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Abstract

abstractThe benefits of strategically balancing exploitation and exploration are well documented in the literature. Nonetheless, many firms tend to overemphasize exploitation efforts, a situation commonly referred to as the ‘success trap’. Previous studies have attributed this behaviour to managerial incompetence or myopia. However, some management teams appear to adequately recognize the exploration need, while not being able to bring about the required strategic change. We draw on system dynamics modelling to investigate this phenomenon. A simulation model is developed and then the behaviour of a selected firm is replicated to uncover the underlying processes. As such, we develop a process theory of the success trap at the managerial level, coined the ‘suppression process’. This process theory describes and explains how the interplay between top managers, board members, and exploitation–exploration activities can trap the firm in the suppression of exploration.

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... To learn from this unsuccessful innovation process, we examine how managers of an SME dynamically (re)configured the interface between old and new businesses while exploring green innovations. The research strategy of this paper is to analyze exploratory innovation processes in a longitudinal process study (Huber and Van de Ven, 1995) in line with other ambidexterity scholars who have adopted this approach (Walrave et al., 2011;Tripsas, 2009;Khanagha et al., 2014). ...
... Learning from a case of failed exploration, this paper aims to examine the problems which occurred over time in managing the interface between the exploratory and exploitative business. In line with ambidexterity scholars who used the case study method (Adler et al., 1999;Tripsas and Gavetti, 2000;Walrave et al., 2011), the research strategy of this paper is to examine exploratory innovation processes and obstacles across value chain functions (research & development, production and sales & marketing), across various organizational levels (top-management, departments, individuals) as well as internal and external exploration (through alliances) in an in-depth longitudinal case study (Yin, 2014). ...
... According to (Yin, 2014), single case-studies are adopted for research that require an in-depth examination of a contemporary topic. Other authors including Adler et al. (1999), (Tripsas and Gavetti, 2000), Walrave et al. (2011) used this method to study the management of ambidexterity of time. While the larger part of the time frame of 10 years was subject to ex-post analysis, we were able to observe the last two years of the unfolding innovation process allowing us to collect first hand insights on the process. ...
Thesis
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The importance of firms to participate in sustainable development has been widely discussed in the literature. Yet, progress is still slow in light of the size and the urgency of the challenge. In terms of sustainability management, the challenge is to engage firms in sustainable development. This includes all firms, also SMEs that represent globally about 70% of pollution but have so far received less attention. Sustainability-oriented innovation (SOI) in the form of new products that lessen negative environmental impact, or even create a positive impact on the environment and positive value for society can play an important role, particularly at established SMEs who see business opportunities in sustainable development and consider possible diversifications into new sustainability markets. Whereas the extant literature discusses what SOIs are and why firms develop them, little is known about how they are developed. To enable firms to innovate for sustainability, it is essential to know more about how SOI are developed. This process is considered as a very difficult one, with many firms failing. The aim of this doctoral research project is to examine how SOIs dynamically unfold at SMEs and how they can be managed. Innovation processes at established SMEs are analyzed with the Fireworks innovation process model. The SOI specific challenges allow advances in the model to be achieved for this context. The findings reveal that SOI unfolds is an emergent, somewhat chaotic way, that duration and outcome are uncertain, that the overall journey is composed of multiple intertwined innovation paths, of which several will likely lead to setbacks. Four practices can help manage this process: first, the creation of a dedicated organization unit for exploration, second intelligent learning for efficient exploration, third in-depth investigation of the related technological innovation system, and fourth careful planning of the integration into the core business for commercialization. This research contributes to the SOI literature by advancing the Fireworks model and thereby proposing a model of how SOIs dynamically unfold. The model is both holistic and detailed, which opens several avenues for future research. Furthermore, the research contributes to management practice by providing a heuristic to manage SOI development at SMEs.
... However, despite the relative conceptual consensus in recent literature that both exploration and exploitation should be seen as forms of search and adaptation, albeit of different types (Gupta et al., 2006;Lavie et al., 2010), the literature has frequently equated the tension between exploration and exploitation with the tension between adaptability and efficiency (e.g., Benner and Tushman, 2003;Adler et al., Winter, 2009;Posen and Levinthal, 2012). The emphasis of research on organizational ambidexterity has typically been on ensuring sufficient exploration in dynamic environments (e.g., Levinthal and March, 1993;Benner and Tushman, 2003;Siggelkow and Levinthal, 2003;Siggelkow and Rivkin, 2006;Walrave et al., 2011), and the conditions in which organizations need to conduct exploitative adaptation have received relatively little attention. ...
... In the organizational adaptation literature, adaptability is often, implicitly or explicitly, considered mainly as a problem of ensuring sufficient exploration (e.g., Levinthal and March, 1993;Benner and Tushman, 2003;Siggelkow and Levinthal, 2003;Adler et al., Winter, 2009;Walrave et al., 2011). This is exemplified in the review by Lavie et al. (2010: 116), who consider it a given that 'flexibility and change are associated with exploration, stability and inertia are associated with exploitation'. ...
... Although some scholars have argued that exploration and exploitation draw on different resources and antecedents and thus may not pose a direct tradeoff (Baum et al., 2000;Katila and Ahuja, 2002;He and Wong, 2004), conceptualizing the explorationexploitation balance as a resource allocation decision has two advantages. First, it is consistent with the generally accepted conceptualization of exploration and exploitation as two distinct organizational processes competing for scarce resources (March, 1991;Uotila et al., 2009;Lavie et al., 2010;Walrave et al., 2011). Second, even to the extent that exploration and exploitation may draw on different resources, organizations still make implicit or explicit choices between the two (March, 1991), and in formal modeling, conceptualizing the tradeoff as a resource allocation decision allows the direct comparison of the relative advantage of exploratory versus exploitative adaptation in different environmental contexts, abstracting away from potentially confounding factors such as resource specificity or conflicting organizational routines. ...
Article
Using a simulation of organizational adaptation in turbulent and complex landscapes, I examine how the optimal balance between exploration and exploitation is influenced by the organization's task environment. I find that, contrary to conventional wisdom, increasing exploration relative to exploitation is not always the optimal response to increased environmental turbulence or complexity. Turbulence is found to have a curvilinear effect on the optimal share of exploratory versus exploitative adaptation, with the relative importance of exploitation greatest at moderate degrees of turbulence. While environmental complexity is found to have a generally positive effect on the optimal share of exploration, the effects of complexity and turbulence are found to interact and, jointly, to increase the relative importance of exploitative adaptation over exploratory adaptation. These findings suggest that the proper exploration–exploitation balance depends, in complex ways, on the pressures for global versus local adaptability posed by the interaction of turbulence and complexity.
