Internal corporate venturing: Overcoming difficulties with organizational structures in the implementation phase

Internal corporate venturing: Overcoming

difficulties with organizational structures in

the implementation phase

Alfred Berg

Hugoh Nykander

Industrial and Management Engineering, master's level 2021

Luleå University of Technology

ACKNOWLEDGMENT

This master thesis is the final part of our Master of Science in Industrial Engineering and Management, with a master’s degree in Innovation and Strategic Business Development, at Luleå University of Technology.

Under this section, we would like to show our appreciation and enlighten our gratitude for the people that have made the master thesis possible. First of all, we would like to show great appreciation to our supervisor at Luleå University of Technology, Sara Thorgren, who has shown great interest in our work and believed in us during the process. Without your insights and expertise in the field of study, the thesis would not be the same, thank you!

Secondly, we would like to send our appreciation to our supervisors at the case company, who have guided us to interesting people, always been there when challenges have arisen and believed in us from day one. We are forever grateful that you gave us the opportunity to write our master thesis at the company. Finally, we would like to show our appreciation to our fellow students at Luleå University of Technology who provided us with valuable feedback during the seminars and to our families and friends that have supported us during the master thesis.

Thank you.

Gothenburg, June 2021

ABSTRACT

Purpose:

The purpose of the study is to enrich the literature connected to how incumbent

firms can mitigate the difficulties connected to the organizational structures during the implementation phase of internal corporate venturing. To fulfill the purpose, we examine the

following research questions: RQ1: How and why do organizational structures create difficulties

during the implementation phase for incumbent firms when engaging in internal corporate venturing? RQ2: How can incumbent firms overcome difficulties with organizational structures when engaging in the implementation phase of internal corporate venturing?

Method:

The study is a qualitative single case study, where one incumbent firm within the

automotive industry situated in Gothenburg, Sweden has been investigated. In sum, 31 interviews have been conducted during three waves and were analyzed via a thematic analysis approach.

Findings:

The result of this study is a framework and a roadmap illustrating the difficulties,

consequences and mitigating actions regarding organizational structures during the

implementation phase of internal corporate venturing. The most prominent difficulties are lack

of internal support systems and organizational behavior obstacles. The most critical consequences are venture strategy obstacles and innovation failure. The most important actions would be to

create a supportive culture and develop a learning organization.

Implications:

This study contributes with insights to the scarce literature on organizational

structure difficulties in the implementation phase of internal corporate venturing. For managers this study contributes with a framework on how to detect and mitigate the difficulties with specific actions that emerge when implementing internal corporate venturing. Lastly, this study assist managers with a conceptual roadmap for how incumbent firms could develop their internal corporate venturing process, the roadmap could be improved and refined over time.

Limitation and future research:

This study is limited to investigate the implementation phase

of internal corporate venturing on a single company, in a single industry, indicating that future research could investigate other industry settings.

Keywords:

Corporate Venturing; Internal Corporate Venturing; New Venture Creation;

TABLE OF CONTENT

1 Introduction ... 1

2 Theoretical background ... 4

2.1 Internal corporate venturing and new venture creation ... 4

2.2 Literature review identifying organizational structures ... 5

2.3 Elements supporting new venture creation ... 7

2.3.1 Corporate strategy ... 7

2.3.2 Management aspects ... 9

2.3.3 Human and Financial capital ... 9

2.4 Connection between our theoretical background and empirical study ... 11

3 Methods ... 12

3.1 Research approach ... 12

3.2 Case selection ... 12

3.3 Three waves of data collection and analysis ... 12

3.4 Quality improvement measures ... 22

4 Findings ... 24

4.1 Corporate strategy in NVC within the implementation phase of ICV ... 24

4.1.1 The difficulties, consequences, and actions for ambiguous objectives ... 25

4.1.2 The difficulties, consequences, and actions for organizational behavior obstacles ... 27

4.2 Management aspects in the implementation phase of ICV ... 28

4.2.1 The difficulties, consequences, and actions for excessive need for control ... 29

4.2.2 The difficulties, consequences, and actions for internal support systems ... 30

4.3 Human and Financial capital in the implementation phase of ICV ... 32

4.3.1 The difficulties, consequences, and actions for innovation resistance ... 32

4.3.2 The difficulties, consequences, and actions for a mind your own business attitude ... 34

4.4 Roadmap for NVC implementation ... 36

5 Discussion ... 43

5.1 Advancing understanding of ICV implementation ... 43

5.2 Useful insights and mitigating actions for managers ... 44

5.3 Limitations and future research ... 45

Appendix A - Literature review on New Venture Creation ... I Appendix B – Interview guide ... IV Appendix C – Secondary data ... VIII

1 INTRODUCTION

In today’s rapidly changing business environment and the rise of innovative tech-embedded organizations, incumbent firms that do not react to the new circumstances will face difficulties with defending the leading market position. According to S&P 500, the average lifetime of companies has fallen from 61 years in 1958 to an all-time low at 22 years in 2019 (Banholzer et al., 2019), which means that companies need to find new ways of doing business. To facilitate new business development and organizational renewal in established organizations (Phan et al., 2009), corporate entrepreneurship (CE) (Kuratko & Audretsch, 2013; Morris et al., 2010) is viewed as one viable strategy. CE refers to “formal and informal activities aimed at creating new business in established companies through product and process innovation and market developments” (Zahra, 1991: 262). Research on CE origins in the early 1970’s when researchers started to investigate how venture teams could be developed (Hill & Hlavacek, 1972; Peterson & Berger, 1971). Further, during the 1980’s the research was extended, and the terminology CE was formulated (Kuratko & Audretsch, 2013). Over the last decades, the development of CE has co-evolved with the rapidly changing business environment and various demands of markets (Kuratko & Audretsch, 2013; Shin & Cho, 2020). The current state of CE research is that it captures two dimensions: (1) corporate venturing (CV), defined as “the set of organizational systems, processes and practices that focus on creating businesses in existing or new fields, markets or industries - using internal and external means” (Narayanan et al., 2009: 59), and (2) strategic entrepreneurship, referring to “a broader array of entrepreneurial activities that do not necessarily involve new businesses being added to the firm” (Morris et al., 2010: 99). This study focuses upon the former, corporate venturing, which we hereafter refer to as CV, and specifically the internal systems, processes, and practices focused on creating new businesses, phrased as internal corporate venturing (ICV) (Narayanan et al., 2009).

