Seminal simulation paper that helps us understand how organizations adapt decision-making according to what they currently know. It simulates adaptation by modelling how knowledge moves into and around an organization, regardless of whether that knowledge is correct or not. March's simulation showed the value of a mix of slow and fast learners in an organization (innovation emerges slowly and as a result of variation).

The problem that organizations must learn to understand and decide upon, is how to allocate scarce resources between two core activities; explorative and exploitative. This decision impacts competitive performance and long-term viability.