Complexity in the oil and gas industry: a study into exploration and exploitation in integrated operations
Bento Journal of Open Innovation: Technology, Market, and Complexity
Complexity in the oil and gas industry: a study into exploration and exploitation in integrated operations
A common organizational response to the recognition of complexity is the consolidation of collaborative work forms. In the oil and gas industry, developments in communication and automation technologies have enabled the implementation of collaborative environments called integrated operations (IO). The IO concept is usually described as the integration of people, work processes and technology with the goal of facilitating decision-making and process optimization. This study contributes to the study of the knowledge dimension of IOs by investigating the exploitation of existing practices and the exploration of new possibilities in complex adaptive processes. Data collected through observations of practices reveal changes in patterns of interaction among oil platform operators relocated to an IO facility and the emergence of a complex interplay between exploitation and exploration. Rather than a spatial or temporal separation between the two processes, the findings illustrate an organic relation between exploration and exploration in the context of uncertainty and local adaptations in oil production. The discussion of findings provides elements to reflect upon knowledge management in the oil and gas industry.
Integrated operations; Complexity; Systems; Exploration & exploitation; Oil & gas; Adaptive processes; Interactions; Learning in organizations; Knowledge
The concept of integrated operations (IO) refers to the emergence of new work forms
characterized by technological developments that enable real time data sharing and
communication among multidisciplinary expertise, geographical areas and organizational
settings. Since the initial initiatives in the early 1990s, the concept of integration has
permeated changes in the operational model of most major oil and gas companies. In most
companies, the concept of integration is practiced with the implementation of shared
workspaces where onshore and offshore personnel interact with the use of video
(Steiro & Torgersen, 2013)
. Such data sharing facilities are usually
called collaboration or operation rooms. The overriding objective is an integration of
people, work processes and technology (Lima, Lima, Quelhas, & Ferreira, 2015).
Rosendahl and Hepsø (2013)
, the Norwegian continental shelf is widely perceived
as the geographical area in which the concept of IO is most consolidated, although it has
permeated organizational changes in many countries.
Integrated operations can be intuitively defined as shared spaces where multiple
operations are remotely controlled in a collaborative manner with the use of
information and communication technologies. IO is more than a simple adoption of
new technology but a major organizational change in terms of perceptions of limitations
of deep-rooted assumptions in the oil and industry. As described by
there is a recognition of complexity in oil production surveillance breaking with a once
dominating approach in which production processes could be divided, understood and
modelled separately. Similarly,
states that IO processes break with a traditional
way of structuring production operations in a sequential manner by introducing a parallel
collaborative process in which processes and agents are interdependent.
The reduction of accommodation costs by moving personal onshore is a common
motivation to implement IO. However, the expected benefits of IO go beyond that. It is
usually expected that IO will promote an organizational environment that facilitates
faster and better decision-making. However, more recent research have addressed
human and organizational challenges that had been little explored in earlier studies. Initial
research on integrated operations often demonstrated an overoptimistic expectation on
IO and a bias on technology issues (
Researching IO in oil and gas is important for several reasons. First, there is the
importance of this industry to global and national economies. This study was conducted in a
context of international crisis with an oil price decline of as much 60% bringing important
economic and social consequences. However, the oil price decline is not the only crisis faced
by oil companies. There is a knowledge crisis one expressed by the need to develop new
strategies to identify the emergence and dissemination of new knowledge in order to thrive
in a complex and uncertain market environment. Second, there is the industry need to
understand the knowledge dimension of IO beyond its technological dimension. The
implementation of IT-based knowledge management tools has facilitated the storage of
. On the other hand, the capacity to learn, develop and share knowledge
seems highly dependent on how members interact. Such tools are little relevant in
addressing tacit dimensions of learning and situated practices that have a highly experiential
character in which knowing and doing cannot be separated from each other
. Hence, there is a here an industrial need to understand more about the
human interactional aspect of IO environments on the interplay between existing
knowledge and the exploration of new one which may lead to the emergence of innovation.
Exploration and exploitation related to open innovation
Understanding exploitation and exploration processes in organizations is relevant to open
innovation in at least three ways. First, as claimed by Yun, Won and Park (2016), (p. 22),
open innovation is based on the flow of technologies and knowledge across the formal
boundaries of firms. From this perspective, one may argue that it is also important for
open innovation to understand the flow of knowledge and networks of diffusion at the
organizational level. In this respect,
West and Gallagher (2006)
state that open innovation
involves facilitating and integrating not only external but also internal sources of
innovations. Second, there is the recognition that innovation always involves a “quest in the
unknown” as asserted by
, p. 2) and therefore there is the need to understand how
exploration occurs in organizational settings. Third, there is a relation between the
emergent dimension of knowledge and open innovation as described by
. Emergence is indeed a central characteristic of complex systems. This means
recognizing that knowledge that can potentially lead to innovation may also emerge in
organizational units that have not initially been designed for exploratory purposes such as
the IO facility studied here. Furthermore, as stated by
Yun et al. (2016)
, there is an
intrinsic relation between open innovation, complex adaptive systems and evolutionary change.
As recognized by the authors, companies struggle to survive if they do not meet the needs
of their surrounding market environment. In evolutionary terms, this challenge may be
understood as the need to match the complexity of an ever-changing environment by
allowing internal variation and facilitating processes of interaction from which innovation
(Andersen, Ree & Sandaker, 2010)
. This study aims at contributing to
understanding this relation by looking at exploitation at exploration at the organizational level
from an evolutionary perspective: therefore interaction and variation are the central
elements of the conceptual framework operationalized here.
