Strategic Use of Corporate Venturing

Abstract

Corporate venturing (CV) is said to be most productive as a path to superior corporate performance when practiced in a strategic manner. Unfortunately, considerable ambiguity exists concerning what it means in an organizational practice sense to strategically pursue CV. The result is a failure of many companies to fully leverage CV for strategic purposes. Based on a review of the CV literature and findings from a field study of 15 Swedish, U.K., and U.S. corporations, this article describes several models that depict the ways in which CV and business strategy coexist as organizational phenomena. Empirically derived propositions are offered to suggest how some companies are strategically engaged in their CV efforts.

The Effect of Pro-Entrepreneurship Architecture on Organisational Outcomes

“…For the purposes of this paper it is argued that using a firm behavior perspective to understand entrepreneurship is meaningful and the advantages of studying small businesses from this perspective are: (1) firm behavior, as strategy, structure, and performance, is more clearly understood than when only studying the individual entrepreneur; (2) firm behavior is more easily measured that at the individual level; and (3) firm behavior is more manageable (Covin, Miles 2007).…”

“…A longstanding literature has conceptualized corporate entrepreneurship (CE) as a multidimensional phenomenon which incorporates the behavior and interactions of the individual, organizational, and environmental elements within organizations (Covin, Miles 2007;Dess et al 1999;Kuratko et al 1993;Morris et al 1994;Morris, Kuratko 2002;Zahra 1993). CE refers to an organization's commitments to pursuing new opportunities, creating new units or businesses, innovativeness in terms of products, services and processes, strategic self renewal, constructive risk-taking and pro-activeness (Antoncic, Hisrich 2004;.…”

Achieving Strategic Intent through Corporate Venturing

“…Ireland et al (2009) argue that firms that exhibit the strategic intent of continuously and deliberately leveraging entrepreneurial opportunities for growth and advantage-seeking purposes are pursuing a corporate entrepreneurship strategy (CES), and that CV may be part of the strategic vision, entrepreneurial architecture, processes and behaviour that firms utilize. While CV may have an important role in supporting a firm's CES, however, Covin and Miles (2007) do not explicitly argue that a firm's business strategy has to be entrepreneurial in order to pursue strategic CV. Indeed, Tidd and Taurins (1999) indicate that there may be a range of motives for CV: these include market-based motives; growth and diversification; combating cyclical demands of mainstream activities; and organizational learning.…”

“…Covin and Miles (2007) have indicated that organizations may take different approaches to the utilization of CV in relation to business strategy, and that CV may either be utilized as part of a business strategy (strategic CV) or not (nonstrategic CV). In addition, they argue that those firms that engage in CV for strategic reasons do so because they realize that innovation is the only way to meet their long-term goals.…”

“…It has been argued that both strategy and the environment have an impact on corporate venturing performance (Tsai et al, 1991), and within the context of this special edition, the paper seeks to understand and explore the role of strategic relationships and market orientation in attempting to achieve a firm's strategic intent through corporate venturing. By addressing this question, the paper aims to answer the ENTREPRENEURSHIP AND INNOVATION Vol 10,No 4 call for further research on the challenges of using corporate venturing effectively for strategic purposes (Covin and Miles, 2007) and will develop a conceptual framework focused on this.…”