Punctuated equilibrium or ambidexterity: dynamics of incremental and radical organizational change over time

Using formal simulation, I examine how environmental turbulence and complexity influence the temporal patterns of incremental and radical organizational change. In stable and simple environments, incremental change is found to be sufficient to keep pace with the task environment. Both turbulence and complexity are found to generate a punctuated equilibrium pattern but with different underlying mechanisms. When both turbulence and complexity are high, the punctuated equilibrium pattern is replaced by a dynamic type of ambidexterity. Implications for managing organizational change are discussed.