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Spinning Them Off: Entrepreneuring Practices in Corporate Spin-Offs
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Why is it that so many aspects of organizations are now spoken of
as practices? How can organizations be studied within a practicebased
approach? How can workable knowledge about them be
produced? The authors answer these questions theoretically and
through empirical examples. They provide an overview on practicebased
studies illustrating their main topics, research methods, and
the theoretical reflections that support a non-rationalist and noncognitivist
view of organizations. The book addresses the principal
features of practice-based theorizing and its key concepts, then
concludes with methodological reflections on the practice-based
approach.
Written for a university public already in possession of basic notions
in organizational studies and intending to conduct analysis of
organizing as a social practice, it will also prove essential for master and PhD students
as well as organizational scholars designing research within Practice-Based Studies.
Including a lively and wide-ranging debate conducted at international level, the book will be
of interest to practitioners curious about a view of work as a practical activity that develops
within ecology of social, economic and material relationships.
The spin-off phenomenon has received ample attention in the fields of entrepreneurship and innovation. In this paper I investigate the bibliometric structure of the literature on spin-off firms. Bibliometric methods enable a fairly objective approach to sort through significant amounts of data to identify the building blocks of this emerging literature. Specifically, I identify the building blocks in terms of topics addressed and links to and between scientific fields. The dataset consists of 215 source articles published between 1957 and 2006 and 2397 cited authors. Two main results are found. First, the field is mainly drawing on empirical studies rather than conceptual work. Second though, co-citation networks reveal important conceptual links between empirical studies.
The spin-off phenomenon has received ample attention in the fields of entrepreneurship and innovation. In this paper I investigate the bibliometric structure of the literature on spin-off firms. Bibliometric methods enable a fairly objective approach to sort through significant amounts of data to identify the building blocks of this emerging literature. Specifically, I identify the building blocks in terms of topics addressed and links to and between scientific fields. The dataset consists of 215 source articles published between 1957 and 2006 and 2397 cited authors. Two main results are found. First, the field is mainly drawing on empirical studies rather than conceptual work. Second, though, co-citation networks reveal important conceptual links between empirical studies.
This paper investigates how early venture entrepreneurs engage in socially embedded practices to resource their firm. We contribute to an emerging literature that calls for a shift in perspective from “resource” as an object to “resourcing” as a practice. This shift entails a focus away from whom entrepreneurs know toward how they engage with their venture's social contexts. Through the analysis of an in-depth longitudinal case study of a life-science venture, we show that social resourcing practices are more reminiscent of a creative coping with ambiguous and ever-changing environments over time than of “heroic” strategizing. We explore how entrepreneurs mobilize and creatively combine their social resources at hand, seek resources through engaging with other practice nets, negotiate differences between practice nets, and reflectively adapt their resourcing practices toward emerging resource contexts in ways that we describe as “riding the practice waves” of social resourcing.
The abstract for this document is available on CSA Illumina.To view the Abstract, click the Abstract button above the document title.
Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.
We outline a research methodology developed around two basic elements: the active discovery and/or creation of mysteries and the subsequent solving of the mysteries. A key element is the reflexive opening up of established theory and vocabulary through a systematic search for deviations from what would be expected, given established wisdom, in empirical contexts. "Data" are seen as an inspiration for critical dialogues between theoretical frameworks and empirical work.
This paper proposes a taxonomy of corporate spin-off firms by exploring the nature of parent firm–spin-off firm relationship. Relying on the resource-based and the resource-dependence theory, special attention is paid to the complementarity of the resource base of the parent firm relative to its spin-off, the intensity of collaboration between the parent and the spin-off, and the dependence of the spin-off firm on the resources provided by the parent organization. Based on cluster analysis, we were able to identify three distinct groups of corporate spin-off firms: spin-offs developing new technologies, spin-offs serving new markets and restructuring spin-offs. These groups differ from one another in terms of the intensity of resource sharing linkages and knowledge transfer between the parent and the spin-off, timing of separation, as well as the direction and breadth of their new product development activities.
In this article, we examine the effects of knowledge relatedness on the post-spin-off growth of firms spun off from industrial parent firms. We predict that growth is maximized when the knowledge base of the spin-off firm partially overlaps with that of its parent. This effect is due to learning: both too small and too great an overlap will inhibit growth, the first because limited knowledge overlap hampers local search and knowledge assimilation and the second because great knowledge overlap hampers the creation of novel knowledge combinations. The propositions are tested and confirmed using a sample of 54 industrial spin-off firms from Finland.