In the first part of the article, I review literature conceptualizing knowledge and learning
in IOs. As the review shows, concepts such as communities of practice, capability and
resilience have brought important insights but did not explicitly approached exploitation
and exploration. In the second part, I articulate a conceptual framework of complexity.
The present study contributes to this field by applying a frame reference of complex
systems to explore processes of interaction and knowledge in IO settings. Organizational
responses to complexity raises questions about the relation between exploring new
alternatives leading to the development of new knowledge and the exploitation of
(Levinthal & March, 1993; March, 1991)
. In the third part, I
present findings from an empirical observation of processes of interaction in a remote
control operation room in one major oil and gas company. In the last part, I discuss
findings highlighting changes in interaction patterns and a complex co-existence in time and
space of exploitation and exploration.
Knowledge in integrated operations: A review of the literature
The simple implementation of common technology platforms or common access to
information in the form of databases does not automatically grant successful collaboration or
knowledge creation. Therefore, patterns of interaction are important.
IOs as forms of common information spaces that expectedly promote multidisciplinary
collaboration and knowledge creation. As described by
information spaces such as IOs are dynamic spaces which are mostly unstable and mutable. These
are multidisciplinary spaces where different communities of knowing bring their own
expertise and engage in process of communications. In such heterogeneous settings, there is
a need for a common understanding in order to fulfill its function. For
Filstad, Hepsø and
), (p. 77), “knowledge sharing in integrated operations across boundaries
occurs within an existing or emerging governance structure, where colleagues collaborate
in virtual teams, where knowing how to perform professionally is key for problem
solving”. Another important factor related to successful collaboration and knowledge sharing
in a broader perspective and in the specific case of IO is trust
(Filstad & Hepsø, 2009)
The willingness to share sensitive information and engage in exploration of new
knowledge requires trust often in the context of informal social practices.
Integrated operations as communities of practice
The concept of communities of practice developed by
Lave and Wenger (1991)
focusing on the social interactional context in which practice takes place is often referred to
in the study of IOs
(Almklov, Østerlie, & Haavik, 2014; Ose & Steiro, 2013)
practice-based orientation has a rather pragmatist perspective on knowledge by
assuming that knowing and doing are intrinsically connected. This connection takes places in
spaces of coordinated interaction among members who have a common activity sharing
a community identity and overlapping values. On the other hand, communities of
practice are less susceptible to management control due to the some of the characteristics
: evolving, shaped by common values, organic, self-managing
and non-hierarchical. Therefore, often knowledge management strategies explicitly aim
at identifying communities of practice and nurturing mechanism of social interaction
and giving them some degree of autonomy.
Resilience and capability
Apneseth, Wahl and Hollnagel (2013
recognize risk in drilling and
offshore operations and conceptualize learning as a key dimension of resilience
engineering. For them, a resilient organization is one that has the capacity to respond and adapt to
external and internal perturbations. Resilience involves the abilities to monitor, to
respond, to anticipate and to learn. The capability approach applied by
and Mydland (2013
) derives from the metaphor of ecology to represent the dynamics of
emerging situation in IOs. The ecology metaphor calls for the limitation in
understandings the organizational and capabilities in the oil and gas industry in terms of fixed
hierarchies and equilibrium markets. The consolidation of IO environments means important
changes in terms of interactions for various organizational agents (
Rosendahl, Egir, Due-Sørensen, & Ulsund, (2013). Such changes are not only technical decisions
but involve alterations in practices and unwritten codes that can either open or close for
variation and the exploration of new knowledge.
This brief review of the literature shows that in spite of conceptual differences, it is
possible to identify a common interest in understanding knowledge sharing, situated
learning and emergence in conditions of uncertainty. The present study conceptualizes
the IO workspace in terms of interactions constituting a unit of adaption nested in an
Exploration and exploitation in adaptive processes
The trade-off between exploitation and exploration in complex adaptive systems is a
matter of interest in different fields ranging from genetics to the decisions about allocations
of resources in organizations
(Axelrod & Cohen, 2000)
. Complexity theorists have a
common interest in the emergence of patterns and novelty from multiple processes of
interactions among different agents of complex systems
(Byrne & Callaghan, 2014; Johnson,
2001; Padgett & Powell, 2012)
. The role and importance of knowledge have long been a
central point of interest in studies of adaptive processes
(Gupta, Smith & Shalley, 2006;
Holland, 1975; Lavie, Stettner & Tushman, 2010; March, 1991; Miller, Zhao & Calantrone,
. Table 1 shows definitions, managerial attitudes and activities usually associated to
exploitation and exploitation:
It is usually argued that organizations face the challenge of reaching a balance between
exploration and exploitation in order to preserve their adaptive capabilities. The challenge
in presented by
in the following terms:
Adaptive systems that engage in exploration to the exclusion of exploitation are likely to
find that they suffer the costs of experimentation without gaining many of its benefits.
They develop too many underdeveloped new ideas and too little distinctive competence.
Conversely, systems that engage in exploitation to the exclusion of exploration are likely
to find themselves trapped in suboptimal stable equilibria (p. 71).
Both processes involve at least some degree of learning as even when replicating already
existing practices, individuals in organizations accumulate experiences producing changes
even if only of incremental character
(Gupta et al., 2006)
. Organizations have explicit and
implicit mechanisms that facilitate exploration and exploitation. Different strategies and
policies might explicitly state patterns of exploration and exploitation. Similarly, implicit
mechanisms such as unwritten norms and informal everyday patterns of interactions might open
or close the possibilities for exploiting existing knowledge and/or exploring new alternatives
, the trade-off between exploitation and exploration
involves risks and vulnerability which are further complicated because the two compete for
often scarce resources in organizations. Potentially positive returns from exploration are
more uncertain and distant in time and space than expected returns from exploitation.
