Dissertation

Three Essays on the Origins and Consequences of Product Exploration

Fast, Jonathan

2023

Overview

The first essay of this dissertation is a review of the literature from leading management journals on product exploration (i.e., a firm’s creation of new products different from those in its existing product portfolio). This review shows a strong base of studies on the antecedents and consequences of product exploration, although the latter has received comparatively less attention. It further reveals five opportunities for future research, two of which motivate the second and third essays of this dissertation. The first of the two opportunities that I focus on is determining how the elements that lead to product exploration operate through the new product development process. The second is to identify whether and when exploratory products are riskier than exploitative products.In the second essay, we extend research on technological exploration as an antecedent to product exploration. Prior research shows that firms can improve their technological exploration through their organizational structure, particularly by implementing structural separation. We consider the downstream effects of structural separation as firms turn technological exploration into product exploration, which requires the difficult translation of technological inventions into commercial products. As a baseline, we predict that technological exploration increases a firm’s product exploration rate. However, we also predict that the delicate transition from technological exploration to product exploration is impeded by barriers stemming from structural separation. We identify three types of structural separation - divisional compartmentalization, geographic dispersion, and internal network fragmentation - as barriers that weaken the baseline relationship. An empirical analysis in the American medical devices industry provides robust support for our hypotheses. The findings of this study contribute to the literatures on ambidexterity, organizational exploration, and organizational R&D structures.In the third essay, we advance research on the performance implications of product exploration. New product introductions can be a source of firm renewal and growth or precipitate a firm’s downfall. We use the concepts of exploration-exploitation and second-order learning from the organizational learning literature to explain this variability. We predict that exploratory products have more variable performance outcomes than exploitative products. This is because they have the potential for superior effectiveness or to create new lines of business, but they also require costly organizational changes and increase the likelihood of mistakes. Further, we hypothesize that this effect is augmented if the product also addresses a new-to-the-firm market segment and is attenuated when the firm has greater experience in marketing exploratory products. Using a large-scale study on stock market reactions to the FDA approval of new medical devices between 2000 and 2015, we find partial support for our hypotheses. The findings of this study contribute to the literatures on organizational learning, new product introductions, and market reactions to strategic actions

• Publisher: ProQuest Dissertations & Theses
• Subject: Innovations / Marketing / Medical equipment / Medicine / Product development
• ISBN: 9798382615875