Sasanka Sekhar Chanda is a Fellow of the Indian Institute of Management Calcutta. Sasanka’s research interests are in strategic decision-making, system failures, and complexity theory. In undergraduate teaching, Sasanka offers an elective An introduction to thinking in complexity. In the postgraduate program, Sasanka offers an elective, Strategic analysis of business events, based on CK Prahalad’s work. In the executive programs Sasanka offers an elective course on Artificial intelligence in management and business. In the doctoral program Sasanka offers courses on theory of the firm, philosophy of social science research, strategy process research and theory development by computational simulation modelling. Prior to joining academics, Sasanka worked in the industry in a range of roles spanning engineering, consulting and management for a period spanning fifteen years.
I see tremendous potential for research by the genetic algorithm model given in Professor James March’s seminal (1991) paper introducing exploration and exploitation through an organizational learning metaphor. To me, it is one of the very few algorithms where the emergence of group-level characteristics—distinct from and not aggregate of individual characteristics—can be studied, particularly in the management and organization studies disciplines. Moreover, it is possible to study order creation in far-from-equilibrium situations, thereby freeing our minds to look beyond the confining stranglehold of research where obtaining equilibrium is considered the only worthwhile endeavour. For some reason or other, March’s study could not be exactly replicated all these years, stymieing its use in research. That issue is now resolved, as can be seen in #2 below. The MATLAB program replicating March (1991) is available in the appendix of my CV that can be downloaded from this web-page. I shall be happy to help in developing understanding and developing modifications and extensions for further research.
Publications in peer reviewed journals
Below, I am listing the papers published in peer-reviewed journals in the order that they are to be read.
1. Chanda S. S., and Ray, S. (2015). Formal theory development by computational simulation modelling: A Tale of two philosophical approaches. Decision, 42(3): 251–267. DOI: 10.1007/s40622-015-0096-y. https://link.springer.com/article/10.1007/s40622-015-0096-y
Description. In this article we distinguish two streams of research for theory development by computational simulation modelling: a critical realist stream that seeks to investigate outcomes by inverting one or more key assumptions in a dominant agent-based model, and a scientific realist stream in the semantic conception tradition that seeks to extend theory or build theory by new constructions in well-known agent-based models, preserving key assumptions.
What is accomplished? The paper lays down a roadmap for researchers wishing to work on theory development by computational simulation modelling (TDCSM). It provides guidance to editors for suitably assessing a TDCSM manuscript.
2. Chanda S. S., and Miller K. D. (2019). Replicating agent-based models: Revisiting March's exploration-exploitation study. Strategic Organization, 17(4): 425–449 DOI: 10.1177/1476127018815295. https://journals.sagepub.com/doi/pdf/10.1177/1476127018815295
Description. In this paper we show that the graphs underlying the March (1991) study — introducing exploration and exploitation through an organizational learning metaphor — were generated using computer code that had three additional features not mentioned in the publication text. Removal of these undocumented features puts March’s theory on firmer footing and opens up the genetic algorithm platform for multi-level theory development in a wide variety of topics in organization and management studies.
What is accomplished? This paper conclusively replicates March (1991) and suggests that the appropriate form of the March (1991) model for future work extending the model is one where the assumptions existing only in March’s code—i.e. absent from the publication text— are taken off. An entire field of theory development is opened up by virtue of the general availability of the genetic algorithm platform for developing multi-level theory.
3. Chanda S. S., and McKelvey (Forthcoming). Back to the basics: Reconciling the continuum and orthogonal conceptions of exploration and exploitation. Computational and Mathematical Organization Theory, DOI https://doi.org/10.1007/s10588-020-09311-y. https://rdcu.be/b4tNx
Description. In this paper we compare and contrast the continuum and orthogonal conceptions of exploration and exploitation, elaborated in March (1991). We observe that the former maps to Astley and van de Ven’s (1983) system structural view; the latter maps to their strategic choice view. Alternately, they correspond respectively to the concepts of induced and autonomous strategic behaviors discussed by Burgelman (1983). We hope this clarification shall put to rest the debates on whether exploration and exploitation are appropriately envisioned as continuum or orthogonal constructs.
