Getting Trapped in the Suppression of Exploration: A Simulation Model

The benefits of strategically balancing exploitation and exploration are well documented in the literature. However, many firms tend to overemphasize exploitation efforts, even in the face of the strong need to step up their exploration activities. We draw on system dynamics modeling and a case study to address this gap in the literature, and develop a theoretical framework of ambidexterity as a capacitated delay process. This framework describes how the interplay between cognitive processes and motivational factors at the top management level severely limits the formation of ambidextrous capability. As such, this paper provides a micro-level theory of how individual and interactional processes at the managerial level inhibit the development of ambidextrous capability.