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Article
Publication date: 3 May 2022

Lixun Su, Annie Peng Cui, Saeed Samiee and Shaoming Zou

This study aims to examine how international small and medium-sized enterprises (ISMEs) improve adaptive marketing capabilities (AMCs) through exploration, exploitation

Abstract

Purpose

This study aims to examine how international small and medium-sized enterprises (ISMEs) improve adaptive marketing capabilities (AMCs) through exploration, exploitation and ambidexterity (EEA) and thereby increase exporting performance. In addition, the present study attempts to examine conditions under which EEA can more effectively improve AMCs.

Design/methodology/approach

The theoretical model was tested by using survey data collected from 119 ISMEs based in the U.S. Partial least squares structural equation modeling was deployed to analyze the data.

Findings

The results show that exploration increases ISMEs’ performance through improving AMCs while ambidexterity reduces ISMEs’ performance through weakening AMCs. However, the negative influence of ambidexterity on AMCs attenuates in a dissimilar host country where ISMEs can conveniently learn new information. Finally, when ISMEs pursue exploitation in an either similar or dissimilar host country, their AMCs do not improve.

Research limitations/implications

We provide empirical evidence of SMEs increasing AMCs and firm performance via EEA within the context of exporting. However, we did not collect objective financial performance of ISMEs.

Practical implications

Our findings provide guidance for ISMEs’ marketing managers to build AMCs by learning something new. Moreover, the findings help ISMEs effectively identify and select the most appropriate international marketing strategy depending on the similarity between host and home countries.

Originality/value

Our findings contribute to the literature by explicating how ISMEs can heighten marketing capability to build competitive advantages in global markets through exploration. However, ISMEs should be cautious when pursuing ambidexterity, which may weaken AMCs and finally decrease firm performance. In addition, we identify external factors that influence effectiveness of EEA in building AMCs. By doing so, the findings help ISMEs understand how to increase AMCs so as to improve competencies in fast-changing global markets.

Details

European Journal of Marketing, vol. 56 no. 5
Type: Research Article
ISSN: 0309-0566

Keywords

Book part
Publication date: 4 August 2014

Guktae Kim and Moon-Goo Huh

Despite the theoretical assumption that balancing exploration and exploitation is important for long-term performance and survival, previous studies have provided few…

Abstract

Despite the theoretical assumption that balancing exploration and exploitation is important for long-term performance and survival, previous studies have provided few insights into these relationships because they have focused mainly on the short-term financial performance of organizations. In addition, balancing exploration and exploitation is a critical challenge for small- and medium-sized enterprises (SMEs) that lack the resources, capabilities, and experience necessary to achieving ambidexterity. In this regards, this study empirically explores the relationship between the explorationexploitation balance and SMEs’ longevity in order to address two important questions from the ambidexterity perspective: (1) How does the balance between exploration and exploitation influence organizational survival? (2) How is the appropriate balance between exploration and exploitation influenced by an organization’s internal and external contexts?

An analysis of 1981–2012 data from the Korean SMEs in IT industry reveals an inverted U-shaped curvilinear relationship between the extent of exploratory innovation and organizational longevity, providing support for the ambidexterity perspective. We further examine the moderating effects of financial slack and environmental dynamism on the relationship between exploratory innovation and organizational longevity. The results indicate that financial slack moderated the exploration–longevity relationship and call for a contingency approach for a better understanding of performance implications of the explorationexploitation balance.

Details

Exploration and Exploitation in Early Stage Ventures and SMEs
Type: Book
ISBN: 978-1-78350-655-2

Keywords

Book part
Publication date: 11 May 2010

Toni Sfirtsis and Rudy Moenaert

The dynamic capabilities perspective focuses on the ability of an organization to develop its resource base in order to meet environmental expectations. Therefore, it is…

Abstract

The dynamic capabilities perspective focuses on the ability of an organization to develop its resource base in order to meet environmental expectations. Therefore, it is closely interrelated to the issue of managing the interaction of exploration and exploitation. The competence of continuously optimizing the interaction of exploration and exploitation has been referred to as organizational ambidexterity. Managing this interaction implies resolving a firm's permanent struggle to overcome the barriers related to the right configuration between exploration and exploitation.

By incorporating the concept of combinative capabilities as balancing routines into the conceptualization of ambidexterity we distinguish structural, interaction, and socialization capabilities that are deployed in overcoming these barriers to resource (re)configuration.

Drawing on knowledge management and barriers to resource configuration we expect that the way organizations deploy combinative capabilities to manage the interaction between exploration and exploitation depends on the observed barriers to resource (re)configuration. By combining the constructs of barriers to resource reconfiguration, ambidexterity, and combinative capabilities we intend to gain more insight in the way organizations manage the actual interaction between exploration and exploitation. Our paper will introduce a set of propositions indicating the relationship between ambidexterity, barriers to resource (re)configuration, and combinative capabilities as balancing routines.

