Strategic repertoire variety and new venture growth: The moderating effects of origin and industry dynamism

New ventures (companies eight years or younger) face an important choice in attempting to achieve growth: Should they follow “strategic simplicity” by relying on a few similar competitive actions, or emphasize “strategic variety” by implementing multiple different competitive actions? Data from 140 new ventures in Spain suggest that new ventures benefit from pursuing strategic variety, especially when their industries are highly dynamic. Further, although new ventures in general gain from strategic variety in highly dynamic industries, independently owned ventures achieve higher growth rates than their corporate counterparts. Copyright © 2013 John Wiley & Sons, Ltd.     

Internal corporate joint ventures: Development processes and performance outcomes

Joint venture activity and internal corporate venturing represent two administrative innovations receiving increased attention in strategic management research. This study investigates a new hybrid form of administrative innovation: internal corporate joint ventures, which combine the equity involvement typically found in joint ventures with the internal staffing of a semiautonomous unit typical of internal corporate ventures. Drawing on both a process model and a variance model, the structuring, development and performance of 53 such ventures in an industry-specific setting is examined.     

Interfirm coopetition,interfirm knowledge creation,and collaborative innovation performance: The moderating roles of environmental competitiveness and dysfunctional competition

This paper investigates whether and how interfirm coopetition—the combination of cooperation and competition—affects collaborative innovation performance in competitive environments. We address this issue by introducing interfirm knowledge creation as a mediating mechanism based on knowledge creation theory and by examining the moderating effects of environmental competitiveness and dysfunctional competition. The hypotheses are tested using survey data from a sample of 170 Chinese high-tech firms. The results show that interfirm knowledge creation mediates the impact of interfirm coopetition on collaborative innovation performance. Furthermore, the findings indicate that the positive relationship between interfirm coopetition and interfirm knowledge creation is stronger under higher levels of environmental competitiveness but weaker under higher levels of dysfunctional competition. The positive relationship between interfirm knowledge creation and collaborative innovation performance is more evident under higher levels of environmental competitiveness. These findings enrich the interfirm coopetition literature, contribute to knowledge creation theory by extending it to the interfirm context, and provide a better understanding and useful advice for enterprise managers and government officials.     

Development of new B2B venture corporate brand identity: A narrative performance approach

The development and role of brand identity in new B2B ventures is not well explored despite the challenge for such organisations in establishing reputational legitimacy. Previous research defines corporate brand identity as stable and endogenous to the organisation based either on the reputational capital of the organisation or the founder. We challenge this view in this paper from a conceptual and empirical perspective. Combining narrative theory and performativity theory this article suggests brand identity develops as a narrative performance. The study employs a narrative case analysis of interviews and archival data generated during a three-year period to examine the development of corporate brand over time. This study shows that the development of corporate brand identity and the context of the development of new B2B venture are closely intertwined processes and provides a framework for understanding the phenomenon. Brand identity is not a stable core emanating from inside the company but develops over time through a reciprocal sensemaking and dynamic interactions between company and the key external stakeholders in its context. We conclude that brand identity is built not only upon the reputational capital of past behaviours but of the brand itself as it explores and interacts within its brand eco-system.     

Exploring Correlates of Product Launch in Collaborative Ventures: An Empirical Investigation of Pharmaceutical Alliances

This paper examines collaborative ventures leading toward the launch of new products in the pharmaceutical industry. These collaborative ventures are one of the most underresearched areas in the new product literature, yet the preponderance of these collaborative ventures makes it an area of great importance for scholars and practitioners alike. As such, the purpose of the study is to examine why some collaborative projects produce a favorable outcome (the launch of a product) whereas others do not. That is, what characteristics of partner firms in the collaborative ventures and what characteristics of the partnership lead to a successful launch of a new product in the pharmaceutical industry? Secondary data from the pharmaceutical industry are employed in a multinomial logit model. Data from 128 collaborative ventures from 1980 to 2004 are used in the analysis. The partner firms in the collaborative ventures are from various industries ranging from malt beverages to pharmaceutical preparations to electronic and other equipment among others. Of the 128 collaborative ventures, 66 were successful in leading to a new product launch, whereas 62 did not result in the launch of a new product. The results from the multinomial logit analysis suggest that combined marketing resources of parent companies, combined technological intensity of parent companies, and combined asset bases of parent companies contribute to the likelihood of an eventual product launch in a collaborative venture. However, the results of the analysis show that contrary to expectations, technological complementarity of partners in the collaborative venture is not a significant predictor of successful new product launch. The results of the study suggest certain aspects for managers to consider when establishing collaborative ventures. To maximize the possibilities of the collaborative venture leading to the successful launching of a new product, managers should be concerned with the resources potentially available to partners in the collaborative venture from parent firms. These resources are not only of financial nature but also of technological nature. The existence of these resources does not ensure provision of resources to the collaborative venture; however, without the possibility of these resources it appears that successful launch of a product is less likely.     

