Exploration and Exploitation Capabilities

Exploration and Exploitation Capabilities

César Camisón-Zornoza (Department of Business Administration and Marketing, Universitat de València, Spain), Montserrat Boronat-Navarro (Department of Business Administration and Marketing, Universitat Jaume I, Spain) and Beatriz Forés-Julián (Department of Business Administration and Marketing, Universitat Jaume I, Spain)
Copyright: © 2015 |Pages: 12
DOI: 10.4018/978-1-4666-5888-2.ch056
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Background

Strategic decisions are closely related to the choice of how much to invest in different activities, and for exploration and exploitation to be achieved, different resources, processes, skills, and even organizational structures are required. In his seminal paper, March (1991) suggests that the activity of exploration is related to searching, experimenting with new alternatives, and taking risks, whereas exploitation refers to refining, efficiency, implementation, and selection. The change proposed from the Organizational Learning perspective is the need to strike a balance between the two activities (Bontis, Crossan, & Hulland, 2002), rather than forcing the organization to choose between channeling more resources toward one activity or the other. Since the publication of March’s paper, the two concepts have been widely analyzed in strategic management, innovation, organizational learning, and other literatures, from different perspectives and considering different meanings.

Table 1 outlines a number of studies that analyze different aspects of exploration and exploitation. It reveals how the definitions and measurement methods adopted vary widely from one study to another.

Key Terms in this Chapter

Structural Ambidexterity: Organizations with differentiated units specialized in exploration or in exploitation, to achieve both capabilities simultaneously at organizational level.

Exploration: The capability to generate new ideas in the organization that depart from previous experiences.

Contextual Ambidexterity: The simultaneous achievement of exploration and exploitation through mechanism different as the structure, as processes or activities.

Exploitation: The capability to incorporate knowledge into the operations of the firm, refining and extending previous activities.

Ambidexterity: The simultaneous achievement of exploration and exploitation.

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