Explorative Actions in Search for a New Logic of Business Activity

Explorative Actions in Search for a New Logic of Business Activity

Päivi Ristimäki (University of Helsinki, Finland)
DOI: 10.4018/978-1-4666-6603-0.ch011
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Abstract

This chapter analyzes a Finnish ICT firm's explorative actions after the firm's predominant business logic based on technological product development had come to the end of its lifecycle. The explorative actions are seen here both as a means of learning to break out from the historically formed work routines and as a means for inventing a new ground for business logic. For this study, an analytical model was created for depicting explorative actions in the ICT firm's marketing. The analysis of engendered explorative actions during the period of three years shows how new modes of interacting with the customers contributed to the managements' strategic reorientation. The explorative actions intertwined aspects of exploration and exploitation in a dialectical unity of opposites. The study also highlights the role of everyday experience of problems and the role of intellectual understanding of an aggravating contradiction in activity as stimuli to take explorative actions.
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Introduction

The era of information and communication technology embodies techno-socio-economic transformation processes triggered by profound technological innovations. Perez (2002; 2005) portrays technological revolutions as surges of development in two phases. In the first, the installation phase, new potentials for productive activity are created through the evolution of applications of the inventions. The groundbreaking product development in this phase is supported by financial investors expecting high revenues by taking high risks. According to Perez (2014, p. 7), “technology-push” characterizes the mode of development in that period. After the bubble of overinvestment in the new technologies bursts out in a financial crisis, a new period starts in which the development is based more on “demand-pull” and broad deployment of the new technologies in all areas of the society. The deployment phase of the information and communication technological surge has been characterized by the development of dedicated, industry-oriented applications and the production of comprehensive ICT architectures providing largely shared, dynamic and networked ICT ecologies and enabling new service concepts (Prahalad & Krishnan 2008; Perez 2014). Cusumano, Suarez & Kahl (2008) have described the spreading of the use of new information and communication technologies with the help of a business lifecycle model. According to them, business activities are predominantly engaged in products through new technological innovations. Experimentation in the markets with various product concepts leads to a standard solution and turns the focus on competition and cost efficiency in the production of the standard solution. After the broad use of the standard product, the focus of competition moves on technology-related services and the support of the implementation and use of technological applications.

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