... In the domain of management science, many scholars and practitioners have looked into this tension between the exploitation of previous knowledge and the exploration of new avenues for producing new knowledge and organizational capabilities (Repenning and Sterman, 2002;Garcia et al., 2003;Walrave et al. 2011;Morrison, 2012;Rahmandad, 2012). Most studies have drawn upon this exploitationexploration tradeoff and James March's position that "central to a firm's survival over time is its ability to exploit existing assets and knowledge bases and simultaneously explore new systems of work and new technologies to improve organizational capabilities" (March, 1991). ...
... Some studies in balancing exploitation and exploration have looked into the role of uncertainty and dynamism of the environment in which organizations operate (Walrave et al., 2011). Their results indicated that environmental dynamism (e.g., information uncertainty, fluctuations of demands, changing competition) plays a significant role in the relative impact of exploitation and exploration; that is, dynamism favored continuing improvements in exploration where a greater impact of productivity could be achieved. ...
... Environmental dynamism (D) is a complex variable that refers to a range of situations where novel features and surprises exist, demands and resources fluctuate over time, it is uncertain how existing methods would work and so forth. Walrave et al. (2011) have presented elaborate indices of dynamism in the context of commercial organizational settings. In the present study, a simplified index (D) has been used to captured these situations in general, without elaborating further on the nature of dynamism. ...
Article
In human factors and safety, the principle of Efficiency-Thoroughness-Tradeoff (ETTO book of Hollnagel, 2009) has stimulated a new perspective on how safety events may arise when organizations increase pressures at work to produce more, faster but with less resources. Several studies have provided evidence of the ETTO principle in healthcare, manufacturing, maintenance, maritime, aviation and air traffic control. This paper seeks to look deeper into the mechanisms and dynamics of ETTO by using a system dynamics approach of similar exploitation-exploration tradeoffs as applied in the context of management science. The model has looked into the dynamics of two variants of thoroughness, that is, compensation tactics and explorative strategies. Simulation trials with a system dynamics model have identified ‘tipping points’ where production challenges cannot be met by continuing to do more by exploiting existing resources. Results also indicate that exploration can become a source of organizational slack that can be traded in to increase capabilities and hence, productivity up to a certain point. ETTO situations have also been examined in conditions of environmental dynamism (e.g., information uncertainty, fluctuations of demands and borderline conditions) that affect the effectiveness of operations and long-term capabilities. Finally, the system dynamics model has looked into ways that exploration could be enhanced by means of articulation and learning. By using a simulation model, this article shows how quantitative modeling can provide additional insights into the ETTO principle.
... This one-sided managerial focus tends to result in the so-called "failure trap" (Levinthal and March, 1993;Andriopoulos and Lewis, 2009). On the other hand, a strong focus on exploitation might result in relatively certain returns but also discourages more radical learning, and is therefore likely to undermine the firm's adaptability (Teece et al., 1997;Benner and Tushman, 2003;Walrave et al., 2011). This phenomenon has been called the "success trap" (Levinthal and March, 1993). ...
... As a consequence, recessions provide few opportunities for accelerated firm growth. If these opportunities are not explored, a recession is likely to reinforce organizational decline (Walrave et al., 2011). Marketing scholars have long maintained that contractions, compared to expansions, present managers with the rare opportunity to boost their firms' market share and long-term profitability (O'Malley et al., 2011;Steenkamp and Fang, 2011). ...
... This decrease can give rise to a vicious feedback loop, in which the negative performance trend further deteriorates the alignment between environmental demands and the balance of attention to EE, which in turn accelerates organizational decline (Leonard-Barton, 1992;Levinthal and March, 1993). In responding to economic recessions and other external threats, senior managers frequently let their firms slip into such a trap (Schmitt et al., 2010;Walrave et al., 2011). In contrast, a vicious feedback loop is (far) less likely to develop in a recovery because of the general rise in output levels (Deleersnyder et al., 2004). ...
Article
Full-text available
Managerial attention to exploitation and exploration has a strong influence on organizational performance. However, there is hardly any knowledge about whether senior managers need to adjust their distribution of attention to exploitation and exploration in response to major changes in demand patterns in their industry. Drawing on the analysis of a panel data set of 86 firms in the information technology industry exposed to an economic recession and recovery, we find that successfully navigating an economic downturn demands more managerial attention to exploration, while leveraging the subsequent upswing requires more attention to exploitation. As such, this study contributes to the literature by providing a dynamic perspective on ambidexterity: that is, senior managers need to redistribute their attention to exploration and exploitation, to effectively meet the changing environmental demands over time.
... In other words, intervention studies pertain to how an issue or problem can be corrected (Forrester, 1961) and rely on model-based experimentation. Such explorations, often referred to as "what-if" experiments (Morecroft, 1988), typically are conducted through ad hoc adjustments of key model parameters (e.g., Repenning, 2001;Walrave et al., 2011). Yet such a manually conducted approach implies that most modelers work with a very limited number of experiments and evaluations, simply due to time constraints, which in turn limits the policy formulation and analysis phase of SD (Sterman, 2000). ...
... Beyond model calibration and validation, system dynamicists frequently seek to determine the effect that parameter changes have on system behavior, through what-if experiments. Such input manipulations often appear in the context of intervention studies (e.g., Romme et al., 2010;Repenning, 2001;Walrave et al., 2011). For example, explorations might address which intervention size, at which moment in time, can break a reinforcing behavior that has manifested itself as an unanticipated side effect, as exemplified by "fixes that fail" structures (Senge, 1990). ...
... The method differs from existing frameworks (e.g., Kwakkel and Pruyt, 2015;Yücel and Barlas, 2011), in that it is designed specifically to calculate intervention thresholds (graphs) and is more lightweight as a result. In turn, system dynamicists can go beyond manually conducted, ad hoc experiments-as are commonly presented in management and organization science (e.g., Romme et al., 2010;Walrave et al., 2011)which should stimulate new studies of intervention dynamics. ...
Article
Full-text available
This paper details a semi-automated method that can calculate intervention thresholds—that is, the minimum required intervention sizes, over a given time frame, that result in a desired change in a system's output behavior pattern. The method exploits key differences in atomic behavior profiles that exist between classifiable pre-and post-intervention behavior patterns. An automated process of systematic adjustment of the intervention variable, while monitoring the key difference, identifies the intervention thresholds. The results in turn can be studied and presented in intervention thresholds graphs in combination with final runtime graphs. Overall, this method allows modelers to move beyond ad hoc experimentation and develop a better understanding of intervention dynamics. This article presents an application of the method to the well-known World 3 model, which helps demonstrate both the procedure and its benefits.
... This one-sided managerial focus tends to result in the so-called "failure trap" (Levinthal and March, 1993;Andriopoulos and Lewis, 2009). On the other hand, a strong focus on exploitation might result in relatively certain returns but also discourages more radical learning, and is therefore likely to undermine the firm's adaptability (Teece et al., 1997;Benner and Tushman, 2003;Walrave et al., 2011). This phenomenon has been called the "success trap" (Levinthal and March, 1993). ...
