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One way that firms attempt to innovate is through investment in R&D activity. However, there is much heterogeneity in innovations among firms making comparable R&D investments. This article explores employee ownershipʼs moderating effect on the relationship between R&D intensity and innovative output. The basis for the moderation is that ownership increases motivation and commitment to the innovation agenda of the company, and retains employeesʼ entrepreneurial efforts for internal opportunities. Using hierarchical regression, the data support the hypothesis that employee stock ownership positively moderates the relationship between R&D intensity and innovative output. Implications for future research and practice are addressed.

In this chapter, the authors conceptualize corporate entrepreneurship as a mental model that allows firms to adapt to new competitive landscapes by facilitating the development of new cognitive scripts and schemas. The authors begin by explaining what it means for a firm to be competitively bewildered, or lost, in a rapidly changing competitive domain. The authors also describe five stages of being lost competitively. The authors then map the attributes of an entrepreneurial firm – adaptability, speed, flexibility, aggressiveness, and innovativeness – to stages of the bewilderment process wherein they may be most helpful to realign competitive realities and entrepreneurial scripts and schemas. The authors conclude by proposing contributions resulting from conceptualizing corporate entrepreneurship as a bewilderment schema and also explain how this represents a novel perspective.

This paper aims to examine whether the ability of early-stage ventures to obtain external funding and the amount of additional information provided to potential investors are affected by the level of assurance (audit, review or compilation) received from independent accountants on the ventures’ historical financial statements. The assurance level provided should differently impact potential investors’ willingness to invest in a new venture and need for additional information during due diligence evaluation of the organization and entrepreneur.

To examine the relative effects of the signal provided by these levels of assurance on investment decisions, a survey is administered to collect data regarding an investment-related decision scenario. The three levels of assurance in independent accountant’s reports (audit, review or compilation) is manipulated when eliciting participants’ responses.

Results indicate that respondents perceive the signal provided by compilation reports, review reports and audit reports as increasing in reliability and are more likely to invest in a venture providing reports with that increasing reliability. Audited financial statements are viewed as the most reliable and provide a positive signal to potential investors and lenders. Consequently, potential investors may require less additional information from entrepreneurs with audited financial statements when conducting due diligence investigations.

Subjects used (Master of Business Administration students, with an average work experience of over six years, including some with investing experience) may not be the best proxies for early-stage investors.

This is the first study to examine the relative effectiveness of signals provided by the independent accountant’s audit, review and compilation reports in assisting early-stage business ventures and entrepreneurs raising funds, and dealing with due diligence requests for additional information. Results indicate that engaging an auditor for independent assurance on financial statements can benefit entrepreneurs by increasing the likelihood of obtaining necessary funds and decreasing the amount of additional information needed by potential investors.

In business environments characterized by intense competition, globalization, rapid technological diffusion, accelerated product life cycles, and evolving industry boundaries, the ability of firms to adapt effectively to their changing environments is a strategic imperative (Hitt, Keats, & DeMarie, 1998; Nadler & Tushman, 1999). The exhibition of strategic adaptability – the ability of a firm to alter its alignment with the environment through reactive and proactive behaviors (Evans, 1991) – is a function of the goodness-of-fit that exists between the capabilities of a firm and the demands imposed by its relevant industry context (Burgelman & Grove, 1996). When firm capabilities are well aligned with industry success factors, those capabilities constitute strategic assets for the firm, or resources that lead to the achievement of competitive success in that context (Amit & Schoemaker, 1993). The possession of strategic assets thus contributes to a state of adaptation, defined by Chakravarthy (1982) as a state in which an organization exhibits the capacity to survive the conditions of its changing environment. Because of the constantly shifting nature of the environment, a state of adaptation is not a permanent settling point for the organization, but rather a moving target for the organization as it attempts to remain “mapped on” to the exigencies of the environment.

This tenth volume in the series Advances in Entrepreneurship, Firm Emergence, and Growth focuses on entrepreneurial strategic processes. Papers related to strategic processes in entrepreneurship have been a recurring feature of the Advances series, starting with the second volume, which included Slevin and Covin's (1995) article of record on entrepreneurial strategic behavior, as well as process-related strategy articles by Carsrud and Kruerger (1995) and Bloodgood, Sapienza, and Carsrud (1995). Subsequent explorations included Volume 7's material on corporate entrepreneurship, Fernhaber and McDougall's (2005) work on strategic adaptation in Volume 8, as well as Salvato, Lassini, and Wiklund's (2006) acquisition process model and Samuelsson's innovative-imitative process comparison in Volume 9. Common to all of these has been the central intent of the strategy approach: the pursuit of organizational success.

The purpose of this study is to evaluate the effect of opportunity relatedness and uncertainty on the decision of a corporate entrepreneur to pursue a venturing opportunity.

The study uses a conjoint experimental design to reveal the structure of respondents' decision policies. Data were gathered from 47 useable replies from corporate entrepreneurs and were analyzed with hierarchical linear modeling (HLM).

Results show that product relatedness, market relatedness, perceived certainty about expected outcomes and slack resources all have a positive effect on the willingness of a corporate entrepreneur to pursue a new venture idea. Moreover, slack was found to diminish the positive effect of product relatedness on the likelihood to pursue a venturing opportunity.

By providing a better understanding of decision-making schemas of corporate entrepreneurs, the findings of this study help improve the practice of entrepreneurship at the organizational level. In order to make more accurate opportunity assessments, corporate entrepreneurs need to be aware of their cognitive strategies and need to factor in the salient criteria affecting such assessments.

This paper adds to the limited understanding of corporate-level decision-making with regard to pursuing venturing opportunities. More specifically, the paper adds new insights regarding how relatedness and uncertainty affect new venture opportunity assessments in the presence (or lack thereof) of slack resources.