Investigating Managers' Exploration and Exploitation Activities: The Influence of Top‐Down, Bottom‐Up, and Horizontal Knowledge Inflows*

Abstract

This paper develops and tests hypotheses on the influence of a manager's knowledge inflows on this manager's exploration and exploitation activities. Based on a survey among managers of a leading electronics firm, the findings indicate, as expected, that top-down knowledge inflows of a manager positively relate to the extent to which this manager conducts exploitation activities, while they do not relate to a manager's exploration activities. Furthermore, as expected, bottomup and horizontal knowledge inflows of a manager positively relate to this manager's exploration activities, while they do not relate to a manager's exploitation activities. We contribute to current literature on exploration and exploitation by focusing on the manager level of analysis, and by adding the importance of knowledge flow configurations to the literature on the impact of organizational factors upon exploration and exploitation. , 2006). However, there is a lack of conceptually and empirically validated understanding about exploration and exploitation at the manager level of analysis. This is quite surprising as previous research in organizational learning (Crossan et al., 1999;Vera and Crossan, 2004), strategy research (Burgelman, 1983b(Burgelman, , 1991Floyd and Lane, 2000;Rajagopalan and Spreitzer, 1996;Rosenbloom, 2000; Trispsas and Gavetti, 2000) and technological innovation (Duncan, 1976;Tushman and O'Reilly, 1996) indicates that firm or unit level exploration and exploitation to a large extent originate in the exploration and exploitation activities of their managers. These studies indicate that insight into managers' exploration and exploitation activities and 4 into how these activities may be influenced, benefit our understanding about how to build exploration and exploitation within a business-unit or firm.Taking a knowledge perspective (Grant, 1996;Gupta and Govindarajan, 2000;Kogut and Zander, 1992;Schulz, 2001), this paper investigates how the acquisition of knowledge from other persons and/or units in the same organization by a manager, influence this manager's exploration and exploitation activities. On the basis of studies of intra-organizational knowledge flows (Gupta and Govindarajan, 2000;Schulz, 2003), we will conceptualize and operationalize knowledge acquisition by a manager in terms of a manager's knowledge inflows. Previous research indicates that knowledge acquisition is an important explanatory factor for exploration as well as exploitation related activities within a firm. In the area of technological innovation, scholars have examined the impact of knowledge acquisition by firms, as reflected in citation patterns within patent applications, in terms of the extent to which innovations tend to be incremental or radical (e.g. Katila and Ahuja, 2002;Nerkar, 2003;Rosenkopf and Nerkar, 2001). Studies in the field of organizational learning indicate that the acquisition of knowledge is a primary mechanism by which not only firms but also organization members learn from each other (Fiol & Lyles, 1985...

Subsidiary managers’ knowledge mobilizations: Unpacking emergent knowledge flows

“…In leading suitable responses to these challenges, it has been found that middle managers may crossleverage capabilities by "moving" existing capabilities to areas where they believe these capabilities can generate value (Taylor & Helfat, 2009). It has also been established that top-down knowledge inflows to middle managers tend to foster exploitation, and horizontal and bottom up knowledge inflows more likely lead to exploration (Mom et al, 2007).…”

“…While front-line staff might possess and require knowledge that is very specific to their immediate task environment, and top management provides strategic direction and knowledge with regards to the general product-market, technological or geographical domain (Mom, Van Den Bosch, & Volberda, 2007), middle managers operate at the nexus where this specific, bottom up knowledge and general, top-down knowledge collide. Interacting across these vertical interfaces offers subsidiary managers channels to mobilize knowledge from subsidiary front-line and higher-level management both, located at the focal subsidiary and other international sites.…”

Hard, soft or ambidextrous? Which influence style promotes managers’ task performance and the role of political skill

“…The role of managers in resolving tensions related to such opposing and incompatible organizational goals is critical (Mom, Van Den Bosch, & Volberda, 2007;Yoon & Chae, 2012). In order for managers to consistently meet task objectives, they need to assume multiple roles, effectively tackle contradictory tasks and achieve short and a long term goals that stem from their job description (Smith & Tushman, 2005).…”

The relationship between exploration and exploitation strategies, manufacturing flexibility and organizational learning: An empirical comparison between Non-ISO and ISO certified firms

“…But we are interested in Mom, Van Den Bosch, and Volberda (2007) because they relate exploitation and exploration strategies to mechanisms of coordination and decision making, it fits our study best. For these reasons, we chose and adapted six items from Mom et al (2007) to measure exploitation strategy and five items to measure exploration strategy.…”