Fit by adaptation or fit by founding? A comparative study of existing and new entrepreneurial cohorts in China

Extant research provides ambiguous views on the network adaptability of existing ventures and new ventures during environmental change. Applying an institutional perspective, this research aims to provide a clearer picture by comparing the adaptation and network configurations of existing vs. new entrepreneurial cohorts during China's institutional change after 1992. The qualitative and quantitative analyses show that the existing cohort of entrepreneurs displays network inertia, in that they largely maintain strong tie‐based political and market networks; the new cohort instead demonstrates better adaptation by establishing fewer political networks but more weak and diverse market networks. This comparative research unpacks the institutional mechanisms underlying such differences, and serves as a ground for future investigations dealing with the strategic actions of different entrepreneurial cohorts that are largely neglected in previous studies. Copyright © 2014 John Wiley & Sons, Ltd.     

Development of Trust: A Study of Interfirm Relationships in Vietnam

The radical political and economic reforms sweeping through former socialist countries during the last decade have opened rich opportunities for privately owned businesses to emerge and develop. Since the market institutions and infrastructures in these countries are largely underdeveloped, private firms in transition economies rely extensively on interfirm partnerships. This raises the question of how—in the absence of institutions that legitimate markets, contracts, and private property—managers of new business ventures develop new relationships. This paper addresses this issue through analysis of multiple subcontracting relationships formed at a private garment company in Vietnam. This analysis suggests that firms in transition economies develop interfirm trust in ways that are quite different from their counterparts in more highly developed economies.     

Asymmetric information and joint venture performance: theory and evidence for domestic and international joint ventures

The increased number of perspectives on joint ventures (JVs) raises important issues for theory development on interfirm collaboration. In this paper, we bring together two key theoretical perspectives on joint ventures—the asymmetric information perspective and the indigestibility view. On a theoretical level, we focus on the relationship between these two different explanations of joint ventures. We also present new evidence on the firm valuation effects of JVs in domestic and international investment contexts. The findings lend support to the asymmetric information perspective on resource combination through joint ventures. Copyright © 2000 John Wiley & Sons, Ltd.     

New venture strategic adaptation: The interplay of belief structures and industry context

We adopt an information processing perspective to investigate how the interplay of belief structures and industry context shapes new venture strategic adaptation in a sample of 104 publicly traded new ventures founded between 1996 and 2006 in several technology‐intensive industries. Results highlight that distinct espoused belief structures attributes (complexity, centrality, proactive causal logics) and industry growth combinations predict diversity, frequency, and speed of new venture strategic actions. We contribute to prior literature on early firm strategic adaptation by providing an elaborated understanding of the role of espoused belief structures in interpreting and translating industry signals into new venture strategic action. Further, we highlight the role of belief structures in facilitating the fast, diverse, and frequent organizational actions typically associated with continuous adaptation. Copyright © 2014 John Wiley & Sons, Ltd.     

Interfirm cooperation and structural change in the European automobile industry

The past quarter-century has seen the rapid growth of interfirm cooperative arrangements, on a global scale. In the automobile industry, the forms of cooperation have ranged from mergers and acquisitions, with each partner firm retaining its corporate identity and brand name, to very informal strategic partnerships. Because of its past fragmentation, the consolidation of the European industry into “producer groups” has been a main feature of structural change. Arguably, this development and the formation of rent-seeking coalitions within the European Union were of greater significance than companies' purely technology-oriented cooperative ventures. As a result of the industry members' individual and collective rent-seeking, at the national and EU levels respectively, large price disparities among national markets have persisted. Regulatory barriers as well as the noncompetitive behavior of firms continue greatly to influence the automotive sector, despite the Union's ambitious vision of “Europe 92” as the final stage in the development of an open market for products and factors. Whatever benefits automobile producers may have derived from integration, it has done little so far to enhance consumer welfare.     

Network innovation versus innovation through networks

In today's dynamic, complex and interconnected environments, interfirm networks in its various forms (e.g. franchising, retail and service chains, cooperatives, financial networks, joint ventures, strategic alliances, clusters, public-private partnerships, digital platforms) are becoming increasingly important in helping firms improve their competitive position through an enhanced access to innovation, complementary resources and capabilities otherwise not available to them. Driven by increased performance pressures in unpredictable environments, firms embedded in networks are increasingly moving from cooperators to collaborators as value co-creators. The aim of this introductory article is to discuss the role of innovation in business networks by focusing on two major topics: Network innovation versus innovation through networks. In addition, we provide an overview of the articles included in the special issue on Networks and Innovation focusing on the questions: (1) what is the impact of network characteristics on a firm's innovation?; and (2) what are the determinants of innovation in interfirm networks?     

