Exploration, Exploitation and Ambidexterity Flashcards
1
Q
Definition Exploration
A
- Experimentation with new alternatives
- Uncertain, distant and often negative returns
- e.g. Ford (Car ownership/use, autonomous vehicles)
2
Q
Definition Exploitation
A
- Refinement and extension of existing competencies, technologies and paradigms
- Positive, proximate and predictable returns
- e.g. Ford (Small car challenge, infotainment software)
3
Q
The case for ambidexterity - General
A
Both exploration and exploitation are required for adaptation in incompletely known and changing environments to achieve persistent success.
4
Q
The case for ambidexterity - Exploitative
- Strategic intent
- Critical tasks
- Competencies
- Structure
- Controls, rewards
- Culture
- Leadership role
A
- Strategic intent: Cost, profit
- Critical tasks: Operations, efficiency, incremental innovation
- Competencies: Operational
- Structure: Formal, mechanistic
- Controls, rewards: Margins, productivity
- Culture: Efficiency, low risk, quality, customers
- Leadership role: Authoritative, top-down
5
Q
The case for ambidexterity - Explorative
- Strategic intent
- Critical tasks
- Competencies
- Structure
- Controls, rewards
- Culture
- Leadership role
A
- Strategic intent: Innovation, growth
- Critical tasks: Adaptability, new products, breakthrough innovation
- Competencies: Entrepreneurial
- Structure: Adaptive, loose
- Controls, rewards: Milestones, growth
- Culture: Risk taking, speed, flexibility, experimentation
- Leadership role: Visionary, involved
6
Q
Temporal ambidexterity (6)
A
- Organizations oscilate between different structures
- Exploration and exploitation are emphasized sequentially rather than simultaneously -> long phases of exploitation are disrupted by short bursts of exploration
- Particularly suited for small organizations due to limited resources
- Decentralization is used to ignite innovation and change
- Centralization is used to increase coordination and efficiency
- Main challenge: managing transition between exploration and exploitation
7
Q
Structural ambidexterity (7)
A
- Organizations are divided into separate units with different structures
- Flexible “innovative units” explore new areas for growth
- More formal “exploitative units” ensure efficient operation in the existing business
- Exploration/exploitation are adressed by different employees and organizational units
- Exploratory units are small, decentralized, loosely structured, and succeed by experimenting, creating small wins and losses
- Exploitative units are large, centralized, tightely structured, succeed by maximizing efficiency/control
- Main challenge: coordinating across units and managing tensions
8
Q
Contextual ambidexterity (5)
A
- Organizations create supplemental network structures to complement the formal primary structure
- Employees switch between the two types of structures depending on their respective tasks
- Both activities are adressed by the same employee in different structural environments
- Manage trade-offs by supporting a culture emphasizing both exploration and exploitation
- Main challenge: manage tensions within a group or individual
9
Q
Domain ambidexterity (4)
A
- Separates exploration and exploitation across firm boundaries (i.e. governance forms)
- Explore via R&D alliance/Exploit via outlicensing/explore via M&A
- Management of interfaces between functional domains is crucial
- Main challenge: degree of control over partner, sufficient absorptive capacity to realize benefits