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Article
Publication date: 4 November 2019

Xiaoping Zhao, Feibo Shao and Chuang Wu

The purpose of this paper is to investigate the performance implications of two major mechanisms for organizational learning (i.e. exploration and exploitation). Exploration…

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Abstract

Purpose

The purpose of this paper is to investigate the performance implications of two major mechanisms for organizational learning (i.e. exploration and exploitation). Exploration refers to firm activities that explore new and novel knowledge, whereas exploitation reflects the extent to which a firm reuses its existing knowledge. The authors predict curvilinear (i.e. an inverted U-shape) relationships between exploration/exploitation and firm performance, respectively. That is, firm performance first increases with exploration/exploitation at a decreasing rate; then, firm performance decreases at an increasing rate after firm performance reaches a maximum point. Furthermore, the authors examine whether the curvilinear relationships are moderated by two types of firm–stakeholder relationships (i.e. firm–employee and firm–customer relationships).

Design/methodology/approach

Using the data from National Bureau of Economic Research, US Patent Citations Data File, KLD Research and Analytics Inc. and Compustat series, the authors construct an unbalanced panel data set of 3,070 observations in 554 firms from 1991 to 2006. To test the hypotheses, feasible generalized least squares regression is used.

Findings

In consistent with the prediction, the authors find inverted U-shape relationships between exploration/exploitation and firm performance. The authors also find that the curvilinear relationships are moderated by firm–employee relationships. The relationships between exploration/exploitation and firm performance become stronger when firms have better relationships with employees.

Research limitations/implications

The study provides empirical evidence that better firm–employee relationships can strengthen the curvilinear relationships between exploration/exploitation and firm performance. The authors argue that future studies should extend to other stakeholder relationships, using more refined measures, and incorporating the concept of ambidexterity.

Practical implications

The findings suggest that managers should design innovation strategy based on performance implications of exploration/exploitation and that managers should also realize that stakeholder relationships can influence the relationships between exploration/exploitation and firm performance. First, the study shows that although exploration and exploitation can improve firm performance, too much exploration or exploitation is not good for firm performance. Therefore, managers should consider seriously the maximum point of performance that exploration and exploitation can reach and avoid too much exploration or exploitation. Second, firms can invest in firm–employee relationships to gain better performance implications from exploration/exploitation. The study shows that, as firms develop better firm–employee relationship, the relationships between exploration/exploitation and firm performance are stronger and firm performance is likely to reach a higher apex.

Originality/value

The authors find the inverted U-shape relationships between exploration/exploitation and firm performance, moreover, the authors add two contingent factors associated with stakeholders that can help exploration and exploitation contribute more to firm performance.

Details

Management Decision, vol. 59 no. 4
Type: Research Article
ISSN: 0025-1747

Keywords

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Article
Publication date: 12 February 2021

Feibo Shao, Audrey J. Murrell, Xiaoping Zhao, Ke Zhang and Timothy A. Hart

Corporate social responsibility (CSR) and corporate social irresponsibility (CSIR) co-exist within many firms. Yet, without understanding how CSR and CSIR are related, our…

1986

Abstract

Purpose

Corporate social responsibility (CSR) and corporate social irresponsibility (CSIR) co-exist within many firms. Yet, without understanding how CSR and CSIR are related, our knowledge of these concepts is incomplete. This study initiatively explores four relationships between prior CSR/CSIR and subsequent CSR/CSIR.

Design/methodology/approach

This study uses the KLD database as the source of measures on CSR and CSIR. The final sample contains 1,820 firms and 14,420 firm-year observations from 1991 to 2013. The Arellano—Bond GMM estimator is used to test the hypotheses.

Findings

The empirical analyses yield the following results: (1) a positive relationship between prior CSR and subsequent CSR, (2) a negative relationship between prior CSR and subsequent CSIR, (3) a positive relationship between prior CSIR and subsequent CSR and (4) a positive relationship between prior CSIR and subsequent CSIR.

Research limitations/implications

This study provides comprehensive evidence of the dynamic relationships between CSR and CSIR by incorporating multiple relationships between these variables into a single study. It also identifies key contexts that shape these relationships and identifies several promising areas of further inquiry.

Originality/value

This study is the first to examine the dynamic CSR – CSIR relationships in a single study. Most previous studies investigate either CSR or CSIR; few studies have incorporated them into one study.

Details

Journal of Strategy and Management, vol. 14 no. 4
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 18 May 2021

Samik Shome, Deepak Danak, Parag Rijwani and Ashish Chandra

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Abstract

Details

Management Decision, vol. 59 no. 4
Type: Research Article
ISSN: 0025-1747

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