CEO cognitive flexibility, information search, and organizational ambidexterity

Abstract Research summary Although prior research highlights the organizational and cognitive challenges associated with achieving organizational ambidexterity, there has been comparatively less empirical attention focused on the cognitive characteristics that may differentiate top managers of firms that achieve ambidexterity. We build on emerging research and identify cognitive flexibility as a cognitive characteristic with particular relevance to the challenges associated with ambidexterity and suggest that it works through chief executive officers (CEOs)' information search activities. We find that cognitively flexible CEOs are more likely to engage in effortful and persistent information search and rely to a greater extent on outside sources of information. In turn, effortful and persistent information search activities are associated with higher levels of organizational ambidexterity. Our study pushes forward the research agenda on cognitive micro‐foundations of firm capabilities. Managerial summary Ambidextrous organizations, or organizations that have the capability to pursue both incremental and discontinuous innovation, enjoy more sustainable competitive advantages. However, the achievement of organizational ambidexterity poses unique demands for top managers, including cognitive challenges. To help managers better understand these challenges, this study focuses attention on the role of the CEO in the achievement of organizational ambidexterity, and on CEO cognitive flexibility as a potential influencing factor. Our results suggest that CEO cognitive flexibility may influence organizational ambidexterity indirectly through its effect on CEO information search activities, in particular where and how intensely CEOs search for information. Our study reinforces the importance of human factors in the executive office for the development of firm dynamic capabilities, and the implementation of an innovation‐based strategy.