How do threshold firms sustain corporate entrepreneurship? The role of boards and absorptive capacity

Shaker A. Zahra, Igor Filatotchev, Mike Wright

Research output: Contribution to journalArticlepeer-review

187 Scopus citations

Abstract

As companies move from one stage of their cycle to the next, they often have to revamp their skills and build innovative capabilities to survive, achieve profitability, and stimulate growth. Corporate entrepreneurship (CE) activities give these firms a foundation for building and exploiting these capabilities. In turn, stimulating and sustaining CE requires the infusion of resources and new knowledge into the firm's operations, using multiple external sources. In this paper, we highlight the importance of boards of directors and absorptive capacity for gaining access to varied and current knowledge that enriches CE. We suggest that boards and absorptive capacity complement each other in fueling CE activities. Further, boards can sometimes substitute for poor absorptive capacity and vice versa, influencing the intensity of CE activities. Managing these complementarities (or substitutions) is crucial for sustaining CE initiatives and creating value from them.

Original languageEnglish (US)
Pages (from-to)248-260
Number of pages13
JournalJournal of Business Venturing
Volume24
Issue number3
DOIs
StatePublished - May 2009

Keywords

  • Absorptive capacity
  • Boards
  • Capability
  • Corporate entrepreneurship
  • Knowledge-based theory

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