Shifting back and forth: How does the temporal cycling between exploratory and exploitative R&D influence firm performance?

Abstract

This is a repository copy of Shifting back and forth: How does the temporal cycling between exploratory and exploitative R&D influence firm performance?.

Too small to do it all? A meta-analysis on the relative relationships of exploration, exploitation, and ambidexterity with SME performance

“…Evidence from firms of all sizes highlights the merit of sequential switching (Mudambi & Swift, 2011, but it is presently unclear if these benefits extend to resource-constrained SMEs. Sequential switching engenders greater complexity than consistently focusing on either exploration or exploitation due to the challenging transition phase (Lavie et al, 2010;Mavroudi et al, 2020), which affects both the optimal frequency and speed of switching. Consequently, it is unsurprising that switching at a higher frequency generally has negative performance implications (Mavroudi et al, 2020).…”

“…Sequential switching engenders greater complexity than consistently focusing on either exploration or exploitation due to the challenging transition phase (Lavie et al, 2010;Mavroudi et al, 2020), which affects both the optimal frequency and speed of switching. Consequently, it is unsurprising that switching at a higher frequency generally has negative performance implications (Mavroudi et al, 2020). Frequent switches are especially difficult to manage for resource-constrained firms (Mudambi & Swift, 2011).…”

“…Beyond the more general advantages of performing a meta-analysis (e.g., reducing conflicting findings (Hedges & Olkin, 1985) and the examination of a moderator not originally considered by the primary studies (Mueller et al, 2013)), the results from our analysis serve as a starting point for deriving of a roadmap for future research with a specific focus on SMEs. More specifically, building on the notion of punctuated equilibrium (Tushman & Romanelli, 1985), we discuss how SMEs may benefit from sequentially switching between exploration and exploitation instead of engaging in ambidexterity (e.g., Kang & Kim, 2020;Mavroudi, Kesidou, & Pandza, 2020). Moreover, we highlight the importance for future research to consider the role of other potential contingency factors regarding the relative performance implications of exploration, exploitation, and ambidexterity in SMEs at the environmental-, firm-, and individual-level.…”

Firm exporting and investment in exploratory and exploitative R&D

“…We would expect in turn that different aspects of exporting and the associated different types of learning affect differently the R&D investment by firms. However, R&D is not a homogenous activity (Barge-Gil and Lopez, 2014;Mavroudi et al, 2020), but rather incorporates exploitative and exploratory elements which are particularly important for the short-and long-term survival of the firm, respectively (March, 1991). Exploratory R&D is an original work such as experimentation or theoretical work aimed at acquiring new knowledge (March, 1991;Lavie et al, 2010).…”

“…Second, although March (1991) suggests that firms' explicit choices between exploration and exploitation are integrated in decisions about various investments including R&D, few studies on exploration and exploitation focused on R&D investment (Mavroudi et al, 2020). The literature on the determinants of exploration and exploitation uses binary variables (Blindenbach-Driessen and Ende, 2014), point scale measures (He and Wong, 2004;Bierly and Daly, 2007) or ratios based on turnover (Laursen and Salter, 2006) to capture the firm's choices.…”