strategy Track Thesis supervisor: Dhr. dr. B. Flier

Date of submission June 29th 2021

University of Amsterdam – Amsterdam Business School / Master Thesis

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Statement of Originality

This document is written by Student Yorick Vlaar who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

Signature ___________________________________________

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3 Table of Contents

Abstract ... 4

1. Introduction and literature review ... 5

2. Theory and hypotheses ... 9

2.1 Organizational learning ... 9

2.2 Managerial ambidexterity ... 10

2.3 Teleworking and managerial ambidexterity ... 12

2.4 Conceptual model ... 14

3 Methodology ... 14

3.1 Research design ... 15

3.2 Unit of analysis ... 15

3.3 Target group and sample ... 15

3.4 Measurement and Validation of Constructs ... 16

3.4.1 Dependent variable: exploitation activities ... 16

3.4.2 Dependent variable: exploration activities ... 17

3.4.3 Independent variables: teleworking and working at the office ... 18

3.4.4 Control variables ... 19

3.5 Data analysis ... 19

3.6 Generalizability, validity & reliability ... 20

4 Results ... 21

4.1 Univariate analysis ... 21

4.2 Correlation analysis ... 22

4.3 Hierarchical regression ... 23

4.4 Independent samples t-test ... 25

4.5 Theoretical framework and relations ... 26

5 Discussion and Conclusion ... 27

6 Managerial implications ... 32

References ... 33

Appendix A Survey ... 37

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4 Abstract

This study aims to research the relationship between teleworking and managerial ambidexterity.

Due to the current Covid-19 pandemic, most organizations are active in a dynamic business environment. One of the consequences of the pandemic was that managers were obliged to participate in any form of teleworking. Previous studies have shown the importance for ambidextrous managers to focus on explorative activities in situations of environmental dynamism. However, the relationship between teleworking and managerial ambidexterity is an underdeveloped field of research.

The proposed hypotheses have been tested by analysing the responses of 114 managers mostly active in the facilities industry. No significant evidence was found for a positive relationship between teleworking and exploitation. We were able to find a significant relationship between teleworking and exploitation. However, this relationship was tested positive rather than the hypothesized negative relationship. Lastly, no significant differences in the participation in both exploitative and explorative activities between teleworkers and office workers were found. The findings of this study imply that managers can participate in explorative activities when they are teleworking. Since we have not been able to research the influence of the activities and skills of ambidextrous managers on the relationship between teleworking and ambidexterity, we suggest future research into this field.

Keywords: Teleworking, managerial ambidexterity, exploration, exploitation, environmental dynamism.

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5 1. Introduction and literature review

So far, little has been known about the relationship between teleworking and managerial ambidexterity. Ambidexterity, which can be defined as “the ability to simultaneously pursue both incremental and discontinuous innovation and change results from hosting multiple contradictory structures, processes, and cultures within the same firm” (Tushman & O’Reilly, 1996: 24) has a relationship with organizational performance (O’Reilly & Tushman, 2013;

Gibson & Birkinshaw, 2004; Jansen et al., 2012; Junni et al., 2013). Ambidexterity is the combination of both exploration and exploitation and is required for long term survival (O’Reilly & Tushman, 2013). Others, such as Gibson and Birkinshaw (2004) and Jansen et al.

(2012), seem to agree that organizational ambidexterity fosters firm performance. An organization should be able to do so when it is focussing on both exploration and exploitation (O’Reilly & Tushman, 2013; Gibson & Birkinshaw, 2004). Exploration can be explained as seeking new business opportunities, whereas exploitation can be explained as improving productivity and efficiency (March, 1991).

To be able to operationalize ambidexterity, He and Wong (2004) studied whether the firm performance would benefit from the simultaneous pursuit of explorative and exploitative activities. They found that the interaction between explorative and exploitative activities fosters sales growth rate. Others such as Cao et al. (2009) elaborated on this view by indicating that firms that possess sufficient resources will benefit from the simultaneous pursuit of explorative and exploitative activities. To achieve ambidexterity, theory distinguishes between temporal, structural and contextual ambidexterity (Tushman & O’Reilly, 1996). Temporal ambidexterity refers to organizations making trade-offs between exploration and exploitation based on the dynamics of the markets in which they are active (Tushman & O’Reilly, 1996). Structural ambidexterity can be best described as organizations using separate business units to either be active in standard operations (exploitation) or be active in seeking new business opportunities

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6 (exploitation) (O’Reilly & Tushman, 2004; Turner et al., 2013). Lastly, contextual ambidexterity refers to the ability to be both active in exploration and exploitation (Gibson &

Birkinshaw, 2004).

Studies have shown the moderating effect of environmental dynamism on the relationship between organizational ambidexterity and organizational performance (March, 1991; Jansen et al., 2006; Wang & Li, 2008). Environmental dynamism can be defined as the rate and the instability of changes in the environment (Dess & Beard, 1984). One of the first authors that indicated that the structure of an organization depends on the environment in which the organization is active were Burns and Stalker (1961). They advocate that organizations operating in stable environments develop mechanistic management systems, and organizations that operate in turbulent environments develop organic management systems. Situations of environmental dynamism make that current products and services are valued as obsolete and therefore new products and services need to be developed (Janssen, 2006). To develop new products and services, organizations should focus on explorative activities (Janssen et al., 2006). These authors found that organizations that pursue explorative activities in situations of environmental dynamism are likely to increase their financial performance, whereas organizations that pursue explorative activities in turbulent business environments are likely to decrease their financial performance (Janssen et al., 2006).