... As a consequence, recessions provide few opportunities for accelerated firm growth. If these opportunities are not explored, a recession is likely to reinforce organizational decline (Walrave et al., 2011). Marketing scholars have long maintained that contractions, compared to expansions, present managers with the rare opportunity to boost their firms' market share and long-term profitability (O'Malley et al., 2011;Steenkamp and Fang, 2011). ...
... This decrease can give rise to a vicious feedback loop, in which the negative performance trend further deteriorates the alignment between environmental demands and the balance of attention to EE, which in turn accelerates organizational decline (Leonard-Barton, 1992;Levinthal and March, 1993). In responding to economic recessions and other external threats, senior managers frequently let their firms slip into such a trap (Schmitt et al., 2010;Walrave et al., 2011). In contrast, a vicious feedback loop is (far) less likely to develop in a recovery because of the general rise in output levels (Deleersnyder et al., 2004). ...
Data
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Data appendix to the article "Managerial attention to exploitation versus exploration"
... In contrast, the Kirznerian view is more linked to an economic perspective: entrepreneurs are able to see where a good can be sold at a higher price than that for which it can be bought (Busenitz, 1996). Walrave, van Oorschot, and Romme (2011) argued that volatile ecosystems require a more explorative (Schumpetarian) approach than calm ecosystems, and highly competitive markets require a more exploitative (Kirznerian) approach than more monopolistic markets. ...
... These expenses come from SMEs and large incumbent organizations (Tidd & Bessant, 2015), which are much more sensitive to market conjuncture (Verhoeven, Span, & Prince, 2015). Other industrial ecosystems are also experiencing increasing competitiveness (Dankbaar, Smals, & Vissers, 2014) which creates a greater need for exploration and innovation (Walrave et al., 2011). ...
Research
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Business innovation is a multidisciplinary area of expertise that bridges the gap between traditional fields of study such as business administration, organizational studies, marketing, arts, design, engineering and entrepreneurship. This article tries to formulate a definition for business innovation, proposes a framework for business innovation and sets the outlines of a competency framework for education programs in Business Innovation.
... As such, we subsequently drew on systems thinking, representing our findings in the form of a Causal Loop Diagram (CL : Sterman 2000), to arrive at a dynamic explanation of how academics evolved in their boundary spanning approach and ability over time (Fig. 3). CLDs originated in the system dynamics literature (Sterman 2000) and have become common in management and organization studies (e.g., Van Oorschot et al. 2013;Perlow et al. 2002;Walrave et al. 2011;Dattée et al. 2018), to capture and explain feedback driven systems involving dynamic behavior over time (Lin et al. 2006;Stacey 1993). We observed significant behavioral changes about halfway into the project. ...
... This implies scholars might start looking beyond (fixed) antecedents and assumed linear effects to explain academic engagement (outcomes), and consider more complex matters such as the dynamic learning behavior described in this study. In addition to applying CLDs, system dynamics modeling may prove a particularly valuable research method (seeSterman 2000;Walrave et al. 2011). Furthermore, we expose ways development of boundary spanning abilities in the context of academic engagement might be traced. ...
Preprint
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Research on academic engagement and technology transfer or commercialization offers important insights into the relationship between characteristics, activities and abilities of individual academic researchers, with outcomes such as successful technology transfer and commercialization. In particular, the activity of boundary spanning proves central in the successful transfer and commercialization of university developed technologies. However, the process by which academic researchers become boundary spanners remains relatively unexplored. This investigation serves to shed new light on the matter. We draw on an in-depth case study of a large European publicly funded initiative, directed to stimulate industry adoption of a university-developed technology across Europe. Our rich dataset is a result of following the project from start to finish, triangulating from multiple sources over a three-year period. Our analyses offer novel insight into the role of perspective taking as a mechanism both enabling academics to understand knowledge boundaries faced during engagement activities and a critical input to developing and improving boundary spanning abilities. Our findings offer important implications for research on academic engagement and technology commercialization.
... Learning from a case of failed exploration, this paper aims to examine the problems which occurred over time in managing the interface between the exploratory and exploitative business. In line with ambidexterity scholars who used the case study method (Adler et al., 1999;Tripsas and Gavetti, 2000;Walrave et al., 2011), the research strategy of this paper is to examine exploratory innovation processes and obstacles across value chain functions (research & development, production and sales & marketing), across various organizational levels (top-management, departments, individuals) as well as internal and external exploration (through alliances) in an in-depth longitudinal case study (Yin, 2014). ...
... According to (Yin, 2014), single case-studies are adopted for research that require an in-depth examination of a contemporary topic. Other authors including Adler et al. (1999), (Tripsas and Gavetti, 2000), Walrave et al. (2011) used this method to study the management of ambidexterity of time. While the larger part of the time frame of 10 years was subject to ex-post analysis, we were able to observe the last two years of the unfolding innovation process allowing us to collect first hand insights on the process. ...
Conference Paper
Full-text available
A central issue in innovation management is the undesirable spillover of harmful routines and cognitive representations from core business to the exploratory innovation space, as dealt with in ambidexterity research. This paper examines a conventional manufacturing SME in a business-to-business market that developed renewable energy technologies in the scope of a new business unit, but has ultimately failed in the market. The aim is to examine how the interface between the old and new business was managed over time. Using an in-depth qualitative longitudinal case study, we investigated innovation processes over time and identified three major sources of failure. First, an organizational separation drift from a textbook-like to a looser form of separation allows for undesirable spillover of routines cannibalizing the new business over time. Second, a mismatch exists between the intended product-market strategy and the actual product-market exploration. A third source of failure is the simultaneous coevolution of several modes of separation, which increases management complexity.
... As such, we subsequently drew on systems thinking, representing our findings in the form of a Causal Loop Diagram (CLD: Sterman, 2000), to arrive at a dynamic explanation of how academics evolved in their boundary spanning approach and ability over time (Fig. 3). CLDs originated in the system dynamics literature (Sterman, 2000) and have become common in management and organization studies (e.g., Dattée et al., 2018;Perlow et al., 2002;Van Oorschot et al., 2013;Walrave et al., 2011), to capture and explain feedback driven systems involving dynamic behavior over time (Lin et al., 2006;Stacey, 1993). We observed significant behavioral changes about halfway into the project. ...
... This implies scholars might start looking beyond (fixed) antecedents and assumed linear effects to explain academic engagement (outcomes), and consider more complex matters such as the dynamic learning behavior described in this study. In addition to applying CLDs, system dynamics modeling may prove a particularly valuable research method (see Sterman, 2000;Walrave et al., 2011). Furthermore, we expose ways development of boundary spanning abilities in the context of academic engagement might be traced. ...