Exploration and Resource Commitments in Unequal Partnerships: An Examination of Corporate Venture Capital Investments

While established firms' relationships with external ventures may have significant strategic benefits, the realization of such benefits is fraught with considerable uncertainty. The real options and interorganizational learning literatures present an interesting trade‐off for established firms regarding commitment of resources in a partnership. This study seeks to enhance our understanding of how firms manage these trade‐offs when committing resources to external venturing initiatives. We examine the magnitude of resources initially committed by an established firm to an external venturing partnership in the context of corporate venture capital (CVC) investments. While a real options approach suggests that resource commitments should be lowered in the presence of uncertainty regarding realization of benefits, the interorganizational literature emphasizes that resource commitments may be essential for building quality relationships that expedite learning. Corporate investors, who invest in new ventures in order to gain strategic benefits, face higher uncertainty when their investment objectives involve greater exploration. However, greater exploration also increases investors' need to learn from their portfolio ventures. We, therefore, predicted that the degree of exploration would have a U‐shaped relationship with the investor's resource commitment in a venture. We also expected that factors that serve to decrease the investor's uncertainty, i.e., investor experience diversity and venture affiliation to prominent venture capitalists, would moderate the U‐shaped relationship between exploration and resource commitment. The predictions of the study are tested on a sample of 248 initial investments in private ventures made by incumbent firms in the computer, semiconductor, and telecommunications industries between 1996 and 2000. We find some support for our hypotheses. This study contributes to the external venturing literature on CVC investments by examining the determinants of the magnitude of resource commitment to new ventures, and integrates real options perspective, which advocates low resource commitments under uncertainty, with the organizational learning literature, which argues for greater resource commitment to secure partner cooperation. The results of this study reveal interesting insights into how CVC investors manage individual investments to generate strategic benefits.     

Managing cooperative research and development: partner selection and contract design

This paper explores the influence of partner selection and the design of contracts and agreements on the chances for a collaborative R&D venture to 'succeed'. It is based on questionnaire data regarding 49 such ventures undertaken by companies based in four Nordic countries. The age distribution of the sample is taken into account through use of statistical event history analysis, testing hypotheses regarding the determinants of the hazard rate. The results show that prior contacts with prospective partners improve the chances that a cooperation will succeed. Such contacts help prevent difficulties due to differences in corporate culture, inadequate technical capabilities, incongruous strategic intentions, etc. The analysis also suggests that contracts and agreements should avoid detailed specifications of the procedures to be followed during implementation. Such stipulations create problems by reducing the flexibility required in inherently uncertain R&D collaborations. Granting relative resource self-sufficiency and managerial autonomy to the venture organisation improves its chances of success.     

When does corporate venture capital add value for new ventures?

New ventures face a trade‐off when considering corporate venture capital (CVC) funding. Corporate investors can provide complementary assets that enhance the commercialization of new venture technologies. However, tight links with a particular corporate investor has drawbacks and may constrain new ventures from accessing complementary assets from diverse sources in an open market. Taking this trade‐off into account, we explore conditions under which CVC funding is beneficial to new ventures. Using a sample of computer, semiconductor, and wireless ventures, we find that CVC funding is particularly beneficial for new ventures when they require specialized complementary assets or operate in uncertain environments. Copyright © 2011 John Wiley & Sons, Ltd.     

The mediating effects of interfirm business process integration and joint teamwork on firm performance in supply chains

This paper empirically examines the influences of strategic interdependence and resource complementarity on operational performance and relational performance of Chinese suppliers based on the resource-based view and resource dependence theory. In particular, it analyses the mediating effects of interfirm business process integration and joint teamwork. We apply structural equation modeling to analyze the survey data collected from logistics and supply chain managers, and derive the best model with theoretical foundation and statistical significance. As a result, our work has identified the mediating effects of interfirm business process integration and joint teamwork, and validated the assertion that strategic interdependence and resource complementarity as supply chain resources are fundamental to firm performance. It is stressed that resource capitalization requires interfirm business process integration and joint teamwork to realize the value of supply chain resources. The findings not only contribute to research on interfirm resources and performance, but also have practical implications for operations and supply chain management.     

