Imperial College London
Alternate

ProfessorAnuWadhwa

Business School

Professor of Strategy and Entrepreneurship
 
 
 
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Contact

 

+44 (0)20 7594 1876a.wadhwa

 
 
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Location

 

275ABusiness School BuildingSouth Kensington Campus

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Summary

 

Publications

Citation

BibTex format

@article{Basu:2013:10.1111/jpim.12039,
author = {Basu, S and Wadhwa, A},
doi = {10.1111/jpim.12039},
journal = {Journal of Product Innovation Management},
pages = {956--975},
title = {External venturing and discontinuous strategic renewal: An options perspective},
url = {http://dx.doi.org/10.1111/jpim.12039},
volume = {30},
year = {2013}
}
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RIS format (EndNote, RefMan)

TY  - JOUR
AB  - This study examines the relationship between a firm's venturing activities and its undertaking of strategic renewal. The study was motivated by some important gaps in the corporate entrepreneurship literature on venturing and renewal. The extant literature has not focused on the different types and dimensions of firms' renewal activities. In particular, discontinuous renewal involving shifts in firms' core businesses is not well understood. Moreover, the conditions that drive firms to undertake strategic renewal have not been examined. For example, it is not known how venturing increases or reduces the benefits of undertaking renewal. This study focuses on a discontinuous form of renewal involving major changes in firms' core businesses and examines firms' external venturing activities that complement their internal development. We examine corporate venture capital (CVC) investments, which are direct minority equity investments made by established companies in privately held ventures. Discontinuous renewal is conceptualized as resulting from a set of related, and often sequential, managerial decisions. The first managerial decision is to initiate growth in a business that is relatively newer or smaller for the organization. The second decision is to move away, or even withdraw completely, from the current core business that enabled prior growth and prosperity for the firm and served as its primary revenue earner. Employing a real options perspective, we argue that CVC investments create growth options in new and existing businesses but do not result in firms' withdrawal from existing businesses. Therefore, we expect CVC activity to be negatively associated with the likelihood of a firm undertaking discontinuous renewal. We also propose that the benefits of withdrawing from existing businesses are even lower, and the costs even higher, for firms in dynamic industries and for firms that possess strong internal capabilities. The predictions of the study are tested usin
AU  - Basu,S
AU  - Wadhwa,A
DO  - 10.1111/jpim.12039
EP  - 975
PY  - 2013///
SN  - 0737-6782
SP  - 956
TI  - External venturing and discontinuous strategic renewal: An options perspective
T2  - Journal of Product Innovation Management
UR  - http://dx.doi.org/10.1111/jpim.12039
VL  - 30
ER  -
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