The process of ICV is connected to new venture creation (NVC) (Narayan et al., 2009; Shin & Cho, 2020). Incumbent firms seek new opportunities to increase the performance of the enterprise and secure competitive advantage (Abadli et al., 2020; Kuratko & Audretsch, 2013). The process of NVC has proven to be a key success factor when incumbent firms try to address organizational bureaucratic issues like inefficiency and responsibility (Shin & Cho, 2020). Therefore, the interest for ICV has increased as incumbent firms are interested in finding a way to accumulate, transform, and take advantage of its organizational resources (Dess et al., 2003). However, it is challenging for incumbent firms to manage the process of refining the valuable ideas into new ventures since ICV are handled differently compared to well-established business

units (Covin et al., 2015). Hence, incumbent firms need to manage their organizational structures, referring to activities like; coordination, task allocation, and supervision, that supports the incumbent firm to reach its goals, therefore, supporting the process of ICV (Yang et al., 2013). Two well-discussed topics connected to the challenges of organizational structures during the implementation phase, referring to the post-process for evaluating and selecting internal ideas

of ICV, are: (1) top management support – how supportive the incumbent firms’ senior-level

management is for the new venture (Garrett & Neubaum, 2013; Kuratko et al., 2005), and (2)

knowledge transfer – transferring of knowledge between the incumbent firm and the new venture (Yang et al., 2013).

The challenge with top management support arises when ICV is engaged in areas where radical

innovation occurs, which historically has not been as prevalent as incremental innovation within incumbent firms (Garrett & Neubaum, 2013). Top management can also perceive ICVs as a misalignment between the internal fit and relatedness to the new venture (Simon et al., 1999; Thornhill & Amit, 2001). This creates a situation where the ICVs struggle to get the top management’s attention as they might not be able to see the potential of developing new ventures in unexplored markets (Kuratko et al., 2005), which can affect the future success of the venture. Therefore, ICVs need to offer clear goals and value propositions to the top management (Kuratko et al., 2009), to increase the chances of getting their attention. This is an important challenge for the ICVs to overcome since top management support has shown to be a key success factor for the new venture’s performance (Garrett & Neubaum, 2013).

The challenge with knowledge transfer between the incumbent firm and ICV has proven to be

problematic as incumbent firms are built on hierarchies and boundaries that counteract entrepreneurial efforts (Birkinshaw et al., 2002; Burgers et al., 2009; Dess et al., 1999). The differentiation of internal structures has created a discussion about the autonomy given to the ICV projects, where autonomy is referred to the independence for the ICV projects in relation to the incumbent firm (Thornhill & Amit, 2001). The result of autonomy is a two-sided coin where some argue that autonomy is important to reach success (e.g., Birkinshaw & Hill, 2005; Simon et al., 1999), and some authors argue that it is not positively associated with venture performance (e.g., Kuratko et al., 2009). Hence, without a mechanism for knowledge transfer between the parties, difficulties will arise and influence the future success of the new venture (Garrett & Covin, 2015). Arguably, when there is a lack of top management support and a mechanism of knowledge transfer this hinders the collaboration between incumbent firms and

ICV projects. As a consequence, the incumbent firms will not be able to capitalize upon the entrepreneurial efforts if the challenges are not managed (Shin & Cho, 2020).

The existing literature has focused on different stages of ICV (Hill & Georgoulas, 2016)— evaluation, selection, and implementation—where the majority of publications have discussed the underlying mechanism of organizational structures in the evaluation and selection processes (Barringer & Gresock, 2008; Burgelman 1983; Dess et al., 2003; Hart et al., 2003; Keil et al., 2009; Masucci et al., 2020; Reitzig, 2011). However, few scholars have investigated ICV in

relation to the underlying mechanisms of organizational structures in the implementation phase.

Garret and Neubaum (2013) offered some understanding of how to implement and make the ICV excel in the aspects of top management support but provided little insight into the importance of knowledge transfer. Moreover, while Masucci et al. (2020) provide an extensive framework of the process from idea generation to implementation, their study lacks a thorough explanation for the connection between the different organizational structures, how they influence each other, and how to mitigate the difficulties that arise. Overall, there is a need for more empirical-based research to clarify the underlying mechanism and challenges related to the

organizational structures during the implementation phase of ICV (Dess et al., 1999; Hornsby et

al., 2002; Narayanan et al., 2009).

Concerning the prior literature and the presented shortcomings, the purpose of this study is to enrich the literature connected to how incumbent firms can mitigate the challenges connected to the organizational structures during the implementation phase of ICV, as it is arguably needed (Garret & Neubaum, 2013; Masucci et al., 2020; Wiedeler & Kammerlander, 2019). In doing so, we examine the following research questions:

RQ1: How and why do organizational structures create difficulties during the implementation phase for incumbent firms when engaging in internal corporate venturing?

RQ2: How can incumbent firms overcome difficulties with organizational structures when

engaging in the implementation phase of internal corporate venturing?

By examining these questions, we assist incumbent firm managers with an extended understanding of the role of organizational structures when developing their ICV process to avoid unsuccessful new ventures due to the lack of information about the implementation phase.

2 THEORETICAL BACKGROUND

The theoretical background in our study is used to create a solid foundation for the empirical investigation that will help us examine the organizational structures that creates difficulties in the implementation phase of ICV. The theory that will be presented is divided into three sections with the goal of: (1) explaining what ICV is, (2) the role of supporting organizational structures for new venture creation, and (3) how extant literature is used in our empirical study.

2.1 Internal corporate venturing and new venture creation

The process of ICV originates from the development of CE (Hill & Birkinshaw, 2008; Narayanan et al., 2009; Shin & Cho, 2020), and is defined as: “corporate venturing activities that result in the creation of organizational entities that reside within an existing organizational domain” (Sharma & Chrisman, 2007: 94). The creation of new business activities derives from internal ideas which originates from the employees within the incumbent firm (Hill & Georgoulas, 2016). The reason why incumbent firms have shown an increased interest in ICV during the last decades is mainly due to the change in the business landscape, characterized by increased competition. Incumbent firms therefore seek new opportunities to secure competitive advantage (Abadli et al., 2020; Kuratko & Audretsch, 2013). The process of ICV has shown great potential of increased financial performance (Abadli et al., 2020), use of organizational resources (Dess et al., 2003), venture creation (Narayanan et al., 2009), corporate competitiveness, and promotion of innovation (Shin & Cho, 2020). According to Burgelman (1988) the process of ICV can be divided into two different categories: (1) informal ICV, referring to autonomously independent initiatives inside the incumbent firm, and (2) formal ICV, defined as programs guiding venturing initiatives. This study will focus on the former,

informal processes of ICV, and how organizations can take advantage of the potential benefits. The informal process of ICV has shown to be challenging for incumbent firms since the incumbent firms are often built upon hierarchies and are not familiar with engaging in radical innovation (Garrett & Neubaum, 2013). This complicates the ICV process even further. Whereas the literature is clear on how organizations should evaluate and select internal ideas (Masucci et al., 2020), it is scarce in describing the implementation phase of ICV and providing recommendations for how to overcome implementation challenges (Masucci et al., 2020; Wideler & Kammerlander, 2019). This indicates the need for further investigation on the implementation phase of ICV.

