Management Decision

Ambidextrous supply chain as a dynamic capability: building a resilient supply

chain
Sang M Lee Jin Sung Rha
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MD
54,1
Ambidextrous supply chain as
a dynamic capability: building
a resilient supply chain
2 Sang M. Lee
Received 10 December 2014
Department of Management, University of Nebraska-Lincoln, Lincoln,
Revised 18 June 2015 Nebraska, USA, and
Accepted 8 October 2015
Jin Sung Rha
Department of International Business Administration, Dankook University,
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Yongin, South Korea

Abstract
Purpose – Developing ambidexterity as a dynamic capability is important for firms to sustain their
competitive advantage. Moreover, this capability allows firms to build the resiliency to mitigate enterprise
risks. The purpose of this paper is to apply two main theoretical frames from the strategy literature,
dynamic capabilities, and organizational ambidexterity, to supply chain management (SCM) to examine
mitigation strategies for supply chain (SC) disruptions. The authors empirically investigated how the
firm’s SC ambidexterity is developed through a dynamic capability-building process and how this, in turn,
can mitigate the negative impact of SC disruptions and improve business performance.
Design/methodology/approach – This study conducted a field survey to answer the research
questions as there exists no archival database with detailed information on ambidextrous SC strategies
and dynamic capability. A total of 316 usable responses were received from managers working in
the SC area. Confirmatory factor analysis and structural equation modeling were run on SPSS
(version 16.0) and AMOS (version 18.0) to test the hypotheses to answer research questions.
Findings – Overall, the results of the study confirmed that a dynamic SC capability-building process
is an antecedent of SC ambidexterity, and that SC ambidexterity is important to firms as it mitigate the
negative impact of SC disruptions and enhance business performance. To take advantage of an
ambidextrous SC, through minimizing the negative impact of SC disruptions and maximizing firm
performance, firms should continually search for creative ways to satisfy new market needs and adapt
to the fast changing business environment.
Originality/value – This study applied a dynamic capability-building process and ambidexterity to
SCM. From the resilient SC perspective, the study found that the ability to effectively utilize existing
resources and create novel strategies for problem solving plays a critical role in addressing SC disruptions.
Keywords Dynamic capability, Supply chain disruption, Resilient supply chain,
Supply chain ambidexterity
Paper type Research paper

1. Introduction
As the global business environment has become increasingly complex and dynamic,
firms face the risk of disturbances resulting from problems along the supply chain (SC)
(Faisal et al., 2006). For example, the Japanese earthquake and subsequent tsunami in
March, 2011 caused significant losses of both people and property; the disaster also
negatively affected global SCs. Japanese companies, which account for the production
Management Decision The authors acknowledge that the work presented in this paper has been developed from
Vol. 54 No. 1, 2016
pp. 2-23 Dr Rha’s dissertation “Ambidextrous Supply Chain Management as a Dynamic Capability:
© Emerald Group Publishing Limited
0025-1747
Building a Resilient Supply Chain.” The present research was conducted by the research fund of
DOI 10.1108/MD-12-2014-0674 Dankook University in 2013.
 of about 40 percent of the world’s technology components, endured rolling blackouts to Ambidextrous
manage electric component supply (Reuters, 2011). As a result, many firms worldwide SC as a
had to adjust to supply shortages from Japan. Similarly, SC disruptions in Japan forced
global automakers to delay the launch of new models. SC disruption risk management,
dynamic
defined as “the ability of a system to return to its original state or move to a new, more capability
desirable state after being disturbed” (Christopher and Peck, 2004), has emerged as an
important topic within the domain of resilient supply chain management (SCM). 3
Both management scholars and practitioners have come to regard organizational
innovation as an imperative for minimizing organizational risk. Through innovation,
organizations can adapt to environmental change and mitigate the impact of threats
and risks (O’Reilly and Tushman, 2007; Teece et al., 1997).
Organizational ambidexterity has emerged as an appropriate theoretical perspective
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for explaining innovation, organizational learning, and performance improvement in

the field of SC. In order to successfully implement ambidextrous strategies over the
long term, an organization should acquire dynamic capability ( Jansen et al., 2009;
Kristal et al., 2010; Kriz et al., 2014; O’Reilly and Tushman, 2007). Dynamic capability
includes organizational resiliencies such as adaptation, flexibility, and agility that are
key competencies for adapting to changes in the dynamic and uncertain global
business environment (Duncan, 1976; O’Reilly and Tushman, 2007; Tushman and
O’Reilly, 1996). Ambidexterity based on a dynamic capability-building process
improves competencies and helps firms address uncertain and unexpected
environments. Thus, ambidexterity as a dynamic capability ( Jansen et al., 2009;
O’Reilly and Tushman, 2007) can make a SC more resilient for effectively dealing with
the negative impact of SC disruption.
Unfortunately, the association between SC ambidexterity as a dynamic capability
and resilient SC, which reduces the negative impact of SC instability, has yet to be
comprehensively explicated. Because SC instability occurs at random (Dejonckheere
et al., 2003), firms should enhance their resiliency and capabilities to quickly and
effectively address SC-disruptive events (Christopher and Peck, 2004; Macdonald
and Corsi, 2013; Pettit et al., 2010; Revilla and Sáenz, 2014). Thus, building a resilient SC
can play a critical role in SC risk management (Christopher, 2004; Christopher and
Peck, 2004; Macdonald and Corsi, 2013; Sheffi, 2005; Tang, 2006).
The purpose of this study is to empirically investigate how firms’ SC ambidexterity is
developed through a dynamic capability-building process and how this, in turn, can
mitigate the negative impact of SC disruptions and improve business performance. This
paper is organized as follow. Section 2 reviews the relevant literature to provide the
theoretical background for the study. In Section 3, a theoretical framework is presented
and research hypotheses are developed to link organizational innovation theories with SC
resilience. Section 4 presents the methodologies employed in the research. In Section 5,
the results of the analyses described are presented. Finally, Section 6 concludes the study
and discusses practical contributions, limitations, and avenues for future research.

