Location of Repository

Is the sum more than the corporate entrepreneurship parts? the different effects of social capital on innovation, venturing, and renewal processes

By Henri Burgers, Justin Jansen, Frans Van den Bosch and Henk Volberda


Principal Topic \ud \ud Although corporate entrepreneurship is of vital importance for long-term firm survival and growth (Zahra and Covin, 1995), researchers still struggle with understanding how to manage corporate entrepreneurship activities. Corporate entrepreneurship consists of three parts: innovation, venturing, and renewal processes (Guth and Ginsberg, 1990). Innovation refers to the development of new products, venturing to the creation of new businesses, and renewal to redefining existing businesses (Sharma, and Chrisman, 1999; Verbeke et al., 2007). Although there are many studies focusing on one of these aspects (cf. Burgelman, 1985; Huff et al., 1992), it is very difficult to compare the outcomes of these studies due to differences in contexts, measures, and methodologies. This is a significant lack in our understanding of CE, as firms engage in all three aspects of CE, making it important to compare managerial and organizational antecedents of innovation, venturing and renewal processes. Because factors that may enhance venturing activities may simultaneously inhibit renewal activities. The limited studies that did empirically compare the individual dimensions (cf. Zahra, 1996; Zahra et al., 2000; Yiu and Lau, 2008; Yiu et al., 2007) generally failed to provide a systematic explanation for potential different effects of organizational antecedents on innovation, venturing, and renewal. \ud \ud With this study we aim to investigate the different effects of structural separation and social capital on corporate entrepreneurship activities. The access to existing and the development of new knowledge has been deemed of critical importance in CE-activities (Floyd and Wooldridge, 1999; Covin and Miles, 2007; Katila and Ahuja, 2002). Developing new knowledge can be facilitated by structurally separating corporate entrepreneurial units from mainstream units (cf. Burgelman, 1983; Hill and Rothaermel, 2003; O'Reilly and Tushman, 2004). Existing knowledge and resources are available through networks of social relationships, defined as social capital (Nahapiet and Ghoshal, 1998; Yiu and Lau, 2008). Although social capital has primarily been studied at the organizational level, it might be equally important at top management level (Belliveau et al., 1996). \ud \ud However, little is known about the joint effects of structural separation and integrative mechanisms to provide access to social capital on corporate entrepreneurship. Could these integrative mechanisms for example connect the separated units to facilitate both knowledge creation and sharing? Do these effects differ for innovation, venturing, and renewal processes? Are the effects different for organizational versus top management team integration mechanisms? Corporate entrepreneurship activities have for example been suggested to take place at different levels. Whereas innovation is suggested to be a more bottom-up process, strategic renewal is a more top-down process (Floyd and Lane, 2000; Volberda et al., 2001). Corporate venturing is also a more bottom-up process, but due to the greater required resource commitments relative to innovation, it ventures need to be approved by top management (Burgelman, 1983). \ud \ud As such we will explore the following key research question in this paper: How do social capital and structural separation on organizational and TMT level differentially influence innovation, venturing, and renewal processes? \ud \ud \ud Methodology/Key Propositions \ud \ud We investigated our hypotheses on a final sample of 240 companies in a variety of industries in the Netherlands. All our measures were validated in previous studies. We targeted a second respondent in each firm to reduce problems with single-rater data (James et al., 1984). We separated the measurement of the independent and the dependent variables in two surveys to create a one-year time lag and reduce potential common method bias (Podsakoff et al., 2003). \ud Results and Implications \ud \ud Consistent with our hypotheses, our results show that configurations of structural separation and integrative mechanisms have different effects on the three aspects of corporate entrepreneurship. Innovation was affected by organizational level mechanisms, renewal by integrative mechanisms on top management team level and venturing by mechanisms on both levels. Surprisingly, our results indicated that integrative mechanisms on top management team level had negative effects on corporate entrepreneurship activities. \ud \ud We believe this paper makes two significant contributions. First, we provide more insight in what the effects of ambidextrous organizational forms (i.e. combinations of differentiation and integration mechanisms) are on venturing, innovation and renewal processes. Our findings show that more valuable insights can be gained by comparing the individual parts of corporate entrepreneurship instead of focusing on the whole. Second, we deliver insights in how management can create a facilitative organizational context for these corporate entrepreneurship activities

Topics: 150304 Entrepreneurship, Entrepreneurship, Corporate Entrepreneurship, Social Capital, Innovation, Venturing
Publisher: Swinburne University of Technology
Year: 2009
OAI identifier: oai:eprints.qut.edu.au:26993

