Chapter 5: From the Exploration of New Possibilities to the Exploitation of Recently Developed Competencies: Evidence from Five Ventures Developing New-to-the-World Technologies
5 From the exploration of new possibilities to the exploitation of recently developed competencies: evidence from ﬁve ventures developing new-tothe-world technologies Annaleena Parhankangas and David L. Hawk Introduction Entrepreneurship in general and technology-based entrepreneurship in particular is a process of experimentation and learning (Woo et al., 1994). Entrepreneurs start their venturing process by exploring a newly ‘theorized’ opportunity in a highly uncertain situation. After a certain period of exploration, entrepreneurs will try to gain proﬁts from the experimented opportunities (Choi and Shepherd, 2004). Using the terminology of the organizational learning literature, successful entrepreneurs are able to proceed from the exploration of new possibilities to the exploitation of recently acquired competencies. The postulate of a trade-oﬀ between exploration and exploitation processes is one of the most enduring ideas in organizational theory (see, for instance, Adler et al., 1999). The contradictory nature of exploration and exploitation activities (Abernathy, 1978; Adler et al., 1999; March, 1991) has led several scholars to question whether it is possible for organizations to pursue both types of activities simultaneously. Some scholars have suggested that organizations engage in multiple forms of learning by adopting features from both organic and mechanistic structures (Hedberg et al., 1976; Brown and Eisenhardt, 1997). A contrasting view suggests that corporations should completely separate (Christensen, 1998) or buﬀer experimenting units from exploiting ones (March and Simon, 1958, p. 198). Some studies argue that ambidextrous or dual organizational forms are the key to managing exploration and exploitation activities simultaneously (Bradach, 1997; Tushman and...
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