Related or Unrelated? A Behavioral and Entrepreneurial Action Perspective of Corporate Venturing Logic (Summary)

Frontiers of Entrepreneurship Research: Vol. 30: Iss. 17, Article 3

Posted: 20 Mar 2015

See all articles by Steven W. Bradley

Steven W. Bradley

Baylor University

Kimberly M. Green

Indiana University - Kelley School of Business

Tim R. Holcomb

Miami University

Date Written: 2010

Abstract

We conceptualize corporate venturing as an outcome of search where firms pursue new business through diversification into new markets. Research has generally concluded that ventures related to the current business outperform unrelated ventures. Yet, businesses often pursue opportunities that are divergent from their core business. We know little of why firms search across a broad spectrum of relatedness in their diversification decisions and why some firms enter unrelated businesses despite the documented performance hazards.

We develop a means-motive-opportunity model building from behavioral theory and an entrepreneurial action perspective to explain a firm’s venture search logic. Based on a firm’s prior performance relative to social and historical aspiration levels (motives) and available slack resources (means), the firm makes choices regarding new products or markets (opportunities). In contrast to arguments that suggest the search for solutions to problems and slack search are independent actions, we examine whether combinations of problemistic and slack search reveal four distinct venturing logics. By combining high and low levels of the search dimensions, we create four combinations that operate as different logics of relatedness/diversification in venturing decisions. The logics that emerge are efficiency, expansion, experiment, and escape.

Suggested Citation

Bradley, Steven W. and Green, Kimberly M. and Holcomb, Tim R., Related or Unrelated? A Behavioral and Entrepreneurial Action Perspective of Corporate Venturing Logic (Summary) (2010). Frontiers of Entrepreneurship Research: Vol. 30: Iss. 17, Article 3, Available at SSRN: https://ssrn.com/abstract=2580275

Steven W. Bradley (Contact Author)

Baylor University ( email )

PO Box 98011
Waco, TX 76798-8011
United States

HOME PAGE: http://https://business.baylor.edu/directory/?id=Steve_Bradley

Kimberly M. Green

Indiana University - Kelley School of Business ( email )

1309 East Tenth Street
Indianapolis, IN 47405-1701
United States

Tim R. Holcomb

Miami University ( email )

Farmer School of Business
800 E. High Street, 2075 FSB / MSC1148
Oxford, OH Ohio 45056
United States
5135293665 (Phone)

HOME PAGE: http://fsb.miamioh.edu/

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