Exploitation vs. Exploration

Exploitation and exploration are often described as paradoxes, especially since they require completely different modes of thinking and acting. Achieving ambidexterity, in other words the balance between the two disciplines, is therefore considered a challenge for an organisation and its members.

The following table highlights the differences between the two priorities:

Strategic intentPerformance and growth, maximising profits in today’s marketsInnovation and breakthrough, long-term survival in future markets
Strategic approachUtilisation of the existing potentialSearch for new possibilities
Work contentprecisely defined and specifiedroughly and openly defined, hardly specified
ConformityCompliance with the rules, avoidance of deviationsBreaking the rules, provoking deviations
Risk propensityMinimal risk propensity, risk is seen as a threatHigh risk propensity, risk is seen as an opportunity
Knowledge baseImproving and extending existing knowledge and skillsAcquisition of completely new expertise and replacement of existing knowledge and skills
Key capabilitiesEfficiency and accuracyCreativity and innovation

Anderson, N., Potočnik, K., & Zhou, J. (2014). Innovation and creativity in organizations: A state-of-the-science review, prospective commentary, and guiding framework. Journal of Management, 5(40), 1297–1333. https://doi.org/10.1017/CBO9781107415324.004

Andriopoulos, C., & Lewis, M. W. (2009). Exploitation-Exploration Tensions and Organizational Ambidexterity: Managing Paradoxes of Innovation. Organization Science, 20(4), 696–717. https://doi.org/10.1287/orsc.1080.0406

Gibson, C., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of organizational ambidexterity. Academy of Management Journal, 47(2), 209–226. https://doi.org/10.2307/20159573

He, Z.-L., & Wong, P.-K. (2004). Exploration vs. Exploitation: An Empirical Test of the Ambidexterity Hypothesis. Organization Science, 15(4), 481–494. https://doi.org/10.1287/orsc.1040.0078

Levinthal, D. A., & March, J. G. (1993). The myopia of learning. Strategic Management Journal, 14(2 S), 95–112. https://doi.org/10.1002/smj.4250141009

O’Reilly, C. A., & Tushman, M. L. (2013). Organizational Ambidexterity: Past, Present and Future. Academy of Management Perspectives, 27(4), 324–338. https://doi.org/10.5465/amp.2013.0025

March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71. https://doi.org/10.1287/orsc.2.1.71

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