What is accomplished? We show that, when exploration and exploitation are implemented as constructs at two ends of a continuum, the change in organizational outcomes upon change in the rate of exploitation is higher (than that in the orthogonal conception), and therefore easier to detect. For this reason, managers who seek greater control of the organization may prefer a continuum configuration of exploration-exploitation activities. Likewise, researchers who seek greater ease in finding data for analysis may prefer the continuum conception as well. However, organizational outcomes from an orthogonal configuration of exploration and exploitation are far superior to that from a continuum configuration. Configuring exploration and exploitation as orthogonal activities requires extending autonomy to middle and operational levels to carry out risky (innovation-related) experiments with heterogeneous knowledge from outside the firm. Therefore, company executives need to focus less on preventing wrong-doing by organizational members, and focus more on putting in place systems and processes that allow extending autonomy to middle and operational levels to carry out risky (innovation-related) experiments.
[Astley WG, Van de Ven AH (1983) Central perspectives and debates in organization theory. Administrative Science Quarterly, 28(2):245–273.
Burgelman RA (1983) Corporate entrepreneurship and strategic management: Insights from a process study. Management Science, 29(12):1349–1364.].
4. Chanda S. S., and Ray, S. (2015). Optimal exploration and exploitation: The managerial intentionality perspective. Computational and Mathematical Organization Theory, 21(3): 247–273. DOI: 10.1007/s10588-015-9184-y
Description. This paper suggests a different answer to the question what is an optimal mix of exploration and exploitation. Posen and Levinthal (2012, Management Science) say that the optimal proportion is 50:50. Posen and Levinthal (2012) assume that exploration and exploitation are two ends of a continuum. They use a single-agent bandit model to derive their answer. In our paper we model exploration and exploitation as orthogonal constructs following the multi-agent formalization given in March (1991). We show that several exploration: exploitation mixes attain the same optimal outcome. Thus, managerial intentionality is feasible: managers do not have to adopt one ‘right’ mix of exploration and exploitation. Our work demonstrates Prigogine’s principle, that diversity can be a source of continued order. It further shows that a moderate rate of inflow of diverse, un-vetted knowledge helps firms combat Knightian Uncertainty.
What is accomplished? The paper establishes that managers orienting their organization towards exploitative innovation can do equally well as managers orienting their organization towards exploratory innovation. It also shows that the prescription regarding appropriate managerial action is vastly different in open systems—where the objective is to fashion orderly structures in far-from-equilibrium conditions—compared to the prescription from research that mandates reaching equilibrium in a closed system as its main purpose.
5. Chanda S. S. (2017). Inferring final organizational outcomes from intermediate outcomes of exploration and exploitation: The complexity link. Computational and Mathematical Organization Theory, 23(1): 61–93. DOI: 10.1007/s10588-016-9217-1 (https://rdcu.be/5wsj)
Description. In this paper I suggest an approach to derive probability of organizational success from an intermediate construct, the level of accumulated organizational knowledge. Extent of matches between sub-samples from the org. code knowledge and the environment (or external reality) enable this computation. Thereby, outputs of managerial efforts are better discerned even if environmental perturbations exist. The paper builds on the elaboration by Mosakowski and McKelvey (1997) that the resource-based-view (RBV) of the firm is, in fact, not a tautology, as is discernible when intermediate constructs are separated from final outcome constructs.
What is accomplished? Complexity is introduced as a key construct connecting intermediate outcomes with final outcomes. This enables implementing better accountability of managers.