The last phase of the ICV process is the implementation phase, which consist of three possible options: (1) new-style joint ventures, (2) venture merger and melding, and (3) internal venture (Roberts, 2014). The internal venture is connected to the NVC (Narayanan et al., 2009), which this study will focus upon. A common ground for entrepreneurs is that they all face critical obstacles when initiating the process of NVC (Silva et al., 2019). These obstacles include but are not limited to raising capital, prospecting investors, validating business model, and scaling the business (Silva et al., 2019). While all newly founded ventures are facing challenges, the NVC process within ICV are commonly faced with a more demanding environment, since they either create a new product or service under extreme uncertainties within an incumbent firm (Innocenti & Zampi, 2019; Rippa & Secundo, 2019).

The process of NVC has developed over the years and Edison et al. (2018) presented a framework where the lean-start-up methodology has been combined with ICV to foster NVC for incumbent firms. According to Edison et al. (2018) the methodology consists of three

different steps: (I) Envisioning, where the entrepreneurs specify the vision for the new venture

and translate them into hypotheses, (II) Steering, where the hypotheses are tested and evaluated,

(III) Accelerating, where the incumbent firms seek a way to scale the business. The

lean-start-up methodology, first presented by Blank (2003, 2012) and further developed by Ries (2017), has shown to help incumbent firms to overcome the challenges with the rapidly changing business environment and create new competitive advantages (Edison et al., 2018)

2.2 Literature review identifying organizational structures

The process of NVC has shown potential for increased success rates, but the literature is fragmented in the manner of which organizational structures that are needed to support the process of NVC (Garret & Neubaum, 2013; Masucci et al., 2020; Wiedeler & Kammerlander, 2019). Hence, we use this section for presenting what critical organizational structures that we will focus upon in addressing our research questions. In doing so, we have reviewed articles connected to NVC and ICV. Please find an overview of the literature review in Appendix A. The literature review was used to identify what organizational structure elements that are important for the incumbent firms to understand and implement. The elements will also create an understanding of what organizational structure the challenges consist of in NVC (Narayanan et al., 2009). The review resulted in 13 different elements, presented in bold in Table 1. To facilitate the management of the elements and to clarify the connection between the elements, we have categorized and merged them into three different main elements which are: (1)

Corporate strategy, (2), Management aspects, and (3) Human and Financial capital. Please see the second column in Table 1. Lastly, we connected the organizational structures from the

literature review to the three sub-phases of the NVC process, (I) Envisioning, (II) Steering, and

(III) Accelerating. Please see the third column in Table 1. As Table 1 demonstrates, the various

organizational structures support different phases of NVC. Next, we will explain what the identified organizational structures consist of and why they are important for the incumbent firm to consider.

Table 1: Categorization, coding and explanation of organizational structures in the NVC-phase

Presented Organizational Structures Theme NVC-phase Author(s) Autonomy

How much independence the new venture

is given throughout the NVC 1 II-III

Hill & Georgoulas, (2016); Kurratko et al., (2009); Covin et al., (2019); Sykes, (1986); Garrett & Neubaum, (2013)

Structural

How structures as rules, regulations and authority are defined at the incumbent firm in the NVC

1 II-III Sykes, (1986); Ribeiro & Fernandes, ₍₂₀₁₀₎ Uncertainty

Market, technology and decision making uncertainty during the NVC

1 I-III Jiang & Tornikoski, (2019); Reymen _{et al., (2015)} Relationship to Company

How the incumbent firm handles the relationship with the new venture regards to support, transparency and trust

1 I-III Narayanan et al., (2009); Thornhill & _{Amit, (2001)} Venture Strategy

Alignment between the new venture with

the incumbent firms’ strategy 1 I-III

Hill & Georgoulas, (2016); Narayanan et al., (2009); Kurratko et al., (2009); Gutmann, (2019); Ribeiro & Fernandes, (2010)

Incentives

What kind of incentives the incumbent firm implements when it comes to NVC engagement

2 III

Hill & Georgoulas, (2016); Narayanan et al., (2009); Sykes, (1986); Antoncic & Hisrich, (2001)

Top Management Support

How top level managers of the incumbent

firm supports the new venture 2 I-III

Hill & Georgoulas, (2016); Narayanan et al., (2009); Kurratko et al., (2009); Covin et al., (2015); Sykes, (1986); Thornhill & Amit, (2001); Junni et al., (2020); Gutmann, (2019); Ambos & Birkinshaw, (2010)

Knowledge Transfer

How knowledge is transferred such as team experience, technology experience, management aspects,

back and forth from the new venture

2 I-III Kurratko et al., (2009); Zahra et al., _{(1999); Ambos & Birkinshaw, (2010)}

Venture experience

The incumbent’s firm prior venture creation experience

3 I

Hill & Georgoulas, (2016); Covin et al., (2009); Guerrero & Peña-Legazkue, (2013)

Culture

Values, expectations, and practices that define what is acceptable and good behaviour within the organization

3 I-II Narayanan et al., (2009); Sykes, _{(1986); Ribeiro & Fernandes, (2010);} People

How the company uses their internal

capabilities and employees during the NVC 3 I-II

Hill & Georgoulas, (2016); Ribeiro & Fernandes, (2010)

Market Familiarity

How the incumbent firm transfer their market knowledge if the new venture is operating in the same market

3 II-III Kurratko et al., (2009); Covin et al., _{(2015); Sykes, (1986)} Resources

Availability of resources (e.g., capital,

human capital, support, and time) regards 3 II-III

Kurratko et al., (2009); Sykes, (1986); Thornhill & Amit, (2001); Gutmann, (2019); Ribeiro & 1: Corporate strategy, 2: Management aspects; 3: Human & Financial capital

I: Envisoning, II: Steering, III: Accelerating

D is tr ib ut io n of f un ct io ns : E nv is oi ng , St ee ri ng & A cc el er at in g

2.3 Elements supporting new venture creation

2.3.1

Corporate strategy

The corporate strategy consists of five elements: Autonomy, Structural, Uncertainty,

Relationship to company, and Venture strategy, presented in Table 1. This section covers the essential elements of corporate strategy that the incumbent firms need to consider when engaging in NVC.

