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:
| Exploitation | Exploration | |
|---|---|---|
| Strategic intent | Performance and growth, maximising profits in today’s markets | Innovation and breakthrough, long-term survival in future markets |
| Strategic approach | Utilisation of the existing potential | Search for new possibilities |
| Work content | precisely defined and specified | roughly and openly defined, hardly specified |
| Conformity | Compliance with the rules, avoidance of deviations | Breaking the rules, provoking deviations |
| Risk propensity | Minimal risk propensity, risk is seen as a threat | High risk propensity, risk is seen as an opportunity |
| Knowledge base | Improving and extending existing knowledge and skills | Acquisition of completely new expertise and replacement of existing knowledge and skills |
| Key capabilities | Efficiency and accuracy | Creativity and innovation |
References
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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