In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures.
Bengt Johannisson received the International Award for Entrepreneurship and Small Business Research in 2008. In this essay we present and evaluate his work over the last four decades in three of its dimensions: pioneering, provocative and participative. While his research interests and themes range widely, early on he resisted the individualization of entrepreneurship studies and instead emphasized that entrepreneurship is a social practice that must be contextualized, localized and situated. In so doing, he uses such concepts as networks, industrial districts, regions and local communities. Making interpretive studies possible in a European context, his conceptual and methodological approach documents how future studies of entrepreneurship can be enacted as a reflexive, participative practice where methods of research, intervention and debate become blurred.
Managing through projects has become important for generating new knowledge to cope with technological and market discontinuities. This paper examines how the fit between the creation of technological and market knowledge and important project management characteristics, i.e. project autonomy and completion criteria, influences the success of new business development (NBD) projects. In-depth longitudinal case research on NBD-projects commercialised during the period 1993-2003 in the consumer electronics industry highlights that project management characteristics focusing only on the creation of technological knowledge contributed to the failure of those NBD-projects that required new market knowledge as well. The findings indicate that senior management support and engaging in an alliance with partners possessing complementary market knowledge can offset this misalignment of the organisation of NBD-projects.
As the title indicates, this chapter is a primer on practices. It begins by discussing practice theory generally but mostly presents my own ideas. The topics addressed are practices, activities, and social phenomena, with special attention to temporality and the unfolding of practices. The chapter concludes with comments about conducting research on practices. My goal is to provide practice theoretical stimulation to readers interested in practice-based education and research.
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.
Although previous research shows that corporate spin‐offs contribute to economic growth, few studies link growth to the type of corporate spin‐off. We distinguish between three types of corporate spin‐offs: incumbent‐backed, opportunity, and necessity spin‐offs. Using empirical data on 46 corporate spin‐offs in Flanders, we find that opportunity spin‐offs outperform the other two types. By identifying the type of corporate spin‐offs, this study aims to add to our knowledge on the relationship between spin‐off type and firm growth.
The Xerox Corporation has devised several strategies for managing the numerous spin-off firms that independently commercialized many of its technologies. From 1979 to 1998, thirty-five technology-based organizations emerged from Xerox's research centers. Contradicting the common perception that Xerox “fumbled the future” by letting its technology walk out the door, in fact the company set in motion a series of deliberate initiatives to manage its spin-off organizations. After initially adopting a laissez-faire approach, the company soon turned to ad hoc methods, which evolved into a formal internal venture capital structure and culminated in a triage process, with the result that only companies perceived by Xerox as fitting into its overall corporate strategy were retained. By using spin-offs to withdraw gracefully from areas it considered to be marginal, Xerox for feited the potential to realize value from their research. Some, but not all, of the spin-offs obtained venture capital financing from outside sources and thus prospered independently. Their success demonstrated the opportunity that Xerox missed in managing its spin-offs.
This article criticizes Bourdieu's and Giddens's overintellectualizing accounts of human activity on the basis of Wittgenstein's insights into practical under standing. Part 1 describes these two theorists' conceptions of a homology between the organization of practices (spatial-temporal manifolds of action) and the governance of individual actions. Part 2 draws on Wittgenstein's discussions of linguistic definition and following a rule to criticize these conceptions for ascribing content to the practical understanding they claim governs action. Part 3 then suggests an alternative, Wittgensteinian account of the homology between practices and actions that avoids this pitfall.
The organizational problem firms face is the utilization of knowledge which is not, and cannot be, known by a single agent. Even more importantly, no single agent can fully specify in advance what kind of practical knowledge is going to be relevant, when and where. Firms, therefore, are distributed knowledge systems in a strong sense: they are decentered systems, lacking an overseeing ‘mind’. The knowledge they need to draw upon is inherently indeterminate and continually emerging; it is not self-contained. Individuals' stock of knowledge consists of (a) role-related normative expectations; (b) dispositions, which have been formed in the course of past socializations; and (c) local knowledge of particular circumstances of time and place. A firm has greater-or-lesser control over normative expectations, but very limited control over the other two. At any point in time, a firm's knowledge is the indeterminate outcome of individuals attempting to manage the inevitable tensions between normative expectations, dispositions, and local contexts.