The level of autonomy that the new ventures achieve from the incumbent firms is an important element of the corporate strategy (Covin et al., 2019; Hill & Georgoulas, 2016; Kuratko et al., 2009; Sykes, 1986). During the process of creating a new venture, autonomy should be implemented in varied degrees. A high level of autonomy is beneficial to implement in the early stages of the NVC, which progressively decreases as the new venture grows (Sykes, 1986). Specifically, Kuratko et al. (2009) and Hill and Georgoulas (2016) emphasize that financial, strategic, and goal selection should be executed at venture-level management, because if these decisions occur on higher-level management the risk of less complete, timely and inaccurate decisions is present. Contradictory, Garrett and Neubaum (2013) study does not show any relationship between the venture’s level of autonomy and performance. The authors argue that this depends on whether the knowledge stock of the incumbent firm adds value to the new venture or not (Garrett & Neubaum, 2013). To conclude, autonomy should be implemented in the early stages of the new venture when uncertainty is high and as the venture grows the venture needs to be oversighted by the high-level management in order to align the decision with the corporate strategy (Kuratko et al., 2009; Sykes 1986).

Moving on, NVC demands certain structures of the incumbent firm (Ribeiro & Fernandes, 2010; Sykes, 1986). Two discussed formats of structures that inhibits NVC is centralization and formalization (Ribeiro & Fernandes, 2010). Centralization is described as keeping the control and activity of the corporation under a single authority, formalization on the other hand, is described as implying rules and regulation on how business should be executed within the incumbent firm (Ribeiro & Fernandes, 2010). These kind of structures inhibits the speed and proactive adaptability the new venture needs to be successful. Furthermore, Sykes (1986) discusses structural congruence, which explains how well aligned the new venture is with the incumbent firm’s market. The author emphasizes that if total congruity is achieved, the new internal venture would be perceived as a product extension. Therefore, structural incongruencies to some degree is needed to take the incumbent firm into new markets.

Throughout the NVC, a great amount of uncertainty in the corporate strategy decisions is present (Jiang & Tornikoski 2019; Reymen et al., 2015). Scholars argue that uncertainty can arise in three phases described as: state, effect, and response uncertainty. State uncertainty addresses how market and technological uncertainties affect the creation of a new venture; effect uncertainty describes the inability to predict the future state of the organizational environment; response uncertainty explains the venture managers inability to predict likely consequences of the response choices (Jiang & Tornikoski, 2019; Reymen et al., 2015). Venture managers should handle these uncertainties with effectuation and causation, where effectuation describes how venture managers actively respond to information and feedback to leverage uncertainty meanwhile causation emphasizes prediction, analysis, and planning to reduce uncertainty (Reymen et al., 2015). Arguably, the common ground is that there must be a combined logic between effectuation and causation to make sure that successful decision-making is achieved under a great amount of uncertainty (Jiang & Tornikoski, 2019; Reymen et al., 2015). Otherwise, the risk of not implementing a combined decision-making approach will lead to inaccurate decisions that can inhibit the success of the new venture (Jiang & Tornikoski, 2019). The new venture’s relationship to the incumbent firm is an important aspect of the corporate strategy (Gutmann 2019; Narayanan et al., 2009). For incumbent firms’ there are three important factors that need to be clarified to reach venture success: (1) the support the venture receives, (2) the transparency of the venture within the incumbent firms’ boundaries, and (3) trust for the new venture (Thornhill & Amit, 2001). In addition to the factors, promotion of a consistent lateral communication within the relationship is crucial for the survival, otherwise the survival of the new venture will be threatened (Narayanan et al., 2009; Thornhill & Amit 2001). The process of NVC needs to be perceived as a strategic asset and fit into the corporate strategy, to enable an effective and timely process (Gutmann, 2019; Kuratko et al., 2009; Narayanan et al., 2009). To select the most promising venture, the incumbent firms need an evaluation system (Hill & Georgoulas, 2016), which enables incumbent firms to provide the right resources and monitor the new venture, resulting in an alignment with the overall corporate strategy. The connection between the new venture and the corporate strategy provides clarity when addressing autonomy, initial goals and value proposition, which will provide guidance throughout the uncertain nature of NVC (Gutmann, 2019; Kuratko et al., 2009; Penker, 2021).

2.3.2

Management aspects

The management aspects consist of three elements: Incentives, Top management support, and

Knowledge transfer, presented in Table 1. This section covers the essential elements of the management aspects that the incumbent firms need to consider when engaging in NVC. In the process of NVC, incentives and rewards created by the top management is important since it will affect the outcome of the venture (Hill & Georgoulas, 2016; Narayanan et al., 2009; Sykes, 1986). The types of incentives and rewards that have been discussed are connected to creating incentives for engaging in NVC or equity-based rewards for key personnel (Antoncic & Hisrich, 2001; Narayanan et al., 2009). The conclusion is that strong financial incentives will create individuals who are more prone to offset their career and related risk to start engaging in NVC (Hill & Georgoulas, 2016). However, the incentives and rewards do not come without risk, and should be managed carefully. If created inefficiently, managerial challenges can occur connected to supporting the new venture and inequalities within the core business (Birkinshaw et al., 2002).

Knowledge transfer is an essential organizational structure which has proven to be a driving force for growth in NVC (Ambos & Birkinshaw, 2010; Kuratko et al., 2009; Zahra et al., 1999). The ambition is that the venture management should share, articulate, and transfer knowledge within the new venture (Zhara et al., 1999). When this is fulfilled, it enables an integration and a set stage for an effective cultivation by the venture’s management to leverage the knowledge for success. This creates a situation where formal and informal communication can be enhanced. This allows new insights to be accessible throughout the new venture, resulting in a situation where the new knowledge has the right impact (Ambos & Birkinshaw, 2019; Kuratko et al., 2009). The challenges with knowledge transfer arise since the incumbent firms are built on hierarchies and outlined boundaries that counteract entrepreneurial efforts (Burgers et al., 2009). To enable knowledge transfer, it is important to have top management support which has shown to be a key success factor for the new venture to leverage knowledge (Hill & Georgoulas, 2016; Junni et al., 2020). Top management support has shown to mitigate the challenges connected to hierarchical structures and the institutional context (Ambos & Birkinshaw, 2010; Penker, 2021; Thornhill & Amit, 2001).

2.3.3

Human and Financial capital

The Human and Financial capital consists of five elements: Venture experience, Culture, People,

elements of Human and Financial capital that the incumbent firms need to consider when engaging in NVC.

