Explorers, Exploiters and Hybrids: Do culture and the environment make any difference?

Some players generate new and novel ideas and concepts while other players exploit existing ideas and extend product lines rather than explore the possibilities of entirely new products that are radically different. March (1991) argues that firms can have both an exploitative as well as an exploratory capacity. The decision to engage in exploitation and exploration is the outcome of strategic choices. Explorative trajectories are needed when old complementary assets are no longer sufficient to maintain a leadership position and little can be gained by exploit existing knowledge and skills. The interplay of exploitation and exploration takes place both within and between businesses. Firms that scan outside their normal supply chain networks are more likely to be exploring for innovations than firms who are attempting to exploit existing opportunities and ideas. This paper examines how the business environment influences the exploration and exploitation activities of firms involved in NPD and investigates the influence of market volatility and culture on the exploration and exploitation initiatives of NPD activities. The paper uses data from an international survey of NPD involving researchers in Europe and Australia. Initial statistical analysis indicates that regardless of the nature of the uncertainty in the market, most firms will use both exploratory and exploitative trajectories rather than focus on one. While it has been argued that firms will struggle to balance the dualism inherent in exploiting and exploring, it appears from the data in this study that many firms are achieving sufficient balance to survive. The study makes significant theoretical contributions to the literature through extending the concepts of exploitative and exploratory capacities in new product development.