Relative exploration orientation and different levels of organization performance : the moderating effect of organizational slack

Hele tekst

(1)Master Thesis. Relative exploration orientation and different levels of organizational performance: the moderating effect of organizational slack. Student:. Lukas Verkerk. Student nr.:. 10293302. Supervisor:. Bernardo S. B. C. Lima. Second supervisor:. Pepijn van Neerijnen. Study:. MSc. in Business Studies – Strategy Track. Institution:. University of Amsterdam. Submission:. August 15, 2014. Version:. Final.

(2) TABLE OF CONTENT ABSTRACT ............................................................................................................................... 3 INTRODUCTION ...................................................................................................................... 4 LITERATURE REVIEW ........................................................................................................... 8 Organizational performance ................................................................................................... 9 Balancing exploitation and exploration ................................................................................ 11 Organizational slack: excess resources................................................................................. 14 Absorbed and unabsorbed slack ........................................................................................... 18 DATA AND METHODS ......................................................................................................... 21 Research Setting and Data Collection .................................................................................. 21 Measures ............................................................................................................................... 21 Dependent Variables ......................................................................................................... 21 Independent variable ......................................................................................................... 22 Moderating variables ........................................................................................................ 23 Control Variables .............................................................................................................. 24 Model .................................................................................................................................... 24 RESULTS................................................................................................................................. 26 Descriptive statistics ............................................................................................................. 26 Regression analyses .............................................................................................................. 29 DISCUSSION AND CONCLUSION ...................................................................................... 34 LIMITATIONS AND FUTURE RESEARCH ........................................................................ 37 REFERENCES......................................................................................................................... 39.

(3) ABSTRACT The relationship between exploitation and exploration is dynamic and multifaceted. Organizations that are able to manage this relationship and create a balance between exploitative and explorative activities are able to positively influence organizational performance. As exploitation mainly focusses on short term objectives and exploration has a more long term orientation, these features have a paradoxical relationship. Because of these opposing characteristics it can be expected that both exploitation and exploration influence organizational performance in different ways. This study will advance the existing body of knowledge by investigating the relationship between exploitative and explorative activities and their influence on short and long term performance. Further, this research tests the moderating effect of absorbed and unabsorbed organizational slack in the relationship between relative exploration orientation and the different levels of organizational performance. To test the formulated relationships, this study used a data sample covering five years of information on 109 manufacturing firms of the Global Fortune 500 list. The findings of this study cannot support the expected curvilinear relationship between relative exploration orientation and short and long term performance due to non-significant statistics. The results do support the moderating effect of unabsorbed and absorbed slack on the relationship between relative exploration orientation and both short and long term performance..

(4) “The only limit to our realization of tomorrow will be our doubts of today.” Franklin Delano Roosevelt INTRODUCTION Economic recessions, governmental regulations, technological developments and organizational changes force organizations to find the right balance between being adaptive to these changes and keeping the business going. Due to the economic turmoil of the last years organizations are more than ever forced to re-assess their organizational structure and business model, enabling them to react to internal and external turbulence. These changes and adaptations are likely to influence organizational performance. Previous research shows that the level of performance generated by an organization strongly depends on the alignment a firm can achieve with its environment (Simsek, 2009). Ann organization can realize such an alignment by constantly reconfiguring and develop its resources while at the same time exploiting current activities and competencies (March, 1991; Simsek, 2009). This suggests that organizations need to be adaptable in order to be able to generate return on investments not only in the short term but also in the long term. Organizations need to keep up their short term performance in order to generate return on investments, making it possible to respond to current organizational and environmental hazards. According to March (1991) organizations manage to do so by focussing on efficiency, creating structure and by reducing variety. On the other hand an organization also needs to focus on future performance to enable its long term survival by being innovative and adapting its products and services to environmental changes and changing market demand. However, there are environmental and organizational contingencies that may disrupt and influence the organization its balance, making it harder to align and balance the short and long term focus of the firm (Auh & Menguc, 2005; Jansen, Van Den Bosch & Volberda, 2006;.

(5) Uotila, Maula, Keil & Zahra, 2009; Raisch & Birkinshaw, 2008; Lavie, Stettner & Tushman, 2010). The exploitation and exploration literature focusses on this challenge organizations face to find the right balance between short term and long term objectives. On the one hand exploitation focusses on the short term activities and goals an organization has. On the other hand exploration focusses on the more long term activities an organization needs to focus on. Organizations try to balance the relationship between exploitation and exploration since they are ends of the same continuum, meaning that they constantly influence each other and the level of available organizational resources (March, 1991; Gupta, Smith & Shalley, 2006). If exploitation goes up, an organization focusses strongly on short term activities which will at the same time decrease the level of explorative activities an organization is in. The perfect balance between exploitation and exploration is called ambidexterity. Achieving ambidexterity means that an organization sufficiently exploits current activities to generate profits and simultaneously explores the markets to capture new opportunities to ensure future viability (March, 1991; Gupta et al., 2006). To balance these paradoxical features, a trade-off needs to be made because an organization cannot survive without achieving short term success nor can it survive if it does not have long term goals and objectives. And since exploitation and exploration are fighting over the same scarce resources within the same continuum, a compromise between these incompatible features is needed. How organizations can achieve and sustain the right balance between exploration and exploitation thus is a pivotal question to scholars and organizations, as achieving this balance influences organizational performance. This study will explore this to be achieved balance, by looking at the relative emphasis an organization has on exploration over exploitation, hereafter ´relative exploration orientation´ (Uotila et al., 2009). Low relative exploration orientation will indicate a stronger focus on exploitation over exploration activities, meaning that most resources will.

(6) be devoted to exploitative activities. This means that fewer resources are available to explore. High relative exploration indicates that the aim of the organization is to focus on explorative long term objectives over exploitative activities which means that fewer resources are available for exploitative activities (March, 1991; Gupta et al., 2006; Uotila et al, 2009). The level of balance between exploitation and exploration is likely to influence both the short and long term performance of an organization. Raisch and Birkinshaw (2008) developed a model describing this relationship between exploitation, exploration and organizational performance. They however found that the relationship between exploitation, exploration and performance remains limited and deficient. Other empirical research found that the achieved balance between exploitation and exploration influences various performance outcomes like return on investment and an organization its market share (He & Wong, 2004; Jansen et al., 2006; Lavie, Kang & Rosenkopf, 2009; Uotila et al., 2009; Venkatraman, Lee & Iyer, 2007). Lavie et al. (2010) have explicitly stated that: “more empirical research is needed to reveal the multifaceted performance implications of exploration and exploitation in various contexts” (p. 138). Even though the existing literature widely supports that exploration is related to innovation and long term goals and exploitation is more connected to short term activities, so far an attempt to make a distinction between short and long term performance in relation to exploitative and explorative activities has rarely been taken into account (Lin, Yang & Demirkan, 2007; March, 1991; Auh & Menguc, 2005). Though it seems that making a distinction between short and long term performance can have a pivotal influence on the way organizations organize their exploitative and explorative activities as these activities provide contrary performance outcomes (He & Wong, 2004; Uotila et al., 2009). By splitting performance into a dual measurement, namely short and long term performance, this study can provide new insights and valuable information with regard to the influence relative exploration orientation has on the different levels of.

