Playing Two Games at Once: The Roles of Absorptive Capacity and Organizational Trust in the Relationship Between Entrepreneurial Climate and Organizational Ambidexterity

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The ever-changing competitive and unpredictable nature of the business environment dictates that organizations must be as good at anticipating future trends as they are at profitably running their current operations. Thus, organizational ambidexterity is essential for long-term survival. The dynamic business environment calls for behaviors across an organization encouraged by organizational actors, especially the top management team that are tasked with the strategic direction of the organization. Fostering an entrepreneurial climate as perceived by employees in the organization is the first step in laying the foundation for learning and innovation. Supported by the upper echelons theory, the present study examined the relationship between entrepreneurial climate and organizational ambidexterity, with additional interest in the roles that organizational trust and absorptive capacity play in the relationship. Using a sample of full-time employees across several industries recruited on the professional network platform LinkedIn to test the hypothetical and alterative models, the study confirms a positive relationship between an entrepreneurial climate and organizational ambidexterity with the mediating effect of absorptive capacity. However, organizational trust did not have a significant effect. Opportunities for future research are discussed.