Abstract
Organizational ambidexterity (OA)—the simultaneous pursuit of explorative and exploitative innovations—engenders nested (paradoxes manifesting across organizational levels) and knotted paradoxes (intertwined co-occurring paradoxes at the same or across organizational levels). Both nested and knotted paradoxes are managed by internal stakeholders using approaches that are socially constructed by influences emanating from within and beyond an organization. External stakeholders also help shape organizational innovations but their influence on the management of paradoxes has largely been overlooked. In this study, we collected and analyzed data from internal (n = 19) and external stakeholders (n = 18) in organizations pursuing explorative and exploitative clean energy transitions at nine Canadian energy utilities. We find that the external stakeholders engage with knotted inclusivity–efficiency and existing–emerging needs paradoxes. Our findings add to OA and business and society literature by revealing how the approaches that internal and external stakeholders adopt for paradox management have implications for each other, and thus OA. We also provide practical insight into how external stakeholder paradoxes can be managed through stakeholder inclusivity and enhanced transparency of innovation plans, with positive implications for OA.
Keywords
Introduction
Organizational ambidexterity (OA) is a paradox, a persistent tension between the two interdependent opposing forces of explorative and exploitative innovation, which has conventionally been examined inside an organization (Berti & Simpson, 2021; Papachroni et al., 2016; Tushman & O’Reilly, 1996). The paradox of OA may manifest at different organizational levels and relate to learning, performance, organizing, and belongingness (March, 1991). They may manifest as the same paradox across multiple levels (i.e., nested paradoxes) and/or as an entangled knot of co-occurring multiple interdependent paradoxes (i.e., knotted paradoxes) at the same or multiple levels (Cunha & Putnam, 2019; Jarzabkowski et al., 2022; Sheep et al., 2017).
OA literature suggests different internal stakeholder approaches to manage the OA-related paradoxes (hereafter referred to as paradox management): adoption of dual structures or timelines, or the integration/synthesis of OA needs (Jarzabkowski et al., 2013; Lüscher & Lewis, 2008). The observations of paradoxes within an organization, and the internal stakeholders’ paradox management are both socially constructed. 1 Past studies (Berti & Simpson, 2021; Papachroni et al., 2016; Pradies et al., 2021; Smith & Lewis, 2011) observe how the patterns in which information and power are shared by other internal stakeholders can encourage the manifestation of a paradox and/or facilitate an internal stakeholder’s paradox management approach. Despite acknowledging influences on paradox management from within the organization, the part external stakeholders may play in shaping internal stakeholders’ paradox management, or the potential links between internal and external paradox management in an organization’s pursuit of OA are yet to be examined in OA and paradox studies. We address that gap in this paper.
External stakeholders have significant opportunities to influence decisions on OA and the management of paradoxes because they play key roles in the brainstorming, co-development, and promotion of explorative and exploitative innovations (Andriopoulos & Lewis, 2009; Parker et al., 2017; Shaikh & Randhawa, 2022). Like internal stakeholders, external stakeholders who are affected by an organization’s efforts to be innovative can be confronted with tensions, paradoxical or otherwise (Freeman et al., 2020). For instance, tensions between economic and environmental innovations affect the internal decision-makers and the external stakeholders anticipating the innovations (Maon et al., 2019; Nielsen et al., 2019). Past studies, especially from the business and society literature, suggest that efficient management of external stakeholder tensions between economic versus environmental outcomes is necessary to ensure their support for organizational innovation and discourage negative external stakeholder mobilization (Crane, 2020; Hahn, 2015; Han & Chen, 2021; Hayibor, 2012). However, the potentially paradoxical tensions perceived by external stakeholders as organizations pursue OA, and their possible role in influencing internal stakeholders’ management of OA remain under-theorized. Thus, we examine the following two research questions:
Research Question 1: How do internal and external stakeholders navigate OA-related paradoxes as organizations pursue OA?
Research Question 2: How do the paradox management approaches adopted by internal and external stakeholders influence each other (if at all)?
This study is set in the context of nine neighboring Canadian energy utilities pursuing cleaner energy goals via explorative and exploitative innovations. We collected primary interview and archival documentary data from 19 internal stakeholders (senior and middle managers across nine utilities) and 18 external stakeholders (knowledge experts, policy influencers, First Nations and community leaders, and political/environmental activists) who influenced their innovations.
The findings from our data enable two contributions. First, we contribute to the OA and paradox studies literature by highlighting the hitherto unobserved knotted external stakeholder paradoxes (inclusivity–efficiency and existing–emerging needs). Our study shows how external stakeholders’ management of their knotted paradoxes influences how internal stakeholders manage their OA-related paradoxes in two ways. First, through participation in focused stakeholder engagement structures (facilitating internal stakeholders’ use of dual structures of engagement to manage paradoxes), and second, by providing diverse views on innovation plans (stimulating internal stakeholders’ reflexive inquiries, which facilitate the adoption of a both/and approach to specific paradoxes).
Our second contribution to OA and business and society studies focuses on how the management of paradoxes by external stakeholders is simultaneously influential and reliant on the paradox management approaches adopted by internal stakeholders; that is, how external stakeholders are simultaneously instrumental in the pursuit of OA, and how their instrumentality is restricted by the internal stakeholders. By showing that external stakeholders’ integration or synthesis of OA-related paradoxes largely depends on the openness of internal stakeholders to sharing their innovation plans with them, this study therefore extends previous understanding of external stakeholders’ instrumentality in securing OA. The study shows that beyond being innovation supporters, external stakeholders, through their influences on internal stakeholder paradox management are indirectly instrumental in the pursuit of OA and that the knotted nature of internal and external stakeholder paradox management in the pursuit of OA restricts their instrumentality in OA.
The paper is structured as follows. We begin by reviewing the concept of OA as an overarching paradox made up of nested/knotted paradoxes. We explore how their management is shaped by internal stakeholders who are influenced by external stakeholders. We then explain our methods and findings, before concluding the paper by outlining the study’s implications for the OA, paradox, and business and society literatures.