Managerial sensemaking in a transforming business ecosystem: Conditioning forces,moderating frames,and strategizing options

Disclosing the root cause of managerial action in environments undergoing change, is intrinsically linked to understanding how managers perceive both themselves, and their focal network including the broader surrounding environment. Despite an increased research interest into the interlink between sensemaking and strategizing, empirical evidence on how different limitations manifest in the sensemaking of individual managers in specific contexts is scarce.This study focuses on individual level sensemaking in a transforming business ecosystem as a microfoundation of strategizing. It explores the diverseness of managerial sensemaking by comparing noticed cues, moderating frames and sensemaking outcomes as reflected in different strategizing options. The empirical data derive from 52 semi-structured interviews with top managers in a local business ecosystem. Based on our analysis, we develop an empirically grounded model that unwraps the frames that influence how managers perceive and interpret the changing environment and the implications for their business.Our study provides important empirical corroboration to extant research on the cognitive microfoundations of strategizing in networked environments and adds detail to the underlying sensemaking mechanisms at play. The results highlight the local context and the identity embeddedness of focal actors herein, as factors that significantly influence managerial sensemaking in transforming business ecosystem contexts.     

Strategic concepts as micro‐level tools in strategic sensemaking

Research Summary: The purpose of this article is to illuminate the role of concepts in strategic sensemaking. Based on a longitudinal real‐time study of a city organization, we demonstrate how the concept of “self‐responsibility” played a crucial role in strategic sensemaking. We develop a theoretical model that elucidates how strategic concepts are used in meaning‐making, and how such concepts may be mobilized for the legitimation of strategic change. Our main contribution is to offer strategic concepts as a missing micro‐level component of the language‐based view of strategic processes and practices. By so doing, our analysis also adds to studies on strategic ambiguity and advances research on vocabularies. Managerial Summary: Our analysis helps to understand the role of strategic concepts, that is, specific words or phrases with established and at least partly shared meanings, in an organization's strategy process. We show how adopting the concept “self‐responsibility” helped managers in a city organization to make sense of environmental challenges and to promote change. Our analysis highlights how such concepts involve ambiguity that can help managers to establish common ground, but can also hinder implementation of specific decisions and actions if it grows over time. We suggest that under environmental changes, development of new strategic concepts may be crucial in helping managers to collectively deal with environmental changes and to articulate a new strategic direction for the organization.     

The adoption of agency business activity,product innovation,and performance in Chinese technology ventures

This study examines the roles of firm characteristics and environmental factors in the formation of interfirm alliances. Specifically, we examine the dual role of these groups of factors as inducements and opportunities for Chinese high‐technology new ventures (HTNVs) in their adoption of agency business activity, a downstream type of alliance involving marketing and distribution of the products of foreign firms. Results suggest that both internal and external factors are related to the adoption of agency business activity but the inducement and opportunity value of environmental uncertainty may be dampened by institutional support provided to HTNVs. Further, we find that successful agency business activity is positively related to new venture performance but negatively related to its product innovation efforts. Theoretical and managerial implications are discussed. Copyright © 2002 John Wiley & Sons, Ltd.     

Interaction in business relationships: A time perspective

Interaction is central to the relationship framework in business markets. Yet there is some theoretical imprecision with regard to the way interaction works in time. Clarification of this nexus further develops the interaction concept and provides theoretical support for the dynamic view of business relationships being developed by the industrial marketing and purchasing (IMP) group.The role of time as a backdrop for interaction is elaborated in conjunction with the cognitive ability of humans to arrive at an understanding of interfirm interaction. This elaboration extends the concept of horizontal relationship time (i.e., past, present, future), illustrates constraints on interfirm interaction, and analytically distinguishes between interaction as exchange versus adaptation while also displaying the importance of the actor in business relationships. In addition, theoretical grounds are provided for dismissing business relationship life cycle theories. Finally, the cognitive nature of time and relationships provides a means for theory development and management implications free from cultural and normative overtones.     

Top Management Support and Initial Strategic Assets: A Dependency Model for Internal Corporate Venture Performance

Internal corporate venturing is frequently used by established companies desiring to innovate and grow. These ventures, however, often fail, and previous research has revealed surprisingly little about the antecedents to performance for this strategically important phenomenon. Using resource dependence theory and the resource‐based view, a model is developed wherein the positive relationship between top management support and the internal corporate venture's (ICV) initial strategic asset endowment is moderated by the amount of the venture's operations autonomy. We then argue how top management support, the venture's initial strategic asset endowment, and parent‐venture product similarity are related to ICV performance. Primary data were collected from 72 firms which furnished data on 145 ICVs. The results suggest that increases in the level of support provided by top management leads to higher levels of initial strategic assets endowed in the corporate venture. This relationship, however, is weakened the more corporate parents give their ICVs operations autonomy. Further, top management's support of the corporate venture, as well as the level of initial strategic assets endowed to the venture, increases the subsequent performance of the ICV. The performance benefit of these initial strategic assets, however, is lower the more there is an overlap between the parent's and the venture's products.