Juggling Information Technology (IT) Exploration and Exploitation: A Proportional Balance View of IT Ambidexterity

The current information systems (IS) literature treats information technology (IT) ambidexterity as a single aggregated construct, assuming perfect balance or simultaneously strong IT exploration and exploitation. Taking a different perspective, we propose that IT ambidexterity can be achieved through a proportional balance between its two dimensions, and the optimal balance depends on the specific context. Based on matched-pair data from a field survey of business and IT executives, we find a three-way interaction among environmental dynamism, IT exploration, and IT exploitation such that IT ambidexterity matters only in dynamic environments. More important, through polynomial regression and response surface analysis, we find that the proportionally balanced, rather than the perfectly balanced, combinations of IT exploitation and exploration maximize organizational agility. We further demonstrate how the effect of proportional balance of IT ambidexterity varies in stable and dynamic environments. This study offers a novel understanding: IT exploration and IT exploitation do not need to be equally strong to improve agility, and their proportional balance associated with maximal agility varies across different levels of environmental dynamism. It improves the current knowledge of IT ambidexterity and makes a significant contribution to IS strategy research and practice.