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臺大管理論叢
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supported the proposition that decision makers, explicitly or implicitly, appeal to ROR in
making investment decisions under conditions of uncertainty.
Our results highlight the danger of short-sighted exploration. As shown in Model 10 in
Table 5, current exploration has a negative impact on current performance; that is, it takes
time to realize the benefits of current exploration. By cutting current exploration activities, a
firm can increase its short-term profitability but suffer long-term returns. Therefore, firms
must manage their exploration activities cautiously over time.
Finally, our study contributes to our understanding of the performance implications of
exploration and exploitation under uncertainty. Performance is a function of exploitation,
which is instrumental in translating prior exploration into returns. Although exploration,
exploitation, and their strategy implications have been extensively studied conceptually,
there have been surprisingly few empirical investigations of them (Isobe et al., 2004). The
few exceptions have addressed the problem in terms of the ambidexterity hypothesis (He and
Wong, 2004). Although with some limitations, our study provides valuable insight into the
relationship between exploration, exploitation, and firm performance.