Cognitive ambidexterity: Examination of the cognitive dimension in decision-making dualities

Päivi Karhu Lappeenranta 2017 171 pages Acta Universitatis Lappeenrantaensis 756 Diss. Lappeenranta University of Technology ISBN 978-952-335-108-0, ISBN 978-952-335-109-7 ISSN-L 1456-4491, ISSN 1456-4491 This doctoral thesis addresses the cognitive dimension of the various dualities that especially managers confront when making decisions. The study demonstrates how similar decision-making situations can be perceived differently: where one decisionmaker may identify a challenge, another may find a way to channel tensions toward creative purposes. The two distinct yet interrelated literature streams of dualities and organizational ambidexterity have recognized the need for managers to respond to conflicting internal and external demands, which exposes them to a myriad of cognitive challenges. This thesis contributes to the discussion by building a framework of cognitive ambidexterity, which is defined as the ability to engage in parallel mental processes that are paradoxical or contradictory. Whereas duality scholars have been interested in the relationship of the poles of the dualities calling those for instance paradoxes and dilemmas, ambidexterity scholars have discussed the organizations’ ability to manage the opposing demands of exploration and exploitation – which is one type of duality discussed in this thesis – through spatial, temporal or contextual and behavioral solutions. Thus far, little exploration has been done about micro-foundations of ambidexterity and the cognitive processes related to dualities in decision-making. The aim of this thesis is to understand the micro-foundations of dualities, and the strategies that enable managers to handle the opposite demands of such decision-making pairs. To do this, the study draws from managerial cognition literature, which helps to explain how decision-makers identify, assess and cope with dualities and the tensions that arise from the incompatibilities within them. Altogether this study suggests that cognitive ambidexterity can fill a gap that is acknowledged across different research fields—namely, the lack of understanding about the micro-foundations of dualities like paradoxes and dilemmas, which is a limitation that may preclude the achievement of organizational ambidexterity. In addition to providing a conceptual illustration of cognitive ambidexterity, this thesis explores the identified research gaps empirically with qualitative and experimental methods. The qualitative studies operationalize and extend a widely cited tension framework, and test analogical reasoning in the context new product development, providing insights on different types of dualities and creative ways of coping with them. The laboratory experiment appears to be the first to explore decision-makers’ performance in facing dualities that have varying levels of cognitive complexity and their preference regarding dilemma or paradox solutions; it also sheds light on the opportunities and challenges related to different types of dualities. Extant literature on dualities and individual ambidexterity often highlights the superiority of simultaneous paradoxical solutions as opposed to dilemma solutions; this study showcases the usefulness of separate and sequential coping mechanisms in the light of cognitive demands. Altogether this study illuminates the cognitive dimension of decision-making by merging knowledge from distinct literature on dualities, organizational ambidexterity and managerial cognition; it addresses that business environments are, and will continue to be, characterized by dualistic demands. This thesis suggests that through active awareness of the unconscious cognitive processes that hinder or aid decision-making, managers can break from path-dependent patterns, reframe perceived threats to potential business opportunities and build ambidexterity into organizations in a way that prepares them to respond optimally to the dualities that they become inevitably confronted with.