Organizational ambidexterity and professional firm performance: the moderating role of organizational capital

In this article, we examine the extent to which organizational capital influences ambidexterity (the simultaneous exploration and exploitation of knowledge) and firm performance in accounting firms. Organizational capital is the knowledge embedded in the organization using organizational databases, processes, and culture that enables knowledge transfer between individuals and groups within the organization. We theorize that organizational capital strengthens the impact of organizational ambidexterity on firm performance. Using a time-lagged research design, our results from 93 accounting firms show that organizational capital (Time 1) moderates organizational ambidexterity (Time 2) and change in firm revenue growth between Time 1 and Time 2. We also find that the link between ambidexterity and performance is stronger where firms have higher levels of organizational capital. This study highlights the importance of organizational resources in enhancing the performance impact of organizational ambidexterity.