Corporate versus independent new ventures: Resource, strategy, and performance differences

Shrader, Rodney C.; Simon, Mark

doi:10.1016/s0883-9026(96)00053-5

Cited by 152 publications

(105 citation statements)

References 42 publications

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“…Bettis and Hitt, 1995;Henderson and Clark, 1990;Tushman and Anderson, 1986) and technology-based start-ups in particular (Chandler and Hanks, 1994;Dollinger, 1995;Shrader and Simon, 1997). They comprise technological knowledge, trade secrets, technical know-how generated by R & D and other technology-specific intellectual capital (Dollinger, 1995).…”

Section: Internal Capabilities and Organizational Performancementioning

confidence: 99%

“…Start-ups are charged higher interest rates by financial institutes, pay higher prices and with harsher credit terms for supplies and parts, and adopt above-market compensation plans for their employees. In short, during their early years, start-ups with inadequate financial resources face a critical disadvantage before they evolve into a full-fledged company (Dollinger, 1995;Schoonhoven et al, 1990;Shrader and Simon, 1997). Schoonhoven et al (1990) argued that a new venture's initial capital expenditures increase the speed with which its first products reaches the market.…”

Section: Internal Capabilities and Organizational Performancementioning

confidence: 99%

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Internal capabilities, external networks, and performance: a study on technology‐based ventures

Choonwoo

Lee

Pennings

2001

Strategic Management Journal

1,523

1,110

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This study examined the influence of internal capabilities and external networks on firm performance by using data from 137 Korean technological start-up companies. Internal capabilities were operationalized by entrepreneurial orientation, technological capabilities, and financial resources invested during the development period. External networks were captured by partnership-and sponsorship-based linkages. Partnership-based linkages were measured by strategic alliances with other enterprises and venture capitalists, collaboration with universities or research institutes, and participation in venture associations. Sponsorshipbased linkages consisted of financial and nonfinancial support from commercial banks and the Korean government. Sales growth indicated the start-up's performance. Regression results showed that the three indicators of internal capabilities are important predictors of a start-up's performance. Among external networks, only the linkages to venture capital companies predicted the start-up's performance. Several interaction terms between internal capabilities and partnership-based linkages have a statistically significant influence on performance. Sponsorship-based linkages do not have individual effects on performance but linkage with financial institutions has a multiplicative effect with technological capabilities and financial resources invested on a start-up's performance. Implications and directions for future research were discussed. ABSTRACTThis study examined the influence of internal capabilities and organizational linkages to external entities on firm performance by using data from 143 Korean business ventures.

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Section: Internal Capabilities and Organizational Performancementioning

confidence: 99%

Section: Internal Capabilities and Organizational Performancementioning

confidence: 99%

Internal capabilities, external networks, and performance: a study on technology‐based ventures

Choonwoo

Lee

Pennings

2001

Strategic Management Journal

1,523

1,110

View full text Add to dashboard Cite

show abstract

“…help SMEs in internationalization process. As a learning process, SMEs' consideration related to their characteristic and degree of risk aversion (Thomsen & Pedersen, 2000) and the SMEs' resource endowment (Shrader & Simon, 1997). As a result, alliances and agreements can improve the international performance of SMEs by providing resources and mitigating the uncertainty of internationalization process (Welch, 1992;Keeble, Lawson, Smith, Moore, & Wilkinson, 1998;Lu & Beamish, 2001).…”

Section: Discussionmentioning

confidence: 99%

“…The ownership types become an interesting issue, especially it determines business strategy related to the degree of risk aversion (Thomsen & Pedersen, 2000) and the firm's resources endowment (Shrader & Simon, 1997). Moreover, based on the agency theory, ownership concentration has a relevancy toward the monitoring cost mechanism which involves shareholders and ends up with ownership Herlina Yoka Roida, M.Com (Fin), Faculty of Business, Widya Mandala Catholic University.…”

mentioning

confidence: 99%

Family Ownership Type and the International Involvement of SMEs: Empirical Study of Agency Theory in East Java Indonesia

2012

CBR

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This paper briefly draws the dimension of small, micro and medium enterprises' (SMEs) behavior in terms of internationalization strategy based on the ownership structure among SMEs in East Java. The finding is very interesting when there is no ownership structure variation, so the decision to choose international involvement could not be supported. Also, the scale determination is not becoming constraint of SMEs in East Java to involve internationally, especially thought export strategy. However, several aspects are considered to control the export behavioral dimension which is research and development (R&D) and sales, significantly. The result shows that there still are other elements except ownership type could impact internationalization strategy choices of SMEs in East Java.

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“…This is because the inventions that the CVs develop can presumably spur the innovation process of established companies. But incumbent companies should not exert too much control on their ventures if they don't want to jeopardize their innovativeness (Shrader and Simon 1997). In particular, the decision rights for innovation projects should be granted to the venture (Aghion and Tirole 1997).…”

Section: Discussionmentioning

confidence: 99%

The Contribution of Corporate Ventures to Radical Innovation

2010

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10060.pdf Non-Technical SummaryEstablished firms' difficulty to innovate has been discussed extensively among economists. In contrast to incumbent firms, industry entrants are often described to be more Our analysis is based on a sample of about 2,500 ventures in German manufacturing in the period 1993-2007. We find that CVs innovate more radically than a control group of independent ventures (IVs). The contribution of corporate ventures to radical innovations, however, significantly decreases with a more concentrated ownership structure. Ownership concentration increases the parents' incentive to monitor and control the ventures. The resulting lack of managerial discretion makes it difficult for the ventures to develop radical innovations. In conclusion, our findings signal the need to balance the control incentive, stemming from the incumbents' investment into corporate venturing, with the benefits from granting some independence to the ventures. We conclude with management advice on how a balance can be achieved. Das Wichtigste in Kürze August 2010 AbstractEstablished firms often face significant obstacles to innovation. As a solution, it has been suggested to form corporate ventures. Based on a sample of corporate and independent ventures in German manufacturing, we show that corporate ventures are more innovative than the control group, i.e. the independent ventures. In particular, corporate ventures are more successful at developing radical innovations. This effect, however, decreases with the ventures' degree of ownership concentration. We conclude that corporate ventures with a high ownership concentration are more likely to be controlled and monitored by their corporate sponsors, resulting in less favorable conditions for radical innovation.

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Corporate versus independent new ventures: Resource, strategy, and performance differences

Cited by 152 publications

References 42 publications

Internal capabilities, external networks, and performance: a study on technology‐based ventures

Internal capabilities, external networks, and performance: a study on technology‐based ventures

Family Ownership Type and the International Involvement of SMEs: Empirical Study of Agency Theory in East Java Indonesia

The Contribution of Corporate Ventures to Radical Innovation

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