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An Analysis of James March's Exploration and Exploitation in Organizational Learning
19 Feb 2018-
TL;DR: In this article, the authors present a key text for scholars and business practitioners interested in promoting economic well-being and sustainable growth by maintaining a balance between exploration and exploitation processes, which depends on the interchange between the adaptive capability of the company, predictability and consistency, competition, anticipations, level of risk, learning, socialization dynamics within the organization, and overall environmental turbulence.
Abstract: Exploration and Exploitation is a key text for scholars and business practitioners interested in promoting economic well-being and sustainable growth. March’s work promotes the preservation of companies’ competitiveness and sustainability in the fluctuating market environment by maintaining a balance between exploration and exploitation processes. He explicates that this balance depends on the interchange between the adaptive capability of the company, predictability and consistency, competition, anticipations, level of risk, learning, socialization dynamics within the organization, and the overall environmental turbulence. These intricacies make March’s text invaluable.
Citations
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TL;DR: A conceptual absorption of OL into KM is shown, which may enrich academic discussion and also provide some clarity to the conceptualization of these two fields, to jointly analyse the evolution of KM and OL.
Abstract: This paper aims to focus on research regarding organizational learning (OL) and knowledge management (KM), and to specifically investigate whether OL has been conceptually absorbed by KM.,This study is based on 16,185 articles from the Scopus and ISI Web of Science databases, using VantagePoint 10.0 software. The method used in this study is a systematic literature review covering KM and OL publications from the 1970s, when the OL field started to grow, up to 2016.,Nuclear processes of OL, creation and acquisition of knowledge, have been conceptually absorbed by KM literature in the past years.,Only two databases have been considered, Scopus and ISI Web of Science, because of their academic prestige. However, these databases include a large number of articles on KM and OL. Search terms used could exclude some relevant terms, although all major descriptive terms have been included.,This paper identifies thematic clusters in KM and OL, evolution of both fields, most cited authors and representative journals by topic.,This is the first paper to jointly analyse the evolution of KM and OL. This paper shows a conceptual absorption of OL into KM, which may enrich academic discussion and also provide some clarity to the conceptualization of these two fields.
81 citations
Cites background from "An Analysis of James March's Explor..."
...…were developed further in the 1990s, when Argote and Epple (1990) described learning curves, Weick (1991) considered OL frequency and forms, March (1991) studied the exploration and exploitation of knowledge, Huber (1991) considered OL constructs (knowledge acquisition, information…...
[...]
12 Aug 2016
TL;DR: The authors explored the virtues of variety against those of linearity in innovation and entrepreneurial ecosystems in exemplary empirical instances, and showed that good progress in regional innovation policy and entrepreneurial accomplishment at regional level proceeds apace.
Abstract: Today, interesting and important interconnections have been made that promise great leaps forward for innovation systems and entrepreneurial ecosystems - especially operating at the regional or sub-national level of the space economy. Of course, there are politics in such relationships. Most notable are those that are critical of anything that “interferes” with market hegemony (neoliberal bias) which has weakened commitments such as those pioneered in South Korea in the early years of the twenty-first century, later to be followed by numerous Scandinavian policy experiments (Denmark, Norway and Sweden) as well as austerity policy to enlarge regional governance spaces, as in Germany and France (not to mention the dismantling in 2010 of Anglo-regional governance in the UK). Meanwhile, however, it can be seen that good progress in regional innovation policy and entrepreneurial accomplishment at regional level proceeds apace. This is known as the “co-operative bias” in contemporary political economy. Entrepreneurial ecosystems and regional innovation systems are excellent examples of “generative growth” mechanisms (floated in Cooke, P, Generative Growth, Knowledge Economies and Sustainable Development: implications for Regional Foresight Policy, 2002) as a counter to Romer-style individualistic endogenous growth theory. The paper explores the virtues of variety against those of linearity in innovation and entrepreneurial ecosystems in exemplary empirical instances.
60 citations
Cites background from "An Analysis of James March's Explor..."
...Here the skills of the other actors in the entrepreneurial “division of labour” are more highly valued for exploitation of a repetitive kind than the often unstable creative processes associated with exploration (March 1991)....
[...]
TL;DR: In this paper, the authors developed a model to explain the multi-level and cross-level relationships between HRM practices and innovation, and proposed that HRM practice fostering individual-, team- and organisational-level learning should form a coherent system to facilitate the emergence of innovation.
Abstract: Drawing on the 4I organisational learning framework, this article develops a model to explain the multi-level and cross-level relationships between HRM practices and innovation. Individual-, team- and organisational-level learning stocks are theorised to explain how HRM practices affect innovation at a given level. Feed-forward and feedback learning flows explain how cross-level effects of HRM practices on innovation take place. In addition, we propose that HRM practices fostering individual-, team- and organisational-level learning should form a coherent system to facilitate the emergence of innovation. The article is concluded with discussions on its contributions and potential future research directions.
58 citations
Cites background or result from "An Analysis of James March's Explor..."
...Innovation, which is defined in a similar fashion as exploration in our analysis, is a variation-increasing process (March, 1991)....
