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Strategic Corporate Venturing in Interlinked Ambidextrous Units: An Exploratory Model
Abstract
With scarce research on the intersection of corporate venturing and firm strategy, few companies succeed in using their dedicated corporate venturing units for strategic renewal. This study examines this intersection in so-called interlinked-ambidextrous corporate venturing units. Through relational interlinks with internal and external stakeholders, these organizational entities combine the exploration of new market opportunities with the exploitation of existing core competencies to develop new competitive advantages for their parent companies. That way, they aim to create organizationally consequential new business that can change the competitive positioning of a company. To investigate such strategic corporate venturing, the study collects and analyses qualitative data from interlinked-ambidextrous units in 16 European companies. The resulting key themes and their relationships are mapped onto an exploratory model of strategic corporate venturing that includes organizational context factors as antecedents; process activities, relational mechanisms, and dynamic capabilities as enablers; and an ambidextrous orientation as a mediator for the intended strategic renewal task. Embedding these key findings within existing theory provides valuable contributions to the development of the strategic corporate venturing concept and the understanding of interlinked-ambidextrous corporate venturing units. This can help practitioners tackle the strategic renewal challenge through corporate venturing.
... The domain of corporate entrepreneurship (CE) has steadily evolved over the last 50 years and is widely viewed as contributing to the advancement of a firm's corporate strategy, enhancing our understanding of the complex and dynamic nature of entrepreneurship within established organizations (Glinyanova et al., 2021;Ireland et al., 2009;Kreiser et al., 2021;Urban, 2021). CE typically varies in firms due to the mix of individual, organizational, and environmental antecedents, which combine together to influence entrepreneurial activity (Kuratko et al., 2014;Lenart-Gansiniec et al., 2023;Weiss et al., 2023). In this regard, scholars have observed that corporate entrepreneurship activity (CEA) is a result of both internal and external triggers of organizational change and have designated a 'pro-entrepreneurship organizational architecture' as a crucial element of a CE strategy (Ireland et al., 2009. ...
... Change induced by the environment, organizational setting, or employee acting as a change agent might result in a wave of change in other parts of the ecosystem. For instance, a recent study demonstrates how through relational interlinks with internal and external stakeholders, firms combine the exploration of new market opportunities with the exploitation of existing core competencies to develop new competitive advantages (Weiss et al., 2023). Consequently, the necessity for an organization to transform depends on the optimal configurational patterns of CE drivers, which can change over time (Anderson et al., 2012;Kraus et al., 2011). ...
... This procedure culminated in responses from various managerial grades across the total population dataset, and the sample included (a) employees that are decision-makers within the organization regarding CEA, and (b) hold an average span of control of 10 employees per manager. In this regard, academics have acknowledged the role that management at multiple levels plays in achieving a CE activities (Brown et al., 2001;Ireland et al., 2003;Kuratko et al., 2014;Weiss et al., 2023). Furthermore, the sample size was verified using the" partial least squares structured equation modeling (PLS-SEM) heuristic statistical tests to identify the minimum number of respondents required, namely the '10 times' PLS-SEM analytic heuristic and the power analyses tests" (Hair et al., 2017). ...
PURPOSE: Corporate entrepreneurship (CE) is a multi-faceted phenomenon, and although there is extant research on CE, there are knowledge gaps that warrant a deeper understanding. Indeed, focusing solely on independent variables overlooks the extent to which CE activities are mutually and reciprocally supportive. We align our article with research calls for theory building, which provides a novel understanding of the dynamic complexity of the CE process. METHODOLOGY: In this regard, we formulate and empirically evaluate an integrated CE model that reflects the integrative complexity of the antecedents driving CEA. The study context is the South African banking sector, where primary data (n = 312) is obtained via a structured survey. Four meta-hypotheses and several sub-hypotheses, reflecting the organizational, individual, and environmental level antecedents, are tested using partial least squares structural equation modeling (PLS-SEM). FINDINGS: The main study finding validates that corporate strategy is the bedrock of CEA. The results also reveal that entrepreneurial strategy, entrepreneurial structure, transformational leadership, organizational resources, and an entrepreneurial mindset are significant predictors of CEA. IMPLICATIONS: Practical implications highlight that it is important for managers to consider the configuration of the predictors within the CE model, which function as pathways to entrepreneurial corporate strategy. ORIGINALITY AND VALUE: Our study makes a unique contribution by developing and testing an integrated and comprehensive model reflecting the dynamic complexity of the antecedents driving CEA. It is anticipated that the results will allow researchers to compare and examine comparable antecedents to CEA and their applicability in global country contexts.
... In contrast to the proponents of contingency theory, however, proponents of the paradox theory assume that these conflicting requirements are paradoxical in nature and therefore do not represent unsolvable dilemmas (Smith & Lewis, 2011). Instead of considering exploration and exploitation to be incompatible, according to this more modern view, the two orientations rather represent complementary processes which, despite their different requirements, areespecially over longer time horizonseven mutually dependent and reinforcing each other (see e.g., Smith & Tushman, 2005;Gupta, Smith & Shalley, 2006;Andriopoulos & Lewis, 2009;Farjoun, 2010;Weiss et al., 2023). ...
... Based on the upper echelon theory (Hambrick & Mason, 1984;Hambrick, 2007), most prior research on structural ambidexterity focused mainly on the top management team (TMT) or senior management as the key point for (re-)integration between the structurally separated units (see e.g., Galbraith, 1982;Tushman & O'Reilly, 1996;Benner & Tushman, 2003;He & Wong, 2004;O'Reilly & Tushman, 2004;Smith & Tushman, 2005;Lubatkin et al., 2006;Tushman et al., 2010). More recently, however, researchers began to acknowledge that integration on lower hierarchical levels and at the unit level (Rogan & Mors, 2014;Hansen, Wicki & Schaltegger, 2019;Weiss et al., 2023) might also represent a critical success factor for organizations pursuing ambidexterity to achieve satisfactory results (i.e., higher performance), especially when it comes to knowledge transfer between units, which usually happens on the individual level (Kim et al., 2018;Mom et al., 2019;Tempelaar & Rosenkranz, 2019;Foss & Kirkegaard, 2020). ...
This paper reports the results from a research-in-progress project investigating the effects of boundary spanning activities between explorative and exploitative units in structurally ambidextrous organizations on their product innovation performance, both in terms of more incremental (i.e., new-to-firm) and more radical (i.e., new-to-market) innovation. Drawing on Social Capital Theory (SCT) and applying a Knowledge-based View (KBV), a dataset from the European Manufacturing Survey (EMS) collected in Switzerland consisting of data from 476 organizations was analyzed. The preliminary results of the data show that boundary spanning activities between explorative and exploitative units are indeed related to higher product innovation performance and that innovation speed represents an important mediator in this relationship.
