Balancing Exploration and Exploitation in Supply Chain Portfolios

This study investigates the influence of supply chain portfolios on the paradox of exploration and exploitation within interfirm collaborations. This study deploys two supply chain portfolio characteristics, supplier diversity and repeated partnerships, to explain the evolution of technological innovations and supply chain portfolios. It tests a set of hypotheses using a longitudinal study of 76 Taiwanese high-tech companies between 2001 and 2005. The findings support the premise that a diverse supplier base and deep familiarity with individual suppliers stimulate firms' exploration and exploitation activities. This study also finds that the threshold effects of these two characteristics on exploration activities clarify how determinants of firms' supply chain portfolios influence the developmental paths in the firm's evolution of exploration and exploitation activities.