Corporate Renewal through Internal Venturing and Spin-offs: Perspectives from Organizational Economics

Tom Elfring, Nicolai J. Foss

    Research output: Working paperResearch

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    Abstract

    We address the closely related phenomena of corporate venturing and spin-offs in the context of organizational economics, for example, agency perspectives and the evolutionary perspective on firms. These perspectives allow us to say something about both the amount and nature of variety creation inside firms. For example, there are strong arguments that firms will tend to produce too few and too “narrow” venture ideas. Moreover, organizational economics is helpful in deriving propositions about the occurrence of spin-offs, which we separate into “vicious” and “virtuous” ones. The former type refers to ventures that could have helped bringing corporate renewal, but where overruled venture managers left the firm in frustration. The latter type refers to ventures that are too far away from the firm’s core business(es) to assist in corporate renewal, but where their spin-off is tantamount to a learning experience to the firm.
    Original languageEnglish
    Place of PublicationCopenhagen
    PublisherInstitut for Industriøkonomi og Virksomhedsstrategi, Handelshøjskolen i København
    Number of pages35
    ISBN (Print)8778690129
    Publication statusPublished - 1997
    SeriesWorking Paper / Department of Industrial Economics and Strategy. Copenhagen Business School
    Number1997-7
    ISSN1398-7461

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