How firms undertake organizational changes to shift to more-exploratory strategies: A process perspective

• Published in: Research policy 2021-01, Vol.50 (1), p.104118, Article 104118
• Main Authors: Vedel, Jane Bjørn, Kokshagina, Olga
• Format: Article
• Language: English
• Subjects: Balancing mechanisms; Business administration; Exploration-exploitation; Humanities and Social Sciences; Organizational adaptation; Organizational structures; Process perspective
• ISSN: 0048-7333; 1873-7625
• DOI: 10.1016/j.respol.2020.104118

•Studies the changes firms undertake to shift to more-exploratory strategies.•Adopts a process perspective to study firms’ evolving organizational structures.•Shows the interplay between structural adjustments and shifts toward exploration.•Demonstrates how firms deploy, change, and combine balancing mechanisms over time.•Shows how firms’ structural choices influence adaptation to exploratory outcomes. Firms’ organization of exploratory research has interested scholars of both research policy and organization theory, yet we still know too little about how firms undertake organizational changes to shift to more-exploratory strategies. Adopting a process perspective, we explore this question through a longitudinal, comparative case study of a Danish pharmaceutical firm and a French-Italian semiconductor firm. We demonstrate how firms adjust their organizational structures to increase exploration, a process of constantly addressing countervailing organizational and interorganizational demands by deploying, combining, and changing balancing mechanisms at the organizational and managerial levels. Moreover, our findings show that firms’ different organizational structures affect their adaptations to exploratory outcomes. These findings advance theory because they illuminate the dynamic interplay between firms’ adjustments of organizational structures and their movements toward more exploration. We use a recursive process model to theorize our findings.