Organizational change capability and ambidexterity: The mediating role of innovativeness and responsiveness

Talaja, Anita; Škokić, Vlatka; Mise, Nikol Article Organizational change capability and ambidexterity: The mediating role of innovativeness and responsiveness Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Talaja, Anita; Škokić, Vlatka; Mise, Nikol (2023) : Organizational change capability and ambidexterity: The mediating role of innovativeness and responsiveness, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 10, Iss. 3, pp. 1-21, https://doi.org/10.1080/23311975.2023.2279380 This Version is available at: https://hdl.handle.net/10419/294730 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Published by Informa UK Limited, trading as Taylor & Francis Group. Published online: 23 Nov 2023. Submit your article to this journal Article views: 523 View related articles View Crossmark data MANAGEMENT | RESEARCH ARTICLE Organizational change capability and ambidexterity: The mediating role of innovativeness and responsiveness Anita Talaja 1 , Vlatka Škokić 1 * and Nikol Mise 1 Abstract: This study aims to investigate whether organizational change capability (OCC) enables firms’ ambidexterity (explorative innovativeness and exploitative responsiveness) and results in above-average performance. Besides testing whether ambidexterity is possible, the study also investigates how it can be achieved by testing the role of mediators in the relationship between OCC and a firm’s performance. The study surveyed suppliers of a large Croatian firm from the construction industry. A total of 160 usable surveys were collected and data analysis was conducted using partial least squares structural equation modeling. Our study confirms the positive effect of OCC on a firm’s responsiveness and innovativeness, while also demonstrating that OCC has a positive impact on a firm’s performance. In addition, the results empirically show for the first time that OCC and innovativeness have a positive impact on a firm’s responsiveness. This study contributes to the understanding of the OCC construct by linking it to ambidexterity and investigating the role of mediators in the relationship between OCC and a firm’s performance. Subjects: Business, Management and Accounting; Innovation Management; Strategic Management Keywords: ambidexterity; dynamic capabilities; innovativeness; organizational change capability; responsiveness 1. Introduction To understand the impact of a firm’s organizational change capabilities on performance, we draw on dynamic capabilities (DC) and ambidexterity theory. The dynamic capabilities concept has emerged from a resource-based view (RBV). According to the RBV, competitive advantage arises from the firm’s internal environment (Wernerfelt, 1984), with the firm’s resources as coordinating mechanisms (Rumelt, 1991). If a firm has valuable, rare, and inimitable resources and capabilities, and if the organization supports their usage, a firm will achieve sustainable competitive advantage and above-average performance (Barney, 1991, 1997, 2001). These characteristics of organizational resources are referred to as the VRIO framework. Although RBV is one of the most influential theories in management research (Kraaijenbrink et al., 2010), it is also extensively criticized. A significant number of critiques are related to its static character, immobility and heterogeneity assumptions, and absolute internal orientation while ignoring industry influence (Foss & Knudsen, 2003; Porter, 1991; Priem & Butler, 2001). Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 1 of 21 Received: 25 July 2023 Accepted: 30 October 2023 *Corresponding author: Vlatka Škokić, Faculty of Economics, Business and Tourism, Cvite Fiskovica 5, University of Split, Split 21000, Croatia E-mail: [email protected] Reviewing editor: Pablo Ruiz, Universidad de Castilla- La Mancha, Spain Additional information is available at the end of the article © 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. On the grounds of RBV, to overcome its drawbacks, Teece and Pisano (1994) proposed the dynamic capabilities (DC) framework. The DC framework refers to a volatile environment and emphasizes the role of strategic management in adapting, integrating, and transforming internal and external organizational skills, resources and functional abilities to environmental change (Eisenhardt & Martin, 2000; Macher & Mowery, 2009; Teece et al., 1997; Wang & Ahmed, 2007). In addition, dynamic capabilities are created by accumulating relevant experience and learning, which enables them to (re)configure operational capabilities and resources (Regnér, 2008; Zollo & Winter, 2002). There is a broad consensus that DC has a positive impact on firms’ performance (Ferreira & Coelho, 