2. Literature review
2.1 Dynamic SC capability-building process
The dynamic capability perspective evolved from the resource-based view (RBV)
(Bowman and Ambrosini, 2003). While RBV focusses on resource identification and
resource choice, the dynamic capability perspective stresses resource deployment
and capability-building to adapt to changes in technologies and customers (Helfat and
Peteraf, 2003). Dynamic capability explains how market uncertainty and a dynamic
 MD business environment form business conditions in which competitive advantage arises
54,1 from the firm’s capability to adapt to environmental uncertainty and change
(Eisenhardt and Martin, 2000; Lacerda et al., 2014).
Teece (2007) developed a synthesized and integrated framework for dynamic
capability-building, consisting of: sensing opportunities and threats, seizing opportunities,
and reconfiguring a firm’s tangible and intangible assets. Sensing opportunities and
4 threats is related to a scanning creation, learning, and interpretive activities both within
and without the firm (Teece, 2007). In the SC context, sensing is congruent with SC
visibility, which is the ability to monitor exact information of upstream and downstream
inventories, demand and supply conditions, and production and purchasing (Christopher
and Lee, 2004; Christopher and Peck, 2004; Lee et al., 2000). SC sensing can help improve
operational performance such as shipment accuracy, customer service, and inventory
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turnover, leading to competitive advantage (Barratt and Oke, 2007; Patterson et al., 2004;
Småros et al., 2003; Wei and Wang, 2010). Successful scanning and searching in SC lead
firms to enhance responsiveness (agility), planning (scheduling), and decision making
(Armistead and Mapes, 1993; Barratt and Barratt, 2011; Kent and Mentzer, 2003; Patterson
et al., 2004). Thus, SC sensing facilitates SC dynamic capability, for improving outcomes
and operational capability.
After sensing, firms engage in the seizing process, which involves the ability to
make timely decisions in order to develop new opportunities (Teece, 2007; Teece and
Pisano, 1994; Teece et al., 1997). SC agility can be congruent with the seizing process in
that SC problems should be addressed in a speedy manner to respond to the changing
marketplace environment (Swafford et al., 2006). SC agility focusses on improving
adaptability and flexibility for responding effectively to the changing market
environment (Lee et al., 2013; Sharp et al., 1999). Previous studies found SC agility is
positively associated with operational capabilities (Gligor and Holcomb, 2012; Yusuf
et al., 2013). Achieving SC agility allows firms to reduce inventory, counteract market
variations efficiently, respond to consumer demand quickly, and integrate with
suppliers and partners effectively (Mason et al., 2002).
To sustain sales growth and competitive advantage, firms should have the ability to
recombine, redeploy, and reconfigure their assets and organizational structures as they
acquire more assets to manage and control malfunctions (Teece, 2007; Teece and Pisano,
1994; Teece et al., 1997). Reconfiguration completes the dynamic capability-building
process based on identification of opportunities (sensing) and judicious selection of
product attributes (seizing) (Teece, 2007). In the SC literature, flexibility is the ability to
restructure SC assets, strategies, and operations to react or adapt to changes in
information systems, products, customers, and vendors while maintaining high
performance (Beamon, 1999; Candace et al., 2011; Duclos et al., 2003; Gosling et al., 2010;
Kumar et al., 2006; Lee et al., 2013). SC flexibility allows firms not only to save money and
time but also to decrease inventory and the resources required to respond to market
changes (Harrison and New, 2002; Kumar et al., 2006). Accordingly, SC flexibility is
positively associated with operational outputs (e.g. delivery) and the overall
organizational performance (e.g. sales growth rate) (Lee et al., 2013; Malhotra and
Mackelprang, 2012; Sanchez, 2007; Swafford et al., 2008; Vickery et al., 1997).

2.2 SC ambidexterity
Duncan (1976) first used the term “ambidexterity” to represent the management trade-
off caused by dual organizational systems: one for the alignment of current certainties
and the other for adaptation to new possibilities. Ambidextrous organizations are able
 to exploit existing competences and explore new opportunities with equal dexterity Ambidextrous
(Lubatkin et al., 2006). Gibson and Birkinshaw (2004) indicated that ambidextrous SC as a
ability involves simultaneously utilizing exploitation and exploration, efficiency and
flexibility, and alignment and adaptability.
dynamic
Exploitation focusses on utilizing existing resources and current competitive capability
advantage, while exploration is aimed at searching for new resources and expanding
markets. Exploitation includes refinement, choice, production, efficiency, selection, 5
implementation, and execution; whereas exploration usually includes search, variation,
risk taking, experimentation, play, flexibility, discovery, and innovation (March, 1991).
Tushman and O’Reilly (1996) indicated that organizational ambidexterity strengthens the
market and technological leadership in the long term because firms are able to proactively
cope with environmental shift. Ambidexterity enhances a firm’s flexibility to solve
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problems quickly and efficiently during new product development (Sheremata, 2000).
Moreover, competitive advantage can be achieved through ambidexterity (Birkinshaw,
2005; Duane Ireland and Webb, 2007; Lacerda et al., 2014; O’Reilly and Tushman, 2007).
Some operations management researchers have used the term “ambidexterity” to
indicate a firm’s ambidextrous ability to make and develop a relationship with
suppliers (Azadegan and Dooley, 2010; Chiu, 2014; Hernández-Espallardo et al., 2011;
Im and Rai, 2008; Tokman et al., 2007), whereas others have invoked the term broadly
to indicate operational strategies to improve firm performance (Blome et al., 2013;
Chandrasekaran et al., 2011; Kristal et al., 2010; Liu et al., 2009; Subramani, 2004) or
gauge the ability of a firm to promote technology innovation (Phillips et al., 2006; Sidhu
et al., 2007). In addition, conceptual definitions of SC exploitation and exploration are
similar to those in the strategy literature. SC exploitation focusses on maintaining a
relationship with current suppliers, searching for SC solutions using existing resources,
and leveraging current SC technologies, whereas SC exploration involves searching for
SC solutions based on novel approaches and seeking creative ways to satisfy
customers (Kristal et al., 2010; Patel et al., 2012). Ambidextrous operations and SC
strategies have been shown to be positively associated with firm performance
indicators, including financial outcomes, strategic capabilities, and technology
innovativeness (Blome et al., 2013; Patel et al., 2012).

