Experiential learning processes of exploitation and exploration within and between organisations: an empirical study of product development

This paper empirically examines the relationship between exploitation and exploration in intra- and interorganisational learning processes. Exploitation is about creating reliability in experience and thrives on productivity and refinement. Exploration is about creating variety in experience and thrives on experimenting and innovating. Specifically, the paper explores four learning processes: (a) How intraorganisational exploitation generates interorganisational exploration; (b) how interorganisational exploration generates intraorganisational exploitation; (c) how interorganisational exploitation generates intraorganisational exploration; and (d) how intraorganisational exploration generates interorganisational exploitation. The empirical data consists of two case studies of organisational learning in product development processes of one Scandinavian and one American software producer and their respective interorganisational collaborations with business partners. The findings show how exploitation can be a cause for exploration, and vice versa, that moreover may transcend learning levels. The mechanisms by which such dynamics are generated are discussed. Overall, the framework as proposed in the paper further develops existing theories on organisational learning, by proposing how exploitation and exploration are empirically interlaced within and between organisations.