The trade-off also involves tensions between individual knowledge and what March
regards as the organizational code comprising the socialization of language, beliefs and
practice. In the development of knowledge, there is then a two-way adaptation between
individual learning and the organizational code called mutual learning
organizational code consists of norms, rules and procedures which are expressions of the
knowledge stored over time by learning from organizational members. However, there is a
tendency in adaptive processes to privilege exploitation of existing alternatives in relation to
the exploration of unknown ones in order to consolidate the reliability of performance.
Ambidexterity is a central concept in the study of exploration and exploration in
organizational settings. As described by
Stettner and Lavie (2014)
, ambidexterity refers
Managerial actions enabling
exploitation and exploration
to the possibilities and implications of reaching a balance between exploration and
exploitation. The main question here is how exploratory and exploitative processes take
place and interact in organizations. As reviewed by the authors, most studies argue for
a separation of exploratory and exploitative processes in organizations. Such separation
can assume different forms: temporal (transitions between exploration and exploitation
over time) or spatial (separate organizational units or domains of activities engaging in
either exploration and exploitation). Although the authors acknowledge the interplay
among different organizational domains, their longitudinal analysis of software firms in
the US highlight the third form by exploring via externally oriented modes while
exploiting in internal organizational
(Stettner & Lavie, 2014)
. Their study departs from
the assumption that exploration and exploitation involve different kinds of routine and
relying on both simultaneously “induces in tension, complexity and coordination
challenges that can undermining performance”
(Stettner & Lavie, 2014, p. 1906)
. On the
other hand, the evolutionary perspective offered here focus on adaptation processes
and brings an organic perspective towards ambidexterity that will be further discussed
in the light of empirical findings.
Variation and selection in complex systems
Explaining organizational adaptation from an evolutionary perspective requires framing
exploration and exploitation in terms of variation, interaction and selection
. The organizational response to an increasing environmental complexity
involves changes from an organizational paradigm focusing on control management to
one facilitating behavioral variation
. Selection requires a wider range
of solutions and practices than on the previous organizational paradigm that focused
on standardization and control. In order to match the complexity of the environment,
there is a need to allow for variation facilitating the emergence of new solutions and
practices in order to cope with an ever-changing environment. The focus on interaction
demands looking at webs of influence beyond formal organizational hierarchies and
divisions. For instance, there is an increasing recognition of the evolutionary and
continuous rather than revolutionary character of processes of change in organizations
(Warner Burke, 2013)
. As highlighted by
Andersen et al. (2010)
, both learning and
selection are relatively constant processes in natural systems but it would be a
misconception to assume that selection is goal-oriented and necessarily leading to improved
outcomes. From this perspective, the very concept of learning loses the rather
normative value usually implied by learning organization models. However, organizations use
different forms of interventions to engineer selection
The selectionist perspective raises questions regarding dominant organizational
assumptions in the oil and gas industries. Oil companies have many characteristics of
professional bureaucracies configurations where there is a high degree of specialization
(Bremdal & Korsvold, 2013)
. In such configurations, skilled professionals require control
of their own activities and work in a highly independent manners. In bureaucratic models
of organization, there is an embedded focus on standardization and control of unwanted
variation. There are structures that restrict interactions to the level of formal processes in
order to avoid the risk of undesired variations
an understanding of the concept of integration that strengthens the choice of complex
systems as the theoretical framework in this study: “the common sense of ‘integration’ is
to make something ‘into a whole’. This means that parts that hitherto were considered
separately and that may have functioned separately, become subsumed under a common
framework” (p. 345). Integration draws attention to increasing interactions and
interdependencies between different parts of a system. That implies in heterogeneity and
uncertainty. Bearing that in mind, using the frame of reference of complex systems to understand
the concept of integration implies in variation and the exploration of new knowledge.
Complexity and the possibilities for engineering organizational history
The evolutionary dynamics of organizations have attracted attention from
management scholars for many decades. However, further developments in complexity
have been accompanied by a redefinition of organizational evolution moving from
outcome conceptions to process conceptions
. As described by March,
the initial conceptions of ordered paths towards efficient outcomes have gradually been
substituted by a historical logic of multiple equilibria, branching processes and networks
of diffusion in local adaptation processes. There is then space to move from a normative
understanding of selection: “there are irreversible branches, thus path-dependence and
decisive minor moments. The branch-points, involving factors as mutations, mating,
communication contacts, and fortuitous opportunities often seem chancelike in their
resolution, yet decisive in their effects on subsequent history”
(March, 1994, p. 44)
central theoretical implication of this development is a stronger emphasis on engineering
rather than predicting history. In organizational settings, attempts to engineer history can
range from large to small interventions that might implicitly aim at changing information
flows, altering structure of interactions and/or managing the exploitation and exploration
relation. From this perspective, implementing IO settings can be seen as forms of
interventions intending to change patterns of interaction hereby bringing implications for
exploitation and exploration.
Most of the organizational research I presented on my literature review focus on
developments in the Norwegian oil industry where the concept of IO was initially
implemented and is regarded to be in advanced stage of consolidation. However,
the case that I analyze here is located in another country and different types of
evidence suggest that the very concept of integration has different meanings and
implications than in the Norwegian context. The qualitative data was gathered over
6 weeks throughout observations of everyday practices in a large oil and gas
In 2009, the company launched a strategic program aiming at integrating
operations in Exploration and Production. The expressed aims of the program included
increased efficiency, lower operational costs and faster flow of information
contributing to effective decision-making. However, its implementation presents itself in
varying stages of consolidation in different operational units of the company. The
observations were conducted in a facility from where operations in eleven offshore
platforms were remotely controlled. This was located in the oldest operational unit
of this company that historically generated much of the know-how that was later
transferred to other units. Some middle managers informally described this unit as
one in which changes usually encounter resistance and happen in a slow pace. The
implementation of the IO concept here implied in the gradual movement of
platform operators to an onshore facility. While in most companies, the IO facility is
called collaboration or operation room, in this unit the IO room is called
operational control center.
