A closer look at March’s notion of Exploitation: Organisational knowledge stocks and exploitative new radical products development

Purpose Although organisational exploitation displaces exploration in practice, research on the relative relationships between internal organisational knowledge stocks and subsequent organisational exploitation is largely absent. This study aims to empirically investigate possible relationships between organisational exploitation and internal knowledge stocks accumulated by multiproduct firms categorised along two dimensions of organisational experience that have been traditionally associated with the exploration-exploitation construct. Design/methodology/approach Multilevel mixed-effects regression analysis was used to analyse open-source data to investigate the possible relationships between various internal knowledge stocks and organisational exploitation in terms of the subsequent development of new radical products. Findings Radical innovative experience accumulated in both distal and proximal technological areas have a positive relationship with the subsequent exploitative development of new radical products. Contrary to assertions in the literature, incremental experience has a negative relationship with the latter. Research limitations/implications This study’s findings suggest that the supposed relationships between organisational exploitation and knowledge stocks categorised along two dimensions of organisational experience that have been traditionally associated with the exploration-exploitation construct may need to be reassessed. Generalisability of the findings to other industries may be limited due to the use of a single-industry sample. Practical implications In making resource allocation decisions regarding the knowledge assets to develop to support future exploitative innovative endeavours, organisations should emphasise development of experience associated with the intended type of innovations. Originality/value Through an empirical investigation, this study’s findings contribute to clarifying the relationships between subsequent exploitative endeavours and knowledge stocks categorised along the two dimensions of organisational experience.