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Book part
Publication date: 18 July 2006

Markku V.J. Maula, Erkko Autio and Gordon Murray

The present study develops a multi-theoretic framework of the mechanisms of value creation in interorganizational relationships and of the key factors influencing those…

Abstract

The present study develops a multi-theoretic framework of the mechanisms of value creation in interorganizational relationships and of the key factors influencing those mechanisms. The integrative use of several theories in building the model is justified by numerous studies suggesting that a multi-theoretic approach is required to understand the complexity of interorganizational relationships (Gulati, 1998; Osborn & Hagedoorn, 1997; Park et al., 2002). We believe that the relationships between start-up companies and their corporate investors, with each party holding a diversity of strategic and financial objectives, are not less complex than other potential interorganizational relationships. They may therefore also require ideas from several theories to be properly understood. In this study, we build the models applying primarily the resource-based and the knowledge-based views, as well as social capital theory. Ideas from other theoretical approaches are used to complement these theories.

Details

Entrepreneurship: Frameworks And Empirical Investigations From Forthcoming Leaders Of European Research
Type: Book
ISBN: 978-1-84950-428-7

Article
Publication date: 11 September 2007

L. Gregory Henley

The purpose of this article is to describe how investing in entrepreneurial ventures can help large firms pursue corporate entrepreneurship initiates. Ventures can be

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Abstract

Purpose

The purpose of this article is to describe how investing in entrepreneurial ventures can help large firms pursue corporate entrepreneurship initiates. Ventures can be attractive partners due to their ability to provide a disproportionate share of radical innovations.

Design/methodology/approach

Based on existing literature and information collected via 45 surveys and 72 interviews, the paper shows that strategic fit is an important variable that determines the type of benefits ventures can provide to investing firms.

Findings

Three benefits large firms can reap from investing in ventures are: managing the risks and uncertainties of innovation; learning from the venture; and increasing bargaining power over ventures that supply innovative products.

Research limitations/implications

Existing research does not go far enough to explain the range of benefits corporate venture capital can provide. The majority of investments were found in ventures that sell innovative products to the investing firm and have technological competences different from the investing firm.

Practical implications

Organizing for innovation is often a challenge for large firms. Because ventures may be more effective when started outside the firm than inside, investing in select entrepreneurial ventures can help firms effectively explore for radical innovation while continuing to exploit their existing resources internally.

Originality/value

For corporate strategists concerned about improving their firm's innovativeness, corporate venture capital can be part of a corporate entrepreneurship toolbox that can help augment a large firm's growth and competitive position. It can be particularly helpful in managing the risks and uncertainties inherent with radical innovation.

Details

Journal of Business Strategy, vol. 28 no. 5
Type: Research Article
ISSN: 0275-6668

Keywords

Book part
Publication date: 13 October 2016

Tim C. Hasenpusch and Sabine Baumann

The fast-changing, highly competitive and technology-driven business environment forces established firms to continually search for new business opportunities and…

Abstract

The fast-changing, highly competitive and technology-driven business environment forces established firms to continually search for new business opportunities and innovative ideas. In reaction, corporations such as Google, Microsoft, Cisco and Bertelsmann have launched new corporate venture capital (CVC) units or have intensified existing CVC activities. This chapter examines the structure, patterns and investment focus of telecommunication, IT, consumer electronics and media & entertainment firms’ CVC investments by conducting a data-mining project based on the Thomson Reuters Private Equity database. The data-mining project reveals the increasing importance of CVC activities as a strategic development tool to address the requirements of the increasing costs, speed and complexity of a technology-driven industry since the bursting of the Internet bubble. Therefore, following chapter is one of the first CVC studies to describe and compare CVC investments of the last CVC wave across industry sectors.

Details

Mergers and Acquisitions, Entrepreneurship and Innovation
Type: Book
ISBN: 978-1-78635-371-9

Keywords

Article
Publication date: 16 February 2022

Weiqi Dai, Yi Wang, Mingqing Liao, Mei Shao, Yue Jiang and Miao Zhang

One increasingly popular financing option for entrepreneurial ventures is to attract corporate venture capital (CVC) investments. Prior research tends to take a…

Abstract

Purpose

One increasingly popular financing option for entrepreneurial ventures is to attract corporate venture capital (CVC) investments. Prior research tends to take a CVC-centric perspective assessing the benefits and contingencies for incumbent firms or corporate investors to engage with entrepreneurial ventures. Few studies have taken the opposite perspective of investigating factors that entrepreneurial ventures need to take into account when engaging with CVC investments. As such, this study aims to investigate pre- and post-IPO entrepreneurial venture performance that partners with CVC providers or corporate investors, as well as to assess organizational and environmental contingencies.

Design/methodology/approach

This study draws on a sample of 631 entrepreneurial ventures from the CSMAR database ranging from 2009 to 2019, along with CVC financing data from the CVSource database and financial data in entrepreneurial ventures’ annual reports from the Juchao Network. This study applies multiple linear regression modelling and fixed effect panel data analyses to test the proposed hypotheses.

