Aspiration-Based Learning to Balance Exploration and Exploitation in Organizational Learning

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This chapter considers organizational learning as mutual learning between an organization and the individuals working in it. The process of mutual learning has implications for understanding and managing the tradeoff between exploration and exploitation. We propose an aspiration-based model to balance exploration and exploitation in organizational learning. The model is intended to improve the knowledge acquired by the members of an organization and the organization itself. In the proposed model, individuals in the organization are allowed to experiment with their beliefs according to their aspiration level and are allowed to interact to communicate their aspiration level. Simulation results show that the model improves the knowledge obtained by the members of the organization and the organization itself and that the model is able to deal with open systems.