OA as a Paradox, Nested and Knotted Paradoxes, and Approaches to Paradox Management
To secure OA, an organization’s senior management must manage the competing tensions of exploration and exploitation, and build a shared vision across the organization’s hierarchy such that a compelling strategic intent, which justifies both exploration and exploitation innovations, is continuously communicated and followed throughout an organization (O’Reilly & Tushman, 2011). The competing demands of exploration and exploitation manifest as various nested/knotted paradoxes: learning, performance, organizing, and belongingness at the same or different organizational levels (Jarzabkowski et al., 2013; Schad et al., 2016; Sheep et al., 2017). In addition, not all tensions related to OA need to be paradoxical. If a pull and push tension emerges as an either/or choice between two independent opposite poles of a tension, it can be a solvable dilemma (Gaim, 2017; Sheep et al., 2017).
Andriopoulos and Lewis (2009) observe that paradoxical definitions related to performance (steady income–breakthrough profits, existing–emerging customer needs) and the organization of employee work (autonomy–control, passion–discipline) are interlinked on the same level as senior managers try to secure OA. However, the management of short- versus long-term performance tensions by senior managers has been found to generate work control–flexibility tensions for non-managers, middle managers, and junior managers (Farjoun, 2010; Turner et al., 2016; Turner & Lee-Kelley, 2013). Smith and Beretta (2021) extend this understanding of how paradoxes are interlinked by suggesting that paradox management is not invariably top-down. They argue that paradoxes in knowledge sharing can affect the organizing paradoxes of management, and that the paradox of exploration–exploitation is not always the overarching paradox in which other paradoxes are nested. In addition, Sheep et al. (2017) suggest that perceived tensions within organizations appear to be knotted rather than nested, with the end of one paradox being comparable with the pole of another (e.g., exploitation at the organizational level is compared with employee flexibility at more junior levels). It is therefore impossible to untangle one paradox without amplifying another.
These studies suggest that underlying tensions linked with OA may be inherent to various levels of the organization’s systems and also socially constructed (Smith & Lewis, 2011). For instance, studies have observed how power dynamics in organizations and the transparency of OA-related communications (Berti & Simpson, 2021) can encourage or discourage the appearance of a nested/knotted paradox for an organizational member at another hierarchical level. Thus, the nested and knotted nature of paradoxes suggests that the actors within an OA stakeholder’s environment play a critical role in influencing perceptions of paradoxes.
Prior work suggests that internal stakeholders who perceive OA-related paradoxes adopt varying methods of managing them. They may attempt to integrate and embrace the contradictory poles of a tension (Jarzabkowski et al., 2013; Lüscher & Lewis, 2008) or differentiate them with structures or time (Gaim & Wåhlin, 2016; Maclean et al., 2021; Tracy, 2004). They may reflexively examine past/opposing views, facilitating the contextualized learning of new/opposing perspectives (Lüscher & Lewis, 2008; Maclean et al., 2021) to accept both poles of a paradox. This is similar to the integration approach, in which links between exploration and exploitation are identified to facilitate both poles of the OA paradox (Andriopoulos & Lewis, 2010; Cunha et al., 2019; Lüscher & Lewis, 2008). However, paradox management is, like the paradoxes themselves, shaped by other actors in the environment. For example, Pradies et al. (2021) observed that junior organizational members help shape senior managers’ paradox management processes by asking the right questions and providing support. Similarly, tensions perceived by internal stakeholders can exacerbate the appearance of paradoxes for another actor, or elevate or mitigate their paradox management efforts. Middle-level managers who are being pushed to explore and exploit simultaneously may be less able to ask critical questions when senior managers are brainstorming new ideas, thus impacting senior manager’s ability to balance exploration and exploitation (Sheep et al., 2017). However, although the nested and knotted nature of paradoxes across sundry internal stakeholders has been acknowledged, OA and paradox studies have yet to examine whether nested/knotted OA-related paradoxes transcend organizational boundaries and whether external stakeholder tensions shape internal stakeholders’ paradox responses.
OA and the Role of External Stakeholder Paradoxes
Innovations include the commercialization of new ideas, which may be derived from different types of knowledge, capabilities, skills, and resources, and interactions between various actors (Fagerberg, 2006, p. 3). Knowledge flows may be managed via external alliances with research centers, suppliers, customers, scientists, and even competitors (Bresciani et al., 2018). The simultaneous pursuit of explorative and exploitative innovation is, like many organizational outcomes (Berman et al., 1999; Li et al., 2018), influenced by internal and external stakeholders, whose actions have implications for each other (Chang et al., 2011; Graham, 2020; McCarthy & Muthuri, 2018). The role played by external stakeholders in organizational innovation has been seen as helping legitimize innovations (Banducci, 2017; Hahn et al., 2016, 2018), developing shared social meanings to support innovations (Kaplan & Tripsas, 2008; Lee & Raschke, 2023), and enabling entrepreneurial endeavors (Davidsson et al., 2020). The trust and engagement of external stakeholders (Autio et al., 2013; González-Ramos et al., 2023; Kujala et al., 2022; Lee & Raschke, 2023), which are crucial to ensuring acceptance and diffusion of an organization’s innovation efforts (Jay, 2013), can be elevated if the organization transparently communicates its innovation plans to engaged external stakeholders (Albu & Flyverbom, 2019; Crane, 2020). Indeed, the newer innovation models argue innovation decisions have moved outside the C-suite (Cillo & Verona, 2022), with external stakeholders being directly involved in the creation of radical new products (Ardito et al., 2020; Schweitzer et al., 2019).
Business and society studies have recently noted the indirect instrumentality of external stakeholders in the pursuit of organizational outcomes by internal stakeholders (e.g., Hahn et al., 2018). Galkina et al. (2022) reveal how external stakeholders’ responses are important to determining the balance of exploration and exploitation. Rey-Garcia et al. (2021) show how comparable tensions are perceived by various external and internal stakeholders as organizations pursue sustainable innovations, while Schad and Bansal (2018) argue that the demands, interests, and potential paradoxes of external stakeholders significantly influence the landscape for OA-related decisions and actions.
