| How do incumbent firms effectively respond to disruptive innovations? The extant literature shows that incumbent firms, while often excelling at incremental innovation, usually fare poorly in the face of disruptive innovation. Even firms that have been the direct beneficiaries of disruptive innovations in the past can fall prey to more agile competitors during these periods of upheaval. Organizational Ambidexterity - the idea of striking the right balance between the exploitation of existing resources and the exploration of new capabilities -- can be used as a theoretical framework to investigate how firms adapt and change in the face of disruptive innovation. In this study, we use ambidexterity as a lens to study Red Hat, a leader in Open Source Software, during the company's transition through a period of disruptive innovation -- namely Cloud Computing. The study reveals a number of interesting insights. The first is that the nature of the disruptive innovation itself shaped Red Hat's organizational response. The second is that Red Hat demonstrated a high level of contextual ambidexterity in its response which, in turn, led Red Hat to selectively adopt structural ambidexterity principles. The third is that Red Hat's history as a successful Open Source Software company enabled it to implicitly become ambidextrous by adopting and implementing key Open Source cultural values. In conclusion we discuss the implications of these findings for theory and practice. |
