Untangling the effects of overexploration and overexploitation on organizational performance: The moderating role of environmental dynamism

Heli Wang, Jiatao Li

Research output: Journal PublicationArticlepeer-review

117 Citations (Scopus)

Abstract

Because a firm's optimal knowledge search behavior is determined by unique firm and industry conditions, organizational performance should be contingent on the degree to which a firm's actual level of knowledge search deviates from the optimal level. It is thus hypothesized that deviation from the optimal search, in the form of either overexploitation or overexploration, is detrimental to organizational performance. Furthermore, the negative effect of search deviation on organizational performance varies with environmental dynamism; that is, overexploitation is expected to become more harmful, whereas overexploration becomes less so with an increase in environmental dynamism. The empirical analyses yield results consistent with these arguments. Implications for research and practice are correspondingly discussed.

Original languageEnglish
Pages (from-to)925-951
Number of pages27
JournalJournal of Management
Volume34
Issue number5
DOIs
Publication statusPublished - 2008
Externally publishedYes

Keywords

  • Consistency in search
  • Environmental dynamism
  • Organizational performance
  • Overexploitation/overexploration

ASJC Scopus subject areas

  • Finance
  • Strategy and Management

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