Exploiting old lessons and exploring new ideas: A Confucian approach to exploitation and exploration

This paper extends James March’s pioneering work on exploitation and exploration with respect to Confucian thought. Contrary to the conventional, rational approach that assume a paradoxical relationship between exploitation and exploration, we suggest the possibility of a mutually beneficial relationship by highlighting some features of Confucian thought based on the ontological, epistemological, and axiological foundations of the Confucian program of learning: the li-qi philosophy, the alternation of yin and yang, the penetration into the ultimate principle through seriousness and sincerity, and the morality of learning. We argue that the rational approach may lead to pursuing a superficial balance between exploitation and exploration, whereas a Confucian approach promotes substantive learning in the pursuit of fulfilling one’s mission with seriousness and sincerity, during which exploitation and exploration spontaneously reach a dynamic balance by alternating with each other. We provide implications for innovation by illustrating two cases—Apple and AmorePacific—and discuss some intriguing points derived from our Confucian approach in order to stimulate new ideas for future research on organizational learning and innovation.