... This step is crucial for moving beyond mere categorization and towards a deeper theoretical contribution. As an example, see Fig. 3: 601 in Weiss et al. (2024), which builds a model based on the second-order themes and aggregate dimensions that could be tested quantitatively in the future (with independent, dependent and mediating variables). Moreover, Yeshi et al. (2024) propose a more complex dynamic model of refugee entrepreneurs' resilience ( Fig. 2: 183). ...
... Ambidextrous organizations are more adaptable to changing environments. They can navigate the cultural and strategic differences between themselves and their corporate partners, reducing the likelihood of misalignments and conflicts (Weiss et al. 2023). By maintaining a focus on both exploratory and exploitative activities, startups can sustain their innovative capabilities, ensuring that their sustainability initiatives continue to evolve and improve over time (Yu and Zhu 2022). ...
In today's competitive landscape, startups and large corporations increasingly acknowledge the mutual benefits of collaboration. Despite the apparent benefits, collaborations come with their own set of challenges that may affect their success. This research delves into the dynamics of collaborations between startups and large corporations, assuming the startup’s perspective. It aims to explore the paradoxical tensions arising from this asymmetrical relationship and how they impact the sustainability performance of startups. It further investigates how startups manage the pressures of large corporations to prioritise short-term gains over long-term sustainability goals, examining the role of ambidexterity in maintaining a commitment to sustainability when facing these challenges. Through a survey conducted among 189 Born-Sustainable Italian startups engaged in open innovation initiatives with large corporations, this paper seeks to uncover how these pressures influence startups' ability to achieve sustainable performance and balance immediate performance expectations with long-term sustainability goals. The findings are expected to contribute to a deeper understanding of the mechanisms that enable startups to navigate the complexities of collaborations, enhancing innovation, resilience, and sustainability performance, thus fostering a more collaborative and productive partnership.
... Second, while traditional corporate venturing units are responsible for investing in externally located opportunities (e.g., a promising start-up) (Hill and Birkinshaw 2014), CVBs are tasked to generate opportunities for investments. Thus, they operate at the intersection of corporate venturing and firms' strategy (Weiss et al. 2023) by leveraging and recombining incumbents' internal and external resources to test and transform many new ideas quickly and agilely into new digital options (Back et al. 2019). Finally, CVBs usually consist of serial entrepreneurs (Schmidt et al. 2019) who are experts in building new digital businesses (Tkalich et al. 2021). ...
To avoid conflicts with the core business and the existing organizational identity, incumbents increasingly externalize their digital innovation activities by handing them over to separate innovation units. While IS research provides knowledge on how internally driven innovations are initiated and developed in such units, we do not yet understand how they capitalize on internal resources, combine them with external ones, and pursue competitive actions with digital technologies. To address this issue, we apply a digital options thinking lens to investigate how corporate venture builders (CVBs) generate digital options for incumbent firms, i.e., opportunities to invest in digital innovations. Based on a case study with six CVBs, we find that such units bundle incumbents’ resources and digital innovation trends (novel technologies and digital business models) into digital options through four roles. Furthermore, we demonstrate the importance of adding a detailed preparation process to the digital options framework.
... the adaptability of a firm's new venture involves actively embracing evolving opportunities, strategically aligning actions with available resources, seizing favorable conditions swiftly and avoiding limited paths (Weiss et al., 2023). this multifaceted strategy ensures the firm's agility, responsiveness and strategic acumen while navigating the complexities of a dynamic business environment (Yu et al., 2020). ...
Drawing upon the resource-based view of the firm, this article employs this perspective to examine how new venture adaptiveness and innovative ambidexterity mediate the relationship between entrepreneurial bricolage and new venture growth within Bangladesh’s Ready-Made Garment Industry. The research employed purposive, convenience and snowball sampling techniques to gather data from 303 individuals engaged in wholesale and retail businesses. The study’s findings indicate a positive correlation between entrepreneurial bricolage and new venture growth. Moreover, the mediating effects of new venture adaptiveness and innovative ambidexterity in the relationship between entrepreneurial bricolage and new venture growth are statistically significant. This article proposes a set of tactics aimed at enhancing resource reconfiguration through adaptability and explores novel approaches to optimize resource effectiveness. The study offers substantial insights into new venture growth that could prove valuable to policymakers, entrepreneurs and authorities operating within Bangladesh’s Ready-Made Garment Industry.
Purpose
Exploring open value, cultivating digital capability (DC) and driving business model innovation (BMI) have become an inevitable choice for enterprises to meet market demand and adapt to environmental changes. However, as one of the situational variables of BMI, the positive or negative influence of openness has not been proved and the path mechanism between DC and BMI is not clear. Based on the dynamic capability theory, this paper takes manufacturing enterprises as an example to explore the internal impact mechanisms of organizational openness on BMI. It extends the analysis by introducing DC as a mediating variable and introducing manufacturing enterprise type (high-tech and non-high-tech) as a moderating variable.
Design/methodology/approach
A questionnaire survey was conducted using data collected in China, data from 355 manufacturing enterprises were collected to carry out empirical research. Participants were mainly middle and senior managers with a comprehensive grasp of their firms’ information. Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used to test the reliability and validity of the sample data, and negative binomial regression analysis was used to test hypothesis relationships.
Findings
The authors find an inverted U-shaped relationship between openness and BMI, and explain that excessive openness may lead to low resource utilization, organizational inertia, cooperation distrust, which will have a negative impact on BMI. DC includes digital resource capability (DRC), digital management capability (DMC) and digital collaboration capability (DCC), which promote BMI and play a mediating role between openness and BMI. Enterprise type has a moderating effect on the relationship between DC and BMI.
Research limitations/implications
The results of this paper summarize the opportunities and threats of open innovation, help enterprises fully understand the double-edged sword impact of openness, guide manufacturing enterprises to be sensitive to openness and achieve sustainable innovation. By analyzing the path of DRC, DMC and DCC to BMI, managers can improve their understanding of digital-driven value creation process and improve the competitive advantage of enterprises.
Originality/value
This paper presents the relationships among openness, DC and BMI. We find the non-linear effects of openness on DC and BMI, bridging the inconsistent view of positive or negative relationship between openness and organizational change in previous studies. The introduction of DC extends the theory of dynamic capability in the digital age, and opens the “black box” from opening to BMI from the process perspective of DRC, DMC and DCC. From the perspective of enterprise type, this paper provides different choices of capability upgrading and strategic innovation based on openness for high-tech and non-high-tech manufacturing enterprises.
This study investigates how innovation through external partnerships via Corporate Venture Capital and Corporate Venture Clienting contribute to strategic renewal. Corporate Venture Capital identifies and captures future growth opportunities through equity investments, while Corporate Venture Clienting integrates start-up innovations into core business operations through equity-free purchasing. Analyzing 83 semi-structured interviews with representatives from both external Corporate Venturing modes, the findings highlight that combining Corporate Venture Capital to develop new competitive advantages and Corporate Venture Clienting to enhance current competitiveness can drive comprehensive strategic renewal in different, but complementary, ways. This research extends theory on strategic corporate venturing and open innovation through external partnerships and offers practical guidance for corporate decision-makers on leveraging innovations for strategic renewal.
