Influence and Structure: Extending a model of organizational learning

Influence and Structure: Extending a model of organizational learning
Author(s): Prietula, Michael and Kane, Gerald C.
Year: 2006
Paper Number: GBS-DIA-2006-001
Goizueta Department: Decision and Information Analysis

Abstract

Using computational modeling of organizational learning, March (1991) differentiated between two learning mechanisms - exploration and exploitation. Exploitation refers to the mechanism by which individuals modify their beliefs to that of the organizational code, thereby diffusing organizational knowledge. Exploration refers to the modification of the organizational code by the influence of individual knowledge whose beliefs better correspond with reality, thereby developing new organizational knowledge. Although much work has been done to expand these dual themes,little work has been done to extend the model upon which these themes have been built. In this paper, we extend March's original model to discover how various organizational characteristics will affect exploration and exploitation in organizations. We modified the exploitation process in two ways: individuals are influenced by others, and individuals are influenced in the context of reference groups. We also modified the exploration process in two ways: the organizational code learns from teams, and the organizational code learns from hierarchies.