(7) organizational performance. Doing so, this study will try to answer this call for more empirical research (Lavie et al., 2010) and extend the existing body of knowledge around the concept of exploitation and exploration. Knowing how exploitative and explorative activities influence the different levels of organizational performance namely makes it possible to balance these activities and the resulting performance outcomes. Prior research emphasizes on the importance of organizations to balance their exploitative and explorative activities (March, 1991; Gupta et al., 2006). But as this balance can be influenced by internal as well as external factors, striking this balance can be difficult. Scholars state that slack resources can counter these internal and external influences as slack resources can be used to balance exploitative and explorative activities (Bourgeois, 1981; March, 1991; Greve, 2007; Voss, Sirdeshmukh & Voss, 2008). Having slack resources thus enables the organization to create some leeway which can diminish the tension between exploitation and exploration (Bourgeois, 1981; Sharfman, 1985; Sharfman, Wolf, Chase & Tansik, 1988). From this perspective, slack resources make it possible to focus simultaneously on exploitation as well as exploration activities because the organization can use slack resources as a buffer mechanism to reduce uncertainty, absorb risks and handle setbacks which can positively influences organizational performance (Greve, 2007; Sharfman et al., 1988; Voss et al., 2008). In line with these arguments it thus could be expected that organizations with high amounts of slack have more room to balance exploitation and exploration and positively influence short and long term goals compared to organizations with lower levels of slack resources. This means that the relationship between relative exploration orientation and organizational performance might also be influenced by the level of available slack resources as the fight over scarce organizational resources can be tempered. Prior studies show that organizational slack influences both exploitation and exploration as well as organizational performance (March, 1991; George, 2005; Greve, 2007; Voss et al., 2008;.

(8) Uotila et al., 2009). Therefore, it is expected that organizational slack will play a moderating role in the direct relationship between relative exploration orientation and the different levels of organizational performance (Tan & Peng, 2003; Lavie et al., 2010). Concluding, this research will contribute to the existing body of literature by focussing on the relationship between the relative exploration orientation and the short and long term performance of the organization. Doing so provides valuable insights in how striking a balance between exploitation and exploration can influences the short and long term performance of an organization. Furthermore this study aims to provide a better understanding of the moderating impact organizational slack has in this relationship between relative exploration orientation and the different levels of organizational performance. To develop and empirically validate this research a longitudinal research design will be used. This research paper is structured as follows. In the next section a review of the theoretical background will be presented and several hypotheses will be articulated. The methods section will provide information around the research setting, the used data set and the explanation of the different variables used in this study. Next, the empirical findings will be presented in the results section. After which the findings will be discussed, possible limitations of the study will be articulated and avenues for future research will be presented.. LITERATURE REVIEW The terminology of exploitation and exploration originates from the area of organizational learning and got firstly introduced by James March (1991). March stated that organizations need to combine the exploitation of present objectives, while simultaneously explore for future innovations and developments to stay competitive in the marketplace (March, 1991; Tushman & O’Reilly, 1997; Judge & Blocker, 2008). Exploitation is focused.

(9) on the incremental change of existing knowledge aiming at features like control, efficiency, execution, clarity, low costs, production scale, implementation and certainty. Exploration focusses on features that increase variance like creativity, flexibility, autonomy, innovation, variation, risk taking and experimentation (March, 1991; O’Reilly & Tushman, 2008). When organizations, business units or individuals are able to be both exploitative and explorative they are called “ambidextrous”. By clarifying the features exploitation and exploration focus on, the paradox between the two becomes clear. Exploitation and exploration draw on different structures and competencies. But at the same time both exploitation and exploration are fighting for the same portfolio of resources available to the organization to ensure the survival of the organization in the present and future (He & Wong, 2004). The paradoxical problem organizations face regarding exploitative and explorative activities is that they need to have sufficient resources to exploit current development and activities in order to achieve short term wins and keep the business going. At the same time, organizations need to devote enough resources to explore future possibilities to stay competitive in future market conditions (March, 1991; Levinthal & March, 1993). The risk of a misbalance between exploitation and exploration can be found in the effects this has on the focus and the performance level of an organization. Organizational performance Being able to measure organizational performance allows an organization to visualize how the firm is doing with regard to its short and long term performance. Organizations can use this knowledge to communicate with employees, stakeholders and the external environment on how the organization is performing (Rumelt, Schendel & Teece, 1994; Combs, Crook & Shook, 2005). These measurements also enable an organization to adapt organizational goals and by doing so possibly influence outcomes (Meyer, 1991). Organizational performance can have a broad scope and has been topic of discussion in.

(10) strategic management research for decades (Combs et al., 2005). Venkatraman and Ramanujam (1986) developed three levels of performance measurements, trying to create clarity around the diversity of organizational performance measurements. The three distinguished levels are; organizational effectiveness, operational performance and financial performance. Venkatraman and Ramanujam (1986) define the first performance measure ‘organizational effectiveness’ as a broad performance scope focussing on strategic management as a whole. Next, operational performance is narrower, looking at nonfinancial indicators of performance such as the level of innovativeness, market outcomes and product quality. The final performance measure formulated by Venkatraman and Ramanujam (1986) is called financial performance. This level focusses specifically on performance measurements such as sales growth, return on investment and return on assets. Where Venkatraman and Ramanujam (1986) have described a three level perspective on organizational performance and its measurements, Murphy et al. (1996) define four main performance domains. These four domains are efficiency (e.g. return on investment and return on equity), growth (e.g. stock growth, sales growth, and profit growth), profitability (e.g. return on assets and return on sales) and size (e.g. market share). Finally, there are a number of studies that articulate organizational performance with even more and diverse dimensions (Chakravarthy, 1986; Rowe & Morrow, 1999; Tosi, Werner, Katz & Gomez-Mejia, 2000; Maltz, Shenhar & Reilly, 2003). These different studies suggest that there is no single or perfect way to formulate and measure organizational performance. All these efforts to articulate a coherent formula to measure organizational performance show the importance of mapping the outcomes of organizations. Organizations from thereon are able to use this information to achieve organizational goals and articulate strategies with the aim to improve short and long term performance. The literature does not formulate a consistent definition of short and long term performance as such. In this study, short term performance refers to the.

