Popadiuk, Silvio; Bido, Diógenes de Souza

doi:10.1590/1982-7849rac2016150018

Silvio Popadiuk

Universidade Presbiteriana Mackenzie

Diógenes de Souza Bido

Universidade Presbiteriana Mackenzie

Dados dos Autores. Silvio Popadiuk. Rua da Consolação, 930, Consolação, 01302-907, São Paulo, SP, Brasil. E-mail: spopadiuk@gmail.com Diógenes de Souza Bido. Rua da Consolação, 930, Consolação, 01302-907, São Paulo, SP, Brasil. E-mail: diogenesbido@yahoo.com.br, dsbido@gmail.com

Exploitation is a reflective second-order latent variable (Jarvis, C. B., Mackenzie, S. B., & Podsakoff, P. M. (2003). A critical review of construct indicators and measurement model misspecification in marketing and consumer research (p. 205). Journal of Consumer Research, 30(2), 199-218. doi: 10.1086/376806). Its indicators were the first-order latent variables: (PA) partnerships, (CO) competition, (OE) operational efficiency and (SO) strategic orientation. As these relations are measurement model, we did not state them as hypotheses. Exploration is a reflective second-order latent variable. Its indicators were the first-order latent variables: (KP) knowledge practices and (IP) innovation practices. Formative latent variables, in general, are to generate indexes; reflexive latent variables are those in which the indicators express the latent variable (Bagozzi, R. P. (2007)Bagozzi, R. P. (2007). On the meaning of formative measurement and how it differs from reflective measurement: comment on Howell, Breivik, and Wilcox (2007). Psychological Methods, 12(2), 229-237. doi: 10.1037/1082-989X.12.2.229. On the meaning of formative measurement and how it differs from reflective measurement: comment on Howell, Breivik, and Wilcox (2007). Psychological Methods, 12(2), 229-237. doi: 10.1037/1082-989X.12.2.229); Coltman, T., Devinney, T. M., Midgley, D. F., & Venaik, S. (2008)Coltman, T., Devinney, T. M., Midgley, D. F., & Venaik, S. (2008). Formative versus reflective measurement models: two applications of formative measurement. Journal of Business Research, 61(12), 1250-1262. doi: 10.1016/j.jbusres.2008.01.013. Formative versus reflective measurement models: two applications of formative measurement. Journal of Business Research, 61(12), 1250-1262. doi: 10.1016/j.jbusres.2008.01.013; Mackenzie, S. B., Podsakoff, P. M., & Jarvis, C. B. (2005)Mackenzie, S. B., Podsakoff, P. M., & Jarvis, C. B. (2005). The problem of measurement model misspecification in behavioral and organizational research and some recommended solutions. The Journal of Applied Psychology, 90(4), 710-730. doi: 10.1037/0021-9010.90.4.710. The problem of measurement model misspecification in behavioral and organizational research and some recommended solutions. The Journal of Applied Psychology, 90(4), 710-30. doi: 10.1037/0021-9010.90.4.710. We classified coordination mechanisms – centralization, formalization, and connectedness - as reflexive latent variables based on a discussion by Jansen, J. J. P., Van Den Bosch, F. A. J., & Volberda, H. W. (2005). Managing potential and realized absorptive capacity: how do organizational antecedents matter? Academy of Management Journal, 48(6), 999-1015. doi:10.5465/AMJ.2005.19573106; Hage, J., & Aiken, M. (1967). Program change and organizational properties: a comparative analysis. American Journal of Sociology, 72(5), 503-519; Cardinal, L. B. (2001). Technological innovation in the pharmaceutical industry: the use of organizational control in managing research and development. Organization Science, 12(1), 19-36. doi: 10.1287/orsc.12.1.19.10119; and Lin, X., & Germain, R. (2003). Organizational structure, context, customer orientation, and performance: lessons from Chinese state-owned enterprises. Strategic Management Journal, 24(11), 1131-1151. doi: 10.1002/smj.348.

Knowledge Practices – (Exploration)	Factor loading	t-value
Volume of new ideas generated	.719	12.3
Use of new sources of knowledge drawn from partners	.768	14.9
Existing knowledge in databases	.794	17.1
Use of knowledge already in place in the company	.793	14.9
Sharing in-house knowledge	.855	29.9
Individual learning processes	.801	18.4
Collective learning processes	.854	26.7
Team-building capacities	.854	33.0
Personnel development intensity	.883	37.3
Appreciation of individual knowledge	.823	22.9

Innovative Practices – (Exploration)

Focus on completely new products or processes	.812	16.1
Prototype development	.764	11.5
Product innovation rate	.832	21.3
Marketing techniques innovation	.822	18.6
Opening up new distribution channels	.816	20.2
Focus on radical product innovations	.893	38.4
Focus on radical technology innovations	.852	30.1
Ceaseless quest for new markets	.790	15.8
Development of new products and services	.879	30.4
Aggressive participation in technology-based alliances	.805	19.0

