Measuring Knowledge Exploitation and Exploration: An Empirical Application in a Technological Development Center in Brazil

Medición de la explotación y exploración del conocimiento: Una aplicación empírica en un Centro de Desarrollo Tecnológico de Brasil

Silvio Popadiuk, Marcos Antonio Franklin, Patricia Gonçalvez Vidal, Lilian Aparecida Pasquini Miguel y Vanderli Correia Prieto

Exploration and Exploitation Dimensions

From the literature review, it can be identified that, in the study of the exploration and exploitation strategies, there are at least two perspectives: one related to the internal environment, and another related to the external environment. Regarding the internal environment, the focus is on the organization´s capabilities and, therefore, on the efficient and the effective use of its resources. This is a function of the fit between organizational activities and the organization´s strategic planning. The organizational efficiency and effectiveness are always related, in high and low levels of intensity, translated by the management of the organizational knowledge, its control mechanisms, its norms and procedures, as well as its routines (Nelson and Winter, 1982). From the external environment perspective, the search for a favorable competitive position means a constant monitoring of competition and a consistent partnership with several players in the external environment.

From the internal perspective, it has been identified at least five dimensions: (1) the strategic orientation; (2) the organizational knowledge; (3) the organizational efficiency; (3) the costs of the organizational activities; and (3) the result of the organizational knowledge application, i.e., the incremental or radical innovation.

From the external perspective, two dimensions emerged: (1) the competitive monitoring and (2) the relationship with the external environment associated with the partnership/alliances. Table 2 presents a set of attributes related to each dimension, taken from the literature review.

Table 2
Attributes associated to the dimensions of the exploration and exploitation strategies

These dimensions will follow a pattern, according to the literature review. One of the major purposes of this article is to understand the fit between the theoretical considerations and what is happening in a real company. Table 3 shows the hypothesis made accordingly to the patterns that the dimensions should follow regarding exploration and exploitation strategies.

Table 3
Hypothesis regarding the Dimensions

The R&D Institute

The Research and Development Institute (RDI), subject of this study, is a spin out originated from the separation of this institute from a multinational company in the year 2000. The RDI is located in the North Region of Brazil, with representation in two other locations in Brazil. During the conduction of this research project, the only client of this RDI was the multinational headquarter, that develops activities related to the telecommunications with global reach. At the time of the study (January to November, 2007), the RDI was divided into five departments: operations and logistics, software development, mechanics; solutions; and administrative support. There are 120 employees working in these five departments, throughout the locations as well as in other sites of the major client, the multinational company. Most of these employees have college degrees, are male (80%) and have less than thirty years, 50% percent of these employees have been working in this institute for the past three years (since its inception).

The Brazilian legislation provided fiscal benefits to companies conducting R&D activities in the North region of Brazil. Furthermore, the multinational company also committed a large investment in the development of this institute, a fact revealing a strong dependency of this institute. Moreover, all the projects developed inside the institute have the multinational company as the final client.

Method

The research presented here is part of a major research effort to understand how the organizations use the knowledge strategies of exploitation and exploration to increase the organizational learning and the development of innovations. The complete research was designed as a qualitative and quantitative research. A structured questionnaire with open questions as well as a questionnaire with closed questions, were developed, pre-tested with two managers from different companies, and rewritten according to their comments. The present article presents the results from the questionnaire with closed questions that was developed for the respondents to analyze 46 attributes regarding the knowledge strategies of exploration and exploitation, using a six-point Likert scale. The Likert scale had the two extreme, lower and higher with different adjectives that best described the strategic orientation towards exploiting knowledge versus exploring knowledge. The content validity was identified through the extraction of the attributes from the literature review.

The data, presented here, were obtained during a trip to the RDI in the North Region of Brazil. In this trip, five researchers spent a week visiting this institute with the purpose of understanding how this institute used the knowledge strategies of exploration and exploitation, as well as to examine the context of this institute in terms of its culture, structure, processes and information technology. The data presented here refer to a survey passed by the communication department to all employees that were in that site during that week. Seventy employees answered the survey, a number that correspond to 90% of the employees located at that site. There were several people traveling for business and vacation, but the communication department could not report the right amount of people available at that time.

To examine the hypotheses presented in Table 3, regarding the pattern expected for the exploration and exploitation strategies dimensions, we first conducted a factor analysis. To categorize the groups in the sample, we then conducted a cluster analysis. These analyses were done using SPSS version 13. After doing the cluster analysis, a categorical regression with optimal scaling (Meulman and Heiser, 1999) was performed to determine the factors more important to determine the innovative behavior.

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