A closer look at March’s notion of Exploitation: Organisational knowledge stocks and exploitative new radical products development

What is it about?

Although exploitation displaces exploration in organisational innovation through the use of existing knowledge to achieve more timely and predictable returns, research on the relative relationships between existing internal organisational knowledge stocks and subsequent organisational exploitation is largely absent. In particular, the associations between organisational exploitation and, respectively, the distal-proximal technological experience and radical-incremental innovative experience, remain to be empirically tested. There is therefore a lack of clarity between organisational exploitation and these two dimensions of organisational experience which traditionally have been associated with the exploration-exploitation construct. Using multilevel mixed-effects regression analysis, this study reveal that proximal-radical experience and distal-radical experience have a positive relationship with the subsequent exploitative development of new radical products. Proximal-incremental experience, conversely, has a negative relationship with the former. This latter finding is contrary to prior research that have found that radical innovative experience and incremental innovative experience are positively related to, respectively, exploration and exploitation.

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