CORPORATE CULTURE AS AN ANTECEDENT OF SUCCESSFUL EXPLORATION AND EXPLOITATION

Abstract

Organisational culture is a decisive factor for a firm's innovativeness and performance. Our empirical model explores the relationship between organisational culture — based on the competing values model — as an antecedent of exploration and exploitation, innovation success and firm performance. It is tested on a sample of 232 CEOs of corporations in the US. Relationships between the constructs were analysed through path modelling, using the Partial Least Squares (PLS) method, employing the SmartPLS software. The results reveal a strong influence of corporate culture on exploration and exploitation, innovation success and performance. More specifically, we find significant positive relationships between hierarchy culture and market culture and exploitation. A clan culture negatively impacts exploration. Only an adhocracy culture positively influences both exploitation and exploration. Exploration and exploitation are positively related to innovation success and firm performance. Theoretical and managerial implications, limitations, and an agenda for further research are discussed.