The Dynamic Capability and Ambidexterity in the Early-Stage Startups: A Hierarchical Component Model Approach

This study investigates the implication of startup ambidexterity toward competitive advantage. It integrates a model that combines the dynamic capability and ambidexterity concept through organizational learning, innovation, and adaptation. This research is a cross-sectional quantitative research. There are 121 startup founders and co-founders participated in the survey distributed through questionnaires at a regional event in Indonesia. The Hierarchical Component Model (HCM) was established using Partial Least Square – Structural Equation Model (PLS-SEM), which analyzes the high-order and low-order construct through measurement and structural model evaluation. The study has two main results; first, it shows that start-ups have more exploration behavior than exploitation at the early stage of startup development by measurement model evaluation. The second result shows that startup ambidexterity has a positive and significant effect on competitive advantage. This study integrates dynamic capability and ambidexterity through learning ambidexterity, innovation ambidexterity, and alignment/adaptation and seeks to understand its implication for competitive advantage. The study also stresses the importance of future research from methodological and substance to reconcile the dynamic capability and organization ambidexterity.