Balancing exploration and exploitation: The moderating role of competitive intensity

Seigyoung Auh, Bulent Menguc

Research output: Contribution to journalArticlepeer-review

377 Scopus citations

Abstract

Drawing on Miles and Snow's classification of strategy type, this paper addresses the contingency role that competitive intensity plays in explaining the relationship between exploration/exploitation and firm performance. We further refine our firm performance measure into separate measures of effective and efficient firm performance. Our conceptual argument posits that for defenders, exploration will be positively related to effective firm performance while exploitation will be negatively related to efficient firm performance as competitive intensity increases. Conversely, for prospectors, we assert that exploration will be negatively related to effective firm performance, whereas exploitation will be positively associated with efficient firm performance as competition intensifies. Empirical results provide general support for our predictions. The implications for business theory and practice are discussed.

Original languageEnglish (US)
Pages (from-to)1652-1661
Number of pages10
JournalJournal of Business Research
Volume58
Issue number12
DOIs
StatePublished - Dec 1 2005
Externally publishedYes

Keywords

  • Competitive intensity
  • Effective firm performance
  • Efficient firm performance
  • Exploitation
  • Exploration
  • Miles and Snow typology

ASJC Scopus subject areas

  • Marketing

Fingerprint Dive into the research topics of 'Balancing exploration and exploitation: The moderating role of competitive intensity'. Together they form a unique fingerprint.

Cite this