Exploratory and Exploitative Organizations and Firm Performance

Exploratory and Exploitative Organizations and Firm Performance
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Exploratory and Exploitative Organizations and Firm Performance
Abstract
Business organizations tend to use their existing competencies and resources to maintain their competitiveness in the diverse economic sectors for sustainable growth and development. Among the competencies for exploitation or exploration by a firm may include its management of knowledge, information cooperation, search breadth, and ability to employ collaboration. The exploitation and or exploration of the outlined competencies have equally diverse effects on the performance of a firm. Provided herein is a comprehensive analysis of both the exploitation and exploration of the outlined competencies and their unique influences on firm performance. The article makes use of literature review analysis of various studies on ambidexterity of organizations to showcase the effect of using the two aspects of the approach on firm performance. The study finds that effective exploitation of knowledge management and exploring the employment of collaboration in various business activities correlates to overall improvement in firm performance.
Introduction
The increasing competition within different sectors at both the local and global levels of the economy calls for increased investment in effective business strategies for sustainable growth and development (O’Reilly, C. A., 2011). Business entities strive to maintain their competitiveness in the highly competitive markets across the diverse sectors of the global economy. Sustainable growth and development offer the best remedy for continuous relevance in the market through consistent profits and revenue generation. However, maintaining such a positive growth trajectory calls for a comprehensive assessment of an organization’s competencies and their ability to sustain the firm’s viability in the market. The analysis of the firm’s competencies further highlights a firm’s potential for future growth and its adaptability to the emerging trends. The identified competencies or resources at a firm’s disposal determine whether the firm can sustain or rather maintain its daily business operations upon continuous exploitation (Kim, C.Y., 2019). The availability of resources also plays a significant role in expansion of business activities as they determine the firm’s potential for venturing or exploring other opportunities. Exploitation thus refers to one of the most common business strategies characterized by a firm’s ability to capitalize on its existing competencies or resources for maximum profitability and sustenance of the daily business operations. Exploration, on the other hand, refers to the firm’s ability to utilize its primary resources or competencies towards enhancing its flexibility or adaptability to future changes and emerging trends in the industry of operations.
Literature Review
It is common to find business organizations in joint or collaborative efforts in undertaking various projects that are beneficial to all the participants. Such collaborations tend to have different effects on firm performance, depending on the approach taken by an individual...