(11) achievement of organizational objectives over a period of less than one year. Respectively, long term performance indicates the achievement of organizational objectives over a period of more than one year. In practice, the trade-off that needs to be made between exploitation and exploration activities tends to shift more to the short term side of the scale. This can be explained by the fact that exploitative activities are more tangible and visible compared to long term goals (March, 1991). These activities show direct results and positively influence the short term performance of the organization. Explorative activities tend to be more distant in time, with no direct results, higher risks and might even sometimes bring uncertainty to existing business models (Gupta et al., 2006; O’Reilly & Tushman, 2008). Exploration thus is connected to long term performance as the organization develops long term goals to assure the survival of the firm. Because most organizations prefer to focus more on exploitation, this failure to strike an optimal balance between exploration and exploitation can result in the underperformance of the firm (Uotila et al., 2009). Balancing exploitation and exploration Organizations that simultaneously focus on exploitative activities as well as on explorative activities are able to balance these activities and achieve optimal organizational performance (Benner & Tushman, 2002; He & Wong, 2004; Raisch & Birkinshaw, 2008). When an organization only focusses on one of the two features a misbalance can occur, which influences organizational performance and can threaten future survival of the organization (Lee & Makhija, 2009). Balancing exploitation and exploration in the right way might be challenging for organizations because of the difficulty to compare forthcoming results of exploitation and exploration..

(12) As mentioned above, exploitation activities mainly lead to direct and certain pay-offs which positively influence an organization its short term performance. Benner (2010) supports this by showing that for companies in the electronic industry exploitation activities are directly being rewarded with an increase in stock prices. When an organization tends to focus more on the exploitation of current activities, the firm becomes efficient and effective and generates short term returns. When efficiency goes up, the organization can for example take a more aggressive competitive market position by lowering its current prices of products and services, which is likely to result in increased short term performance. However, the danger and negative effects of a strong focus on short term objectives, competences and returns becomes clear when markets and environments change. The strong focus on present activities will likely ensure that the organization becomes strong and efficient in doing what it does at this specific moment in time. This makes that exploitative organizations feel less the need to change their current business model and invest in new ways of doing business (Levinthal & March, 1993). Besides, the current business model seems to be fruitful and brings the desired return on investment. Because of this short term focus the organization becomes path dependent and inflexible (Gupta et al., 2006; Lavie et al., 2010). This results in an organization that overdevelops one technique or strategy, which makes shifting to another direction not attractive, very hard and at a certain point in time maybe even impossible (Levinthal & March, 1993; Benner & Tushman, 2003). The organization might be dominant in the short run, but from a long term perspective the organization can become obsolete because it cannot keep up with the changes and jolts in the environment due to its rigidness and inflexibility (Prahalad & Hamel, 1990). The organization is locked due to its own “success trap”, making it impossible for the firm to respond to environmental changes (Gupta et al., 2006). It thus can be expected that the relationship between relative exploration.

(13) orientation and short term performance is positive at first, but will decrease due to its own rigidness. Hypothesis 1: There is a curvilinear relationship between the relative exploration orientation of an organization and its short term performance. In contrast to exploitation, exploration activities are less predictable, with higher risks and have a longer pay-off horizon due to the diverse possible outcomes that the future might bring (Gupta et al., 2006). Because of this unpredictable and long term focus of exploration, organizations need to be more innovative, flexible and with a dynamic character to respond correctly and enable the growth of explorative activities (March, 1991). Uotila et al. (2009) show that due to the uncertain nature and the long term focus of explorative activities, most firms are reticent with regard to directing sufficient resources to explorative activities. When focusing strongly on the long term perspective, organizations attempt to constantly find new knowledge, information and possibilities to empower future developments and positively influence long term organizational performance (March, 1991; Uotila et al., 2009). This means that organizations are willing to position themselves in uncertain or underdeveloped areas. Investing in future developments brings along risks as an organization cannot know for sure if these new developments of competencies and innovations will provide the returns the organization needs to survive in the competitive market place. In order for an organization to enable explorative activities, the firm should not only focus on one possible future scenario but prepare for multiple ones. Doing so increases the chances of an organization to capture the innovations that provide future returns and success to the organization. The organization needs to develop the ability to recombine and reconfigure its assets and capabilities to react to changing demands, emerging markets and environmental changes (Levinthal & March, 1993). But because of the uncertainty of explorative activities, exploration frequently results in failure, which forces the organization to continue the search for more explorative activities.

(14) (Levinthal & March, 1993; Gupta et al., 2006). A decrease in performance thus can occur when the organization mainly focusses on the long term perspective but is not able to effectively implement and use the new features in the organization. This means that the organization continuously innovates without gaining sufficient revenues from these developments to support its day-to-day operations. This lack in providing sufficient revenues will eventually disrupt the organization and negatively influence the long term performance of the organization (O’Reilly & Tushman, 2008; Teece, Pisano & Shuen, 1997). In line with the described literature, this research expects at first an increase in long term performance due to an increase in explorative activities. After which a decrease in performance will occur because the organization is unable to effectively implement and extract value from the explorative activities. Hypothesis 2: There is a curvilinear relationship between the relative exploration orientation of an organization and its long term performance. Organizational slack: excess resources Barney (1991) defines resources as: “all assets, capabilities, organizational processes, information and knowledge controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness” (p. 101). Resources are among the key assets of an organization to keep the day-to-day operations running. Resources also enable a firm to develop a long term plan with short term goals, innovate, take risks and learn from mistakes (Singh, 1986). Resources can thus be tangible and intangible. And it are these resources and the choices an organization makes with these resources that enable the firm to be competitive, create strategies, achieve short and long term goals and properly respond to distress in the competitive landscape (George, 2005). Slack resources specifically have the ability to create leeway for organizations..

(15) Slack resources are the result of excess resources available within an organization that are not needed in the short term to enable continuity of current processes and activities of the organization (Greve, 2003). These excess resources come in handy in times of distress and adversity when performance decreases and extra resources are needed to assure continuity and stability of the organization its activities (Bourgeois, 1981). Slack thus can boost organizational activities and counter distress in the internal and external environment (Greve, 2003). Bourgeois (1981) defines organizational slack as: “that cushion of actual or potential resources which allows an organization to adapt successfully to internal pressures for adjustment or to external pressures for change in policy, as well as to initiate changes in strategy with respect to the external environment” (p. 30). Slack resources can be seen as a buffer of excess resources making it possible to reduce the tension between exploitation and exploration and absorb environmental shocks (Sharfman et al., 1988; Levinthal, 1997; George, 2005). Because of these excess resources the firm might also be able to positively influence the short and long term performance of the organization since the fight over scarce resources can be tempered internally (Greve, 2007; Voss et al., 2008). Organizational slack facilitates search, experimentation and innovation, which are all features connected to exploration, long term objectives and uncertain results. In comparison to explorative activities, exploitative activities have clear goals and show direct results. Because of these more tangible features of exploitation, organizations are tempted to focus primarily on exploitation which increases short term performance but decreases long term performance. Because organizational slack can reduce uncertainty and risks, these excess resource make it possible to re-balance the tilt of organisations towards exploitation creating a more balanced organization which positively influences both short and long term performance of the organization (Nohria & Gulati, 1996; Sidhu, Volberda & Commandeur, 2004; Voss et al., 2008). Slack thus has the power to influence both positive as well as negative situations that.

