Options for Strategic Change: Exploration or Exploitation in Marketing for New Wealth Creation

Abstract

In this chapter, we set out to present a framework for understanding changes in marketing practices by European, Japanese and US companies in Southeast Asia after the Asian economic crisis. How organizations evolve and adapt to their environments continues to be a central theme of organization and strategic change theories (Burns and Stalker 1961; Lawrence and Lorsch 1967; Thompson 1967; Donaldson 1996; Rajagopalan and Spreitzer 1997). Lewin, Long and Carroll (1999) have developed a model of new wealth creation, and following them we classify changes in marketing practices into two types: exploration and exploitation. The model assumes that the historical pattern of organization adaptations establishes a firm-specific path dependence which enables and restricts future adaptations, and that the long-term survival of the organization requires both exploitation and exploration adaptations (Levinthal and March 1993). Also, the nation-state form of capitalism creates a system of constraints which affects the type and direction of changes in marketing practices after the crisis (Lewin, Long and Carroll 1999).