EXPLORATION AND EXPLOITATION: DRIVING ORGANIZATIONAL CAPABILITY AND ORGANIZATIONAL CHANGE TOWARD COMPETI-TIVE ADVANTAGE

Abstract

There are two important aspects that usually influence the organizational competitive advantage, i.e. organizational capabilities and organizational change. This study aimed to frame the role of organizational capabilities and organizational change based on exploration and exploitation in the form of balancing and ambidexterity toward organizational competitive advantage, and justify that the organizational capabilities and organizational change are becoming important in organizational competitiveness, and those are becoming more effective if there are complementary relationships between exploration and exploitation. For this purpose, a systematic thematic approach is applied by collecting, synthesizing, reviewing, and understanding previous related scientific articles. Sustainable competitive advantage of firms may lay in the firm's ability to simultaneously balancing exploration and exploitation. Organizations that focus exclusively either on exploration or exploitation, as well as neither on exploration nor exploitation, may become obsolete. Balancing both exploitation and exploration activities creates an ambidextrous organization and allows this organization to be creative and adaptable at the same time, and it can drive organizational capabilities and organizational change in generating the realization of superior competitive organizations.