Article
Full-text available
Research on academic engagement and technology transfer or commercialization offers important insights into the relationship between characteristics, activities and abilities of individual academic researchers, with outcomes such as successful technology transfer and commercialization. In particular, the activity of boundary spanning proves central in the successful transfer and commercialization of university developed technologies. However, the process by which academic researchers become boundary spanners remains relatively unexplored. This investigation serves to shed new light on the matter. We draw on an in-depth case study of a large European publicly funded initiative, directed to stimulate industry adoption of a university-developed technology across Europe. Our rich dataset is a result of following the project from start to finish, triangulating from multiple sources over a three-year period. Our analyses offer novel insight into the role of perspective taking as a mechanism both enabling academics to understand knowledge boundaries faced during engagement activities and a critical input to developing and improving boundary spanning abilities. Our findings offer important implications for research on academic engagement and technology commercialization.
... We conduct a longitudinal process study (Huber and Van de Ven, 1995) of an established entrepreneurial firm which embarked towards exploring renewable energy technologies (RET). Our analysis follows an embedded case design with multiple levels of analysis (individuals, teams/functions, organisation, network partners), in line with studies from more conventional technological contexts (Walrave et al., 2011;Tripsas, 2009;Khanagha et al., 2014). The firm's diversification began with the owner-manager's universalism values and with a deliberate organisational separation to enable sustainability-oriented exploration of RET. ...
... Such process studies of individual organisations are important to unravel the underlying dynamics of a phenomenon (Siggelkow, 2007), particularly in the case of unsuccessful innovation projects (van Oorschot et al., 2013). We looked at the unfolding innovation processes at TechLtd and the dynamics involved in managing ambidexterity at the interface between the existing (conventional) and new (sustainability-oriented) businesses and thereby followed the methodological approach of other ambidexterity scholars (e.g., Khanagha et al., 2014;Tripsas, 2013;Walrave et al., 2011). We also follow Jelinek and Schoonhoven (1993) who emphasise the need to go "inside" the firm. ...
Article
Full-text available
Sustainability is a key societal challenge and has become an opportunity for innovation. While start-ups are prone to enter such new territories, established companies are more hesitant to leave current trajectories and embrace uncertainty linked to sustainability-oriented exploration. We present a case of a conventional high-tech firm of an owner-manager whose strong values of universalism led him to initialize a sustainability-oriented diversification by exploring renewable energy technologies. Our longitudinal study uncovers how changes in ambidextrous organizational design and represented managerial values ultimately resulted in failed exploration. Our contribution is threefold: First, we link individual-level managerial values of universalism with organizational-level phenomena of sustainability-oriented exploration and diversification. Second, we contribute to bridging hitherto mostly separate bodies of literature on sustainability-oriented innovation and ambidexterity to better understand how conventional firms can deploy their technological capabilities for sustainability. Third, we conceptualize the "separation drift" as fading organizational separation resulting in exploration failure.
... In this respect, each research method has its strengths and weaknesses. For instance, system dynamics (SD) models produce feedback-driven explanations of complex system behaviour (Schwaninger, 2006) and are instrumental in investigating multiple interacting processes and feedback loops, time delays, and other non-linear effects (Romme, 2004;Rudolph & Repenning, 2002;Walrave, Van Oorschot, & Romme, 2011). Moreover, SD models can be used to combine qualitative and quantitative aspects of a dynamic phenomenon (Sterman, 2000). ...
Article
Full-text available
Combining system dynamics (SD) modelling with other research methods serves to articulate complex problems and explore potential solutions and policies. A growing number of studies draw on SD in combination with at least one other method, but there is hardly any knowledge about why, when, and how to make such combinations. We address this gap by conducting a systematic literature review of studies that have combined SD with at least one other method. Our findings are synthesised in an evidence-based framework that demonstrates why, when, and how SD is combined with other methods. This framework provides a point of reference for those who want to go beyond stand-alone SD modelling. In addition, this paper contributes to the multi-methodology literature by consolidating an area in which substantial experience in combining methods has been gained.
... By developing an ability to continuously reorganize assets for value creation, managers enhance the potential of a resource to be rebundled or repurposed when environmental conditions change (O'Brien & Folta, 2009). Indeed, prior studies suggest that asset management capability may be "especially critical in times of decline, when uncertainty and ambiguity tend to be (unusually) high" (Walrave, van Oorschot, & Romme, 2011: 1739. ...
Article
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As the likelihood of worldwide crises increases due to globalization and the resulting economic contagion, understanding why some multinational enterprises (MNEs) prevail in such environments becomes ever more critical. Drawing from the concept of dynamic managerial capabilities, we posit that MNE in-crisis performance is associated with the pre-crisis development of asset management capabilities, or the capacity of managers to orchestrate assets so as to extract more value from the firm’s resource pool. Specifically, we argue that because dynamic managerial capabilities evolve as a response to a firm’s task environment, MNEs that operate in dynamic industries develop stronger asset management capabilities. However, we also posit that whether these capabilities contribute to in-crisis performance is contingent upon the munificence of the industry environment in which the capability evolves. Asset management capabilities that evolve in munificent environments would encompass a wider spectrum of routine-altering activities, and thus increase the ability of the MNE to react to more revolutionary events, such as global economic crises. Conversely, asset management capabilities that evolve in resource-scarce environments will result in more strategic lock-in due to firms' constrained ability to experiment with novel resource configurations, resulting in poorer in-crisis performance. We test our hypotheses using a sample of 854 MNEs in the context of the global financial crisis of 2008, and find support for our hypotheses. We discuss implications for the dynamic capabilities view and MNE resilience.
... In times characterized by transitions in the industry, firm executives may need to creatively destroy the present source of their success to come up with better ideas, better products and better solutions that will build the success of tomorrow. Also, Walrave et al. (2011) proposed that exploitation and exploration are conflicting elements, given that the companies' resources are limited and that devoting resources to exploitation will thus directly decrease the resources that can be dedicated to exploration. Gupta et al. (2006) suggested that both exploration and exploitation refer to learning but to different degrees or types of learning and that, depending on whether the focus is on one domain or many, exploration and exploitation take the form of two ends of a continuum. ...
... Where conceptual virtual laboratories may fully rely on earlier research, phenomenon driven explanations gather empirical data to test their dynamic theory. It is a 'history-friendly approach' in that it "serves to map the evolution of a specific empirical case against the developmental predictions drawn from a model" (Walrave et al. 2011(Walrave et al. , p. 1732. Compared to qualitative approaches, developing a formalized model provides a tool that helps providing a "bridge between thick description and broader theoretical generalizations" (Black et al. 2004, p. 605). ...
Article
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There is an increasing attention for dynamic organizational theories. The system dynamics methodology, although originally developed for practical contributions, is increasingly used to develop dynamic theoretical contributions. However, these studies differ substantially in the research designs they apply. Some of these studies adopt a quantitative approach while others adopt a qualitative approach. Some of these studies focus on testing existing theories, while other studies focus on building theory or combine both theory testing and building. This variety hinders an effective understanding of the methodology. To increase clarity, this paper provides a systematic review of system dynamics based theoretical contributions in organizational theory between 1990 and 2016. By looking at differences and commonalities I show how various methodological decisions combine into three distinctive internally consistent system dynamics based research strategies for theoretical contributions. These results support making methodological decisions in future research designs when applying system dynamics to develop dynamic organizational theories.