(16) are impacting the organization. Slack can for example influence the level of innovation within an organization by using the available excess resources to invest in organizational development (Cyert & March, 1963). With regard to negative situations that might affect the firm, organizational slack can reduce the external and internal pressure experienced by the organization, resolve conflicts and absorb discontinuities within the organization as well as in the external environment (Bourgeois & Astley, 1979; Cyert & March, 1963; Bourgeois, 1981). The level of organizational slack available to an organization can also influence strategic changes, making it easier for the firm to react to environmental changes by innovating existing products or the development of new products (Bourgeois, 1981). Furthermore, organizational slack has the power to influence organizational activities directly as well as indirectly. If an organization for example has liquid assets like cash available as slack resources, the firm can influence the retention of its intellectual human capital when the market becomes more competitive. Because the organization is able to pay its highly skilled employees extensively, the organization is able to keep its intellectual human capital in place, making it possible to retain the specialized knowledge these highly skilled employees possess (Rothaermel & Hess, 2007; Bourgeois, 1981). Furthermore, organizational slack has the power to influence the decision making process of an organization when searching for new opportunities and alternative solutions to overcome obstacles (Cyert & March, 1963). Cyert and March (1963) state that the amount of organizational slack available to an organization lowers the threshold of acceptability, meaning that slack-rich organizations reduce their search for alternative solutions compared to organizations with a lower amount of slack. Thus organizations with low slack are likely to increase their search for alternative solutions before injecting their slack resources. Since their excess resources are scarce these organizations need to assure that the right decisions are made as mistakes can endanger the organization its adaptability and even its existence. In line.

(17) with these findings, previous research shows that when performance decreases slack resources also decrease. When performance goes down, organizations tend to use their excess resources to stabilize performance and maintain the day-to-day business activities with the aim to achieve organizational goals and ensure the survival of the firm (Cyert & March, 1963; Singh, 1986). Slack resources have the potential to assure the existence and long term survival of organizations as slack allows firms to respond to internal and external changes that affect the organization. Organizations that are not able to respond or absorb these changes face challenges that can disrupt the organization as a whole (Bourgeois, 1981). In contrast to this positive view on the influence of organizational slack on the performance of organizations, there are others with a more negative view on slack. According to them, high levels of organizational slack can negatively influence the decision making process of organizations. Next to that organizations with high amounts of excess resources are tempted to invest in unrelated products and services which can negatively influence the firm its performance (Bourgeois, 1981). Again others predict a curvilinear relationship between organizational performance and the level of organizational slack available (Bourgeois, 1981; Sharfman 1985; Sharfman et al., 1986). This means that up to a certain level, organizational slack positively influences organizational performance. However, when the level of organizational slack exceeds this point, performance will be influenced in a negative way. This point of transition differs per organization as this point of transition depends on organizational size and the type of market a firm operates in (Sharfman et al., 1988). In contrast to high levels of organizational slack, organizations with few excess resources need to be sure when and how much slack resources the organization wants to use because of its scarcity. According to the resource constraint literature this would mean that organizations with scarce excess resources would be more efficient because they only use these resources.

(18) when the firm is sure that implementing them would positively influence the performance of the firm (Starr & Macmillan, 1990; George, 2005; Baker & Nelson, 2005). Absorbed and unabsorbed slack As organizational slack can influence organizational activities in different ways, the existing literature has categorized organizational slack into different types. Unabsorbed slack and absorbed slack are two of those categories. Unabsorbed slack is also called high discretionary slack (Singh, 1986). These slack resources are mainly excess resources like uncommitted liquid resources, financial reserve, credit lines and raw resources (Sharfman et al., 1988; Greve, 2003). Unabsorbed slack are uncommitted resources, making it possible to use these resources for a variety of organizational activities (Voss et al., 2008). Because unabsorbed slack has not yet been connected to organizational activities, these slack resources are more flexible compared to absorbed slack. Since these excess resources are mainly liquid assets the organization can allocate these resources as it sees fit. Furthermore, unabsorbed resources can be used to achieve short term as well as long term objectives of the organization. This means that opportunities available to the organization in the short and long run can be positively influenced using these uncommitted excess resources. In line with these arguments, it is expected that unabsorbed slack positively influences the relationship between relative exploration orientation and short term as well as long term performance of an organization. Hypothesis 3: Unabsorbed organizational slack positively moderates the relationship between relative exploration orientation and the short term performance of an organization..

(19) Hypothesis 4: Unabsorbed organizational slack positively moderates the relationship between relative exploration orientation and the long term performance of an organization. Absorbed slack, also known as low discretionary slack, are tangible excess resources like underused facilities, employees, machines, excess inventory and excess capacity of a production line (Greve, 2003; George, 2005). Absorbed slack thus can be seen as resources that are already part of organizational activities but are being underutilized on not yet in use at all. These excess resources can be reconfigured and redesigned enabling the organization to redeploy these resources and respond to changes in the competitive landscape, thereby influencing organizational performance (George, 2005). But redesigning and reconfiguring absorbed resources takes time and since absorbed slack resources are often already linked to organizational activities, using these resources provides limitations. As these excess resources are mainly underutilized resources like machines and already constructed facilities, these resources are built for a specific purpose. This makes these resources not easy to relocate, meaning that organizations that do reconfigure these resources will probably only change small features and use these resources for comparable organizational activities. Because of this focus on exploitative activities, it is expected that these resources will mainly be used to strengthen existing organizational activities and discard explorative activities. Concluding, organizations will use absorbed organizational slack in the short and long run mainly to support exploitative activities as these excess resources enable organizational efficiency and effectiveness. For that reason, it is expected that absorbed slack will positively influence the relationship between relative exploration orientation and short term organizational performance..

(20) Hypothesis 5: Absorbed organizational slack positively moderates the relationship between relative exploration orientation and the short term performance of an organization. Because of their context dependent features, the redeployment of absorbed slack into more explorative activities is time consuming and expensive. Taking these arguments into account, it is expected that absorbed slack will negatively influence the relationship between relative exploration orientation and long term organizational performance. Hypothesis 6: Absorbed organizational slack negatively moderates the relationship between relative exploration orientation and the long term performance of an organization..

(21) DATA AND METHODS Research Setting and Data Collection To test the stated hypotheses, this empirical study used data derived from the Thomson Reuter ONE Banker database. The data has been collected from 1998 till 2003 and contained data from the Global Fortune 500 organizations. The sample used in this research has been selected by using the four digit Standard Industrial Classification (SIC) codes 2000 till 3999 which include only manufacturing organizations. Definitions used in the utilities and mining industries are similar to the operational definitions of exploration and exploitation but have a different meaning in these industries. To overcome this potential bias, the utilities and mining industries are being excluded from the sample. After excluding the utilities and mining industries the final sample used in this research consists of 109 manufacturing firms which can be found in the Global Fortune 500 list published by the American business magazine Fortune in the year 2010. The final dataset consists of 654 usable data points. The average firm size measured as the number of fulltime employees is 87588.15 with a standard deviation of 77839.69. Measures Dependent Variables This research makes a distinction between the short and long term performance of organizations as it is expected that exploitation and exploration influence short- and long term performance in a different way. Where exploitation influences the organization in a direct way and in a short term manner, exploration focusses more on the long term perspective of the organization which includes more uncertain and long term performance results. These differences also ask for a different measurement of their influence on the performance of the.

