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- Title
Lessons from the Celltech Case: Balancing Knowledge Exploration and Exploitation in Organizational Renewal.
- Authors
McNamara, Peter; Baden-Fuller, Charles
- Abstract
This article applies the lens of the knowledge exploration/exploitation dilemma to the renewal of Celltech Plc. From a theoretical perspective it has oflen been argued that as a firm matures, exploitation of current organizational knowledge drives out exploration of new ideas, and that this increases the likelihood of firm failure. This same literature gives few clues as to how balance can he maintained, or decline reversed. Our case study documents the decline of Celltech, its rejuvenation from near bankruptcy in 1990, and its subsequent ability to prosper to become the eighth largest biotech firm in the EU in terms of market capitalization. Through the Celltech case we show empirically that renewal based on exploration is possible even in a firm where exploitation has come to dominate. This case also illustrates how a balance between exploration and exploitation can be maintained for over half a decade, despite the theoretical tendency stated in the literature for exploitation to dominate. We offer insights into the process of maintaining a balance, including reorganization to release internal diversity to stimulate exploration, creation of a common language, and building systems to institutionalize the maintenance of a balance between exploration and exploitation.
- Subjects
KNOWLEDGE management; KNOWLEDGE workers; INTELLECTUAL capital; ORGANIZATIONAL learning; CORPORATE reorganizations; CORPORATE culture
- Publication
British Journal of Management, 1999, Vol 10, Issue 4, p291
- ISSN
1045-3172
- Publication type
Article
- DOI
10.1111/1467-8551.00140