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臺大管理論叢
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27
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forming alliances with existing partners in Beckman, Haunschild, and Phillips’s (2004)
research), the relationship between exploration and exploitation can be orthogonal (Gupta,
Smith, and Shalley, 2006). Given that this study focuses on how a firm, in the face of
uncertainty, balances exploration and exploitation in two different function domains y—
R&D and capital investments to earn rents, this study adopts an orthogonal relationship
between exploration and exploitation and uses the firm as the unit of analysis.
The primary objectives of this study are twofold. First, we empirically investigate
whether uncertainty influences exploration and exploitation. Second, we choose the
semiconductor industry as our research context involving high uncertainty which enables us
to elucidate how firms allocate resources for exploratory and exploitative activities to pursue
superior performance. In contrast to previous research that focused exclusively on March’s
(1991) reasoning to postulate the relationship between exploration, exploitation, and firm
performance; we consider that real options reasoning can complement the classical
arguments and provide a more solid theoretical foundation for understanding exploration and
exploitation.
A real options approach addresses sequential decision making under conditions of
uncertainty and provides an appropriate theoretical foundation for investigating how a firm
allocates resources between exploration and exploitation for the purpose of enhancing
returns in the face of uncertainty. This approach provides insights into the relationship
between exploration and exploitation and their effects on a firm’s performance. Drawing on
real options reasoning, we suggest that uncertainty positively impacts exploration and
exploitation serves as a mediator of the relationship between exploration and firm
performance.
Our study fills four gaps in the exploration and exploitation literature. First, very little
large-scale empirical research has been systematically conducted on examining the
interactions between exploration and exploitation in firms (Holmqvist, 2004). Second, with
very few exceptions (Benner and Tushman, 2002, 2003), few studies have explicitly dealt
with the causal relationship between exploration and exploitation longitudinally (Uotila et
al., 2009). Third, our research provides the first empirical test on whether firms employ real
options reasoning to allocate exploratory and exploitative investments
1
under uncertainty.
Fourth, although scholars have acknowledged the lag effects of exploration on performance,
1 Exploration and exploratory investments are interchangeable while exploitation and exploitative investments
are interchangeable in this study.