Many companies face the ambidexterity challenge: they must exploit their current business while at the same time exploring new opportunities. Some scholars indicate that a portfolio management approach is suitable to tackle this challenge and achieve continuous innovation. This study investigates how managers balance and integrate exploration and exploitation in innovation portfolio management (IPM) for the intended outcome of ambidexterity by conducting a single-site case study with a global automotive and industrial parts supplier. The resulting exploratory model suggests novel antecedents and enablers for achieving ambidexterity through IPM. The conclusions support the prevalent finding that IPM helps to balance exploration and exploitation. Interestingly, the data reveals that it is not only the balancing of exploration and exploitation that is facilitated by IPM: those activities are also integrated by establishing organizational and processual linking mechanisms. These findings reinforce the perspective that the holy grail of ambidexterity lies in the combination rather than in the mere balancing of exploration and exploitation.
The research literature on Corporate Venturing (CV) has increased over the last few years. While research mainly focuses on analyzing one single CV dimension (e.g. Ambidexterity, etc.) or the interplay between selected dimensions, rarely does research cover and explain all CV dimensions and their characteristics holistically. This paper analyzes the status quo of different CV dimensions and their characteristics. To do so, we identified 100 studies we first used to perform a bibliometric analysis. After that, we executed a conceptual systematic literature review (SLR), updating and extending an existing research paper written by Gutmann (Manag Rev Q 69(2):121–157, 2018). The bibliometric analysis results help objectively evaluate and describe the research landscape and point out leading countries, main keywords, main cited papers, and main research clusters of our CV research. We discovered three new dimensions within our SLR: Relatedness, Time Horizon, and Development Stage. In addition, we show new findings within the 7 CV dimensions described by the existing research paper. Even though the characteristics within each dimension have, to some extent, developed significantly over time, each of the dimensions described in this paper contains substantial new knowledge. e.g. previously the dimension “Link to the corporate firm” mainly covered operational and structural linkages. However, we distinguish these linkages between operational and strategic autonomy.
Purpose
The paper tries to investigate the impact of applications of the resource-based view (RBV) theory in the management field to improve the firm’s profitability. Global firms are innovating and adopting new technology, paving the way to improve their performance.
Design/methodology/approach
We have adopted RBV in management practices such as marketing, strategy, finance, and human resources.
Findings
RBV has gained researchers' attention with the growing competitive world and new challenges to retaining customers and achieving their pre-defined targets. We attempt to identify the issues related to the usage of RBV in management.
Originality/value
Using RBV in management may help researchers create a competitive mindset and be prepared for uncertain challenges in the business world.
This study exploits a unique sample of 536 Belgian SME business owners, collected immediately after the first COVID‐19 lockdown, and provides new insights into how , during severe crises, business owners' entrepreneurial alertness functions as a critical strategic opportunity discovery skill for SMEs. Concretely, we find that entrepreneurial alertness can determine the emergence of a business model innovation (BMI) as a strategic response to severe crises, which then stimulates business owners' intent to start a new internal corporate venture (ICV). Creating such a new separate organizational entity within the structure of the existing firm can be strategically used as a tool to pursue the successful implementation of this BMI. Robustness and sensitivity analyses show that our results hold, and, in addition, we find that if business owners are lowly skilled in being able to be alert to discover innovative new opportunities for their firm, that this lack of skills negatively influences engaging in BMI and the subsequent intent to create such a new ICV to effectively implement the BMI. We discuss this study's contributions to the literature on BMI and (strategic) corporate venturing and address this study's practical implications.
In uncertain and dynamic environments, established companies must engage in strategic "innovation-to-business" to continuously develop new technology/market-combinations as competitive advantages for future profitable growth. To achieve this, they can leverage Research & Development (R&D) and similar innovation functions for such strategic renewal. However, this requires enhancing their innovation management system, as they are traditionally focused on more incremental technological innovations for established markets. A theoretical framing of the key concepts provides an organizational framework with the required dynamic capabilities and organizational characteristics for such an innovation management system. The following case study of the Schaeffler Group presents their enhanced innovation management system in practice. Summarized as P 3 , this includes specifically organizational measures for an agile Portfolio management, systematic Process, and supporting organization of the involved People. Together, these measures help Schaeffler to establish and apply the required dynamic capabilities and ambidextrous orientation for successful "innovation-to-business".
To adapt their competitive advantages for successful strategic renewal, established companies must apply suitable innovation activities. One way to achieve this is the establishment of corporate venturing units that create organizationally consequential new business innovation for their parent company. However, the understanding of the distinctive organizational characteristics for such strategic corporate venturing is limited. To address this gap, our abductive study develops a conceptual organizational framework by linking key concepts of strategic renewal with corporate venturing. This framework is subsequently compared with insights emerging from the qualitative data of 29 corporate venturing units. This comparison allows us to define six types of units with different possible roles for the strategic renewal of the parent company, and a final exploratory organizational framework with distinctive organizational characteristics for strategic corporate venturing. These include a set of dynamic capabilities with corresponding resources as possible enablers for a planned innovation logic that requires interlinked-ambidextrous structures. These findings provide a foundation for an empirical model of strategic corporate venturing, as well as novel insights for establishing dynamic capabilities and ambidexterity within inter-linked organizational entities. Practitioners can build on these findings to leverage corporate venturing units as a systematic and organized innovation activity for strategic renewal. K E Y W O R D S continuous innovation, corporate innovation, corporate venturing, corporate venturing units, dynamic capabilities, innovation management, new business innovation, organizational ambidexterity, strategic corporate venturing, strategic renewal
Plain English Summary
This review analyzes the articles published in the corporate entrepreneurship field and presents the future research agenda. Research agrees that corporate entrepreneurship has a positive impact on firms’ profits and growth. This has generated an increase in the number of research articles published in this area. However, previous literature has some limitations and areas that should be further explored. First, there are many different definitions and terms to refer to corporate entrepreneurship activities. This makes it difficult to understand the current state of corporate entrepreneurship research. Second, we lack up to date comprehensive literature reviews summarizing the knowledge and advances generated in the field in the last years. Overall, the objective of this research is to explore the content and evolution of corporate entrepreneurship research. This research contributes by summarizing and synthesizing the main findings in previous literature. It also contributes by identifying relevant inconsistencies and ambiguities in previous literature that have prevented the development of certain areas within the corporate entrepreneurship field.
