How do organizations build and enact paradoxical thinking to manage conflicting stakeholder interests?

Abstract

Organizations increasingly face persistent tensions between conflicting stakeholder demands, such as profitability versus sustainability. While paradoxical thinking, the ability to accept and integrate such contradictions, has been studied at the individual level, little is known about how it develops as an organizational capability. This study addresses that gap by examining how organizations build and enact paradoxical thinking to manage stakeholder tensions. Using Leonard-Barton’s core capability framework, four building blocks are investigated: collective capability to navigate stakeholder tensions, supportive managerial systems for paradox engagement, system-enabled visibility and coordination of tensions, and cultural alignment with paradoxical thinking. A qualitative multiple-case study of six organizations was conducted using semi-structured interviews. The findings show that paradoxical thinking is enacted through the dynamic interaction of people, systems, and culture. Internal alignment, psychological safety, and flexible coordination enable organizations to engage tensions constructively. The study concludes that paradoxical thinking is not a fixed trait but an evolving capability shaped by organizational routines and values.