By adding the individual as a new level of analysis, researchers have been able to create theories on managerial ambidexterity (Mom et al., 2007; Mom et al., 2015; Birkinshaw &

Gibson, 2004; Good & Michel, 2013). Managers play a central role in organizations when connecting operational management with strategic management (Floyd & Lane, 2000). Mom et al. (2007) argue that managerial ambidexterity enables managers to fulfil this role.

Managerial ambidexterity is a construct that exists of exploitative and explorative activities (Mom et al., 2007). Exploitative activities require managers to rely on their interpersonal skills

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7 by having a short-term focus (Mom et al., 2007). Explorative activities require managers to rely on their intra-personal skills by having a long-term focus (Mom et al., 2007). Mom et al. (2015) argue that managers’ performance depends on their ability to meet requirements that are not listed in their job description. Two of these requirements are work context uncertainty and work context interdependence (Mom et al, 2015). Work context uncertainty is a construct in which managers must meet their requirements in exceptional or novel circumstances (Mom et al., 2015). Work context interdependence requires a manager to socially interact with others to collaborate and create networks (Mom et al., 2015).

Driven by the Covid-19 pandemic, business around the world seem to be active in situations of high environmental dynamism. As one of the outcomes, more and more managers are teleworking (CBS, 2021). Both advantages and disadvantages arise when managers telework. Two main advantages of teleworking relate to the personal aspect. Job satisfaction improves and performance increases (Haddon & Lewis, 1994; Baily & Kurkland, 2002; Boell et al., 2013; Baruch, 2001). The main disadvantage of teleworking is the disability to participate in the informal culture of an organization (Haddon & Lewis, 1994; Baruch, 2001; Boell et al., 2013). The need for managers to deal with work context uncertainties, together with the advantages of teleworking make us suspect that managers that are teleworking are not hindered to continue performing exploitative activities. The need for managers to deal with work context interdependencies, combined with the disadvantages of teleworking make us suspect that managers are less able to perform explorative activities when they are teleworking. Since previous studies have shown that situations of high environmental dynamism require managers to focus on explorative activities (Janssen et al., 2006), we feel the need to research this field.

To do so, the following research question is proposed:

What is the impact of teleworking on managerial ambidexterity?

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8 To answer the research question, the following sub-questions are proposed:

Sub question 1: Will teleworking be positively related to the extent to which managers engage in exploitation activities?

Sub question 2: Will teleworking be negatively related to the extent to which managers engage in exploration activities?

Sub question 3: Will managers who are working at office locations engage more in exploration and exploitation activities compared to managers that are teleworking?

To generate data, questionnaires have been sent to managers that are working in the facilities industry. Managers that are active in this branch are known for their execution of both explorative and exploitative activities. Furthermore, these managers are both teleworking and working at office locations. The survey is spread to facility managers in the Netherlands during the period of three weeks by using convenience sampling and snowball sampling.

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9 2. Theory and hypotheses

2.1 Organizational learning

First studies into the field of organizational learning explained balancing between exploration and exploitation as making distinctions between the refinement of existing technologies or inventing new technologies (March, 1991). Theory argued that both exploratory learning and exploitative learning are fundamentally incompatible because both require scarce organizational resources (March, 1991). Long periods of exploitation were alternated by short bursts of exploration due to punctuated equilibrium (Burgelman, 2002). Because organizations need to make explicit and implicit choices between the two, scarce resources were distributed amongst either exploitation or exploration activities (March, 1991). Assigning resources to separate business units was the main driver for achieving structural ambidexterity (Levinthal &

March, 1993). Next to the perspective of structural ambidexterity, other researchers developed theory from the perspective of contextual ambidexterity. This theory suggests that when exploration and exploitation are combined, they form a dynamic learning cycle (Katila &

Ahuja, 2002). To be able to leverage the complementarities of both exploration and exploitation, organizations should pursue both activities simultaneously (Birkinshaw & Gibson, 2004; Gupta et al., 2006). Both adaptability - discussed as the ability to create new opportunities, and alignment - the possibility to create and deliver value in the short term – need to be mastered to succeed over the long term (Birkinshaw & Gibson, 2004). Finding the right balance between adaptability and alignment was discussed as the best path to achieve ambidexterity (Birkinshaw & Gibson, 2004; Gupta et al., 2006). Latest studies argue that resource-constrained organizations foster from balancing exploration and exploitation, whereas combining exploration and exploitation is more beneficial to firms having access to both internal and external resources (Cao et al., 2009; He & Wong, 2004). In practice, organizational ambidexterity is reliant on both human capital and social capital (Raisch & Birkinshaw, 2008).

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10 Human capital happens to be the knowledge, skills, and abilities of the individuals working at an organization. Social capital can be explained as the willingness and motivation of these individuals to pursue ambidextrous activities (Wasko & Faraj, 2005)

2.2 Managerial ambidexterity

Floyd and Lane (2000) explain the role of middle management as the hub through which strategic information flows. Middle management is obliged with the role of interacting with both operating management as well as top management (Floyd & Lane, 2000). Mom et al.

(2007) argue that managers can fulfill their role because of their managerial ambidexterity.

Managerial ambidexterity is a construct that consists of both exploration and exploitation activities (Mom et al., 2007). The essence of exploitation activities is that managers refine their knowledge, extend their existing competencies, focus on production and adopt a short-term orientation (Mom et al., 2007). Exploration activities are activities in which managers search for new organizational functions such as norms, routines, systems and structures, experimenting with new business processes, and adopting a long-term orientation. Later studies of Mom et al.