The purpose of this paper is to examine the ability of a firm to innovate and absorb its innovative developments by borrowing concepts and models from project portfolio management (PPM). Using past research and the existing literature, it evaluates the potential to apply PPM to the medium-term strategic planning efforts of small- and medium-sized firms. The implementation of strategic innovation requires organizations to develop both a dynamic culture and flexible internal systems that yield to major external changes in their industry as well as internal resource changes. Such changes could include supply or value chain adjustments, changes in consumer behavior, re-allocation of internal resources or the responses of competitors. This paper examines the planning and implementation of project portfolio management tools in small- and medium-sized enterprises (SMEs) (50–250 employees) with a mid-range (2–4 years) planning horizon that are required to innovate in a strategic context to remain competitive or to take advantage of new opportunities. It relates strategic foresight to the ability of the firm to adjust tactically, including in the utilization and development of internal tools, processes, systems and culture. This paper contributes to the literature by examining the potential for PPM methodologies and models to support decision making in a strategic context in SMEs, an area that is under-represented in the research on strategy. It also relates this foresight with strategic innovation and draws parallels between the strategic management planning process and the use of project portfolio management models. It argues that strategic innovation is closely tied with the ability not just to innovate but to absorb this innovation within the organizational processes and build organizational maturity. It also examines the potential use of project portfolio management models to aid strategic innovation. The use of PPM models in support of strategic innovation may contribute to the sustainability of SMEs as businesses and to the potential to identify new business models that enhance the sustainability of a firm’s competitive advantage, particularly in the medium-term.
Corporate entrepreneurship (CE) is essential for today’s firms and currently a topic of considerable interest within the business community. Although the magnitude of related studies has increased over the last years, research on CE is missing an inte- grated concept and a research agenda for understanding the dynamics of resource deployment and withdrawal, resulting from legitimacy within the organization. The objective of this study is to examine the determinants influencing the provision and withdrawal of resources in the context of corporate entrepreneurship and identify the underlying strategies for gaining legitimacy. Analyzing more than 30 years of research, we provide a multidimensional framework synthesizing the state-of-the-art of resource allocation and withdrawal in CE. Our findings suggest that CE entities undertaking legitimation efforts, to be perceived as a meaningful and trustworthy organizational element and receive active and passive support, is very important. Based on the structured literature review, we propose a legitimacy perspective on the resource dynamics in CE settings, to further advance our understanding of resource deployment and withdrawal within organizations.
In times of changing business environments, firms must constantly renew their competitive advantage by establishing dynamic capabilities. While often attempting to employ this in corporate venturing activities, they face the challenge of simultaneously exploring new and exploiting existing business opportunities. Examining possible approaches to mastering this feat of ‘organizational ambidexterity’ reveals an extensive but scattered picture. To better integrate this effort by assessing how corporate venturing is linked with organizational ambidexterity in the literature and identifying possible organizational setups, this systematic literature review builds on a sample of 172 studies. Based on different dimensions of dynamic capabilities, the analysis indicates that corporate venturing may take a solely explorative or an exploitative role, or balance both, to directly enable organizational ambidexterity, following a ‘trade-off’, respectively ‘paradox’, school of thought. As a result, this paper identifies four different setups of corporate venturing in an integrated framework, based on the ability and approach to enabling organizational ambidexterity. Here, the synthesis in the proposed framework of the studies examined allows differentiating between not directly ambidextrous separated or integrated corporate venturing and directly ambidextrous contextual or interlinked corporate venturing. As a novel contribution to the fields of strategic management, organizational change and corporate entrepreneurship, this integrated perspective suggests an often overlooked, potentially more strategic role for corporate venturing in the strategic renewal of a firm’s competitive advantage, thus building the basis for further empirical research on strategic corporate venturing approaches for organizational ambidexterity and their application in practice.
Competitive advantage is a significant concept both in studies of strategic management and in the practice of organizations. The dynamic reality of the market and competitors' innovation capacity make it difficult for companies to achieve their goals and maintain sustainable competitive performance. In small and medium-sized enterprises (SMEs), this difficulty is often compounded by a scarcity of strategic resources, which can considerably decrease their competitive advantage sources. In the present study, we discovered, through a systematic literature review (n = 70), a conceptual typology, with identification of five classes, categorized as (i) methodological procedures, (ii) organizational environment, (iii) organizational performance, (iv) resources/profile and (v) organizational research which were used to capture notions around dynamic capabilities and competitive advantage for SMEs. Likewise, as a result, a diverse selection of three clusters was found to show the positive influence (direct and indirect) of dynamic capabilities on competitive advantage and that performance variables mediate the impact on innovation capacity. Given this, we have answered two research questions related to the (i) discovery of state of the art and (ii) future research directions on Dynamic Capabilities and Competitive Advantage for SMEs.
This study employed a resource-based view to develop a multilevel model of firm-level high-performance work systems, dyad-level human capital, firm-level bridging ties and unit-level corporate entrepreneurship. We collected multisource and multilevel data from 420 senior managers, 1260 managers and 3348 employees of 210 units from 96 Taiwanese manufacturing and service sectors firms. The results revealed that dyad-level human capital partially mediated the relationship between firm-level high-performance work systems and unit-level corporate entrepreneurship and firm-level bridging ties moderated the effect of firm-level high-performance work systems on unit-level corporate entrepreneurship through dyad-level human capital. Our findings contribute to corporate entrepreneurship by exploring its antecedent and indirect effect from a resource-based perspective. Furthermore, we have found that the indirect influence of firm-level high-performance work systems and unit-level corporate entrepreneurship varies as a function of the bridging ties at the firm level. This paper advances existing research by offering new insights in the area of corporate entrepreneurship.
In an attempt to become more flexible and responsive, corporates increasingly collaborate with start-ups. By doing so, corporates hope to make a transition towards a more entrepreneurial organization or to rejuvenate their organizational culture and working practices. We present the results of a multiple case study in which we compare eight corporate—start-up collaborations that achieved different success rates in terms of promoting corporate renewal. Our focus is on the corporate individuals that participate in the collaboration and we combine literature on corporate entrepreneurship with institutional theory to study the conditions under which these individuals are more likely to exhort transformational agency and to contribute to renewal. Our results indicate that the effect of corporate—start-up collaborations on renewal is mediated by two individual-level mechanisms: reflexivity and intrinsic motivation. In addition, we identify several organizational contingencies that affect both the likelihood that corporate individuals adopt a reflexive orientation and are intrinsically motivated as well as the likelihood that their transformational efforts are successful.
Research on corporate entrepreneurship-venturing activities by established corporations-has received increasing scholarly attention. We employ bibliometric methods to analyze the literature on corporate entrepreneurship published over the last five decades. Based on the results of citation and co-citation analyses, we reveal central works in the field and how they are interconnected. We investigate the underlying intellectual structure of the field. Our findings provide evidence of the growing maturity and interdisciplinarity of corporate entrepre-neurship and provide insight into research themes. We find that resource-based view and its extensions still remain the predominant theoretical perspectives in the field. Drawing on these findings, we suggest directions for future research.
