RECONCILING COMPETING INSTITUTIONAL LOGICS IN CORPORATE VENTURE CAPITAL UNITS

2020 ◽  
pp. 2040004
Author(s):  
MARCEL AHLFÄNGER ◽  
MAGDALENA KOHUT ◽  
JENS LEKER
Keyword(s):  
Venture Capital ◽  
Institutional Theory ◽  
Institutional Logics ◽  
The Other ◽  
Corporate Venture Capital ◽  
Organisational Structure ◽  
Strategic Objectives ◽  
Prior Literature ◽  
Corporate Venture

Prior literature highlights the competing institutional logics corporate venture capital (CVC) units have to face due to their intermediary position between the two environments in which they operate — the VC industry and the corporate firm. By conducting an inductive case study of 20 CVC units, we unravel how novel organisational subunits reconcile the conflicting logics in terms of their organisational structure. We show that, instead of fully aligning with one or the other environment, most units form hybrid organisations incorporating elements of both logics. Our data suggest that CVC units tend to follow the hybridisation strategy of selective coupling rather than apply strategies of compromising or decoupling. The type of structure depends on factors on the intra-, inter-organisational and industry level. We further suggest a specific hybridisation pattern that is especially beneficial in the achievement of a unit’s strategic objectives. Our findings contribute to both institutional theory and CVC literature.

scholarly journals Strategic Objectives of Corporate Venture Capital as a Tool for Open Innovation

2020 ◽  
Vol 6 (4) ◽  
pp. 157 ◽  
Author(s):  
Felix Pinkow ◽  
Jasper Iversen
Keyword(s):  
Venture Capital ◽  
Open Innovation ◽  
New Technologies ◽  
New Ventures ◽  
Corporate Venture Capital ◽  
Comprehensive Overview ◽  
Conceptual Foundation ◽  
Strategic Objectives ◽  
External Knowledge ◽  
Corporate Venture

Corporations are confronted with challenges adjusting to changing technologies and markets. Seeking innovations externally through open innovation is a possible approach to go beyond the internal development of innovations. One practice of open innovation to assimilate external knowledge is corporate venture capital (CVC), meaning minority investments in entrepreneurial ventures by incumbent firms, whereby the objectives of CVC investments might be purely financial or may pursue strategic goals. CVC has been identified as a possible approach to ambidexterity, since investments in new ventures can allow to explore new technologies and markets, or to improve internal exploitative capabilities. Although literature on the potential strategic benefits of CVC is abundantly available, a systematic conceptualization of strategic objectives is lacking. Therefore, this paper examines strategic objectives of CVC and seeks to enrich, extend and conceptualize existing research through a theoretical framework. The conceptual foundation of this study embeds CVC in the ambidexterity literature, and clusters objectives of CVC investments in view of an ambidextrous organization and the degree of autonomy given to CVC units. The strategic objectives that can be pursued through CVC investments are (a) strengthening the core business, (b) leveraging the ecosystem, and (c) exploring new markets and technologies. This study concludes with a comprehensive overview of the strategic objectives that can be pursued by CVC, illustrates the barriers and limitations of CVC investments, and discusses the role of autonomy and ambidexterity with respect to the individual strategic objectives. Hereby, CVC is identified as a powerful approach to engage in open innovation practices, since it allows one to pursue a range of different strategic objectives through tapping into external knowledge held by new ventures. Often considered an approach for exploring new technologies through external knowledge acquisition, CVC is also identified as an open innovation approach that allows organizations to increase their internal exploitation capabilities.

THE IMPACT OF STRATEGY AND STRUCTURE ON THE PERFORMANCE OF CORPORATE VENTURE CAPITAL UNITS

2021 ◽  
Author(s):  
MAGDALENA KOHUT ◽  
MARCEL AHLFÄNGER ◽  
JENS LEKER
Keyword(s):  
Venture Capital ◽  
Structural Design ◽  
Qualitative Data ◽  
Corporate Venture Capital ◽  
Organisational Structure ◽  
Corporate Venturing ◽  
Organic Hybrid ◽  
Corporate Venture ◽  
Strategy And Structure ◽  
The Impact

The range of organisational designs and their interplay with the objectives of corporate venture capital (CVC) units has yet to be fully understood. Using primary qualitative data collected from 20 CVC units, the authors show that although strategy does not always consciously drive structural design, there are clear patterns of beneficial organisational structure that support achievement of particular objectives. Furthermore, the authors discuss the implications of objectives and organic, hybrid and mechanistic structures on CVC performance, contributing both to the CVC literature and the practice of corporate venturing.

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