Organizational ambidexterity and firm performance: the mediating role of strategic flexibility

Abstract

Purpose This study investigates the effect of organizational ambidexterity (exploration and exploitation) on firm performance, with strategic flexibility as a mediating variable. It addresses a critical gap in the strategic management literature by situating the ambidexterity, performance link within a sub-Saharan African context, specifically Ghana, where firms operate in environments characterized by high volatility, institutional voids and regulatory ambiguity. Design/methodology/approach Adopting a cross-sectional quantitative research design, the study collected data from 378 firms across five major sectors (technology, retail, manufacturing, healthcare and professional services) in the Greater Kumasi Metropolitan Area. Structural Equation Modeling using AMOS 23 was employed to assess the relationships among the constructs. Findings The results revealed that organizational ambidexterity significantly influences both strategic flexibility (β = 0.618, p < 0.001) and firm performance (β = 0.291, p < 0.001). Strategic flexibility also significantly predicts firm performance (β = 0.387, p < 0.001). Mediation analysis confirmed that strategic flexibility partially mediates the relationship between ambidexterity and performance, enhancing the adaptive capacity of firms in dynamic environments. Practical implications The study recommends that managers in emerging economies adopt dual structures that support both innovation and operational refinement while simultaneously investing in resource reallocation capabilities and environmental responsiveness. Policymakers are urged to create enabling environments through regulatory reforms and SME support programs that enhance organizational agility. Originality/value This study makes a novel contribution by empirically validating a mediation model that links ambidexterity to performance through strategic flexibility in the specific context of a developing economy characterized by institutional voids and informal networks. It demonstrates that in such environments, ambidexterity's value is not a given but is contingent upon the firm's capacity for strategic flexibility, which acts as a necessary adaptive lubricant. This advances theory by moving the discussion from if ambidexterity works to how it works under systemic constraints.