3. Hypotheses development
3.1 Dynamic SC capability-building process
Many researchers have viewed dynamic capability as a process (Lacerda et al., 2014;
Makadok, 2001; Schreyögg and Kliesch‐Eberl, 2007; Teece, 2007; Winter, 2003); thus,
the dynamic capability-building process should be routinized and embedded in the
organizational structure as a process of developing effective SCs. This study shows that
the dynamic SC capability-building process consists of three interrelated SC capabilities:
visibility (sensing), agility (seizing), and flexibility (reconfiguring) as shown in Figure 1.
SC visibility reduces complexity and uncertainty, which cause SC instability, and
then enables the firm to rapidly capture opportunities, react to risks, and restructure
assets and resources along the SC (Bruce et al., 2004; Christopher, 2000; Swafford et al.,
2006). Thus, the following hypotheses are proposed:
H1. SC sensing is positively related to SC seizing as part of the dynamic SC
capability-building process.
H2. SC sensing is positively related to SC reconfiguring as part of the dynamic
SC capability-building process.
 MD SC sensing (visibility)
54,1 - Acknowledge SC
risks
- Perceive potential
opportunities in the
SC (e.g. new
product
6 development)
SC reconfiguring
(flexibility)

- Effectively
recombine resources
to routinize
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competitive
SC seizing (agility)
advantages from
sensing and seizing
- React quickly after
SC turbulence
- Pursue long-term
- Give shape to success
potential
opportunities at the
right time
Figure 1.
The dynamic SC
capability-building
process

Agile SC enables the firm to make timely decisions to deal with SC problems such as
delivery delays, unsatisfied customers, and lead time issues because agility allows to
quickly deal with conflicts in the strategic decision-making process and improves
responsiveness to environmental changes (Lee et al., 2013; Li and Liu, 2014; Swafford
et al., 2008). To routinize acquiring competitive advantage from scanning for and
capturing threats and opportunities, the firm should pursue reconfigurable flexibility,
the ability to effectively integrate and combine existing resources into novel
combinations (Teece, 2007; Teece et al., 1997). This realignment guarantees long-term
success (Teece, 2007). Reconfigurable SC flexibility is positively affected by SC seizing
activities such as learning, coordinating, and integrating (Wei and Wang, 2010).
Thus, the following hypothesis is suggested:
H3. SC seizing is positively related to SC reconfiguring as part of the dynamic SC
capability-building process.
3.2 SC ambidexterity as a dynamic capability
Dynamic capability and organizational ambidexterity should be understood within the
framework of adaptation systems (Gibson and Birkinshaw, 2004; O’Reilly and Tushman,
2007; Zollo and Winter, 2002). “Ambidexterity as a dynamic capability” indicates that
dynamic capability is fundamentally associated with a combination of exploitation and
exploration (Ancona et al., 2001; Katila and Ahuja, 2002; Kriz et al., 2014).
This study suggests that ambidexterity can be embodied in the firm’s SC through the
dynamic SC capability-building process as an antecedent of SC ambidexterity. Searching
for new opportunities and potential threats across the SC is critical for evaluating the
current SC capacity and developing new products and systems (Barratt and Oke, 2007;
McCrea, 2005). This capability leads to a high level of innovation (Blome et al., 2013;
 Lacerda et al., 2014; Simatupang et al., 2002). Thus, external and internal scanning Ambidextrous
improves the firm’s ability to evaluate strategic decision-making risks in such a way that SC as a
scanning practices can reconcile the conflict between exploitation and exploration
(Chandrasekaran et al., 2011). The following hypothesis is developed:
dynamic
capability
H4. SC sensing is positively related to SC ambidexterity.
Organizational agility brings with it the advantage of reacting to diverse changes as an 7
element of ambidexterity (Vinekar et al., 2006) because agility meets the requirements
of ambidexterity by facilitating flexible operational processes (e.g. informal
interactions) for exploitation and evolving rapidly in response to shifts in the
business priorities for exploration (Chandrasekaran et al., 2011; Ramesh et al., 2012).
Thus, the following hypothesis is proposed:
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H5. SC seizing is positively related to SC ambidexterity.