Oil platforms are complex structures where different processes such as drilling,
extraction, processing and storing take place. In large platforms, the structure
provides accommodation for over two hundred people and helicopter traffic is
(Booth & Butler, 1992)
. The platforms located in the geographical area of this
case studied varied in size, production and level of complexity. While some
performed all the above processes, others only extracted the natural resource and
directed it to other platforms, which initially processed the raw material before it
could be transported onshore for refining. Besides oil production, Gas Oil
Separation Plants (GOSP) include utility systems that provide energy, water and air to
be used in the platform
. Some platforms provide gas to other
platforms in the same area. In this sense, there was a complex network of
interdependence and intense information flow among the platforms. In offshore
production platforms, the local control room is the central space for monitoring
and controlling production processes and safety procedures
(Walker et al., 2014)
Platform operators are professionals monitoring production processes, storage and
assisting oil production teams. In many companies, the concept of integration
brought changes to the role of the platform operator by demanding them to be
part of distributed teams
(Walker et al., 2014)
It was difficult to create conditions for classical interview situations due to the long
working shifts and the fast-paced routine of the operational control center. Therefore,
the methodological choice here was to observe the work routine maintaining dialogues
with participants as they conducted and described their own activities in day and night
shifts. Data-gathering was characterized by periods when the researcher observed the
daily interactions and periods when descriptions of practices were gathered in a
dialogical manner with participants
(Bryman & Bell, 2015)
. Dialogues were transcribed
and observations were noted in memos. Recurrent themes were identified and analyzed
in an interpretive manner. Observations, field notes, extracts from dialogues and
meetings were coded and categorized under two clusters of findings: interactions and local
adaptations. Local adaptations were thereafter divided in exploitation and exploration.
Data associated with restriction of variation were associated with exploitation while
data which were interpreted opening for the possibility novelty was grouped under
exploration. The choice of structuring findings in such clusters were theory-driven
informed by the conceptual framework of complex systems (the focus on interactions as
units of analysis) and conceptualization of units of adaptations by March (exploration
and exploitation in local adaptations). This study has thus a qualitative character
applying the framework of complexity in an interpretive manner giving space for
contextuality and the experience of participants
(Tsoukas & Hatch, 2001)
. Working with different
kinds of evidence (observational and dialogical) contribute to bring objectivity to the
interpretive character of this study. In this respect, gathering personal experiences from
participants and observing practices as they were being conducted provided the
opportunity to compare and to some extent cross-check different kinds of data. I present
here extracts of data that are conceptually representative of overall findings. The
following figure (Fig. 1) illustrates the research rationale and presentation of findings:
In order to protect the anonymity of the company and participants, the country where
this study was conducted is not mentioned here. At times, the researcher’s lack of
technical knowledge of oil production limited the understanding of some processes. This can
be regarded as a limitation of this study. However, this limitation was to some extent
compensated by the effort to learn about oil production by reading a technical handbook
and maintaining a collaborative communication with the company’s
research and development center in order to clarify the professional language of
participants. This helped me to refine the analysis and interpretation of observational
data. The data reveals emerging exploratory practices that were not always verbalized
as learning in the language spoken by the participants and that could not be
anticipated by looking only into the highly exploitative character in which the IO concept
was implemented in this company.
Understanding changes in the activity of oil platform operators is particularly
interesting as it takes place in a context where two dimensions of complexity coexist.
First, there is the complexity of production itself in which different processes are
interrelated. The operator is in important position in terms overviewing such
processes and responding to incidents that might occur. Second, there is the
complexity of dynamic processes of interactions and interdependence among different
platforms. The observation of changes in interactions patterns brought the integration
process brings important implications for exploitation and exploitation in organizational
learning. The concept of integration did not assume in this context the character
of multidisciplinarity and teleconferencing communication with offshore staff as in
other settings, but of a tighter communication and cooperation among operators
with diverse previous experiences.
Changes in interactions
In each shift, twelve operators shared the facility in a rather noisy environment with
intense communication with platforms by radio and phone, and alarms ringing indicating
potential problems in offshore facilities. There is an intense exchange of information
and constant problem-solving between offshore personnel and the operator in the
Operators described the transition from the platform to the onshore facility as a
tradeoff. First, there were descriptions of gains in life quality by moving from the stressful
confinement environments of the platforms and having more contact with their own families.
The second gain was described in terms of proximity and a more direct interaction with
operators responsible for other platforms. Operators described increasing and facilitated
communication with operators responsible for other platforms due to physical proximity.
It was possible to observe that operators in the control room would regularly walk to each
other’s desk to discuss ongoing issues and were therefore less dependent on radio or
phone. This was regarded as particularly positive in critical situations such as recovery
from platform shutdowns in which fast communication is often decisive. For instance, the
operators of platform that was recovering from a shutdown could walk to the desk of
another operator and ask for more gas in order to restart operations. Other operators in the
room followed attentively such situations. They could anticipate possible consequences to
their own platforms facilitating decision-making and therefore responding faster to
unexpected events. As operators described, small incidents can lead to major outcomes to
platforms in the same area. In such cases, only the operator has the local knowledge can
operate his/her platform, but rapid information exchange with other operators was seen
as highly decisive.