The venture experience in the target market of how to handle the human and financial capital seems beneficial for NVC, its impact is a discussed topic that diverges in prior literature (Guerrero

& Peña-Legazkue 2013; Hill & Georgoulas 2016). Kuratko et al.’s (2009) study shows no

relationship between venture creation experience and future success of venture creation. In contrast, Hill and Georgoulas (2016) and Guerrero and Peña-Legazkue (2013) emphasize that experience in NVC does matter due to prior experience in networking capacity, and that leadership skills indeed will have an effect.

A corporate culture that is accepting and supportive throughout the NVC is needed to assist the new venture (Ribeiro & Fernandes, 2010; Riley et al., 2009; Sykes, 1986). The corporate culture should be built on collaboration and trust, which will encourage the human capital to cooperate, interact, and innovate (Ribeiro & Fernandes, 2010). A supportive culture within the incumbent firm will nurture and sustain innovation and therefore, be beneficial for NVC (Riley et al., 2009). Possessing these dimensions within the corporate culture will mitigate the risk of inefficient communication and misunderstanding between the incumbent firm and the new venture, making the process more effective and collaborative (Narayanan et al., 2009).

The incumbent firm should manage their human capital to create teams that will enable NVC (Hill & Georgoulas, 2016; Ribeiro & Fernandes 2010). Scholars have found factors of human capital defined as collaboration, interaction, and cooperation among team members (Hill & Georgoulas, 2016; Ribeiro & Fernandes, 2010), which is strengthened by Sykes (1986) who found that human capital with the right capabilities and experiences of the target market influenced the success of the new venture positively. Furthermore, to efficiently utilize the human capital, functional expertise and managerial skills are required. Functional expertise is related to the ability to obtain and interpret knowledge, meanwhile managerial skills are related to the ability to leverage information to the advantage of the new venture (Riley et al., 2009). The market familiarity of the incumbent firm’s market and the new venture’s value proposition has been investigated (Covin et al., 2015; Kuratko et al., 2009). Covin et al. (2015) found that if the new venture aims for the same market as the incumbent firm, the new venture has higher probability of success. The incumbent firm can therefore supply the new venture with knowledge to develop an explicit value proposition and anticipate the demand drivers of the target market (Sykes, 1986). To summarize, the incumbent firm will provide information and

experience to the new venture, which will reduce the complexity around the new value proposition, resulting in that the new business entry will be more complete in terms of positioning and objectives of how to integrate the new venture in the market (Shane, 2000; Kuratko et al., 2009).

Lastly, the incumbent firm must provide the new venture with sufficient and accessible resources (Gutmann, 2019; Kuratko et al., 2009; Sykes, 1986; Thornhill & Amit, 2001). When it comes to the availability of resources, the attractiveness of the new venture to the incumbent firm is decisive. Therefore, the new venture needs to ensure that their activities are aligned with the corporate strategy, which lets the incumbent firm to be more tolerant regarding the risk of failure for the NVC in the long term (Kuratko et al., 2009; Sykes, 1986). Gutmann (2019) discusses four dimensions of the availability of resources: (1) the reasons for launching, (2) the performance of the new venture, (3) how much capital stake the incumbent firm takes, and (4) the congruences between the new venture and the incumbent firm are important to consider. Aforementioned dimensions need to be aligned with the corporate strategy so that resources are given to the new venture to enable success throughout the NVC process (Gutmann, 2019; Thornhill & Amit, 2001).

2.4 Connection between our theoretical background and empirical study

Our review and synthesis of the literature plays an important role for the empirical study. First, we entered the empirical study by specifically focusing upon the following phases of NVC within

the implementation of ICV: (1) Envisioning, (II) Steering, and (3) Accelerating. Secondly, we

entered the study with a focus on three main organizational structures relevant for supporting

NVC: (1) Corporate strategy, (2) Management aspects, and (3) Human and Financial capital.

Lastly, we used the organizational structures presented in Table 1 for developing questions to the semi-structured interviews, as discussed in greater detail in the Methods section.

3 METHODS

3.1 Research approach

This study had a research approach where we first reviewed the literature to find the gaps in the literature related to the implementation phase of ICV. When the present literature was reviewed, we created research questions to contribute to the literature gaps. This was followed by three waves of data collection and analysis described in section 3.3. During the study, we went back and forth between data collection and analysis (Murphy et al., 2017), to continuously evaluate

our findings and deepening our understanding of how and why organizational structures create

difficulties during the implementation phase of ICV. The goal with this type of research approach was not to test theory. Instead, theory was used to create a foundation to be drawn upon in entering our empirical study. Subsequently the theory could be used to strengthening our understanding of how incumbent firms could overcome the difficulties with mitigating actions, This approach enabled us to ensure that the collected data helped us to answer the research questions, both by utilizing what was known in the literature prior to our study and by data that was collected with an evolving understanding of the phenomenon (Saunders et al., 2016; Murphy et al., 2017). Lastly, the insights that we achieved from the empirical data led to a better understanding of how we could contribute to prior research.

3.2 Case selection

We have studied the NVC in the implementation phase of ICV through a single case study of a leading global automotive provider. At the time of the study, the company had 42,000 employees across more than ten countries. The company had limited prior knowledge about how to implement an effective NVC process, only pilot projects with moderate results. They had identified a need of embracing innovative ideas to transform them to new ventures to keep their competitive edge. The company had several innovative ideas but no informal process to proceed further due to limited knowledge of how to distribute resources, transfer knowledge and how to implement top management support.

3.3 Three waves of data collection and analysis

Our study consisted of both primary and secondary data, where the data was collected through three different waves. The primary data was collected through interviews, while the secondary data was gathered from internal documents from the case company and external documents from companies with experience of ICV and NVC. In addition, informal information was collected through regular meetings with the supervisors at the case company (from November 2020 to

May 2021). The data analysis method used for this study were a thematic analysis of primary data where the goal was to generate valuable findings to the final framework for how incumbent firms can work with the organizational structures connected to NVC within the implementation phase of ICV (David & Sutton, 2011).

Wave one – Creating a deeper understanding of the situation at the case company

The first wave consisted of data collection through conversations with our supervisors (which we refer to as information interviews) and in-depth review of archival data. A total of six informal interviews were performed and they lasted approximately one hour. The purpose was to discuss the problem in detail, identify underlying factors for prior failed ICV projects, and collect contextual information to create a current state image. We did not apply any specific method of analysis in this first wave. Instead, the informal interviews and archival data were used to map out the situation of the company. While our understanding of the situation at the case company was deepened throughout the other waves, this first wave of data collection was important for the development of research questions and how we designed the following waves of data collection and analysis.

