Structural ambidexterity and competency traps: Insights from Xerox PARC

•Structural ambidexterity can be seen as a dynamic capability that can be compromised by competency traps.•Competency traps have cognitive, organizational and behavioral dimensions.•Competency traps come into play when management perceives inventions to fall outside existing capabilities and business scope.•From a network ambidexterity perspective inventions of explorative unit can be treated as external to focal organization.•This treatment mirrors the dynamics of portfolio resources in the context of alliances.

We investigate the organizational dysfunctions that can interfere with the implementation of structural ambidexterity as a dynamic capability. We find that these dysfunctions give rise to competency traps characterized by interlinked cognitive, organizational and behavioral dimensions, that can severely compromise structural ambidexterity. Further, from the perspective of network ambidexterity, we also find that the inventions of the explorative unit can be treated as external to the focal organization, mirroring the dynamics of portfolio resources found in the context of strategic alliances. Our findings extend understanding of organizational ambidexterity as a dynamic capability, in particular how competency traps can severely compromise ambidexterity; and how network-like effects can adversely shape intra-firm dynamics.