Is organizational ambidexterity always beneficial to family-managed SMEs? Evidence from China

• Ambidextrous strategy is not always conducive to firm performance. • Family management weakens the positive impact of organizational ambidexterity on firm performance. • Formalization exacerbates the negative moderating effect of family management on the relationship between ambidexterity and performance. Organizational ambidexterity is considered an essential strategy for firms to achieve sustainable competitive advantages, but it is unreasonable to expect all firms to equally profit from pursuing organizational ambidexterity, as this is a resource-intensive strategy. Using the resource-based view, we proposed and tested two internal boundary conditions that shape the impact of organizational ambidexterity on firm performance: family management and formalization. The results of our three-way interaction analysis of data from 324 Chinese SMEs show that a higher level of family management weakens the positive impact of organizational ambidexterity on firm performance, and this negative moderating effect is further strengthened by the degree of a firm’s formalization. These findings help us better understand why resource-constrained firms are more likely to struggle when pursuing organizational ambidexterity.