Attaining competitive advantage is especially crucial for innovative firms. Due to increased competition, firms employ various types of innovation activities to position themselves against their competitors. Ambidexterity and strategic agility have been found to strengthen this position. Whereas scholars analyzed strategic agility’s and ambidexterity’s impact on organizational performance, ambidexterity’s impact on the competitive advantage of organizations remains largely unexplored. Tensions between exploration and exploitation within an ambidextrous strategy make it difficult to reap benefits in establishing competitive advantage. Contrary, strategic agility centers on organization’s capacities to quickly respond to shifting demand, hence, increasing its competitive advantage. Through a mixed-method approach, comprising of a literature review and quantitative analyses of 150 German mid-sized firms in the engineering industry, it is demonstrated how ambidexterity, exploration and exploitation, in conjunction with strategic agility, affect the competitive advantage of firms. In order to sustain, firms should either favor an exploration strategy of innovation processes to come up with radically new knowledge, products and services, or combine an exploitation strategy with strategic agility. A strategy of sole exploitation is not beneficial towards increased competitive advantage, while an ambidextrous strategy seems to even negatively influence the competitive advantage of a firm.
Despite its centrality to a longstanding literature on corporate entrepreneurship, no systematic review of the internal corporate venturing (ICV) literature has (to our knowledge) been published to date. Given the longevity, complexity and dispersed nature of both the ICV phenomenon and its literature, a review appears timely. Using criterion sampling, supplemented by the ancestry method, to identify relevant articles, we content-analyzed 131 articles published between 1963 and 2013.
While practice-oriented literature, venture-level analyses, and the use of cross-sectional case methods and surveys have dominated, an increasingly diverse and sophisticated set of theoretical perspectives have been brought to bear on a wide range of themes. The extant set of major themes examined in the ICV literature – i.e. managerial guidelines for conducting ICV; forms of ICV; comparisons of ICV and other venturing modes; the role of ICV in parent company strategy; the impact of venture strategy on ICV outcomes; the impact of organizational context on ICV outcomes; debates concerning the structural separation versus integration of ICV; processes of ICV; and temporal dynamics underlying ICV – show room for building enhanced conceptual and empirical rigor, as well as for continued exploration. In addition, considerable scope exists for exploring new research avenues concerning this challenging and strategically important phenomenon.
This paper investigates, from meta-analytic approach, some topics that were unexplored in others dynamic capabilities meta-analysis. Hence, our research advances to identify and test the main antecedents of dynamic capabilities, the possible moderation effects of economic and cultural contexts in the relationship between dynamic capabilities and firm performance and the mediation effects between the antecedents of dynamic capabilities and firm performance. (1) The elements that stimulate dynamic capabilities development are resources, knowledge and learning, alliances and environmental dynamism. However, entrepreneurial orientation has no direct relationship with dynamic capabilities. (2) Dynamic capabilities play a mediating role between resources, knowledge and learning, alliances and firm performance. Curiously, entrepreneurial orientation is not mediated by dynamic capabilities in relation to performance. (3) Economic and cultural moderation affect the relation between dynamic capabilities and performance. Surprisingly, we detected that an Eastern orientation, presenting a high level of power distance and a low level of individualism, promotes stronger effects in the relationship between dynamic capabilities and firm performance than a Western orientation. Thus, our main contribution is to broaden the previous research on dynamic capabilities and to propose a future research agenda. In addition, this study adds new empirical evidence to the study of dynamic capabilities, which reduces the heterogeneity of previous results.
Deep and insightful interactions with the data are a prerequisite for qualitative data interpretation, in particular, in the generation of grounded theory. The researcher must also employ imaginative insight as they attempt to make sense of the data and generate understanding and theory. Design research is also dependent upon the researchers’ creative interpretation of the data. To support the research process, designers surround themselves with data, both as a source of empirical information and inspiration to trigger imaginative insights. Constant interaction with the data is integral to design research methodology. This article explores a design researchers approach to qualitative data analysis, in particular, the use of traditional tools such as colored pens, paper, and sticky notes with the CAQDAS software, NVivo for analysis, and the associated implications for rigor. A design researchers’ approach which is grounded in a practice which maximizes researcher data interaction in a variety of learning modalities ensures the analysis process is rigorous and productive. Reflection on the authors’ research analysis process, combined with consultation with the literature, would suggest digital analysis software packages such as NVivo do not fully scaffold the analysis process. They do, however, provide excellent data management and retrieval facilities that support analysis and write-up. This research finds that coding using traditional tools such as colored pens, paper, and sticky notes supporting data analysis combined with digital software packages such as NVivo supporting data management offer a valid and tested analysis method for grounded theory generation. Insights developed from exploring a design researchers approach may benefit researchers from other disciplines engaged in qualitative analysis.
An organisation’s portfolio of new product development (NPD) projects represents its potential for survival. Innovation ambidexterity holds the key to longevity. Accordingly, selecting the right projects for a portfolio critically impacts organisational success, both in the short and longer term. Selecting for successful portfolios is further complicated in dynamic, highly competitive and highly regulated markets. Furthermore, in current economies that demand value from investment, decision-making around project selection for the portfolio becomes even more crucial. However, there is a dearth of discussion and empirical evidence that focuses on project portfolio selection and more specifically in contexts of ambidexterity and ongoing change. Moreover, the tensions between exploratory and exploitative projects are likely to be made salient during project portfolio selection, and manifest in conflicts between different selection options, yet these tensions have not yet been addressed in the portfolio selection literature. Drawing on the current and heretofore non-connected literatures across fields of ambidexterity and paradox, project portfolio selection, cognition and performance control, this paper proposes an initial conceptual model of the factors that impact project portfolio selection and ambidexterity. This paper contributes to a greater appreciation of the pivotal role of project portfolio selection, as distinct from project and portfolio management, in generating a portfolio that drives organisational success. Moreover, it identifies performance measures and managing conflict as important determinants of project portfolio ambidexterity. Future work is required to enhance and validate this model.
Along with the impact of globalization and the emerging new technologies, companies must manage the change by perceiving it as an opportunity to be able to sustain, grow and compete in a rapidly changing environment and respond to change with innovation. Innovation reflecting the perspective of companies on change creates value through change. In today’s business world, there are true opportunities for the ones that can manage the process of change well. At this point, a company desiring to create value and maintain the sustainable competitive advantage should use innovation strategically. A strategic perspective on innovation leads the organization to look at the whole system beyond the product and the process in order to create value. Successful companies in innovation deal with it in a holistic and systematic approach by developing a fully integrated innovation strategy with its mission and objectives and by making organizational culture and organizational systems compatible with the strategy.
