Internal Corporate Venture Operations Independence and Performance: A Knowledge-Based Perspective

Abstract

Internal corporate ventures (ICVs) are entrepreneurial initiatives originated within a company and intended from inception as new businesses for the parent. The literature suggests that parent-ICV structural separation positively affects ICV performance. However, the literature also suggests that ICVs can be nurtured within the parent's existing organizational structure. Our model explores ICV operations independence as a knowledge flow impediment affecting ICV performance. Primary data from 145 ICVs suggest that operations independence is not associated with ICV performance, but that parent-venture market familiarity, venture opportunity identification mode, and venture planning autonomy moderate the relationship between operations independence and ICV performance.

The contingent effects of differentiation and integration on corporate entrepreneurship

“…The proposed contingency view extends prior studies that often implicitly assumed that organizational designs are either conducive to CE or not, regardless of organizational size or state of the environment (cf. Burgers et al, ; Garrett and Covin, ). Our findings give rise to rethinking—or at least qualifying—this assumption and suggest investigating the consistency of design effects on CE in different types of environments and organizations.…”

“…A key premise of corporate entrepreneurship (CE) theory and practice is that mainstream and CE activities require fundamentally different organizing principles (Burgelman, ; Garrett and Covin, ). An acknowledged way to facilitate CE, defined as the sum of a firm's innovation, venturing, and strategic renewal activities (Ling et al, ; Zahra, ) is to set up organizational structures that provide autonomy to CE activities (Block and MacMillan, ; Burgelman, ; Gilbert, ).…”

Offensive and Defensive Corporate Entrepreneurship: Learning to Think Like an Outsider

“…Organizational structure has a significant impact on entrepreneurial efforts (Garrett and Covin, 2015). At times the corporation must adopt a structure that insulates entrepreneurial efforts from existing processes, values, and resources.…”

“…Both assert that corporate entrepreneurship requires the support of the board of directors and senior management. Interference with the culture or values of the entrepreneurial team can mitigate the independence created by providing access to resources and the freedom to develop new processes (Garrett and Covin, 2015). Christensen and Overdorf (2000, p. 74) concur: "only the CEO can ensure that the new organization gets the required resources and is free to create processes and values that are appropriate to the new challenge."…”

Strategy in A Digitally Disrupted Environment

“…Corporate venturing, in essence, represents setting up an entirely new corporate structure; employees for the larger organization must be assigned and rotated between the larger parent company and the spin off entity (Garrett &Covin, 2015). This rotation of employees in and out of the larger organization provides benefits that exceed the operational activities participated in while working at the spin off company.…”