Performance of internal corporate ventures: the effect of team interactions and the absorptive capacity of the firm

Abstract

Internal corporate ventures are launched by organisations to create value and build competitive advantage. This research investigates the effect of interactions among venture team members and the absorptive capacity of the organisation on the performance of the venture. The interaction factors investigated are task conflict, relationship conflict, process conflict, cohesion and strategic consensus. Through a survey administered to 124 executives working in internal corporate ventures across 14 industries, the research concluded that conflict has a negative association with venture performance. Cohesion and strategic consensus have a positive association with venture performance. The absorptive capacity of the organisation has a mediating effect on the strategic consensus-performance relationship. A multi-group analysis shows that for venture team members, the strongest relationship is between process and relationship conflict; for team leaders, the strongest relationship is between task and relationship conflict. The findings contribute to an understanding of determinants of venture performance.