Balancing Exploration and Exploitation Through Structural Design: The Isolation of Subgroups and Organizational Learning

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The classic trade-off between exploration and exploitation in organizational learning has attracted vigorous attention by researchers over the last two decades. Despite this attention, however, the question of how firms can better maintain the balance of exploration and exploitation remains unresolved. Drawing on a wide range of research on population and organization structure, we argue that an organization divided into semi-isolated subgroups may help strike this balance. We simulate such an organization, systematically varying the interaction pattern between individuals to explore how the degree of subgroup isolation and intergroup connectivity influences organizational learning. We also test this model with a range of contingency variables highlighted in the management research. We find that moderate levels of cross-group linking lead to the highest equilibrium performance by enabling superior ideas to diffuse across groups without reducing organizational diversity too quickly. This finding is remarkably resilient to a wide range of variance in factors such as problem complexity, environmental dynamism, and personnel turnover.
Publisher
INFORMS
Issue Date
2010-05
Language
English
Article Type
Article
Keywords

COLLABORATION NETWORKS; COMPLEX NETWORKS; DECISION-MAKING; LOCAL SEARCH; WEAK TIES; KNOWLEDGE; PERFORMANCE; INNOVATION; MODEL; IMPACT

Citation

ORGANIZATION SCIENCE, v.21, no.3, pp.625 - 642

ISSN
1047-7039
DOI
10.1287/orsc.1090.0468
URI
http://hdl.handle.net/10203/102357
Appears in Collection
MT-Journal Papers(저널논문)
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