title: Challenging the exploration and exploitation dichotomy: towards theory building in innovation management
Creators: name: Zhou, Qijun
Publisher: name: University of Glasgow
Year: 2020
Subjects: subject: Exploration and exploitation, ambidexterity, innovation management.

description: The conceptual dichotomy between exploration and exploitation, importantly highlighted in March’s (1991) seminal paper, has been widely employed to study innovation management processes and resource allocation decisions in organisations. Despite its extensive usage, the validity of this dichotomy has not been subjected to adequate theoretical scrutiny and empirical support. Therefore, this thesis provides a critical examination of the origins and consequences of exploration and exploitation, and questions this dichotomy especially as pertaining to its application in innovation management. It challenges the taken-for-granted assumption that these two concepts refer to distinct and observable decision-making processes and concludes that this is an assumption largely unwarranted. A systematic literature review about the use of this dichotomy was conducted in the context of innovation management and the findings confirmed that although studies have proposed related notions, such as ambidexterity, as a way to overcome the supposed trade-off between exploration and exploitation. It is confirmed that there has been no attempt hitherto to question the validity of this dichotomy. Also, little empirical evidence was found to suggest that the understanding of managing innovation can be enhanced through a reliance on this dichotomy. Thus, it is argued that the employment of this dichotomy in practices for managing innovation has not been justified and should be investigated directly through empirical evidence. To investigate exploration and exploitation both as performance criteria and internal processes, a mixed-method design that utilises data envelopment analysis (DEA) as quantitative method, and a focus group supplemented by interviews as the qualitative method was relied on. Findings from DEA indicated that exploration and exploitation can be used as criteria for performance evaluation in innovation. However, findings from the qualitative part of the study suggested that in practices for innovation management, exploration and exploitation are not viewed as separated internal processes; hence, this distinction is not featured in decision-making during innovation processes. This means that the classification based on exploration and exploitation is not used for appraisal of activities or projects in managing innovation. It is therefore concluded that the dichotomy of exploration and exploitation is not valid in practices for innovation management and thus its application in theorising innovation should be reconsidered; thus, studies of innovation management should not unquestioningly rely on this dichotomy, because it does not reflect organisational reality. Consequently, this study contributed to innovation management literature by pointing to alternative possible directions, such as ‘problem-solving’, in theorising the processes of innovation management for future studies.