Top management teams’ shared leadership and ambidexterity: the role of management control systems
| Author | Timurs Umans,Elin Smith,William Planken,William Andersson |
| DOI | 10.1177/0020852318783539 |
| Date | 01 September 2020 |
| Published date | 01 September 2020 |
| Subject Matter | Articles |
Review of
Administrative
Article
Sciences
International Review of Administrative
Top management teams’
Sciences
2020, Vol. 86(3) 444–462
!
shared leadership and
The Author(s) 2018
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ambidexterity: the
DOI: 10.1177/0020852318783539
journals.sagepub.com/home/ras
role of management
control systems
Timurs Umans
J€
onk€
oping University, Sweden
Elin Smith
Kristianstad University, Sweden
William Andersson
Kristianstad University, Sweden
William Planken
Kristianstad University, Sweden
Abstract
The study explores how top management teams’ shared leadership is related to orga-
nizational ambidexterity in public-sector organizations, theoretically and empirically
considering how this relationship is contingent on the management control system.
Using a sample of 85 Swedish municipal housing corporations, we find that shared
leadership has a positive relationship with organizational ambidexterity in public-
sector organizations. Moreover, increasing use of new public management control
systems, based on combined reward and performance controls, positively moderates
this relationship. The study also finds that traditional public management control
Corresponding author:
Timurs Umans, J€
onk€
oping International Business School, J€
onk€
oping University, Box 1026, 551 11 J€
onk€
oping,
Sweden.
Email: timur.uman@ju.se
Umans et al.
445
systems, based on combined planning and administrative controls, do not moderate the
relationship between top management teams’ shared leadership and organizational
ambidexterity. Accordingly, this article contributes to the public and strategic manage-
ment literature, as well as to managerial practice.
Points for practitioners
The article suggests that sharing leadership within top management teams can result in
a balanced resource allocation in municipal corporations. To be more effective in
achieving this balance, public sector managers might consider emphasizing new public
management-inspired management control systems and de-emphasizing those of a
more traditional type.
Keywords
ambidexterity, management control system, municipal corporations, shared leadership,
top management team
Introduction
Organizational ambidexterity – a non-financial organizational outcome refer-
ring to organizational ability to engage in both explorative and exploitative
activities – is a popular organizational outcome in strategic management and
corporate governance (e.g. Lubatkin et al., 2006). Achieving organizational
ambidexterity arguably relates to top managers’ characteristics, leadership
styles and means of influencing organizational performance (Umans, 2013).
Researchers generally agree that top management teams (TMTs) represent an
important locus for resolving inherent tensions in balancing explorative and
exploitative activities and in achieving organizational ambidexterity (e.g. Smith
and Tushman, 2005).
Studies exploring the role of top managers in achieving organizational ambi-
dexterity traditionally adopt a top-down approach, assuming that chief executive
officer (CEO) leadership affects the TMT and other organizational members (e.g.
Smith and Umans, 2015). CEO decisions are, in turn, reflected in managerial
ability to balance the firm’s explorative and exploitative activities (Mihalache
et al., 2014). Emerging research suggests an alternative perspective in which lead-
ership behaviour is distributed among TMT members rather than concentrated in
one individual (Mihalache et al., 2014). We posit that the latter perspective on
leadership holds greater promise for understanding the emergence of organization-
al ambidexterity. The concept of TMT shared leadership embedded in that per-
spective represents a ‘team process where leadership is carried out by the team as a
whole, rather than solely by a single designated individual’ (Ensley et al., 2006). It
allows functionally diverse top managers to handle large amounts of information,
446
International Review of Administrative Sciences 86(3)
create alternatives and better address conflicts and ambiguity (Umans, 2013).
These aspects are shown to result in an ability to balance explorative and exploit-
ative resource allocation (Mihalache et al., 2014).
Raisch and Birkinshaw (2008) argue that while considerable effort has been
made to understand what triggers organizational ambidexterity, few studies
explore the conditions under which ambidexterity emerges (for exceptions, see
Jansen et al., 2009; Mihalache et al., 2014). According to Benner and Tushman
(2003), organizational ability to achieve ambidexterity rests on the ability to
address various strategies, structures and processes. Drawing on management
accounting and control research, we propose that management control systems
are closely associated with structures and processes, being essential in decisions
concerning resource use and allocation (Merchant and Van der Stede, 2007).
