Managerial Dilemmas and Entrepreneurial Challenges in the Ambidexterity of SMEs: A Systematic Review for Execution System

Abstract

According to the organizational learning theory, there are two types of corporate activities, exploitation and exploration, for enhancing and improving corporate performance. However, organizations are continually faced with choosing between these two conflicting activities that require different organizational structures, strategies, and environments, respectively. This study’s objective is to use a systematic review methodology to investigate how implementing organizational ambidexterity affects managerial performance in small- and medium-sized enterprises (SMEs). Although there is a general consensus about the relationship between ambidexterity and firm performance, few studies have probed into the mechanism of how it is applied to management process and what antecedents affect the implementation of OA in SMEs. The qualitative method was conducted to investigate the influence of the ambidexterity strategy of SMEs on firm performance. According to the findings, organizational ambidexterity in SMEs has a positive impact on the firm’s managerial performance. SMEs must make decisions that consider environmental factors. Making practical decisions based on accurate formation, considering organizational human resources for implementing ambidexterity, and sharing specific performance goals are all important considerations. This study is also important for SMEs’ top management teams to make proper decisions for the firm’s sustainable growth via OA, and shed new light on the literature of organization theory that operates in a more turbulent environment.

1. Introduction

The company maximizes corporate operation efficiency by maximizing the exploitation of accumulated resources through management. However, in today’s market environment of high market uncertainty, businesses must explore new opportunities. Exploration activities at a company can capitalize on opportunities for new products, services, and innovative technologies. So, in today’s companies, exploitation should be performed simultaneously with exploration. Companies must establish a process that balances exploitation and exploration [1]. Large enterprises have relatively abundant resources. However, because resources are always scarce, it is difficult for small- and medium-sized enterprises (SMEs) and ventures (hereinafter referred to as SMEs) to balance exploitation and exploration [2]. Various studies suggest approaches for carrying out these two activities. Organizational ambidexterity refers to an organization’s ability to pursue and balance these two activities at the same time. Recently, SMEs and ventures have also adopted an ambidexterity strategy that simultaneously operates exploitation and exploration for performance and survival [3,4].

This research looked at the ambidexterity strategies of SMEs that are growing with limited resources. Various methods of implementing ambidexterity have been studied according to the environment and situation of the enterprise. Due to a lack of resources and management skills, SMEs always face greater challenges when seeking ambivalence [5]. This is especially likely for SMEs in transitional and high-growth industries, where top management teams are confronted with and must choose from a plethora of future business opportunities. Many previous studies have discussed OA in SMEs, but there is no integrated research and, therefore, no clear implications that SMEs could apply to their business.

The goal of this study is to expand on previous research on organizational ambidexterity in SMEs by looking into the factors that influence the relationship between OA and SME performance. Although many scholars have studied the relationship between ambidexterity and firm performance, few studies have looked into how it is applied to management processes and what factors influence OA implementation in SMEs. The research questions of this study are as follows:

(1)

What factors influence the implementation of organizational ambidexterity in SMEs, and how do different types of organizational ambidexterity affect SMEs’ performance?

(2)

How should SMEs that have been through the effectuation process develop an ambidexterity strategy?

Some of the additional research questions that could flow from this main question are: Do SMEs that were developed on the basis of the effectuation process after startup choose organizational ambidexterity for their firm’s future growth? Can SMEs expect the same effect as large firms through the implementation of organizational ambidexterity? Although scholars have studied this emerging topic for more than 15 years, there has been limited research conducted in the field of SMEs. This study is also important for SMEs’ top management teams to make proper decisions for the firm’s sustainable growth via OA. Undertaking a careful analysis of the mechanism of organizational ambidexterity in SMEs, this study may shed new light on the literature of organization theory that operates in a more turbulent environment.

2. Literature Review

2.1. The Concept of Exploitation and Exploration

March (1991) [2] published a key paper on exploitation and exploration in organizational learning, which clearly stated the notion of the activities required by the firm. Exploitation implies an organization’s activities, such as efficiency, selection, execution, production, as well as firms learning to enhance their existing capabilities and competencies, using existing knowledge, focusing on current activities, mitigating risks, and predicting outcomes through exploitation in their existing business [3,6,7]. Organizational activities associated with exploration include variation, new knowledge, experimentation, flexibility, long-term needs, risk-taking, entrepreneurship, and innovation [8,9,10]. Exploration, in other words, refers to the development of new organizational routines, as well as the discovery of new technologies, products, business opportunities, and processes [9,11,12].

Based on the conceptual understanding of exploitation and exploration, previous studies have identified what each activity produces as an outcome within the organization. Juni et al. (2013) [3] found that exploratory activity was primarily related to the firm’s long-term growth in their meta-analysis. While the firm’s exploration activities may not impact immediate profit, they eventually positively impact growth [13]. In contrast, firms pursuing productivity efficiency rather than innovation were the focus of exploitation activity [3,14]. That is, the firm’s exploitative activities mainly relate to the firm’s current profits but do not closely relate to growth [3]. Organizations may abandon a promising and seemingly attractive business opportunity because stakeholders perceive the opportunity as overly disruptive. [15].

Because it is hard to choose just one of the two strategies, previous research on ambidexterity has argued that firms must balance exploitation and exploration [16]. The ability to aim and apply exploration and exploitation has been suggested as essential for the long-term performance and survival of organizations [3,4]. Furthermore, according to Schumpeterian theory, innovative organizations outperform noninnovative ones, and ambidextrous organizations outperform businesses that focus solely on one strategy, such as exploitation or exploration [17].