Wave two - Distinguish the challenges of organizational structures

The second wave began with contacting a selection of people that possessed prior experience in ICV projects for interviews. The list of people was acquired from our supervisors. Two criteria were set of inclusion on the list: (1) people with experience from the ICV projects with high management involvement and (2) people with experience from ICV projects with low management involvement. The criterion was developed in consensus with our supervisors, who had in-depth knowledge about the entire management of the company and related projects. The purpose of the interviews was to identify the underlying difficulties, consequences and actions connected to the three main organizational structures within the NVC process. Such data would enable us to extend and explain the elements identified in our literature review and add to a greater understanding of why organizational structures create difficulties during NVC. A total of 18 semi-structured interviews were conducted with managers: six with experience from high management involvement in ICV projects and twelve with experience from low management involvement in ICV projects. This enabled us to investigate the extremes regarding the ICV projects within the case company. The reason why we could not choose an equal number of interviews on high and low involvement was the lack of prior ICV projects of the case company’s management.

We both participated in all 18 interviews. For each interview, one of us led the interview and the other took notes. The semi-structured interviews enabled the usage of themes and follow-up questions to enable in-depth specific answers, see Appendix B, which is suitable when using a qualitative research approach (Saunders et al., 2016). During the interview process we searched for organizational structures that create difficulties in the NVC process, what the consequences are for these difficulties, and what actions that could be implemented to mitigate the identified difficulties. To ensure that our scope was accurate and that our findings from the theoretical background covered the identified organizational structures from the data collection, our interview guide was constantly evaluated and updated. This approach enabled us to create a deeper understanding about the underlying organizational structures that create difficulties for the NVC process, which also ensured that the data collection tied closely to the research questions of the study.

Since the case company operated in an international environment, the interviews were conducted in Swedish or English, depending on location and origin of the informant. Due to COVID-19, interviews were conducted with the help of the video conference call tool Microsoft Teams. The length of the interviews varied between 40 to 150 minutes, and were all recorded and transcribed. The interviews were handled confidentially, and all informants were given an identifier code that only we could link to their actual names (David & Sutton, 2011). All the semi-structured interviews are presented in Table 2. To minimize the risk that informants are identifiable, we do not present what position each has at the company. They held roles such as innovations managers and leaders, business developers, and heads of different departments.

Table 2: Overview of the semi-structured interviews

To analyze the semi-structured interviews a thematic analysis approach was used. In detail, a four-step thematic analysis approach was used to find and analyze patterns in our data collection from wave two. The first and second step were repeated in order to achieve an iterative process between data collection and data analysis. In contrast, the third and fourth step did not start until all of the 18 semi-structured interviews were complete. In Figure 1 a detailed description of the steps is presented.

Figure 1: Illustration of the approach for the thematic analysis.

Step 1 – A basis for initial thematic analysis were created from the literature findings

In the first step of our thematic analysis a matrix in Microsoft Excel was created, in this matrix all the data from the interviews was inserted and indexed based on the challenges found in the

literature e.g., lack of top management support, lack of knowledge transfer and lack of incentives.

This matrix formed the base for our thematic analysis.

No. Informant code Duration (min) Transcribed _words Date No. Informant code Duration _(min) Transcribed _words Date

1 V01 90 4143 2021-03-04 10 V10 70 6963 2021-03-15 2 V02 150 9900 2021-03-04; _2021-03-11 11 V11 90 8368 2021-03-18 3 V03 120 10195 2021-03-05 12 V12 65 5975 2021-03-19 4 V04 60 4592 2021-03-05 13 V13 58 4661 2021-03-22 5 V05 80 7172 2021-03-08 14 V14 55 4875 2021-03-25 6 V06 80 6063 2021-03-09; _2021-03-11 15 V15 65 5743 2021-03-23 7 V07 60 5731 2021-03-11 16 V16 40 4270 2021-03-23 8 V08 85 6776 2021-03-11 17 V17 55 6017 2021-03-26 9 V09 90 7560 2021-03-12 18 V18 100 8615 2021-03-31; _2021-04-13 Create an initial thematic analysis from the literature

findings

Step 1

Data condensation based on findings from the literature

Step 2

Create new themes from data

Step 3

Analyze and find correlation between

themes to mitigate identified challenges

The purpose of the second step was to familiarize and condense the transcribed data in each challenge from step one. Since we had a large amount of transcribed data, the condensation method was applicable. We could highlight the most important answers connected to organizational structures difficulties, consequences, and actions within NVC. The condensed answers then formed the basis for step three.

Step 3 – New themes created from data

The third step began with analyzing the condensed answers from step two, the purpose was to find similarities and differences in the answers to identify the difficulties, consequences, and actions connected to the organizational structures. The result of step three was that six aggregated

dimensions connected to Corporate strategy, seven aggregated dimensions connected to

Management aspects and seven aggregated dimensions connected to Human and Financial capital. The aggregated dimension are connected to the difficulties, consequences and actions. For an overview of the data structure see Tables 3, 4, 5.

Table 3: Data structure of Corporate strategy

First order Codes _{order codes}Second Aggregated _dimensions First order Codes Second order _codes Aggregated _dimensions First order Codes _{order codes}Second Aggregated _dimensions

- Top management do not assign a budget for innovation connected to NVC

- Impossible to lead radical innovaiton without budget

No budget for NVC

- Network is crucial for success

- Top management support is needed for success - NVC projects are exposed to internal competition - Focus lies on core business, initiatives that are not aligned will get no attention

Internal political obstacles

- Educate top management how to build relationships with NVC initiaves

- Educate top management regards to risk vs. reward - Implement a learning by doing mindset

Learning by doing enviroment

- No company process for how to deal with the NVC process

- No structure for bringing attention towards NVC - Inexplicit roles between the management of the NVC project and the mother company - No structure of how to create a legal realtionship between the NVC project and the mother company

No clear objectives for

NVC

- Ideas that not connected to core business get no attention

- Corporate strategy focus on "Selling more cars" - If it fits the core business, employees get resources - No willingness to initiate NVC projects that are outside core business

Excessive focus on core business

- Build a common function for NVC between the new business and the mother company - Offer a subscription model for support functions - Create road map for implementation - Develop a strategy concerning goals, equity, responsibility and target market

Create a mutually beneficial function

- The company is not explorative regards to new business opportunities

- Education for innovation is limited - No proper structure for the NVC process - No education about why NVC is important

Lack of interest for

NVC

- No support systems for projects with high uncertainty, leds to rejection

- Risk minimizing mindset - High focus on analysis in the begining - NVC project rejection due to knowledge gap in top management

- No KPIs for top management on NVC projects

Fear of risk taking

- Establish a central incubationprogram - Create guidelines for NVC implementation - Create clear structure when it comes to autonomy, uncertainty, meeting places, and team creation - Create a standardized NVC process to lower barriers - Develop a trial and error process

