Securing Innovation through Corporate Spin-off. An Exploratory Case Study

This thesis explores how a large established firm can secure and manage technology-based innovation through the use of a corporate spin-off. This study is performed in the setting of a large media firm and its four technology spin-off companies. The inductive findings of this research are then related to the broader literature on corporate spin-offs as well as the literature on organizational ambidexterity.

First, this study identifies antecedents conducive to innovation that were present at the parent company and were important for generating the innovation activities; and the study shows that once these antecedents were withdrawn it created doubt in the ability of the established firm to innovate through the spin-off mode in the future. This study also locates key behaviours and actions that the established firm used in its relationship to its innovation initiatives that aided these initiatives both before and after spinning-off. This research then uncovers the chief benefits that the established firm obtained by pursuing its innovation through the spin-off mode and argues that these benefits are the result of the exploitation of the innovations and the spin-off companies achieving ambidexterity themselves. 

Additionally, this research finds that because of the type of spin-offs that are examined here, where the parent company uses the spin-offs’ products, the parent was able to avoid the challenges of integrating the innovation that are often mentioned in the literature. Also, this study finds that the use of the parent company as a showroom for the spin-offs’ products was a considerable advantage that has not been recognized yet within current strategy literature.

Finally, this study contends that future organizational ambidexterity research should examine the corporate spin-off mode, because this thesis indicates that it is a fruitful way for an established firm to achieve organizational ambidexterity and that this approach may have unique benefits.