However, organizational ambidexterity is recognized as a paradoxical characteristic in the sense of pursuing two different activities at the same time as evidenced by the use of various terminologies in various studies. Scholars, for example, assert that causation and effectuation are not mutually exclusive but rather interactive relationships [18,19] and that these two strategies can be viewed as distinct types of exploitation and exploration [2,20,21], cost leadership and differentiation [22], competition and collaboration [23], and efficiency and flexibility [24,25].

2.2. Characteristics of SMEs

SMEs face greater difficulties than large corporations when pursuing an ambidexterity strategy. The majority of previous studies on ambidexterity have concentrated on large corporations. However, in recent years, there has been a growing body of literature studying the practice of ambidexterity at the scope of SMEs, such as ventures, high-tech startups, and entrepreneurial firms [26]. Many SMEs face managerial quandaries regarding their growth, such as whether to pursue differentiation or low cost as a strategy, adopt a mechanistic or flexible structure, or prioritize control or autonomy [27]. SMEs may require a new logic to effectively manage their resources and introduce entrepreneurial bricolage, which is defined as “making do by applying combinations of the resources at hand to new problems and opportunities” [28]. SMEs’ core competencies and management skills are to overcome scarce resources and operate ambidextrous organizations.

This study helps to broaden the recognition and integration of organizational ambidexterity in SMEs, as well as the practical difficulties and factors that affect their ability to engage in two different activities related to SMEs’ performance.

2.3. Features of Organizational Ambidexterity

Firms can use organizational ambidexterity to solve conflict and the dilemma of paradoxes by employing a few typologies. In previous studies, two ambidextrous methods, contextual and structural ambidexterity, were most representatively presented. Structural ambidexterity is defined as the separation of individuals or groups based on the action plan of an organization [29,30,31]. To address the conflict and dilemma created by the paradoxes of balancing exploration and exploitation, firms establish separate units that respond to environmental changes and communicate with external stakeholders.

On the other hand, contextual ambidexterity is defined as performing both two strategies at an individual level in the organizational unit [30]. Individuals focus on the organization’s regular activities while also undertaking new activities [30]. According to this HRM viewpoint, an ambidextrous structure enables an organization to better take advantage of business opportunities while holding onto its current market share. However, when implementing contextual ambidexterity, an important question about who can manage an individual arises [5,32].

Previous literature suggests another pathway to achieve organizational ambidexterity for firms; sequential ambidexterity [31,33]. Sequential ambidexterity refers to an organization’s focus on one of the competing objectives in turn.

Firms achieve different structural alternatives, such as structural or contextual separation, to resolve the organizational paradox. While earlier studies argued that firms should build separate organizational units to gain the benefits of adaptability and alignment at the same time [16,34,35]. However, the separated units may not be effective for SMEs due to their small size and limited resources. In reality, these structures hinder the sharing of knowledge and capabilities with the mainstream units. Thus, Duncan (1976) [36] suggests that organizations should implement a dual structure that allows them to structurally respond to their environment while pursuing both exploration and exploitation.

As a result, the focus of this research has been on the factors that enable organizations to create dual structures, as well as the systems and processes that facilitate ambidexterity for SME performance.

2.4. Performance in the SME Organizations

Empirical studies have already indicated that ambidextrous organizations have a positive effect on the firm’s performance [4,5,33,37,38,39,40,41]. Many studies have proposed that organizational ambidexterity is related to a longer period of survival [42], better financial performance [43,44,45], and improved learning and innovation [46,47], whether directly related to the firm’s performance or not.

However, scholars still have arguments that pursuing such organizational ambidexterity can be either beneficial or detrimental to firms [48,49,50]. The lack of empirical tests of the ambidexterity-performance relationship has been criticized by Raisch and Birkinshaw (2008) [31] and Andriopoulos and Lewis (2009) [51]. Few studies have provided empirical support for the hypothesis of ambidexterity and performance. For example, Bierly and Daly (2001) [52] investigated the impact of ambidexterity on firm performance in a sample of 98 manufacturing firms but found no significant results. Katila and Ahuja (2002) [53] discovered a positive relationship between the proclivity to cite different patents and the proclivity to cite specific patents repeatedly on new product development, but did not test the impact on firm performance [54].

These ambiguous findings encourage further investigation into whether ambidexterity has a significant impact on the performance and survival of SMEs. However, it is a challenge to capture when and how ambidexterity is implemented and results are created due to the nature of SMEs that operate firms with scarce resources.

Therefore, this study focuses on SMEs that are thriving with scarce resources, and analyzes the evidence of the relationship between organizational ambidexterity and performance. SME organizational performance indicators, such as SME innovation, financial gains, product innovation, sales, and investment scales, must be defined, as well as any qualitative outcomes presented in the literature. Simultaneously, the factors affecting SMEs’ performance need to be studied. Scholars have discovered that organizational culture is one of the factors influencing firm performance [55,56,57,58]. Additionally, manager performance is regarded as the degree to which the manager meets the requirements of his/her general work context toward the firm’s performance [59,60]. Thus, by investigating the factors influencing the firm’s performance, this study will determine the relationship between SMEs’ ambidexterity and performance and under what conditions.

3. Theoretical Framework

3.1. Organizational Learning Theory

Organizational adaptation capabilities are a core concept of organizational behavior theory, suggesting that exploitation and exploration activities are needed as a rational system for organizational sustainability. Organizational learning refers to the distribution, acquisition, storage, and interpretation of new knowledge, which are vital success factors of firms [61,62,63]. This study employs organizational learning theory from the perspective of adaptation to employ the ambidexterity strategy to overcome the company’s uncertain environment.

