Exploration, Exploitation, or Ambidexterity? A Meta-Analysis of SME Strategic Orientation and Performance Across Different Levels of Environmental Munificence

This study investigates whether small and medium-sized enterprises (SMEs) gain greater performance benefits from focusing on exploration or exploitation than from pursuing an ambidextrous orientation, and examines home-country munificence as a boundary condition. Given their limited resources, SMEs must decide when it is advantageous to commit to a single strategic logic. We introduce the adverse environment-focus paradox , which proposes that the advantages of a focused orientation can be amplified in certain adverse environments but not in others. Drawing on meta-analytic evidence from 3,423 observations across 21 studies and 13 countries, and on prior meta-analyses, we integrate this contingency perspective, advancing theory on how environmental conditions and SMEs’ strategic orientations interact. Our study invites further inquiry into the fit between the environment and sequential shifting and timing in SMEs to clarify when an SME should fit between them in its organizational lifetime and the potential impact of such shifting. JEL classifications: L25, M10, and M21