Header

UZH-Logo

Maintenance Infos

Exploration, exploitation, and financial performance: analysis of S&P 500 corporations


Keil, Thomas; Uotila, Juha; Maula, Markku; Zahra, Shaker A (2009). Exploration, exploitation, and financial performance: analysis of S&P 500 corporations. Strategic Management Journal, 30(2):221-231.

Abstract

The literature suggests that established firms need to balance their exploration and exploitation activities in order to achieve superior performance. Yet, previous empirical research has modeled this balance as the interaction of orthogonal activities. In this study, we show that there is a trade-off between exploration and exploitation and that the optimal balance between exploration and exploitation depends upon environmental conditions. Using a novel methodology to measure the relative exploration versus exploitation orientation, we find an inverted U-shaped relationship between the relative share of explorative orientation and financial performance. This relationship is positively moderated by the R&D intensity of the industry in which the firm operates.

Abstract

The literature suggests that established firms need to balance their exploration and exploitation activities in order to achieve superior performance. Yet, previous empirical research has modeled this balance as the interaction of orthogonal activities. In this study, we show that there is a trade-off between exploration and exploitation and that the optimal balance between exploration and exploitation depends upon environmental conditions. Using a novel methodology to measure the relative exploration versus exploitation orientation, we find an inverted U-shaped relationship between the relative share of explorative orientation and financial performance. This relationship is positively moderated by the R&D intensity of the industry in which the firm operates.

Statistics

Citations

Dimensions.ai Metrics
241 citations in Web of Science®
256 citations in Scopus®
631 citations in Microsoft Academic
Google Scholar™

Altmetrics

Downloads

0 downloads since deposited on 20 Jun 2013
0 downloads since 12 months

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2009
Deposited On:20 Jun 2013 14:54
Last Modified:18 Feb 2018 01:01
Publisher:Wiley-Blackwell
ISSN:0143-2095
OA Status:Closed
Publisher DOI:https://doi.org/10.1002/smj.738
Other Identification Number:merlin-id:8135

Download