This paper explores the determinants of external knowledge search strategies, specifically, exploitative and exploratory search. The literature emphasizes environmental context and technological resources, especially R&D, as important determinants of the search strategy. In this paper we focus on two types of the firm’s formal structure: formalized and decentralized structures. The study uses survey data from the ceramic tile industry in Spain. The results show that a competitive environment and a decentralized organizational structure play a role in shaping the firm’s external search strategy, but that R&D has no effect. We find that competition inhibits exploratory search, while a decentralized firm structure encourages the use of this type of search strategy to the detriment of exploitative search. Our results emphasize that the mechanisms driving exploratory and exploitative searches are intrinsically different.