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.
