March Model Research Articles

Users' Involvement in Value Co‐Creation: The More the Better?

Literature on value co‐creation often postulates that a greater degree of co‐production increases the potential of value co‐creation. To test this hypothesis, we build a computational model of value proposition inspired by March's model of organizational learning. The model allows us to represent various cases of co‐creation: (i) without co‐production, (ii) with downstream co‐production, and (iii) with upstream co‐production. Repeated simulations are partly supporting the literature. On one hand, we find that deeper involvement of consumers into the value offering process increases the potential for value co‐creation. One the other hand, we find that co‐production can increase inequalities of satisfaction among consumers. Also, while scenarios with learning consumers offer the highest potential for value co‐creation, a negative relationship emerges between the number of learning consumers and organizational performance.

Balancing exploration and exploitation in complex environments

PurposeThe objective of this study is to model and analyze the exploration‐exploitation dynamics of March's model of mutual learning in a complex environment. By enhancing the above mentioned model, the paper seeks to propose a new agent‐based model of mutual learning within an organization.Design/methodology/approachThe paper replicates March's model of simulating learning within an organization using an agent‐based simulation approach, and extends it by modelling the problem space as a fitness landscape using Kauffman's NK model technique.FindingsIt was found that it is impossible to find a right balance between exploration and exploitation using the communication structure of March's model.Practical implicationsThe proposed model could help create a virtual laboratory for experimenting organizations' behavior in a complex co‐evolving environment. This virtual laboratory may be used in the future to support the decision‐making process of managers and policy makers.Originality/valueDesigning the external environment as a fitness landscape helps in discovering what effect the environmental complexity has on the emerging balance between exploration and exploitation. It is the first study to design the environment of a model which analyzes the mutual learning between an organization and its members as a complex non‐linear space.

Exploration, Exploitation, and Knowledge Management Strategies in Multi-Tier Hierarchical Organizations Experiencing Environmental Turbulence

James G. March conceived organizational learning as a balance between the exploration of new alternatives and the exploitation of existing competencies in an organization. This study extends March's model to consider exploration and exploitation in a hierarchical organization. First, the effect of additional tiers in a hierarchical organization is analyzed and related to March's original constructs of exploration, exploitation, personnel turnover, and environmental turbulence. Second, the study evaluates additional effects of a knowledge management system that collects and shares knowledge from expert individuals in an organization. This study finds that in the absence of personnel turnover, a knowledge strategy of high exploitation and low exploration for a multi-tiered hierarchical organization reduces the veracity of average individual knowledge levels when compared to alternative strategies. The magnitude of this reduction in veracity increases as the number of tiers in a hierarchical organization increase; flat organizations will see less of a reduction compared to multi-tiered organizations. A weighted least-squares regression performed on a second set of data corroborates this central observation. Cumulative findings have strategic relevance for both organizational theory and the application of knowledge management systems.

Exploration and exploitation revisited: Extending March's model of mutual learning

A system of actors, appropriately organized, is able to learn even in situations where individuals in isolation cannot. This was one of the most important, though seldom emphasized, insights of March's paper [March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87]. The present paper builds on March's original simulation and incorporates a number of different real-world organizational features. The results suggest that unconstrained experimentation is of great benefit to organizational learning, although it should not be carried to excess. Low levels of turnover in personnel are beneficial and mitigate the problem of high socialization March noted in 1991. Inclusion in the policy-making elite should be predicated on performance rather than seniority and on shorter rather than longer individual performance histories, particularly when environments are changing rapidly. Finally, erring on the side of stringency in selecting members of the organization for the policy-making elite is better than erring toward laxity.