(22) organization as a whole. The accounting-based performance measure return on assets has been used to measure the short term performance of the organizations. Return on assets is defined as the accounting-based measure of short term performance, looking at the profitability of the company its assets in generating revenue (Lubatkin & Shrieves, 1986; Allen, 1993). Because exploration is expected to have a more long term impact on performance, it would not be appropriate to use an accounting based performance measure as this will not be able to accurately measure the extended results of long term performance. For that reason this research will be using a market-based measure Tobin’s Q, to analyse the long term performance of organizations. Tobin’s Q makes it possible to measure long term performance effects by looking at the ratio of the market value of the organization in comparison to what it would cost to rebuild the organization (Tobin, 1969). Independent variable The independent variable used in this study will be the relative amount of exploration activities versus exploitation activities of an organization. This research will use a content analysis method developed by Uotila et al. (2009) and will be based on the annual organizational activities of manufacturing firms. The content analysis method makes it possible to collect, analyse and interpret a large set of data provided by a lot of different organizations during a longer period of time (in this case five years). The analysis quantifies the annual activities of the organizations by coding the published news articles and newswires of the organizations in this dataset. Doing so the relative balance between exploitation and exploration activities of the manufacturing organization in this data set can be statistically mapped using the definitions formulated by March (1991). March (1991) defines exploration by using words like “search, variation, risk taking, experimentation, play, flexibility,.

(23) discovery and innovation” (p. 71). And states that exploitation includes terminologies like “refinement, choice, production, efficiency, selection, implementation and execution” (March, 1991: p.71). The independent variable has been established by the sum of exploration word count results divided by the total amount of exploitation and exploration word count results. With regard to the used published news articles and newswires the Factiva database, owned by Dow Jones & Company, has been used. This information and research tool gives access to leading news platforms such as The Wall Street Journal, Barron’s, MarketWatch and other business press releases. Using the Factiva database enables this research to unroll a complete and heterogeneous contents analysis with regards to the news features around the manufacturing organizations and the word count analysis method. Moderating variables The moderating variable in this research will be organizational slack. This research will distinguish two types of organizational slack, namely: absorbed slack and unabsorbed slack. Both absorbed and unabsorbed organization slack influence the relationship between relative exploration orientation and performance in a different way. Absorbed slack are tangible excess resources such as underused facilities, highly skilled employees and machines. In this research, absorbed slack has been measured by looking at the ratio of selling, general and administrative expenses to sales (Singh, 1986; Greve, 2003). Unabsorbed slack are excess financial reserves such as cash. Unabsorbed slack has been measured by looking the cash flow indicator ratio (operating cash flow divided by sales ratio). Prior research shows opposing views on the impact of organizational slack on relative exploration orientation and performance. Proponents state that excess resources (absorbed and unabsorbed) make it possible to explore because the organization can use these slack.

(24) resources as a buffer mechanisms to absorb risks and setbacks (Greve, 2007; Sharfman et al., 1988). The opposing view believes that excess resources make organizations less innovative with a stronger focus on exploitation (Bourgeois, 1981). Control Variables To disable biasing influences, this research also takes several control variables into account, namely: firm size, total search entries and environmental dynamism. Firm size will be measured as a logarithm of the company’s number of employees. Firm size may positively influence the ability of the organization to create a balance between exploration and exploitation since the larger an organization, the more resources an organization may have at hand enabling the firm to also generate more slack resources compared to smaller organizations (Steenkamp & Fang, 2011). The second control variable being used is total search entries per organization to overcome any influence that may occur because of an unequal amount of search results between the coded words of exploitation and exploration. This is an important control variable since the independent variable, relative exploration orientation, needs to be unaffected by the quantity of found words by the content analysis method. It is expected that the environment in which organizations are active might change because of environmental instability and discontinues changes over which organizations have no influence (Jansen et al., 2006; Simsek, 2009). To overcome these unpredictable factors, environmental dynamism is the third control variable added in this research. Model To answer the formulated hypotheses, several linear and non-linear hierarchical multiple regression analyses have been ran. As hypotheses 1 and 2 expect a curvilinear relationship, these hypotheses have been answered by running non-linear hierarchical multiple regression analyses. Next hypotheses 3 to 6 are being answered running linear.

(25) hierarchical multiple regression analyses. Running these linear and non-linear hierarchical multiple regression analyses, make it possible to see which control, independent or moderating variables have the greatest impact on the dependent variables. Furthermore, linear and non-linear hierarchical regression analyses show if the individual variables included in every hierarchical step are substantially and significantly contributing to the models that are being tested. As these ordinary least squares regression analyses have their limitation with regard to an increased chance of multicollinearity, this research will control for this limitation extensively in the results section of this study (Field, 2009). The statistical tests will be presented in three tables. Every table consists of five to eight models. In table 2, the first and fourth models run a linear regression analysis between the control variables (firm size, total search entries and environmental dynamism) and the dependent variables. Models two and five in table 2 include the independent variable, relative exploration orientation, into the hierarchical regression. And models three and six include the squared relative exploration orientation variable to test for the curvilinear relationship expected in hypothesis 1 and 2. In tables 3 and 4, models one and five run a linear regression analysis between the control variables and the dependent variables. Models two and six include the independent variable and models three and seven add the slack variable into the regression analysis. Finally, models four and eight of tables 3 and 4 include the moderating effects to test if the hypotheses 3 to 6 are supported. As described above there is one independent variable, relative exploration orientation, which will be used in every hypothesis. The two dependent variables, return on assets and Tobin’s Q, will change per hypothesis depending on the focus on short or long term performance. Next, the moderating variables will also change depending on the to be tested interaction effect per hypothesis. To test the third and fourth hypotheses, unabsorbed organizational slack will be used as the moderating variable on the relationship between.

(26) relative exploration orientation and the dependent variables short term performance and long term performance. Evidently to test the fifth and sixth hypothesis, absorbed organizational slack will be used as the moderating variable on the relationship between relative exploration orientation and the dependent variables short term performance and long term performance.. RESULTS Descriptive statistics For each variable used in the analysis, the correlation matrix (Table 1) summarizes the descriptive statistics and bivariate correlations. Before creating the interaction terms and to overcome multicollinearity, the independent variable and the slack variables have been mean centred (Aiken & West, 1991). To check for potential multicollinearity, the variance inflation factors (VIF) and the tolerance level have been calculated within each regression analysis. The highest level of tolerance within all the models was .999. This value indicates that there is no multicollinearity, since .999 is well above the cut-off value of .2. The highest variance inflation factors within all the models was 1.295, which also indicates that there is no multicollinearity since 1.295 is below the cut-off value of 10.0 suggested by the literature (Field, 2009). Finally one can check for multicollinearity by looking at the level of correlation between the independent variable and slack variables in the correlation matrix. The highest correlation between these variables is .619 which is well below the cut-off value of .9. These findings also confirm that there is no multicollinearity between the variables (Field, 2009). The independent variable relative exploration orientation correlates significantly and positively with both the dependent variables and moderating variables. Further, the independent variable relative exploration orientation correlates significantly positive with.

