The influence of marketing exploitation and exploration on business-to-business small and medium-sized enterprises' pioneering orientation

Abstract

Organisational learning theory proposes firms can gain market knowledge through adaptive processes - marketing exploitation and exploration. Our study examines how these processes impact pioneering orientation, firms' emphasis on launching innovative products ahead of competitors, in business-to-business (B2B) small- and medium-sized enterprises (SMEs). The prevailing view is firms should simultaneously pursue both processes or focus on just one. We challenge this notion and posit B2B SMEs should generally prioritise one process over the other to effectively shape pioneering orientation. However, certain circumstances like upstream supply chain (SC) integration and strong information technology (IT) competence enable firms to optimise benefits by alternating between processes. Our longitudinal analysis of 213 Chinese B2B SMEs supports this argument, revealing marketing exploration has a stronger positive influence on pioneering orientation than exploitation. Furthermore, our analysis shows upstream SC integration alone does not moderate, but combined with robust IT competence, can increase the advantages of marketing exploitation over exploration when fostering pioneering orientation in B2B SMEs.