Exploitation and exploration in a company with institutionalized Lean practices

Abstract

This study investigates the difficult task of balancing continuous improvement of existing business on one side, and exploring new opportunities on the other. The two strategies are equally important for a company’s long-term success, but also fundamentally different. While one is associated with control, refinement, efficiency and reduced variation (exploitation), the other involves risk-taking, experimentation and innovation (exploration). In a time when globalization is tightening the competitive landscape, and in a market that is perhaps more dynamic and rapid-changing than ever, mastering this balance is becoming increasingly important.