Chandrasekaran et al. (2011) argued that the development of a flexible system to respond
to changes leads to a high level of ambidexterity because flexibility, a key element of
adaptation, can play an important role in introducing new products and solving current
operational problems. Furthermore, Wei and Wang (2010) indicated that SC
reconfiguration (flexibility) enables firms to develop new products and services and
have more knowledge of the current market. Thus, the following hypothesis is suggested:
H6. SC reconfiguring is positively related to SC ambidexterity.
3.3 Effect of SC ambidexterity as a dynamic capability on SC disruption
Dynamic capability and ambidexterity enhance a firm’s adaptability to uncertain and
dynamic business environments because these capabilities can create critical
knowledge for innovation through organizational learning (March, 1991; O’Reilly and
Tushman, 2007). This adaptability is a key element of resilient SCs (Christopher, 2000,
2004; Christopher and Lee, 2004; Christopher and Peck, 2004; Craighead et al., 2007;
Jüttner et al., 2003; Macdonald and Corsi, 2013; Tang, 2006) because resilience is the
ability to reconfigure past experiences for novel new approaches to secure a reliable SC
(Weick and Sutcliffe, 2007). Organizations with a higher level of resilience and
system state desirability pursue ambidextrous and dynamic capability strategies
(Mamouni Limnios et al., 2014).
Christopher and Peck (2004) indicated that SC resilience enables firms to minimize the
damage after experiencing SC risks and return to a stable or better status. Because
organizational resilience helps create competitive advantage, it can alleviate vulnerability
(Sheffi, 2003). SC resilience can be accelerated through flexibility, visibility, collaboration,
and security (Macdonald and Corsi, 2013; Pettit et al., 2010; Sheffi, 2003, 2005). Thus, a
dynamic SC capability-building process can help make SC more resilient.
An ambidextrous SC enhances a firm’s ability to cope with a new business paradigm
and improves flexibility in uncertain environments because ambidexterity improves
inter-organizational relationships, capabilities, and competitive advantage (Blome et al.,
2013; Chiu, 2014; Kristal et al., 2010; Patel et al., 2012). Moreover, the greater the
adaptability and alignment capability embodied in an organization, the more
ambidexterity the organization has (Chandrasekaran et al., 2011; Gibson and
Birkinshaw, 2004). Thus, ambidexterity can be facilitated better with a resilient SC.
The following hypothesis is posited:
H7. SC ambidexterity is negatively related to the negative impact of SC disruption.
 MD 3.4 The effect of ambidexterity on firm performance
54,1 Organizational ambidexterity positively impacts firm performance. In the field of SCM,
ambidexterity enhances combinative capability (Kristal et al., 2010), technology
innovativeness (Sidhu et al., 2007), operational efficiency (Im and Rai, 2008; Subramani,
2004), and flexibility (Blome et al., 2013; Chandrasekaran et al., 2011; Patel et al., 2012).
Thus, the following hypothesis is posited:
8 H8. SC ambidexterity is positively related to firm performance.
3.5 Linking the impact of SC disruption and firm performance
Many studies have proved that SC disruptions negatively impact financial performance,
operational performance, quality, and customer satisfaction. Bode et al. (2011) suggested
that SC disruptions probably decrease overall efficiency, product quality, adaptability to
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customer demands, sales, and delivery reliability, while increasing costs and price. A
resilient SC cushions these negative impacts. If firms do not rapidly implement strategic
control to manage the SC risk, they may not sustain their business performance because
the negative impact of SC disruption aggravates firm performance (Blackhurst et al.,
2005; Macdonald and Corsi, 2013). Thus, the following hypothesis is developed:
H9. The negative impact of SC disruption is negatively related to firm performance.
Figure 2 presents the proposed theoretical framework.

4. Research methodology
This study conducted a field survey to examine the research questions as there is no
archival database available that provides detailed information on ambidextrous SC
strategies and dynamic capability. With the help of a Korean research consulting firm, we
searched for the target survey respondents with managerial job titles including such terms
as SC, logistics, senior, director, leader, engineering, project, process, system, production,
operations, plant, and quality to create the mailing list. The total numbers of target
respondents were 1,651. Confirmatory factor analysis (CFA) and structural equation

Effect of resiliency on disruption

SC ambidexterity as a dynamic capability: building a resilient SC
negative impact and performance

SC
Disruption’s
SC Sensing H4 (+) Negative
H7 (–) Magnitudes

H2 (+)
H1 (+) H6 (+)
SC Re- SC
configuring Ambidexterity

H3 (+) H9 (–)
H8 (+)

SC Seizing H5 (+)
Firm
Figure 2. Performance
The proposed
research model SC dynamic capability
building process
 modeling (SEM) were run on SPSS (version 16.0) and AMOS (version 18.0) to test the Ambidextrous
hypotheses developed to answer research questions. SC as a
4.1 Measurement dynamic
Based on the review of relevant literature, the most measurement items used in this capability
study were adopted from previous studies. Two active researchers and two chief
executive officers of manufacturing companies in South Korea were suggested to carry 9
out a pilot study for us. Based on the pilot survey, the questionnaire was refined for
clarity and consequently eight inappropriate items (SEN5, SEN6, SEI4, SEI7, REC7,
SDN9, SDN10, and FP5 in Table I) were dropped based on respondents’ ideas. Table I
summarizes the final measurement items included in the questionnaire.
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4.2 Sample
A cross-sectional survey was administered using Qualtrics to measure variables and
test the hypotheses. Because this study investigates SCM topics such as SC innovation
(dynamic capability and ambidexterity) and disruption impacts, the respondents
targeted by this study were mid- to high-level managers and engineers who worked in
SC and logistics departments in South Korean firms. Most firms in South Korea face
fierce competition because of the small domestic market and the continuing difficulties
in the global economy. Moreover, since South Korea lacks natural resources, the
country relies primarily on SC innovations to achieve competitive advantage.
A questionnaire link was sent to 1,651 possible respondents. A total of 316
questionnaires were completed and returned, a response rate of 19.14 percent. Table II
shows respondents’ demographic information.

4.3 Testing for possible bias in the self-report survey

If respondents differ substantially from non-respondents, the study sample may be biased.
A non-response bias test was conducted based on Armstrong and Overton’s (1997)
assumption that late respondents and non-respondents have similar tendencies.
Respondents were divided into two groups in terms of survey completion date:
125 respondents (39.5 percent) that completed the survey in February 2013 and 191
respondents (60.5 percent) that completed the survey in March 2013. A t-test was conducted
and the result showed no significant difference between the early response and late
response groups ( p ¼ 0.205). Thus, this study does not have a non-response bias problem.
Self-reporting measures using a single source may cause common method variance
problems (Campbell and Fiske, 1959). Podsakoff and Organ (1986) indicated that the
Harman one-factor test serves to assess the potential for common method variance in
the data. An unrotated factor analysis using the eigenvalue-greater-than-one criterion
showed seven factors that exceeded one accounting for 66 percent of the total variance,
and the first factor accounted for only 28 percent of the variance. Therefore, the
common method bias is unlikely to be a serious problem.

