Exploration and exploitation and firm performance variability: a study of ambidexterity in entrepreneurial firms

Vinit Parida, Tom Lahti, Joakim Wincent

Research output: Contribution to journalArticleScientificpeer-review

20 Citations (Scopus)

Abstract

A challenge young entrepreneurial firms usually face is reducing variability
in firm performance in order to mitigate survival difficulties. This paper suggests ventures should have a clear preference for either exploration or exploitation, because such an approach to ambidexterity reduces variability in firm performance. We specifically concentrate on the moderation effects of firm size and environmental dynamism in a sample of young entrepreneurial firms. We found evidence for the effects of lower performance variability in dynamic environments. This is an important insight, because environmental dynamism is a contingency where performance variance is considered problematic for entrepreneurial firms. Our research has implications for the establishment
phase of entrepreneurial firms as it suggests they should carefully consider how
much they explore to be as different as possible and how much they exploit to be as effective as possible. This is particularly important when they are younger and exposed to dynamic environments.
Original languageEnglish
Peer-reviewed scientific journalInternational Entrepreneurship and Management Journal
Volume12
Issue number4
Pages (from-to)1147–1164
Number of pages18
ISSN1554-7191
DOIs
Publication statusPublished - 2016
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • Exploration
  • Exploitation
  • Ambidexterity
  • Performance variance
  • Entrepreneurship

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