Some studies have observed paradoxes in the interactions of internal and external stakeholders in the context of innovation or OA. Henry et al. (2022) show that internal stakeholders may aim for inclusivity in their innovation decision-making by inviting specific external stakeholders to participate in stakeholder engagements. In doing so, they may find that there is tension between stakeholder inclusivity and the administrative efficiency necessary for a speedy decision. Similarly, studies suggest that external stakeholders are themselves likely to encounter paradoxical risk–benefit decisions when an organization divulges plans that involve diverse innovation paths (e.g., Chowdhury et al., 2021). However, OA studies that examine these paradoxes, tensions, and influences do so from a managerial standpoint, emphasizing the need to balance competing internal and external stakeholder demands (Li et al., 2018; Smith & Umans, 2015). Other studies recommend ensuring that engagement with broader societal stakeholders addresses specific purposes, such as gathering contextual knowledge, setting innovation agendas (Castelló et al., 2016; Chen & Eweje, 2022), or sharing information with competitor stakeholders (Luo & Rui, 2009). Similarly, business and society scholars address the influence of external stakeholders by highlighting the perils of ignoring them, recommending that organizations consider their goals with competing societal demands from the perspective of stewardship rather than instrumentality (van Lieshout et al., 2021), not least because external stakeholders who have been ignored can engage in mobilization that negatively impacts the organization’s market value (Dorobantu et al., 2017; Hahn, 2015; Hayibor, 2012). But although business and society studies acknowledge that external stakeholders play a role in the pursuit of organizational innovation, they are yet to show how the external stakeholders’ perceived paradoxes (e.g., risk–benefits) influence the internal stakeholder’s pursuit of OA. We, therefore, explore how external stakeholder paradoxes can impact internal stakeholder paradox management as organizations strive for OA.
Methods
There were three steps to the collection and analysis of data for this study.
Step I: Data Collection
We began by seeking insight into the paradoxes of internal stakeholders and how these are managed in contexts characterized by strong competing interests that support exploration and exploitation. Our study is set in an industry where technological transitions impact organizations and people: energy utilities confronting clean energy transitions. Drawing on personal connections, we contacted senior managers at EnergyCo, a large public energy utility responsible for the generation, distribution, and transmission of energy in a major Canadian province. Between July and August 2017, the first author identified and interviewed 10 internal stakeholders (senior and middle managers) at EnergyCo, and four internal stakeholders (senior managers) at other nearby competing energy utilities. Frequent references to external stakeholders during the interviews made it clear that the research aims needed to be revised to include external stakeholders and the tensions (paradoxical or otherwise) they perceive as organizations pursue OA. Guided by our existing respondents, we contacted 54 internal and external stakeholders in the region, 23 of whom agreed to be part of the study. Graduate researchers in the region helped us to conduct five more internal interviews and 18 external stakeholder interviews, generating a sample of 37 interviews. Interviews lasted 60 to 90 minutes, they were transcribed verbatim, and the complete interview guide is shared in the Online-only Appendix I. The stakeholder roles, their organizational affiliations, and their associations with the innovation pursuits (at the time of the interview) are described in Online Appendices II and III. We abductively analyzed the data from the interviews, as described next.
Step II: Data Coding
We coded all the excerpts we perceived to be paradoxes or paradox management (based on prior definitions from Gaim, 2017; Jarzabkowski et al., 2013; Sheep et al., 2017). As suggested by Ketokivi and Mantere (2010), we compiled a list of these definitions and the typologies of paradoxes/paradox management already known to extant OA and paradox studies, and compared this with the paradox/paradox management themes identified in the data. We observed paradox themes (self-preservation–customer orientation, competition–collaboration, existing–emerging needs) and paradox management (integration, differentiation, synthesis, and reflexive inquiries and both/and thinking) among internal and external stakeholders (cf. Andriopoulos & Lewis, 2010; Jarzabkowski et al., 2013; Smith et al., 2016). We continued to code the data until we reached agreement and theoretical saturation on every paradox and paradox management theme. As well as the previously observed themes, our study, informed by current OA and paradox research, identified a new theme that had not been solidly established in OA and paradox studies. Drawing on Henry et al. (2022), we termed this new external stakeholder paradox “inclusivity–efficiency,” and the response of external stakeholders “reframing as a dilemma,” echoing nomenclature in Sheep et al. (2017). Like past studies (Jarzabkowski et al., 2022; Sheep et al., 2017), we observed that the different paradoxes were often knotted together. In the case of internal stakeholders, one pole of the existing–emerging needs paradox became intertwined with the opposing pole of the self-preservation–customer orientation paradox, with existing needs becoming associated with self-preservation, and emerging needs being aligned with customer orientation (Jarzabkowski et al., 2022; Sheep et al., 2017). Similarly, for external stakeholders, the management of one paradox was entangled with the management of another (cf. the knotted paradoxical tensions in internal stakeholders observed by Cunha & Putnam, 2019). We defined this common theme across internal and external stakeholders as “knotted paradoxes with mitigating effects.” The complete list of paradoxes, paradox management approaches, and definitions of nested and knotted paradoxes are drawn from previous literature. We utilized these with our data observations to define our themes (available upon request from the authors).
Step III: Making Sense of the Themes and Patterns in the Data
At this juncture, we realized that many of our paradox management themes for the internal and external stakeholder groups had explicit implications for each other. For instance, respondent GAEA1 stated that they managed their inclusivity–efficiency paradox by engaging with EnergyCo structures, which facilitated fast and broad stakeholder engagements. A senior manager at EnergyCo (ECSM1), discussing the same engagement, said that adopting a structure to encourage stakeholder participation helped them manage the duality of the competing interests inside and outside the organization. Thus, we identified a new hitherto unexamined theme: the knotted nature of internal and external stakeholder paradox management. Building on prior works that observed interconnections between paradoxes (Jarzabkowski et al., 2022; Sheep et al., 2017), we defined this new theme as linked observable actions by an internal (external) stakeholder group for managing persistent tension between two interdependent opposing forces, which actions have a mitigating implication for the paradox/paradox management of the external (internal) stakeholder group. Thus, our study not only observes the paradoxes and paradox management experienced by external stakeholders as they perceive an organization’s pursuit of OA but also observes the implications that the internal and external paradox management approaches have for each other.
