Exploration and exploitation fit and performance in international strategic alliances

Exploration and exploitation constitute two separate, potentially conflicting strategic choices for firms engaged in international strategic alliances. Our empirical study challenges the ambidexterity argument and demonstrates that exploration and exploitation are separate (though not necessarily antithetical) strategies with different antecedents and performance consequences.Our results show that while competency similarity is conducive to upstream innovative performance, prior experience with the partner is potentially damaging for this type of performance and trust and cultural distance do not play significant roles. When the motive is efficiency and downstream market performance, prior experience with the partner instead is beneficial, as are high levels of trust and low levels of cultural distance. These findings have key implications for literature on strategic fit and alliance performance.

► Strategic fit between partner selection criteria and motivational intend is instrumental in determining alliance performance.
► Our study challenges the ambidexterity argument, demonstrating that exploration and exploitation are separate strategies.
► Our results illustrate how relational capital plays a crucial role in determining upstream and downstreamperformance.
► Results point to how relational antecedents play different (and often opposite) roles depending on the underlying intent.
► Empirical analysis of 120 alliances shows that exploration and exploitation are conflicting yet distinct strategies.
► Our research links exploration/exploitation strategies to international alliance performance in a cross-industry setting.