Strategic innovation is a future-oriented concept that contains a creative discovery. The strategic consideration of innovation involves the use of appropriate strategic management techniques to increase the impact of innovation activities on growth and performance of the company. In this study, the concept of strategic innovation - which includes a strategic approach to innovation - has been examined within the framework of its antecedents, the elements forming it and the advantages provided to the company.
This article, together with a companion video, provides a synthesized summary of a Showcase Symposium held at the 2016 Academy of Management Annual Meeting in which prominent scholars—Denny Gioia, Kathy Eisenhardt, Ann Langley and Kevin Corley—discussed different approaches to theory building with qualitative research. Our goal for the symposium was to increase management scholars’ sensitivity to the importance of theory-method “fit” in qualitative research. We have integrated the panelists’ prepared remarks and interactive discussion into three sections: an introduction by each scholar, who articulates their own approach to qualitative research; their personal reflections on the similarities and differences between approaches to qualitative research, and answers to general questions posed by the audience during the symposium. We conclude by summarizing insights gleaned from the symposium about important distinctions among these three qualitative research approaches and their appropriate usages.
The companion video is available on YouTube: https://youtu.be/_JdOSCzSpMc
Large companies initiate many new businesses, but few of them reach scale. The ambidexterity literature describes how companies create exploratory businesses, but says little about how they subsequently scale these businesses. The strategy literature uses real option theory to explain the transition to scale, but does not consider the complex relationships between corporate ventures and their parent organizations. By comparing six longitudinal cases of large firms' new business initiatives, we find that corporate businesses that scale undergo a graduation process in which they meet the varying expectations of multiple organizational resource providers. At the unit level, they convince established core units that the potential value from combining their resources exceeds the cost of cannibalization and internal competition. They do so by initially differentiating themselves to develop distinctive capabilities, but subsequently integrate these capabilities with those of the core units. At the corporate level, the new units demonstrate their value by adding strategic capabilities that complement those of their main organizations. They initially integrate with their corporate parents to ensure resource flows, but then differentiate themselves to develop their own strategic profile. We contribute to the ambidexterity literature by unpacking the triggers, conditions, and interaction patterns that allow exploratory units to scale. We also contribute to the strategy literature by showing the importance of multilevel exchange relationships, complementary resources, time effects, and identity dynamics for corporate decisions on whether, and when, to scale new opportunities.
An increasing number of established companies have recently started to launch corporate accelerator programs to engage with entrepreneurial startups, making this a worldwide, cross-industrial phenomenon. Nevertheless, there is a lack of understanding of the various objectives and approaches adopted by companies. This article examines 13 in-depth case studies of corporate accelerator programs and is the first to empirically derive and discuss a typology for corporate accelerators, assessing objectives and design configurations. Thereby, the article contributes to the emerging discussion about corporate accelerators in corporate entrepreneurship literature. Moreover, the findings provide corporate managers with an understanding of corporate accelerators and guidance for how to make design choices for startup engagement programs.
Companies need to constantly renew themselves to remain competitive in rapidly changing market environments, regardless of their size or age. Even though strategic renewal is a crucial factor for sustainable success of organizations, it is only an emergent area in literature. This article examines potential antecedents of strategic renewal and impact on firm performance. Based on 104 companies’ responses to a structured questionnaire, the empirical findings demonstrate that strategic renewal positively impacts firm performance, and that entrepreneurial orientation and organizational learning are antecedents. From a practical managerial viewpoint, our results suggest that firms following a strategic renewal approach can increase the long-term success of their organizations: Firms that are entrepreneurially oriented and willing to learn can successfully manage strategic renewal.
Strategic renewal has become a prominent theme in a variety of organization and management research domains in recent years. It refers to the process that allows organizations to alter their path dependence by transforming their strategic intent and capabilities. With contributions from an increasing range of theoretical perspectives and research contexts, the strategic renewal literature has become fragmented and lacks common definitions and conceptual clarity, which prevent cross-fertilization and harm further development. This study systematically reviews the various literature streams on strategic renewal to provide a more integrative perspective. The authors identify three key theoretical tensions at the heart of strategic renewal research, namely learning vs. resource, induced vs. autonomous, and co-alignment vs. co-creation. By exploring these key tensions, the authors define strategic renewal's conceptual core, identify gaps in the past literature, and provide guidance for future research.
This chapter deals with the categorisation of dynamic capabilities, especially generic types of dynamic capabilities are proposed along existing theory of entrepreneurship, exploration and exploitation. Examples of actual and proposed types of dynamic capabilities are then introduced and prioritised along the framework. Finally, the relation to entrepreneurship research is discussed. © Stuart Wall, Carsten Zimmermann, Ronald Klingebiel and Dieter Lange 2010. All rights reserved.
This paper presents a theoretical exploration of the construct of corporate entrepreneur-ship. Of the various dimensions of firm-level entrepreneurial orientation identified in the literature, it is argued that innovation, broadly defined, is the single common theme underlying all forms of corporate entrepreneurship. However, the presence of innovation per se is insufficient to label a firm entrepreneurial. Rather, it is suggested that this label be reserved for firms that use innovation as a mechanism to redefine or rejuvenate themselves, their positions within markets and industries, or the competitive arenas in which they compete. A typology is presented of the forms in which corporate entrepreneurship is often manifested , and the robustness of this typology is assessed using criteria that have been proposed for evaluating classificational schemata. Theoretical linkages are then drawn demonstrating how each of the generic forms of corporate entrepreneurship may be a path to competitive advantage. V-'orporate entrepreneurship has long been recognized as a potentially viable means for promoting and sustaining corporate competitiveness.
Research summary
How do external venturing units effectively achieve external knowledge search and integration of their initiatives with mainstream organizational units? We investigate this largely unexplored question through an inductive study of 17 corporate venture capital units. We document a set of five novel practices that influence the efficacy of a unit's external search and internal integration and identify how these practices complement a broader set of practices used by all units. We highlight the entrepreneurial nature of managing an external venturing unit, often to overcome unfavorable corporate contexts, a perspective that prior research has largely overlooked. Our findings provide unique insights into why some corporate investors are better at learning from external start‐ups than others.
Managerial summary
External venturing involves strategic partnerships by established firms with entrepreneurial ventures. Top management usually tasks autonomous units with searching for willing and potentially valuable partners. These units must integrate their activities with the operations of parent firms to elicit cooperation from important business units. To understand how external venturing units implement search and integration in combination, we study corporate venture capital ( CVC ) units, which form external partnerships through minority investments in start‐ups. While all units adopted fundamental processes that are well established in the venture capital community, certain processes that are idiosyncratic to corporate investing helped units demonstrate superior performance in their strategic missions. These processes often required CVC unit managers to be entrepreneurial and politically savvy in building connections with relevant personnel in parent firms. Copyright © 2015 Strategic Management Society
Innovation portfolio management (IPM) addresses the resource allocation across a firm's portfolio of new product development projects consistent with corporate strategy. The paper provides a comprehensive review of IPM research and offers new conceptual arguments by systematizing prior findings in the following four categories: optimization perspective, strategic perspective, decision-making perspective and organizational perspective. These different approaches to IPM have been largely disconnected so far, but they can complement one another to provide new theoretical insights into a critical topic in innovation research. The different approaches are therefore integrated into an overarching perspective and a detailed research agenda is proposed.
