Organisational ambidexterity and social enterprise performance: A Ghanaian perspective

Abstract

Background: Despite the important role of social enterprises in addressing the gaps in social service and infrastructure provision by national governments, the organisational capabilities that make social enterprises competitive and effective are still under-researched in emerging economies. Aim: The purpose of the study is to extend the extant studies on the nexus between organisational ambidexterity and firm performance to the social enterprise context. More specifically, we draw on the Dynamic Capability Theory to investigate business-like social enterprises in Ghana and how organisational ambidexterity (i.e. exploitation and exploration) influences their social and economic performance. Setting: Organisational ambidexterity was tested on 317 randomly selected social enterprises in Ghana. Method: The study employed a quantitative research design via a survey questionnaire while the structural equation modelling technique in Analysis of a Moment Structure (AMOS) software was used to test the study’s hypotheses. Results: It was found, among other things, that both exploration and exploitation are positively and significantly related to social performance (social marketing achievement and social value creation) and economic performance (commercial marketing achievement and economic value creation) of social enterprises. That is, the simultaneous pursuit of exploitative and explorative initiatives does not decrease but increase social enterprise performance. These results defy the conventional wisdom that the trade-off between exploitative and explorative functions may decrease organisation efficiency and bring unnecessary costs. Conclusion: Organisational ambidexterity can be considered a cradle of strategic revitalisation and competitive advantage for social enterprises enhancing social and economic performance. Therefore, we suggest that social entrepreneurs should pursue exploitative and explorative ambidexterity simultaneously through appropriate structural ambidexterous mechanisms like structural separations or contextual ambidexterous mechanisms such as non-structural separations of units.