Effects of Internal Corporate Venturing on the Transformation of Established Companies

The organizational capability to adapt to the fast and radical changes of market parameters becomes a prerequisite for companies’ long-term survival. In this context, organizational ambidexterity has gained much attention in research and practice. It is the capability to develop new businesses (exploration) while simultaneously optimizing the existing core businesses (exploitation). Established companies face several challenges in achieving this capability, as the underlying learning modes of exploration and exploitation are mutually incompatible. One way to solve these challenges is to separate the exploration-oriented part from the core organization. Corporate venturing has been widely recognized as one tool to create these dual structures to develop new businesses, based on discontinuous innovation. In recent times, new corporate venturing forms emerge in practice. This growing number of different forms has led to new applications of corporate venturing which go beyond the pure development of new businesses, toward supporting the entrepreneurial transformation of companies. This study aims at answering how different corporate venturing forms contribute to the strategic renewal of established companies. For this purpose, qualitative research methods are used to analyze data from 17 interviews conducted in two German high-tech companies. The study at hand provides empirical evidence in the field of corporate venturing by uncovering new insights about the different transformational effects of corporate venturing initiatives on the core organization. It further reveals that corporate venturing forms can be classified into two categories according to their respective level of entrepreneurship and frequency of execution. Both categories exhibit different transformational effects and can be understood as being complementary to each other.