A Climate Change towards Exploration: The obstacles to exploration in the context of the organizational climate

Lemmens, Jasper (2010) A Climate Change towards Exploration: The obstacles to exploration in the context of the organizational climate.

Abstract:This research was initiated by a part of the management team of the R&D department of Electro B.V. in order to find solutions in becoming a more innovative department. When this research started the innovations of the previous period were incremental and the creation of radical innovations was desired by some R&D executives. From the start of this thesis a focus was put on stimulating innovative behavior by changing the perceptions of the R&D employees regarding innovation. Within innovation literature, the distinction between exploration and exploitation is made for innovations which are intended to create new technologies and markets on the one hand, and refine and execute more efficient production on the other hand (March, 1991). In order to survive in the long term, researchers believe that a company should pursue both exploration and exploitation. This combination is known as ambidexterity (Duncan, 1976). In this study, the knowledge from this literature stream is used to increase exploration within Electro B.V. Literature streams which focus on the social aspects of innovation often describe the organizational culture or climate. In order to correctly assess the managerial objectives, this thesis thus combines the literature streams of exploration and organizational climate. Exploration is often related to the outputs of innovation activities. Therefore, the stimulation of exploratory activities, rather than exploration directly, is emphasized in this study. The central question is formulated as: What changes concerning the organizational climate should be made within the R&D department of Electro B.V. in order to execute more exploratory activities? The chosen methodology is a case study of Electro B.V. with a focus on the R&D department. The case study allows for multiple data collection methods. Three main data sources are used. First, a survey was conducted among the R&D management and a limited number of executives of the Marketing and Human Resources department. The results of the survey provide a broad overview of the current state of Electro B.V. with respect to innovation. Second, a retrospective project analysis of the project Product 1 was done to determine obstacles to exploratory activities. The project was chosen for its exploratory character. The third research activity is the analysis of a project which was initiated at the start of this thesis. This project was chosen to enable the analysis of the first activities within a project and to assess the current organizational climate. The results show shared climate dimensions of which several dimensions act as an obstacle to exploratory activities. The most important obstacles are a risk averse climate and a lack of vision. Besides obstacles in the climate, other obstacles to exploration are found. These are a focus on exploitation, a structure that does not allow exploratory activities and a low amount of slack resources. Several solutions are extracted from the two literature streams in order to tackle the obstacles to exploration. Regarding climate, these solutions incorporate an increase in risk orientation and the development of a shared vision regarding exploration which focuses on the R&D department. From such vision the R&D employees should really be able to derive what kind of activities is expected from them. Besides climate aspects, an idea management system for developing new technologies can help to stimulate exploration. Also a structure is needed which separates exploratory and exploitative activities and allocates resources to either exploration or exploitation. The conclusions drawn from this research indicate that the organizational climate can affect the behaviors regarding exploration. Shared dimensions with exploration literature are risk, participative safety and achievement orientation. This thesis addresses that the climate does not influence exploration alone. Researchers should account for the interplay between the organizational climate and organizational structure when investigating exploration
Item Type:Essay (Master)
Confidential Described as ‘Electro B.V.’
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/60011
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