The 19 internal stakeholders in our sample were middle and senior managers from large or small energy utilities. Eleven managers worked at EnergyCo, and the others worked for its allies and competitors from nearby provinces. As shown in the Online Appendix III, all the managers had key roles in OA-related exploration or exploitation decisions or actions. The sample of 18 external stakeholders comprised five knowledge experts and five policy influencers, three participants who identified as both knowledge experts and policy influencers, one research partner, three environmental activists, and one First Nations leader. The latter also identified as a community leader, as did the small utility senior manager. We compiled data from LinkedIn and interviews on participants’ functional and organizational tenure (at the time of the interview, the average organizational tenure for internal stakeholders was 8 years, and their average role tenure was 5 years), their involvement with organizational innovation, professional networks, educational background, and their self-identification. The LinkedIn data helped validate our internal and external stakeholder categorizations. Data was first gathered in 2020 and we rechecked its validity in 2023. In early 2024, we reached out to most of our study participants to gauge any changes in their views on innovations (a total of 20 follow-ups via VOIP calls) at the energy utility they had discussed in the interview. Most reported that COVID had stalled their innovation plans between 2020 and 2022–23 and that their clean energy transition goals had not changed significantly between 2017 and 2024. We explored whether any of the individually differentiating data (including differences in their association with OA-related decisions and actions) could explain the observed paradox management of each stakeholder group, but we did not decipher any pattern (see Online Appendix III).
To contextualize the primary data and help us better understand whether the innovations our participants were explaining were exploitative or exploratory in nature, we gathered 25 archival documents from EnergyCo and four large utility competitors nearby. The documents (from 2015 to 2020, and covering nine utilities) were electricity system review reports, long-range strategic plans, reliability and resource plans, project discussion papers, integrated resource scenarios and modeling plans, consolidated financial statements, demand-side management plans, decarbonization reports, and 10-year plans. The Online Appendix IV shows a data usage table, setting out how each of our data sources was employed in the data analysis.
Findings
The aim of the study was to gain insight into how internal and external stakeholders navigate their paradoxes as an organization strives to secure OA, and how each group’s paradoxes and the management of these affect the other.
Observing Internal and External Stakeholder Paradox Managements (RQ1)
Our research pioneers an exploration of how external stakeholders voice paradoxes (existing–emerging needs, stakeholder engagement inclusivity–efficiency) and adopt approaches (reframing as a dilemma, synthesizing opposing forces into a complex new need, integrating opposing forces with a connecting link) to manage the paradoxes as organizations pursue innovations ambidextrously. We also affirm prior work by confirming the paradoxes of internal stakeholders (existing–emerging needs, self-preservation–customer orientation, and competition–collaboration) and their use of paradox management approaches (differentiation of opposing forces with dual structures, integration of opposing forces with common links). Finally, we add to prior studies by observing that internal stakeholders sometimes mix paradox management approaches, contextualizing opposing views through reflexive inquiries and adopting both/and thinking to accept both poles of a paradox.
Implications of Internal and External Paradox Management on Each Other (RQ2)
We observed three new interlinked themes between internal and external paradox management. First, external stakeholders were reliant on internal stakeholders sharing information on their innovation plans and policies to synthesize or integrate their existing–emerging needs and inclusivity–efficiency paradoxes. Similarly, when external stakeholders, engaging with the dual structures set by internal stakeholders, reframed their inclusivity–efficiency paradox as a dilemma, they prompted internal stakeholders to reflect on their own views and develop a contextualized understanding of the views of the external stakeholders. This then helped the internal stakeholders manage their self-preservation–customer orientation and competition–collaboration paradoxes. Finally, internal stakeholders only chose to reveal their innovation plans and policies to external stakeholders when they needed opposing views to facilitate a both/and approach and if they did so proactively and consistently, external stakeholders would be better enabled to manage their paradoxes. Figure 1 details these connections between the stakeholder paradox management approaches.
The knotted nature of internal and external stakeholder paradoxes as organizations pursue ambidexterity.
Since this paper focuses on the paradoxes and paradox management of the under-researched external stakeholders, we next present quotes that illustrate each new external paradox and paradox management theme. We then discuss their interconnection with internal paradox management. In many instances, the paradoxes and paradox management approaches are observed in the same excerpt and are presented as such for ease of understanding. We avoid repetition by only defining the paradox and paradox management approach when it is first introduced. Further detailed evidence corresponding to each of the observed themes and their definitions, drawn in abduction with existing literature, is presented in the Online Appendix V. The first two letters of the interview codes denote the anonymized names of the interviewee’s organizational affiliations, and the second two letters denote their role. Hence, SM (senior manager) and EA (environmental activist) = SMEA, and the final number denotes the interview’s order (SMEA1 = first interview). The key to the interview references accompanies the individual details in the Online Appendix III. To showcase the paradoxes and paradox management (which mostly appear together in excerpts), they are in bold typeface.
External Paradoxes and Paradox Management
Existing Versus Emerging Needs in External Stakeholders
The existing–emerging needs paradox is defined as the persistent tension between the opposing forces of existing and emerging needs, which are interrelated. Although past studies (Andriopoulos & Lewis, 2010) observe this paradox among internal stakeholders pursuing OA, ours is one of the first to identify the paradox for external stakeholders. We follow past work and define the external stakeholder’s existing needs to include the needs of the utility’s existing customers, such as improvements to the design or efficiency of an existing product or service (e.g., greater energy resilience) that may be met by exploitative innovations in the organization.
2
Similarly, the emerging needs of the external stakeholder may be met by the utility’s explorative innovations in the form of radical projects that can create new market segments or significantly change the existing market (e.g., environmentally conscious heating and lighting solutions). These specific emerging needs (met by, say, integrated smart grids) are related to the existing needs for improved efficiency in heating and lighting products and services. These two sets of needs oppose each other on a temporal and often environmental consciousness dimension. As a policy influencer said: Now there are consultants who emphasize the cost efficiency needs for today and then there are the ones who are always futuristic. For them it is all blockchains, and EVs.