5. Results
5.1 Measurement model
This study used a two-stage procedure for data analysis as suggested by (Anderson
and Gerbing, 1988). Before the structural model was analyzed, CFA was undertaken to
examine the measurement model. The items that contributed to a standardized
coefficient with values less than 0.50 and that resulted in standardized residuals greater
than |4.00| (SEN2, SEN8, SEI5, REC4, and REC8) were dropped. In reflective scales,
 MD Constructs and item measures Literatures
54,1
SC sensing
SEN1: we can perceive demand shifts and changes in customer preference Li and Liu (2014)
before competitors do
SEN2: we can fully understand the impact of internal and external
environment (delete)
10 SEN3: we can feel the major potential opportunities and threats in our SC
SEN4: we have good observation and judgment ability in our SC
SEN5: we often have meetings to discuss the market demand and
forecast (delete)
SEN6: we have perfect SC information management system (delete)
SEN7: we have frequent interactions with other departments to acquire new
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knowledge related to product development, process innovation, or logistics and

distribution practices Wei and Wang (2010)
SEN8: we exchange documents containing valuable knowledge, which help
to improve our SC performance, with the SC partners (delete)
SC seizing
SEI1: we can quickly deal with conflicts in the strategic decision-making Li and Liu (2014)
process in our SC
SEI2: under any circumstance we can make timely decisions to deal with
SC problems
SEI3: we can reconfigure resources in time to address environmental change
SEI4: we can quickly adjust delivery capability (delete) Swafford et al. (2008)
SEI5: we can quickly improve responsiveness to changing market
needs (delete)
SEI6: we can quickly reduce manufacturing lead time
SEI7: we can quickly improve delivery reliability (delete)
SC reconfiguring
REC1: we can successfully realign or reinvent SC in response to (or in Wei and Wang (2010)
anticipation of) market change
REC2: we can successfully reconfigure SC resources to come up with new
productive assets
REC3: we are able to engage in resource re-combinations to better match the
product-market areas in this SC
REC4: we are able to cope with a wide range of market change (delete) Stevenson and Spring
REC5: we are able to align (or re-distribute) skills to meet the current needs (2007)
of the whole SC
REC6: we can effectively integrate and combine existing resources into novel
combinations in the SC
REC7: we can rapidly send and receive products cost effectively as customers
and sources of supply change (delete)
REC8: we can successfully build collaborative relationships both up and
downstream, including for new product development (delete)
SC exploitation
EPT1: in order to stay competitive, our SC managers focus on reducing Kristal et al. (2010)
operational redundancies in our existing processes
EPT2: in order to stay competitive, our supply chain managers focus on
improving our existing technologies
EPT3: leveraging our current SC technologies is important to our
firm’s strategy
Table I.
Measurement items (continued )
 Constructs and item measures Literatures
Ambidextrous
SC as a
EPT4: our managers focus on developing strong competencies in our
existing SC processes
dynamic
capability
SC exploration
EPR1: we proactively pursue new supply chain solutions Kristal et al. (2010)
EPR2: we continually experiment to find new solutions that will improve 11
our SC
EPR3: to improve our SC, we continually explore new opportunities
EPR4: we are constantly seeking novel approaches in order to solve SC
problems
SC disruption negative magnitudes
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How did the disruption negatively affect (directly or indirectly) your Bode et al. (2011)
business unit on the following dimensions?
SDN1: procurement costs/prices for the purchased item
SDN2: overall efficiency of our operations
SDN3: product quality of our final product(s)
SDN4: responsiveness to customer demands Zsidisin and Wagner
SDN5: delivery reliability (on-time delivery, order accuracy) (2011)
SDN6: sales
SDN7: customer satisfaction Zsidisin and Wagner
SDN8: order fulfill capacity (2011)
SDN9: production (delete)
SDN10: total stock (delete)
Firm performance
What is your firm’s performance relative to its competitors in the
following areas:
FP1: relationship with customers and information about their Rai et al. (2006)
preferences
FP2: finding new revenue stream
FP3: productivity improvement (assets, operating costs, and labor costs)
FP4: market share Wisner (2003)
FP5: average selling price relative to competitors (delete)
FP6: overall product quality
FP7: overall competitive position Table I.

deleting an item from the measurement model does not change the original meaning of
constructs ( Jarvis et al., 2003). The overall fit statistics for the revised measurement
model showed acceptable fits as shown in Table III.
Convergent validity was confirmed because all of the standardized estimates were
significant at the 0.001 level and the t-value was greater than the threshold of 1.96 (Anderson
and Gerbing, 1988) as shown in Table IV. The AMOS output provides the t-value as a critical
ratio value that can be calculated by dividing the estimated covariance by its standard error.
All AVE values, the construct relative to the total amount of variance, were greater than the
recommended value of 0.5 (Fornell and Larcker, 1981). Discriminant validity can be assured
by comparing AVE with the squared correlation between constructs (Fornell and Larcker,
1981). As shown in Table V, AVE values for the constructs were higher than the squared
correlation between constructs. Thus, discriminant validity was established.
In order to check internal reliability, Cronbach’s α was calculated for each construct
using equal factor weighting as shown in Table IV. Because all values exceeded 0.7
(Fornell and Larcker, 1981), internal consistency is assured. Moreover, composite reliability
 MD Frequency Percent
54,1
Respondents
Job title type
Supply chain (logistics) manager 87 27.5
Factory manager 103 32.6
Risk manager 74 23.4
12 Top executive 42 13.3
Others 10 3.2
Organizations
Industry type
Logistics/distribution 45 14.2
Construction 42 13.3
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Electronic/other electrical equipment and components 28 8.9