2020; Narayanan et al., 2009; Nhon et al., 2020), but little is known about the ways they affect firm performance (Zott, 2003). Fabrizio et al. (2022) explains that understanding the key elements of firms’ DC is crucial in particular for small and medium-sized enterprises (SMEs) because of a shortage of strategic resources, which in turn decreases their competitive advantage sources. In addition, dynamic environments which most companies are facing, require a proactive approach. Such an approach requires a specific capability, which has been referred to as organizational change capability (OCC) (Soparnot, 2011). OCC is a generic dynamic capability that enables change implementation in adapting to opportunities and threats (Andreeva & Ritala, 2016; Judge & Blocker, 2008; Judge & Elenkov, 2005; McGuinness et al., 2002; Soparnot, 2011). The antecedents and outcomes of OCC have gained substantial research attention, while mediators “are beginning to be investigated” (Montreuil, 2023, p. 1191). To achieve competitive advantage and above-average performance, a firm must prepare for new markets through exploration, while efficiently responding to current demands through exploitation (Judge & Blocker, 2008). The balance between exploration and exploitation is hard to achieve since is extremely difficult to be good at both processes simultaneously. This ability to exploit and explore is called ambidexterity, and dynamic capabilities form the core of a firm’s ambidexterity (Easterby-Smith & Prieto, 2008; O’Reilly & Tushman, 2008; Zollo & Winter, 2002). Our study addresses this gap and investigates whether (and how) OCC as dynamic capabilities, enables firms’ ambidexterity and leads to above-average performance. The contribution of this paper is reflected in the development and testing of a model that perceives responsiveness as a market-driven exploitation strategy and innovativeness as a marketdriving exploration strategy. The model tests whether responsiveness and innovativeness could be simultaneously developed using the organizational change capabilities to achieve above-average performance, i.e. the model tests if ambidexterity is possible. This study contributes to the OCC literature, which is a new and growing field in need of additional research and development (Heckmann et al., 2016; Montreuil, 2023; Sanchez-Medina, 2020). McGuinness et al. (2002) argue that OCC can be used as a link between the literature on strategic management (dynamic capabilities, competitive advantage) and marketing (MARKOR and responsiveness) on the one hand and organizational change management on the other. Judge and Elenkov (2005) call for additional research on OCC and performance outcomes as well as links to innovation. 2. Theory and hypotheses 2.1. Organizational change capabilities Without adequate adaptation and change management, the firm will most likely lose its competitive advantage and risk its survival (Richard, 2014). The concept of organizational change capability (OCC) originates from the RBV. It is a dynamic approach that explains the evolution of organizations, where change is a deliberate and conscious reaction (Soparnot, 2011). OCC is a dynamic capability (Soparnot, 2011), that allows the firm to adapt existing capabilities to new threats and opportunities and helps to create new capabilities (Judge & Blocker, 2008; Judge & Elenkov, 2005; Soparnot, 2011) and to achieve and sustain a competitive advantage (McGuinness et al., 2002). Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 2 of 21 OCC is the ability to manage change. It determines a firm’s effectiveness in change implementation (McGuinness & Morgan, 2005). It refers to the dynamic capability that allows a firm to adapt existing capabilities to new opportunities and to develop new capabilities (Judge & Elenkov, 2005). It can help with efficient planning and implementation of all changes while reducing the negative impact on people and the firm’s functioning (Ackerman Anderson & Anderson, 2010). The concept of OCC is associated with the quality of the implementation of change resulting from any other capability (McGuinness et al., 2002). OCC should be developed in all firms, regardless of size, industry, and other parameters (Heckmann et al., 2016). Since the OCC concept is quite a new concept, Supriharyanti and Sukoco (2023) in their most recent overview argue that the definitions do vary but describe the same ideas. According to Naveed et al. (2017) the main predictors of OCC are process, strategy, attitude, structure, culture and technology. McGuinness and Morgan (2005) state that OCC has three components; a suitable basis for continuous change (part of organizational culture), the ability to shape continuous change (partly culturally shaped and partly through systems and