Exploratory Innovation: The Role of Organisational and Top Management Team Social Capital


What makes companies adaptable to changes and crises, and thus ensures their long-term survival? The magic word seems to be ‘innovation’, but yet many companies fail to innovate. In his PhD thesis Exploratory Innovation: The Role of Organisational and Top Management Team Social Capital, Alexander Alexiev looked at what distinguishes companies succeeding to innovate from those who do not succeed irrespective of the industry they are in. He found that indeed it seems difficult for companies to acquire new knowledge that diverges away from their existing knowledge base.

In his research amongst Dutch companies in various industries, he found one that of the best ways for firms looking for new knowledge is by making use of social capital – in other words, the connections within and between social networks inside and outside of the firm. Organisations should encourage experimentation and nurture the flow of knowledge among their units and across their borders. Alexiev also found top management teams (TMT) have an important role to play when it comes to innovation. In addition to allocating resources to new initiatives, TMTs are valuable for recognising exploration opportunities and defining threatening environmental changes.

So it is important for senior managers to actively seek strategic advice from their wide networks of internal and external connections in order to truly increase the chances of the organisation encountering, and adopting new, and possibly foreign, knowledge.

“At all times, social capital needs to be activated in order to be efficient to a company,” Alexiev says. “Being connected is not sufficient. Top managers have to be aware that they need to seek divergent knowledge in order for their company to remain successful in the long run. Thus, TMTs can add value by steering firm strategy towards innovation.” He continues: “I found diversity within TMTs to be very beneficial as well. Different backgrounds can help to facilitate the process of learning within the organisation and move it to the next level.”

Alexander Alexiev defended his dissertation on September 9, 2010. His promoters were Prof.dr.ing. F.A.J. Van Den Bosch, Professor of Management Interfaces between Organisations and Business, and Prof.dr. H.W. Volberda, Professor of Strategic Management and Business Policy, both from Rotterdam School of Management, Erasmus University. Co-promoter was Prof. dr. Justin Jansen. Other members of the Doctoral Committee were Prof. dr. Ulrich Lichtenthaler, Prof.dr. Suzana Rodrigues, and Dr. Jatinder Sidhu.

About Alexander Alexiev

Alexander Alexiev (Silistra, Bulgaria, 1980) is a graduate (cum laude) from the research master programme of the Erasmus Research Institute of Management (ERIM). Prior to joining ERIM, he obtained undergraduate degrees in International Business Administration from Erasmus University Rotterdam and Sofia University St Kliment Ohridski. Next to his research, he has taught undergraduate and master courses at the Rotterdam School of Management, Erasmus University. His dissertation research includes a forthcoming publication in the Journal of Management Studies and has been presented at numerous international conferences in the field. In his work, Alexander Alexiev explores how organisations can timely avoid failure by embracing innovation beyond their existing technological and market trajectories. The focus in his studies is on management behaviours and organisational features that can support organisational learning, especially those malleable by an organisation’s strategic top.

Abstract of the dissertation

One of the most difficult challenges for organisations is to innovate beyond their existing technological and market trajectories. Despite being complex, exploratory innovation is needed for the long-term survival of the enterprise. Existing studies point to economic triggers that can foster its pursuit: decline of firm performance or availability of slack resources. However, these factors may still fail to ensure adaptation if organisations are unable to act on emerging opportunities or to respond timely to environmental threats.

This dissertation advocates a behavioural and learning approach to study exploratory innovation. The concept is dissected into four organisational issues and processes: creation of search routines, learning of divergent knowledge, environmental sensing and strategic decision making. A framework for the antecedents, mediators and moderators of exploratory innovation is developed by combining insights from organisational social capital and upper echelon literature.

The empirical studies that examined specific relationships from the framework demonstrated the significance of organisational and top management team (TMT) social capital as antecedents of exploratory innovation. Firms that explore often possess also a capability for knowledge acquisition. TMTs tap into their social capital by engaging in external and internal advice seeking. Findings show that external advice seeking can promote exploratory innovation in firms with homogeneous TMTs and comprehensive decision making in organisations with less empowered lower-level managers.

More information

Pictures of the event     
Full text of the dissertation