Drawing on corporate entrepreneurship (CE) and social network research, this study focuses on strategic renewal as a form of CE and examines the impact of boundary-spanning at top and middle management levels on business units’ exploratory innovation. Analyses of multi-source and multi-level data, collected from 72 top managers (TMs) and 397 middle managers (MMs) operating in 34 units of a multi-national organization, indicate that TMs’ boundary-spanning is positively related to units’ exploratory innovation, but also has a cascading effect on MMs by increasing their perceived role conflict. MMs’ role conflict is negatively related to units’ exploratory innovation and thus offsets some of the benefits gained through TMs’ boundary-spanning activities. Taking a configurational perspective on social exchanges at multiple levels, we show that role conflict is reduced by overlapping boundary-spanning ties among TMs and MMs. Surprisingly, MMs’ boundary-spanning does not relate to exploratory innovation. Our study shows that with regard to boundary-spanning, a top-down approach to CE as strategic renewal may be most effective because TMs play a key role in driving exploratory innovation. However, TMs need to be aware of the cascading social liabilities of their boundary-spanning behavior and ensure MMs develop similar networks. We advance ongoing debates in studies about CE and social networks by providing empirically validated insights into who drives strategic renewal and by uncovering the benefits and costs of social exchanges for strategic renewal. Furthermore, we uncover potential causes of mixed findings in network theory research and highlight a remedy to social liabilities.
Purpose-This paper aims to categorize and organize dynamic capabilities that have been inductively identified in empirical research into a comprehensive taxonomy. Thus, it addresses calls in the literature for a better understanding of dynamic capabilities and integration of scattered empirical findings into theory. Design/methodology/approach-A systematic literature review approach was adopted, with a total of 34 articles published between August 2007 and April 2020, from which 240 idiosyncratic dynamic capabilities were identified. The taxonomy was constructed using the Gioia-method. Findings-The main finding is a three-level taxonomy of dynamic capabilities (DC). Level DC-1 is based on the existing triad of sensing, seizing and transforming. Level DC-2 is newly introduced to the literature by this study, consisting of 19 dynamic sub-capabilities that categorize and organize all 240 idiosyncratic dynamic capabilities in the sample (level DC-3). The taxonomy supports the existing claim that dynamic capabilities are common in key features and idiosyncratic in details. Moreover, theoretical connections to business model innovation and ambidexterity are indicated. Practical implications-This study integrates scattered empirical findings of specific dynamic capabilities and translates them to a practitioner audience. The taxonomy allows the strategic manager to understand what they specifically are and, thus, assess the dynamic capability endowment of the firm which allows deploying, developing and fostering them. Originality/value-The taxonomy provides a comprehensive and tangible picture of what dynamic capabilities look like in practice. It improves existing knowledge and understanding by bridging the rigor-relevance gap between rather rigorous conceptual literature and rather relevant empirical research as it integrates them. As such, it can serve as a "map" of dynamic capabilities for scholars and practitioners.
Corporate Venture Capital (CVC) units position themselves as smart capital providers in new venture firm New Venture Firm (NVF) financing. In line with the resource-based view and social capital theory, extant research postulates that CVCs contribute complementary assets beyond capital to their NVFs. However, the non-financial value for NVFs is mainly created through a corporate business unit within the CVC's corporate parent company. As agency theory implies, the strategic agendas of CVCs, NVFs, and corporate business units may not always align and thereby often hamper value creation. Hence, our qualitative research builds on a cross-industry case study of eleven CVC units to show how they leverage resources from their corporate sponsors to add value for NVFs. We reveal the mechanism behind CVC value creation holistically by identifying eight design elements that lead to a typology of four distinctive CVC forms. This classification offers a representation of the CVC landscape based on their institutional environment.
The Journal of Applied Behavioral Science is in the enviable position of being a go-to journal for many readers seeking useable insights for solving practical problems in managing modern organizations. A perennial source of such knowledge has been case studies, but case studies have been treated as questionable sources of widely applicable knowledge because they have been assumed to be idiosyncratic and to lack adequate “scientific” rigor. In this brief article, I argue for using a methodological approach to studying single cases that addresses both these thorny problems.
This study challenges and develops some of the key arguments underpinning dynamic capabilities research. Dynamic capabilities are identified in strategic management research as central to firm performance helping firms adjust to external dynamism. They are considered necessary since ordinary capabilities are typically described as inert, static, or as evolving only through unintended mutating or slipping. This study builds on routine theory that ascribe routines the ability to evolve, and draws on first-hand qualitative data from a Nordic firm. The study demonstrates mindfully evolving evolving ordinary capabilities play a role underestimated in dynamic capabilities research by helping firms adjust to environmental dynamism. We also spell out new roles for dynamic capabilities in relation to such mindfully evolving ordinary capabilities.
Management journals are currently responding to challenges raised by the “replication crisis” in experimental social psychology, leading to new standards for transparency. These approaches are spilling over to qualitative research in unhelpful and potentially even dangerous ways. Advocates for transparency in qualitative research mistakenly couple it with replication. Tying transparency tightly to replication is deeply troublesome for qualitative research, where replication misses the point of what the work seeks to accomplish. We suggest that transparency advocates conflate replication with trustworthiness. We challenge this conflation on both ontological and methodological grounds, and we offer alternatives for how to (and how not to) think about trustworthiness in qualitative research. Management journals need to tackle the core issues raised by this tumult over transparency by identifying solutions for enhanced trustworthiness that recognize the unique strengths and considerations of different methodological approaches in our field.
For long-term success, companies need to adapt to technological and environmental change. Organizational ambidexterity, which balances the exploration of new opportunities with the exploitation of existing capabilities, is increasingly viewed as a promising approach to tackle this challenge. However, despite the important role of individuals in firms' ambidexterity and performance, how the exploration of new opportunities and exploitation of existing capabilities are triggered at an individual level and their subsequent effects on overall performance remain poorly understood. Accordingly, the present research shifts the focus from organizational ambidexterity to individual ambidexterity. Based on data from 415 employees, the results of structural equation modeling show that both organizational architecture and organizational context can be used to induce individual ambidexterity. Furthermore, positive performance effects of individual ambidexterity across different organizational levels, namely the team and department levels, are confirmed.