March (1991) [2] stated that activities to improve corporate performance in terms of organizational learning can be divided into exploitation and exploration. Organizations are forced to concentrate on exploitation and exploration activities even though those activities are in conflict [30]. Therefore, companies must find a compromise to balance these two activities.

It is also necessary to consider a resource-based perspective (RBV), as companies will eventually be forced to respond to an uncertain environment based on the resources they own. RBV is a strategic position that governs how a company interacts with its tangible and intangible resources [64]. Many studies suggest that the concept of RBV is more suitable for exploitation than exploration. However, understanding how to apply the concept of RBV in an organization’s activities is required to maintain an appropriate balance between exploration and exploitation. In most cases, businesses will focus and act on either exploration or exploitation. When a company focuses solely on one activity, path-dependent tendencies can be significant, increasing organizational inertia. This poses a risk to the organization in the long run. Based on organizational learning theory, this study explains how companies adapt to new activities that they have never engaged in before.

3.2. Conceptual Framework

Figure 1 shows the activities focused on exploitation and exploration based on large companies and SMEs (startups and ventures) [65]. Quadrant 4 (Q4) represents the activity of existing market participants. Q1 now represents startups entering the market and exploring new businesses. SMEs can exist in both of these areas. However, the premise that SMEs are close to startups and ventures was presented earlier in this study. Q1 and Q4 both choose a path toward Q2, completing an ambidexterity strategy by reinforcing an activity they were not focused on. Ferrary (2011) [66] described changes in an organization’s internal processes toward Q2 after a large company acquisitioned and merged a startup. Startups that need to investigate stable businesses in the market focus mainly on exploration activities. However, most startups that are acquired by a larger company and primarily carry out the exploitation process are primarily engaged in exploitation activities. Ferrary (2011) [66] explains that it is not easy to implement an ambidexterity strategy unless companies are willing to do both. Based on the theory of the resource-based view, the merged firm has comparatively fewer resources, causing it to rely on the larger firm’s resources following the M&A.

According to organizational learning theory, SMEs have internal resources that can be used to quantify benchmarking and respond flexibly to environmental changes in a flexible manner. SMEs belonging to Q4 might be in the growing or mature stage of the firm where the SMEs already have exploitative capability and intention to adopt explorative activities. In contrast, SMEs in Q1 may be in the early stages of development, where the SMEs remain at the startup level and intend to increase the firm’s efficiency level. According to Kollmann, Kuckertz, and Stöckmann (2009) [67], entrepreneurial growth companies that have just survived the birth stage still have exploratory behavior—and have entered the phase of rapid growth in which the venture is transferred into a managed firm [68,69,70,71]. Furthermore, traditional technological life cycle theory suggests that exploration may have the highest payoff in the early stage due to radical product innovation and competing product designs, whereas exploitation may have a higher payoff in the later stage due to cost savings in incremental process innovation [67]. Thus, exploration is a prerequisite for exploitation, but the advantage of exploration is also dependent on the knowledge gained through exploitation [72].

Previous research on organizational ambidexterity has been conducted mainly on large firms. The purpose of this research is to look at SMEs that are implementing organizational ambidexterity and analyze the factors that influence their ambidexterity and performance. Thus, as illustrated in Figure 2, a conceptual framework was constructed for this research.

4. Methods

This research employs systematic review (SR) methodology, which employs a structured process to identify trends and meaningful themes in a large body of literature on specific subjects and research questions. This SR methodology is part of the evidence-based management (EBMgt) movement. Evidence-based research synthesis is a valuable method for assessing, summarizing, and disseminating the findings of a large amount of data and scholarship, which is available in print and online databases [73]. Popay et al. (2006) [73] assert that the evidenced-based research synthesis is an invaluable method of assessing, recapping, and sharing the findings of a large amount of data and scholarship, which is available in print and online databases. Another strength of this method, as posited by Gough, Thomas and Oliver (2012) [74] is that the evidenced-based research synthesis is to demonstrate a transparent, thorough, and reliable process for evidence review. Evidence-based synthesis can be a useful tool to help transform contemporary management practice into evidence-based management (EBM). In addition, EBM can bridge the gap between the business and academic worlds by utilizing systematic reviews as the methodology for the decision-making process. The evidenced-based research synthesis has the potential to deliver the synthesis of many different situations by highlighting how certain mechanisms work in particular contexts [74].

SR is appropriate for this study because it allows us to examine a wide range of empirical studies on organizational ambidextrous approaches in SMEs and their performance. As a result, the SR approach enables us to examine the state of the research question in a short time. Finally, we can use sophisticated and well-structured search and synthesis techniques to draw meaningful conclusions about ambidexterity approaches in a variety of ways.

• According to Steven (2001) [75], an SR process should include formulating a clear question, locating all relevant research, and carefully evaluating the quality of each study to meet the rigor required for clinical decisions or, in the case of this review, management decisions (p. 532). The following research questions will be addressed through a synthesis of existing management theory and primary research studies. As previously stated, the methodology will be thematic synthesis. Relevant research will be found by employing carefully chosen inclusion/exclusion criteria, key terms, search strings, and the most applicable date ranges. The following is the methodological approach taken in this study. Identifying the question: this dissertation study’s research question was to determine the antecedents to organizational ambidexterity in SMEs as an intervention within the entrepreneurial and managerial processes of organizational systems to achieve innovation and efficiency.
• Clarifying the purpose of the review: determining whether ambidexterity in SMEs will improve firm performance, allowing SMEs to seize new opportunities and increase efficiency.
• Articulating theories: because the implementation of ambidexterity involves numerous challenges and knowledge exchanges, the theory chosen is the basic principle that drives this mechanism.
• Search for the evidence: the nature and approach of the bibliographic search chosen to answer, obtain and identify bibliographic search engines containing appropriate scientific literature, subject matter experts, databases, and gray materials.
• Appraise the evidence: an appraised piece of evidence for trustworthiness, validity, and alignment to the research question.
• Extract the results: review cumulative findings from the literature and combine all the knowledge, from the evidence-based literature appraised and instructional strategies.
• Synthesize findings: evaluate the decision’s effectiveness and efficiency, as well as its relevance in answering the research question and solving the business problem while making any necessary adjustments.
• Conclude and make recommendations: highlight gaps in the synthesis of the findings that need to be addressed in the future to develop a set of recommendations and document the implications for managers in SMEs.