6. Chatterjee A., Chanda S. S., and Ray S. (2018). Administration of an organization undergoing change: Some limitations of the transaction cost economics approach. International Journal of Organizational Analysis, 26(4): .691–708. DOI: IJOA-07-2017-1202 https://www.emeraldinsight.com/eprint/PFGBTPPAGSZHAJ92RNFD/full
Description. In this paper we build theory highlighting the dark side of transaction cost economics (TCE) theory. Specifically we discuss the deleterious consequences that ensue when TCE is used to administer organizations undergoing change. The dysfunctions arise owing to (a) TCE’s inappropriate overreliance on managerial foresight (b) TCE’s inability to handle interaction between transactions, given that TCE uses a transaction between dyadic parties as the unit of analysis and (c) TCE’s inability to distinguish between shirking and honest mistakes.
What is accomplished? This paper contributes to the literature that highlights negative impacts of governing organizations by the TCE approach. Specifically, it suggests reasons why large change projects fail and why radical innovation has virtually dried up in multinational firms governed on TCE principles.
7. Chanda S. S., and Ray, S. (2016). Learning from Project Failure: Globalization lessons for an MNC. Thunderbird International Business Review, 58(6): 575–585. DOI: 10.1002/tie.21776
Description. In this paper we suggest that as far as configuration and implementation of information technology solutions for companies is concerned, the design skills clearly lie in countries like India, on account of greater familiarity with a wider variety of business processes compared to the Western countries. This is quite the opposite of what transpired when Western countries shifted manufacturing to China, keeping design to themselves.
What is accomplished? The paper highlights that higher variety in service delivery in the emerging markets confers higher service design and configuration skills to emerging market designers, challenging a groupthink that all design must occur in the West.
8. Chanda S. S., Ray S., and McKelvey B. (2018). The continuum conception of exploration and exploitation: An update to March’s theory. M@n@gement, 21(3): 1050–1079. http://www.management-aims.com/download.php?id=401&l=en&f=en_1538596574.pdf
Description. In this paper we show that for the continuum conception of exploration and exploitation, March’s (1991) result (Figure 2, p. 77) that more exploration is always desirable reverses if we use a lower stock of collective human capital (CHC) than that assumed in March’s experiments. Our research indicates that a section of extant research is mistaken in assuming that March’s formal model for the continuum conception suggests an inverted U-shaped relation between the extent of exploration and organizational outcome. Instead, the level of CHC determines whether it is rewarding to focus on exploration or exploitation. Thus, the formal model supports managerial intentionality towards exploratory and exploitative innovation through appropriate choice of the level of CHC. We call for a new “balance” discussion, focusing on the determinants of the minimum level of the non-preferred activity from among exploration and exploitation.
What is accomplished? This paper effectively provides the missing half of March’s theory regarding the continuum conception of exploration and exploitation.
IV). Chanda, S. S., Yayavaram, S. (2020) An algorithm to find superior fitness on NK landscapes under high complexity: Muddling through. https://arxiv.org/abs/2006.08333
In this article we show that, under high complexity—given by pervasive interdependence between constituent elements of a decision in an NK landscape—our algorithm obtains fitness superior to that reported in extant research. In our algorithm, we distribute the decision elements comprising a decision into clusters. When a change in value of a decision element is considered, a forward move is explored if the aggregate fitness of the cluster members residing alongside the decision element is higher. The decision configuration with the highest fitness accomplished in the path is selected. Our algorithm obtains superior outcomes by enabling more extensive search, and allowing inspection of more distant decision configurations. We name this algorithm the muddling through algorithm, in memory of Charles Lindblom who spotted the efficacy of the process long before sophisticated computer simulations came into being.
III). Chanda S. S., McKelvey, B. (2018) A computational study explaining processes underlying phase transition. arXiv.org > physics > arXiv:1810.04036 https://arxiv.org/abs/1810.04036
In this article we demonstrate a mechanism for phase transition that has the potential to challenge the dominant Ising model, or inform where the Ising model fails. Here, phase transition is defined as attainment of very widely differing final value on an outcome of interest, on account of small differences in initial conditions. We unearth an elegant mechanism by going deep into results akin to phase transition found in a genetic algorithm model. The mechanism involves initial accumulation of incorrect knowledge (or harmful chemicals / vectors) OR correct knowledge (or beneficial chemicals / vectors) owing to initial difference in concentration, followed by positive feedback loops where (a) a virtuous cycle leads to high accumulation of correct knowledge (or beneficial chemicals / vectors) and (b) a vicious cycle leads to high accumulation of incorrect knowledge (or harmful chemicals / vectors).