(27)

(28) both the dependent variable long term performance (r = .181, p < .01) and the dependent variable called short term performance (r = .124, p < .01). The correlations with the moderating variables are also of the same magnitude. The independent variable shows a significant positive correlation with both the unabsorbed slack variable (r = .115, p < .01) and the absorbed slack variable (r = .165, p < .01). The control variables firm size and total search entries do not seem to correlate significantly with the independent variable. Accordingly, the relationship between the independent variable and the control variable firm size is negative but not significant (p > .05). The relationship between the independent variable and the control variable total search entries is positive but neither significant (p > .05). The third control variable, environmental dynamism, does correlate significantly with the independent variable (r = -.108, p < .01). The dependent variable long term performance shows a significant negative correlation with the control variable firm size (r = -.085, p < .05) and a positive correlation with the control variable total search entries (r = .300, p < .01). The dependent variable short term performance correlates negatively with the control variable firm size (r = -.095, p < .05) and significantly positive with the control variable total search entries (r = .203, p < .01). The dependent variables do not correlate significantly with environmental dynamism (p > .05). Finally, the two dependent variables, short and long term performance, correlate strongly and significantly with the moderating variables in this research. The dependent variable long term performance has a strong and positive correlation with the moderating variable unabsorbed slack (r = .498, p < .01). Next, long term performance also positively correlates with the moderating variable absorbed slack (r = .246, p < .01). In line with the long term performance variable, the second dependent variable short term performance has a positive correlation with the moderating variable unabsorbed slack (r = .619, p < .01) and a positive correlation with the second moderating variable absorbed slack (r = .145, p < .01)..

(29) Regression analyses Table 2 summarizes the results of the regression analyses performed to test hypotheses 1 and 2. Before running the regression analyses the independent variable relative exploration orientation was mean centred by subtracting the mean (Aiken & West, 1991). The baseline models are Model 1 and Model 4 and contain the control variables firm size, total search entries and environmental dynamism. Hypothesis 1 predicts a curvilinear relationship between relative exploration orientation and the dependent variable short term performance. The relationship was tested by running a non-linear regression analysis. Models 1 to 3 in Table 2 summarize the results of this curvilinear regression analysis. Model 3 shows that Hypothesis 1 cannot be confirmed as no statistical significant interaction was found between relative exploration orientation and long term performance (p = .289). Hypothesis 2 predicted a curvilinear relationship between the relative exploration orientation of an organization and its long term organizational performance. This second hypothesis was also tested performing a non-linear regression analysis. Models 4 to 6 in Table 2 summarize the results of this curvilinear regression analysis. Model 6 specifically shows.

(30) that Hypothesis 2 cannot be supported because no statistical significant interaction was found between relative exploration orientation and long term performance (p = .157). Hypotheses 3 to 6 concern the relationship between the independent variable relative exploration orientation and the dependent variables short and long term performance while including the moderating effects of absorbed and unabsorbed organizational slack. The hypotheses were tested by running a series of hierarchical multiple regression analyses. Before running the hierarchical regression analyses the independent variables relative exploration orientation, unabsorbed slack and absorbed slack have been mean centred by subtracting the mean (Aiken & West, 1991). The results of the hierarchical multiple regression analyses for hypotheses 3 and 4 are presented in Tables 3. And the results of the hierarchical multiple regression analyses for hypotheses 5 and 6 are presented in Tables 4. Tables 3 and 4 have an identical construct. The baseline models are Model 1 and Model 5 and contain the control variables firm size, total search entries and environmental dynamism. Models 2 and 6 introduce the independent variable relative exploration orientation. Models 3 and 7 include alternately per hypothesis the variables unabsorbed slack and absorbed slack. And Model 4 and 8 presents the full model by including the hypothesized interaction effects. Model 1 in Table 3 shows that the control variables explain a significant portion of the variance (10.0%, p < 0.001). Model 2 introduces the independent variable relative exploration orientation into the regression analyses. Relative exploration orientation explains an additional small but significant portion of the variance (1.0%, p < 0.001) and is significantly related to the dependent variable short term performance. Model 3 shows the results of the regression analysis including the unabsorbed slack measure. Unabsorbed slack explains an additional big and significant portion of variance (29.0%, p < 0.001) in the dependent variable.

(31)

(32) short term performance. In Model 4 the hypothesized moderation effect is being measured. The results of the full model show a significant and positive coefficient (β = 0.81, p < 0.001) combined with an additional significant increase of variance (3.0%, p < 0.001). These results support Hypothesis 3, which predicted a positive moderating effect of unabsorbed organizational slack on the relationship between relative exploration orientation and short term performance.. Model 5 in Table 3 provides the baseline for hypothesis 4. The three control variables included, explain a significant portion of the variance (17.0%, p < 0.001) in the dependent variable long term performance. Model 6 introduces the independent variable relative exploration orientation. This model shows that the independent variable explains an additional significant portion of the variance (3%, p < 0.001) in the dependent variable long term performance. Model 7 introduces unabsorbed slack. Unabsorbed slack explains an additional 13% of variance, which also is significant (p < 0.001). Hypothesis 4 predicts that unabsorbed slack positively moderates the relationship between relative exploration orientation and the long term financial performance of an organization. Model 8 in table 3 supports this.

(33) prediction, showing that the interaction effect between the independent variable relative exploration orientation and the moderating variable unabsorbed slack explains an additional 3.0% at a significance level of p < 0.001. The coefficient of the interaction effect is significant and positive (β = 0.29, p < 0.001), supporting Hypothesis 4. Figure 2 represents this significant interaction. Table 4 shows the results of the hierarchical multiple regression analyses on the dependent variables short and long term performance in combination with the moderating variable absorbed slack. As the hierarchical multiple regression analyses to test hypotheses 5 and 6 only changed the moderating variable in comparison to Table 3, models 1, 2, 5 and 6 have identical values as in Table 3. Therefore, the control variables and inclusion of the independent variable in Table 4 (models 1 and 2) explain a significant portion of variance, respectively 10.0% (p < 0.001) and an additional 1.0% (p < 0.001), in the dependent variable short term performance. Model 3 explains an additional small but significant portion of variance when absorbed slack is included (1.0%, p < 0.05). And Model 4 in Table 4 shows that including the moderating effect of absorbed organizational slack on the relationship.

