The role of competitive strategy in the performance impact of exploitation and exploration quality management practices

This study aims to advance understanding about quality management (QM) practices by clarifying how competitive strategy conditions the impacts of exploitative and explorative QM practices on performance.

The authors apply partial least squares structural equation modeling to data from a sample of German pharmaceutical firms.

The results show that the impact of exploitative and explorative QM practices on firm performance is contingent on the competitive strategy pursued. Explorative QM practices are significantly more relevant for firms following a differentiation strategy, whereas exploitative QM practices are significantly more relevant for cost leaders. Furthermore, for strategically ambidextrous firms that follow simultaneously a cost and a differentiation focus, the interplay of the two QM practices matters.

This paper contributes to understanding which kind of management practices, exploitative and/or explorative, have greater performance impacts under certain competitive strategy conditions.