Findings

The results show that CVC investment contributes to entrepreneurial ventures’ financial performance, both pre- and post-IPO. However, while research and development (R&D) intensity and geographic proximity strengthen the positive relationship between CVC investment and entrepreneurial ventures’ performance pre-IPO, R&D intensity has a negative moderating effect on the relationship between CVC investment and entrepreneurial ventures’ performance post-IPO.

Practical implications

First, in emerging economies, adopting a CVC financing strategy is an important strategic choice for entrepreneurial ventures that have a great demand for external capital, resources and technology support. Second, leveraging the relationship between external financing and internal R&D investment is essential for them to maintain their core competitiveness and sustainable growth. Moreover, entrepreneurial ventures should deal with the coopetitive relationship with incumbent companies and manage their dependency on other market participants in the external environment.

Originality/value

This study focuses on the performance implications for entrepreneurial ventures engaging with CVC investments pre- and post-IPO. First, this study broadens and expands prior research on the mechanism of the relationship between CVC and entrepreneurial ventures’ financial performance. Second, the research conducts a comparative study of the moderating effects of different timings. Third, this study applies learning theory to the field of CVC in emerging economies.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 1 January 2012

Boaz Vaizler and David Gordon

Any corporate executive ever faced with the task of launching new businesses within her organization must know this is quite a difficult challenge. Creating a new business

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Abstract

Purpose

Any corporate executive ever faced with the task of launching new businesses within her organization must know this is quite a difficult challenge. Creating a new business is risky enough by itself and arguably even more problematic for large, successful firms “caught in the chains” of ever‐improving what already works. In light of this true dilemma, this paper aimed to review rich up‐to‐date literature on corporate venturing in search for evidence‐based recommendations that are really practical.

Design/methodology/approach

By means of critical reading and careful selection based on real‐world experience from the trenches of Intel Strategic Planning, the authors screened relevant literature from diverse sources including professional practitioner publications as well as academic research journals.

Findings

Despite the surprisingly scarce practical advice found in reviewed literature, this paper emphasizes a short list of useful tips for corporate executives. For example: dedicate corporate resources but surrender central ownership; put your faith in the best people and not necessarily in the best ideas; ensure top executives “walk the talk” as sponsors and hands‐on leaders; and protect disruptive innovation from being shot down by existing customers' influence. These findings are accompanied by a conceptual model mapping the main issues in corporate venturing to four distinct areas: design, resources, decisions, and monitoring.

Originality/value

The key findings of this paper are brought as practical tips for executives attempting to construct a corporate venturing structure that works; these tips are noteworthy as they may contradict some of the common wisdom in corporate strategy.

Details

Journal of Business Strategy, vol. 33 no. 1
Type: Research Article
ISSN: 0275-6668

Keywords

Article
Publication date: 19 June 2017

Ya-Hui Lin, Chung-Jen Chen and Bou-Wen Lin

The purpose of this paper is to investigate the impacts of strategic control and operational control on new venture performance in the China context.

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Abstract

Purpose

The purpose of this paper is to investigate the impacts of strategic control and operational control on new venture performance in the China context.

Design/methodology/approach

This study tests the hypotheses in a sample of 83 new ventures that have equity investment by established firms and are founded between 1993 and 2007 that issued initial public offerings while not more than eight years old.

Findings

The results of this study show that: strategic control has a significantly negative relationship with new venture performance; operational control has a significantly positive relationship with new venture performance; industry relatedness between the corporate investor and the new venture and the new venture’s political ties moderate the relationships between the two types of control and new venture performance. The results are robust to alternative measurements of new venture performance.

Practical implications

The management control that the corporate investor exercises over the new venture is a significant determinant of the new venture success. Managers have to distinguish between strategic control and operational control and understand their impacts on new ventures.

Originality/value

This study highlights the issue of management of corporate venturing capital relationships from the new venture’s perspective. In addition, this study separates strategic and operational control within management control and examines how they influence new venture performance.

Details

Management Decision, vol. 55 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 7 August 2009

Yi‐Fen Huang

The purpose of this paper is to develop an understanding of the effects of existing capabilities, by exploration and exploitation, on the choice between internal corporate

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Abstract

Purpose

The purpose of this paper is to develop an understanding of the effects of existing capabilities, by exploration and exploitation, on the choice between internal corporate venturing and external corporate venturing.

Design/methodology/approach

Data from 259 Taiwanese firms in the information technology (IT) sector are collected. The study period is four years: 2003 to 2006. Information on corporate financial data and new ventures from the Taiwan Economic Journal (TEJ) database are collected, as well as patent information from the Taiwan Intellectual Property Office (TIPO). Poisson regression is used to test the hypotheses.

Findings

There exists a positive relationship between a firm's existing capabilities and corporate venturing activities. The findings indicate that exploration is a better predictor of internal corporate venturing, while exploitation is better at predicting external corporate venturing.

