The complexity of exploration and exploitation in organizations

The presented work aims to study the exploration-exploitation problem in a complex organization. The study roots in a rich and influential research stream, starting from the paper of James March (1991) who created a model to address interesting questions on the balance between exploration and exploitation. In the presented study, the organization is considered embracing different aspects of the mechanisms of knowledge exchange. First, the organization is modelled as a multicultural centre of activities where the knowledge is no universal but is composed by different areas of knowledge. Second, different communication channels are modelled together, covering most of the chances individuals have to seek for knowledge. Autonomous search, search through propinquity, search through friendship, and search through governance (itself split into project and department meetings) are the channels modelled. The study shows interesting results. First, March's output seems to be valid within a delimited range of members in an organization. Second, the environment has a huge impact on exploration exploitation problem. With different channels activated and different settings, the exploration exploitation output of the organization could be extremely different. Third, the study of the connections network shows the presence of a cost in terms of energy in maintaining the communication channel. Moreover, the network tends to change its structure according to the active channels. Last, the complexity of exploration exploitation problem is demonstrated by the presence of emergent phenomena. The study covers many different aspects and discusses about important points of the exploration-exploitation dilemma. Moreover, such a sophisticated model opens different directions for future studies and offers practical implications for balancing exploration-exploitation within organizations.