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    Lessons from the Celltech Case: Balancing Knowledge Exploration and Exploitation in Organizational Renewal


    McNamara, Peter and Baden-Fuller, Charles (1999) Lessons from the Celltech Case: Balancing Knowledge Exploration and Exploitation in Organizational Renewal. British Journal of Management, 10 (4). pp. 291-307. ISSN 1045-3172

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    Abstract

    This article applies the lens of the knowledge exploration/exploitation dilemma to the renewal of Celltech Plc. From a theoretical perspective it has often 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 be 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.

    Item Type: Article
    Additional Information: The definitive version of this article is available at Lessons from the Celltech Case: Balancing Knowledge Exploration and Exploitation in Organizational Renewal (pages 291–307) Peter McNamara and Charles Baden-Fuller. DOI: 10.1111/1467-8551.00140
    Keywords: Celltech Case; Knowledge Exploration; Knowledge Exploitation; Organizational Renewal;
    Academic Unit: Faculty of Social Sciences > School of Business
    Item ID: 5462
    Identification Number: https://doi.org/10.1111/1467-8551.00140
    Depositing User: Peter McNamara
    Date Deposited: 08 Oct 2014 16:24
    Journal or Publication Title: British Journal of Management
    Publisher: Wiley
    Refereed: Yes
    URI:

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