Automobile hardware and manufacturing 23 7.3
Metal manufacturing 19 6.0
Industrial, commercial machinery, and computer equipment 13 4.1
Rubber and miscellaneous plastics products 7 2.2
Service 93 29.4
Miscellaneous manufacturing industries 46 14.6
Number of employees
1-50 159 50.3
51-100 35 11.1
101-150 26 8.2
151-200 7 2.2
201-250 14 4.2
Table II. 251-300 10 3.2
Respondent 300 65 20.6
characteristics Total respondents ¼ 316

Table III.
Revised χ2 df Bollen-Stine bootstrap p CMIN/df CFI IFI RMSEA RMR
measurement
model fit indices 797.970 532 0.059 1.500 0.955 0.956 0.040 0.052

including actual factor loading was used to assure the degree to which the scale indicators
reflect an underlying factor. As shown in Table IV all values of composite reliability were
greater than the recommended value of 0.6. Thus, the construct reliability is assured.
SC ambidexterity is a higher order construct composed of SC exploitation and SC
exploration (Kristal et al., 2010). Higher order factor analysis must be conducted to test
whether the first-order factors (exploitation and exploration) can converge to a single higher
order construct (SC ambidexterity). Following Kristal et al. (2010), the second-order construct
reflected by SC exploitation and exploration was assessed by checking the significance of
path loadings from SC ambidexterity to exploitation and exploration in the structural model.

5.2 Structural model

After checking reliability and validity, the structural model was analyzed to test the research
hypotheses. The structural model had satisfactory model fit results, as shown in Table VI.
The positive and significant path loadings linking SC ambidexterity to SC
exploitation ( β ¼ 0.395, p o 0.01) and SC exploration ( β ¼ 0.249, p o0.01) confirmed
 Constructs and item Cronbach’s Composite Standardized
Ambidextrous
measures α reliability AVE Mean SD factor loading CR p-value SC as a
dynamic
SC sensing 0.822 0.804 0.510 4.73 0.79
SEN1 4.73 1.00 0.605 fixed capability
SEN3 4.79 0.91 0.651 11.383 o0.001
SEN4 4.69 0.97 0.808 9.730 o0.001
SEN7 4.72 1.02 0.773 9.650 o0.001 13
SC seizing 0.795 0.803 0.512 4.78 0.79
SEI1 5.02 1.35 0.802 fixed
SEI2 5.12 1.33 0.795 14.737 o0.001
SEI3 4.84 1.36 0.514 8.968 o0.001
12.937 o0.001
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SEI6 4.95 1.34 0.712

SC reconfiguring 0.862 0.879 0.548 4.97 0.84
REC1 4.97 1.08 0.733 fixed
REC2 4.99 1.01 0.790 13.438 o0.001
REC3 4.92 1.01 0.763 12.986 o0.001
REC5 5.00 1.06 0.786 13.367 o0.001
REC6 4.97 1.09 0.662 11.240 o0.001
SC exploitation 0.811 0.815 0.527 4.79 0.84
EPT1 4.84 0.97 0.638 fixed
EPT2 4.81 1.07 0.753 10.347 o0.001
EPT3 4.78 1.06 0.804 10.697 o0.001
EPT4 4.74 1.10 0.697 9.831 o0.001
SC exploration 0.857 0.861 0.609 4.94 0.89
EPR1 5.02 1.02 0.806 fixed
EPR2 4.94 1.05 0.876 16.185 o0.001
EPR3 4.85 1.08 0.668 12.136 o0.001
EPR4 4.96 1.13 0.758 14.133 o0.001
SC disruption’s
negative magnitudes 0.916 0.911 0.563 3.33 0.92
SDN1 3.31 1.16 0.717 fixed
SDN2 3.33 1.14 0.744 15.489 o0.001
SDN3 3.41 1.20 0.732 12.332 o0.001
SDN4 3.31 1.11 0.730 12.317 o0.001
SDN5 3.27 1.19 0.803 13.526 o0.001
SDN6 3.34 1.12 0.820 13.796 o0.001
SDN7 3.28 1.16 0.768 12.932 o0.001
SDN8 3.40 1.15 0.679 11.424 o0.001
Firm performance 0.893 0.887 0.567 4.78 8.11
FP1 4.69 1.02 0.715 fixed
FP2 4.84 1.05 0.712 14.392 o0.001
FP3 4.77 0.95 0.745 12.390 o0.001
FP4 4.73 1.03 0.723 11.880 o0.001
FP6 4.82 1.01 0.827 13.663 o0.001
FP7 4.84 0.96 0.790 13.128 o0.001 Table IV.
Notes: AVE, average variance extracted ¼ Σ (factor loading2)/(Σ (factor loading2) + Σ (error)); Measurement
composite reliability ¼ Σ (factor loading)2/(Σ (factor loading)2 + Σ (error)) model results
 MD SC disruption’s
54,1 SC SC SC SC SC negative Firm
Constructs AVE sensing seizing reconfiguring exploitation exploration magnitudes performance

SC sensing 0.51 1
SC seizing 0.51 0.396** 1
SC reconfiguring 0.55 0.344** 0.651** 1
14 SC exploitation 0.53 0.236** 0.363** 0.270** 1
SC exploration 0.61 0.146** 0.241** 0.172** 0.242** 1
SC disruption’s
negative impacts 0.56 −0.183** −0.334** −0.345** −0.132* −0.056 1
Firm
Table V. performance 0.57 0.266** 0.640** 0.624** 0.264** 0.109 −0.548** 1
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AVE and correlation Notes: n ¼ 316. *p o 0.05; **p o0.01 (two-tailed)