[...]
...Hence, tension is experienced between feed-forward and feedback learning (Crossan et al., 1999), which is manifested in the tension between exploration and exploitation and between risky innovation and proven success (March, 1991; Benner and Tushman, 2003)....
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...trap’, which is where organisations rely on previously successful exploitation at the expense of exploration (March, 1991)....
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...Because exploration captures discovery and innovation and exploitation includes refinement and efficiency (March, 1991), this framework is pertinent to the outcome of interest in this article – innovation....
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...includes refinement and efficiency (March, 1991), this framework is pertinent to the outcome of interest in this article – innovation....
[...]
TL;DR: In this article, the authors investigate foreign market re-entry commitment strategies, namely the changes in the modes of operation (commitment) undertaken by multinational enterprises (MNEs) as they return to foreign markets from which they had previously exited.
Abstract: We investigate foreign market re-entry commitment strategies, namely the changes in the modes of operation (commitment) undertaken by multinational enterprises (MNEs) as they return to foreign markets from which they had previously exited. We combine organisational learning theory with the institutional change literature to examine the antecedents of re-entry commitment strategies. From an analysis of 1020 re-entry events between 1980 and 2016, we find that operation mode prior to exit is a strong predictor of subsequent re-entry mode. Contrary to the predictions of learning theory, we did not find support for the effect of experience accumulated during the initial market endeavour on the re-entry commitment strategies of MNEs. In turn, exit motives significantly impact on the re-entrants’ decision to re-enter via a different mode of operation, by either increasing or decreasing their commitment to the market. We show that re-entrants do not replicate unsuccessful operation mode strategies if they had previously underperformed in the market. When favourable host institutional changes occur during the time-out period, re-entrants tend to increase commitment in the host market irrespective of the degree of prior experience accumulated in the market.
52 citations
TL;DR: In this article, the authors conceptualize that strategic entrepreneurship, as a synthesis of young technology-based firms' opportunity-seeking and advantage-seeking behaviours, can affect both explorative and exploitative innovation activities in these firms, and expect that subsequent innovation ambidexterity affects profitability.
Abstract: Innovation ambidexterity is especially complex for young technology-based firms because they are resource-challenged and knowledge-deficient in strategic terms; but they possess considerable scope for entrepreneurship. Strategic entrepreneurship may provide a solution. Incubators emerged as a policy solution precisely due to this dilemma. We conceptualise that strategic entrepreneurship, as a synthesis of young technology-based firms’ opportunity-seeking and advantage-seeking behaviours, can affect both explorative and exploitative innovation activities in these firms, and expect that subsequent innovation ambidexterity affects profitability. Our empirical analyses reveal complex and competing interrelationships that both ease and exacerbate the tensions associated with innovation ambidexterity. We contribute to theory by testing strategic entrepreneurship as it applies to innovation ambidexterity and evidence behaviours that contribute to its foundations. To entrepreneurs and managers, we offer a set of prescriptions for innovation ambidexterity in young firms that accounts for the complementarities between complex and theoretically opposing constructs.
39 citations
Cites background from "An Analysis of James March's Explor..."
...Under these circumstances, the mediocrity proposed by March (1991) should not arise....
[...]
...Given the tensions inherent in the ambidexterity thesis (Junni et al., 2015; March, 1991; Tushman and O’Reilly, 1996; Zimmermann et al., 2018), EO is a means by which to manage the interfaces between exploration and exploitation....
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...However, there is a danger in assuming that creating high levels of both exploration and exploitation is always beneficial for firms (Cao et al., 2009; March, 1991; cf. Simsek, 2009; Simsek et al., 2009), neglecting the value and purpose of each activity and their conceptual origins and status in such firms....
[...]
...Nonetheless, the lure for young technology-based firms successful at achieving innovation ambidexterity is the ability to secure the benefits of exploration while suffering fewer of its costs, establishing a platform for longer term sustainability, which could not accrue with a focus on exploitation alone (March, 1991)....
[...]
...…there is a danger in assuming that creating high levels of both exploration and exploitation is always beneficial for firms (Cao et al., 2009; March, 1991; cf. Simsek, 2009; Simsek et al., 2009), neglecting the value and purpose of each activity and their conceptual origins and status in…...
[...]
References
More filters
TL;DR: A conceptual absorption of OL into KM is shown, which may enrich academic discussion and also provide some clarity to the conceptualization of these two fields, to jointly analyse the evolution of KM and OL.
Abstract: This paper aims to focus on research regarding organizational learning (OL) and knowledge management (KM), and to specifically investigate whether OL has been conceptually absorbed by KM.,This study is based on 16,185 articles from the Scopus and ISI Web of Science databases, using VantagePoint 10.0 software. The method used in this study is a systematic literature review covering KM and OL publications from the 1970s, when the OL field started to grow, up to 2016.,Nuclear processes of OL, creation and acquisition of knowledge, have been conceptually absorbed by KM literature in the past years.,Only two databases have been considered, Scopus and ISI Web of Science, because of their academic prestige. However, these databases include a large number of articles on KM and OL. Search terms used could exclude some relevant terms, although all major descriptive terms have been included.,This paper identifies thematic clusters in KM and OL, evolution of both fields, most cited authors and representative journals by topic.,This is the first paper to jointly analyse the evolution of KM and OL. This paper shows a conceptual absorption of OL into KM, which may enrich academic discussion and also provide some clarity to the conceptualization of these two fields.