To illustrate the entire process of selecting evidence and establishing the final sample set for this SR, a preferred reporting items for SRs and meta-analysis (Prisma) diagram is used. As shown in Figure 3, prisma is a preferred reporting chart for studies that were included and excluded from the SR. As stated by Gough et al. (2012) [74], Prisma is an essential component of the SR methodology because it allows the reader to follow the rigorous process of reviewing the evidence and establishing the final sample size.

5. Analysis and Findings

5.1. Description of the Data Set

For this study, evidence from the scholarly literature was selected from a wide range of contexts, including studies of firms of different SME sizes, industries, geographic locations (different countries), growth stages, and lifespan.

The companies examined in the included scholarly studies were from three continents. Given that the studies included in this study drew from firms in North and South America (35%, 13 studies), Europe (24%, 9 studies), and Asia (27%, 10 studies), the common themes extracted for this study may have cross-cultural applications, such as for firms from different geographical locations.

Only studies published after the year 2000 were considered, which was one of the key inclusion criteria. Given the relatively new and rapidly evolving theory development of organizational ambidexterity in SMEs, this criterion was used to review the most recent literature on ambidexterity-related topics.

The organizational level of analysis of this study was SMEs. Figure 4 also shows that there was insufficient research on OA-SMEs related to the research question in the early 2000s, with an increase in articles occurring in recent years. This rise could be attributed to changes in the market environment and a recognition of the importance of SMEs as a driver of economic growth.

The distribution of the sample sizes was 37 studies. There were multiple studies for each of the sample groupings (interview, review, 0-10 samples, etc.). This distribution chart implies that the conclusions drawn from the evidence assessed in this SR of the literature might have broad application given the varying number of SMEs reviewed in the aggregate data. In addition, the type of research methodology for the 37 studies included in this SR of the literature is shown next to the sample size chart.

Table A2. Basic Description of Included Articles.

#	Database	Published Year	Cited	Authors	Journals
1	OneSearch	2019	0	Felício et al.	Journal of Business Research
2		2018	9	Yu et al.	Technological Forecasting and Social Change
3		2017	2	Sussan et al.	JOURNAL OF THE ASIA PACIFIC ECONOMY
4		2012	87	Gedajlovic et al.	Journal of Business Venturing
5		2013	310	PATEL et al.	Academy of Management Journal
6		2014	48	Clercq et al.	Small Bus Econ
7		2016	1	Lillegraven et al.	Nordicom Review
8		2017	3	Ikhsan et al.	International Journal of Business and Society
9		2016	12	Parmentier and Picq	Human Resources Management
10		2011	147	Ferrary	European Management Journal
11		2019	3	Martínez-Climent et al.	Sustainability
12		2009	165	Chang et al.	Research Policy
13		2018	0	Soares et al.	Journal of Technology Management and Innovation
14		2015	93	MOM et al.	Human Resource Management
15		2018	5	Du and Chen	International Journal of Innovation Studies
16		2014	23	Chen and Kannan-Narasimhan	R&D Management
17		2018	1	Kusumastuti et al.	Policy and Governance Review
18		2012	12	Selcer and Decker	The International Journal of Organization Innovation
19		2008	118	Han and Celly	Canadian Journal of Administrative Sciences
20		2015	1	Joharianzadeh et al.	International Journal of Management, Accounting, and Economics
21		2009	30	KOLLMANN et al.	Journal of Enterprising Culture
22		2015	33	CHEBBI et al.	Human Resource Management
23		2015	42	HEAVEY et al.	Human Resource Management
24		2004	3579	He and Wong	Organization Science
25		2007	106	Cegarra-Navarro and Dewhurst	The International Journal of Human Resource Management
26	ABI/INFORM	2010	12	Burpitt and Valle	Journal of Small Business Strategy
27		2015	19	Park and Kim	Asia Pacific Journal of Management
28	SCOPUS	2019	1	Liu, Wang, and Li	Frontiers of Business Research in China
29		2018	5	Battaglia et al.	Management Decision
30		2018	7	Günsel et al.	Kybernetes
31		2018	32	Acosta et al.	Journal of Knowledge Management
32		2017	5	Venugopal et al.	Management Decision
33		2013	228	Voss and Voss	Organization Science
34		2011	153	Chang et al.	Management Decision
35		2012	219	Chang and Hughes	European Management Journal
36	Snowballing	2006	1743	Lubatkin et al.	Journal of Management (from article #4)
37		2008	2036	O’Reilly and Tushman	Research in Organizational Behavior (from article #4)

Note. Cited: from an article published year until 3 November 2019.

and

Table A3. Sample, Methodology, and Theory Descriptions of Included Articles.

