Exploration versus exploitation: Emotions and performance as antecedents and consequences of team decisions

Abstract

We analyze performance and emotions as antecedents and consequences of team strategic decisions to explore a new routine versus exploiting an existing one. In a laboratory study, we examine team decision making over time and draw causal inferences about the relationships among team emotions, team performance, and explore–exploit decisions. We use self‐report data to measure team emotions, and validate results with psychophysiological data. We find that declines in performance increase the likelihood that teams decide to explore new routines rather than exploit existing ones. We also find a marginal positive effect of positive emotions, as measured by both self‐report and psychophysiological data, on team decisions to explore a new routine. Further, teams successful at implementing new routines report increased positive emotions, as measured by the self‐report data. This relationship is fully mediated by performance change. Copyright © 2015 John Wiley & Sons, Ltd.