In today's volatile business environment the last remaining source of truly sustainable competitive advantage lies in `organizational capabilities': the unique ways each organization structures its work and motivates its people to achieve clearly articulated strategic objectives.

This landmark volume helps managers to understand the concepts and learn the skills involved in designing their organization to exploit their inherent strengths. Tushman and Nadler present a design process, explore key decisions managers face, and list the guiding principles for incorporating the design function as a continuing and integral process in organizations that are looking to the future.

Tushman and O'Reilly examine how leadership, culture, and organizational architectures can be both important facilitators of innovation and, not uncommonly, formidable obstacles. They demonstrate how to clarify today's critical managerial problems, use culture and commitment to promote innovation and implement strategy, and deal with changing innovation requirements as organizations evolve.

Fully revised, this second edition offers a proven strategy for using ambidexterity to build discontinuous growth for mature organizations, and the flexibility to adapt in fast-changing environments. Why do successful firms find it so difficult to adapt in the face of change – to innovate? In the past ten years, the importance of this question has increased as more industries and firms confront disruptive change. The pandemic has accelerated this crisis, collapsing the structures of industries from airlines and medicine to online retail and commercial real estate. Today, leaders in business have an obligation not only to investors but to their employees and communities. At the core of this challenge is helping their organizations to survive in the face of change. The original edition summarized the lessons that the authors as researchers and consultants had learned over the previous two decades. Since then, they have continued to work with leaders of organizations around the world confronting disruptive change. With updates to every chapter, including new examples and analysis, this fully revised edition incorporates the lessons and insights that the authors have gained in the past five years. Two new chapters critically examine the role of organizational culture in promoting or hindering ambidexterity and its underlying fundamental disciplines. Using examples from firms such as Microsoft, General Motors, and Amazon, O'Reilly and Tushman illustrate how leaders can align their organization's cultures to fit the needed strategy, and how ideation, incubation, and scaling approaches, when used altogether, can successfully develop new growth businesses.