#	Authors	Study Context	Methodology (Sample Size)	Main Theory
1	Felício et al. (2019) [89]	Portugal SMEs	Quantitative (202 respondents)	Organizational learning theory, Behavioral theory
2	Yu et al. (2018) [97]	China software firms	Quantitative (312 firms)	Causation and Effectuation
3	Sussan et al. (2017) [13]	Korea high-tech firms	Quantitative (2800 firms)	Traditional strategy
4	Gedajlovic et al. (2012) [65]	China high-tech firms	Quantitative (122 firms)	Agency theory
5	Patel et al. (2013) [77]	US high-tech manufacturing SMEs	Quantitative (215 firms)	Behavioral theory
6	Clercq et al. (2014) [85]	Canadian SMEs	Quantitative (146 firms)	Contingency perspective
7	Lillegraven et al. (2016) [84]	US newspaper SMEs	Quantitative (143 firms)	Strategic management theory
8	Ikhsan et al. (2017) [27]	Indonesia SMEs	Quantitative (133 firms)	Organizational learning theory
9	Parmentier and Picq (2016) [82]	France’s creative industry SMEs	Qualitative (11 firms)	Ambidexterity
10	Ferrary (2011) [66]	US corporations	Qualitative (2 Corp.–case study)	Open innovation
11	Martínez-Climent et al. (2019) [98]	(N/A)	Qualitative (review)	Resource-based view, theory of dynamic capabilities
12	Chang et al. (2009) [90]	Taiwan universities	Quantitative (229 respondents)	Institutional theory
13	Soares et al. (2018) [17]	Brazil’s higher education institutions	Quantitative (79 respondents)	Institutional theory
14	Mom et al. (2015) [92]	Global 500 (service and manufacturing) firms	Quantitative (337 respondents)	Maturity degree of organizational ambidexterity
15	Du and Chen (2018) [78]	China high-tech SMEs	Qualitative (2 firms–case study)	Human resource management
16	Chen and Kannan-Narasimhan (2015) [76]	US Silicon Valley firms	Qualitative (51 interviewees)	(N/A)
17	Kusumastuti et al. (2018) [80]	Indonesia business group	Quantitative (450 respondents)	Formal integration mechanisms (OT)
18	Selcer and Decker (2012) [79]	US large oil and gas company	Qualitative (31 interviewees)	Resource-based view
19	Han and Celly (2008) [54]	Canada’s international new venture firms	Quantitative (70 firms)	Structuration theory (loose-tight coupling)
20	Joharianzadeh et al. (2015) [100]	(N/A)	Qualitative (Propositions)	Theory of dynamic capability
21	Kollmann et al. (2009) [67]	(N/A)	Qualitative (Propositions)	(N/A)
22	Chebbi et al. (2015) [81]	France telecommunication market	Qualitative (interview)	(N/A)
23	Heavey et al. (2015) [86]	US high-tech SMEs	Quantitative (99 firms)	Structural configurations theory
24	He and Wong (2004) [38]	US manufacturing firms	Quantitative (206 firms)	Social capital theory
25	Cegarra-Navarro and Dewhurst (2007) [93]	Spain optometry and telecommunication SMEs	Quantitative (269 firms)	Organization theory
26	Burpitt and Valle (2010) [72]	US furniture industry SMEs	Quantitative (94 firms)	Organizational learning theory
27	Park and Kim (2015) [101]	Korean government-sponsored companies	Quantitative (467 firms)	Behavioral theory, Resource-based view
28	Liu, Wang, and Li (2019) [102]	China SMEs	Qualitative (63 firms)	(N/A)
29	Battaglia et al. (2018) [91]	Italy’s high and medium-tech industries	Quantitative (221 firms)	(N/A)
30	Günsel et al. (2018) [83]	Turkey SMEs	Quantitative (105 firms)	The emerging view of domain ambidexterity
31	Soto-Acosta et al. (2018) [103]	Spain manufacturing SMEs	Quantitative (429 firms)	Strategic management
32	Venugopal et al. (2018) [104]	India IT, electronics, biotech SMEs	Quantitative (78 firms)	Knowledge-based view
33	Voss and Voss (2013) [105]	US nonprofit theater industry SMEs	Quantitative (107 firms)	Behavioral integration
34	Chang et al. (2011) [106]	Scotland manufacturing and service SMEs	Quantitative (265 firms)	Strategic combinations
35	Chang and Hughes (2012) [107]	Scotland manufacturing and service SMEs	Quantitative (243 firms)	(N/A)
36	Lubatkin et al. (2006) [5]	US SMEs	Quantitative (139 firms)	(N/A)
37	O’Reilly and Tushman (2008) [109]	(N/A)	Qualitative (Propositions)	Echelon theory

in Appendix B contain more specific information, such as journal names, study context, the sample size for each article, and the main theory employed in the study.

The citations of a study represent the ripple effect of a certain research domain. The total number of citations for all studies examined in this study was 9290 with an average of 251 citations across 37 articles. However, we excluded four studies that had quite high citation numbers at the end of the process of article selection. Those studies with a high citation count were cited numerous times in recent studies chosen through library research, so there was a strong possibility that they would be redundant to the others. Articles for analysis were gathered with the most recent and influential articles in mind to draw meaningful conclusions. Table A2 and Table A3 in Appendix B provides citation numbers for each study.

5.2. Antecedents of Ambidexterity in SMEs

Eighteen studies (49% of total articles) examined the causes of organizational ambidexterity or how specific factors influenced ambidexterity implementation in SMEs. Among these 18 studies, 14 provided evidence in the results section of the article based on various experiments conducted by each study, while four only provided antecedents in the literature review section of the study. The four studies that did not speak to the results were excluded, and only the factors from the study results of the 14 articles were aggregated.

Table 1. Key antecedents of SMEs ambidexterity as found in the systematic review.