(2015) show that managerial ambidexterity fosters individual performance in situations of uncertainty and interdependent work context. According to these authors, the performance of managers is not only based on formal requirements, but also informal requirements. Uncertainty and interdependence are two constructs that are oftentimes not described in job descriptions but are of high value. Uncertainty can be best explained as situations in which managers encounter new situations, difficulties that managers may experience with anticipating problems and demands, varieties in requirements that need to be encountered, and unclearness about how these requirements effectively need to be met (Mom et al., 2015). Interdependence is a construct in which managers must collaborate and interact with others to enable them to meet the demands that they face. Driven by the Covid-19 pandemic, we see that managers have to deal

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11 with uncertainty and interdependence in situations when they are working from other locations as their traditional office (CBS, 2021).

The degree to which managers can perform both explorative and exploitative activities might be influenced by the organizational context in which managers are active (Birkinshaw &

Gibson, 2004). As one of the first conducting research into contextual ambidexterity, Birkinshaw and Gibson (2004) argued that contextual factors such as stretch, trust, discipline and support may influence managers’ ambidextrous behaviour. These contextual antecedents enable managers to make decisions between the execution of explorative and exploitative activities (Birkinshaw & Gibson, 2004). Others have argued that leadership style (Kauppila &

Tempelaar, 2016), team behavioural integration (Lubatkin et al., 2006) and shared team vision and team reward structures (Jansen et al., 2008) are contextual aspects that can influence the ability of a manager to participate in ambidextrous behaviour

Next to the contextual aspects of managerial ambidexterity, the degree to which managers can demonstrate ambidextrous behaviour might be influenced by their characteristics (Raisch et al., 2009). Previous studies have shown the influence of managers’ personality traits and intrinsic motivation on the construct managerial ambidexterity (Kao & Chen, 2016). These authors have been able to demonstrate a relationship between managers’ intrinsic motivation, managerial ambidexterity, and the moderating role of emotional intelligence. Others, such as Rosing et al. (2011) argue that high levels of emotional intelligence result in variation of task adaptive performance and managerial ambidexterity. Lastly, Smith and Tushman (2005) have shown that paradoxical thinking, or the ability of a manager to deal with contradictory demands, may influence managers’ ambidexterity. These authors have demonstrated the influence of cognitive ability and cognitive flexibility on managers’ ability to embody ambidextrous behaviour (Smith & Tushman, 2005).

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12 2.3 Teleworking and managerial ambidexterity

Baruch (2001) explains that teleworking is a construct that has its origins in the late 1950s. The idea was that both technological innovations and the development of electronics and communication systems enabled work to be relocated to locations other than the traditional office. During the 1970s and 1980's the interest in teleworking expanded with its climax in the 1990s, when studies suggested that the virtual organization would be the next big new thing (Baruch, 2001). Although much was expected from this new way of working, actual figures showed that back in the 1990s, only less than 1% of the employees are using teleworking (Baruch, 2001). To enable employees to telework, four factors need to be in place (Baruch, 2001). These factors are: 1) the actual job that needs to be done, 2) the characteristics of the organization, 3) the home/work interface, and 4) the individual that is teleworking. The latter is concerned with the impact of teleworking on the individual and is comprised of five factors, namely: the identity (changed conceptions in multiple roles of the individual), the skills (development or atrophy of skills), the context (use of time and space), the role demands (changes in priorities and demands), and the role outcomes (changes in attitudes and satisfactions) (Baruch, 2000). Over the past years, multiple advantages of teleworking have been proposed. When looking at personal advantages, productivity and job satisfaction are mentioned in most studies (Haddon & Lewis, 1994; Baily & Kurkland, 2002; Boell et al., 2013;

Baruch, 2001). Other aspects, such as financial advantage, an increase of work-life balance, spatial mobility, and increased work autonomy have been demonstrated (Baruch, 2001; Boell et al., 2013).

Mom et al. (2015) argue that managers need to be able to deal with work context uncertainty. To do so, managers need to fulfill multiple roles and multiple tasks simultaneously (Mom et al., 2015). Ambidextrous managers can fulfill these multiple roles because they can switch back and forth between routines and activities. (Mom et al., 2015). Furthermore, work

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13 context uncertainties ask for greater information processing (Mom et al., 2015). Lastly, ambidextrous managers are motivated to take initiative and act on unanticipated change (Mom et al., 2015). We see multiple similarities in the advantages of teleworking, the essence of exploitative activities and the work context uncertainty in which ambidextrous managers are active. Therefore, we argue that managers should be able to engage in exploitation activities when they are teleworking. This leads to the following hypothesis:

H1: Teleworking will be positively related to the extent to which managers engage in exploitation activities

Haddon and Lewis (1994) indicated the informal culture of work and the inability to participate in this informal culture as one of the most negative outcomes of teleworking. Later studies show that the most recognized shortcomings of teleworking are less influence over people and events, questionable job security, lower visibility, work-life blurring, and interruptions (Baruch, 2001;

Boell et al., 2013). According to Mom et al. (2015), ambidextrous managers can cross interfirm vertical and horizontal boundaries to build and maintain personal networks. By doing so, managers create opportunities for collaboration, are looking to build internal linkages, and create possibilities to manage interdependencies (Mom et al., 2015). To manage these interdependencies, a manager is dependent on his or her social skills and possibilities to interact with others (Mom et al., 2015). When taking the disadvantages of teleworking, the essence of explorative activities and the work context interdependencies of managers into consideration, we hypothesize that managers will be less able to engage in exploration activities:

H2: Teleworking will be negatively related to the extent to which managers engage in exploration activities

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14 We believe that both advantages and disadvantages of teleworking enable, or disable managers to perform explorative and exploitative activities. The Covid-19 pandemic makes that managers are teleworking, however, there are still managers that are working from office locations. To test whether managers that are working at office locations are engaging more in both explorative and exploitative activities, we formulated the following hypotheses:

H3a: Compared to managers that are teleworking, managers that are working at the office will engage more in exploitation activities

H3b: Compared to managers that are teleworking, managers that are working at the office will engage more in exploration activities

2.4 Conceptual model

To answer the proposed research question, a research design has been formulated. The design of this study is shown in exhibit 1:

Exhibit 1: Conceptual model H3a +

H3b + H2 - H1 + Teleworking

Exploration Exploitation

Working at the office

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15 3 Methodology

3.1 Research design

To answer the research question “what is the influence of teleworking on managerial ambidexterity” and the proposed hypotheses a survey is conducted. Previous research shows that managerial ambidexterity is a construct that can be analysed with the use of questionnaires (March, 1991; Mom et al., 2007). By using questionnaires, we were able to gather sufficient data to answer the research question. We performed a cross-sectional study and thereby compared the performance of multiple managers during a period of three weeks.

3.2 Unit of analysis

This research is conducted at the individual level, managers in specific. The gathered data enabled us to conclude at the level of these individuals.

3.3 Target group and sample

The target group for this study were managers that are working in situations of contextual ambidexterity. These managers are participating in both exploitative and explorative activities.

We needed to include managers that are working at home and managers that are working at the office. Managers are selected who are working in large, medium and small-sized organizations.

Ideally, these managers are active in the service industry in the Netherlands. Managers that meet these criteria are facility managers. Facility managers are known for their focus on day to day tasks, as well as the long-term strategic development of their department and are active in multiple business sectors (Kincaid, 1994). We strived to reach a wide variety of facility managers, to minimize threats to external validity. The facility managers are selected with the use of convenience sampling. By using this type of sampling, we strived to select a heterogeneous group of respondents. Snowball sampling is the second method we used. The facility managers that participate in the survey will are asked to spread the survey through their network. The respondents received a survey that is designed with the use of Qualtrics. The

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16 survey is shown in Appendix A. The time frame in which the respondents were able to participate in the survey was three weeks. The first method, spreading the survey via LinkedIn resulted in a total of 1.500 views. Next to the personal distribution of the survey, the link was also distributed via multiple business channels of the organization VFM Facility Experts. This resulted in another 2.500 views on LinkedIn. The survey was also distributed via direct mail.

All resulted in a total of 138 participants. A total of 24 respondents dropped out during the survey, resulting in 114 surveys that were used for data analysis. The average age of the respondents lies between 30 and 39 years. On average, respondents are working five years at their current organization, from which four in their current function. Most respondents are highly educated and are working in organizations with 50 – 250 employees.

3.4 Measurement and Validation of Constructs

To develop a measure for managerial ambidexterity, we needed to gather data on both exploration and exploitation activities of managers (March, 1991; Mom et al., 2007; Mom et al., 2009).

3.4.1 Dependent variable: exploitation activities

To collect data on the dependent variable exploitation activities, we adopted the seven items that are proposed by Mom et al. (2009). These items measure the engagement of managers in exploitation activities. The reliability of this measure is α = 0.87, with sample items such as

‘activities of which a lot of experience has been accumulated by yourself’ and ‘activities which clearly fit into existing company policy’. The seven items are measured on a seven-point Likert scale, starting from 1 (to a very small extent) and raging to 7 (to a very large extent).

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17 3.4.2 Dependent variable: exploration activities

To collect data on the dependent variable exploration activities, we adopted the seven items that are proposed by Mom et al. (2009). These items measure the engagement of managers in exploration activities. The reliability of this measure is α = 0.90, with sample items such as

‘searching for new possibilities with respect to products/services, processes or markets’ and

‘activities that are not clearly (existing) company policy yet’ The seven items are measured on a seven-point Likert-scale, starting from 1 (to a very small extent) and raging to 7 (to a very large extent).

An exploratory factor analysis was conducted to assess for discriminant and convergent validity (Field, 2013). The Kaiser-Meyer-Olkin measure indicated the adequacy of the sampling for the analysis, with KMO= .783. The correlations between items were sufficiently large for EFA (Bartlett’s Test of Sphericity X2 (91) = 615.993, p <.001). After running the analysis, two factors were retained; one exploitation factor and one exploration factor. Two exploitation items showed a high loading on the exploration factor. To assess whether these items should be removed, a reliability test was performed. Results of this test showed that the item ‘activities of which a lot of experience has been accumulated by yourself’ had a low score on item correlation, with α = .270. Removing this item would increase the Cronbach’s Alpha by .017.

The second item, ‘activities which serve existing (internal) customers with existing services/products’ showed a moderate score on the correlation of the items, with α = .450.

