The Study Of Intraorganizational Cooperation Mechanism In Corporate Venture Capital

Corporate venture capital (CVC) appeared in the1960s. It has developed into an importantpart of the venture capital investment activities worldwide. CVC activities play an important rolein the large companies to acquire external innovation from start-up to achieve “organic growth”through CVC investment. The most important feature of CVC activities is the intraorganizationalcooperation between business unit (BU) of the parent company and CVC unit, which distinctfrom the independent venture capital (IVC). Despite the close cooperation between BU and CVCunit brings abundant advantage for the CVC activities, there are still a lot of conflicts betweenBU and CVC unit that hinder the success of CVC activities. As the development of economicand capital market of China, more and more large enterprises participate in CVC activities. So ithas important theoretical and practical significance to study the intraorganizational cooperationmechanism in CVC activities, including the drive mechanism of BU unit involved in thecooperation and the process model of cooperation between BU an the CVC unit.Based on the review of literature related to CVC to define the basic aspects of CVC and thebasic theory to account for the external innovation activities of CVC and the intraorganizationalcooperation between BU and CVC unit, the intraorganizational cooperation mechanism is builtin the third and forth chapter.In order to study the driving force that propels BU to cooperate with CVC unit in the CVCactivities, the theoretical frame work of “Awareness-Motivation-Capability”(AMC) that putforward by Ming-Jer Chen to analyze the competitive behavior driving factors based on thedynamic competition theory. It is innovative to use the AMC theoretical framework to analyzethe drive mechanism in the intraorganizational "cooperation" context to find how BU is aware ofthe opportunities of cooperation with CVC unit, the motivations of BU to join in the cooperationand the capability of BU fit for the respondent to cooperate with the CVC unit to promote thesuccess of CVC activities.The process of intraorganizational cooperation between BU with CVC unit in the CVCactivities is actually to add value for the start up through the investment phase of providingfinancial support from CVC unit and the incubator of new technology development and the help of commercialization. In the fourth part, McCoy’s research framework is extended to analyzeprocess of the intraorganizational cooperation between BU and CVC unit. There are three stagesof the process model, including project selection, project development, projectcommercialization. Each stage is composed by technical factor, market factor, and financialfactor. The technology and market factor is provided by BU and the financial factor is providedby CVC unit. Through CVC activities the innovation ecosystem for the core business of BU isbuilt by the investment portfolio of start up, which form the sustainable competitive advantage ofBU.Finally, the drive mechanism and process model that is built in the third and fourth chapteris used to analyze the case of Tencent whose CVC activities are active in the TMT market inChina. Through in-depth case studies details about intraorganizational cooperation is analyzed,including the three main driving factors and the process of cooperation between BU and CVCunit, which provides some reference for other large enterprise to carry out CVC activities moresuccessful.