Inclusivity–Efficiency Paradox
Each external stakeholder was, in their various capacities, engaged with one or more energy utilities. Although they were glad to represent their group’s interests in the internal stakeholder’s engagement opportunities, they were cognizant that many voices were not getting heard. External stakeholders shared their perception that efficient stakeholder engagement (i.e., generating speedy decision-making and giving full consideration to the views of represented stakeholders) meant that many other stakeholder viewpoints were excluded. Thus, the external stakeholders perceived that their commitment to engage was being pulled in opposite directions by the non-inclusivity of the engagement and the efficiency of the function. We define this paradoxical tension as the inclusivity–efficiency paradox. Although this paradox is similar to inclusivity–efficiency tensions observed in prior studies (Andriopoulos & Lewis, 2010; Henry et al., 2022; Ospina & Saz-Carranza, 2010), this is one of the first observations of the inclusivity–efficiency paradox in the context of external stakeholders/stakeholder engagement. For example, a sustainable solutions group knowledge expert said: I go in there and see very few faces there that should be there . . . I am unhappy, but I don’t walk out.
In this excerpt, we see how the knowledge expert frames inclusivity and efficiency as competing forces that pull him in two different directions. But he also observes that an efficient stakeholder engagement process would by definition be inclusive, and an inclusive process would have to be organized extremely efficiently. Yet, lacking the power to organize an efficient and inclusive stakeholder engagement process, we see him reframing his paradox as a dilemma: a choice between inclusivity and efficiency. We next explore this novel approach to an external stakeholder paradox.
The Integration of Existing and Emerging Needs
We observed that to manage this existing–emerging needs paradox, external stakeholders relied, inter alia, on integrating connections across the opposing forces of existing and emerging needs. Just as previous studies (e.g., Andriopoulos & Lewis, 2010) have done for internal stakeholders, we define the integration approach for external stakeholders as the management of a paradoxical tension through the observation of a connecting link between the dependent opposite poles of the tension, emphasizing the connection so that both poles of the paradox may be secured. For instance, the same policy influencer spoke about balancing existing and emerging energy needs: There is a question of how to do this. There should be more of a
He explains that rather than focusing on the emerging needs of blockchain or EVs as entirely separate from the existing needs and concerns associated with them, balance can be achieved by focusing on cost saving as a value that is common to both. Cost saving bridges the current need for accessibility and the emerging needs of blockchain; it thus serves as the link that balances existing and emerging needs for external stakeholders.
The Synthesis of Existing and Emerging Needs
External stakeholders can, through the acquisition of more information, synthesize opposing forces to create a complex new force. This approach to managing paradoxical tensions differs from integration in that a complex new force can accommodate the preexisting forces even where there is no connecting link between them. As such, it is similar to Jarzabkowski et al.’s (2013) observation that paradoxes are sometimes managed by adjusting the responses to two opposing forces, resulting in the formation of a new complex response even when there are no obvious prior connections between the two responses. In our study, it is the external stakeholders who take this action, synthesizing a complex new need from two paradoxical needs, and aligning their thoughts rather than molding a complex response. While their approach is similar to the synthesizing approach adopted by internal stakeholders, they are balancing their paradoxical needs (rather than the paradoxical organizational responses of internal stakeholders). A knowledge expert said: The Internet of Things (IoT) will be pervasive. Smart equipment will save energy, so will electrical cars. Connectivity will be helpful, although it will be pricey . . . but we don’t know.
His statements suggest that he was open to revising his existing needs around reusing, recycling, and reducing energy if more information on the Internet of Things (IoT) was made available by the energy utility because this would empower him to develop a two-pronged complex new plan that could include the possibilities for IoT/smart equipment to meet both current and future energy needs. We note that in this approach, the external stakeholder tends to oversimplify the distinctions between their two opposing needs and therefore glosses over the persistent underlying tension between them (cf. an observation by Poole & Van de Ven, 1989 for internal stakeholders).
Reframing Inclusivity–Efficiency Paradox as a Dilemma
In the two external stakeholder paradox management approaches explained above, the opposing poles of a paradox are secured either simultaneously or over a period of time. However, with the inclusivity–efficiency paradox, we observed that external stakeholders discursively reframed this paradox as an either/or dilemma, justifying the trade-off between inclusion and efficiency and usually accepting efficiency over inclusivity. Thus, we define a new approach to the management of paradoxes, which we label reframing. We propose that reframing a paradox as a dilemma involves changing the way the actor makes sense of the interdependencies between the opposing forces of a paradox (in our case, efficient stakeholder engagement versus the need for it to be inclusive). By reframing the paradox as an alternative understanding of a dilemma in which inclusivity is detached from efficiency, the participants could consider other indicators such as pace, response time, and in-depth expertise; these trumped the diverse evaluations of new products and services that more inclusive engagement may have offered. Although similar efforts to reduce paradoxes to dilemmas for ease of management have been observed in internal stakeholders by Sheep et al. (2017), we make the novel observation that external stakeholders adopt a similar approach. For instance, an environmental activist who promoted the equitable natural resource rights of all, including groups that were racially and ethnically marginalized, said: Part of the reason I do not have an organizational take on this topic is that,
Here we see the inclusion–efficiency paradox reframed as a dilemma and a choice, and the respondent justifies her engagement with a non-inclusive process on the basis that some excluded parties are getting to voice their opinion. The environmental activist acknowledges the paradox between inclusivity and efficiency in the decision-making process, but her continued involvement in the EnergyCo expert stakeholder engagement implies that she is prioritizing efficiency over inclusivity. She finds solace in the detachment of inclusivity from efficiency because expert opinions were at least being heard in EnergyCo’s “efficient” process. In addition, unlike Jarzabkowski et al.’s (2013) observation of the temporary splitting of poles to make an either/or choice, we see that in reframing, respondents adopt a new lens of understanding to make sense of a previously understood entity, formulating an alternative that they can live with or manage (Gaim, 2017). In our case, we see this reframing in reference to the persistent tension between an efficient (i.e., inclusive of all stakeholders) stakeholder engagement process and their understanding that such inclusion would make the process inefficient in terms of speed or depth of expertise.
