In order to keep pace with a rapidly changing environment, organizations must navigate a fundamental tension between exploration and exploitation. Over time, organizations often drift toward exploitation of known strengths and established resources, but this tendency can be harmful in a dynamic and competitive landscape. A classic simulation by James March (1991) demonstrated the importance of maintaining some degree of belief heterogeneity in an organization for the sake of long-term... Show moreIn order to keep pace with a rapidly changing environment, organizations must navigate a fundamental tension between exploration and exploitation. Over time, organizations often drift toward exploitation of known strengths and established resources, but this tendency can be harmful in a dynamic and competitive landscape. A classic simulation by James March (1991) demonstrated the importance of maintaining some degree of belief heterogeneity in an organization for the sake of long-term learning. In March’s lineage, this thesis examines the effects of various exploratory strategies (i.e., individual experimentation, codification frequency, structural modularity, and employee turnover) on organizational learning in a bottom-up, networked, interpersonal learning context. Results demonstrate the complex interdependency of these variables in the exploration/exploitation tradeoff. Exploratory analyses suggest that a small degree of random individual experimentation has a favorable reward-to-risk ratio and that it is preferable to turnover as an exploratory strategy. Show less