Create support for

NVC

- NVC projects get no attention and is often rejected - The NVC project needs to be aligned with core values

- Company politics sorrounding innovation creates a barrier

- The attention the NVC projects recevies is dependent on the person behind the idea

Internal barriers for

NVC

- No process for internal or external implementation of NVC projects

- Internal structures inhibits NVC projects - A operational company which makes innovation complicated

- Without a process, progress are impossible

The need of a implementation

process

Process-controlled organization

- Create a transparent and trusted department for NVC

- Implement a central advisory board for NVC - Occupy time for buidling structure concerning innovation

- Create innovation KPIs for top management - Align spin off strategically to top mangement - Challenge top management to see potential of

Create a central department

for NVC

- Without interest from top management the NVC project gets rejected

- Selective perception is present when investigating new NVC projects

- Top management do not see the potential value of a implementation of a NVC project

No strategic NVC alignment

- Create blue prints for NVC projects - Define roles of engagement for NVC projects - Create a okey-to-fail relationship

- Use analysis and pilots to lower uncertainty in NVC - Create guidelines regards to relationship and transparency

Create a structure for

building relationship

- The NVC project is forced to show evidence of success before it is even started

- Top management is afraid of losing control over the new NVC project

- New ideas are forced to show a multitude of analysis

- The company is risk mitigating, not risk taking

Risk mitigating organization

- NVC projects needs a clear connection to core business

- The strategy of the NVC project needs to be aligned with current car project

NVC alignment with core business Create a supportive culture

How/Difficulties Why/Consequences Actions

Ambiguous objectives Developing a learning organization Organizational behavior obstacles Venture strategy obstacles

Table 4: Data structure of Management aspects

First order Codes Second

order codes Aggregated dimensions First order Codes order codesSecond Aggregated dimensions First order Codes order codesSecond Aggregated dimensions -Fear of losing control over technology development

- Only accept technology associated to core business - No communication from top management about strategies and long-term value of NVC

- Long way to reach top management level

Obsessive control

- Hard to establish NVC ideas without internal network

- Top management support definitive for NVC - Unilateral mentality of "We solely build cars"

Importance of top managment support Inconsistent Leadership

- Create a "show and tell" culture

- Promote driven employees for NVC engagment - Create attention for new ideas and NVC - Highlight innovation champions

Motivate for engagement

Create a Supportive

Culture - Fear of loosing expert competence

- No culture to support the implementation of NVC - A person must be responsible for faliure

- No incentives for NVC projects Fear of Failure

- No resources allocated outside core business - Heavily focus on ROI and IP-creation - Short-termism, only focus on next car project - NVC projects is considered disturbance to core business

- No clear goals for radical innovation

No goal Alignment

Fuzzy Objectives

- Create systems for learning by mistakes - Orchestrate "Fuck-up-nights" to share knowledge

- Develop a okey to fail environment Create an okay-to-fail

enviroment

- No connection between NVC and corporate strategy - No process for refine NVC ideas

- Lack of decision making structures in NVC projects Lack of NVC structures

- Fear of failure mentality

- NIH-syndrome create a situation where it is hard to reach internal acceptance

- Internal envy among actors - Conflict of interest - No personal accountability Internal Antagonism Mixed intentions

- Educate top management about NVC - Create structures for Knowledge Transfer, Pitch-sessions and sync meetings

- Education about the NVC process - Use IP for knowledge transfer

Education about NVC

- Mind your own business mentality, NIH-syndrome - Heavy focus on product development compared to radical innovation

- No middle management attention - No incentives for innovation

Internal organizational

barriers

- Develop top management "Buy-in" systems for NVC - Create an enviroment where the process of NVC is a expressed need and will

- Create personal accountability which is evaluated during development talks

- Develop incentive program for NVC that focuses on ambitions not personal agendas

Highlight the importance

of NVC

- Knowledge transfer happens from successful projects - Knowledge transfer dependent on IP creation - No clear process for knowledge transfer - Knowledge can be shared between individuals verbaly but not formally written

Knowledge transfer structures -The interest of NVC depends on the individual

- Only consider knowledge transfer from trusted collegues

- To succeed with knowledge transfer the individual need a large internal network of people

Network antagonism

How/Difficulties Why/Consequences Actions

Develop a learning organization Excessive need for control Lack of internal support systems

Table 5: Data structure of Human and Financial capital

First order Codes Second

order codes Aggregated dimensions First order Codes order codesSecond Aggregated dimensions First order Codes order codesSecond Aggregated dimensions - Lack of forum to discuss radical innovation and new

business initiatives

- No meetups to bring individuals with similar interest together

- Lack of cross-functional cooperations - Lack of system to find competence on the intranet

No Knowledge

sharing without network

- Impossible to handle resources without structures - No support for NVC or interest in new technology - The culture do not support NVC

- Without a process for NVC it is hard to promote the idea

- Without a structure for allocate employees efficiently, the idea disappear

Innovation dies in its early stages

- Create a meeting points to discuss new ideas - Create a forum where financial resources could be applied for

- Develop a central department that focus on the NVC process

Central continues

meetups

-No personal accountability or KPI´s on NVC - The culture builds on cost-efficiency and resoruce prioritization

- Employees are good to follow processes but without them nothing works

- Incremental innovation takes precedence over radical innovation

Sub-Optimization

- Resources availbility depends on mother company equity

- The availabilty of resources do not have a proper structure

- It is hard to make process with innovation when there is no budget

Resource obstacles

- Develop a central department that educate the human capital about the NVC process - To enable success, you need education

- Stipulate role descriptions for the NVC process Education about NVC

- Lack of attention from top management - Internal contradictions influence the NVC process - Nobody speaks up against the managers - Somebody needs to own the failure

No-speak-up Culture

- Internal conflicts between departments - Internal agendas hinder the process of NVC - Hard to balance short- and long-term objectives

Misalignment between internal intrest

Ambidexterity of internal focus

- Use NVC coaches to support the employees - Create templates for business models - Create a central staff function that share NVC knowledge

Innovation support - Attitude toward " I know the most"

- No understanding of NVC - The culture only focus on core business - Ideas conected to core business succeed, other vanish

NIH-syndrome

- Develop a function for finding employees with expert competence

- Develop a function for allocation of staffs between internal departments

- Top managemnt needs to communication a venture strategy throughout the organization

- Develop a legal structure for IP creation, shareholders, spinn-outs, and legal rights

- Create a budget for NVC projects

Top-down goal alignment

- Stipulate KPI for NVC projects - Measure managers on innovation and cross-functional cooperation to create accountability - Develop strategies, goals and visions to foster culture - Develop innovation goals without internal political agendas

Stipulate innovation accountability

- Create an enviroment where it is okay to fail and learn from mistakes

- Create trust for innovation and give it time - Top management needs to communicate the importance of innovation for future success and long-term value Create an okay-to-fail enviroment Create a supportive culture

How/Difficulties Why/Consequences Actions

Radical innovation

resistance

Mind your own business attitude Develop a learning organization Develop a clear implementation strategy Innovation failure

Step 4 – Analyze and find correlation between themes to mitigate identified challenges

The final step consisted of all themes being reviewed and compared against each other. The purpose was to identify which of the difficulties and consequences that connect to each organizational structure that could be mitigated with the actions found from the data collection. This resulted in a framework that illustrates the connections between the difficulties, consequence, and the mitigating actions. The framework created the basis of our conceptual roadmap and illustration of how the NVC process could be developed. The final themes were analyzed in-depth and were used as the findings for this study.

