Fostering individual-level ambidexterity in SMEs: a relational-contract perspective on informal external drivers of employees' ambidextrous behaviour

We contribute to a conceptual understanding of how SME managers can efficiently influence their employees' exploration-exploitation activities or, in other words, how they can foster individual-level ambidexterity, which arises in SMEs when exploration and exploitation activities are balanced. We adopt a relational-contract perspective to discuss informal external drivers of employees' ambidexterity. More specifically, we draw on social-learning theory to analyse how managers' ambidextrous behaviours might enable employees' exploration-exploitation activities. We suggest that it is important for SME managers to serve as role models of ambidextrous behaviour in order to foster non-managerial employees' ambidexterity. Furthermore, we draw on rational-choice and social-exchange conceptualisations of employee-manager exchange to analyse the influence of extrinsic motivators on employees' exploration-exploitation activities. Top-down social processes of learning and employee-manager exchange might together constitute relational contracts between managers and employees. We suggest that such contracts can efficiently foster employee-level ambidexterity as they combine relational with transactional elements by enabling social learning via managers' exploration-exploitation role models and aligning employees' interests with those of the organisation via social exchanges. As the social processes behind relational contracts cannot be easily copied, we argue that employees' ambidexterity facilitates the emergence of sustained competitive advantages.