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臺大管理論叢
第
27
卷第
3
期
115
2.3 Uncertainty, Exploration, and Exploitation
Previous research has shown that the real options perspective can be useful in
understanding how firms can cope with exogenous uncertainties in their technological and
market domains (Vassolo, Anand, and Folta, 2004). We propose the real options lens to
reason how a firm allocates resources between exploration and exploitation for the purpose
of enhancing performance under uncertainty. Although many scholars propose that
organizations respond to uncertainty, what is meant by uncertainty seems to differ from study
to study. This study defines uncertainties that underpin most others’ definitions:
Uncertainties are the difficulties firms have in predicting the future, which comes from
incomplete knowledge (Beckman et al., 2004). According to Beckman et al. (2004),
uncertainty is classified into two levels: market uncertainty and firm-specific uncertainty.
Market uncertainty is external and is shared across a set of firms while firm-specific
uncertainty is unique and internal to the firm. Given that this study has focused on a single
industry — the semiconductor industry, uncertainty is identified mainly as firm-specific
uncertainty (Beckman et al., 2004). Firms may face technical uncertainty, which is
uncertainty about the likelihood of technical success and the costs associated with success
(McGrath, 1997). Technical uncertainty is firm-specific to the extent that other firms have
different capabilities and probabilities of success (Beckman et al., 2004). The U.S.
semiconductor industry grows continuously but in a cyclical pattern with high volatility. In
the face of uncertainty, firm capabilities to maintain high degrees of flexibility and
innovation in order to constantly adjust to the rapid pace of change in the market are key
factors for success. Firms attempt to reduce uncertainties by broadening their networks and
by forming relationships with new partners, which is a form of exploration (Beckman et al.,
2004). Likewise, to address this uncertainty, we argue that firms invest more in exploratory
investment, somewhat implying a higher value for options created by exploratory investment
under uncertainty. Thus, we hypothesize that:
Hypothesis 1: Uncertainty is positively related to exploration while it has no effect on
exploitation.
2.4 Exploration, Exploitation, and Firm’s Performance
According to ROR, firms should not commit all of their resources at the outset. Instead,
they should delay some of their investment decisions so they can take advantage of future
uncertainty. Exploration can be regarded as “initial investments” through which a firm