Corporate Venture Capital: How established firms use external resources to create new competencies

This Doctoral Dissertation is triggered by an emergent trend: firms are increasingly referring to investments in corporate venture capital (CVC) as means to create new competencies and foster the search for competitive advantage through the use of external resources. CVC is generally defined as the practice by non-financial firms of placing equity investments in entrepreneurial companies. Thus, CVC can be interpreted (i) as a key component of corporate entrepreneurship - acts of organizational creation, renewal, or innovation that occur within or outside an existing organization– and (ii) as a particular form of venture capital (VC) investment where the investor is not a traditional and financial institution, but an established corporation. My Dissertation, thus, simultaneously refers to two streams of research: corporate strategy and venture capital. In particular, I directed my attention to three topics of particular relevance for better understanding the role of CVC. In the first study, I moved from the consideration that competitive environments with rapid technological changes increasingly force established corporations to access knowledge from external sources. Firms, thus, extensively engage in external business development activities through different forms of collaboration with partners. While the underlying process common to these mechanisms is one of knowledge access, they are substantially different. The aim of the first study is to figure out how corporations choose among CVC, alliance, joint venture and acquisition. I addressed this issue adopting a multi-theoretical framework where the resource-based view and real options theory are integrated. While the first study mainly looked into the use of external resources for corporate growth, in the second work, I combined an internal and an external perspective to figure out the relationship between CVC investments (exploiting external resources) and a more traditional strategy to create competitive advantage, that is, corporate diversification (based on internal resources). Adopting an explorative lens, I investigated how these different modes to renew corporate current capabilities interact to each other. More precisely, is CVC complementary or substitute to corporate diversification? Finally, the third study focused on the more general field of VC to investigate (i) how VC firms evaluate the patent portfolios of their potential investee companies and (ii) whether the ability to evaluate technology and intellectual property varies depending on the type of investors, in particular for what concern the distinction between specialized versus generalist VCs and independent versus corporate VCs. This topic is motivated by two observations. First, it is not clear yet which determinants of patent value are primarily considered by VCs in their investment decisions. Second, VCs are not all alike in terms of technological experiences and these differences need to be taken into account.

Coastal flood vulnerability assessment with geomatic methods: Test sites of western Thailand, Sydney (Australia) and aeolian islands (south tyrrhenian sea, Italy)

The work undertaken in this PhD thesis is aimed at the development and testing of an innovative methodology for the assessment of the vulnerability of coastal areas to marine catastrophic inundation (tsunami). Different approaches are used at different spatial scales and are applied to three different study areas: 1. The entire western coast of Thailand 2. Two selected coastal suburbs of Sydney – Australia 3. The Aeolian Islands, in the South Tyrrhenian Sea – Italy I have discussed each of these cases study in at least one scientific paper: one paper about the Thailand case study (Dall’Osso et al., in review-b), three papers about the Sydney applications (Dall’Osso et al., 2009a; Dall’Osso et al., 2009b; Dall’Osso and Dominey-Howes, in review) and one last paper about the work at the Aeolian Islands (Dall’Osso et al., in review-a). These publications represent the core of the present PhD thesis. The main topics dealt with are outlined and discussed in a general introduction while the overall conclusions are outlined in the last section.

From core rigidities to dynamic capabilities: the role of external knowledge. A multiple case study

This study focuses on the processes of change that firms undertake to overcome conditions of organizational rigidity and develop new dynamic capabilities, thanks to the contribution of external knowledge. When external contingencies highlight firms’ core rigidities, external actors can intervene in change projects, providing new competences to firms’ managers. Knowledge transfer and organizational learning processes can lead to the development of new dynamic capabilities. Existing literature does not completely explain how these processes develop and how external knowledge providers, as management consultants, influence them. Dynamic capabilities literature has become very rich in the last years; however, the models that explain how dynamic capabilities evolve are not particularly investigated. Adopting a qualitative approach, this research proposes four relevant case studies in which external actors introduce new knowledge within organizations, activating processes of change. Each case study consists of a management consulting project. Data are collected through in-depth interviews with consultants and managers. A large amount of documents supports evidences from interviews. A narrative approach is adopted to account for change processes and a synthetic approach is proposed to compare case studies along relevant dimensions. This study presents a model of capabilities evolution, supported by empirical evidence, to explain how external knowledge intervenes in capabilities evolution processes: first, external actors solve gaps between environmental demands and firms’ capabilities, changing organizational structures and routines; second, a knowledge transfer between consultants and managers leads to the creation of new ordinary capabilities; third, managers can develop new dynamic capabilities through a deliberate learning process that internalizes new tacit knowledge from consultants. After the end of the consulting project, two elements can influence the deliberate learning process: new external contingencies and changes in the perceptions about external actors.

