Exploration and exploitation strategies in SME family firms

Abstract

The survival of family firms may lie in their ability in exploiting their current competitive advantage while concurrently exploring new opportunities present in their way. However, scantiness of resources makes it hard to employ both strategies simultaneously. As such, this paper examines on how family firms decide to pursue exploitation or exploration strategies. The unique culture of family firms, for instance, long-term orientation, risk aversion, and aspiration, suggests a variety of ways to implement strategies, which could be the exploration or exploitation strategy. Hence, the main objective of this study is to review both the exploration and exploitation strategies found in the literature as practiced in family firms. In addition, this study proposes a conceptual model to further comprehend the decisions made in undertaking exploration and exploitation strategies among family firms.