Academic journal article Journal of Applied Management Accounting Research

Organisational Ambidexterity and the Management Accountant: A Review

Academic journal article Journal of Applied Management Accounting Research

Organisational Ambidexterity and the Management Accountant: A Review

Article excerpt


The term technological unemployment (Keynes, 1930) describes a situation where the pace of technology change is so rapid that the number of new jobs created by the economy is unable to replace those made redundant by the changes. In 2014, the Economist magazine reported that for much of the twentieth century, global economies adjusted and evolved, enabling the creation of new jobs which replaced those lost in the face of constant and significant technological change (Economist, 2014). Two emerging factors are now significantly impacting on the ability of the global economy to sustain its capacity for absorbing jobs lost as a result of technological change. The first is the growing reach and power of computerisation (Frey and Osborne, 2013), and the second, the replacement of labour by capital (Summers, 2013). A significant contributor giving rise to this situation is the reduction in the cost for deploying computer power. This resulted in a substantial restructure of the global economy, a process which commenced in the closing decades of the twentieth century and continues into the twenty first (Brynjolfsson and Hitt, 2000).

When faced with rapidly changing environments management is forced to search for, select, and introduce something new before existing cash generating products or services become obsolete (Eisenhardt, 1989b; Roberts, 2004). This process of renewal strengthens the potential for future sustainability (O'Cass, Heirati and Viet Ngo 2014). It replenishes existing capability by introducing additional or new capacity for generating future cash flow (Tushman and O'Reilly III, 1996). In some industries, the competing firms will only achieve this goal by developing and executing a carefully structured process of retention and renewal (O'Cass,, 2014).

The process commences by first identifying viable products or services within the existing offer that can be retained. Products or services found to be non-viable are targeted for an abandonment or harvesting strategy. A critical aspect of this renewal process is the implementation of appropriate innovation programs for developing new products to replace those found to be obsolete (Lewin and Volberda, 1999; Atuahene-Gima, 2005). To ensure continuity of supply this renewal by innovation should ideally be undertaken in parallel with the product abandonment process (Raisch and Birkinshaw, 2008; O'Cass,, 2014).

Conflicting Agendas

A strategy that focuses on product retention and abandonment while simultaneously nurturing the development of replacements has been found to give rise to a number of irreconcilable conflicts (Cantarello, Martini and Nosella, 2012; O'Cass,, 2014). The conflicts arise because the respective activities are based on contradictory agendas and reconciliation between them is difficult (Smith and Tushman, 2005).

The activities within an organisation that focus on the support required for the extant product range are collectively described as its exploit capability (March, 1991). Activities focused on developing new products, services and markets, are referred to as the explore capability (March, 1991). Simultaneous support of both explore and exploit activities give rise to a structural contradiction that lies at the heart of the conflict (Cantarello,, 2012; O'Cass,, 2014). The reason being that some structures are more suited to the maintenance of extant capabilities, while others support the nurturing of innovation (Pettigrew and Fenton, 2000; Eisenhardt and Martin, 2000; Benner and Tushman, 2003). Mechanistic structures built on principles of centralisation, clear lines of command, and plenty of rules, are suited for maintaining a mature established capability (Farjoun, 2010; O'Reilly III and Tushman, 2004).

Typically, this is the capability producing the extant cash generating product range (Burns and Stalker, 1961). Organic structures characterised by fluid job descriptions, high communication levels, and few rules, free up employees (Burns and Stalker, 1961). …

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