processes), and retaining the energy of that change (maintaining employee commitment). Soparnot (2011) states that the ability to manage change consists of context, process, and learning dimensions. The context dimension is made of resources that enable the change process. The process dimension refers to change implementation, and the learning dimension refers to the firm’s introspective ability to review its capability to manage change. Judge and Elenkov (2005) define OCC through the following dimensions: 1) trustworthy leadership: the ability of top management to earn the trust of the rest of the organization and show organizational members how to achieve goals; 2) trusting workers: the ability of the rest of the organization to express constructive disagreement and/or enthusiasm for new management ideas; 3) capable champions: the firm’s ability to attract, retain and empower change leaders; 4) involved middle management: the ability of middle managers to effectively connect top management with the rest of the organization; 5) innovative culture: the firm’s ability to encourage innovative activities; 6) accountable culture: the firm’s ability to successfully manage resources and successfully meet predetermined deadlines; 7) system communication: the firm’s ability to communicate vertically, horizontally and with clients, and 8) systems thinking: the firm’s ability to focus on causes and recognize interdependencies within and outside the firm’s environment. Although there are differences in defining dimensions of OCC, Supriharyanti and Sukoco’s (2023) systematic review shows that more than 40% of analyzed papers refer to OCC using Judge and Elenkov’s (2005) definition. The most commonly used and tested model is by Judge and Elenkov (2005). Taking this into account and the fact that Judge and Elenkov’s (2005) eight-dimension classification of OCC with its detailed approach encompasses various aspects of OCC that can appear in a firm, their classification will be used in this study. OCC is associated with organizational openness and tolerance for change, which depends on the overall structure and systems of the organization. It can be assumed that if the OCC is not at a high level, the proposed changes will be abandoned very quickly, or after their implementation, their impact on the organization’s performance will be absent (McGuinness et al., 2002). OCC can be described as allocating and developing change and operational capabilities that support longterm performance. There is also evidence that an exclusive focus on individual change can cause negative performance, while strategic, directed, structural, interconnected, and guided changes work well together and lead to better performance (Klarner et al., 2007). The purpose is to use OCC to achieve maximum performance (Ackerman Anderson & Anderson, 2010), which was empirically confirmed by Adna and Sukoco (2020). Based on that, we propose: H1. Organizational change capability positively influences a firm’s performance. Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 3 of 21 2.2. Ambidexterity and organizational change capabilities To be successful and achieve above-average profits, a firm must prepare for new markets while efficiently responding to current demands. However, the critical question is how firms can simultaneously respond to current and future needs (Judge & Blocker, 2008). Dynamic capabilities are linked to discussions about exploitation and exploration strategies (Judge & Blocker, 2008). The aim is to discover whether it is possible and how to use both strategies simultaneously. The process of a firm’s adaptation includes the ability to productively exploit the firm’s existing assets and position while simultaneously exploring new technologies and markets, i.e., configuring and reshaping resources to exploit existing and exploring new opportunities. This the ability to exploit and explore is known as ambidexterity. Exploitation is associated with efficiency, growth in productivity, control, and safety, while exploration is related to discovery, autonomy, and innovation. Ambidexterity refers to all of the above. Most authors believe that firms cannot pursue exploitation and exploration at the same time due to the “stuck in the middle” hypothesis (Thornhill & White, 2007). Moreover, Clauss et al. (2021) proved that ambidextrous strategy has a negative impact on firm’s competitive advantage, while Rojas- Córdova et al. (2023) elaborate that managers should create specific exploitation-exploration mix in relation to contextual factors (organizational and environmental conditions). In order to overcome the difficulties regarding implementation of ambidexterity and uncertainty of its outcomes, Stoiber et al. (2023) define seven concepts of ambidextrous structures