Research limitations/implications

Empirical results are derived from a sampling of information technology firms in Taiwan thus raising issues about their generalizability to other empirical contexts.

Practical implications

That internal and external corporate venturing could be complementary is clarified; meaning that each could contribute to a particular type of strategic renewal. For firms that engaged much more in exploration, internal corporate venturing is a better for growth than external corporate venturing; it can leverage existing technologies and keep valuable breakthrough technologies in‐house. In contrast, for firms that focus much more on exploitation, learning externally is a better renewal strategy than venturing internally; it can access and integrate resources trans‐organizationally to create novelty that may serve as avenues for further growth.

Originality/value

This is the first study that compares the effects of exploration and exploitation with regard to the decision to engage in internal or external corporate venturing.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 15 no. 5
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 1 June 2006

Rajagopal

The purpose of this research is aimed at discussing the external and internal strategic fit in corporate ventures in Latin America.

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Abstract

Purpose

The purpose of this research is aimed at discussing the external and internal strategic fit in corporate ventures in Latin America.

Design/methodology/approach

This study is based on empirical investigation through semi‐structured interviews administered to the managers of multinational companies operating in Mexico. The success of the corporate ventures in Mexico has been evaluated from the perspectives of economic and relational attributes. The results of the study showed that the degree of fit between a corporate parent and venture affects the success of the venture. The success is associated with high levels of commitment, competitive skills and dynamics in the functional management of the venture. In this study the variables of economic and relational dimensions of external and internal fit have shown greater association with venture success. It has also been found that ventures opt for greater autonomy and less economic dependency with their parent ventures for leading success and these findings make an intuitive sense.

Findings

The study may have limitations on generalizing some of the findings because of the survey type study.

Research limitations/implications

Corporate venturing as a strategy for international business development has become significant in view of the process of globalization resulting in free trade and business development opportunities for multinational companies. This study provides an understanding of the venture managers to succeed in Latin American business environments in view of the organizational culture and employee behaviour.

Practical implications

This paper is based on the economic and behavioural indicators affecting strategic fit in the corporate venture.

Originality/value

This paper would contribute to important areas in Latin American business where such studies are scarce.

Details

Management Decision, vol. 44 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 11 May 2012

Ellen Enkel and Sanjay Goel

Since corporate ventures operate under the organizational conditions of a parent company, this article aims to highlight key conditions influencing the success of a new venture.

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Abstract

Purpose

Since corporate ventures operate under the organizational conditions of a parent company, this article aims to highlight key conditions influencing the success of a new venture.

Design/methodology/approach

Two cases of corporate venturing are analyzed regarding their performance since they are characterized by different conditions within one international consumer‐goods company. Hence, the literature on corporate entrepreneurship is reviewed and combined with a case study to explore the role and drivers of organizational conditions in the inception and development of new corporate ventures.

Findings

The case study reveals two key organizational differences pertaining to corporate new ventures — procedural clarity and procedural discipline. These differences mitigate the variety of risks that corporate entrepreneurs face and smooth or hinder their way to evolve their venture from ideas to business.

Research limitations/implications

As the study includes two venturing cases within the same company in the fast moving consumer goods industry (FMCG), the findings are so far limited to the characteristics of this company type and its sector.

Practical implications

This article supports mid‐level managers to run corporate ventures more successfully by introducing a clear action plan with well defined phases. Individual managers' impact should be limited and linked to a more objective network‐structure.

Originality/value

In contrast to previous literature, this paper highlights the influence of organizational conditions under which corporate ventures are initiated and operated. Additionally, there are further factors identified, the ventures' internal visibility, and the knowledge support by the parent company, which will influence the venture's success or failure.

Details

Journal of Business Strategy, vol. 33 no. 3
Type: Research Article
ISSN: 0275-6668

Keywords

Article
Publication date: 19 July 2019

Michael Kötting

Through digitization and globalization, corporate incubators have gained new relevance as tool to foster innovation within established companies. Although many studies…

Abstract

Purpose

Through digitization and globalization, corporate incubators have gained new relevance as tool to foster innovation within established companies. Although many studies address business incubators in general, the specifics of corporate incubators are often neglected in the literature. The paper aims to discuss this issue.

Design/methodology/approach

The author systematically reviewed academic articles regarding corporate incubation, published in peer-reviewed journals. In the course of a subsequent analysis, open questions for further research were identified and addressed.

Findings

Corporate incubators differ significantly from business incubators. Based on an analysis of 45 academic papers, the main features of corporate incubators have been identified and addressed.

Originality/value

The present work suggests that it is one of the first that systematically analyze the literature on corporate incubation. Based on the literature review, a holistic framework was constructed that highlights the different elements of corporate incubation and also considers the incubator as knowledge broker between business units and ventures.

Details

European Journal of Innovation Management, vol. 23 no. 3
Type: Research Article
ISSN: 1460-1060

Keywords

1 – 10 of over 30000