Academic journal article Entrepreneurship: Theory and Practice

The Corporate Venture Champion: A Resource-Based Approach to Role and Process

Academic journal article Entrepreneurship: Theory and Practice

The Corporate Venture Champion: A Resource-Based Approach to Role and Process

Article excerpt

The role of the venture champion in the corporate venturing process is the subject of limited discussion in the relevant literature (Burgelman, 1988; Venkatamaran, MacMillan, & McGrath, 1992; Shane, 1994; Guth, 1997). Whereas there is consensus as to the importance of that role in the overall corporate venture process, there is little systematic discussion from the perspective of the champion. Resource-based theory provides a starting point for development of theory to explain behaviors of venture champions regarding resource identification, acquisition, and deployment. The existent theoretical gap may be bridged by an understanding of how resource bases and organizational contexts are different for independent and corporate entrepreneurs. This paper draws from a resource-based framework and examines contextual variations in time, success hurdles, and boundaries influencing independent entrepreneurs and corporate venture champions and leading to differences in resource types and acquisition process. This topic is of increasing importance as large established companies seek new ways to be innovative and flexible. Further, the extent to which companies can specify the competencies and resource-related behaviors of the corporate venture champion will affect the likelihood of the venture's success.

The creation of new corporate ventures occurs in various organizational contexts, including small company start-ups, joint interorganizational ventures, and large diversified corporations (Van de Ven, Venkataraman, Polley, & Garud, 1989). Recent research reports that 11% of U.S. start-ups are sponsored by existing businesses (ERC, 1997). The research on this corporate start-up process is anchored in the marketing literature, sprinkled throughout the strategy literature, and emerging strongly in the area of entrepreneurship. The phenomena is referred to as corporate venturing (Von Hippel, 1977; Block & MacMillan, 1995), corporate entrepreneurship (Ellis & Taylor, 1987; Zahra & Covin, 1995; Kuratko, Montagno, & Hornsby, 1990) or business development (Roberts & Berry, 1997). Related topics include intrapreneurship (Pinchot, 1985), entrepreneurial organizations (Jelinek & Litterer, 1995), and the management of innovation (Van de Ven, 1988). Each of these terms actually represents a unique area for discussion. While there is considerable cross-over in theoretical frameworks and operationalization between studies, mingling concepts creates conceptual cloudiness and reduces the potential for increased understanding. "Corporate venturing" is defined as the internal generation of new business (Block & MacMillan, 1995). "Business development" more broadly addresses new markets, products, or a combination thereof (Roberts & Berry, 1997). Scholhammer (1982) argues that internal or "intra-corporate entrepreneurship" refers to all formal entrepreneurial activities within an existing business structure. "Intrapreneurship" refers to entrepreneurship within a corporation (Pinchot, 1985), while the process of "innovation" describes the development and implementation of innovation ideas within an organization (Van de Ven et al., 1989). While this process may involve the creation of a new business entity, it is not necessarily so.

Early studies of internal corporate venturing approached new business development through either internal development (exploiting internal resources), acquisition, joint ventures, or minority venture capital positions (Roberts & Berry, 1997). The majority of research in this area focuses on the venture as the unit of analysis (Ellis & Taylor, 1987; 1988) and explores market and firm conditions influencing the creation and survival of new corporate ventures (Venkataraman et al., 1992; Burgelman, 1988). The firm conditions conducive to entrepreneurial behaviors are attributed to factors such as resources and competencies (including entrepreneurial talent), organizational structure and institutional legitimacy for intrapreneurial behaviors and activities (Van de Ven et al. …

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