The Exploration–Exploitation Dilemma: A Review in the Context of Managing Growth of New Ventures

Abstract

The metaphor of ambidexterity has been used by researchers to refer to the ability of the organization to maintain dual attention on exploration and exploitation activities in order to survive and excel the present, and secure the future, by creating potential for sustainable growth in future. Managing this duality is a challenge as often the needs of both these activities are contradictory. With business environment becoming increasingly dynamic, it is becoming more essential for start-up firms to balance their attention and resource allocation for exploration and exploitation activities. In our interaction with several start-up founders for another research, we found that at times start-ups were too focused on exploring the new, and engaged in too much experimentation, and in the process lost the scope of exploiting the outputs of their exploration activities. At the same time, we found start-up firms which seemed to be getting over-engaged in exploitation. However, it is unclear how start-ups cope with the dilemma of exploration and exploitation. In this article, we raise the need for investigating the mechanisms of how ambidexterity is managed in the growth phase of start-up firms.