... Besides managerial cognition, the dynamic interplay of different organizational entities has been found to contribute to success traps. Walrave et al. (2011) use system dynamics modeling to investigate the interplay between top managers, board members, and exploitation-exploration activities, concluding that on the managerial level external pressures to exploit (e.g. from board or stakeholders) bring about a suppression effect of exploration despite the awareness of its need. ...
... Considering the complex and dynamic nature of electricity systems, System Dynamics has been reported as an appropriate analysis methodology in the sector already in 2006 (Schwaninger, 2006). System Dynamics provides an understanding of changes focusing on the interaction between physical flows, information flows, delays and policies that capture the dynamic interrelations among the system's variables, that can guide future policy-making (Romme, 2004;Walrave et al., 2011). The structural elements in System Dynamics are the causal loop diagrams. ...
Article
The aim of this research is to provide a comprehensive analysis framework for fostering the transition of electricity systems towards sustainability and energy security. In this sense, we first provide a critical taxonomy of extant studies, as these are mapped on strategic, tactical and operational levels of the hierarchical decision-making process. Sustainability constituents along with the considered supply or demand viewpoints are also mapped. Following, we recognize and classify the major elaborated performance metrics used to monitor and assess the sustainable performance of electricity systems. We then integrate the recognized decision-making process with the physical systems’ perspective to demonstrate the complex and dynamic nature of the electricity systems. Our critical analysis reveals that sustainability and energy security are rapidly evolving research fields; however, the often myopic perspective of the reviewed studies hinders the effective evaluation and analysis of renewable energy systems. Our analysis further allows for the identification of gaps and overlaps in literature, as well as of future research areas.
... This link opens up several opportunities for future research. If indeed being a stakeholder firm may be understood in terms of exploitation and exploration, this might imply that stakeholder firms might outperform traditional firms specifically in those industries that are characterized by high competitiveness and dynamism, because these are the industries in which firms focusing on exploration outperform those that focus on exploitation (Walrave, Van Oorschot, and Romme, 2011). Moreover, it might imply that stakeholder firms, like ambidextrous firms, might benefit from 'transformational leadership' if they simultaneously have the aim to gradually improve their existing products and services (Jansen, George, Van den Bosch, and Volberda, 2008). ...
Conference Paper
Work in progress, please do not cite without permission of the authors More and more firms aim to adopt a stakeholder approach and firms that succeed have been called stakeholder firms. Instead of focusing on shareholder value, these firms try to simultaneously satisfy the needs of various stakeholders. Becoming a stakeholder firm however may come with challenges. While scholars have been debating conceptual aspects of the stakeholder approach, this study instead looks at real-world barriers that firms may encounter when in transition to becoming a stakeholder firm. To be able to understand the full complexity of this transition, this study aims to identify barriers on the level of the individual, the firm, and the system. Evidence comes from a case study of a firm in such a transition. Based on 26 interviews, we identify seven barriers, followed by a discussion of the implications of these results for stakeholder theory, the scientific domain that studies the stakeholder approach.
... Prior studies have, for instance, used CATA analysis to capture firms' endeavors in exploitation and exploration (e.g. Uotila et al. 2009;Vagnani, 2015;Gatti, Volpe and Vagnani, 2015;Titus et al., 2014;Walrave et al., 2011;Heyden et al., 2014) and entrepreneurial orientation (e.g. Short et al. 2010;Boling et al., 2016;Engelen et al., 2016;Wolfe and Shepherd, 2015). ...
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This paper demonstrates the potential of computer-aided text analysis (CATA) as a technique to operationalize hard-to-measure constructs in international business research, provided that a rigorous set of validity tests is applied. CATA allows performing content analyses on large textual databases by constructing indicators using deductively and inductively derived keywords. We show the critical validity steps that have to be followed to arrive at valid CATA indicators. We illustrate the CATA technique through an application to the concept of global mindset, which has received substantial attention in the international business and strategy literature. We conclude that CATA analysis is a valuable method for international business research, but that its potential can only be unleashed with proper procedures and due attention to construct validity. With the increasing availability of large textual databases such as collections of press releases, newswire archives and SEC filings, computer-aided text analysis (CATA) creates new opportunities to analyze otherwise unobserved firm and managerial traits. CATA can be applied to a broad range of firm activities and industries across long time periods, whilst eschewing the low response rates typical for surveys. In this paper, we demonstrate the critical validity steps that have to be followed to arrive at valid CATA indicators of firm and managerial traits, with an application to international business. As an empirical illustration, we build a keyword-based indicator of firms’ global mindset using a large dataset of news articles.
... These instances are likely to face significantly different selection pressures than those pioneering an innovation outside the dominant regime though. The case of Kodak that invented digital photography but then decided not to commercialize it (Tripsas and Gavetti, 2000) suggests incumbents of the prevailing regime may face more severe corporate 'selection environments' (Walrave, Van Oorschot, and Romme, 2011), even when their external environment is less selective. This raises interesting questions with regard to path-breaking innovation by focal firms that are incumbents to the prevailing regime versus those that are not. ...
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Path-breaking innovations are increasingly developed and commercialized by networks of co-creating actors, called innovation ecosystems. Previous work in this area demonstrates that the ‘internal’ alignment of actors is critical to value creation in the innovation ecosystem. However, the literature has largely overlooked that the success of an innovation ecosystem also depends on its ‘external’ viability, determined by the broader socio-technical environment. That is, path-breaking innovations inherently challenge the prevailing socio-technical regime in a domain (e.g., established rules, artifacts and habits) that tends to be resistant to change. Overcoming this resistance is a major challenge for ventures pioneering path-breaking innovations. The paper contributes to the literature on innovation ecosystems by explicitly considering the socio-technical viability of the innovation ecosystem around a path-breaking innovation. In particular, we theorize about the objects of manipulation in an innovation ecosystem and discuss the strategies that a focal venture, orchestrating the innovation ecosystem, can employ in manipulating these objects so as to increase the socio-technical viability of the ecosystem. We arrive at a multi-level perspective on innovation ecosystem development that integrates internal alignment and external viability and informs a research agenda for future studies in this field.
... Some theoretical SD research projects have the objective to provide an explanation for an observed instance of a phenomenon and for such studies collecting data is an important element (e.g., Rudolph et al., 2009;Walrave et al., 2011;Rahmandad and Repenning, 2016), but this does not necessarily need to be the case. Since data might not-or only to a limited degree-be available, there are many examples of theoretical SD studies that do not use data (e.g., Sastry, 1997;Sterman and Wittenberg, 1999;Gary, 2005;Rahmandad, 2012). ...