The tasks of operators consisted mainly of oil production surveillance, monitoring
different processes and safety tests conducted in the platform. Such activities required
prior technical knowledge of oil production and regulations from the national oil
agency. The normal work shift had a rather cyclical routine starting with receiving a
report and discussing possible problems and sometimes unexpected events with
operators from the previous shift. In the words of one operator, the normal workday was a
“routine that is not really a routine” in which the ongoing standard practices were
punctuated by unexpected events, problem-solving and fast decision-making. The
physical proximity changed interactions in other ways indicating another important
tradeoff. There were gains in terms of consolidating relations of trust and friendship with
operators in the same operational unit but also losses in terms of interpersonal
relations with offshore colleagues. Physical proximity and consolidation of trust relation
created the condition for the emergence of exploration of new possibilities in the
operational control center.
Local adaptations and knowledge: A complex interplay between exploitation and
In the initial stage of the data gathering period, operators readily described their
activities in terms of routines, procedures and standards indicating an exploitative character.
At this stage, initial conversations with operators revealed accounts of learning in terms
of acquiring pre-established technical knowledge, procedures and regulations.
Furthermore, most participants described experiencing an increasing standardization of
practices in recent years in the form of a steady increase in norms, standard procedures
and in both internal and external auditing by government agencies. In the words of one
operator, “now we have more noes than yeses”. In this initial period that lasted for a
week, learning beyond the acquisition of already existing technical knowledge about
written norms and procedures was rarely verbalized by participants .
The non-verbalization of exploration can be exemplified the case of risk analysis
meetings that anticipate the transference of operational control from an oil platform to the
offshore facility. These meetings usually lasts for two days and follow a “what-if” rationale in
which operators, managers and external consultants analyze a list of operational practices
and discuss possibilities and potential problems of transferring processes from the
platform to the operational control center. I observed a risk analysis meeting with operators
that would later be relocated onshore from a relatively large and complex platform, which
performs not only oil production but also provides gas to other platforms in the same
geographical area. The main risk mentioned by operators both during the analysis
meeting and in the room was a possible loss in terms of tacit knowledge acquired with their
experience in the platform. One operator explained this dimension of knowledge in the
following terms: “you have to learn to feel the platform and that’s something you only
develop when you are there”. On the other hand, learning or knowledge sharing was not
mentioned neither by the four operators, the two managers and the two external
consultants present in the meeting. In the words of an external consultant that attended the risk
analysis meeting, integrated operations “look sometimes very unstructured. We need to
make things more uniform. We need to standardize”.
However, observations of everyday patterns of interactions and practices show likewise
an important exploratory dimension that it is not always described as learning or even as
knowledge sharing in the language used by oil platform operators. This took often the
form of everyday adaptations and improvements that were locally initiated rather than
externally designed. I present three examples of emergent exploratory processes that were
Developing a new practice
Changes in registration and storage of pressure and temperature of oil reservoirs is
one of such changes. In the end of work shift, operators are responsible for
producing a spreadsheet showing hourly variations in the temperature and pressure of
oil reservoirs. Storing such information is important for safety reasons. During the
initial period of implementation of the operational control center, operators would
manually take notes and transfer such information from the measurement device
program to a spreadsheet. This procedure was regarded as time-consuming and
susceptible to errors. By comparing their own practices, operators of different
platforms identified the need to develop faster and more reliable forms of storing such
data and worked on a program that automatically produced the spreadsheet using
data from the measurement device program. As they described such innovative and
exploratory process were facilitated by the proximity they experienced in integrated
environments where problems were identified, different practices were compared
and new possibilities were assessed. A common expression used by operators in
the room in relation to such processes was “if it works, I want to use it too”.
Exploration emerging from problem-solving
The activity of the platform operator involves a great amount of unexpected
problemsolving. As described by participants, such unexpected events represent important
situations in which they developed an understanding of the interrelation between different
production processes. For instance, in the first days of observations, the sudden
extinguishment of gas flare in one platform was the subject of a conversation marked by an
intense flow of information between the remote and the local operators. The flare stack
is a combustion means used for burning flammable gas and is a protection against the
risk of over-pressurizing production devices. Understanding the problem and
reigniting the flare demanded exploring and eliminating possible causes throughout a
process of deduction exchanging information with local operators. At a later stage, this
episode generated an informal conversation among operators in the operational control
center in which they compared similar situations in their own platforms and discussed
changes in practices.
Interpreting and comparing the use of standards and regulations
The work routine in oil platforms involves conducting equipment tests which often
demands inhibition of instruments and safety systems. Such processes are described in an
internal document with guidelines for inhibition and control of security systems.
Operators in the operational control center were expected to keep a physical copy of this
document on their desks. The document states that it is the responsibility of the
platform manager and operators in the local and in remote control rooms to follow the
guidelines, analyze risks, register processes and suggest improvements. Furthermore,
this documents states a hierarchy of responsibility in authorizing equipment inhibition
according to equipment or system being controlled and the length of inhibition period.
Operators in the control room played central role by gathering necessary documents to
authorize inhibitions. In some moments, the communication between remote and local
operators assumed a conflictual tone as offshore staff argued that the authorization
process was rather time-consuming often unnecessarily delaying processes. In the same
way, operators in the control center described mismatches between the “real life” of oil
production and standards that they had to comply with as described in the guidelines
document. On the other hand, an important dimension of integration is the physical
proximity opening for the possibility of comparing how the standards are used in other
platforms. The integration in the form of physical proximity among operators of
different platforms provided the space for interpretation in such guidelines and in different
moments, operators would discuss and compare procedures.