Wave three – Validation and clarifying of the findings

The goal of wave three was to validate and refine our findings from wave two. This phase was also used to discuss our framework, the conceptual roadmap, find areas for improvement, and gain deeper insight about the NVC within the implementation phase of ICV. In the third wave, the interviewees were selected based on their knowledge within the subject ICV, and held roles such as CEO, chief IP officer and business developer. In total, seven interviews were conducted with three different companies, to check if our findings seemed generalizable to other industries. During the interviews, both of us participated and we had the same structure as in wave two with one interviewer and the other as a note-taker. The interviews started with a review of our thematic analysis (see, Table 2, 3, 4) to confirm that we had identified the right organizational structures that create difficulties in the NVC process, what consequences it resulted in and what actions that could be done to mitigate the identified difficulties. However, most time was spent on the conceptual roadmap to identify if they agreed with us or if something needed to be changed or added. The interviews lasted between 30 and 60 minutes. For an overview of this set of interviews, see Table 6.

Table 6: Overview of the validation interviews

Secondary data

To complement our primary data, secondary data from other companies than the case company was collected with experience from the implementation phase of ICV through documented material such as internal reports, journals, company presentation, and books. This enabled us to get a more comprehensive understanding of the organizational structures that affect the implementation phase of ICV and could therefore, contribute with practical evidence for the study. Most of the secondary data was used to find inspiration for how the conceptual roadmap could be developed and how description of processes could be used to increase the understanding and practical application. The secondary data is illustrated as a table in Appendix C that indicates how the different sources have been used in the creation of the NVC process and how the secondary data has been used in this study.

3.4 Quality improvement measures

The trustworthiness of qualitative research is affected by four elements: credibility, transferability, dependability, and confirmability (Guba, 1981). To strengthen the credibility, defined as collecting data that explain the focus of the study (Graneheim & Lundman, 2004), we collected data from different perspectives by interviewing both employees, top level managers and partners to ensure that we covered different perspectives. The data collection was also performed inthree waves and different methods were applied, which strengthen the credibility even further. The interviews were conducted in either English or Swedish, depending on the informant’s native language, to decrease the risk of misunderstandings and ambiguous answers due to language

No. Informant code Duration _(min) Date

19 V19 50 2021-04-28 20 V16 45 2021-05-06 21 V06 32 2021-05-06 22 V07 35 2021-05-05 23 V20 60 2021-05-07 24 V21 30 2021-05-07 25 V22 45 2021-05-11

barriers. Further, to increase the credibility and generate trustworthiness in the answers, all informants were given an explanation of key-concepts and guaranteed complete anonymity during all interviews, see Appendix A.

In this study, transferability is referred to how our findings could be applied in other situations, contexts, and circumstances (Graneheim & Lundman, 2004). Since the study is based on a single case company of how the organizational structures creates difficulties during NVC within the implementation phase of ICV, the transferability is considered as relatively low. However, to strengthen the transferability, an extensive description of the research methodology and the case company are provided, which helps the reader to understand if the study could be applied in other contexts. During the study, validation interviews have also been conducted to understand if the identified difficulties, consequences and actions are industry specific, or if they could be transferred to other industries, which increases the transferability.

Dependability refers to the situation where data can change over time (Graneheim & Lundman, 2004), therefore our data collection was done in a narrow timespan of 41 days, which will decrease the risk. To further increase the dependability an extensive description of the research methodology and analysis is presented where the reader can follow every step of the process. Beside this, the study has also been reviewed four times by four other master thesis students and our supervisor at Luleå University of Technology.

Lastly, confirmability referred to the possibility to make conclusions without being affected by biases from ourselves and different stakeholders (Cope, 2014). To increase the confirmability and base our findings on the data collection, we applied a thematic analysis approach. The thematic analysis approach allowed us to go back and forth between data collection and previous literature, which increased the confirmability. In addition, we also discussed the result of our study with three different companies, one in Sweden and two in the United States, who all have prior experience of how to mitigate the difficulties arising in ICV to lower the biases. Moreover, we created awareness of how biased decision occur and we constantly reviewed the informant’s information in order to mitigate the risk of being biased.

4 FINDINGS

In this section we present the findings from our empirical study. The section is divided into two main parts. The first part focuses on presenting the underlying analysis of data (Tables 2-4) resulting in a framework illustrating how organizational structures during NVC process cause difficulties, what consequences that arise, and how the incumbent firm can mitigate them with specific actions. The framework should be read from left to right where the horizontal arrows illustrate the connections between the difficulties and consequences as well as identified actions. Vertical arrows illustrate the mitigating actions between the difficulties and consequences. In the first part of the findings, we describe the findings in relation to the three organizational

structures identified from theory, Corporate strategy, Management aspects and Human and

Financial capital. The second part of the findings provides a roadmap for NVC.

Figure 2: Overview of framework for organizational structures.

4.1 Corporate strategy in NVC within the implementation phase of ICV

In this section we have focused on finding and analyzing organizational structures that creates

difficulties, consequences and actions connected to corporate strategy. Our empirical findings

resulted in two aggregated dimensions connected to the difficulties (ambiguous objectives;

E n v i s i o n i n g S t e e r i n g A c c e l e r a t i n g

Why the difficulty arise Actions that could mitigate the difficulty What consequence it can lead to

Ambiguous objectives

Mind your own business attitude

Excessive need for control Radical innovation resistance Organizational behavior obstacles Lack of internal support systems Process-controlled organization Fuzzy Objectives Mixed intentions Venture strategy obstacles Ambidexterity of internal focus Inconsistent Leadership Innovation failure Developing a learning organization Create a supportive culture Develop a clear implementation strategy

Together, they support the implementation phase of ICV