Organizational Learning Strategy and Firms’ Competitive Advantage Evolution

This study explores the relationship between firms’ organizational learning and evolution of their competitive advantage to explain when a firm would switch between exploitation and exploration learning when its competitive advantage changes. The empirical findings suggest that firms would invest more resources in exploitation to build and sustain their competitive advantage. Conversely, they would invest more resources in exploration when their competitive advantage is eroded. The results indicate that firms adopt a punctuated equilibrium learning pattern, which balances a change over time between exploration and exploitation for adapting to highly competitive environments