Rhythm and shift frequency of strategic renewal in Indonesian firm performance

Ida Ayu Kartika Maharani, Badri Munir Sukoco, David Ahlstrom, Indrianawati Usman

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: This study aims to explore how manufacturing firms in emerging economies can effectively adjust the rhythm and shift frequency between exploitation and exploration renewal. The authors also examine how these strategic adjustments can significantly boost firm performance, offering insights into the dynamic process of strategic renewal. Design/methodology/approach: This study analyzes annual reports of 127 Indonesian manufacturing firms from 2014 to 2019, applying both linear and curvilinear regression models to examine the hypotheses. Data on exploration and exploitation renewal were meticulously gathered using computer-aided text analysis, using targeted keywords to identify strategic renewal efforts. Findings: The study shows that a rather irregular balance rhythm between exploitation and exploration renewal surprisingly enhances firm performance. A curvilinear relationship emerges as performance peaks when the shift frequency of renewal occurs about three times. This relationship optimizes the strategic renewal processes, emphasizing that firms need to remain agile and adaptable in today’s dynamic market environment. Originality/value: This study leverages organizational learning to assess how the paradoxical dimensions of exploration and exploitation renewal impact firm performance. By focusing on the temporal transition of these tensions, it provides insights into optimizing the rhythm and shift frequency of renewal, transitioning from a static to a dynamic accord.

Original languageEnglish
Pages (from-to)1687-1709
Number of pages23
JournalJournal of Asia Business Studies
Volume18
Issue number6
DOIs
Publication statusPublished - 11 Nov 2024

Keywords

  • Balancing
  • Exploitation/exploration
  • Frequency
  • Indonesia
  • Innovation
  • Rhythm
  • Strategic renewal

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