In this paper, we propose a theoretical model for testing paradox theory. We propose two paradoxical tensions—cognitive ambivalence and emotional ambivalence and develop hypotheses regarding their relationships with their antecedents and consequences. The antecedents include identity, business model, tight-loose coupling, and environmental characteristics such as munificence and dynamism. We propose that multiple identities, dual business models, tight coupling, environmental scarcity, and environmental dynamism may lead to higher levels of paradoxical tensions, which in turn, are likely to result in negative consequences in terms of performance at various organizational levels. However, employees and managers can use their paradoxical mindsets and paradoxical leadership, respectively, to intervene and moderate the negative effect of paradoxical tensions. Further, these moderation effects may be mediated by other factors such as strategic agility and ambidexterity to improve performance at various levels. We suggest methods to test the model and discuss implications for future research in paradox theory. Our paper responds to a call to innovate and strengthens a recent theory by drawing on ideas across disciplines and fields in an effort to solve modern challenges. Hence, this paper is relevant for the 2024 Annual Meetings of the Academy of Management theme: Innovating for the future.