Norms and regulations: Restricting variation
The standardization of the activities in the integrated remote control room raises
questions regarding organizational exploration and exploitation. Standard procedures usually
have an explicit concern with operational safety and are regarded as safeguards and legal
protections in case of accidents. In other words, strictly following regulatory norms
reduces the legal liability of the company and its employees in case of major accidents.
The initial implication is an increase in internal and external auditing assessing how they
comply with regulatory norms. Standards are either introduced by national regulatory
agencies or developed internally in the company.
The operational control center remained in many ways little connected to other
departments in its operational unit indicating limited access to networks of diffusion in
the company. Although it was possible to observe an intense communication with
offshore platforms, the same cannot be said about communication beyond auditing and
reporting between the control room and the overall operational unit. The guidelines for
inhibition and control of security is an example of that. This documented goes through
yearly cycles of revisions during which operators may suggest changes but do not
participate in the revisions. Such findings suggest that local adaptations in the integrated
control room remained largely isolated from other adaptive processes in the company.
The analysis of findings suggests a complex interplay between the exploitation of already
existing practices and everyday local adaptations emerging from processes of interactions.
The conceptual framework of complex systems suggests that the main findings can be
interpreted and discussed in the light of concepts of interaction and variation.
Furthermore, the findings provide material to reflect upon ambidexterity in integrated operations.
Interaction and factors enabling and constraining variation
As demonstrated by
, exploration demands variation. Therefore, it is
important to identify factors that either facilitated or constrained variation in the IO
environment. It was possible to observe that at least two factors restricted variation showing that
the integrated environment was designed in a highly exploitative rather than exploratory
character. The first factor was the lack of the multidisciplinarity that characterize
integrated operations in most oil and gas companies. The second factor was the increasing
regulation of the activity of oil platform operators in the form of externally and internally
designed norms and standard procedures. The main integration that took place was in
terms of work processes among operators of different platforms providing gains in terms
of information flow and faster decision-making. It is indeed this context that facilitated an
important dimension of variation: the professional experience of the operators. Each
operator had years of experiences working in platforms that performed different roles in the
web of interdependence of this unit of production.
The physical proximity among platform operators changed patterns of interaction and
trust. Sharing a common workspace provided the opportunity to develop a more direct
understanding of the interdependence among operators and particularities of production
processes in other platforms. Furthermore, this form of integration created conditions for
comparing and discussing practices. From an evolutionary perspective, such occasions
can be regarded as branching points from which local adaptations may emerge.
A complex interplay between exploitation and exploration: A view on ambidexterity
The findings suggest a more dynamic perspective on ambidexterity. As presented in
Levinthal and March (1993)
, the relation between exploration and
exploitation is presented as a trade-off and a matter of explicit or implicit choices made in
organizations. From a conceptual perspective, there is a much delineated difference
between the two processes. In the experimental character of computer simulations from
discusses the effect of turnover and environmental turbulence on
exploration and exploitation, such differentiation is enlightening and necessary. However, in
systems such as the IO control room operating in a complex environment, there is an
interplay between exploration and exploitation rather than being divided by a clear
temporal or spatial boundary. There was an intricate relation between exploitation in terms of
pre-defined procedures and technical knowledge, and the exploration in terms of
networked problem-solving and local adaptation. From this perspective, ambidexterity in
exploration and exploration assumes a more organic relation between the two
processes. From a knowledge management perspective, much can be learned by
recognizing the relation between exploration and exploitation in the complexity of oil
Engineering organizational history: Networks of diffusion
Conceptualizations of complexity and evolution in organizational studies suggest a
theoretical reorientation from predicting history towards engineering history with
local interventions. Moreover, from a systems perspective, there is the need to
match the complexity of the environment. Such conceptual assumptions might be
the base for possible interventions and changes in the business model of oil and
gas companies in turbulent times. Collaboration – or control, as in the case
studied here – rooms are located in oil companies that are designed as professional
bureaucracies divided in different units with their own functions and mechanisms
of professional authority. A mutual adaptation - or mutual learning, as described
by March - would require working with the structure of interactions among
organizational units by strengthening communication patterns. Written norms and
standard procedures are part of what is conceptualized by March as the
organizational code. However, as described by March as the organizational code is
not static but changing dynamically as selection occurs. In more consolidated IO
environments, the multidisciplinary aspect might facilitate interaction with other
units. However, in the case investigated here, the IO facility had little
communication with other units of adaptation in the company, which might restrict the
emergence of mutual learning between individuals and the organizational code. In such
circumstances, the local adaptations as the ones observed in this IO facility remain
restricted to its own unit of evolution.
In adaptive systems, norms and systems of beliefs have a rather fluid and
dynamic nature. In that sense, interventions in the form of changes in the business
model of oil and gas companies could benefit by understanding learning and
adaptation as relatively constant processes and nurturing networks of diffusion among
different units of adaptation. However, this does not mean simply increasing the
flow of information – in systems already overloaded with information – but to
locate specific functions of units of adaptation in terms of their of processes of
interdependence and communication with other units. From a systems perspective,
interventions should not be restricted to the formal organizational structure but
identifying the “real” emergent processes of networking and nurturing processes
from which the local adaptations might lead to learn in a broader perspective.
