The Effect of Prior Innovation Paths on Path Switching between Exploitation and Exploration

Organizations can achieve a balance between exploitation exploration by cycling temporally through periods of exploitation and periods of exploration. This paper conceptualizes exploitation and exploration as technological paths in organizations by drawing from the theoretical framing provided by the organization path dependence. The prior paths of organizations affect their choice for next actions and decision. Exploitation and exploration represent different phases of organization path dependence and their path characteristics affect the occurrence of path switching over time. This paper addresses how duration, intensity, and dynamics of previous innovation paths influence path switching between exploitation and exploration. We find that the duration of an exploitation path prevents organizations from shifting to exploration. However, the intensity and dynamics of exploitation paths increases the likelihood of path switching to exploration. The duration and dynamics of an exploration path enables them to shift to the exploitation. In contrast, the intensity of exploitation paths delays path switching to exploration. The findings of this paper imply that previous organization paths might not only constrain the next paths but also stimulate path dynamics. The constraint or enabling effect of organization paths to path dependence depends on the characteristics of organization paths. The current innovation paths can be considered an evolution of, rather than a departure from, the prior innovation activities.