Internal Stakeholder Paradoxes and Their Paradox Management
We observed that internal and external stakeholders shared the paradox of existing–emerging needs, and that both employed integration mechanisms to accept the opposing forces without compromising either of them. Since these paradoxes and their management approaches are similar for both groups, we focus next on the paradoxes and paradox approaches that were unique to the internal stakeholders: self-preservation–customer orientation, and competition–collaboration. We then examine the various approaches (adoption of dual structures, reflection on their own past to contextualize the opposing views, and adoption of a both/and approach) that the internal stakeholders employed to manage these paradoxes.
Self-Preservation–Customer Orientation Paradox
We define the self-preservation–customer orientation paradox as a persistent tension between the utility’s need for short-term survival, and the meeting of emerging customer needs for long-term adaptability. This is similar to previously observed paradoxes (e.g., long-term adaptability–short-term survival; Andriopoulos & Lewis, 2010). For instance, EnergyCo middle manager 4 said:
Here, we see the middle manager describing the energy utility’s short-term need for survival (which hinges on current investments) and the long-term need to meet emerging needs (i.e., clean energy) as a paradoxical tension between two interdependent poles: one cannot exist without the other.
Competition–Collaboration Paradox
We define the competition–collaboration paradox as the persistent tension between competition and collaboration with other partners, which is similar to the cooperation–competition paradox observed by Stadtler (2018). For example, middle manager 2 at EnergyCo said:
The respondent describes here how competition and collaboration, which can pull an energy utility in different directions, are the interdependent poles of a tension; a utility is not competitive if it does not occasionally collaborate with partners to leverage the strengths of everyone, and it cannot collaborate if the partners are not competitively strong enough to bring a new/unique contribution to the table. Thus, competition and collaboration are manifested as a paradoxical tension.
Use of Dual Structures to Manage Self-Preservation–Customer Orientation Paradox
All internal stakeholders referred to tensions between preserving the existence of their utility firm in the short term and facilitating the customer desire to be self-reliant in the long term. For example, Private E Inc. is a large private energy trading utility that has operated in an eastern Canadian province since 2002. A middle manager from the firm said: Each market needs to
He speaks of two structures: one focused on engaging more with external stakeholders to explore new insights around the renewable and electrification paths; the other driven by internal R&D. Together they sustain the utility’s long-term adaptability and short-term survival. We observe that this approach to the self-preservation–customer orientation paradox is similar to Tushman and O’Reilly’s (1996) suggestions for structural ambidexterity with dual structures, in that the distinctions between the opposing forces are accentuated, and a separate structure is adopted to secure them simultaneously or sequentially, However, in our case, the dual structures are related to internal structures (R&D) and external structures (engagement), through which innovation insights are gathered. We follow prior studies (e.g., Tushman & O’Reilly, 1996) in defining this approach as “the dual structures approach to managing paradoxical tensions.”
Reflexive Contextualization and the Use of a Both/And Approach to Manage Competition–Collaboration Paradox
The internal stakeholders in our study actively reflected on past experiences and historical events as they described their close engagement with external stakeholders. This enabled them to contextualize the external stakeholders’ views despite their own vested and antagonistic interests. This approach echoes previously identified paradox management approaches: the top management team’s paradoxical inquiries (Lüscher & Lewis, 2008) and the contextualization of tensions (Maclean et al., 2021). This approach, which we define as reflexivity with contextualization and a both/and approach, is a combination of reflexivity and contextualized learning, which enables the ability to embrace both views of a paradox. This was seen only in internal stakeholders who engaged closely with external stakeholders (mostly as part of the dual structures of innovation to manage the internal stakeholder paradoxes of self-preservation–customer orientation and existing–emerging needs). It was observed that they spoke of managing the opposing forces of self-preservation versus customer orientation, and competition versus cooperation. For instance, if the organization used dual structures to engage with internal and external stakeholders and thus manage their existing versus emerging needs, then we saw the effects of these differentiation efforts in the use of reflexivity and contextualization so as to integrate opposing views, thereby mitigating the paradoxes around competition versus collaboration.
For example, EnergyCo middle manager 4 remarked:
EnergyCo middle manager 4 uses the example of countries collaborating and competing to contextualize EnergyCo’s relationship with N Power and justify the both/and approach to competition and collaboration with N Power.
The Knotted Nature of Internal and External Stakeholder Paradoxes
We observed that the external stakeholder paradoxes of inclusivity–efficiency were often entangled in the management of existing–emerging needs, with the manifestation of one often triggering the other. This interdependent webbing of coexisting paradoxes, where the management of one has an amplifying/triggering/mitigating effect on the other, is in line with prior studies examining knotted paradoxes (Cunha & Putnam, 2019; Jarzabkowski et al., 2022; Sheep et al., 2017). For instance, a community leader/senior manager at a small utility said:
Here, we see statements related to the perception of an inclusivity–efficiency paradox, in which the respondent reframes the paradox as a dilemma and chooses to focus on the need for the invited leaders’ panel to deliberate fast and efficiently so they can balance their existing and emerging needs. His reframing of the inclusivity–efficiency dilemma (through his observation that he was invited to a program he recognized to be non-inclusive) becomes part of his overarching focus on managing his community’s paradox between existing and emerging needs.
Similarly, we see that the internal stakeholder paradoxes of self-preservation–customer orientation and existing–emerging needs are knotted together at the same level. In some instances, a respondent would acknowledge one paradox and then pitch contrasting aspects of two parallel paradoxes against each other, suggesting that managing one of these paradoxes would mitigate the other. This interwovenness of coexisting paradoxes that exert mitigating effects on each other reflects prior observations on the mitigating effect of knotted paradoxes (Cunha & Putnam, 2019; Jarzabkowski et al., 2022; Sheep et al., 2017). For instance, ECMM3 said:
In this excerpt, ECMM3 weaves the self-preservation–customer orientation paradox with the existing–emerging needs paradox, suggesting that addressing one paradox automatically addresses the other.