Table VI. χ2 df Bollen-Stine bootstrap p CMIN/df CFI IFI RMSEA RMR

Structural model
fit indices 817.822 572 0.088 1.430 0.959 0.959 0.037 0.070

that SC ambidexterity is a second-order construct as reflected by SC exploitation

and exploration.
H1-H3 were posited to investigate the dynamic SC capability-building process.
The SEM showed a positive link between SC sensing and SC seizing (γ ¼ 0.485,
p o 0.001). There is no significant relationship between SC sensing and SC
reconfiguring (γ ¼ 0.011, p W 0.1). The model showed a positive link between SC
seizing and SC reconfiguring ( β ¼ 0.773, p o 0.001).
H4-H6 suggested that the dynamic SC capability-building process would be
positively associated with SC ambidexterity. The results revealed no significant
relationship between SC sensing and SC ambidexterity (γ ¼ 0.003, p W 0.1), but positive
links between SC seizing and SC ambidexterity ( β ¼ 0.773, p o 0.001) and SC
reconfiguring and SC ambidexterity ( β ¼ 0.313, p o 0.05).
H7 and H8 proposed that SC ambidexterity would negatively affect the impact of SC
disruption and positively affect firm performance. The structural model showed a
negative link between SC ambidexterity and the negative impact of SC disruption
( β ¼ −0.374, p o 0.001) and a positive link between SC ambidexterity and firm
performance ( β ¼ 0.611, p o 0.001).
H9 suggested that the negative impact of SC disruption would be negatively
associated with firm performance. The results showed a negative link between the
negative impact of SC disruption and firm performance ( β ¼ −0.350, p o 0.001).
Table VII summarizes the results of the significance test for the paths of the research
model. In addition, Figure 3 shows the model’s significant path coefficients.

6. Conclusion
SC visibility allows firms to share information with partner organizations and
effectively manage and control planning, scheduling, and manufacturing, in turn
improving their ability to react quickly to unexpected risks and chances to strengthen
capabilities (Småros et al., 2003; Wei and Wang, 2010). Consistent with this idea, the
empirical results confirmed that SC sensing is positively associated with SC seizing.
 Hypothesized path Path coefficient SE p-value Result
Ambidextrous
SC as a
H1: SC sensing → SC seizing 0.485 0.076 0.000** Supported dynamic
H2: SC sensing → SC reconfiguring 0.011 0.080 0.862 Not supported
H3: SC seizing → SC reconfiguring 0.773 0.157 0.000** Supported capability
H4: SC sensing → SC ambidexterity 0.003 0.024 0.966 Not supported
H5: SC seizing → SC ambidexterity 0.773 0.090 0.000** Supported
H6: SC reconfiguring → SC ambidexterity 0.313 0.035 0.022* Supported 15
H7: SC ambidexterity → SC disruption’s −0.374 0.433 0.000** Supported
negative impacts
H8: SC ambidexterity → Firm performance 0.611 0.564 0.000** Supported Table VII.
H9: SC disruption’s negative impacts → Firm −0.350 0.055 0.000** Supported Results of the
performance significance test for
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Notes: *p o 0.05; **p o0.001 the model’s paths

Resiliency’s effect on disruption’s

SC ambidexterity as a dynamic capability: Building a resilient SC
negative impacts and performance

SC SC SC
H4 (+) Exploitation Exploration Disruption’s
SC Sensing 0.003 Negative
0.249** Magnitudes
0.395** –0.374**
H2 (+)
H7 (–)
H1 (+) 0.011 H6 (+)
SC Re- SC
0.485**
configuring Ambidexterity H9 (–)
0.313*
0.773**
–0.350**
H3 (+) H8 (+)
0.611**
0.773**
H5 (+)
SC Seizing
–0.044
Firm Size 0.064
(Control Firm Figure 3.
Dynamic SC capability- Variable) Performance Significant path
building process coefficients in
Notes: *p:0.05; **p:0.01 (two-tailed) the model

Greater SC visibility leads to greater flexibility in adapting dynamic

situations (Wang and Wei, 2007). Contrary to the expectation, there was
no significant direct relationship between SC sensing and reconfiguration flexibility.
However, SC seizing was positively associated with realigning SC resources.
Thus, SC sensing is indirectly linked to SC reconfiguring through SC agility.
Moreover, this result confirms the results of previous studies that an agile
SC has more flexibility to integrate and recombine resources along the SC
(Swafford et al., 2008; Wei and Wang, 2010). Following Preacher and Hayes (2004),
Sobel tests were conducted to discuss the indirect effects. One-sided Sobel tests
showed that SC seizing indeed mediates the relationship between SC sensing
and SC reconfiguring (z ¼ 4.42, p ¼ 0.00). Overall,the findings provide substantial
empirical support for the idea that a dynamic SC capability-building process is
based on positive relationships among SC visibility, SC agility, and SC flexibility.
 MD The fact that SC sensing was not significantly related to SC ambidexterity is
54,1 contrary to the hypothesis. However, SC seizing and reconfiguring were positively
associated with SC ambidexterity. SC sensing indirectly affected SC ambidexterity
through SC seizing. One-sided Sobel tests showed that SC seizing indeed mediates the
relationship between SC sensing and ambidexterity (z ¼ 2.84, p ¼ 0.00). The results
showed that SC ambidexterity is directly affected by forces in execution rather than
16 search capability.
Based on the organizational resiliency view, this research found that SC
ambidexterity is negatively related to the impact of SC disruption. This implies that
SC ambidexterity can be a proper mitigation strategy to address SC disruption’s
negative impact. Consistent with extant empirical evidence, the results of this study
showed that SC ambidexterity is positively associated with firm performance.
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This confirms prior research that argues organizational ambidexterity fosters firm
performance (Cao et al., 2009; He and Wong, 2004; Kristal et al., 2010; Patel et al., 2012).
As expected, firms having a higher extent of damage from SC disruption indicated a
lower level of firm performance.