Removing this item would reduce the Cronbach’s Alpha by -.010. Therefore, we decided only to remove the first exploitation item. After removing this item, we reran the exploratory factor analysis. The Kaiser-Meyer-Olkin measure indicated the adequacy of the sampling for the analysis, with KMO = .781. The correlations between items were sufficiently large for EFA (Bartlett’s Test of Sphericity X2 (78) = 567.382, p <.001). The exploratory factor analysis with Varimax rotation showed again that two factors were retained, one exploitations factor

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18 (Eigenvalue = 2.8) with six items counting for 31.6% of the total variance and one exploration factor (Eigenvalue = 4.0) with seven items counting for 30.9% of the total variance. All exploration and exploitation items showed a factor loading of a minimum of 0.4, which confirms that items correlate with the intended factors. The results of the exploratory factor analysis are shown in Table 1.

Table 1. Exploratory Factor Analysis

Items Factor a

1 2

Exploitation (α = .81)

Activities which you carry out as if it were routine -.071 .837

Activities which serve existing (internal) customers with existing services / products .510 .509 Activities of which it is clear to you how to conduct them -.053 .824

Activities primarily focussed on short-term goals .089 .458

Activities which you can properly conduct by using present knowledge .000 .825 Activities which clearly fit into existing company policy .118 .761

Exploration (α = .81)

Searching for new possibilities with respect to products / services .658 .274 Evaluating diverse options with respect to products / services, processes or markets .675 .334 Focussing on strong renewal of products / services or processes .677 .035 Activities of which the associated yields or costs are currently unclear .692 .062

Activities requiring some adaptability of you .710 .000

Activities requiring you to learn new skills or knowledge .623 -.108 Activities that are not (yet) clearly existing company policy .697 -.144

aExtraction method: principal component analysis. Rotation Method: Varimax with Kaiser normalization

3.4.3 Independent variables: teleworking and working at the office

The independent variables teleworking and working at the office were measured by asking the respondents to indicate the number of hours they are either teleworking or the number of hours they are working at their office. The respondents were asked to indicate the amount of time in a fixed measure of 10 hours (0-10, 10-20, 20-30, 30-40, and 40 plus). To verify the reliability of this measure, respondents were asked to indicate their contractual hours during the period of a week. In the first steps of the data analysis, the items were used as being measured. To determine whether there were differences between people who are teleworking and people that

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19 are working at the office, we recoded the variables in 1 (teleworking), 2 (working at the office) and 3 (equal amount of teleworking and working at the office).

3.4.4 Control variables

Relevant control variables that were included are: 1) age, 2) tenure in the organization, 3) tenure in the current function, 4) education, 5) firm size, 6) hierarchical level, and 7) environmental dynamism. Age and tenure were included because previous studies have shown that the experience of managers may influence their ambidexterity (Birkinshaw & Gibson, 2004; Mom et al., 2009). To control specialization effects (Birkinshaw & Gibson, 2004) we included the variable tenure in the current function. Adler et al. (1990) and Mom et al. (2009) argue that cognitive effects may positively relate to managers’ ambidexterity. To control for these effects, we included the variable education. March (1991) explained that size effects may influence the ability of a manager to focus on either exploration or exploitation activities, due to the ability to have more resources to their disposal. These possible effects were controlled by introducing the control variable firm size. Floyd and Lane (2000) explain that the hierarchical level of a manager may influence his or her ambidexterity. Higher levels of managers seem to be more ambidextrous compared to lower levels of managers (Floyd & Lane, 2000). To control for these effects, the control variable hierarchical level was included. Lastly, Janssen et al. (2006) showed that a situation of high environmental dynamism affects managers' ambidexterity. To control for these effects, the control variable environmental dynamism was included.

3.5 Data analysis

Before the hypothesis could be tested, preliminary steps were necessary. First, the data were screened. All dependent, independent, and control variables were tested to assess for missing values. A total of 24 individual responses were removed due to missing values. The items teleworking and working at home were recoded in the values 1 (teleworking), 2 (working at home) and 3 (same amount of teleworking and working at the office). The control variable

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20 environmental dynamism was checked for internal consistency by running a reliability test. The scale had a Cronbach’s alpha >7, which confirms internal consistency (Cronbach, 1951). A correlation matrix was made with the use of SPSS. The next steps were running a hierarchical regression test and an independent samples t-test to assess the hypotheses.

3.6 Generalizability, validity & reliability

To prevent participant bias, participants were asked to answer the questions based on their own experiences. Furthermore, the anonymity of the respondents was assured. To increase the reliability of the study, the questionnaire was pre-tested. After pre-testing the questionnaire preliminary steps and data analysis was performed. Since this study primarily focussed on managers active in the facilities industry, and these managers being employed in the Netherlands, this study might be prone to difficulties regarding the generalizability of the results. Furthermore, by making use of convenience sampling, a bias in the representativeness of the results might occur. Lastly, to cover issues concerning internal validity, constructs and control variables that are proven to be effective in previous studies are used to measure the variables exploration, exploitation and environmental dynamism.

The results of this study will be discussed in the next chapter.

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21 4 Results

This section contains the results of this study. First, descriptive statistics for all variables that are used in this study are shown. Furthermore, the results of the correlation analysis are provided. Next, the results of the hierarchical regression analysis and t-tests are shown. Lastly, the theoretical framework including the results of this study is presented.

4.1 Univariate analysis

The results of the univariate analysis are shown in table 2. These results imply that managers engage in both exploitation (x = 4.71) and exploration (x = 4.13) activities. Most respondents are working 20-30 hours from home and 10-20 hours from the office. The variable teleworking / working @ office is a variable that is recoded. This variable indicates that most participants are teleworkers. Respondents are in the age range of 20 – 65+ years, with most respondents belonging to the category 30 – 40 years. The variable tenure in organization shows that respondents are working somewhere between 0 and 30 years at their current organization. The variable tenure in function shows that the respondents are working between 0 and 20 years in their current function. The variable environmental dynamism indicates that the respondents currently working in a rather stable business environment (X = 2.91).