Details

A Focussed Issue on Identifying, Building, and Linking Competences
Type: Book
ISBN: 978-1-84950-990-9

Book part
Publication date: 4 August 2014

Blake D. Mathias

Since March (1991) presented his ideas on organizational learning, hundreds of empirical tests have been conducted on relationships among the activities of exploration

Abstract

Since March (1991) presented his ideas on organizational learning, hundreds of empirical tests have been conducted on relationships among the activities of exploration, exploitation, ambidexterity, and firm performance. Despite continued interest in his ideas, there has not been a systematic assessment of extant research to reveal whether, and to what extent, these activities relate to firm performance. This study uses meta-analysis to take a next step by aggregating results of 117 studies from more than 21,000 firms. I find strong performance effects for exploration and exploitation, but contrary to received theory, I discover ambidexterity yields weaker effects than a focus on either exploration or exploitation. Thus, I leverage these findings to offer future research opportunities.

Details

Exploration and Exploitation in Early Stage Ventures and SMEs
Type: Book
ISBN: 978-1-78350-655-2

Keywords

Article
Publication date: 17 February 2022

Min Ju and Gerald Yong Gao

The purpose of this paper is to examine the performance impact of foreign ventures' exploration and exploitation strategies in emerging markets. Exploration and…

Abstract

Purpose

The purpose of this paper is to examine the performance impact of foreign ventures' exploration and exploitation strategies in emerging markets. Exploration and exploitation represent key strategic choices and have been extensively studied in the context of domestic markets. Yet the implication of such innovation strategies for foreign ventures operating in emerging markets has been under-researched. We aim to investigate whether foreign ventures can realize the value of exploration and exploitation strategies in emerging markets and also the moderating role of marketing capability and operation flexibility to enable the implementation process.

Design/methodology/approach

This study adopts the hierarchical moderated regression approach using a sample of foreign ventures operating in high-tech manufacturing industries in China.

Findings

The authors find that both exploration and exploitation have positive effects on firms' financial performance. Marketing capability strengthens the performance impact of exploration, but exhibits no such impact of exploitation. Moreover, operation flexibility positively moderates the effects of both exploration and exploitation on performance.

Research limitations/implications

This study provides important insights into whether foreign ventures can boost performance through exploration and exploitation strategies in emerging markets as well as the implementation-level factors that can facilitate such positive effects.

Originality/value

The study is novel in revealing the moderating role of marketing capability and operation flexibility in facilitating the performance outcome of exploration and exploitation strategies.

Details

International Marketing Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-1335

Keywords

Book part
Publication date: 22 November 2018

Younggeun Lee and Patrick M. Kreiser

In this chapter, the authors examine the main effect of entrepreneurial orientation (EO) – a firm’s strategic entrepreneurial posture – on balancing exploration and…

Abstract

In this chapter, the authors examine the main effect of entrepreneurial orientation (EO) – a firm’s strategic entrepreneurial posture – on balancing exploration and exploitation in the form of organizational ambidexterity. Resource-constrained firms face an imperative to conduct innovative activities, survive hostile environments, and compete with larger and more resource-rich firms. The authors contend that firms can address these potential impediments through achieving ambidexterity via dynamic capabilities, firm-specific resources, and institutional factors. Specifically, The authors review the EO and ambidexterity literatures and summarize extant arguments related to the relationship between EO, exploration, and exploitation. The authors also discuss the most prominent scales and measures of EO, exploration, and exploitation. Moreover, the authors discuss operationalizational challenges that should be considered when conducting EO–ambidexterity research and suggest future research directions by specifying an agenda outlining useful theoretical perspectives and various contingencies that may influence the EO–ambidexterity relationship.

Details

The Challenges of Corporate Entrepreneurship in the Disruptive Age
Type: Book
ISBN: 978-1-78754-443-7

Keywords

Book part
Publication date: 1 January 2012

Sara Louise Muhr, Michael Pedersen and Mats Alvesson

Contemporary working life highlights the challenge between exploitation and exploration both on a general and a more individual level. Here, we focus on the latter, and…

Abstract

Contemporary working life highlights the challenge between exploitation and exploration both on a general and a more individual level. Here, we focus on the latter, and connect the critical debate regarding self-management to March's exploitation/exploration trade-off, as this forms a useful theoretical frame to understand how employees make sense of their self-management efforts. The employee is subjected to an individual responsibility to understand and manage an exploration of the self while handling the norms of self-exploitation that a self-management culture creates. Through an empirical study of a large group of management consultants, we explore how they perform and make sense of self-exploitation and self-exploration through three specific discourses: the discourse of workload, the discourse of aspiration, and the discourse of fun. Through these, the consultants try to identify optimal amounts of work, play, and ambition, all while handling the trade-off between self-exploitation and self-exploration. We show how this keeps failing, but how it reappears as a necessary condition for avoiding future failures. In all three discourses, the trade-off therefore presents itself as the problem of as well as the solution to self-management.

