Exploration and Exploitation Revisited: Exploration and Exploitation Revisited: Extending March’s Model of Mutual Learning

I am immensely indebted to James G. March for his comments and encouragement on this and earlier versions of the paper, and for so generously sharing with me the code for his original simulation. Thanks are due also to Charles Galunic, Anne Lawrence, Woody Powell, Peter Moran and the anonymous reviewers for the Academy of Management and the Scandinavian Journal of Management for their comments on earlier drafts and to Nancy Adler for her help with my writing. And as always, to Judith for her devotion and support. All remaining errors are mine. Exploration and Exploitation Revisited- 2-A system of actors, appropriately organized, is able to learn even in situations where individuals in isolation cannot. This was one of the most important, though seldom emphasized, insights of March’s paper, “Exploration and Exploitation in Organizational Learning ” (1991). The present paper builds on March’s original simulation and incorporates a number of different real-world organizational features. The results suggest that unconstrained experimentation is of great benefit to organizational learning, although it should not be carried to excess. Low levels of turnover in personnel are beneficial and mitigate the problem of high socialization March noted in 1991. Inclusion in the policy-making elite should be predicated on performance rather than seniority and on shorter rather than longer individual performance histories, particularly when environments are changing rapidly. Finally, erring on the side of stringency in selecting members of the organization for the policy-making elite is better than erring towards laxity