This essay introduces a new form of social ontology and sketches its bearings on the analysis of organizations. The essay begins by contrasting the two social ontological camps — individualism and societism — into which social theory has been divided since its inception. It then describes the new approach, called site ontology, according to which social life is tied to a context (site) of which it is inherently a part. Examples of such ontologies are presented, as is my own thesis that the site of social life is composed of a nexus of human practices and material arrangements. The bearing of the latter ontology on the character, origin, and perpetuation of organizations is then considered, using an academic department as an example. Contrasts are also drawn with various approaches in organizations theory, including rational organizations, neoinstitutionalism, systems theories, and selection theories. A final section considers the complex psychological structure of organizations, working off Karl Weick and Karlene Robert’s notion of collective mind in organizations.
The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
The essay examines what organizations are as they happen. It first argues that the happening of an organization has two basic components: the performance of its constituent actions and practices and the occurrence of events whereby its material arrangements causally support these activities. Equating the idea of something as it happens with that of something in real time, the essay then examines two kinds of real time in which organizations occur. The first is the unfoldings of the performances and events that are the happening of the organization. The second is the co-occurrences of the teleological past, present, and future in organizational actions. As it happens, however, an organization is more than what there is to it in real time. It also embraces the persisting structures of its practices and its enduring material arrangements, both of which, among other things, institute possible real times for the organization. The essay argues that the perpetuation of practice structure should be understood as organizational memory.
In this paper, I outline a perspective on knowing in practice which highlights the essential role of human action in knowing how to get things done in complex organizational work. The perspective suggests that knowing is not a static embedded ca- pability or stable disposition of actors, but rather an ongoing social accomplishment, constituted and reconstituted as actors engage the world in practice. In interpreting the findings of an empirical study conducted in a geographically dispersed high- tech organization, I suggest that the competence to do global product development is both collective and distributed, grounded in the everyday practices of organizational members. I conclude by discussing some of the research implications of a perspective on organizational knowing in practice. (Distributed Competence; Geographically Distributed Organizing; Know- ing; Organizational Knowledge; Organizing Practices) With the intensification of globalization, acceleration in the rate of change, and expansion in the use of informa- tion technology, particular attention is being focused on the opportunities and difficulties associated with sharing knowledge and transferring "best practices" within and across organizations (Leonard-Barton 1995, Brown and Duguid 1998, Davenport and Prusak 1998). Such a focus on knowledge and knowledge management is particularly acute in the context of global product development, where the development and delivery of timely and innovative products across heterogeneous cultures, locales, and mar- kets are critical and ongoing challenges. Dealing effec- tively with such challenges requires more than just good ideas, strong leaders, and extensive resources; it also re- quires a deep competence in what may be labeled "dis- tributed organizing"—the capability of operating effec- tively across the temporal, geographic, political, and cultural boundaries routinely encountered in global operations.
The authors examine how managers select between corporate restructuring implementation alternatives and how those decisions influence the profitability of the restructuring event. They argue that managers and owners have information asymmetries with respect to the assets in the restructuring and the restructured firms' diversification strategy, and that managers select between two popular implementation alternatives, spin-offs and sell-offs, to convert knowledge differences into financial gain. When the restructured assets reside in primary and related business lines or the firm has low and related diversification among its business lines, the restructuring is difficult for observers to assess and understand. Spin-offs most effectively and profitably reduce information asymmetries by transferring assets to the capital market and increasing the efficiency and transparency of the restructuring firm. Conversely, when the restructured assets reside in secondary and unrelated business lines or the firm has high diversification, sell-offs best mitigate asymmetries by using market forces to reallocate assets to their most productive uses while improving the strategy and performance of the restructuring firm. Tests of a sample of 204 restructuring events support the hypotheses. Overall, the findings suggest that the influence of corporate restructuring on financial performance is determined in part through how the restructuring is implemented. Copyright © 2007 John Wiley & Sons, Ltd.
The paper explores the usefulness of analysing firms from the resource side rather than from the product side. In analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested. These tools are then used to highlight the new strategic options which naturally emerge from the resource perspective.
