Group-Level Exploration and Exploitation

Organisational research has studied the tension between exploration and exploitation for years. In essence, this body of research agrees on the necessity of a balance between explorative and exploitative processes to prevent an organisation from falling into a learning trap. Thus, to enhance the active management of this balance in organisations, a deeper theoretical understanding of the factors that influence the development of exploration and exploitation has to be gained. One of the recently discussed factors is the interplay between exploration and exploitation on different organisational levels. This paper picks up this discussion. It provides an in-depth, computer simulation-based analysis of the performance of organisational types with varying degrees of within-group and between-group exploration and exploitation in situations of different degrees of task complexity. The findings indicate that a high share of between-group processes as compared to within-group processes positively influences the organisational performance level and that dependent on task complexity the optimal share of exploration and exploitation varies.