Managing the exploitation-exploration tradeoff: how leaders balance incremental and discontinuous innovation

The purpose of this paper is to explain how leaders balance exploitation (incremental innovation) and exploration (discontinuous innovation).

A qualitative study with 11 senior leaders in Australian Defence Force.

The study identifies a number of factors that leaders take into account when deciding whether to focus on exploitation or on exploration.

The study concludes that transactional leadership is appropriate in the context of exploitation, while transformational leadership is appropriate in the context of exploration.