... As TIS growth and decline constitute a dynamically complex phenomenon, there is an opportunity to develop a Systems Dynamics (SD) model with respect to their underlying growth and decline processes (Davis et al., 2007;Walrave et al., 2011;2014). SD models allow for investigating multiple interacting processes and feedback loops, time delays, and other non-linear effects (Sterman, 2000)-characteristics commonly referred to by the transition community. ...
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Currently there is no formal model describing the dynamics of technological innovation systems. This paper develops a system dynamics model that integrates the concept of ‘motors of innovation’, following the literature on emerging technological innovation systems, with the notion of ‘transition pathways’ that was developed as part of the multi-level-framework thinking. As such, the main contribution of this paper is a cross-over of two key-frameworks into a system dynamics model that can serve as underpinning for future research. The model’s behaviour is illustrated by means of analyses of TIS dynamics in the context of different transition pathways, under different resourcing conditions. The paper also provides a future research agenda, pursuable by means of experimentation and/or further development of the presented model.
... This may facilitate experimentation and increase the ability to pursue risky innovation projects (Chen, 2008;Nohria and Gulati, 1996). Slack may also decrease the pressure for short-term performance from shareholders (Walrave et al., 2011). As a result, CEOs with a research orientation and slack resources are able to better pursue their innovative ideas and research. ...
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This study develops and tests a comprehensive framework that explains what, when, and how CEO characteristics influence firms’ innovation outcomes in R&D‐intensive industries. Empirical evidence from 109 CEOs from 87 U.S.‐based pharmaceutical firms over the period 2001–2013 reveals that research‐oriented CEOs – those with ability and motivation for science and technology – increase their firms’ innovation outcomes. The results indicate that the CEO–innovation relationship strongly depends on the extent of CEOs’ managerial discretion, which is shaped by the organizational context. We contribute to a more comprehensive understanding of the role of CEOs in firms´ innovation performance differentials.
... This recent integration of literature streams has provided a broader outlook on the organizational and managerial mechanisms for dealing with exploitation or exploration and other organizational dualities. Originally, March (1991) proposed exploration and exploitation to be two contradictory activities that can be considered as two ends of a same continuum that are competing for scarce resources and are technically incompatible (see also Walrave et al., 2011). However, this does not apply to all resources. ...
... This recent integration of literature streams has provided a broader outlook on the organizational and managerial mechanisms for dealing with exploitation or exploration and other organizational dualities. Originally, March (1991) proposed exploration and exploitation to be two contradictory activities that can be considered as two ends of a same continuum that are competing for scarce resources and are technically incompatible (see also Walrave et al., 2011). However, this does not apply to all resources. ...
... To learn from this unsuccessful innovation process, we examine how managers dynamically (re)configured the interface between old and new businesses while exploring green innovations. The research strategy of this paper is to analyze exploratory innovation processes in a longitudinal process study (Huber and Van de Ven, 1995) across multiple levels of analysis (individuals, teams/functions, organization, network partners) in line with other ambidexterity scholars who have adopted this approach (Walrave et al., 2011;Tripsas, 2009;Khanagha et al., 2014). Overall, we contribute to theory and practice by linking innovation failure to pitfalls occurring in the management of ambidexterity and related organizational design. ...
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The ambidexterity literature suggests radical innovation is driven by preventing the undesirable spillover of routines and cognitive representations from the exploitative core business to the exploratory innovation space. This paper presents a longitudinal process study uncovering the anatomy of an unsuccessful exploration of green technologies by a medium-sized entrepreneurial firm. We investigated their innovation processes to understand how the managers configured and reconfigured the exploration-exploitation interface over time by using various modes of balance. The paper contributes to ambidexterity theory by identifying three separation pitfalls. First, a 'separation drift' from a textbook-like to a looser form of organizational separation allows for the undesirable spillover of routines which cannibalize the new business over time. Second, a mismatch can occur between the intended product-market strategy and the actual product-market exploration. A third pitfall increases management complexity due to the simultaneous use of several modes of balance originally perceived as a more resource-efficient alternative to a clear-cut organizational separation.
... Often these take the form of designing "what-if" experiments, which include system improvement and boundary-adequacy tests via creation of additional model structure (Forrester and Senge, 1980;Morecroft, 1988;Martinez-Moyano and Richardson 2013). What-if experiments are typically performed using ad hoc adjustments of key model parameters (e.g., Repenning, 2001;Walrave et al., 2011) as well as functional values, functional shapes, and forms of decision equations (Barlas 2007). Boundary-adequacy experiments are uniquely important because they test whether or not modification of the model boundary assumptions would change policy recommendations arrived at in the original analysis (Forrester and Senge 1980). ...
Article
The use of dynamic systems models by scientists, managers, and policy-makers is becoming more common due to the increasingly complex nature of ecological and socioeconomic problems. Unfortunately, most scientific training in the life sciences only includes dynamic modeling as elective, supplementary courses at a beginners-level, which is not conducive to generating the expertise needed to properly develop, test, and learn from dynamic modeling approaches and risks utilization of poor quality models and adoption of unreliable recommendations. The objective of this paper is to fill part of that gap, particularly regarding model experimentation , by summarizing key concepts in experimental design for simulation experiments and illustrating hands-on examples of experiments needed for developing a deeper understanding of complex, dynamic systems. The experiments include extreme conditions testing, sensitivity analyses of model behaviors given variation in both parameter values and graphical (table) functions, and "what-if?" experiments (e.g., counterfactual trajec-tories, boundary-adequacy tests, and intervention threshold experiments). Each experimental example describes the theoretical foundation of the test, illustrates its application using an ecological systems model, and increases in degree of difficulty from novice to advanced skill levels. By doing so, we demonstrate consistent, scientific means to glean valuable insights about the model's structure-behavior link, uncover any unforeseen model flaws or incorrect formulations, and enhance the confidence (validity) of the model for its intended use.
... Yitzhack Halevi et al., 2015) and middle managers (e.g. Burgess, Strauss, Currie, & Geoffrey, 2015;Chang & Hughes, 2012), to our knowledge, only two studies have looked at the link between boards and exploration/exploitation more generally (Heyden, Oehmichen, Nichting, & Volberda, 2015;Walrave, van Oorschot, & Romme, 2011). Advancing this nascent sub-stream of inquiry into OA, we add that boards of directors play a distinctive role in shaping the extent to which exploration and exploitation are integrated in strategy. ...