II). Chanda, S. S. (2016) Corporate Strategy as order creation in disequilibrium, IIM Indore Technical Note, Technical Note, AY 2016-17, TN/01/2016-17/SM
In this article I interpret Professor C. K. Prahalad’s work as a call to fashion business organizations as orderly structures that survive and prosper in far-from-equilibrium conditions, departing from an economics-led view of trying to find equilibrium points for firms to function on. The idea that orderly structures can thrive in far-from-equilibrium conditions was elaborated by Ilya Prigogine in his Noble Prize acceptance lecture. On account of an inability to accommodate irreversibility in the theoretical models, the economics-led view is of limited use in management studies. As noted by Professor Bill McKelvey and others, agent-based models are eminently suited to incorporate irreversibility as well as avoid being prisoner to other unpalatable and inappropriate assumptions of mathematics.
I). Chanda, S. S. (2015) CEO cognition in strategy research. http://dx.doi.org/10.2139/ssrn.2586215.
In this article I argue that the mental maps of CEOs get shaped by the experiences they accumulate by meeting various stakeholders as part of their job role, e.g., (a) the TMT (b) Financial Analysts in the Wall Street (c) Regulators (d) Media (e) Board (own firm) (f) Shareholders (g) Debt and Bond holders (h) Employees of the firm (i) Management Consultants engaged by the firm (j) Trade Associations, (k) Board of Director membership in other firms.
Papers accepted in conferences
12. Chanda SS (2020) ‘Anticipating a Renaissance in the evolution of organization theory’ INDAM 2020, IIM Tiruchirappalli, India.
11. Chanda SS (2019) ‘Does a biased media pose challenges to democratic functioning?’ International Conference on Operations Research & Decision Sciences (ICORDS) – 2019, IIM Visakhapatnam, India.
10. Chanda SS, Nargundkar R. (2019) ‘Why keep promises when contracts are incomplete?’ Asian Academy of Management Conference, Bali, Indonesia.
9. Chanda S. S. (2018) ‘Corporate strategy as order creation in far-from-equilibrium conditions’. 20th Annual Convention of the Strategic Management Forum, IIM Tiruchirappalli.
8. Chanda S. S. (2018) ‘When are exploration and exploitation orthogonal constructs, when do they form ends of a continuum?’ SMS Special Conference in Hyderabad.
7. Chanda S. S. (2017) ‘Ontology and epistemology of conceptual replication of computational simulation modelling research’. Academy of Management Annual Meeting (AOM), RM Division, 2017, Atlanta, Georgia.
6. Chanda S. S. (2013) ‘Comprehensiveness in making strategic decisions: Boon or bane?’ SMS India Special conference at Mohali, India, December, 2013.
5. Chanda S. S., and Ray S. (2013) ‘Why do strategic projects fail in MNCs? A resource dependence perspective’. SMS India Special Conference at Mohali, India, December 2013.
4. Chanda S. S., and Ray, S. (2011) ‘Do managers add value in any environment?’ Journal of Management Studies (JMS) Alternative Conference, October 2011, Hong Kong, SAR.
3. Chanda S. S., Ray S., and Das R. (2011) ‘Developmental programmes, microcredit and Gandhian innovation: Pillars of a bottom of pyramid strategy?’ Strategic Management Society (SMS) Special Conference 2011, San Diego.
2. Das R., Ray S., and Chanda S. S. (2011) ‘New venture creation in a knowledge intensive industry in India: An experiment’. Strategic Management Society (SMS) Special Conference 2011, San Diego.
1. Chanda S. S., and Ray, S. (2011) ‘Generic strategies in dynamic environments’. Academy of Management Annual Meeting (AOM), BPS Division, 2011, San Antonio, Texas.