Iterative Transitions Between Exploration and Exploitation: Experiences from the Finnish Manufacturing Industry

  • Helinä MelkasEmail author
  • Tuomo Uotila
  • Tuija Oikarinen
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 255)


This chapter describes methods for advancing exploration and exploitation in industrial settings and presents the experiences of Finnish manufacturing companies that have used such methods. The chapter explores the foundations of exploration and exploitation, and incorporates also both the absorptive capacity and the analytical and interpretative innovation processes into a novel framework for different types of networks, including production, development and innovation networks. In addition to the theoretical considerations, this chapter includes introductions to the various renewal methods and manufacturing company case studies. This work will provide insight into the practical implementation of exploration and exploitation activities and into overcoming the dilemma of transitioning between exploration and exploitation activities in different contexts.


  1. Amin, A., & Roberts, J. (2008). Knowing in action: Beyond communities of practice. Research Policy, 37(2), 353–369.CrossRefGoogle Scholar
  2. Brown, J. S., & Duguid, P. (1998, Spring). Organizing knowledge. California Management Review, 40(3), 90–111. doi: 10.2307/41165945.CrossRefGoogle Scholar
  3. Burt, R. (2004). Structural holes and good ideas. American Journal of Sociology, 110(2), 349–399. doi: 10.1086/421787.CrossRefGoogle Scholar
  4. Cohen, W., & Levinthal, D. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35, 128–152.CrossRefGoogle Scholar
  5. Cook, S. D. N., & Brown, J. S. (1999). Bridging epistemologies: The generative dance between organizational knowledge and organizational knowing. Organization Science, 10(4), 381–400.CrossRefGoogle Scholar
  6. Cooper, R. G. (1993). Winning at new products: Accelerating the process from idea to launch. Cambridge, MA: Addison-Wesley.Google Scholar
  7. Gherardi, S., & Nicolini, D. (2002). Learning in a constellation of interconnected practices: Canon or dissonance? Journal of Management Studies, 39(4), 419–436.CrossRefGoogle Scholar
  8. Gilsing, V., & Nooteboom, B. (2006). Exploration and exploitation in innovation systems: The case of pharmaceutical biotechnology. Research Policy, 35, 1–23.CrossRefGoogle Scholar
  9. Grisoni, L., & Page, M. (2010). Two to the power of three: an exploration of metaphor for sense making in (women’s) collaborative inquiry. Organization Management Journal, 7, 12–25.CrossRefGoogle Scholar
  10. Heron, J., & Reason, P. (2001). The practice of co-operative inquiry: Research ‘with’ rather than ‘on’ people. In P. Reason & H. Bradbury (Eds.), Handbook of Action Research (pp. 144–154). London: Sage.Google Scholar
  11. Kim, L. (1998). Crisis construction and organizational learning: Capability building in catching-up at Huyndai Motor. Organization Science, 9, 506–521.CrossRefGoogle Scholar
  12. Koen, P., Ajamian, G., Burkart, R., Clamen, A., Davidson, J., D'Amore, R., Elkins, C., Herald, K., Incorvia, M., Johnson, A., Karol, R., Seibert, R., Slavejkov, A., & Wagner, K. (2001). Providing clarity and a common language to the “fuzzy front end”. Research-Technology Management, 44(2), 46–55.Google Scholar
  13. Lester, R. K., & Piore, M. (2004). Innovation—The missing dimension. Cambridge and London: Harvard University Press.Google Scholar
  14. Li, Y., Vanhaverbeke, W., & Schoenmakers, W. (2008). Exploration and exploitation in innovation: Reframing the interpretation. Creativity and Innovation Management, 17(2), 107–126.CrossRefGoogle Scholar
  15. March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87.CrossRefGoogle Scholar
  16. Melkas, H., Uotila, T., & Tura, T. (2016). Policies of related variety in practice: The case innovation session method. European Planning Studies, 24(3), 489–510.CrossRefGoogle Scholar
  17. Nonaka, I., & Takeuchi, H. (1995). The knowledge creating company: How Japanese companies create the dynamics of innovation. New York: Oxford University Press.Google Scholar
