Achieving high efficiency and sustainability through new ventures exploration and exploitation strategies: Insight from well-established and emerging technology standards

Abstract This study aims to clarify whether exploration strategy and exploitation strategy should be combined to create a greater financial performance according to the level of production technology capability in new ventures. We examine the moderation effect of technology standard on the relationship of exploration/exploitation strategy and financial performance by the aid of the strategic purity model with 265 US new ventures belonging to light industry sectors. We claim that exploration strategy exercises a more positive impact on financial performance than exploitation strategy in the case of adopting emerging technology standard (ETS). In the meantime, the harmony of these two types of strategies can better improve financial performance, rather than just develop a pure strategy in the case of adopting well-established technology standard (WTS). The findings from our study expand the analysis horizon of how exploration and exploitation strategies affect financial performance when faced with an uncertain technology standard; this is a necessary work to push forward the trade-off of strategic purity. Our findings have significant implications, both for issues relevant to the trade-off and uncertainty for sustainable societies in which new ventures as an economic activist are involved, and for the intellectualization based on big data to which such firms are expected to contribute in a strategic manner.