Islamic business ethics and organizational ambidexterity: a new paradigm for business performance in Islamic business

Purpose This study aims to investigate the role of ta’awun ambidexterity, a new construct based on Islamic principles of collaboration, in improving business performance within Islamic organizations. It specifically examines how organizational culture, including market, clan and adhocracy cultures, influences ta’awun exploitation and exploration, and how these, in turn, affect business performance. This study introduces the concept of ta’awun ambidexterity, which uniquely integrates Islamic ethics with contemporary organizational ambidexterity theory. Design/methodology/approach A quantitative research design was used, using structural equation modeling with AMOS 24.0. This study surveyed 250 leaders of Muhammadiyah-owned enterprises (Amal Usaha Muhammadiyah [AUM]) in East Java, Indonesia. The research framework was built on organizational learning theory and integrated with Islamic business ethics. The constructs were adapted from the established literature, with ta’awun ambidexterity operationalized using newly validated Islamic business behavior indicators. Findings The findings show that all three cultural dimensions significantly influence ta’awun’s ambidexterity. Market and clan cultures have a strong positive effect on both ta’awun exploitation and exploration. Adhocracy culture significantly affects ta’awun exploration and has a marginal effect on ta’awun exploitation. Furthermore, both ta’awun ambidexterity dimensions significantly contribute to improved business performance. Research limitations/implications This study is limited to Muhammadiyah-owned enterprises in East Java, Indonesia, which may affect the generalizability of the findings to other types of Islamic organizations or regions. The study’s implications suggest that spiritually grounded cooperation can enhance innovation and resource optimization in Islamic organizational settings. This study provides an empirical basis for developing strategic policies for Islamic organizations to reinforce the synergy between adaptive work cultures and Islamic values. Originality/value This study introduces and defines ta’awun ambidexterity as a novel construct, merging Islamic ethics with contemporary organizational theory. By embedding values such as mutual assistance, trust and shared purpose, it offers a distinct perspective on how Islamic organizations can enhance their competitiveness while adhering to their spiritual mission. This study bridges the gap between spirituality and managerial rationality in value-based organizational governance.