TY - JOUR

T1 - The Effect of Venture Strategic Disintegration and Structural Integration on Parent Value, in the Context of New Digital Business Models

AU - Kum, Menes Etingue

AU - Gordon, Adam Vigdor

AU - Kortmann, S.C.J.J.

PY - 2019/5/13

Y1 - 2019/5/13

N2 - Corporate venturing is increasingly applied by established companies to innovate and achieve growth. However, many ventures fail, and little research exists investigating phenomena driving venture success. Previous research has investigated the effect of strategic disintegration on venture performance, but no current research assesses the tradeoff between structural integration and strategic disintegration, in relation to maximising contribution of the parent to venture value. We collected quantitative data of 203 European cross industries ventures in the digital business, which we validated in 170 interviews with respective firms and ventures executives. The results show parent companies achieve greater value for their ventures by integrating ventures in their business structure while providing ventures independence in making strategic decisions for their new business ideas. Strategically disintegrated ventures benefiting from structural advantages of the company, such as top management support and insights from the collaborative work with different functions of the organisation, achieve higher value for the parent company. Furthermore, the study distinguishes between strategic and operational disintegration, which identifies which areas the parent company less needs to intervene in, while creating value for the venture

AB - Corporate venturing is increasingly applied by established companies to innovate and achieve growth. However, many ventures fail, and little research exists investigating phenomena driving venture success. Previous research has investigated the effect of strategic disintegration on venture performance, but no current research assesses the tradeoff between structural integration and strategic disintegration, in relation to maximising contribution of the parent to venture value. We collected quantitative data of 203 European cross industries ventures in the digital business, which we validated in 170 interviews with respective firms and ventures executives. The results show parent companies achieve greater value for their ventures by integrating ventures in their business structure while providing ventures independence in making strategic decisions for their new business ideas. Strategically disintegrated ventures benefiting from structural advantages of the company, such as top management support and insights from the collaborative work with different functions of the organisation, achieve higher value for the parent company. Furthermore, the study distinguishes between strategic and operational disintegration, which identifies which areas the parent company less needs to intervene in, while creating value for the venture

KW - Corporate venturing

M3 - Journal article

JO - Journal of Business Venturing

JF - Journal of Business Venturing

SN - 0883-9026

ER -