81 citations
12 Aug 2016
TL;DR: The authors explored the virtues of variety against those of linearity in innovation and entrepreneurial ecosystems in exemplary empirical instances, and showed that good progress in regional innovation policy and entrepreneurial accomplishment at regional level proceeds apace.
Abstract: Today, interesting and important interconnections have been made that promise great leaps forward for innovation systems and entrepreneurial ecosystems - especially operating at the regional or sub-national level of the space economy. Of course, there are politics in such relationships. Most notable are those that are critical of anything that “interferes” with market hegemony (neoliberal bias) which has weakened commitments such as those pioneered in South Korea in the early years of the twenty-first century, later to be followed by numerous Scandinavian policy experiments (Denmark, Norway and Sweden) as well as austerity policy to enlarge regional governance spaces, as in Germany and France (not to mention the dismantling in 2010 of Anglo-regional governance in the UK). Meanwhile, however, it can be seen that good progress in regional innovation policy and entrepreneurial accomplishment at regional level proceeds apace. This is known as the “co-operative bias” in contemporary political economy. Entrepreneurial ecosystems and regional innovation systems are excellent examples of “generative growth” mechanisms (floated in Cooke, P, Generative Growth, Knowledge Economies and Sustainable Development: implications for Regional Foresight Policy, 2002) as a counter to Romer-style individualistic endogenous growth theory. The paper explores the virtues of variety against those of linearity in innovation and entrepreneurial ecosystems in exemplary empirical instances.
60 citations
TL;DR: In this paper, the authors developed a model to explain the multi-level and cross-level relationships between HRM practices and innovation, and proposed that HRM practice fostering individual-, team- and organisational-level learning should form a coherent system to facilitate the emergence of innovation.
Abstract: Drawing on the 4I organisational learning framework, this article develops a model to explain the multi-level and cross-level relationships between HRM practices and innovation. Individual-, team- and organisational-level learning stocks are theorised to explain how HRM practices affect innovation at a given level. Feed-forward and feedback learning flows explain how cross-level effects of HRM practices on innovation take place. In addition, we propose that HRM practices fostering individual-, team- and organisational-level learning should form a coherent system to facilitate the emergence of innovation. The article is concluded with discussions on its contributions and potential future research directions.
58 citations
TL;DR: In this article, the authors investigate foreign market re-entry commitment strategies, namely the changes in the modes of operation (commitment) undertaken by multinational enterprises (MNEs) as they return to foreign markets from which they had previously exited.
Abstract: We investigate foreign market re-entry commitment strategies, namely the changes in the modes of operation (commitment) undertaken by multinational enterprises (MNEs) as they return to foreign markets from which they had previously exited. We combine organisational learning theory with the institutional change literature to examine the antecedents of re-entry commitment strategies. From an analysis of 1020 re-entry events between 1980 and 2016, we find that operation mode prior to exit is a strong predictor of subsequent re-entry mode. Contrary to the predictions of learning theory, we did not find support for the effect of experience accumulated during the initial market endeavour on the re-entry commitment strategies of MNEs. In turn, exit motives significantly impact on the re-entrants’ decision to re-enter via a different mode of operation, by either increasing or decreasing their commitment to the market. We show that re-entrants do not replicate unsuccessful operation mode strategies if they had previously underperformed in the market. When favourable host institutional changes occur during the time-out period, re-entrants tend to increase commitment in the host market irrespective of the degree of prior experience accumulated in the market.
52 citations
TL;DR: In this article, the authors conceptualize that strategic entrepreneurship, as a synthesis of young technology-based firms' opportunity-seeking and advantage-seeking behaviours, can affect both explorative and exploitative innovation activities in these firms, and expect that subsequent innovation ambidexterity affects profitability.
Abstract: Innovation ambidexterity is especially complex for young technology-based firms because they are resource-challenged and knowledge-deficient in strategic terms; but they possess considerable scope for entrepreneurship. Strategic entrepreneurship may provide a solution. Incubators emerged as a policy solution precisely due to this dilemma. We conceptualise that strategic entrepreneurship, as a synthesis of young technology-based firms’ opportunity-seeking and advantage-seeking behaviours, can affect both explorative and exploitative innovation activities in these firms, and expect that subsequent innovation ambidexterity affects profitability. Our empirical analyses reveal complex and competing interrelationships that both ease and exacerbate the tensions associated with innovation ambidexterity. We contribute to theory by testing strategic entrepreneurship as it applies to innovation ambidexterity and evidence behaviours that contribute to its foundations. To entrepreneurs and managers, we offer a set of prescriptions for innovation ambidexterity in young firms that accounts for the complementarities between complex and theoretically opposing constructs.
39 citations