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Disentangling the exploration/exploitation cacophony: A strategy-oriented typology for incumbents.

Bertels, H.M.J. & Koen, P.A. Disentangling the exploration/exploitation cacophony: A strategy-oriented typology for incumbents.

Abstract

March's seminal article on exploration and exploitation has led to a plethora of interpretations of what exploration and exploitation are. This conceptual diversity is reflected in the empirical literature and impedes the accumulation of research findings into a coherent research body. Moreover, despite evidence from previous research that exploration is multifaceted, most empirical research continues to use a single exploration construct. This limits our ability to build a more fine-grained understanding of how distinctive types of exploration should be managed differently. We build on capability, prospect and institutional theory to discern three dimensions along which established organizations can exploit or explore: technology, financial hurdle rate, and value network. Based thereupon, we distinguish between one exploitative and four exploratory strategies for incumbents. We make suggestions on how to manage the exploration/exploitation interface for each of these strategies and end by discussing how our framework sheds new light on the exploration/exploitation literature.

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