Competition – (Exploitation)

Appearance of new competitors (new players)	.728	3.0
Existence of substitute products or processes	.645	3.1
Competition in the local (Brazilian) market	.821	2.9
Price-based competition in the local (Brazilian) market	.841	2.9
Fierce competition in company industry	.854	2,9
Existence of promotional (or price) wars in company industry	.821	2.9
Competition covers company offers easily	.701	2.6
Price-based competition is the high point of the company industry	.728	2.9

Strategic Orientation – (Exploitation)

Strategic view focused on the present	.945	61.1
Strategies focused on the short term	.946	59.9

Organizational Efficiency – (Exploitation)

Creation of detailed routines	.779	17.0
Importance of efficiency	.853	28.8
Focus on performing activities	.878	30.5
Concerns about gains of scale	.818	18.4
Organizational control mechanism	.847	24.0
Focus on costs	.844	24.2
Focus oriented towards production	.834	20.4

Partnerships – (Exploitation)

Local relationships with outside partners	.820	19.5
Level of dependency on outside partners	.661	8.6
Use of contracts in relationships with outside partners	.740	11.5
Transparency in joint efforts with partners	.772	13.5
Duration of outside partnerships	.803	15.8
Sharing knowledge with partners	.842	24.9
Concern with establishing outside partnerships	.863	24.7
Number of outside partners for the company	.828	19.3

Centralization (Dewar, Whetten, & Boje, 1980Dewar, R. D., Whetten, D. A., & Boje, D. (1980). An examination of the reliability and validity of the Aiken and Hage scales of centralization, formalization, and task routineness. Administrative Science Quarterly, 25(1), 120-128. doi: 10.2307/2392230; Hage & Aiken, 1967Hage, J., & Aiken, M. (1967). Program change and organizational properties: a comparative analysis. American Journal of Sociology, 72(5), 503-519.; Jansen et al., 2005)	Factor loading	t-value

Most decisions people make here have to have their supervisor’s approval	.650	3.1
There can be little action taken here until a supervisor approves a decision	.791	3.5
A person who wants to make his own decisions would be quickly discouraged	.915	3.1
Even small matters have to be referred to someone higher up for the final decision	.684	2.8
People need to ask their supervisor before they do almost anything	.557	2.1

Formalization (Deshpande & Zaltman, 1982Deshpande, R., & Zaltman, G. (1982). Factors affecting the use of market research information: a path analysis. Journal of Marketing Research, 19(1), 14-31. doi: 10.2307/3151527; Jansen et al., 2005)

Whatever situation arises, written procedures are available for dealing with it	.748	8.5
Rules and procedures occupy a central place in the organizational unit	.813	11.0
Written records are kept of everyone’s performance	.737	9.2
Written job descriptions are formulated for positions on all organizational levels	.756	9.9
Employees are hardly ever checked for rule violations	Excluded

Connectedness (Jansen et al., 2005; Jaworski & Kohli, 1993)Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: antecedents and consequences. Journal of Marketing, 57(3), 53-70.

There is ample opportunity for informal hall talk among employees	.624	6.0
Employees from different departments feel comfortable calling each other when the need arises	.724	10.1
Managers discourage employees from discussing work related matters with those who are not their immediate superior	Excluded
People around here are quite accessible to each other	.880	28.0
It is easy to talk with virtually anyone you need to, regardless of rank or position	.830	16.3

Company	Degree of exploration	Degree of exploitation	Degree of ambidexterity based on the balance between exploration and exploitation	Degree of ambidexterity based on the combination between exploration and exploitation
A	10	5	Low	High
B	5	5	High	Low

