Silicon Valley Start‐ups and Corporate Innovation

This study applies the theory of ambidextrous organizations to corporate venturing, thereby introducing a novel perspective on the matter of corporate innovation – one that regards venturing not only as a tool for innovation and exploration but also for exploitation. To achieve this end, the study develops a new model called “Ambidextrous Corporate Venturing”.

In addition, this study explores the application of the ‘Spin-Along Approach’ as a practical phenomenon that combines the activities of internal and external venturing (Rohrbeck et al. 2007, 2009) into a new type of venturing. It combines the idea of spinning in and out at the same time in order to combine the advantages associated with a large corporation with those of a small start-up firm to create the ‘best of both worlds’. I suggest that within this new type of venturing lies the possibility of fostering short-term efficiency and long-term adaptability and, thus, of resolving the ‘Innovator’s Dilemma’. In other words, the Spin-Along Approach appears to be a practical method to achieving ambidexterity.

In sum, this study explores two essential and testable propositions for further studies on this topic: first, that the most effective way to realize long-term success, especially in dynamic environments, is a new form of corporate venturing that I call ‘Ambidextrous Corporate Venturing’ (ACV-model); second, that the best way of realizing this new form of venturing in practice is the ‘Spin-Along Approach’. The main aim of this study is the conceptualization of the topic and preparation of a theoretical background for further empirical research in the second study.

Organizational ambidexterity is a new research stream in organization theory. Ambidextrous organizations manage to simultaneously exploit existing capabilities and explore new opportunities. Yet, until now, little empirical research has been conducted on how to realize organizational ambidexterity and, more specifically, on the ambidextrous designs that secure the long-term success of innovations. This study intends to fill this gap by developing a theory based on case study evidence. Specifically, the spin-along phenomenon as a special type of ambidextrous corporate venturing is analyzed. The spin-along approach is defined here as a combination of internal and external venturing activities.

The results show that ambidexterity can be realized through the spin-along approach by optimizing structural, contextual and leadership-based antecedents and that these antecedents are strongly interrelated and can strengthen or weaken one another. Evidence shows further that it is useful to implement a coordinating management layer between the parent company and the spin-along in order to optimize the antecedents. In doing so, an ambidextrous middle management, rather than the senior management of the parent, handles the conflicting goals between exploitation and exploration, and plays a decisive role in realizing ambidexterity. On the whole, the spin-along approach could be regarded as a fourth method that unifies the three concepts of “temporal separation”, “structural separation” and “parallel structures”. Accordingly, organizational ambidexterity can be achieved by increasing exploration and exploitation capabilities while simultaneously balancing them.

This study concludes with propositions that are based on the developed theoretical framework as a foundation for future research on ambidextrous corporate venturing. Additionally, practical advice will be given and critical success factors defined for realizing ambidexterity in corporate practice.

For decades, Silicon Valley has been the most important region for technological growth and innovation in the world. Since the 1950s, numerous innovative high-tech companies located in Silicon Valley – including HP, Intel, AMD, Oracle, Apple, Cisco, Yahoo!, eBay, Google and Facebook – have achieved renowned success.

This cumulative dissertation contributes to the broader research agenda in organizational literature on the matter of how to manage and organize corporate innovation successfully. In doing so, this dissertation especially focuses one recurring topic in the literature - how firms can achieve long-term success by being both efficient and exploiting their current business; while simultaneously being flexible to environmental changes and adaptive through innovations and the exploration of new opportunities. Despite the fact that Schumpeter’s process of creative destruction has been well known for over a century, it is still discussed among scholars as to how it can be managed successfully, especially in a corporate context. This dissertation is a contribution on this matter and thus extends the existing organizational and management literature in academia.