that can facilitate implementation of disruptive business models. Their analysis also shows that the different ambidextrous structures do not address all barriers equally because different structures have different values for the companies. O’Reilly and Tushman (2008) state that ambidexterity is possible, but difficult to achieve. They believe that dynamic capabilities form the core of a firm’s ambidexterity. Zollo and Winter (2002), as well as O’Reilly and Tushman (2008), believe that the above processes can co-evolve. Easterby- Smith and Prieto (2008) associate dynamic capabilities with ambidexterity and claim that dynamic capabilities depend on the evolution of knowledge through exploration and exploitation, where exploration refers to the generation of new ideas and selecting the most suitable, and exploitation to use existing methods in new contexts. A firm must strike a balance between exploration and exploitation because it is extremely difficult to be good at both processes simultaneously. Since OCC are dynamic capabilities (Judge & Blocker, 2008; Judge & Elenkov, 2005; McGuinness et al., 2002; Soparnot, 2011), our study aims to explore whether OCC could enable ambidexterity. Strategic actions can be either market-driven or market-driving. Responsiveness is market-driven action that aims to respond to changes in the external environment. Innovativeness is marketdriving action that induces changes in the market structure. These two types of actions are complementary (Jaworski et al., 2020; Wei & Wang, 2011). By perceiving responsiveness as market-driven exploitation strategy, and innovativeness as market-driving exploration strategy, this study investigates if both could be simultaneously developed using OCC. 2.3. Exploitation strategy and firm’s responsiveness According to Judge and Blocker (2008), market orientation is an exploitation strategy that emphasizes serving customers by understanding their needs and creating value for them. It is a set of processes that include creation, expansion, and response to the market, as well as the firm’s ability to understand the needs of customers and suppliers while building a relationship with them. Narver and Slater (1990) argue that market orientation consists of three behavioral components: customer orientation, competitor orientation, and inter-functional coordination. The goal of market orientation is satisfying customer needs through market intelligence generation, dissemination of market intelligence, and responsiveness to it (Kohli et al., 1993). Usually in research market orientation is conceptualized through information generation, dissemination, and responsiveness (González-Benito & González-Benito, 2005; Jiménez-Jiménez & Cegarra-Navarro, 2007; Kaynak & Kara, 2004; Santos-Vijande et al., 2005; Taylor et al., 2008), and our study adopts this classification. Moreover, we focus on responsiveness since it is a market-driven exploitation strategic action Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 4 of 21 (Jaworski et al., 2000; Wei & Wang, 2011) that refers to a firm’s market-sensing activities (Day, 1994). It is the result of a firm’s interaction with the external environment and is the extent to which a firm responds to market changes (Homburg et al., 2007; Wei & Wang, 2011). Since dynamic capabilities could be the source of a firm’s ambidexterity (Easterby-Smith & Prieto, 2008; O’Reilly & Tushman, 2008), OCC is a dynamic capability (Judge & Blocker, 2008; Judge & Elenkov, 2005; McGuinness et al., 2002; Soparnot, 2011), while responsiveness is a marketdriven exploitation strategic action (Jaworski, et al., 2000; Wei & Wang, 2011), we hypothesize: H2. Organizational change capability positively influences a firm’s responsiveness. Market orientation aims to create superior performance for the firm (Narver & Slater, 1990; Wei et al., 2014). Hence, the firm’s responsiveness is also expected to increase the firm’s performance (Lee, 2010; Luo, 2001; Wei & Wang, 2011) The firm that can exploit its existing resources to respond to its customer needs and competitor actions should have higher performance (Grein et al., 2001), so responsiveness affects firm’s performance (Darroch, 2005). We hypothesize: H3. A firm’s responsiveness positively influences a firm’s performance. Firms with an exploitative strategy seek a close relationship with customers, respond to competitors’ actions, and expect this relationship to lead to valuable and rare competitive advantage. But focusing entirely on market exploitation can pose a risk for the firm. It usually influences shortterm performance, while long-term performance is questionable (Judge & Blocker, 2008). 