(34) between relative exploration orientation and short term performance explains an additional significant 3.0% (p < 0.001). The coefficient of the interaction effect is positively significant (β = 41.99, p < 0.001), supporting Hypothesis 5. The significant interaction is shown in Figure 3. The control variables and inclusion of the independent variable in models 5 and 6 in table 4 explain a significant portion of variance, respectively 17.0% (p < 0.001) and an additional 3.0% (p < 0.001), in the dependent variable long term performance. Model 7 incorporates absorbed slack into the regression analysis, which explains an additional significance of variance (2.0%, p < 0.001) in the dependent variable. Model 8 reports the full model. Hypothesis 6 predicted a negative moderation effect of absorbed slack on the relationship between the relative amount of exploration on long term performance. Model 8 does not supports this hypothesis with the significant and positive coefficient of β = 12.13 (p < 0.001). Hypothesis 6 is not supported.. DISCUSSION AND CONCLUSION This research contributed to the strategic management literature by investigating the multifaceted relationship between exploitation and exploration and their influence on the different levels of organizational performance. Further, this study looked at the relationship between exploitation, exploration and the different levels of organizational performance in combination with the moderating effect of absorbed and unabsorbed slack. Exploitation and exploration both influence organizational performance in a different manner. Where exploitation is strongly aligned with the short term perspective, exploration is more focussed on the long run. How organizations are supposed to balance these features thus can be seen as a pivotal question. In line with these questions scholars have different thoughts about the.

(35) influence of absorbed and unabsorbed slack on an organization. On the one hand theorists believe organizational slack has a positive influence on the performance of an organization as organizational slack can temper the battle over scarce resources an organization has at hand. The opposing view states that organizational slack negatively influences the performance of organizations as excess resources make organizations inflexible and reactive, trying to overcome changes and jolts in the marketplace by using more excess resources instead of changing the business model (Lavie et al., 2010). This research tried to provide new insights on these contradictory perspectives by looking at the relationship between relative exploration orientation and short and long term organizational performance. While also looking at the moderating effects of absorbed and unabsorbed slack on this relationship. Previous research did look at the interaction between relative exploration orientation and organizational performance, but did not take into account short and long term performance as different influential levels. First this study tested the expected curvilinear relationship between relative exploration orientation and short term performance. The results of this research cannot confirm the formulated curvilinear relationship as no significant statistical evidence has been found. Secondly, hypothesis 2 also expected the relationship between relative exploration orientation and long term performance to be curvilinear. The results of this research could not support nor reject this hypothesis either. There was no statistical significance found for the curvilinear relationship between relative exploration orientation and long term performance. Next, this research contributed to the existing literature by looking at the moderating effect of unabsorbed and absorbed organizational slack on the relationship between relative exploration orientation and the different levels of organizational performance. The results with regards to the moderating effect of unabsorbed organizational slack on the relationship between relative exploration orientation and organizational performance are positive and.

(36) significant. It thus can be concluded that unabsorbed slack positively moderates this relationship between relative exploration orientation and short as well as for long term performance. Finally this study examined the moderating effect of absorbed organizational slack on the relationship between relative exploration orientation and the different levels of organizational performance. After reviewing the existing literature, it was expected that absorbed slack would positively moderate the relationship between relative exploration orientation and short term performance. With regard to the relationship between relative exploration orientation and long term performance, it was expected that absorbed slack would negatively moderating the relationship. The results show that absorbed organizational slack indeed positively influences the relationship between relative exploration orientation and short term performance. But in contrary to what was expected, absorbed slack also seems to positively influence the relationship between the independent variable and long term performance. An explanation for this unexpected result might be found in the used data sample of manufacturing organizations. As most of these organizations are situated in competitive industries, this competitiveness has a negative influence on the ability of organizations to focus on explorative activities (Singh, 1986). In more stable environments, organizations have the time to focus on innovation and taking risks. But in unstable industries it might be the case that the competitive pressure forces organizations to be as efficient as possible to secure the survival of the organization in the short run (Pfeffer, 1978; Singh, 1986). Thus the organizations will use unused and underutilized absorbed slack to intensify their exploitative activities. These arguments could explain the unexpected results with regard to the positive influence absorbed organizational slack has on the relationship between relative exploration orientation and long term organizational performance. Extended research on this relationship would be needed though to statically support these arguments..

(37) LIMITATIONS AND FUTURE RESEARCH A strength of this study is the longitudinal research design, using a dataset covering five years of organizational and market information from a total of 109 manufacturing organizations. However, this research has also some limitations that should be taken into account which from thereon can provide valuable information to future research designs. First, the content analysis method developed by Uotila et al. (2009) and used in this study to statistically map the relative balance between exploitation and exploration activities, used the definitions around exploitation and exploration formulated by March (1991). Examples of these terms formulated by March (1991) are flexibility, discovery, risk taking, refinement, efficiency and execution (p. 71). Some of these definitions are similar to definitions used in the utilities and mining industries, but have a different meaning in these industries. To prevent for any biases, these manufacturing industries were excluded from this data sample. Future research could formulate synonyms around the definitions formulated by March (1991) making it possible to include more diverse industries. Doing so makes the results more generalizable and applicable to other contexts, which might provide new insight with regard to the relative exploration orientation performance relationship in other industries. In line with this first limitation, using only the definitions formulated by March (1991) might also have excluded valuable information from the industries that were included in the content analysis. Because synonyms for the exploitation and exploration terms are not being recognized by the content analysis method developed by Uotila et al. (2009) for these included industries. Including synonyms into the content analysis method might diminish the exclusion of valuable information from the included industries and thus increases the strength of the dataset..

(38) Furthermore, this study only used published news articles and newswires of the organizations. This means that unpublished news articles and newswires used for internal communication by the organizations are not included, making this research miss out on possibly a large set of information that can be valuable to this research. One can for example expect that newswires distributed only via internal communication emphasizes on different or additional features connected to exploitative or explorative activities of the organizations. Fourth, this research looked at the biggest manufacturing firms of the world included in the Global Fortune 500 list. Future research could run a similar analysis only looking at small and medium enterprises to assess if similar relations and correlations are found.. Fifth, this. research used absorbed and unabsorbed slack measures as moderating variables. Including a third organizational slack measure described in the literature, called potential slack, could provide additional information and new insights with regard to the moderating effect of organizational slack on the relationship between relative exploration orientation and the different levels of organizational performance. Finally, additional control variables like firm age could be included in future research. One could namely state that older organizations are found to be less flexible and are not able to respond to changes as effective and quick compared to younger organizations. Firm age thus might influence the level of performance and relative exploration orientation of organizations (Steenkamp & Fang, 2011)..