Suggested articles



  1. (1983). A model of the interaction of strategic behavior, corporate context and the concept of strategy’.
  2. (2007). A note on strategic renewal and corporate venturing in the subsidiaries of multinational enterprises’. Entrepreneurship Theory and Practice,
  3. (2006). Ambidexterity and performance in small- to medium-sized firms: the pivotal role of top management team behavioral integration’.
  4. (1987). An exploration of climates for technical updating and performance’.
  5. (1983). An introduction to sample selection bias in sociological data’.
  6. (1990). Applied Linear Statistical Models.
  7. (2000). Capabilities, cognition and inertia: evidence from digital imaging’.
  8. (2006). Change in the presence of residual fit: can competing frames coexist?’
  9. (2003). Common method biases in behavorial research: a critical review of the literature and recommended remedies’.
  10. (1986). Construct measurement in organizational strategy research: a critique and proposal’.
  11. (2008). Corporate entrepreneurship as resource capital configuration in emerging market firms’. Entrepreneurship Theory and Practice,
  12. (1993). Corporate Venturing.
  13. (1994). Creating Corporate Entrepreneurship'.
  14. (2000). Designing corporate ventures in the shadow of private venture capital’.
  15. (1967). Differentiation and integration in complex organizations’.
  16. (1992). Diversification Posture and Top Management Team Characteristics’.
  17. (2000). Entrepreneurship in medium-size companies: exploring the effects of ownership and governance systems’.
  18. (1993). Environment, corporate entrepreneurship and financial performance: a taxonomic approach’.
  19. (1977). Estimating non-response bias in mail surveys’.
  20. (1984). Estimating within-group interrater reliability with and without response bias’.
  21. (2003). Exploitation, exploration, and process management: the productivity dilemma revisited’.
  22. (2006). Exploratory Innovation, Exploitative Innovation, and Financial Performance: How do Organizational Antecedents and Environmental Moderators
  23. (2003). Extending the theory of the multinational enterprise: internationalization and strategic management perspectives’.
  24. (1982). Factors affecting the use of market research information: a path analysis’.
  25. (2007). Fairness from the top: perceived procedural justice and collaborative problem solving in new product development’.
  26. (1996). Governance, ownership, and corporate entrepreneurship: the moderating impact of industry technological opportunities’.
  27. (1982). Groupthink: psychological studies of policy decisions and fiascoes.
  28. (1996). Improving labor productivity: human resource management policies do matter’.
  29. (1991). Intergroup relations and organizational dilemmas: the role of categorization processes. In
  30. (2007). International venturing by emerging economy firms: the effects of firm capabilities, home country networks and corporate entrepreneurship’.
  31. (1999). Knowledge creation and social networks in corporate entrepreneurship: the renewal of organizational capability’. Entrepreneurship Theory and Practice,
  32. (2005). Managing Strategic Contradictions: A Top Management Model for Managing Innovation Streams’.
  33. (1985). Managing the new venture division: research findings and implications for strategic management’.
  34. (1993). Market orientation: antecedents and consequences’.
  35. (2001). Mastering strategic renewal: Mobilising renewal journeys in multi-unit firms’. Long Range Planning,
  36. (2002). Modularity, strategic flexibility, and firm performance: a study of the home appliance industry’.
  37. (2003). Mutual forbearance: the role of intrafirm integration and rewards’.
  38. (2003). Organizational learning and strategic renewal’.
  39. (2005). Predicting order and timing of new product moves: the role of top management in corporate entrepreneurship’.
  40. (1991). Predictors and financial outcomes of corporate entrepreneurship: an exploratory study’.
  41. (2004). Project-based learning and the role of learning boundaries’.
  42. (1994). Raising Radicals: Different processes for championing innovative corporate ventures’.
  43. (1998). Social capital and value creation: The role of intrafirm networks’.
  44. (1996). Social capital at the top: effects of social similarity and status on ceo compensation’.
  45. (1998). Social capital, intellectual capital and the organizational advantage’.
  46. (2002). Social structure of “coopetition” within a multiunit organization: coordination, competition, and intraorganizational knowledge sharing’.
  47. (2002). Something old, something new: a longitudinal study of search behavior and new product introduction’.
  48. (1992). Strategic renewal and the interaction of cumulative stress and inertia'.
  49. (2000). Strategizing throughout the organization: managing role conflict in strategic renewal’.
  50. (1962). Strategy and Structure.
  51. (2002). Strategy as vector and the inertia of coevolutionary lock-in’.
  52. (2007). Strategy-organization configurations in corporate venture units: impact on performance and survival’.
  53. (1997). Technology brokering and innovation in a product development firm’.
  54. (1996). The ambidextrous organization’.
  55. (1997). The art of continuous change: linking complexity theory and time-paced evolution in relentlessly shifting organizations’.
  56. (2008). The effect of international venturing on firm performance’.
  57. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance’.
  58. (2007). The impact of managerial environmental perceptions on corporate entrepreneurship: towards understanding discretionary slack’s pivotal role’.
  59. (2005). The influence of intellectual capital on the types of innovative capabilities’.
  60. (2003). The performance of incumbent firms in the face of radical technological innovation’.
  61. (1995). Thought worlds colliding: the role of contradiction in corporate innovation processes’.
  62. (1992). top management team demography and corporate strategic change.’
  63. (1999). Toward a reconciliation of the definitional issues in the field of corporate entrepreneurship’.
  64. (2004). Transferring, translating, and transforming: an integrative framework for managing knowledge across boundaries’.
  65. (2005). Unbundling the structure of inertia: resource versus routine rigidity’.
  66. (1989). Work Group Demography, Social Integration, and Turnover’.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.