This paper examines the role of learning in corporate restructuring. Drawing from two viewpoints of organizational learning, absorptive capacity and organizational improvisation, we examine whether experience with corporate restructuring modes (sell-offs, spin-offs) influences subsequent restructuring and financial performance. Consistent with an absorptive capacity view, cumulative and repetitive experience with sell-offs was related to the adoption of an ensuing sell-off and to higher performance. Conversely, and consistent with an organizational improvisation view, short-term and contemporaneous experience with spin-offs was related to the subsequent use of spin-offs and to increases in financial performance. The findings contribute to a dynamic explanation of corporate restructuring and its influence on financial performance, illustrate differences between learning in a repetitive situation and learning when repetition is rare, and indicate when absorptive capacity and organizational improvisational views are most profitable. Overall, these findings show that different kinds of restructuring experiences were associated with different modes of restructuring and performance records. Considered collectively, the organizational learning perspective offers insights into why some corporate restructuring strategies appear as intentional and deliberate actions while others resemble more spontaneous and simultaneous responses. Copyright © 2008 John Wiley & Sons, Ltd.
The article reflects on the diffusion of the ‘resource-based view of the firm’ into academic and practitioner thought. The contributions of many people are noted. In closing, I offer some speculations about the future use of these ideas.
abstractWe contribute to the literature on corporate spin-offs and university spin-offs by exploring how different characteristics in the technological knowledge base at start-up influence spin-off performance. We investigate how the technological knowledge characteristics endowed at start-up predict growth, taking into account whether the knowledge/technology is transferred from a corporation or university. We use a novel, hand-collected dataset involving 48 corporate and 73 university spin-offs, comprising the population of spin-offs in Flanders during 1991–2002. We find corporate spin-offs grow most if they start with a specific narrow-focused technology sufficiently distinct from the technical knowledge base of the parent company and which is tacit. University spin-offs benefit from a broad technology which is transferred to the spin-off. Novelty of the technical knowledge does not play a role in corporate spin-offs, but has a negative impact in university spin-offs unless universities have an experienced technology transfer office to support the spin-off.
This paper aims to better understand the development of entrepreneurial competencies to create new ventures within the non‐commercial academic environment. We build upon the evolutionary perspective considering where resources come from to help define these competencies and explain their paths of development. The study follows the creation and early growth of four university spin‐offs within the UK and Norway. We identified three competencies of opportunity refinement, leveraging, and championing that appeared crucial for the ventures to gain credibility. Although selected competencies were inherent within the academic founders, the specific competencies for venture creation had to be developed or acquired. This was achieved iteratively through entrepreneurial experience and accessing competencies from disparate actors such as industry partners and equity investors. Propositions are offered to guide future empirical research based upon our framework.
Adopting a process perspective on entrepreneurship, captured by the notion of “entrepreneuring,” the emerging practice-theory
approach in the social sciences is proposed as an appropriate frame of reference. Entrepreneuring as a practice is ontologically/epistemologically
qualified by presenting phronesis as the relevant guiding intellectual virtue in the knowledge-creating process. A constructionist view invites different modes
of coping with an ambiguous environment, including the use of analogizing and bricolage when enacting entrepreneuring by way
of improvisation and personal networking. The notion of “organizing context” is introduced to grasp how collective support
for entrepreneuring may be mobilized. Enactive research as an interactive way for doing field research is outlined and illustrated
in order to complete the paradigmatic and theoretical arguments for a practice-theory approach to entrepreneuring with an
adequate methodology.
KeywordsEnactive research–Entrepreneuring–Phronesis–Practice-theory–Organizing context
Managing through projects has become important for generating new knowledge to cope with technological and market discontinuities. This paper examines how the fit between the creation of technological and market knowledge and important project management characteristics, i.e. project autonomy and completion criteria, influences the success of new business development (NBD) projects. In-depth longitudinal case research on NBD projects commercialised from 1993 to 2003 in the consumer electronics industry highlights that project management characteristics focusing only on the creation of technological knowledge contributed to the failure of those NBD projects that required new market knowledge as well. The findings indicate that senior management support and engaging in an alliance with partners possessing complementary market knowledge can offset this misalignment of the organisation of NBD projects.
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 overtime 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.ABSTRACT FROM AUTHOR
Many new firms are started by entrepreneurs who got the idea while working for their previous employer. Sometimes employers also agree to develop their employees' ideas internally. This paper develops a multi-task incentives model to analyze optimal corporate strategies towards employee innovations. The model explains when employees become entrepreneurs (sometimes even involuntarily); when they become intrapreneurs, managing internal ventures; when they become managers of a corporate spin-off; and when they are denied all of these options. Important determinants for these choices are the allocation of intellectual property rights, and the availability of outside resources, such as venture capital.
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