(39) REFERENCES Aiken, L. S., & West, S. G. (1991). Multiple Regression: Testing and Interpreting Interactions. Thousand Oaks, CA: Sage Publications. Allen, F. (1993). Strategic management and financial markets. Strategic Management Journal, Winter Special Issue 14: 11–22. Auh, S., & Menguc, B. (2005). Balancing exploration and exploitation: The moderating role of competitive intensity. Journal of Business Research, 58(12), 1652–1661. Baker, T., & Nelson, R. (2005). Creating something from nothing: Resource construction through entrepreneurial bricolage. Administrative Science Quarterly, 50: 329-366. Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management 17: 99–120. Benner, M. J. (2010). Securities analysts and incumbent response to radical technological change: Evidence from digital photography and internet telephony. Organization Science, 21(1), 42-62. Benner, M. J., & Tushman, M. L. (2002). Process management and technological innovation: a longitudinal study of the photography and paint industries. Administrative Science Quarterly 47(4): 676–706. Benner, M. J., & Tushman, M. L. (2003). Exploitation, exploration and process management: The productivity dilemma revisited. Academy of Management Review, 28: 238–256. Bourgeois, J. (1981). On the measurement of organizational slack. Academy of Management Review, 26, 29-39..

(40) Bourgeois, J., & Astley, W. G. A. (1979). Strategic model of organizational conduct and performance. International Studies of Management & Organization, 9(3), 40-66. Chakravarthy, B. (1986). Measuring strategic performance. Strategic Management journal, 6: 437-458. Combs, J. G., Crook, T. R., & Shook, C. L. (2005). The dimensionality of organizational performance and its implications for strategic management research. In Research Methodology in Strategy and Management, Ketchen, D.J., Bergh, D.D. (Eds). Elsevier: 259–286. Cyert, R. M., & March, J. G. A. (1963). Behavioral theory of the firm. Englewood Cliffs, N. J.: Prentice-Hall. Field, A. (2009). Discovering Statistics Using SPSS. Sage Publications, London, 3rd edition. George, G. (2005). Slack resources and the performance of privately held firms. Academy of Management Journal, 48(4), 661-676. Greve, H. R. (2003). A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Academy of Management Journal, 46: 685-702. Greve, H. R. (2007). Exploration and exploitation in product innovation. Industrial and Corporate Change, 16(5), 945–975. Gupta, A. K., Smith, K. G., & Shalley, C. E. (2006). The interplay between exploration and exploitation. Academy of Management Journal, 49, 693–706. He, Z. L., & Wong, P. K. (2004). Exploration vs. exploitation: An empirical test of the ambidexterity hypothesis. Organization Science, 15: 481-494..

(41) Jansen, J. J. P., Van Den Bosch, F. A. J., & Volberda, H. W. (2006). Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators. Management Science, 52 (11): 1661–1674. Judge, W. Q., & Blocker, C. P. (2008). Organizational capacity for change and strategic ambidexterity: Flying the plane while rewiring it. European Journal of Marketing, 42 (9/10): 915-926. Lavie, D., Kang, J., & Rosenkopf, L. (2009). The performance effects of balancing exploration and exploitation within and across alliance domains. Paper presented at the Academy of Management Best Paper Proceedings, Chicago. Lavie, D., Stettner, U., & Tushman, M. L. (2010). Exploration and exploitation within and across organizations. The Academy of Management Annals, 4(1), 109-155. Lee, S. H., & Makhija, M. (2009). Flexibility in internationalization: is it valuable during an economic crisis. Strategic Management Journal, 30(5), 537-555. Levinthal, D. A. (1997). Adaptation on rugged landscapes. Management Science, 43, 934-950 Levinthal, D., & March, J. (1993). The myopia of learning. Strategic Management Journal, 14: 95–112. Lin, Z. J., Yang, H., & Demirkan, I. (2007). The performance consequences of ambidexterity in strategic alliance formations: Empirical investigation and computational theorizing. Management Science, 53(10), 1645–1658. Lubatkin, M. H., & Shrieves, R. E. (1986). Toward reconciliation of market performance measures to strategic management research. Academy of Management Review 11(3): 497–512..

(42) Maltz, A., Shenhar, A., & Reilly, R. (2003). Beyond the balanced scorecard: Refining the search for organizational success measures. Long Range Planning, 36, 187–204. March, J. G. (1991). Exploration and Exploitation in Organizational Learning. Organization Science, 2(1): 71–87. Meyer, A. D. (1991). What is strategy’s distinctive competence? Journal of Management, 17(4), 821–833. Murphy, G., Trailer, J., & Hill, R. (1996). Measuring performance in entrepreneurship research. Journal of Business Research, 36, 15–23. Nohria, N., & Gulati, R. (1996). Is slack good or bad for innovation? Academy of Management Journal, 39(5), 1245–1264. O'Reilly, C. A., & Tushman, M. L. (2008). Ambidexterity as a dynamic capability: resolving the innovator's dilemma. Research in Organizational Behavior, 28: 185–206. Pfeffer, J. (1978) Organizational design. Arlington Heights, IL: AHM. Prahalad, C. K., & Hamel, G. (1990). The core competence of the corporation. Boston (MA). Raisch, S., & Birkinshaw, J. (2008). Organizational Ambidexterity: Antecedents, Outcomes, and Moderators. Journal of Management, 34 (3): 375-409. Rothaermel, F. T., & Hess, A. M. (2007). Building dynamic capabilities: Innovation driven by individual, firm and network effects. Organization Science. 18: 898-921. Rowe, W., & Morrow, J. (1999). A note on the dimensionality of firm financial performance using accounting,. market,. and. subjective. Administrative Sciences, 16(10), 58–70.. measures.. Canadian. Journal of.

(43) Rumelt, R., Schendel, D., & Teece, D. (1994). Fundamental issues in strategy. Boston, MA: Harvard Business School Press. Sharfman, M. P. (1985). Environmental pressure, organizational buffers and organizational performance: A structural equation model. Unpublished doctoral dissertation, University of Arizona, Tucson. Sharfman, M. P., Wolf, G., Chase, R. B., & Tansik, D. A. (1988). Antecedents of organizational slack. Academy of Management Review, 13(4), 601–614. Sidhu, J. S., Volberda, H. W., & Commandeur, H. R. (2004). Exploring exploration orientation and its determinants: Some empirical evidence. Journal of Management Studies, 41(6), 913–932. Simsek, Z. (2009). Organizational ambidexterity: Towards a multilevel understanding. Journal of Management Studies, 46(4), 597-624. Singh, J. (1986). Performance, slack and risk taking in organizational decision making. Academy of Management Journal, 29, 562-585. Starr, J., & MacMillan, I. (1990). Resource cooptation via social contracting: Resource acquisition strategies for new ventures. Strategic Management Journal, 11: 79-93. Steenkamp, J. B. E., & Fang, E. E. (2011). The impact of economic contractions on the effectiveness of R&D and advertising: Evidence from US companies spanning three decades. Marketing Science, 30(4), 628-645. Tan, J., & Peng, M. (2003). Organizational slack and firm performance during economic transitions: Two studies from an emerging economy. Strategic Management Journal, 24: 1249-1264..

No results found