Changing direction and the evolution of corporate venturing in an ICT firm in Korea

‘Corporate Venturing (CV)’, which is broadly defined as an innovation practice by creating and nurturing internal CV teams or investing in external start-ups (Burgelman, 1983b; Dushnitsky and Lenox, 2005), has been adopted by large incumbent firms wishing to ensure their survival and business s growth in the future. Despite its promised benefits, CV activities are often terminated in the early stages. Nevertheless, some firms start their CV programs again, and these recurring patterns of CV activities contribute towards ‘CV cyclicality’. However, we have limited understandings of the phenomenon of CV cyclicality at the level of the firm. This thesis, therefore, aims to develop a better understanding of the cyclical nature of CV (i.e. CV cyclicality) in a way that helps managers manage CV activities—engaged scholarship (Van de Ven, 2007). To explore CV cyclicality at the firm level, this thesis adopted an in-depth case study approach. A large Korean ICT firm (pseudonym: Company Alpha), which is the exemplar of a large firm in Korea that repeated CV activities over time, was examined (from early 2013 to 2017) to find out how CV activities were developed, terminated, and then re-started during the period between 1990 and 2015. This approach enabled to find the importance of the term ‘direction’ for the CV practitioners at Company Alpha and in the Korean context. Hence, this thesis also aims to usefully conceptualize ‘direction’ itself to understand and explain Company Alpha’s corporate venturing activities and how they repeat over time. This thesis suggests that the direction of corporate venturing (CV) can be usefully conceptualized as an internal consistency between the firm’s structure (with actors residing in the structure) and its strategy. Drawing on research orchestration theory (Sirmon et al., 2007; 2011), a conceptual framework (the direction of CV) was developed by combining both the main managerial actors who conduct CV activities (the starting point) and the primary strategic objective that the CV program pursues and is designed to achieve (the end point). The thesis demonstrates that this new framing of direction helps us to better understand and explain Company Alpha’s repeating CV cycles. From the examination of the twenty-six years history of CV (from 1990 to 2015) at the Korean ICT firm through the lens of the direction of CV, this thesis makes its main argument about the CV cyclicality at Company Alpha: rather than being terminated separately, a series of CV programs evolved over time for the purpose of combining resources in a new way; results of deliberate and experimental efforts then formed an evolutionary cycle of CV. The thesis also argues that what was terminated during the firm’s repeated CV activities was, instead, a distinct evolutionary cycle of CV, which later re-initiated with the next CV cycle. This thesis makes substantial contributions to knowledge. Firstly, this thesis makes contributions to the CV literature by providing a detailed and empirical evidence-based explanation of CV cyclicality at a large Korean high-tech firm (repeated evolutionary CV cycles aimed at new resource combination), which goes beyond a relatively simple dichotomy between termination and evolution. Secondly, the thesis also contributes to the strategy and innovation management literature by suggesting a new framing of direction from an internal firm perspective. This helps us to understand organizational and strategic change in a new way that organizations can generate changes proactively by reconfiguring their internal elements, even without stimuli external to the firm. Thirdly, for practitioners, the findings from the thesis contribute by providing an empirical insight that can help managers manage their CV activities. Almost no organizational memory about their previous CV efforts remained within the firm, however, this thesis casts an empirical light by unfolding how a repeating pattern (the evolution of CV) occurred within the first (1997–2002) and the second CV cycle (2011–2015) of the firm. The case firm and other companies may benefit from having knowledge of a corporate history of CV cycles including failures.