The impact of corporate venturing on a firm's competence modes

Abstract

In this conceptual paper we investigate how corporate venturing influences an organization's competences. The impact of various types of corporate ventures on the portfolio of strategic options of a firm's competence modes (Sanchez, 2004a; Sanchez & Heene, 2002) will be assessed by distinguishing two fundamentally different dimensions of corporate venturing: technology and product (Block & MacMillan, 1993). We argue that the level of product and factor market dynamism mediates the effect of corporate venturing on a firm's competence modes. Corporate ventures that significantly increase the level of product or factor market dynamics will increase the flexibility in all five competence modes. These ventures have a direct effect on the lower-order competence modes and an indirect, lagged effect on higher-order competence modes through feedback loops. The developed framework and the propositions contribute to managing the ability of a firm to change its coordination, resource, and operating flexibility in order to sustain value creation.

Citation

Henri Burgers, J., Van Den Bosch, F.A.J. and Volberda, H.W. (2008), "The impact of corporate venturing on a firm's competence modes", Martens, R., Heene, A. and Sanchez, R. (Ed.) Competence Building and Leveraging in Interorganizational Relations (Advances in Applied Business Strategy, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 117-140. https://doi.org/10.1016/S0749-6826(07)11005-2