Concept Category	Antecedents	Authors
Culture	organizational culture (bottom-up approach)	Ikhsan et al. (2017) [27]
Operation	leadership ambidexterity, centralization, connectedness	Chen and Kannan-Narasimhan (2015) [76]
HRM	HRM system, HRM practices, manager’s fit, enhanced human resource capacity	Patel et al. (2013); Du and Chen (2018); Selcer and Decker (2012) [77,78,79]
Structure (legal)	top-management shareholdings, advisory boards, private companies	Gedajlovic et al. (2012) [65]; Kusumastuti (2018); Chebbi et al. (2015) [80,81]
Competency	creativity, long term consideration and entrepreneur’s experience, entrepreneurial bricolage	Parmentier and Picq (2016) [82]; Chebbi et al. (2015) [81]; Günsel et al. (2018) [83]
Preparation	readiness for change, firm life cycle stage	Lillegraven et al. (2016) [84]; Günsel et al. (2018) [83]
Cooperation	Intra-firm knowledge exchange, inter-organizational coordination, cross-functional organization, unit inter-dependence	De Clercq et al. (2014) [85]; Ferrary (2011) [66]; Heavey et al. (2015) [86]
Support	leaders’ commitment and support, senior team (rewards, social relationships)	Soares et al. (2018) [17]; Heavey et al. (2015) [86]

shows how the antecedents were divided into eight categories.

According to the literature uncovered for this SR, the most supportive mode to implement organizational ambidexterity in SMEs is a cooperative organizational tendency. Four of the studies support cooperation as an antecedent, including intra-firm knowledge exchange, inter-organizational coordination, cross-functional organization, and unit interdependence [27,66,77,82,85,86]. However, the authors who presented the cooperation antecedent also discovered preparation and support antecedents in their study.

These findings are in line with previous scholars who focused their research on the antecedents of organizational ambidexterity [5,30,31,32]. While earlier studies (e.g., [87,88]) provided empirical evidence of the importance of an organizational atmosphere based on employee and manager cooperation, the relationship between organizational support and new product development performance was not statistically significant [58,83]. The resources, care, and autonomy provided to employees were referred to as organizational support [89].

Although all eight antecedents identified in the body of evidence contribute to the implementation of AMB for SMEs, cooperation may be the most fundamental antecedent, in that it must be initiated before the other antecedents, such as leadership commitment, readiness for changes, connectedness, etc. can be realized. Cooperation is especially important in the pursuit of AMB in SMEs because knowledge utilization and sharing in organizations must be actively performed to overcome a lack of slack resources, which is common in SMEs.

5.3. Organizational Structure and Features of Ambidexterity in SMEs

For the second theme, almost all the studies chosen for the SR mentioned either structural or contextual ambidexterity in SMEs, however, only nine of the 37 studies provided evidence for the type of ambidexterity in the study’s results and conclusions. After analysis, eight of the nine studies concluded that contextual ambidexterity should be implemented in SMEs. Although Ferrary (2011) [66] discussed the negative aspects of contextual ambidexterity in the organization, there was only one study that concluded that structural ambidexterity should be implemented in SMEs [89]. These findings demonstrate that for many scholars contextual design for ambidexterity is assumed to contribute to more valid results for SMEs than structural ambidexterity. In creative industries, SMEs lacked the human and financial resources required to conduct two types of activity to achieve an ambidextrous structure. As a result, Parmentier and Picq (2016) [82] argued that contextual ambidexterity models are better suited to SMEs than other models, particularly in the creative industries.

Table 2. Types and common theme of SMEs ambidexterity resulted in the literature reviewed.

AMB Type	Common Theme	Components	Selected Study
Structural	Structure	Need to separate the structures	Felício et al. (2019) [89]
Contextual	HR	The proper set of HR practices	Patel et al. (2013) [77]
		Negative interaction with internal rivalry	De Clercq et al. (2014) [85]
		Contextual is more critical for employees	Chang et al. (2009) [90]
		Make integrated behavior of employees	Du and Chen (2018) [78]
	Culture	The learning process (bottom-up culture)	Ikhsan et al. (2017) [27]
	Structure	No internal separation for AMB	Heavey et al. (2015) [86]
	Industry	Suite in the creative industries	Parmentier and Picq (2016) [82]
	Environment	The disadvantage in changing environment	Ferrary (2011) [66]

provides more information on the different types of structures and their components.

Chang et al. (2009) [90], Patel et al. (2013) [77], De Clercq et al. (2014) [85], and Du and Chen (2018) [78] discussed the importance of human resources in contextual ambidexterity, and Du and Chen (2018) [78] emphasized integrated-employee behavior as an advantage of contextual ambidexterity. According to this viewpoint, contextual ambidexterity is more likely to emerge from a distinct human resources base than from a set of practices. More specifically, ambidexterity is realized through the flexibility with which SMEs’ human resources allocate their time and attention to exploration and exploitation.

Previous research has increasingly argued for evidence for the positive impact of contextual ambidexterity [38]. According to the findings of this study’s SR of the literature, contextual ambidexterity in an organization required practices that work to improve resource flexibility in their human base so that employees have the discretion and motivation to devote their energy to activities associated with both exploitation and exploration. Exploitation, for example, is seen as a result of having clear performance standards and goals, rapid and open feedback systems, and consistency in how employees are managed. Exploration, on the other hand, refers to an organizational context in which employees actively and voluntarily push their standards and goals to higher levels. Therefore, the HR system in SMEs is highly important to produce these contextual elements. Finally, developing contextual ambidexterity within the HR system improves employees’ practical activity in demonstrating exploitation and exploration across an entire business unit. HRM practices can help SMEs create a behavioral environment that encourages employees to explore and exploit.