2.4. Exploration strategy and innovativeness An exploratory strategy creates value through innovation and experimentation while considering the risks of operating in new markets. The exploratory strategy advocates looser ties with customers to adapt more easily to the market. The idea behind this strategy is that, if there are no strong ties with customers, the firm can be flexible and adaptable to a dynamic market (Judge & Blocker, 2008). Klammer et al. (2017) link innovativeness as entrepreneurial orientation to ambidextrous strategic renewal. The study is conducted through a large scale online survey focusing on members of the middle and top management of mature companies. Their results demonstrate that strategic renewal positively impacts firm performance, and that entrepreneurial orientation and organizational learning are antecedents. According to Hurley and Hult (1998), innovativeness describes a firm’s openness toward new ideas, it is a measure of the firm’s orientation toward innovation, it refers to the ability of an organization to develop, adopt and implement new ideas, processes, or products successfully (Nasution & Mavondo, 2008). Innovativeness is implicit to the theory of dynamic capabilities, an outcome of the competition process (Lawson & Samson, 2001). Innovativeness explains the relationships between a firm’s resources, capabilities, and product market (Wang & Ahmed, 2007). Its function is to acquire, mobilize and reshape knowledge and ideas into new products, processes, and systems (Lawson & Samson, 2001; Robertson et al., 2012). Fabrizio et al. (2022) analyze existing articles on dynamic capabilities and conclude that a recurrence of terms “innovation” and “performance” can be seen in several studies of the textual corpus suggesting that innovativeness leads to higher performance. Dynamic capabilities are linked to innovation (Teece, 2007; Verona & Ravasi, 2003). According to Ng and Ahmed (2022) dynamic capabilities have a positive effect on innovation and can directly stimulate it (Wendra et al., 2019). Judge and Elenkov (2005) state that OCC, as a type of dynamic capabilities, is associated with, but not equal to organizational ability to learn and innovate (Judge & Elenkov, 2005). Innovation processes are the result of dynamic capabilities development (Fabrizio et al., 2022). Thus, we propose: Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 5 of 21 H4. Organizational change capability positively influences the firm’s innovativeness. 2.5. Innovativeness and responsiveness Market orientation has significant interaction with innovativeness (Cacciolatti & Lee, 2016). Carbonell and Rodrıguez Escudero (2008) propose that innovation speed impacts responsiveness directly and firms pursuing innovative strategy will be more likely to respond more effectively to new information and market changes, i.e. will have higher responsiveness. According to Ng and Ahmed (2022), the more a firm develops innovations the greater the level of its timely responsiveness will be. We hypothesize: H5. Innovativeness positively influences a firm’s responsiveness. H6. The link between organizational change capability and responsiveness is mediated by innovativeness. However, the problem with the exploratory strategy is that firms can hardly define the financial benefits they achieve with it (Judge & Blocker, 2008). Innovation is resourceconsuming, and firms are constrained in available resources, hence the investment in innovation has to be well-founded (Martin et al., 2017). Although theory states that innovativeness has a positive effect on a firm’s performance (Hult & Ketchen, 2001; Lee, 2010) and this relationship has been empirically confirmed (e.g. Chang et al., 2014; Lee & Hsieh, 2010; Santos- Vijande et al., 2013; Saunila, 2017), studies are reporting a negative or even non-significant relationship between innovativeness and performance (e.g. Menguc & Auh, 2006; Vermeulen, de Jong & O’Shaughnessy, 2005). These mixed results could stem from the fact that this relationship is not direct, as shown by Darroch (2005). For innovativeness to truly translate to superior performance, it must be complemented by high responsiveness. The rationale is that while innovativeness can lead to new products or processes, these innovations may not resonate with the market unless the organization is also responsive to emerging market conditions and changing customer demands. Day (1994) posited that market-responsive firms were better positioned to leverage their innovations for superior performance. Furthermore, Hult et al. (2004) found that firms that were both innovative and responsive were better at meeting customer needs, thereby achieving better performance outcomes. Slater and Narver (1998) discovered that while innovation leads to new product development, a firm’s ability to respond to these developments dictated whether or not those products would succeed