  18. Oikarinen, T., Kallio, A., & Pässilä, A. (2011a, August 12–16). Shared leadership for innovation through interactive and interpretive discourse. In Transcending boundaries for successful Continuous Innovation, CINet PDW Workshop in 2011 Annual Meeting of Academy of Management West Meets East: Enlightening, Balancing and Transcending, San Antonio, TX.Google Scholar
  19. Oikarinen, T., Pässilä, A., & Hong, J. (2011b, December 4–7). Dramatizing as a learning facilitator for practice-based innovation in networks. Paper presented in the 7th International Conference on Researching Work and Learning.Google Scholar
  20. Parjanen, S. (2012). Creating possibilities for collective creativity. Brokerage functions in practice-based innovation. Acta Universitatis Lappeenrantaensis 474, Lappeenranta University of Technology, Lappeenranta.Google Scholar
  21. Parjanen, S., Harmaakorpi, V., & Frantsi, T. (2010). Collective creativity and brokerage functions in heavily cross-disciplined innovation processes. Interdisciplinary Journal of Information, Knowledge, and Management, 5, 1–21.Google Scholar
  22. Pässilä, A. (2012). A reflexive model of researched-based theatre. Processing innovation at the crossroads of theatre, reflection and practice-based innovation. Dissertation, Acta Universitatis Lappeenrantaensis 477, Lappeenrata University of Technology.Google Scholar
  23. Pässilä, A., Frantsi, T., & Tura, T. (2008). Älyllistä ristipölytystä; innovaatiosessiomenetelmä. In eds. V. Harmaakorpi, & H. Melkas (Eds.), Innovaatiopolitiikkaa järjestelmien välimaastossa. Suomen Kuntaliitto; Acta no. 200/2008.Google Scholar
  24. Pässilä, A., Melkas, H., & Uotila, T. (2013). Facilitating collaborative knowledge creation by using ‘research-based theatre’ in organizational innovation: Experiences from a Finnish wood-processing company. Futures, 47, 59–68.CrossRefGoogle Scholar
  25. Pässilä, A., & Oikarinen, T. (2014). Research-based theatre as a facilitator for organisational learning. In P. Meusburger, A. Berthoin Antal, & L. Suarsana (Eds.), Learning organizations: Extending the field (pp. 203–221). Dordrecht: Springer.CrossRefGoogle Scholar
  26. Phillips, N. (1995). Telling organizational tales: on the role of narrative fiction in the study of organizations. Organization Studies, 16(4), 625–649.CrossRefGoogle Scholar
  27. Schreyögg, G., & Geiger, D. (2006). Developing organizational narratives: A new dimension in knowledge management. In B. Renzl, K. Matzler, & H. Hinterhuber (Eds.), The future of knowledge management (pp. 82–98). Basingstoke: Palgrave Macmillan.CrossRefGoogle Scholar
  28. Smedlund, A. (2009). Network approach to Fundamental tasks in knowledge-based organizations. Doctoral Dissertation Series, Department of Industrial Engineering and Management, Helsinki University of Technology, 2009/13, Espoo. URL:
  29. Taylor, S., & Ladkin, D. (2009). Understanding arts-based methods in managerial development. Academy of Management Learning & Education, 8(1), 55–69.CrossRefGoogle Scholar
  30. Todorova, G., & Durisin, B. (2007). Absorptive capacity: Valuing a reconceptualization. Academy of Management Review, 32(3), 774–786.CrossRefGoogle Scholar
  31. Tura, T. (2009). Innovaatiosessio [Innovation session]. A presentation (in Finnish). Lahti Science and Business Park/Lappeenranta University of Technology, Lahti. Unpublished manuscript.Google Scholar
  32. Van de Ven, A., & Johnson, P. (2006). Knowledge for theory and practice. Academy of Management Review, 31(4), 802–821.CrossRefGoogle Scholar
  33. Vickers, D. (2008). Beyond the hegemonic narrative—A study of managers. Journal of Organizational Change Management, 21(5), 560–573.CrossRefGoogle Scholar
  34. Zahra, S. A., & George, G. (2002). Absorptive capacity: A review, reconceptualization and extension. Academy of Management Review, 27(2), 185–203.Google Scholar

Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.Lappeenranta University of TechnologyLUT LahtiFinland

Personalised recommendations