Corporate Venture Capital Contributions to Strategic Renewal: Neglected Paths and Barriers
Document Type
Article
Publication Date
2023
Keywords
corporate venture capital, direct and indirect path to renewal, entrepreneurial ecosystem, institutional and organizational barriers, strategic renewal
Abstract
Research Summary
Via a study of the corporate venture capital (CVC) unit of a multinational corporation, we examine how CVC contributes to strategic renewal. We find the commonly featured direct path to renewal to have limited impact as access to venture technology is constrained by key external institutional barriers. By contrast, we highlight a less studied, but potentially more important, indirect path: the unit's and hence the parent corporation's access to a high-technology ecosystem. Obstacles on this path are internal and organizational: including challenges of integration, goal disparities, and competition for resources and credit between the CVC unit and corporate parent. The significance of the indirect path and revelation of understudied institutional and organizational barriers suggest new directions for rechanneling and contextualizing studies of CVC.
Managerial Summary
We studied the corporate venture capital (CVC) unit of a large multinational firm to discover how such investments can have strategic contributions to the parent firm. We found numerous obstacles in using technological knowledge from the ventures the unit invests in because of legal and reputation barriers against disseminating proprietary information. By contrast, opportunities abound from participating in an entrepreneurial ecosystem to which the CVC activities provide access. These expose the unit to the promises and challenges of emerging technologies and fields, providing important information the unit is free to share with the parent to guide strategic renewal. To do so, however, managers must overcome substantial organizational, political, and resource barriers between the CVC unit and the parent corporation.
Digital Object Identifier (DOI)
https://doi.org/10.1002/sej.1463
Citation / Publisher Attribution
Strategic Entrepreneurship Journal, v. 17, Issue 3, p. 560-584
Scholar Commons Citation
Danneels, Erwin and Miller, Danny, "Corporate Venture Capital Contributions to Strategic Renewal: Neglected Paths and Barriers" (2023). School of Marketing and Innovation Faculty Publications. 33.
https://digitalcommons.usf.edu/mai_facpub/33
Was this content written or created while at USF?
Yes