In pursuing contextual ambidexterity, SMEs need to provide an appropriate environment for employees by offering social support and setting aggressive performance targets. That is, SMEs must provide employees with the appropriate set of HR practices for the development of both efficiency-related competencies and innovation-related competencies [77]. SMEs must ensure that their HR practices encourage cooperative behavior and mitigate internal rivalry because increasing internal rivalry among employees creates inefficiency in organizations because they compete for knowledge, information, and other types of resources [85].

5.4. Performance of SMEs

There were four operational factors influencing the performance of SMEs found in the synthesis of the literature: preparation, human resources, resources, and structure. Preparation was defined as readiness for change, goal setting, behavioral integration of the top management team, and a combination of exploitation and exploration that enabled SMEs to improve their firm’s performance [5,21,79,84,91]. In addition to preparation, human resources are also emphasized as being a fundamental factor for performance in SMEs [54,77,92]. Human resources appear to be a major attribute of organizational ambidexterity because it has been identified as one of the most important subthemes for ambidexterity antecedents and it contributes to SME performance.

The results of analyzing the operational factors affecting performance in more detail are as follows. Patel et al. (2013) [77] concluded that HPWS affect SME performance and, more specifically, growth by producing an ambidextrous workforce in SMEs. In this study, the results provided robust evidence for the relationship between HPWS in SMEs and firm performance. Firms can expect the dynamic processes of knowledge exploration and exploitation as a key source of a firm’s sustainable competitive edge by increasing the abilities of employees through the system [93].

De Clercq et al. (2014) [85] demonstrated a negative relationship between internal rivalry and firm performance and discovered that internal battles over a firm’s resources can impede internal knowledge transfer. Employees must collaborate and interact with others to effectively meet the demands the firm faces rather than compete inside the firm [92].

Other studies [13,21,85,92] demonstrated the performance of SMEs in terms of the environment and government policy. Businesses should consider and capitalize on the direction of government policy. Combining exploitation and exploration can serve as a portfolio diversification function and, depending on the environment, SMEs should balance the contradictory activities. In a less uncertain environment, for example, SMEs should prioritize exploitation, while in a more uncertain environment, they should combine exploitation and exploration [21].

The performance literature was fairly homogeneous in terms of its assessment and value for ambidexterity in SMEs. SMEs that implement a combination of exploitation and exploration perform better overall, but younger or early-stage SME firms should prioritize one activity first to achieve higher performance [91]. Finally, Lubatkin et al. (2006) [5] proposed that behavioral integration of the top management team is critical for achieving an ambidextrous orientation that affects performance in SMEs.

In addition to investigating operational factors for performance in SMEs, it is also necessary to carefully explore the practical meanings of performance that operational factors affect. As we previously discussed, many other researchers have focused on the outcomes and impact of ambidexterity on performance. Among these studies, contextual ambidexterity appropriate for SMEs contributes to both financial and nonfinancial performance [94,95]. In the same vein, almost all the studies selected for the SR defined the word performance in each study. Revenue, revenue growth, sales growth, profit or profitability, and return on investment were all used to define performance (ROI). It was also defined in nonfinancial terms, such as perceived performance in comparison to competitors, user increases, innovation, firm growth, fulfillment of requirements in the firm, customer relationship, and commercialization of a firm’s intellectual properties. Surprisingly, nonfinancial performance measures were more common in this SR than financial performance measures. This is most likely due to nonfinancial performance measures being more easily accessible through survey sampling than profitability estimates.

Table 3. Financial and nonfinancial measures of performance in the SR.

Attribute	Performance Measure	Selected Study
Financial performance	Revenue Revenue growth Sales growth Profit or profitability Return on investment (ROI)	Battaglia et al. (2018); [91] Lillegraven et al. (2016); [84] Lubatkin et al. (2006); [5] Han and Celly (2008); [54] De Clercq et al. (2014); [85]
Nonfinancial performance	Perceived performance compared to competitors User increases Innovation Growth of the firm Fulfillment of the requirement in the firm Relationship with customers Commercialization of the firm’s intellectual properties	Yu et al. (2014); [21] Patel et al. (2013); [77] Lillegraven et al. (2016); [84] Chang et al. (2009); [90] Mom et al. (2015); [92] Selcer and Decker (2012); [79] Han and Celly (2008); [54] Cegarra-Navarro and Dewhurst (2007) [93]

summarizes the financial and nonfinancial performance measures identified in this SR.

5.5. Organizational Resources and Dilemmas in SMEs

Recall that studies indicated that there are often internal fights for a firm’s resources in ambidextrous organizations [85]. March (1991) [2] previously assumed that simultaneously implementing exploitation and exploration in an organization resulted in a zero-sum game in which both approaches competed for scarce organizational resources. Exploitation and exploration generate tensions with a fundamentally different logic and compete for scarce resources, so the firm must weigh the two [38]. As a result, this situation leads to dilemmas or difficulties for SMEs, even with the implementation of ambidexterity.

As previously discussed in this study, dilemmas of the availability of resources, such as financial support, human resources, knowledge, and skills exist in the firm. Gedajlovic et al. (2012) [65] insisted that firms with better performance typically possess more slack resources to support exploitative and exploratory activities. Larger firms may have more slack resources than SMEs. Larger firms may engage more in strategic planning (due to their size) and are more likely to be ambidextrous due to resource constraints. However, the size of the firm is not an omniscient factor that always results in having the ability to better implement ambidexterity. According to Lillegraven et al. (2016) [84], firm size does not affect strategic planning and/or being ambidextrous. Larger established firms are also frequently slower to respond to opportunity than SMEs because their entrepreneurship ability deteriorates over time as their internal structures become increasingly laden with rules, procedures, and systems [5].