The Knotted Nature of Internal and External Paradox Management Approaches
Various excerpts have alluded to how the paradox management approaches of one group of stakeholders may have implications for the paradox management of the other group. Figure 1 depicts three knotted paradox management approaches that were observed from the extracts, each of which we now detail with evidence.
External Stakeholders Seek Information on Organizational Plans and Thereby Participate in the Dual Structures. They Use the Information for Synthesizing or Integrating Needs, or to Reframe a Paradox as a Dilemma
To detach inclusivity from efficiency, a policy influencer said:
Referring to engagement on an integrated resource plan, a senior manager at NS Power stated:
These excerpts show that the external stakeholder’s engagement is inspired by two needs: to reframe inclusivity and efficiency and to obtain information about how to integrate their existing and emerging needs. The internal stakeholder, however, adopted dual structures to explore innovations from both a customer and self-oriented perspective. Thus the paradox management approaches exhibited here are intertwined and have mitigating effects on each other. Our study differs from past work (which observes knotted paradoxes among internal stakeholders) by observing the knotted nature of the paradox management approaches employed by internal and external stakeholders.
By Participating in Dual Structures, External Stakeholder Prompts Contextualized Learning for Reflexivity
Internal stakeholders rely on the external stakeholders to prompt their contextualized learning or, alternatively, to initiate reflexive inquiries into the past or their own experiences, thereby adopting a both/and approach to managing the competition–collaboration or self-preservation–customer orientation paradoxes.
For instance, a middle manager at N Power said:
This senior manager recognizes that conversations with competitors, customers, and suppliers can trigger contextualized learning of an opposing view in a paradox, which induces reflexive inquiries and thereby facilitates a both/and approach to that paradox. Arrow marks 1 and 2 in Figure 1 show how, through engaging in dual structures and seeking information on innovation plans to manage their own paradoxes (existing–emerging needs and inclusivity–efficiency), external stakeholders prompt reflexivity and contextualized learning in internal stakeholders, thereby helping the internal stakeholder manage their own paradoxes around self-preservation–customer orientation and competition–collaboration.
If Internal Stakeholders Share Information Without Waiting for the External Stakeholders to Seek It, Then External Stakeholders Can Integrate/Synthesize Existing–Emerging Needs More Easily
External stakeholders rely on internal stakeholders to share information about future innovation plans so that they can integrate/synthesize their existing and emerging needs. For example, a community leader said: We can revise all our current and future needs and club them into one, i.e., a budgeting need, but we need to know more about what is going to happen to us, our needs, not just our current heating and lighting needs, our needs for the future.
The community leader speaks of needing the energy utility to share information about their future innovation plans so that existing and emerging energy needs (which are a complex budgeting concern) can be integrated. Later in the interview, he said: There are all connected probably,
Here, he imagines that it would be possible to synthesize existing and emerging needs via a connecting link but, just as in the integration approach, managing the existing–emerging needs paradox requires more information from the utility. This observation is echoed by EnergyCo middle manager 4: Yes,
Thus, as shown in Figure 1 (arrow 3), we see that the external stakeholders’ ability to integrate and synthesize their existing–emerging needs or to reframe the inclusivity–efficiency paradox as a dilemma hinges on how proactively the internal stakeholders use the dual structures to share information on innovation plans. This is further evidence of how the internal and external stakeholder paradox management approaches are knotted and have attenuating effects on each other.
Discussion
This study adds to the existing understanding of paradoxes and OA by broadening the investigation to include knotted external stakeholder paradoxes and the implications of their management for internal paradox management. Drawing on this first contribution, we offer an additional contribution to the OA and business and society literatures, by showing that external and internal stakeholder paradox management approaches are knotted with each other and external stakeholder paradox management both helps and relies on internal stakeholder paradox management. Thus, this study offers an alternative perspective on the indirect instrumentality of external stakeholders.
Adding External Stakeholder Paradoxes and Their Management to OA and Paradox Studies
Our study adds to extant OA and paradox studies by identifying new external paradoxes and paradox management approaches, and by showing that these are associated with an organization’s ability to secure OA. By identifying new external stakeholder paradoxes (inclusivity–efficiency, existing–emerging needs) and showing how the former is reframed as a dilemma and how the latter may be managed through integration or synthesis, we highlight similarities in the paradox management approaches of internal and external stakeholders. In addition, we show that an external stakeholder’s engagement with the internal stakeholder’s paradox management approach (i.e., external stakeholders reframe their inclusivity–efficiency paradox as a dilemma and choose efficiency over inclusivity) is necessary for internal stakeholders’ successful utilization of dual structures of innovation to manage the self-preservation–customer orientation paradox. We thus add to learning about how OA can be nurtured in organizations and how internal stakeholder paradox management may be better supported. Our examination of how external stakeholders perceive paradoxes as organizations pursue OA goes beyond claims that external stakeholder support is only necessary for the efficient design and diffusion of innovations or to mitigate negative stakeholder mobilization. We reveal how external stakeholders’ paradox management leads them to engage with the dual structures of innovation (one focused on internal R&D for innovation insights, the other searching for innovation ideas outside the firm through stakeholder engagement), which provides them with an opportunity to prompt contextualized learning and reflexive inquiries in internal stakeholders.
Our study shows how these prompts can lead internal stakeholders to accept opposing views and adopt a both/and approach when managing their self-preservation–customer orientation or collaboration–competition paradoxes. Thus, by uncovering external stakeholder paradoxes, their related management approaches, and the influences these have on internal stakeholder paradoxes as organizations pursue OA, we add to debate in OA and paradox studies about the influences shaping the paradox management responses of internal stakeholders (Berti & Simpson, 2021; Papachroni et al., 2016; Pradies et al., 2021; Smith & Lewis, 2011) and highlight the need for future scholars to examine influences from outside the focal organization.