From a research perspective, this is an important topic for further studies, avoiding
not only a normative view towards learning, but also simplistic notions of
workplace empowerment. Both from a knowledge management and from an open
innovation perspective, recognizing the complex interplay between exploration and
exploitation enabling flows of information and strengthening webs of influence
seems to be a promising track for organizations to thrive in ever complex and
Limitation and further research
The study was limited to one IO facility in a very large oil and gas company. This can be
seen both as a strength and as a limitation. It provided the opportunity to observe changes
in practices and local process of adaptations. On the other hand, researching exploitation
and exploration in IO settings marked by multidisciplinary interaction and better
conferencing possibilities with offshore personnel could bring a further insight. It is also
important to investigate in more detail the information flow and knowledge transfer between the
IO room to the overall company’s structure. Therefore, one promising track for further
research would be a social network analysis
(Borgatti et al., 2014; Parise, 2007; Scott, 2013)
uncovering patterns of communication, information flow between the IO facilities seen as
subsystems in of complex adaptive systems. This approach enables understanding
networks of diffusion, patterns of collaboration and knowledge sharing across organizational
units and even beyond formal organizational boundaries.
The present study contributes to the understanding of the knowledge dimension of
integrated operations by focusing on the interplay between the exploitation of pre-defined
practices and the exploration of new possibilities. The conceptual framework of complex
systems highlights the need to understand organizations beyond formal organizational
design by looking at the emergent character of interactions. The analysis of findings
illustrates a complex relation between the exploitative character in which the IO room was
designed and the situated local adaptations emerging from local interactions among oil
platform operators. The concept of integration is in itself a form of intervention that alters
the structure of interactions among oil platform operators. In a moment of crisis and
increasing environmental complexity, changes in the business model of oil and gas
companies demand a better understanding of local adaptation processes and possibilities for
networks of diffusion. In that sense, we may be able to intervene in organizational history
by facilitating mutual learning between ongoing local adaptations and the organizational
development in a broader perspective.
Not applicable. This project did not have any external funding.
The author is responsible for the whole article. The author read and approved the final manuscript.
The author declares that he has no competing interests.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Almklov , P. , Østerlie , T. , & Haavik , T. ( 2014 ). Situated with infrastructures: Interactivity and entanglement in sensor data interpretation . Journal of the Association for Information Systems , 15 ( 5 ), 263 - 286 .
Andersen , B. , Ree , G. , & Sandaker , I. ( 2010 ). A web of learning opportunities . European Journal of Education , 45 ( 3 ), 481 - 493 .
Apneseth , K. , Wahl , A. , & Hollnagel , E. ( 2013 ). Measuring resilience in integrated planning . In E. Albrechtsen & D. Besnard (Eds.), Oil and gas, technology and humans: Risk assessment methods in organizational change (pp. 129 - 146 ). Farnham: Ashgate.
Axelrod , R. , & Cohen , M. ( 2000 ). Harnessing complexity: Organizational implications of a scientific frontier . New York: Basic Books.
Booth , M. , & Butler , J. D. ( 1992 ). A new approach to permit to work systems offshore . Safety Science , 15 ( 4 ), 309 - 326 .
Borgatti , S. , Mehra , A. , Brass , D. , & Halgin , D. ( 2014 ). Social network research: Confusions, criticisms, and controversies . In D. Brass, G. Labianca , A. Mehra , D. Halgin , & S. Borgatti (Eds.), Contemporary perspectives on organizational social networks (research in the sociology of organizations , 40) (pp. 1 - 29 ). Bradford: Emerald Group Publishing Limited.
Bremdal , B. , & Korsvold , T. ( 2013 ). Knowledge markets and collective learning. Designing hybrid arenas for learning oriented collaboration . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 304 - 327 ). Hershey: IGI Global.
Bryman , A. , & Bell , E. ( 2015 ). Business research methods . Oxford: Oxford University Press.
Byrne , D. , & Callaghan , G. ( 2014 ). Complexity theory and the social sciences. The state of the art . London: Routledge.
Devold , H. ( 2013 ). Oil and gas production handbook: An introduction to oil and gas production . Oslo, Norway: ABB Oil and Gas Retrieved from https://library.e.abb.com/public/34d5b70e18f7d6c8c1257be500438ac3/ Oil%20and% 20gas%20production%20handbook%20ed3x0_web .pdf.
Dougherty , D. ( 2017 ). Taking advantage of emergence for complex innovation eco-systems . Journal of Open Innovation: Technology, Market, and Complexity , 3 ( 14 ), 1 - 19 .
Filstad , C. , & Hepsø , V. ( 2009 ). Knowing through integrated operations in cross-disciplinary virtual teams - collaboration and self-synchronization offshore and onshore . Amsterdam: Paper presented at the Organization Learning Conference (OLC) Retrieved from http://www2.warwick.ac.uk/fac/soc/wbs/conf/olkc/archive/olkc4/papers/ 1acathrinefilstad.pdf.
Filstad , C. , Hepsø , V. , & Skarholt , K. ( 2013 ). Connecting worlds through self-synchronization and boundary spanning: Crossing boundaries in virtual teams . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 76 - 90 ). Hershey: IGI Global.
Gherardi , S. , & Nicolini , D. ( 2002 ). Learning in a constellation of interconnected practices: Canon or dissonance ? Journal of Management Studies , 39 ( 4 ), 419 - 436 .
Grant , R. M. ( 2013 ). The Development of Knowledge Management in the Oil and Gas Industry/El desarrollo de la Dirección del Conocimiento en la industria del petroleo y gas . Universia Business Review , 40 , 92 - 125 .
Gupta , A. K. , Smith , K. G. , & Shalley , C. E. ( 2006 ). The interplay between exploration and exploitation . Academy of Management Journal , 49 ( 4 ), 693 - 706 .
Han , J . ( 2017 ). Exploitation of architectural knowledge and innovation . Journal of Open Innovation: Technology, Market, and Complexity , 3 ( 15 ), 1 - 15 .