Management control systems should be regarded as important contingencies
in the relationship between TMT shared leadership and organizational
ambidexterity.
Organizational ambidexterity is recognized as a useful concept in understanding
the outcomes of public-sector organizations (e.g. Smith and Umans, 2015) given
that their ultimate focus is often not financial performance, but non-financial per-
formance, specifically, the ability to efficiently allocate resources to satisfy stake-
holder needs (Bozeman, 1987). Research into ambidexterity in the public sector has
been limited (e.g. Aargard, 2011; Cannaerts et al., 2016; Choi and Chandler, 2015;
Smith and Umans, 2015). Existing studies have commonly treated ambidexterity as
an outcome (e.g. Smith and Umans, 2015), taken a leadership approach (e.g. Tuan,
2017) or studied ambidextrous employees (e.g. Aargard, 2011). Understanding
how organizational ambidexterity is achieved in the public sector and the condi-
tions under which it emerges would advance our understanding of how public-
sector organizations create stakeholder value.
This study explores how TMT shared leadership relates to organizational ambi-
dexterity in public-sector organizations and how this relationship depends on man-
agement control systems. We explore these relationships empirically using a survey
distributed to the TMT members of Swedish municipal housing corporations,
seeking to make several theoretical and practical contributions. First, we explore
the link between TMT shared leadership and organizational ambidexterity,
advancing our understanding of the role of leadership behaviour in achieving
balance between explorative and exploitative organizational activities. Second,
we explore the conditions under which TMT leadership facilitates ambidexterity,
advancing our understanding of the internal organizational processes and struc-
tures enabling ambidexterity. Third, by exploring our model in a public-sector
context, we contribute to the limited research into how public-sector organizations
can more efficiently allocate resources, and into the triggers and contingencies that
organizations should consider. In practical terms, this article helps public-sector
organization managers to understand how a combination of leadership approach
and management control system can give a more balanced resource allocation,
ultimately improving organizational performance.
Umans et al.
447
Theory development
Organizational ambidexterity
Organizational ambidexterity connotes the organizational ability to balance
explorative and exploitative orientations when using resources (Duncan, 1976):
exploration is characterized by search and discovery, while exploitation is charac-
terized by disciplined problem-solving and refinement (March, 1991). The concept
was introduced by Duncan (1976) and further explored by March (1991).
Although organizational ambidexterity research was pioneered by strategy schol-
ars, the concept has been investigated from various perspectives, including orga-
nizational learning, technological innovation, organizational adaptation, strategic
management and organization design (Raisch and Birkinshaw, 2008). Early studies
explored organizational ambidexterity in itself, whereas later studies paid greater
attention to the mechanisms, that is, organizational structure, context and leader-
ship (Tuan, 2017), supporting organizational ambidexterity. Another topic
of research interest is organizational ambidexterity and its performance effects
(e.g. Lubatkin et al., 2006).
While public-sector research has increasingly explored concepts from strategic
management research (e.g. Modell, 2012), ambidexterity has rarely been examined.
For example, researchers have studied individual ambidexterity (Kobarg et al.,
2017) and ambidextrous leadership (Tuan, 2017). Organizational ambidexterity
and
its
antecedents
have
been
examined
in
conference/working
papers
(e.g. Aargard, 2011) and a limited number of scientific articles (Cannaerts et al.,
2016; Choi and Chandler, 2015; Palm and Lilja, 2017; Smith and Umans, 2015).
Since the reforms of new public management (NPM) and new public governance,
the sector has needed to address innovation (Choi and Chandler, 2015), an indi-
cator
of
the
relevance
of
further
understanding
public
organizational
ambidexterity.
TMT shared leadership and organizational ambidexterity in the public sector
Research argues that organizational ability to pursue and balance explorative and
exploitative activities depends on top management ability to choreograph this
complex process (Halevi et al., 2015). According to Simsek (2009), we need to...
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