Contributions to OA and Business and Society Studies
Our study contributes to extant OA/business and society literatures by highlighting how external stakeholders’ paradoxes are impacted by the paradoxes of internal stakeholders seeking to secure an ambidextrous organization. Our study suggests that external stakeholders have a wider OA role than simply diffusing innovations and reducing potential resistance to them. Their paradox management, although it relies almost entirely on internal stakeholders, significantly influences internal stakeholder paradox management. Thus, we reveal the knotted-dependent nature of paradox management across internal and external stakeholders. While internal stakeholders are afforded a selection of paradox management approaches (dual structures, reflexive inquiries, integration), external stakeholders are more constrained, being reliant on having to observe connecting links between their needs, or the hope that the internal stakeholders will sufficiently inform them about future innovation so that they can synthesize their existing and emerging needs. Thus, our external stakeholders are, unlike internal stakeholders (Jarzabkowski et al., 2013, 2022; Sheep et al., 2017), unable to manage their own paradoxes. We also identify why it is important that external stakeholders are provided with information that enables them to integrate or synthesize their existing–emerging needs paradox: an external stakeholder who is not grappling with the existing–emerging needs paradox will be more likely to engage with the dual structures of internal stakeholders, and thus help them manage their own paradoxes. As such, we add to OA studies (Bresciani et al., 2018) that examine impacts on and from external stakeholders by showcasing how sharing information on innovation plans with external stakeholders can, as part of an internal paradox management approach, amount to more than stakeholder appeasement. Business and society studies that discuss organizational impacts on external stakeholders (e.g., Dorobantu et al., 2017; González-Ramos et al., 2023; Hahn, 2015; Hahn et al., 2018; Kujala et al., 2022; Lee & Raschke, 2023) frequently outline potentially negative organizational impacts on broader society, and emphasize that neglecting the interests of external stakeholders can cause them to mobilize resistance. We add to these understandings by detailing the knotted-dependent nature of internal and external stakeholder paradox management. By proposing that organizations can draw restrictive boundaries around how external stakeholders manage their paradoxes, we urge business and society scholars to examine these organizational restrictions and enablers of external stakeholder paradoxes and explore their potential (in)direct impacts on organizational and societal outcomes.
Practical Implications
Our study offers key guidance to organizational decision-makers, policymakers orchestrating organizational transitions with competing stakeholder interests, and external stakeholders engaging with such organizations. By drawing on the interconnections between internal and external paradox management, our study suggests that in the pursuit of OA, internal stakeholders can benefit from an awareness of the paradoxes that external stakeholders associate with innovation. For instance, by understanding the paradox of inclusivity–efficiency for external stakeholders, organizational decision-makers can refine their own paradox management structures to facilitate greater inclusion, perhaps by engaging in exercises to manage their own paradoxes (e.g., community workshops) and contextualize stakeholder views into new learning. Internal stakeholders might also be prompted to consistently share information with the public about their existing and emerging innovation plans.
Our findings have implications for policymakers seeking to foster organizational transitions that involve competing stakeholder interests. We recommend that these policymakers pay special attention to external stakeholders’ paradoxes and their reliance on internal stakeholders to manage them. For instance, policymakers may be able to guide internal stakeholders to recognize that the exclusion of other marginalized stakeholders creates a paradox for the stakeholders who are invited to engage. Policymakers may be able to nudge wider inclusion by highlighting that external stakeholder paradox management is beneficial for the paradox management of the internal stakeholders also, and/or by coercing regulative pressures. Policymakers may thus help internal stakeholders gain new consumer insights and contextualized learnings. An additional benefit of this would be a reduction in external stakeholder negative mobilization against innovation efforts.
Finally, external stakeholders can benefit from our study by understanding that pragmatically reframing inclusivity–efficiency as a dilemma can resolve this paradox. Also, urging internal stakeholders to share information on their innovation plans will not only improve awareness of potential organizational innovations but also enable the external stakeholders to manage their own paradoxes around existing–emerging needs by synthesizing a new need they can rally around or by integrating the two needs with a common link.
Limitations and Future Research
Our internal stakeholder data was predominantly drawn from senior and middle managers involved in their organization’s explorative and exploitative innovations. Subsequent studies should seek a more balanced hierarchical distribution by including internal actors who may not be involved with the OA decisions and actions. This approach can help explore how the OA-related internal stakeholders’ paradox management is influenced by miscellaneous non-related internal stakeholders and how this influence fares compared with influences from external stakeholders.
Due to the nature of our questions and study setting, participants often assumed that they were speaking as organizational representatives, referring to collective approaches to paradox management. Future studies ought to distinguish between individual and collective approaches in the management of paradoxes so that the varying degrees of influence across individual and collective responses (especially for external stakeholders) may be gauged. Our study involved multiple waves of data collection but its design was not longitudinal. Future scholars could adopt a longitudinal design that incorporates measures of external and internal stakeholder paradox management and its impacts on measurable innovation outcomes.
Finally, our study highlights two major themes for future research. First, the ontological and epistemological possibilities of including external stakeholder views in organizational studies of paradoxes or OA. Second, the need to examine the reliance of external stakeholders on internal stakeholders for paradox management, which will extend the conventional view of how external stakeholder support helps innovation.
Supplemental Material
sj-docx-1-bas-10.1177_00076503241283270 – Supplemental material for Hello From the Other Side: External Stakeholder Paradoxes Matter for Organizational Ambidexterity
Supplemental material, sj-docx-1-bas-10.1177_00076503241283270 for Hello From the Other Side: External Stakeholder Paradoxes Matter for Organizational Ambidexterity by Aparna Venugopal and Rory Donnelly in Business & Society
Footnotes
Acknowledgements
The authors would like to acknowledge the assistance of Dr David Foord (University of New Brunswick, Canada) and his graduate research students in the second phase of data collection. In addition, the authors would like to thank Professor Tobias Hahn, the associate editor, and the three anonymous reviewers, whose feedback has significantly enriched this paper.
Author Contributions
The first author conceived and designed the paper and gathered the data, while both authors contributed equally to the analysis and the writing of the paper.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This study was partly funded by MITACS (grant no. IT07252).
Research Involving Human Participants and/or Animals
This study was performed in line with the principles of the Declaration of Helsinki. Approval was granted by the Ethics Committee of University of New Brunswick (No. REB 2017-090 and REB 2017-125).
Informed Consent
An informed consent was secured from all study participants and no identifying information is revealed in the article.
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