Knowledge Distribution and Coordination in Organizations: On Some Social Aspects of the Exploitation vs Exploration Trade-off

A preliminary investigation of the relationship between the distribution of knowledge and the capability of learning and adapting to changing environmental conditions in organizations finds that commonality of knowledge enables coordination and diversity of knowledge favors discovering and learning of new ways of doing things.

Abstract

This paper puts forward a preliminary investigation of the relationship between the distribution of knowledge and the capability of learning and adapting to changing environmental conditions in organizations. The main focus of the paper is on the trade-off each organization faces between commonality of knowledge, which enables coordination, and diversity of knowledge, which on the contrary favors discovering and learning of new ways of doing things. By means of a simulation model, the paper compares the performance, in terms of coordination and learning, of different organizational designs, characterized by the way in which knowledge is distributed among the members of the organization and by the way in which coordination is achieved though centralized or decentralized coordinating devices.