Quality ambidexterity, competitive strategies, and financial performance: An empirical study in industrial firms
Munoz Rosas, Juan Francisco
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Purpose –The purpose of this paper is to examine the relationship between quality ambidexterity, competitive strategies (cost leadership, differentiation, and focus), and firm performance in Palestinian industry, and to analyze the combination of quality exploitation and quality exploration (quality ambidexterity) associated with different levels of each competitive strategy. Design/methodology/approach – Using data collected through a survey of 205 Palestinian industrial firms, the study conducted Structural Equation Modeling to test the proposed relationships. Additional statistical analyses were applied to the combinations of quality exploitation and quality exploration for each competitive strategy. Findings – The results show a positive and significant relationship between quality ambidexterity and three competitive strategies, and between competitive strategies and financial performance, focus strategy excepted. Balanced combination with similar levels of quality exploitation and quality exploration is found to be more suitable for higher levels of competitive strategies implementation, whereas an excess of quality exploration over quality exploitation is associated with lower levels of strategies implementation. Research limitations/implications – Although Palestine has two regions, the West Bank and the Gaza Strip, all survey respondents were from the West Bank. The data used in this study come from the industrial sector only. Originality/value – This study is the first empirical test to examine the impact of quality ambidexterity on financial performance through competitive strategies. The study results may help managers to implement quality exploitation and quality exploration practices in order to allocate resources effectively and ultimately improve financial performance.