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Exploitative Learning and Entrepreneurial Orientation Alignment in Emerging Young Firms: Implications for Market and Response Performance

Hughes, Mathew, Hughes, Paul and Morgan, Robert E. 2007. Exploitative Learning and Entrepreneurial Orientation Alignment in Emerging Young Firms: Implications for Market and Response Performance. British Journal of Management 18 (4) , pp. 359-375. 10.1111/j.1467-8551.2007.00519.x

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Abstract

Purpose - To explore the relationship between corporate exploitative learning and entrepreneurial orientation (EO), and to investigate the effects of the relationship and the two elements on company performance. Design/methodology/approach - Focuses on new high-technology firms, points out that young firms have limited knowledge, discusses networking as a way of learning, the benefits and disadvantages of exploitative and exploratory learning, and entrenchment of exploitative learning as a key organizational behaviour, and asks what happens if a firm attempts to utilize both EO and exploitative learning. Draws on configuration theory to develop a model, and associated hypotheses, linking business performance to EO, the degree of EO/strategy fit, and EO fit in relation to the level of exploitative learning. Tests the hypotheses by analysing Likert-based questionnaire responses of 211 firms included in the UK Business Incubation Directory, questions respondents on risk-taking, information exchange with other firms, and market and response performances, controls for firm size and age, and explains how an ideal EO/strategy fit benchmark was derived from analyses of high-performing firms. Findings - Confirms that firms with high degrees of EO/strategy fit returned superior performance, and reports that firms characterized by weak exploitative learning returned greater response and market performances, interpreting results as confirmation that weak exploitative learning, and close fit with the ideal EO profile, have greater positive effects on performance. Practical implications - Advises young firms to benchmark their EO scores to gauge their fit against the ideal. Originality/value - Cautions against over-emphasis on exploitative learning.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce
Uncontrolled Keywords: Corporate Strategy, Entrepreneurship, Learning, Organizational Performance, Start-ups
Publisher: Wiley Blackwell
ISSN: 1045-3172
Last Modified: 04 Jun 2017 04:24
URI: http://orca.cf.ac.uk/id/eprint/38338

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