Inferring final organizational outcomes from intermediate outcomes of exploration and exploitation: the complexity link

Sasanka Sekhar Chanda ()
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Sasanka Sekhar Chanda: Indian Institute of Management Indore

Computational and Mathematical Organization Theory, 2017, vol. 23, issue 1, No 3, 93 pages

Abstract: Abstract The difficulty in definitively linking outcomes of managerial action to organizational outcomes has been a festering issue in organizational research. The problem arises because it is not easy to separate the distinctive contributions of managers at intermediate stages, as well as the contribution of external factors beyond the control of managers. Specifically, certain managerial actions focusing on exploratory or exploitative innovation produce an intermediate output, organizational knowledge. From this base of organizational knowledge, further management actions craft the final output that eventually faces the market test. Drawing from complexity concepts, I argue that the probability of correctly fashioning the subset of key elements in the intermediate output may be a good measure of the probability of organizational success. I use March’s iconic computational simulation model to demonstrate the merits of this principle. I model the effect of complexity on managerial intentionality towards exploratory and exploitative innovation. I elicit important insights for research and practice by comparing organizational knowledge outcomes with the outcomes for probability of organizational success, in stable and moderately turbulent environment.

Keywords: Complexity; Dynamism; Exploration and exploitation; Managerial intentionality; Organizational success; Tautology in resource based view (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10588-016-9217-1

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