STRATEGIC AMBIDEXTERITY IN STATE-OWNED ENTERPRISES: THE ROLE OF INNOVATION CAPABILITY AND STRATEGIC AGILITY

• Main Author: Reza Prasetyo, Ilham
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77634
• Institution: Institut Teknologi Bandung

In the modern era, state-owned enterprises confront two contradictory challenges. On one hand, they are obligated to perform public services, necessitating efficiency in their existing business operations. On the other hand, they are also expected to diversify and augment their revenue streams. To effectively navigate these concurrent demands, state-owned companies must foster strategic ambidexterity. In this study, strategic ambidexterity is conceptualized as a higher-level construct, influenced by strategic agility and innovation capability, that can adeptly address these challenges. Data for this study were collected from 84 management-level employees working at a prominent power generation state-owned enterprise. These respondents represent a diverse range of departmental backgrounds and managerial experiences, providing a comprehensive insight into the company's strategic practices. Partial Least Squares Structural Equation Modeling (PLS- SEM) was employed to analyze the relationships among strategic agility, innovation capability, strategic ambidexterity, and firm performance. The findings reveal significant relationships among the constructs. Strategic agility, defined as the capacity to rapidly and efficiently adapt to changes, directly influences both strategic ambidexterity and firm performance. This suggests that firms demonstrating a high degree of strategic agility are better equipped to balance their exploitative and exploratory strategies (strategic ambidexterity), subsequently driving improved firm performance. In contrast, innovation capability, or the firm's ability to develop and implement new ideas and technologies, directly affects strategic ambidexterity but does not exert a direct influence on firm performance. Instead, the effect of innovation capability on firm performance is indirect and is mediated through strategic ambidexterity. This result underscores the role of strategic ambidexterity as a conduit that connects innovation capability with firm performance, emphasizing its importance as a dynamic capability. The study's findings hold significant managerial implications, particularly for SOE firms. For these firms, fostering strategic agility and innovation capability emerges as a strategic priority, enabling them to successfully navigate the complexities of the environment that they are facing. By cultivating these capabilities, firms can enhance their strategic ambidexterity, striking a iv productive balance between exploration and exploitation and driving improved performance outcomes. This study contributes to the literature by conceptualizing strategic ambidexterity as a higher level capability, a perspective that, while theoretically grounded, has received limited empirical attention. Additionally, this study advances our understanding of strategic agility and innovation capability by incorporating these constructs into a single study, thus providing a more comprehensive view of their individual and combined effects on strategic ambidexterity and firm performance. Given these findings, the study concludes with a call for further research into the role of strategic ambidexterity, strategic agility, and innovation capability within the SOE’s context.