Note. Source: Adapted from Cao, Q., Gedajlovic, E., & Zhang, H. (2009)Cao, Q., Gedajlovic, E., & Zhang, H. (2009). Unpacking organizational ambidexterity: dimensions, contingencies, and synergistic effects. Organization Science, 20(4), 781-796. doi: 10.1287/orsc.1090.0426. Unpacking organizational ambidexterity: dimensions, contingencies, and synergistic effects. Organization Science, 20(4), 781-796. doi: 10.1287/orsc.1090.0426. From this Table we can see that company A has level 10 for exploration and level 5 for exploitation. Company B has level 5 for exploration and level 5 for exploitation. Cao et al. (2009)Cao, Q., Gedajlovic, E., & Zhang, H. (2009). Unpacking organizational ambidexterity: dimensions, contingencies, and synergistic effects. Organization Science, 20(4), 781-796. doi: 10.1287/orsc.1090.0426 raise the question: As a response, they affirm that it depends on how the researcher envisages ambidexterity. If ambidexterity is seen as a balance between exploitation and exploration, then company B would be more ambidextrous than company A. However, should it involve a combination of exploration and exploitation, then company A would be rated as more ambidextrous than company B. They conclude that due to the way the researcher defines ambidexterity, it becomes difficult to make a comparison between studies carried out by different researchers into this subject. In part, it is because of this argument that some studies developed by other authors found that the correlation between exploration and exploitation was positive. As examples, we might mention: (.26) Kyriakopoulos, K., & Moorman, C. (2004)Kyriakopoulos, K., & Moorman, C. (2004). Tradeoffs in marketing exploitation and exploration strategies: the overlooked role of market orientation. International Journal of Research in Marketing, 21(3), 219-240. doi: 10.1016/j.ijresmar.2004.01.001. Tradeoffs in marketing exploitation and exploration strategies: the overlooked role of market orientation. International Journal of Research in Marketing, 21(3), 219-240. doi: 10.1016/j.ijresmar.2004.01.001, (.70 and .75) Yalcinkaya, G., Calantone, R. J., & Griffith, D. A. (2007)Yalcinkaya, G., Calantone, R. J., & Griffith, D. A. (2007). An examination of exploration and exploitation capabilities: Implications for product innovation and market performance. Journal of International Marketing, 15(4), 63-93. doi: 10.1509/jimk.15.4.63. An examination of exploration and exploitation capabilities: Implications for product innovation and market performance. Journal of International Marketing, 15(4), 63-93. doi: 10.1509/jimk.15.4.63, (.67) Im, G. (2006)Im, G. (2006). Exploratory and exploitative knowledge sharing in interorganizational relationships (Doctoral dissertation). Georgia State University, Robinson College of Business.. Exploratory and exploitative knowledge sharing in interorganizational relationships (Doctoral dissertation). Georgia State University, Robinson College of Business, (.58) Greve, H. R. (2007). Exploration and exploitation in product innovation. Industrial and Corporate Change, 16(5), 945-975. doi: 10.1093/icc/dtm013, (.46) Isobe, T., & Montgomery, D. B. (2004)Isobe, T., & Montgomery, D. B. (2004). Exploitation, exploration, and firm performance: the case of small manufacturing firms in Japan. Research Collection Lee Kong Chian School of Business. Retrieved from http://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=3341&context=lkcsb_research
http://ink.library.smu.edu.sg/cgi/viewco... . Exploitation, exploration, and firm performance: the case of small manufacturing firms in Japan. Research Collection Lee Kong Chian School of Business. Retrieved from http://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=3341&context=lkcsb_research, (.74) Bierly, P. E., III, Damanpour, F., & Santoro, M. D. (2009)Bierly, P. E., III, Damanpour, F., & Santoro, M. D. (2009). The application of external knowledge: organizational conditions for exploration and exploitation. Journal of Management Studies, 46(3), 481-509. doi: 10.1111/j.1467-6486.2009.00829.x. The application of external knowledge: organizational conditions for exploration and exploitation. Journal of Management Studies, 46(3), 481-509. doi: 10.1111/j.1467-6486.2009.00829.x and (.52) Vorhies, D. W., Orr, L. M., & Bush, V. D. (2011)Vorhies, D. W., Orr, L. M., & Bush, V. D. (2011). Improving customer-focused marketing capabilities and firm financial performance via marketing exploration and exploitation. Journal of the Academy of Marketing Science, 39(5), 736-756. doi: 10.1007/s11747-010-0228-z. Improving customer-focused marketing capabilities and firm financial performance via marketing exploration and exploitation. Journal of the Academic Marketing Science, 39(5), 736-756. doi 10.1007/s11747-010-0228-z

Path Coefficients (Hypothesis)	Model #1				Model # 2 (with controls)
Path Coefficients (Hypothesis)	β	p	ΔR²	R² (R² adj.)	β	p	ΔR²	R² (R² adj.)
Centralization → Exploitation (H1)	-.156	.016	3%	23.1% (22.2%)	-.183	.009	4%	27.0% (25.2%)
Formalization → Exploitation (H3)	.239	.000	8%		.235	.000	8%
Connectedness → Exploitation (H5)	.285	.000	12%		.258	.000	11%
Leader → Exploitation					.143	.007	2%
Sector → Exploitation					-.025	.717	0%
Size → Exploitation					.136	.019	2%

Centralization → Exploration (H2)	-.157	.006	4%	34.2% (33.4%)	-.183	.003	4%	38.4% (36.9%)
Formalization → Exploration (H4)	.283	.000	11%		.281	.000	11%
Connectedness → Exploration (H6)	.369	.000	19%		.343	.000	18%
Leader → Exploration					.153	.004	2%
Sector → Exploration					.016	.782	0%
Size → Exploration					.153	.021	3%

[1] Dados dos Autores. Silvio Popadiuk. Rua da Consolação, 930, Consolação, 01302-907, São Paulo, SP, Brasil. E-mail: spopadiuk@gmail.com Diógenes de Souza Bido. Rua da Consolação, 930, Consolação, 01302-907, São Paulo, SP, Brasil. E-mail: diogenesbido@yahoo.com.br, dsbido@gmail.com

Brasil

Brasil

Exploration, Exploitation, and Organizational Coordination Mechanisms

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