Article
We examine the relation between boards of directors’ knowledge heterogeneity and organizational ambidexterity (OA) (i.e. simultaneous exploration and exploitation) in knowledge-intensive firms (KIFs). Although the literature on OA has started to emphasize its antecedents, the role of the board remains unaddressed. This is an important omission, as boards have become increasingly involved in strategy-making. In turn, studies on boards have looked at their influence on either exploration- or exploitation-type strategies. Yet, KIFs particularly need to balance both exploration and exploitation to renew their knowledge base. We draw on knowledge-based perspectives to disentangle the benefits and costs of board knowledge heterogeneity for driving OA in KIFs. Our empirical analysis based on a longitudinal panel of UK pharmaceutical firms provides support for our hypothesized U-shaped relation. Our findings suggest that the benefits of knowledge heterogeneity only outweigh the costs beyond a particular threshold. Overall, our theoretical approach and allied findings advance the literature by introducing boundary conditions to the resource provision role of boards in KIFs. We discuss contributions for organizational learning, strategic leadership, and human resource management. We conclude with implications for theory and practice, as well as key opportunities for future research.
... Demand uncertainty (Chen et al. 2019) Demand uncertainly makes customers' understanding and profit potential critical, increasing TCOs' confidence to enact and interpret demand to TMT members and reach consensus on innovation adoption. Environmental competitiveness (Walrave et al. 2011) Intense competition, characterized by a large number of firms with similar market shares, efficiency, low prices, tight margins, and no slack, requires a focus on exploitation to achieve positive financial results. Environmental complexity (Li and Tang 2010;Tang et al. 2015) Competition and heterogeneity increase industry concentration and the number and interconnectedness of competitors, enhancing CEOs' discretion and attention to competition and collaboration. ...
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Generating and implementing innovative ideas is a key organizational effort to achieve superior performance and secure competitive advantages. Accordingly, the influence of strategic leaders on organizational innovation is increasingly drawing research attention. In this study, we review and synthesize research on how strategic leaders (chief executive officers, top management teams, and boards of directors) influence innovation and propose a framework to guide future research on this important topic. We explain how existing theories rely on discretional or architectural mechanisms to explain strategic leaders’ influence on innovation and review how current studies relate strategic leaders to the specific stages of the innovation process. We also discuss the role of the internal and external environment in moderating these relationships and provide an overview and criticism of theoretical and methodological issues. Overall, we discuss the most relevant findings of the field, analyze how specific suggestions drawn from our framework can contribute to a comprehensive understanding of the influence of strategic leaders on innovation, and propose multiple research opportunities.
... Ambidexterity is likely to result in both short-and long-term performance gains as firms simultaneously refine and improve their existing products in relatable ways that customers value, and push boundaries with radical innovations that limit the risk of becoming locked into existing products (He & Wong, 2004;Vagnani, 2015). An ambidextrous orientation is positively associated with firm performance because it allows firms to effectively manage existing demands while also anticipating disruptive changes in their industries (Koryak et al., 2018;Mihalache et al., 2014;Walrave, van Oorschot, & Romme, 2011). ...
Article
Chief Executive Officers (CEOs) are essential in driving firm innovation. However, despite existing research on CEO personality characteristics and firm innovation and performance, we know relatively little about how personality characteristics reflecting anticipatory action and strong outcome-oriented components, such as proactiveness, shape firm innovation and performance. We explore the relationship between CEO proactiveness and three facets of organizational innovation, as well as its impact on firm performance. We suggest that CEO proactiveness is manifested in different network-building, problem-solving, and feedback-seeking behaviors with different implications for exploratory innovation, exploitative innovation, and organizational ambidexterity, and that its effect on firm performance is partially mediated by organizational ambidexterity. By examining the influence of this important CEO personality characteristic on key firm strategic choices and performance, we extend research on strategic leadership and firm innovation and performance.
... These schemes operate as different organizational decision making mechanisms driven by the changes of the different interdependent subunits. Walrave, van Oorschot, and Romme (2011) show how "success traps" appear in organizations. They built a system dynamics model with a nested set of causal relations that investigate the behavior of two interconnected investment levels: one in exploration, another one in exploitation. ...
Change is ubiquitous in the study of organizations. Organizational change is characterized by multiple perspectives, both conceptually and methodologically. Computational modeling efforts are not the exception. In this work, we aim to provide an analysis of computational modeling approaches to organizational change. For that, we first review published works that directly connect to developing knowledge in organizational change from a computational lens. Second, we offer an account of unexplored topics in computational organizational change. Last, we highlight the potentialities of computer simulation models based on agent interactions in regard to how they could contribute to the understanding of central issues in this organizational research subfield.
... Drawing on information from these interviews and discussions, we were able to develop a qualitative, participatory system dynamics model. Our model describes feedback mechanisms that enable or limit (Repenning & Sterman, 2002;Walrave et al., 2011) the possibilities of Chemelot's transformation into a cluster with zero GHG emissions. By means of a participatory system dynamics approach, we invited the participants to explore the potential feedback mechanisms of industrial clustering that are relevant to the implementation of deep emission reduction options in the Chemelot cluster. ...
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Industrial clusters are considered more resource- and greenhouse gas-efficient than stand-alone industrial plants, but clustering may also act as a barrier to radical changes required for deep greenhouse gas emission reductions. Here we explore how clustering in an energy-intensive chemical industry cluster may influence attainability of the deep emission reduction targets. Chemelot, located in the southeast of the Netherlands, was willing to collaborate and we adopt a qualitative system dynamics approach based on expert interviews and group model building sessions. We found that clustering may hinder reaching deep emission reductions by three reinforcing feedback mechanisms, or ‘traps’, related to: incremental changes; short-term focus; and companies acting alone. The system dynamics analysis also identified potential mechanisms to escape from these traps, notably: (1) increasing cluster autonomy; (2) activating public support; (3) promoting changes in the supply chain; and (4) attracting long-term investors. The findings can inform policymakers on how to steer industrial clusters towards deep emission reductions, and support industrial cluster decision-makers on both internal and external strategies. Key policy insights • Industrial clustering may offer opportunities to accelerate deep greenhouse gas emission reductions, but it could also cause carbon lock-in because of increased physical and organizational interdependency, which favours incremental changes, short-term focus, and solitary actions rather than collective actions, at the cost of deep greenhouse gas emission reductions. • To fully exploit the potential benefits of industrial clustering for greenhouse gas emission reductions, policies need to take into account the causal relations that operate in a self-reinforcing way to lock the cluster into high greenhouse gas emissions, and that can help escape them. • A coordinating authority operating across the cluster is necessary to ensure effective collaboration within a chemical cluster so as to escape carbon lock-in. • Policies addressing emissions along the full value chain (i.e. to include scope 3) might be mutually beneficial with the circularity and low-emission ambitions of the chemical industry.
... These instances are likely to face significantly different selection pressures than those pioneering an innovation outside the dominant regime though. The case of Kodak that invented digital photography but then decided not to commercialize it (Tripsas and Gavetti, 2000) suggests incumbents of the prevailing regime may face more severe corporate 'selection environments' (Walrave et al., 2011), even when their external environment is less selective. This raises interesting questions with regard to pathbreaking innovation by focal firms that are incumbents to the prevailing regime versus those that are not. ...
