The effects of strategic orientation on operational ambidexterity: A study of indian SMEs in the industry 4.0 era

Drawing on previous literature suggesting that cross-functional integration is highly desirable in the operations management domain, we analyze the effects of strategic orientation (entrepreneurial and market orientations) on operational ambidexterity (exploration and exploitation) for improving business performance. Specifically, grounded in Resource Advantage Theory, we examine the effects of strategic orientation on the operational ambidexterity-performance link using data from 204 SMEs located in northern India. We first find that explorative and exploitative operational activities and their levels (average) have significant impacts on firms’ business performance. We also find that entrepreneurial- and market-oriented Indian SMEs place a greater emphasis on explorative operational activities; however, the impact of market orientation on exploitative operational activities is insignificant while that of entrepreneurial orientation on exploitative operational activities is highly significant. Despite insufficient resources to frequently undertake new projects, SMEs explore new opportunities to make profits, and also optimally utilize their existing resources and capabilities. Thus, the operations function of SMEs can ensure ambidexterity by focusing equally on existing resources and exploring new ones to seize market opportunities. We suggest that future research should investigate the relationships between operational ambidexterity and other orientations (e.g., technology, and learning), performance measures (e.g., customer satisfaction and loyalty), and contexts (e.g., large scale and non-for-profit companies).