2011 - Reprints: Strategy, Innovation and Entrepreneurship
The performance effects of balancing exploration and exploitation within and across governance modes, Academy of Management Best Paper Proceedings of the 2011 annual conference in San Antonio, Texas.
U. Stettner and D. Lavie
(Reprint No. 185)
We advance the notion of balance across governance modes as a superior approach for balancing exploration and exploitation. We refute the latent assumption of independence in prior research by acknowledging interdependence across alternative governance modes. We offer concrete guidance for optimizing the configuration of exploratory versus exploitative activities by noting that exploration is better pursued via an externally-oriented mode such as acquisition. We conclude that a particular governance mode is not universally preferable since its value depends on the nature of organizational activity that the firm pursues in that mode. Our study advances research on exploration and exploitation by demonstrating the merits of coordinating exploration efforts across multiple governance modes.
