Enterprise Risk Management Maturity and Organisational Ambidexterity: Evidence From German Mittelstand Firms

ABSTRACT Enterprise risk management (ERM) may help firms balance tensions between explorative and exploitative innovation, thus achieving organisational ambidexterity. However, this potential effect has not yet been empirically examined by prior research. Drawing on a survey of privately held German Mittelstand firms and quantitative analyses, we analyse the effect of ERM maturity on organisational ambidexterity. We find that ERM maturity is related to higher exploitation but not to organisational ambidexterity. Our findings also suggest that ERM maturity particularly fosters exploitation in smaller firms and organisational ambidexterity in family firms.