Conference Paper
Notably, a revised version of this paper is published as: https://www.researchgate.net/publication/316240226_A_multi-level_perspective_on_innovation_ecosystems_for_path-breaking_innovation
... Y. Yan, J. Guan Technological Forecasting & Social Change 126 (2018) 244-258 alternatives and resource (March, 1991;Walrave et al., 2011). Depending on weak ties theory (Granovetter, 1973), information benefits obtained through such frequent interactions are more likely to be repeated and redundant. ...
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Introduction Leadership is an interpersonal, person-oriented, social influence (Endres & Weibler, 2016), which guides in direction, course, action, and opinion (Bennis & Nanus, 1985). To that end, it is different from management, which is task oriented in the sense of bringing about or accomplishing something, being responsible for, or conducting something (Bennis & Nanus, 1985). Leadership requires a leader, but leaders do not operate in a vacuum, nor do they need to be formal managers. For a long time, the terms “leader,” “leadership” and “manager” were used almost interchangeably, and only recently has there been a distinction in their use (Alvesson & Sveningsson, 2003; Crevani et al., 2010). The development of leadership research over the years has also focused on different aspects of leadership, ranging from an interest in the traits, characteristics, and competencies of individual leaders, to an interest in how leadership is practiced in social settings by leaders, co-leaders, and followers in interaction (Carroll et al., 2008). Recent years have brought much insight about the importance of leadership as a complement to management in projects and has added a variety of perspectives to leadership. Examples include the traditional view of project and program managers as leaders and their associated leadership styles. This person-centric perspective has addressed the particular leadership styles of these roles (e.g., Keegan & Den Hartog, 2004) as well as personal characteristics that bring about certain leadership styles (e.g., Dulewicz & Higgs, 2005). We call this the vertical leader and his or her leadership style. Other research has looked at leadership that emerges from teams or individuals in a team and complements the leadership of the vertical leader. Examples of this include the studies on shared leadership (Pearce & Conger, 2003; Crevani et al., 2007) and its related processes (e.g., Cox, Pearce, & Perry, 2003). We call this approach the horizontal leader and his, her or their leadership style. Most recently, researchers have started to investigate the balance and situational contingency of vertical and horizontal leadership in projects. They showed the particular circumstances under which vertical leaders in projects make way for horizontal leaders to temporarily partake in leading the project (e.g., Müller et al., 2016). We call this balanced leadership, i.e., a situation in which the balance between vertical and horizontal leadership is appropriate.
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According to the ambidexterity literature, organizations tend to favor either exploration or exploitation activities. However, few studies have elucidated why this imbalance occurs, what the ideal balance is, and how to remedy any disparities between what organizations tend to do and what they should do. This study addresses this paucity by situating these questions in the context of environmental conditions (static or dynamic) and organizational conditions (simple or complex) through a strategic fit paradigm lens. We systematically reviewed 20 years of exploration–exploitation research and developed an empirically grounded, contextually relevant framework that describes four organizational archetypes: the Kangaroo, Lion, Mouse, and Camel archetypes. We found that it often makes sense for organizations to be off-balance and identified the factors that cause imbalance and the strategies that managers can employ to manipulate the exploration–exploitation mix according to their organizations’ specific archetypes. By incorporating all three questions and delineating between organizational archetypes, this systematic review brings together the fragmented literature and provides a novel framework for advancing research and influencing managerial practice.
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The ubiquitous practical relevance of system dynamics makes it easy to overlook the scientific impact that system dynamics has had. Studies on building theory with simulations suggest that there are very different ways of arriving at a theoretical contribution, which brings up the question how system dynamics is used to arrive at theoretical contributions. This paper provides a systematic review of system dynamics based theoretical contributions in management theory between 1990 and 2016. The results help pointing out which ways have proven to be specifically helpful for contributing to theory with system dynamics, and which opportunities for the future still exist.
Book
This book constitutes the thoroughly refereed proceedings of five international workshops held in Ljubljana, Slovenia, in conjunction with the 28th International Conference on Advanced Information Systems Engineering, CAiSE 2016, in June 2016. The 16 full and 9 short papers were carefully selected from 51 submissions. The associated workshops were the Third International Workshop on Advances in Services DEsign based on the Notion of CApabiliy (ASDENCA) co-arranged with the First International Workshop on Business Model Dynamics and Information Systems Engineering (BumDISE), the Fourth International Workshop on Cognitive Aspects of Information Systems Engineering (COGNISE), the First International Workshop on Energy-awareness and Big Data Management in Information Systems (EnBIS), the Second International Workshop on Enterprise Modeling (EM), and the Sixth International Workshop on Information Systems Security Engineering (WISSE).
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Jim March's framework of exploration and exploitation has drawn substantial interest from scholars studying phenomena such as organizational learning, knowledge management, innovation, organizational design, and strategic alliances. This framework has become an essential lens for interpreting various behaviors and outcomes within and across organizations. Despite its straightforwardness, this framework has generated debates concerning the definition of exploration and exploitation, and their measurement, antecedents, and consequences. We critically review the growing literature on exploration and exploitation, discuss various perspectives, raise conceptual and empirical concerns, underscore challenges for further development of this literature, and provide directions for future research.
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This paper investigates interrelationships of product design, organization design, processes for learning and managing knowledge, and competitive strategy. This paper uses the principles of nearly decomposable systems to investigate the ability of standardized interfaces between components in a product design to embed coordination of product development processes. Embedded coordination creates 'hierarchical coordination' without the need to continually exercise authority - enabling effective coordination of processes without the tight coupling of organizational structures. We develop concepts of modularity in product and organization designs based on standardized component and organization interfaces. Modular product architectures create information structures that provide the 'glue' that holds together the loosely coupled parts of a modular organization design. By facilitating loose coupling, modularity can also reduce the cost and difficulty of adaptive coordination, thereby increasing the strategic flexibility of firms to respond to environmental change. Modularity in product and organization designs therefore enables a new strategic approach to the management of knowledge based on an intentional, carefully managed loose coupling of a firm's learning processes at architectural and component levels of product creation processes.
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Why might firms be regarded as astutely managed at one point, yet subsequently lose their positions of industry leadership when faced with technological change? We present a model, grounded in a study of the world disk drive industry, that charts the process through which the demands of a firm's customers shape the allocation of resources in technological innovation—a model that links theories of resource dependence and resource allocation. We show that established firms led the industry in developing technologies of every sort—even radical ones—whenever the technologies addressed existing customers' needs. The same firms failed to develop simpler technologies that initially were only useful in emerging markets, because impetus coalesces behind, and resources are allocated to, programs targeting powerful customers. Projects targeted at technologies for which no customers yet exist languish for lack of impetus and resources. Because the rate of technical progress can exceed the performance demanded in a market, technologies which initially can only be used in emerging markets later can invade mainstream ones, carrying entrant firms to victory over established companies.