Henderson , J. , Hepsø , V. , & Mydland , Ø. ( 2013 ). What is capability approach to integrated operations? An introduction to key concepts . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 1 - 20 ). Hershey: IGI Global.
Hepsø , V. ( 2006 ). When are we going to address organizational robustness and collaboration as something other than a residual factor? Amsterdam: Paper presented at SPE intelligent energy conference and exhibition .
Hepsø , V. ( 2009 ). 'Common' information spaces in knowledge-intensive work representation and negotiation of meaning in computer- supported collaboration rooms . In D. Jemielniak & J. Kociatkiewicz (Eds.), Handbook of research on knowledge-intensive organizations (pp. 279 - 294 ). Hershey: IGI Global.
Hislop , D. ( 2009 ). Knowledge management in organizations: A critical introduction . Oxford: Oxford University Press.
Holland , J. ( 1975 ). Adaptation in natural and artificial systems . Ann Arbor: University of Michigan Press.
Hollnagel , E. ( 2013 ). IO, contingency, intractability and resilience . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 342 - 352 ). Hershey: IGI Global.
Johnson , S. ( 2001 ). Emergence. London: Penguin Books.
Larsen , S. ( 2013 ). Managing team leadership challenges in integrated operations . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 103 - 122 ). Hershey: IGI Global.
Lave , J. , & Wenger , E. ( 1991 ). Situated learning: Legitimate peripheral participation . New York: Cambridge University Press.
Lavie , D. , Stettner , U. , & Tushman , M. L. ( 2010 ). Exploration and exploitation within and across organizations . The Academy of Management Annals , 4 ( 1 ), 109 - 155 .
Levinthal , D. A. , & March , J. G. ( 1993 ). The myopia of learning . Strategic Management Journal , 14 ( S2 ), 95 - 112 .
Lima , C. , Lima , G. , Quelhas , O. , & Ferreira , R. ( 2015 ). Integrated operations: Value and approach in the oil industry . Brazilian Journal of Operations & Production Management , 12 ( 1 ), 74 - 87 .
Lochman , M. ( 2012 ). The future of surveillance: A survey of proven business practices for use in oil and gas . SPE Economics & Management. , 4 ( 4 ), 235 - 247 .
March , J. ( 1991 ). Exploration and exploitation in organizational learning . Organization Science , 2 ( 1 ), 71 - 87 .
March , J. G. ( 1994 ). The evolution of evolution . In J. Baum & J. Singh (Eds.), Evolutionary dynamics of organizations (pp. 39 - 49 ). Oxford: Oxford University Press.
Miller , K. D. , Zhao , M. , & Calantone , R. J. ( 2006 ). Adding interpersonal learning and tacit knowledge to March's exploration-exploitation model . Academy of Management Journal , 49 ( 4 ), 709 - 722 .
OLF - Norwegian Oil Industry Association. ( 2005 ). Integrated work processes: future processes on the Norwegian continental shelf (report ). Oslo.
Ose , G. O. , & Steiro , T. J. ( 2013 ). Introducing IO in a drilling company: Towards a resilient organization and informed decision-making? In T . Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 328 - 341 ). Hershey: IGI Global.
Padgett , J. & Powell , W. ( 2012 ). The problem of emergence . In Authors (Eds.), The emergence of organizations and markets (pp. 1 - 30 ). Princeton, NJ: Princeton University Press.
Parise , S. ( 2007 ). Knowledge management and human resource development: An application in social network analysis methods . Advances in Developing Human Resources , 9 ( 3 ), 359 - 383 .
Rosendahl , T. , Egir , A. , Due-Sørensen , L. , & Ulsund , H. ( 2013 ). Integrated operations from a change management perspective . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 282 - 285 ). Hershey: IGI Global.
Rosendahl , T. & Hepsø , V. ( 2013 ). Preface . In Authors (Eds.), Integrated operations in the oil and gas industry: sustainability and capability development (pp. xvii-xxvii) . Hershey, PA: IGI Global.
Sandaker , I. ( 2009 ). A selectionist perspective on systemic and behavioral change in organizations . Journal of Organizational Behavior Management , 20 ( 3-4 ), 276 - 293 .
Scott , J. ( 2013 ). Social network analysis . London: Sage.
Steiro , T. & Torgersen , G. ( 2013 ). The terms of interaction and concurrent learning in the definition of integrated operations . In T. Rosendahl & V. Hepsø (Eds.), Integrated operations in the oil and gas industry: Sustainability and capability development (pp. 328 - 340 ). Hershey: IGI Global.
Stettner , U. , & Lavie , D. ( 2014 ). Ambidexterity under scrutiny: Exploration and exploitation via internal organization, alliances, and acquisitions . Strategic Management Journal , 35 ( 13 ), 1903 - 1929 .
Tsoukas , H. , & Hatch , M. J. ( 2001 ). Complex thinking, complex practice: The case for a narrative approach to organizational complexity . Human relations , 54 ( 8 ), 979 - 1013 .
Walker , G. H. , Waterfield , S. , & Thompson , P. ( 2014 ). All at sea: An ergonomic analysis of oil production platform control rooms . International Journal of Industrial Ergonomics , 44 ( 5 ), 723 - 731 .
Warner Burke , W. ( 2013 ). Organization change: Theory and practice . Thousand Oaks: Sage Publications.
West , J. , & Gallagher , S. ( 2006 ). Challenges of open innovation: The paradox of firm investment in open-source software . R& D Management , 36 ( 3 ), 319 - 331 .
Yun , J. J. , Won , D. , & Park , K. ( 2016 ). Dynamics from open innovation to evolutionary change . Journal of Open Innovation: Technology, Market, and Complexity , 2 ( 7 ), 1 - 22 .