Productivity dilemma

Topics: Strategy, Innovation, Strategic planning Pages: 2 (459 words) Published: April 6, 2014

Productivity dilemma
Productivity dilemma
Abernathy’s productivity dilemma describes businesses trade off between two strategic goals: efficiency and innovation. Efficiency is a result of exploitation, there utilizes existing knowledge and capabilities, resulting in stable and efficient performance. Innovation or adaptability is a result of exploration, which creates new knowledge, enabling organizations to innovate, and adapt to changing conditions. Paul s. Adler highlights that Abernathy sees the productivity dilemma on a one-dimensional spectrum, where businesses choose between short-term efficiency and long-term adaptability (Adler et al., 2009 p. 99-100, 104, 109). Strategies

Only the most important strategies, from the article, will be covered, because of the paper’s words limitations.

O’Reilly and Tushman, 2008 highlights the strategy of structural ambidextrous designs to overcome the productivity dilemma. Structural ambidextrous enables businesses to sustain both exploration and exploitation, there increase efficiency and simultaneously innovates. If e.g. one subunit explores and another exploits, so the subunits are highly differentiated but loosely coupled (p. 101). Brunner et al., 2008 presents the strategy of deliberate perturbation for businesses, there are in mature process. Deliberate perturbation is where organizations intentionally re-introduce variance into mature processes to sustain learning and knowledge creation through exploratory interpretation (p. 104).

Theoretically it makes sense to use the strategies mentioned above to overcome the productivity dilemma, but it is difficult to find the right balance between efficiency and adaptability in the real world. There is not ‘one’ right balance for all businesses. The right balance depends on the business internal structure, core capabilities, industry, suppliers etc. Changes in the environment over time can also change the ‘right’ balance of efficiency and adaptability....
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