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
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: |
|
| Use Licence: |
This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available
here |
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