Preventing or escaping the suppression mechanism : intervention conditions

The benefits of strategically balancing exploitation and exploration are well documented in the literature. However, many firms tend to overemphasize exploitation efforts, even in the face of the strong need to step up their exploration activities. A process theory behind this phenomenon, the suppression mechanism, is further explored here. This process describes the interplay between top management (developing a perceived need to explore influenced by management myopia) and the board of directors as gatekeepers of the capital market (generating an external pressure to exploit) as severely limiting for the formation of a profitable and sustainable exploitation-exploration balance. We draw on system dynamics modeling to identify the critical intervention conditions required for organizations to prevent, or escape, the suppression mechanism. As such, the main theoretical contribution of this paper is the identification of critical intervention conditions (i.e. target, timing, size and duration).