6.1 Theoretical implications

This study makes three theoretical contributions to the SCM literature. First, this study
applied the concept of dynamic capability-building process to SCM. Dynamic
capabilities are not congenital but can be developed through a well-routinized
organizational process for long-term success (Schreyögg and Kliesch‐Eberl, 2007;
Teece, 2007). Through a SCM literature review, this study suggested that in order to
develop dynamic capabilities along the SC, firms should enhance visibility (SC sensing),
agility (SC seizing), and flexibility (SC reconfiguring). Moreover, the empirical results
showed positive relationships among sensing, seizing, and reconfiguring, confirming a
conceptual dynamic capability-building framework (O’Reilly and Tushman, 2007;
Teece, 2007; Teece and Pisano, 1994).
Second, the study results showed that a dynamic SC capability-building process is an
antecedent of SC ambidexterity. The strategy literature classifies antecedents of
ambidexterity into three levels: structural, contextual, and strategic (Gibson and
Birkinshaw, 2004; Simsek et al., 2009). In this research, a dynamic SC capability-building
process comprising SC sensing, seizing, and reconfiguring facilitates SC ambidexterity at
the contextual level. Contextual behavior is a capability to pursue alignment and
adaptability simultaneously across a business unit (Gibson and Birkinshaw, 2004).
Through a dynamic capability-building process, firms’ SCs become healthier, and
in turn have greater capability to integrate existing routines and reconfigure assets to
rapidly address changing demands. This confirms the idea that ambidexterity
is a dynamic capability (Ancona et al., 2001; Gibson and Birkinshaw, 2004; Katila
and Ahuja, 2002; O’Reilly and Tushman, 2007; Zollo and Winter, 2002) in the field
of SCM.
Third, this study found consequences of SC ambidexterity. The negative impact of
SC disruption can be alleviated by SC ambidexterity. Based on the knowledge-based
view and RBV, previous studies have mainly focussed on the impact of ambidexterity
on firm performance, competitive advantage, combinative capability, and new product
development. From the resilient SC perspective (Christopher and Peck, 2004; Holling,
1973; Sheffi, 2003), this study found that the ability to effectively utilize existing
resources and create novel strategies for problems and opportunities along the SC can
play a critical role in addressing SC disruption. Accordingly, SC ambidexterity leads to
 SC resilience. Moreover, this study confirmed previous studies’ findings that SC Ambidextrous
ambidexterity positively affects firm performance. SC as a
dynamic
6.2 Managerial implications capability
This study provides some managerial insights to enterprises. Firms should
continuously search for novel approaches to solving SC problems. Implementing
exploitative strategies focussed on existing core competencies is easier than 17
searching for new opportunities (Groysberg and Lee, 2009). Firms that make an
effort to search for new opportunities along the SC are more likely to be able to
quickly handle difficult situations. Moreover, exploration is a risk-taking strategy
(Gibson and Birkinshaw, 2004; He and Wong, 2004). Firms tend to focus on developing
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stronger competencies in existing SC processes and ignore the importance of actively

seeking out new technologies for SC systems. Initially, this search may seem
not effective, as shown in the empirical results of this study. However, proactively
pursuing new SC solutions through sensing novel approaches not only makes
SCs more flexible but also improves SC ambidexterity through SC agility. Thus, in
order to take advantage of an ambidextrous SC, including both minimizing
negative impact from disruptions and maximizing firm performance, firms should
continually look for creative ways to satisfy new market needs and address quickly to
changing business environments.
Lastly, ambidextrous strategies should be implemented at the right point in
time. SC ambidexterity is directly affected by forces in execution rather than search
capability. Organizational ambidexterity is required to successfully and differently
combine exploitation and exploration in terms of the extent of environmental
uncertainty and a technology-oriented position. From a complementary
perspective, firms need to realign their business processes and resources to keep
pace with the changing combination of exploitation and exploration vis-à-vis
business environments.

6.3 Limitations and future research

This study has several limitations that present opportunities for future research.
First, SC ambidexterity as a second-order factor is insufficient to explain the diverse
dimensions of ambidexterity. Following Kristal et al. (2010), SC ambidexterity
was measured by conducting a second-order factor analysis from a holistic view
to capture the co-variation between SC exploitation and exploration. Even though the
definition of ambidexterity is clear, measuring it is not easy, as ambidexterity relies
on various conceptualizations. Previous research has measured ambidexterity in
several ways. In the antithetical view, ambidexterity is measured by subtracting
exploratory and exploitative innovations (He and Wong, 2004). In the complementary
view, ambidexterity is measured by multiplying (Gibson and Birkinshaw, 2004)
or adding (Lubatkin et al., 2006) exploratory and exploitative innovations. For a detailed
analysis of the impact of SC ambidexterity, two dimensions of ambidexterity (balanced vs
combined) should be investigated.
Second, this research design was cross-sectional; therefore, future research
should investigate the sequential impact of ambidexterity as a dynamic capability
using time-series data. A longitudinal study would be more suitable for examining
the antecedents and consequences of SC ambidexterity. Moreover, the data should be
collected at different time periods, which leads to causal inferences because it satisfies
 MD temporal precedence (Cook et al., 1979). Thus, for future research, data should
54,1 be collected in a consecutive order.

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About the authors

Dr Sang M. Lee is the University Eminent Scholar Emeritus at the University of Nebraska-Lincoln,
USA. He served as President of the Decision Sciences Institute (DSI) and is currently serving as
President of the Pan-Pacific Business Association (PPBA). He is the Editor-in-Chief of Service
Business: An International Journal (Springer) and International Journal of Quality Innovation
(Springer). He has published more than 350 journal articles and 65 books. He is a Fellow of the
Academy of Management, DSI, and PPBA.
Dr Jin Sung Rha is an Assistant Professor at the Dankook University, South Korea. He received
the PhD Degree in Business Administration from the University of Nebraska-Lincoln, USA. He is the
author of numerous articles published in a variety of journals including Management Decision,
Industrial Management & Data Systems, Journal of Intelligence and Information Systems, Production
and Inventory Management Journal, and International Journal of Information and Decision Science.
Dr Jin Sung Rha is the corresponding author and can be contacted at: rhajinsung@gmail.com

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