However, in most organizations, key resources appear to be predetermined and housed in core units. Most entrepreneurial or new venture units lack the core resources or the infrastructure required to transform an early-stage venture project into an established viable business [76]. These resources are typically housed within core business units.

6. Conclusions and Implication

This study’s main goal was to determine whether ambidexterity, which has been described as a strategy for large corporations, can be applied to SMEs, and if so, what precedents there are for doing so and what effect these strategies would have on the performance of SMEs. The research question, “what are the determinants of ambidexterity, and what is the effect of organizational ambidexterity on corporate performance in SMEs?” can be answered in part by this study’s findings.

An SR methodology was used in this study. An SR is an effective way to check the direction of previous studies on a research question. The SR of 37 studies has demonstrated that the original conceptual model should be revised. Figure 5 depicts the relationships discovered during the SR.

According to the review, the organizational ambidexterity of SMEs is a key organizational component that affects the performance of businesses. Additionally, entrepreneurial orientation, where exploration is stronger than exploitation, creates a cooperative culture in the firm, which tends to form contextual ambidexterity in SMEs. Structural ambidexterity influences cooperative organizational culture and knowledge transfer. Additionally, firm performance was not supported by this study however. That is, depending on the firm’s given situation, contextual or structural ambidexterity should be chosen, but most of the studies analyzed in this dissertation study supported contextual ambidexterity.

The initial conceptual model put forth the idea that organizational learning helps SMEs develop their ambidexterity. The key finding of the synthesis was that organizational learning not only improves contextual ambidexterity but also offers an experience that informs the decision-making process improvement, as well as creativity and innovation know-how to seize future opportunities and maintain current profit. The mechanism of the conceptual model is very crucial for SME organizations as this provides an opportunity to modify and adapt to a quickly changing environment. For SMEs, organizational ambidexterity can be invaluable in orchestrating changes to the organization’s structure and how it handles potential future opportunities in the VUCA environment. This conceptual model as shown in Figure 5 can serve as a mechanism for the top management teams to implement ambidexterity in SMEs.

A total of 37 carefully chosen scholarly studies supported the aforementioned research question. In particular, corporate performance is more important than anything else, and ambidexterity has been shown to have a significant correlation with the performance improvement of SMEs. The company’s resources, organizational structure, organizational goals, and vision are significant factors in implementing ambidexterity. The relevance to performance and the factors of execution provide an important foundation for the company’s working manpower to establish a strategy. In the still underdeveloped field of SMEs, achieving successful results through an efficient blending of related elements can be good practice for ambidexterity. An important organizational decision is how a company will implement an ambidextrous strategy. Decisions made by business executives must take into account the organization’s resource level and various environments.

The SR methodology used in this study gave management practitioners who implement organizational ambidexterity in their SMEs invaluable insight. We offer managers a framework for modifying organizational ambidexterity to shape overall innovation management and efficiency.

First, we discovered a strong correlation between organizational structure design and performance. The organizational structure should take into account the company’s resources, core competencies, and environments because these choices have an impact on the company’s sustainability. Since the ambidexterity structure requires a balance between exploitation and exploration as an organizational behavior, organizations must support their members to perform both types of activity because the ambidexterity structure necessitates a balance between exploitation and exploration as an organizational behavior. In this vein, temporal separation is considered for a manager to control organizational changes sequentially between phases of exploration and exploitation [96]. In this type of contextual ambidexterity model, organizations alternate between decentralized periods to foster innovations and centralized periods to increase efficiency. Thus, as a result of this dissertation study, this sequential approach is recommended for practitioners in SMEs.

Second, this study implies that contextual ambidextrous SMEs should pay attention to internal competition. Internal conflicts over a firm’s resources may obstruct the transfer of internal knowledge according to De Clercq et al.’s (2014) [85] research, which established a negative correlation between internal rivalry and firm performance. Practitioners should lessen internal competition because employees need to work together and interact with others to effectively meet the demands the firm faces [92]. A reward system for sharing knowledge and skills could be suggested.

Third, this study shows the need for SMEs to increase knowledge exchange. From the organizational learning perspective, organizations learn to improve their capabilities, apply knowledge, and enhance competencies in their business [3,6,7]. To allow employees to share and learn about the other aspects of their work, firms hold regular project meetings or seminars.

Fourth, the systematic review suggests that the three activities should be used to further HRM. First of all, foster talents internally in the long term rather than recruit from outside. Establish precise criteria for hiring outside talent as well. Lastly, provide hands-on training programs and career development opportunities for employees.

7. Limitations and Future Research

This study has several limitations. First, it is possible that the systematic review methodology used in this dissertation study to extract constructs only adequately captured a subset of the distinction between exploitation and exploration. Future research needs to examine the usefulness of additional measures. Second, as market and technological dynamism change, the successful balance between exploration and exploitation may change significantly. Due to the selected articles’ limitations, this study was only able to analyze specific industries and certain growing stages of firms. To provide more precise controls for industry and growing stage environmental factors, and to investigate how the ideal balance between exploration and exploitation may be dependent on such environmental factors, future research should bring together diverse SME samples. Third, due to sample limitations, this dissertation study could not investigate the impact of explorative and exploitative innovation on long-term performance; 10 years or more. This amount of time is required if we are to examine entrepreneurial orientation businesses in a VUCA setting. To address this issue, future research needs to assemble articles studying longitudinal data over a sufficiently long period.