The neuro-scientific foundations of the exploration-exploitation dilemma

Daniella Laureiro-Martínez, Stefano Brusoni () and Maurizio Zollo
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Daniella Laureiro-Martínez: KITeS, Universita' Bocconi, Milano, Italy
Maurizio Zollo: KITeS, Universita' Bocconi, Milano, Italy

No 4, KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy

Abstract: This paper aims to leverage neuroscience and psychology to contribute to the development of a microfoundation for an important managerial dilemma: the organizational ability to continuously explore novel domains of activity and exploit the current knowledge base with increasing efficacy. The dilemma for firms is at how to search for sustained competitive advantage. The conflicting objectives of exploration and exploitation compete for scarce resources, among which managerial attention is possibly the most critical. We propose that some recent neuroscientific findings could help us uncover the individual-level foundations of the organizational ability to both explore and exploit. Critical to our analysis is an understanding of how individuals allocate their limited time to alternative uses and vary the scope of their attention. We build on recent evidence on the way that individual learning modes are altered, in order to extend the discussion on organizational exploration and exploitation.

Pages: 57 pages
Date: 2009-04, Revised 2009-04
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