Exploration–Exploitation Duality with Both Tradeoff and Synergy: The Curvilinear Interaction Effects of Learning Modes on Innovation Types

Peter Ping Li, Heng Liu, Yuan Li and Haifeng Wang

Management and Organization Review, 2023, vol. 19, issue 3, 498-532

Abstract: How can a firm apply the appropriate interaction between exploration and exploitation with the goal of either radical or incremental innovation? In this study, we seek to answer this puzzling question by reframing exploitation and exploration as a duality of learning (i.e., two modes that are partial complementary for synergy as well as partial conflicting for tradeoff). Specifically, rather than assuming either a positive or negative interaction between exploration and exploitation as prior literature has done, our study highlights a novel pattern of inverted U-shaped interaction between exploration and exploitation for both radical and incremental innovations. With a Chinese sample of 508 firms, our empirical evidence supports our prediction of two patterns of inverted U-shaped interaction of exploration and exploitation. Such unique findings showcase the unique value of reframing paradox into duality from the meta-perspective of yin-yang balancing to shed new light on organizational ambidexterity and innovation management.

Date: 2023
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