How to Handle an Internal Venture?: The Effect of Relatedness on the Internal Venturing Outcomes
2015 (English)Conference paper (Refereed)
This paper uses event history analysis to investigate the effects of relatedness on three different outcomes of corporate venturing, identified as retention, termination, and spin-off. For this purpose, relatedness is defined as the degree to which the venture’s activity matches or overlaps with the parent’s activity. Drawing from literature on relational fit, we argue that highly related ventures would be retained, moderately related ones spun off, and unrelated ones would be probable candidates for termination. However, highly related ventures may be likely to pose internal threat to the parent, and consequently be candidates for termination for political reasons as well. This raises the average level of relatedness of terminated ventures above the average of spin-offs. The empirical findings derived from a sample consisting of 78 ventures launched and developed by a number of companies across the Swedish economy give support to our expectations. The highly related ventures were found to be either terminated or retained, moderately related ones were likely to be spun off, and unrelated ones typically faced termination. This supports our hypothesis that relatedness has an impact on how the internal venture is dealt with.
Place, publisher, year, edition, pages
Relatedness; Corporate Venturing; Venture Survival; Spin-off; Termination; Intrapreneurship
Research subject Business Studies
IdentifiersURN: urn:nbn:se:uu:diva-264441OAI: oai:DiVA.org:uu-264441DiVA: diva2:860444
75th Annual Meeting of the Academy of Management, Vancouver (BC), Canada, August 7-11, 2015