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Internal corporate venture planning autonomy, strategic evolution, and venture performance

Abstract

Theory and research typically suggest that internal corporate (ICV) venture managers should be granted the freedom needed to manage their new business initiatives as they choose, with little or no interference from senior levels of corporate management. The current research investigates the relationship between venture planning autonomy and venture performance, arguing that this relationship is affected by the types (i.e., goal related or value proposition related) and levels (low-to-high) of strategic evolution occurring in the ICV. Data collected from 145 ICVs operating in 72 corporations indicate that venture planning autonomy is most positively related to venture performance when those ICVs’ goals remain stable over the course of venture operations, but the value propositions of those ICVs are evolving.

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Correspondence to Jeffrey G. Covin.

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Appendices

Appendix 1

Table 4 Internal corporate venture identification matrix

Appendix 2

Measures

Unless otherwise indicated, the scale items were assessed using 7-point scales ranging from “strongly disagree” (= 1) to “strongly agree” (= 7).

Venture performance: Please respond to the statements below in reference to the venture in question. Because defunct ventures will have performed variously well prior to their expiration/termination, I am asking you to complete the following scale even if the venture in question is no longer operating. If the venture is defunct, please indicate how you would have evaluated the venture at the time of its expiration/termination. Indicate your level of agreement (by circling the appropriate number) with each statement based on the following scale:

Strongly disagree Disagree Slightly disagree Neutral Slightly agree Agree Strongly agree
1 2 3 4 5 6 7

• This venture generally meets (or met) the expectations of the parent corporation.

• The parent corporation views (or viewed) this venture as being successful, overall.

• The parent corporation believes (or believed) that this venture achieved its key milestones (i.e., events crucial to the venture’s successful development) on schedule for each stage of its development.

• This venture is performing (or performed) well in terms of the criteria (e.g., financial returns, market share, learning/acquisition of new knowledge) the parent corporation considers (or considered) important to the venture’s success.

Venture planning autonomy

The sole responsibility of a higher level(s) of authority within the corporation    Equally the responsibility of a higher level(s) of authority within the corporation and venture-level management    The sole responsibility of venture-level management
1 2 3 4 5 6 7

Who is (was) responsible for each of the following venture activities and decision areas?

  • Setting of the venture’s goals

  • Establishment of a timetable (if applicable) for the achievement of the venture’s goals

  • Choice of formal criteria used to measure the venture’s performance

  • Identification of event milestones (if any) used to assess the venture’s progress

  • Formulation of the venture’s business strategy

  • Decision to change (if necessary) the venture’s business strategy

Venture goal evolution: (1) The venture’s strategic objectives have (had) evolved considerably over time in accommodation of new knowledge acquired in the course of the venture’s operations. (2) The focus of the venture’s objectives has (had) changed considerably as the venture has (had) developed. (3) The venture’s objectives have (had) remained constant from the time they were initially set/established (reverse-coded item).

Venture value proposition evolution: (1) The venture’s value proposition—i.e., the intended basis on which it would appeal to the market—has (had) evolved considerably over time in accommodation of new knowledge acquired in the course of the venture’s operations. (2) The focus of the venture’s value proposition has (had) changed considerably as the venture has (had) developed. (3) The venture’s value proposition has (had) remained constant from the time it was initially set/established (reverse-coded item).

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Covin, J.G., Garrett, R.P., Kuratko, D.F. et al. Internal corporate venture planning autonomy, strategic evolution, and venture performance. Small Bus Econ 56, 293–310 (2021). https://doi.org/10.1007/s11187-019-00220-2

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Keywords

  • Entrepreneurship
  • Corporate entrepreneurship
  • Performance
  • Planning autonomy

JEL classification

  • L26