Table 2. Univariate analysis

Univariate analysis

Variable Mean SD Minimum Maximum

Exploitation 4.71 0.96 1 6.50

Exploration 4.13 1.10 1 6.14

Hours of teleworking 3.12 1.37 1 5

Hours of working @ office 1.68 1.12 1 5

Teleworking / Working @ office 1.39 0.66 1 3

Age 2.09 1.02 1 5

Tenure in organization 4.99 4.54 0 30

Tenure in function 3.82 4.51 0 20

Educational level 2.50 0.71 1 4

Firm size 2.13 0.87 1 3

Supervisory role 1.42 0.50 1 2

Environmental dynamism 2.91 1.01 1 5

Notes: N = 114

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22 4.2 Correlation analysis

The independent variable exploitation shows significant effects with the control variables supervisory role (r = -.27, p = < .01) and environmental dynamism (r = .31, p = < .01).

Furthermore, the correlation analysis implies a significant positive effect between exploration and hours of teleworking (r = .20, p = < .05), indicating that more hours of teleworking will lead to more participation in exploration activities. Several control variables, such as tenure in function (r = -.19, p = <.05), firm size (r = .20, p = < .05), and environmental dynamism (r = .50, p = < .01) show significant effects with the independent variable exploration. Because the control variable environmental dynamism shows significant effects with both exploration and exploitation we derive that situations of environmental dynamism will lead to higher levels of both exploration and exploitation. All results of the correlation analysis are shown in table 3.

Table 3. Correlations

Correlations

Variable 1 2 3 4 5 6 7 8 9 10 11 12

1. Exploitation (.81)

2. Exploration .23* (.81)

3. Hours of teleworking .06 .20* - 4. Hours of working @ office .09 .037 -.67** - 5. Teleworking / Working @ office .02 -.03 -.65** .60** -

6. Age -.03 -.17 .14 .07 -.07 -

7. Tenure in organization .09 -.15 .10 .13 .04 .46** - 8. Tenure in function .13 -.19* -.15 .21* .10 .47** .39** - 9. Educational level .03 -.02 -.06 -.03 -.07 -.21* -.19* -.13 - 10. Firm size .00 .20* .17 -.02 -.01 -.13 -.05 -.24* .04 - 11. Supervisory role -.27** -.14 -.12 -.16 -.08 -.25** -.32** -.25** .00 .01 - 12. Environmental dynamism .31** .50** .17 -.01 -.11 .00 .01 -.06 -.18 .23* -.12 (.81) Notes: N= 114

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

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4.3 Hierarchical regression

We performed a hierarchical regression analysis to test hypothesis 1 (teleworking will be positively related to the extent to which managers engage in exploitation activities) and hypothesis 2 (teleworking will be negatively related to the extent to which managers engage in exploration activities). The results of these analyses are shown in table 3 and 4. Both analyses show a variance inflation factor (VIF) below the cut-off of 10 and tolerance levels higher than .10, which indicates no concerns for multicollinearity (Field, 2013).

Table 4 shows a positive, but not significant relationship between the independent variable teleworking and the dependent variable exploitation (β = .13, p = > .05), which means that hypothesis 1 is not supported. The results of this analysis imply that the more hours participants are teleworking, the more these participants engage in exploitation activities.

Table 5 shows a positive, significant positive relationship between the independent variable teleworking and the dependent variable exploitation (β = .34, p = <.01). Although the relationship between these variables is significant, the hypothesis is not supported because we predicted a negative relationship. The results of this test imply that the more hours participants are teleworking, the participation in exploration activities significantly increases.

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24 Table 4. Hierarchical regression exploitation

Exploitation

Model 1 Model 2

b S.E. β b S.E. β

Control Variables

Age -.17 (.11) -.16 -.19 (.11) -.18

Tenure in organization .01 (.02) .04 .01 (.02) .03

Tenure in function .03 (.02) .15 .04 (.02) .16

Educational level .13 (.14) .09 .14 (.14) .09

Firm size -.07 (.11) -.05 -.09 (.11) -.07

Supervisory role -.46 (.20) -.22 -.40 (.21) -.19

Environmental Dynamism .33 (.10) .32** .32 (.10) .31**

Independent variables

Hours of teleworking .10 (.10) .13

Hours of working at the office .12 (.12) .13

R2 .19** .20

Adjusted R2 .14** .12

ΔR2 .01

Notes: N = 114; * p < .05; ** p < .01

Table 5. Hierarchical regression exploration

Notes: N = 114; * p < .05; ** p < .01

Exploration

Model 1 Model 2

b S.E. β b S.E. β

Control Variables

Age -.11 (-.11) -.10 -.16 (.11) -.15

Tenure in organization -.03 (-.02) -.13 -.04 (.02) -.16

Tenure in function -.02 (-.02) -.09 -.01 (.02) -.06

Educational level .02 (-.13) .01 .04 (.13) .02

Firm size .06 (-.11) .05 .01 (.11) .01

Supervisory role -.37 (-.19) -.17 -.23 (.20) -.10

Environmental Dynamism .51 (-.09) .47** .48 (.09) .43**

Independent variables

Hours of teleworking .27 (.10) .34**

Hours of working at the office .29 (.11) .30**

R2 .32** .37**

Adjusted R2 .27** .32**

ΔR2 .05**

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25 4.4 Independent samples t-test

We performed an independent samples t-test to test hypothesis 3a (compared to managers that are teleworking, managers that are working at the office will engage more in exploitation activities) and hypothesis 3b (compared to managers that are teleworking, managers that are working at the office will engage more in exploration activities). Table 6 and 7 show the results of the independent samples t-tests. The results show no support was found for hypothesis 3a.

