The microfoundations of strategic decision–making: How individual cognitive capabilities shape organizational ambidexterity

This study investigates how senior managers’ cognitive capabilities influence organizational ambidexterity—the ability to balance exploration and exploitation—in dynamic environments. Using mixed-methods research with 245 managers across 89 Tunisian organizations and 12 in-depth case studies, we found that cognitive flexibility was the strongest predictor of ambidextrous performance, followed by human and social capital diversity. Strategic decision-making quality partially mediated these relationships, with effects amplified in highly dynamic environments. We identified five mechanisms through which individual cognition aggregates to organizational capabilities: perspective integration, cognitive resource allocation, adaptive learning, network leverage, and decision process enhancement. Building on recent work on innovation microfoundations and entrepreneurial capabilities, our findings extend understanding of how individual-level characteristics create organizational capabilities in emerging markets. For practitioners, our findings provide actionable guidance for leadership selection, cognitive diversity development, and decision-making process improvement—particularly valuable for organizations in emerging markets.