TY - JOUR
T1 - Balancing exploration and exploitation
T2 - The moderating role of competitive intensity
AU - Auh, Seigyoung
AU - Menguc, Bulent
N1 - Funding Information:
The work described in this paper was fully supported by a grant from the Research Grants Committee of the Faculty of Economics and Commerce, the University of Melbourne.
PY - 2005/12
Y1 - 2005/12
N2 - 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.
AB - 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.
KW - Competitive intensity
KW - Effective firm performance
KW - Efficient firm performance
KW - Exploitation
KW - Exploration
KW - Miles and Snow typology
UR - http://www.scopus.com/inward/record.url?scp=27744469158&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=27744469158&partnerID=8YFLogxK
U2 - 10.1016/j.jbusres.2004.11.007
DO - 10.1016/j.jbusres.2004.11.007
M3 - Article
AN - SCOPUS:27744469158
SN - 0148-2963
VL - 58
SP - 1652
EP - 1661
JO - Journal of Business Research
JF - Journal of Business Research
IS - 12
ER -