6 Exploration and Exploitation in individuals Flashcards
What key cognitive process enables individuals to switch effectively between exploitation and exploration decisions?
Attentional control. The study finds that the ability to disengage from current tasks and focus on alternative options depends on stronger activation in brain regions linked to top-down attention.
How do exploitation decisions differ from exploration decisions in terms of brain region activation?
Exploitation decisions activate reward-related brain regions (e.g., ventro medial prefrontal cortex, hippocampus), reflecting refinement and optimization of known options. In contrast, exploration decisions strongly activate frontal and parietal areas associated with attentional control, uncertainty evaluation, and shifting away from known rewards.
What does the involvement of the locus coeruleus-norepinephrine (LC-NE) system indicate during exploration decisions?
The LC-NE system supports attentional disengagement from current choices. Increased activity here is linked to exploring new alternatives rather than sticking to familiar, exploited ones, signaling the need for cognitive flexibility under uncertainty.
According to the study, how is better decision-making performance related to exploration and exploitation behavior?
Better performance is not about exploring or exploiting more overall, but about knowing when to switch. Individuals who exhibit stronger activation in attentional-control regions (especially the frontopolar cortex) perform better, as they can identify the right moments to move from exploitation to exploration.
What are the three key factors that determine what an established organization can and cannot do when facing disruptive change?
The three factors are resources, processes, and values. While resources are the tangible and intangible assets, processes are the established ways of working, and values are the criteria by which decisions are made and priorities set.
Why are established firms often good at sustaining innovations but struggle with disruptive innovations?
Established firms have processes and values optimized for improving existing products that their best customers already appreciate. These same processes and values often prevent them from pursuing disruptive innovations, which initially are less profitable, target smaller or emerging markets, and don’t align with the company’s established priorities.
How can managers create new capabilities in an organization to address disruptive change?
Managers can develop new capabilities by forming new teams or units dedicated to the emerging challenge. Options include creating heavyweight teams within the company, spinning out a separate organization that develops its own processes and values, or acquiring another firm with the necessary processes and values and allowing it to operate autonomously.
When integrating an acquired company, how should managers preserve the capabilities they purchased?
If the acquired company’s strength lies in its unique processes and values, keep it separate to maintain its way of working. If the acquisition’s primary value is in its resources (e.g., technology, people), integrate those resources into the parent company’s established processes.
Please mark as True or False the following statements about “Understanding the Exploration–Exploitation Dilemma: An FMRI Study of Attention Control and Decision-Making Performance” (Laureiro-Martinez et al., 2015).
A takeaway from the study is that the cognitive processes associated with attentional control can be trained and improved
Exploitation choices are easier for impulsive individuals
Exploitation is easier to pursue because the rewards are more certain than with exploration
Understanding when to appropriately switch from exploitation to exploration leads to higher decision-making performance
A takeaway from the study is that the cognitive processes associated with attentional control can be trained and improved
True. The authors suggest that individual differences in attentional control (a key cognitive process that supports switching between exploration and exploitation) can be developed over time, implying that training can improve these processes.
Exploitation choices are easier for impulsive individuals
False. Impulsive individuals often seek novelty or instant gratification; making disciplined “exploit” decisions (which focus on reliably harvesting known rewards) is not necessarily easier for them.
Exploitation is easier to pursue because the rewards are more certain than with exploration
True. By definition, exploitation involves leveraging known options with predictable returns, making it less risky and thus often “easier” than exploration, whose outcomes are more uncertain.
Understanding when to appropriately switch from exploitation to exploration leads to higher decision-making performance
True. The study’s overall message is that effective performance comes from balancing and dynamically switching between exploration and exploitation. Knowing when to shift modes is critical for better decision outcomes.
Please mark as True or False the following statements about “Meeting the Challenge of Disruptive Change” (Christensen and Overdorf, 2000).
Processes and values are harder to change in larger organizations than in start-ups
Managers should decide how to develop new capabilities (i.e., internally, spinout, acquisition) based on where such capabilities reside (i.e., resources, processes, values)
When new resources (e.g., people) are gained through acquisition, they should not be integrated into the parent organization to avoid that they are affected by existing processes and values
When capabilities are developed internally, there is no need to create a new organizational space (e.g., pull relevant people into a new team)
Processes and values are harder to change in larger organizations than in start-ups
True. In large, established firms, both processes (the ways things get done) and values (the criteria by which decisions are made) tend to be deeply embedded and thus more resistant to change than in smaller or newer organizations.
Managers should decide how to develop new capabilities (i.e., internally, spinout, acquisition) based on where such capabilities reside (i.e., resources, processes, values)
True. One of the key points in the article is that managers need to assess whether new capabilities are primarily about new resources (e.g., talent, technology), new processes, or new values—and then choose the best way (e.g., internal development, spinout, or acquisition) to build or acquire those capabilities.
When new resources (e.g., people) are gained through acquisition, they should not be integrated into the parent organization to avoid that they are affected by existing processes and values
False. Christensen and Overdorf do not prescribe always keeping newly acquired people separate. Depending on the nature of the disruption and the capabilities needed, sometimes you do need to create a separate unit, but in other cases it can be essential to integrate new resources into the parent organization. The recommendation depends on how the existing processes and values match (or clash) with the demands of the disruptive innovation.
When capabilities are developed internally, there is no need to create a new organizational space (e.g., pull relevant people into a new team)
False. Even when developing capabilities in-house, the authors often suggest creating dedicated teams or separate structures that allow these new capabilities to flourish. Simply relying on the existing organizational structure (with its ingrained processes and values) can hamper the development of disruptive innovations.
What is attention?
Attention … “is the taking possession by the mind, in
clear and vivid form, of one out of what seem several
simultaneously possible objects or trains of thought,
focalization, concentration, of consciousness are of its
essence. It implies withdrawal from some things in order to deal effectively with others, and is a condition which has a real opposite in the confused, dazed, scatter brained state which in French is called distraction, and Zerstreutheit in German.”
Two main types of attention
Bottom Up and Top Down = Attention Control
