The role of environmental conditions in the dualities of competence exploitation and competence exploration.

Resumo

Among the many factors that help determine the success of new products, the ability to manage existing assets and capabilities (exploitation) and the development of new capabilities (exploration) are arguably among the most relevant. However, the two kinds of capabilities rely on different paths to success. While exploitation-related capabilities, on the one hand, are based on certainties regarding the efficiency of a company, exploration-related capabilities require the analysis of new technologies and processes. In existing literature, there is a gap on the most appropriate way to manage the trade-off between the exploitation and exploration of competences. In this study, which was conducted among 197 manufacturing organizations, we build on the dualities of exploiting and exploring competences and their impact on new product performance through different paths to success: a) how the exploitation of competences improves quality standards and b) how the exploration of competences fosters product innovativeness. Moreover, the analysis of two environmental conditions (competitive intensity and market turbulence) reveals under which circumstances a firm should follow either type of competence to enhance the performance of new products.