The modern landscape of corporate venturing (CV) is emerging and has undergone increasingly rapid evolutions over the past two decades. A growing heterogeneity of CV modes can be observed such as corporate accelerators, corporate incubators, corporate venture capital, and strategic partnerships with startups. Selecting the appropriate mode is critical given that most corporations struggle to find the proverbial needle in the haystack. Furthermore, scholars’ examination of CV is fragmented and involves competing frameworks and typologies, which fails to provide practitioners with a better understanding of how to effectively choose between distinct CV activities. Building upon a systematic review of the literature, the research question addressed in this paper is: Which CV modes and dimensions can be identified in the literature and how can they be categorized comprehensively? To address this, I propose a reconciliation of various CV dimensions by constructing a framework enhanced with practical examples derived from expert interviews. Going beyond the highly dispersed work on CV I strive to (1) identify, organize, and integrate the relevant literature on corporate venturing activities; (2) analyze the dimensions that have been proposed by scholars to categorize and characterize distinct CV activities; and (3) harmonize competing approaches and introduce a coherent and reconciled framework that organizes CV modes along ‘inside-in’, ‘inside-out’, and ‘outside-in’ innovation flows, thus helping practitioners and scholars alike better understand and choose more appropriately between discrete CV modes in relation to specific objectives.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.
The domain of corporate entrepreneurship is comprised of two categories of phenomena: corporate venturing and strategic entrepreneurship. Corporate venturing consists of entrepreneurial phenomena through which new businesses are created by, added to, or invested in by an existing organization. Its forms include internal, cooperative, and external corporate venturing. By contrast, strategic entrepreneurship consists of a broad array of entrepreneurial initiatives that do not necessarily involve new businesses being added to the firm. Strategic entrepreneurship involves the exhibition of organizationally consequential innovations that are adopted in pursuit of competitive advantage. The forms of strategic entrepreneurship include strategic renewal, sustained regeneration, domain redefinition, organizational rejuvenation, and business model reconstruction.
Large companies have long sensed the potential value of investing in external startups, but more often than not, they fail to get it right. Remember the dash to invest in new ventures in the late 1990s and the hasty retreat when the economy turned? This article presents a framework that will help a company decide whether it should invest in a particular start-up by first understanding what kind of benefit might be realized from the investment. The framework-illustrated with examples from Intel, Lucent, and others - explains why certain types of corporate VC investments proliferate only when financial returns are high, why other types persist in good times and in bad, and why still others make little sense in any phase of the business cycle. The framework describes four types of corporate VC investments, each defined by its primary goal - strategic and financial and by the degree of operational linkage between the start-up and the investing company. Driving investments are characterized by a strong strategic rationale and tight operational links. Enabling investments are also made primarily for strategic reasons, but the operational links are loose. Emergent investments which are characterized by tight operational links, have little current - but significant potential - strategic value. Passive investments offering few potential strategic benefits and only loose operational links, are made primarily for financial reasons, Passive corporate VC investments dry up in a down economy, but enabling and driving investments usually have more staying power. That's because their potential returns are primarily strategic, not financial. In other words, they can foster business growth. Emergent investments may make sense even in a weak market because of their potential strategic value - that is, their ability to help companies identify and spark the growth of future businesses.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed 'best practice'). This suggests that they are more homogeneous, fungible, equifinal and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of REV, we conclude that traditional REV misidentifies the locus of long-term competitive advantage in dynamic markers, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright (C) 2000 John Wiley & Sons, Ltd.
Corporate venture (CV) units constitute vehicles through which firms may act ambidextrously, thereby increasing their longevity, but they suffer from a high failure rate. The authors examine why and how some CV units last significantly longer than others. They argue that CV units endure by developing an ambidextrous orientation themselves—they build new capabilities for the parent firm while simultaneously leveraging its existing strengths. They argue that CV units become ambidextrous by nurturing a supportive relational context, defined by the strength of their relationships with three different sets of actors—parent firm executives, business unit managers, and members of the venture capital community. Using primary data collected from 95 CV units over a three-year period, the authors test and find support for these arguments.
Understanding sources of sustained competitive advantage has become a major area of research in strategic management. Building on the assumptions that strategic resources are heterogeneously distributed across firms and that these differences are stable over time, this article examines the link between firm resources and sustained competitive advantage. Four empirical indicators of the potential of firm resources to generate sustained competitive advantage-value, rareness, imitability, and substitutability are discussed. The model is applied by analyzing the potential of several firm resources for generating sustained competitive advantages. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other business disciplines.
Companies undertake venturing for a variety of reasons. To be successful, they must be clear about their objectives and disciplined in executing the one of four business models most appropriate to achieving them.
For several decades, research about large companies' internal corporate venturing has shown that such activities frequently exhibit substantial cyclicality. Companies may enthusiastically launch ICV initiatives, later shut them down, and still later launch new ICV programs again. In this article, the authors describe four common situations that occur in cycles of corporate venturing. They argue that, unless properly managed, corporate commitment to ICV is apt to fluctuate according to the availability of uncommitted financial resources and the growth prospects of the organization's primary businesses. For example, if the corporation has uncommitted financial resources but the growth prospects of the main business are perceived to be insufficient, then the company may launch a topdown "all-out ICV drive" that is vulnerable to costly mistakes. If, however, the growth prospects of the primary business are perceived to be adequate and there are few uncommitted financial resources, top management is likely to perceive ICV as largely irrelevant. The authors examine factors contributing to ICV cyclicality; they then suggest that companies can achieve better outcomes if executives recognize the strategic importance of internal corporate venturing activities and view them as a way of gaining insights into emerging opportunities.
Corporate entrepreneurship (CE) as a valid and effective area of research has real and tangible benefits for emerging scholars because their work will significantly impact an emerging strategy. The research on CE has evolved over the last 40 years beginning very slowly and growing in importance through the decades. While the inherent value of entrepreneurial action on the part of established organizations has been established, there remains a greater need for further research about CE in organizational settings. Fortunately, knowledge accumulation on the topic of CE has been occurring at a rapid rate, and many of the elements essential to constructing a theoretically grounded understanding of the domains of CE can now be identified. However, despite the recent expansion in CE research, the theoretical and empirical knowledge about the domain of CE and the entrepreneurial behavior on which it is based are still key issues that warrant a deeper understanding. Ongoing scholarly work has also raised new and important research questions and identified further theoretical avenues requiring exploration. In this article, we review some of the significant research work that has been done in the CE literature and examine the future directions for CE researchers. The increasing value of future research in this domain, including the research highlighted in this special issue, may very well enhance the innovative challenges confronting organizations in this new global economic reality.
Organizational ambidexterity refers to the ability of an organization to both explore and exploit — to compete in mature technologies and markets where efficiency, control, and incremental improvement are prized and to also compete in new technologies and markets where flexibility, autonomy, and experimentation are needed. In the past 15 years there has been an explosion of interest and research on this topic. We briefly review the current state of the research, highlighting what we know and don’t know about the topic. We close with a point of view on promising areas for ongoing research.