Abstract
PurposeThis paper describes and discusses company spin-ins and spin-outs as a means to understand company growth in a dynamic context. The following question is asked: How can growth be understood in spin-ins and spin-outs of innovative firms? The paper suggests return on capabilities as a measure to understand growth in an open innovation context.Design/methodology/approachThe empirical part of the paper consists of a single case study. Data was captured through interviews and secondary data sources.FindingsThe paper points to that resources alone do not explain strategic decisions by a company and how spin-ins and spin-outs result from the need for capabilities, changes in business foci and temporary solutions to deal with overcapacities or lack of alternatives.Originality/valueThe paper contributes to research by discussing contemporary issues in strategy and innovation and relating them to the resource-based view and the growth of the firm. Spin-outs, and acquisitions and divestitures as interlinked events have rarely been focused on in the literature, while they remain frequent phenomena in practice.
Highlights
The literature on corporate growth tends to focus on it as a means to reach competitive advantage on global levels (Furlan and Grandinetti, 2011) and primarily concerns the company’s own resources to achieve such growth (Collis and Montgomery, 1995)
This paper describes and discusses company spin-ins and spin-outs as a means to understand company growth in a dynamic context
Spin-ins include any type of acquisition, and in this paper focus on acquisitions of firms
Summary
The literature on corporate growth tends to focus on it as a means to reach competitive advantage on global levels (Furlan and Grandinetti, 2011) and primarily concerns the company’s own resources to achieve such growth (Collis and Montgomery, 1995). This paper suggests that growth should be understood as the increase in return on those (shifting) capabilities central to the firm, as this would indicate an efficient use of competences on the societal level, and as the accumulation of resources per se does not guarantee a sound economic growth. Through talking about the return on capabilities, growth will concern the adding of resources and their divestiture so as to comply with a dynamic context, the reliance on collaboration partners for complementary capabilities and open innovation as an important motor for development. The full terms of this licence may be seen at http:// creativecommons.org/licences/by/4.0/legalcode
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