Learning Strategies in Dynamic Environments
Managers face conflicting demands on the organization: one to cut costs and improve quality by reducing
variance in present processes, and the other to be creative, innovative, adaptable, and flexible and to try out new processes.
The former consists of exploitative learning, or refining present knowledge, and the latter consist of explorative learning, or
seeking out new knowledge. While large sample studies show support for the theory that exploitative learning improves
organizational performance, case studies urge managers to adopt explorative learning. The connection between these
conflicting forms of learning and organizational performance is hypothesized to be moderated by the dynamism of the
environment. This hypothesis is studied through a computer simulation using intelligent agents to model organizations with
different strategies for learning. Results indicate that exploitation may be more suited for environments low in dynamism
while ambidextrous organizations may be more suitable for dynamic environments.
Keywords: Exploitation, exploration, ambidextrous organizations, dynamic environments.