Paper Number

2007

Paper Type

Complete Research Paper

Abstract

To avoid conflicts with the core business and the existing organizational identity, incumbents increasingly externalize their digital innovation activities by handing them over to separate innovation units. While IS research provides knowledge on how internally driven innovations are initiated and developed in such units, we do not yet understand how they capitalize on internal resources, combine them with external ones, and pursue competitive actions with digital technologies. To address this issue, we apply a digital options thinking lens to investigate how corporate venture builders (CVBs) generate digital options for incumbent firms, i.e., opportunities to invest in digital innovations. Based on a case study with six CVBs, we find that such units bundle incumbents’ resources and digital innovation trends (novel technologies and digital business models) into digital options through four roles. Furthermore, we demonstrate the importance of adding a detailed preparation process to the digital options framework.

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Jun 14th, 12:00 AM

EXTERNALIZING DIGITAL OPTIONS THINKING: HOW CORPORATE VENTURE BUILDERS GENERATE OPPORTUNITIES TO INVEST IN DIGITAL INNOVATION

To avoid conflicts with the core business and the existing organizational identity, incumbents increasingly externalize their digital innovation activities by handing them over to separate innovation units. While IS research provides knowledge on how internally driven innovations are initiated and developed in such units, we do not yet understand how they capitalize on internal resources, combine them with external ones, and pursue competitive actions with digital technologies. To address this issue, we apply a digital options thinking lens to investigate how corporate venture builders (CVBs) generate digital options for incumbent firms, i.e., opportunities to invest in digital innovations. Based on a case study with six CVBs, we find that such units bundle incumbents’ resources and digital innovation trends (novel technologies and digital business models) into digital options through four roles. Furthermore, we demonstrate the importance of adding a detailed preparation process to the digital options framework.

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