We found that the mean scores on the variable exploitation are the same for office workers (x

= 4.7) compared to teleworkers (x = 4.7). This indicates that the differences in mean scores between those groups are not significant (t(99) = -.17, p = > .05). Furthermore, no support was found for hypothesis 3b. The differences in mean score between office workers (x = 4.2) and teleworkers (x = 4.1) on the variable exploration slightly differ. Although these mean scores differ, the actual difference is not significant (t(99) = .15, p = > .05). The results of these tests imply that participation in exploration and exploitation activities does not significantly differ between teleworkers and office workers.

Table 6. Independent samples t-test exploitation Exploitation

Variable t df Sig. MD SDE

Teleworkers / office workers -.17 99 .87 -.04 .23

Notes: N = 101; N teleworking = 78; N office = 23

Table 7. Independent samples t-test exploration Exploration

Variable t df Sig. MD SDE

Teleworkers / office workers .15 99 .89 .04 .26

Notes: N = 101; N teleworking = 78; N office = 23

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26 4.5 Theoretical framework and relations

We conclude this results section by providing exhibit 2. This exhibit shows the theoretical framework including the relationships that are found in this study.

Exhibit 2. Theoretical framework and relationships

H3b t(99) = .15, p = > .05

H1 b = .13, p = > .05

Teleworking

Exploration Exploitation

Working at the office

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27 5 Discussion and Conclusion

This study aims to research whether there is a relationship between teleworking and managerial ambidexterity. The first hypothesis states that we predicted a positive relationship between teleworking and exploitation. Although we found that the relationship between these variables is positive, the relationship is not significant. Mom et al. (2007) explained the essence of exploitation activities as the managers’ ability to refine their knowledge, extend their existing competencies, focus on production, and adopt a short-term orientation. We expected that due to the most mentioned advantages of teleworking; productivity and job satisfaction, managers should be perfectly able to execute exploitation activities when they are teleworking. Although it seems that teleworkers can execute these exploitation activities, the results show that an increased amount of hours of teleworking does not significantly increase the participation of teleworkers in exploration activities.

We suggest several explanations for why this is happening. First of all, we expected the current business environment to be highly dynamic due to the current Covid-19 pandemic. Contrary to our expectations, the results show that the respondents assess the current business environment as rather stable. We believe that because our respondents assess the business environment as stable, these managers are more focused on exploitation activities rather than exploration activities. These results are in line with Jansen et al. (2006), who found evidence that relatively stable business environments ask for managers focussing on exploitative activities. These authors even went further, by suggesting that managers' focusing on exploitation activities in rather stable business environments will increase their business performance (Jansen et al., 2006). Because we did not research the moderating effect of environmental dynamism on the relationship between teleworking and exploitation, we cannot be sure whether the relationship between these variables is positively or negatively affected by the construct environmental dynamism. Therefore we suggest that future studies should investigate the moderating and

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28 mediating effects of environmental dynamism on the relationship between teleworking and exploitation.

Second, Mom et al. (2015) argued that ambidextrous managers need to be able to deal with work context uncertainty. In their view, ambidextrous managers should be able to switch back and forth between routines and activities. We expected that managers would be able to deal with these situations when they are teleworking. Since we have not been able to find a significant relationship between the constructs of teleworking and exploitation, we believe that managers might not be able to do so. We can think of multiple reasons why this might occur.

First, blurring of the work-life balance and interruptions which are mentioned as being the shortcomings of teleworking (Baruch, 2001; Boell et al., 2013). As theorized by Raisch and Birkinshaw (2008), managers’ ambidextrous behaviour may be influenced by the contextual factors discipline, stretch, support and trust. Discipline and stretch improve the ability of a manager to perform their tasks (Raisch & Birkinshaw, 2008). We believe that due to the shortcomings of teleworking these two antecedents, discipline and stretch, are negatively influenced. We can think of situations in which managers are teleworking and being disturbed by other people in their surroundings. This possibly resulted in managers being less able to focus on the antecedents discipline and stretch, leading to a constrained ability to participate in exploitative activities when they are teleworking. Second, Kao and Chen (2016) have been able to demonstrate the influence of emotional intelligence on managerial ambidexterity. Both intrinsic and extrinsic motivation are factors of emotional intelligence (Kao & Chen, 2016).

Intrinsic motivation refers to the interest in and enjoyment derived from an activity of its own sake, whereas extrinsic motivation can be best explained as the goal-driven reasons when performing an activity (Deci & Ryan, 1985). We believe that the pace at which managers had to engage in teleworking due to the Covid-19 pandemic negatively influenced managers’

intrinsic motivation. Because managers were told how to change their behaviour, rather than

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29 making these adjustments for themselves, we expect that managers experienced less enjoyment of the activities they had to perform. This potentially resulted in managers being less motivated to participate in exploitative activities when they are teleworking.

