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Exploration, exploitation, and financial performance : analysis of S&P 500 corporations
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Uotila, Juha, Maula, Markku, Keil, Thomas and Zahra, Shaker A. (2009) Exploration, exploitation, and financial performance : analysis of S&P 500 corporations. Strategic Management Journal, Volume 30 (Number 2). pp. 221-231. doi:10.1002/smj.738 ISSN 0143-2095.
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Official URL: http://dx.doi.org/10.1002/smj.738
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.
| Item Type: | Journal Article | ||||||
|---|---|---|---|---|---|---|---|
| Divisions: | Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School |
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| Journal or Publication Title: | Strategic Management Journal | ||||||
| Publisher: | John Wiley & Sons Ltd. | ||||||
| ISSN: | 0143-2095 | ||||||
| Official Date: | February 2009 | ||||||
| Dates: |
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| Volume: | Volume 30 | ||||||
| Number: | Number 2 | ||||||
| Number of Pages: | 10 | ||||||
| Page Range: | pp. 221-231 | ||||||
| DOI: | 10.1002/smj.738 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Restricted or Subscription Access |
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