Details

Managing ‘Human Resources’ by Exploiting and Exploring People’s Potentials
Type: Book
ISBN: 978-1-78190-506-7

Keywords

Book part
Publication date: 4 August 2014

Uriel Stettner, Barak S. Aharonson and Terry L. Amburgey

Despite a growing body of research on exploration and exploitation, scholars have tended to study the phenomena from a narrow perspective mostly within larger…

Abstract

Despite a growing body of research on exploration and exploitation, scholars have tended to study the phenomena from a narrow perspective mostly within larger, well-established organizations. However, it is still far from obvious how top management within small-to-medium sized enterprises (SMEs) are to address the liability of newness and seek access to resources and capabilities relevant for the pursuit of exploration and exploitation. Resource sourcing and allocation decisions are particularly critical in SMEs and must be aligned with the firm’s fundamental strategic intent and growth model. For example, organizations following a stage model by first developing a domestic market and then expanding globally will require different bundles of resources and capabilities than organizations that are designed to conquer the global arena. Indeed, management systems will likely need to adapt across the firm life cycle such that it can fulfill an explorative function in the earlier stages and an exploitative function in later ones. Hence, early-stage ventures have to master the resource reallocation process which is contingent on their access to capital. Across the firm life cycle, venture capitalists can tap into the growth potential of early-stage ventures is a key factor behind their successful short-term innovative performance as well as long-term survival.

Details

Exploration and Exploitation in Early Stage Ventures and SMEs
Type: Book
ISBN: 978-1-78350-655-2

Keywords

Book part
Publication date: 21 September 2018

Charlotte Reypens and Sheen S. Levine

Measuring behavior requires research methods that can capture observed outcomes and expose underlying processes and mechanisms. In this chapter, we present a toolbox of…

Abstract

Measuring behavior requires research methods that can capture observed outcomes and expose underlying processes and mechanisms. In this chapter, we present a toolbox of instruments and techniques we designed experimental tasks to simulate decision environments and capture behavior. We deployed protocol analysis and text analysis to examine the underlying cognitive processes. In combination, these can simultaneously grasp antecedents, outcomes, processes, and mechanisms. We applied them to collect rich behavioral data on two key topics in strategic management: the explorationexploitation trade-off and strategic risk-taking. This mix of methods is particularly useful in describing actual behavior as it is, not as it should be, replacing assumptions with data and offering a finer-grained perspective of strategic decision-making.

Details

Behavioral Strategy in Perspective
Type: Book
ISBN: 978-1-78756-348-3

Keywords

Article
Publication date: 23 September 2021

Miguel Solís-Molina, Miguel Hernández-Espallardo and Augusto Rodríguez-Orejuela

This study aims to analyze the moderating role of a firm’s alliance learning capability. The aim is to investigate the comparative performance of developing exploitation

Abstract

Purpose

This study aims to analyze the moderating role of a firm’s alliance learning capability. The aim is to investigate the comparative performance of developing exploitation (or exploration) activities in collaboration with others vs adopting a go-it-alone posture.

Design/methodology/approach

The authors compare high levels of co-exploitation (or co-exploration) that represent the collaboration stance vs low levels of co-exploitation (or co-exploration) that characterize the go-it-alone posture. Data were collected using a sample of 262 manufacturing firms that developed exploitation-based innovations and 239 exploration-based innovations. Regression models were used to test the hypotheses.

Findings

Empirical results suggest that the best performance is reached by firms that exploit or explore collaborating with others at high levels of alliance learning capability. In contrast, firms perform better by going alone in exploitation activities at low levels of alliance learning capability.

Practical implications

Firms may complement internal efforts of exploitation or exploration by co-developing knowledge with other organizations for higher performance. However, collaborating with others is not free of drawbacks, and, under certain circumstances, the go-it-alone strategy is more convenient.

Originality/value

This paper provides evidence of the role of a firm’s alliance learning capability in determining the differential performance of carrying on exploitation or exploration activities in collaboration with others vs adopting a go-it-alone stance. Thus, it offers an alternative perspective in the literature on organizational learning and innovation management, in contrast with the exploitation and exploration balanced perspective of ambidexterity, by explaining how alliance learning capability fosters firm performance combining exploitation or exploration at organizational and inter-organizational levels.

Details

Journal of Business & Industrial Marketing, vol. 37 no. 5
Type: Research Article
ISSN: 0885-8624

Keywords

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