Individuals' knowledge and their explorative and exploitative behaviors

A growing body of literature has been focusing on the question how individuals in organizations combine exploitation and exploration so as to help organizations become ambidextrous. We take a knowledge-based perspective to understand employees’ explorative and exploitative behaviors and conceptualize knowledge-based precursors to these behaviors along two dimensions: (1) focus on internal and external knowledge (level of existing knowledge vs. absorptive capacity) and (2) knowledge domain (need vs. solution knowledge). This focus addresses two significant gaps in the ambidexterity research (Lavie et al. 2010; Raisch et al. 2009): (1) the tensions of focusing on internal vs. external knowledge and (2) the interactions between different knowledge domains.Drawing on a sample of 864 employees in the home appliances sector, we use regression analyses to test six hypotheses. We argue that existing knowledge will relate positively to exploitative behavior, and that absorptive capacity for new knowledge from outside will relate positively to explorative behavior. Our data supports these conjectures, and shows that these relationships increase non-linearly for all tested relationships, except for the positive relationship between need knowledge and exploitative behavior. We also find support for the hypothesized negative interaction between need and solution knowledge on exploitation and a negative interaction effect of need and solution absorptive capacity on exploration.Our findings make three primary contributions to the research on individual ambidexterity and absorptive capacity. First, we extend the understanding of the cognitive precursors of ambidexterity at the individual level by exploring how individuals’ knowledge and absorptive capacities shape their exploration and exploitation. Second, we show that need knowledge and solution knowledge are substitutes in their effects on exploitative behavior and, analogically, that need knowledge and solution knowledge are substitutes in their absorptive capacity effects on explorative behavior. Third, we contribute to the literature on individual absorptive capacity, introducing individual absorptive capacity for need and solution knowledge as precursors of explorative behavior, which extends the understanding of the micro-level outcomes of this capacity.