Our study only focussed on the number of hours that managers are teleworking, rather than focussing on the activities that managers perform when they are teleworking. Because previous studies demonstrated the importance for ambidextrous managers to deal with work context uncertainties (Mom et al., 2015), we suggest that future studies should explore what type of activities the teleworking managers are engaging in.

The second hypothesis predicts a negative relationship between teleworking and exploration.

Although we found a significant relationship between these variables, this relationship was tested positive instead of negative. This implies that more hours of teleworking will lead to higher levels of participation in exploration activities. We expected that employees not being able to participate in social activities would make them less able to perform in exploration activities. The results point towards another direction, in which employees can perform exploration activities when they are teleworking. We can think of multiple reasons why this relationship is been tested positive. First of all, it seems that most respondents that participated in our study are teleworking. Due to the current Covid-19 pandemic, most employees cannot work at an office. We suspect that managers being obliged to telework have been able to gain skills over the past year that enhance their ability to engage in explorative activities. One could think of skills such as the ability to take initiative and act on unanticipated change (Mom et al., 2015), which happen to be important skills for ambidextrous managers. This seems to be in line with the findings of Baruch (2000), who found a significant relationship between the skills of managers and their ability to effectively participate in teleworking. Examples of these skills are time management skills and the skills to participate in social activities (Baruch, 2000). Second, it seems that teleworking managers have been able to retain the two contextual aspects support

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30 and trust, that are mentioned by Raisch and Birkinshaw (2008). These factors enable managers to develop social capital (Raisch & Birkinshaw, 2008). Based on the development of social capital, managers should be able to build relationships with other employees. These relationships enable the ambidextrous managers to rely on each other and provide assistance to others when needed (Raisch & Brikinshaw, 2008). We believe that due to the ability of the teleworkers to retain these two antecedents, these managers have been able to participate in explorative activities.

Literature suggests the importance of the skills that managers need to oblige to effectively participate in teleworking and the importance of managers' skills to be ambidextrous. Therefore, we suggest that future research should be conducted on the managers’ skills that can influence the relationship between teleworking and managerial ambidexterity.

The third hypothesis states that compared to teleworkers, office workers can perform more in both exploration and exploitation activities. Although we found slight differences in mean scores between teleworkers and office workers, these differences are not significant. Multiple studies have shown the importance for ambidextrous managers to simultaneously shift between explorative and exploitative activities (Gibson & Birkinshaw, 2004; He & Wong, 2004; Mom et al., 2007), especially in situations of environmental dynamism (Good & Michel, 2013; Jansen et al., 2006). Cognitive flexibility makes it possible for managers to shift between explorative and exploitative activities (Mom et al., 2007; Good & Michel, 2013). We have not been able to demonstrate differences between teleworkers and office workers, which makes us believe that teleworkers do not underperform in their ambidextrous behaviour compared to office workers.

A possible explanation for differences in mean scores not being significant could be the cognitive flexibility of the managers. We believe that the managers that participated in this study have been able to shift between explorative and exploitative activities, both when they are teleworking and when they are working at office locations. We suspect that teleworking

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31 managers have been able to adjust to the changes that they had to overcome, even though they have been obliged to telework or not. The ability to adjust and act on unanticipated changes, which is one of the capacities of an ambidextrous manager theorized by Mom et al. (2015), could have made this possible. Lastly, we believe that the managers that participated in this research can be defined as transformational leaders. Transformational leaders are inspirational motivators, provide intellectual stimulation, and possess idealized influence (Jansen et al., 2008). These transformational leaders positively affect the effectiveness of senior leaders in their surroundings by resolving conflicts and contradictory demands (Jansen et al., 2008). We believe that although these teleworking managers had to adjust to a new situation, they have been able to maintain their skills as being a transformational leader. This in return might resulted in the fact that we have not been able to find differences in the participation in exploration and exploitation activities between teleworking managers and managers that are working from office location.

One of the shortcomings of this study is that we only have been able to find 23 participants that are currently working at the office. We, therefore, suggest that future studies should focus on finding more managers that are working at the office. This should enable the possibility to determine any significant differences in the participation in exploration and exploitation activities between teleworkers and office workers. Furthermore, we only have been able to test the relationship between teleworking and exploration with managers that are mainly active within the facilities industry. We suggest that future studies should focus on other business sectors as well. We believe that teleworking will be enhanced by organizations that are mainly active in the business sector, so we recommend that studies should focus on this sector first.

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32 6 Managerial implications

The current Covid-19 pandemic has much influence on the way we are currently working. Most employees active in the business sector had to engage in teleworking. Because recent studies showed that most of the business organizations in the Netherlands will embrace teleworking after the Covid-19 pandemic, we believe that the results of our study are of high importance.

First of all, we have been able to demonstrate that managers that are teleworking can participate in explorative activities. These results are important because until now we did not know whether managers can participate in these kinds of activities. Since we have shown the importance for managers to focus on explorative activities in situations of environmental dynamism, we think that business can benefit from our results. On the other hand, we have been able to demonstrate a positive relationship between teleworking and exploitation activities. These results may point to the direction that when the business environment becomes more stable, managers that are teleworking can engage in exploitation activities. Furthermore, we have been able to demonstrate that there are no significant differences in managers’ participation in explorative and exploitative activities when they are either teleworking or working at an office. These results are of high importance in the period that lies ahead of us. We suspect that teleworking is a way of working that is here to stay and we have proven that, within the context and limits of this study, teleworking ambidextrous managers do not underperform compared to the ambidextrous managers that work at office locations.

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