in the market. Therefore, while responsiveness and innovativeness are independently linked to performance, their interplay magnifies their impact. Slater et al. (2014) noted that responsiveness acts as a mechanism that ensures that innovations are marketoriented. Thus, responsiveness could mediate the relationship between innovativeness and performance. In this context, studies like Zhou et al. (2005) have explored the mediating role of market responsiveness in linking market orientation to performance, which could be analogously extended to innovativeness. Further supporting this mediating role, Braunscheidel and Suresh (2009) found responsiveness to mediate the relationship between agility (which is innovativeness in its essence) and firm performance. Their findings suggested that the ability to introduce agile practices in isolation did not guarantee superior performance. Instead, how these practices were adapted and responded to market demands (responsiveness) played a crucial role. Also, in the context of IT, the responsiveness of IT infrastructure has been proposed as a mediator between IT innovativeness and firm performance (e.g., Ravichandran et al., 2005). Innovativeness, when related to market orientation, increases the chances for better performance (Cacciolatti & Lee, 2016). According to Cacciolatti and Lee (2016), market orientation is a moderator in innovation-performance relationships. Lee (2010) hypothesized and confirmed that market responsiveness and product innovation both have positive effects on firm performance. Collectively, the literature emphasizes that while innovativeness can provide firms with potentially groundbreaking products or processes, responsiveness Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 6 of 21 determines their market success. Firms prioritizing both are better positioned to achieve superior performance, as they can introduce novel offerings and ensure these offerings resonate with the market. We hypothesize: H7. The link between innovativeness and performance is mediated by responsiveness. 3. Research method 3.1. Sample and measurement The survey is based on primary data collected using a questionnaire that was distributed to the suppliers of a large Croatian firm from the construction industry. A total of 160 usable surveys were collected. The constructs were operationalized using already developed and tested measurement scales (Appendix A). Organizational change capability was operationalized using a scale developed by Judge and Elenkov (2005). This scale consists of eight dimensions: trustworthy leadership (OCC_1); involved middle management (OCC_2); capable champions (OCC_3); innovative culture (OCC_4); trusting followers (OCC_5); systems thinking (OCC_6); accountable culture (OCC_7); and system communications (OCC_8) measured by 32 questions. We operationalized the construct OCC with these eight reflective latent variables by calculating the mean of the appropriate answers. Responsiveness was measured using Morgan and Berthon’s (2008) scale describing a firm’s response to competitor and customer actions, while innovativeness is based on Hurley and Hult (1998) and Hult et al. (2007) focusing on acceptance and encouragement of innovation. Since perceptual performance measures collate with objective measures (Powell, 2001), financial performance was measured using the following scale developed by Inemek and Tuna (2009): profits as a percent of sales (PERF1); production cost (PERF2); market share (PERF3); annual sales growth (PERF4); product price (PERF5). A five-point Likert scale ranging from 1 to 5 was used. Measurement and structural models were analyzed using PLS-SEM due to sample size and its flexibility regarding multivariate normality. Since the data is collected by single respondents, it is recommended to assess the potential presence of common method bias. After collecting the data, we conducted Harman’s one-factor test (Podsakoff et al., 2003). When we imported all items into factor analysis, 10 factors emerged that had eigenvalue higher than one. These 10 factors accounted for 70.05% of the variance, while the first factor accounted for 16.40% of the variance. Based on that we concluded that common method bias is not an issue in this research. 4. Results 4.1. Measurement model analysis Before calculating composite measures, to confirm that the items indeed measure underlying variables, we conducted a reliability and validity analysis (Appendix B and C). Cronbach’s Alpha for all eight constructs was higher than 0.7, which confirms internal consistency reliability. Composite reliability measured by rho_a and rho_c is above 0.8 for all items which is satisfactory. All factor loadings are above 0.7 proving indicator reliability. Convergent validity is measured using average variance extracted (AVE). AVE values are above 0.6 meaning that convergent validity is also established. Discriminant validity was tested using the Fornell-Larcker criterion. The square root of the AVE of each construct is higher than its highest correlation with any other construct confirming that discriminant validity is achieved (Hair et al., 2014). Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 7 of 21 Author details Anita Talaja 1 ORCID ID: http://orcid.org/0000-0002-5007-365X Vlatka Škokić 1 E-mail: [email protected] ORCID ID: http://orcid.org/0000-0003-2562-2706 Nikol Mise 1 1 Faculty of Economics, Business and Tourism, Cvite Fiskovica, University of Split, Split, Croatia. Disclosure statement No potential conflict of interest was reported by the author(s). Citation information Cite this article as: Organizational change capability and ambidexterity: The mediating role of innovativeness and responsiveness, Anita Talaja, Vlatka Škokić & Nikol Mise, Cogent Business & Management (2023), 10: 2279380. 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OCC_2 Do middle managers in this business unit: 5. effectively link top executives with frontline employees? 6. show commitment to the organization’s well-being? 7. balance change initiatives while getting work done? 8. voice dissent constructively? OCC_3 Do we have change champion(s) who: 9. command the respect of the rest of the business unit? 10. possess good interpersonal skills? 11. are willing and able to challenge the status quo? 12. have the will and creativity to bring about change? OCC_4 Do we have an organizational culture that: 13. values innovation and change? 14. attracts and retains creative people? 15. provides resources to experiment with new ideas? 16. allows people to take risks and occasionally fail? OCC_5 Do frontline employees: 17. open themselves to consider change proposals? 18. have opportunities to voice their concerns about change? 19. generally know how change will help the business unit? 20. generally view top management as trustworthy? OCC_6 Do change champions recognize the: 21. interdependent systems implications of change? 22. importance of institutionalizing change? 23. need to realign incentives with desired changes? 24. value of addressing causes rather than symptoms? OCC_7 Do employees throughout the business unit: 25. experience consequences for outcomes of their actions? 26. meet deadlines and honor resource commitments? 27. accept responsibility for getting work done? 28. have clear roles for who must do what? OCC_8 Does information flow effectively: 29. from executives to workers? (Continued) Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 19 of 21 Appendix B. Reliability and validity results (Continued) OCC (Judge & Elenkov, 2005) 30. in a timely fashion? 31. across organizational units? 32. from customers to the business unit? Financial performance (Inemek & Tuna, 2009) PERF1 Return on investment PERF2 Profits as percent of sales PERF3 Production cost PERF4 Market share PERF5 Annual sales growth PERF6 Product price Responsiveness (Morgan & Berthon, 2008) RES1 If a major competitor were to launch an intensive campaign targeted at our customers, we would implement a response immediately. RES2 The activities of the different departments in this business unit are well coordinated. RES3 Even if we came up with a great marketing plan, we probably would not be able to implement it in a timely fashion. (R) RES4 When we find that customers would like us to modify a product or service, the departments involved make concerted efforts to do so. Innovativeness (Hult et al., 2007; Hurley & Hult, 1998) IN1 Innovation, based on research results, is readily accepted. IN2 We actively seek innovative supply management ideas. IN3 People in our firm are penalized for new ideas that do not work. (R) IN4 Innovation in our supply management process is encouraged. Cronbach’s alpha Composite reliability (rho_a) Composite reliability (rho_c) Average variance extracted (AVE) OCC_1 0.850 0.851 0.899 0.692 OCC_2 0.797 0.807 0.868 0.623 OCC_3 0.843 0.850 0.895 0.680 OCC_4 0.879 0.893 0.917 0.735 OCC_5 0.793 0.805 0.864 0.615 OCC_6 0.889 0.890 0.923 0.751 OCC_7 0.806 0.840 0.874 0.639 OCC_8 0.890 0.897 0.932 0.820 Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 20 of 21 Appendix C: Fornell Larcker for construct OCC OCC_1 OCC_2 OCC_3 OCC_4 OCC_5 OCC_6 OCC_7 OCC_8 OCC_1 0.832 OCC_2 0.484 0.790 OCC_3 0.568 0.430 0.825 OCC_4 0.497 0.388 0.594 0.858 OCC_5 0.489 0.497 0.586 0.676 0.784 OCC_6 0.541 0.447 0.520 0.472 0.591 0.866 OCC_7 0.460 0.465 0.430 0.380 0.529 0.478 0.799 OCC_8 0.449 0.391 0.467 0.552 0.600 0.465 0.637 0.905 Talaja et al., Cogent Business & Management (2023), 10: 2279380 https://doi.org/10.1080/23311975.2023.2279380 Page 21 of 21