The Inertial Effect of Good Corporate Reputation on Exploration-Exploitation Interplay

Abstract

The positive effects of a good corporate reputation as a substantial organizational intangible asset on the organization outcomes have been immensely researched in the extant literature. Nevertheless, no research has so far touched upon, let alone systematically investigated, the possible side effects of a good reputation and its potential negative effects on the organization’s future outcomes. To that end, we drill into the path-dependent nature of the corporate reputation, and conceptualize how it would hinder organizations from altering their behavior when necessary. Particularly, we dedicate our focus on the negative effect that a good corporate reputation could have on the exploration-exploitation interplay in organizations that possess such a reputation.