The Influence of Fractures on Vulnerability to Pollution of a Carbonate Aquifer: Monte Conero (Italy)

The carbonate outcrops of the anticline of Monte Conero (Italy) were studied in order to characterize the geometry of the fractures and to establish their influence on the petrophysical properties (hydraulic conductivity) and on the vulnerability to pollution. The outcrops form an analog for a fractured aquifer and belong to the Maiolica Fm. and the Scaglia Rossa Fm. The geometrical properties of fractures such as orientation, length, spacing and aperture were collected and statistically analyzed. Five types of mechanical fractures were observed: veins, joints, stylolites, breccias and faults. The types of fractures are arranged in different sets and geometric assemblages which form fracture networks. In addition, the fractures were analyzed at the microscale using thin sections. The fracture age-relationships resulted similar to those observed at the outcrop scale, indicating that at least three geological episodes have occurred in Monte Conero. A conceptual model for fault development was based on the observations of veins and stylolites. The fracture sets were modelled by the code FracSim3D to generate fracture network models. The permeability of a breccia zone was estimated at microscale by and point counting and binary image methods, whereas at the outcrop scale with Oda’s method. Microstructure analysis revealed that only faults and breccias are potential pathways for fluid flow since all veins observed are filled with calcite. According this, three scenarios were designed to asses the vulnerability to pollution of the analogue aquifer: the first scenario considers the Monte Conero without fractures, second scenario with all observed systematic fractures and the third scenario with open veins, joints and faults/breccias. The fractures influence the carbonate aquifer by increasing its porosity and hydraulic conductivity. The vulnerability to pollution depends also on the presence of karst zones, detric zones and the material of the vadose zone.

The European External Action Service and the Implementation of the 'Union Method' in European Foreign Policy

The European External Action Service (EEAS or Service) is one of the most significant and most debated innovations introduced by the Lisbon Treaty. This analysis intends to explain the anomalous design of the EEAS in light of its function, which consists in the promotion of external action coherence. Coherence is a principle of the EU legal system, which requires synergy in the external actions of the Union and its Members. It can be enforced only through the coordination of European policy-makers' initiatives, by bridging the gap between the 'Communitarian' and intergovernmental approaches. This is the 'Union method' envisaged by A. Merkel: "coordinated action in a spirit of solidarity - each of us in the area for which we are responsible but all working towards the same goal". The EEAS embodies the 'Union method', since it is institutionally linked to both Union organs and Member States. It is also capable of enhancing synergy in policy management and promoting unity in international representation, since its field of action is delimited not by an abstract concern for institutional balance but by a pragmatic assessment of the need for coordination in each sector. The challenge is now to make sure that this pragmatic approach is applied with respect to all the activities of the Service, in order to reinforce its effectiveness. The coordination brought by the EEAS is in fact the only means through which a European foreign policy can come into being: the choice is not between the Community method and the intergovernmental method, but between a coordinated position and nothing at all.

Vulnerability and robustness indices against blackouts in power grids

In this dissertation some novel indices for vulnerability and robustness assessment of power grids are presented. Such indices are mainly defined from the structure of transmission power grids, and with the aim of Blackout (BO) prevention and mitigation. Numerical experiments showing how they could be used alone or in coordination with pre-existing ones to reduce the effects of BOs are discussed. These indices are introduced inside 3 different sujects: The first subject is for taking a look into economical aspects of grids’ operation and their effects in BO propagation. Basically, simulations support that: the determination to operate the grid in the most profitable way could produce an increase in the size or frequency of BOs. Conversely, some uneconomical ways of supplying energy are shown to be less affected by BO phenomena. In the second subject new topological indices are devised to address the question of "which are the best buses to place distributed generation?". The combined use of two indices, is shown as a promising alternative for extracting grid’s significant features regarding robustness against BOs and distributed generation. For this purpose, a new index based on outage shift factors is used along with a previously defined electric centrality index. The third subject is on Static Robustness Analysis of electric networks, from a purely structural point of view. A pair of existing topological indices, (namely degree index and clustering coefficient), are combined to show how degradation of the network structure can be accelerated. Blackout simulations were carried out using the DC Power Flow Method and models of transmission networks from the USA and Europe.

Understanding the Combined Role of Internal and External Factors in New Service Development Process within the Professional Knowledge Intensive Business Service Firms

Our research asked the following main questions: how the characteristics of professionals service firms allow them to successfully innovate in exploiting through exploring by combining internal and external factors of innovation and how these ambidextrous organisations perceive these factors; and how do successful innovators in professional service firms use corporate entrepreneurship models in their new service development processes? With a goal to shed light on innovation in professional knowledge intensive business service firms’ (PKIBS), we concluded a qualitative analysis of ten globally acting law firms, providing business legal services. We analyse the internal and factors of innovation that are critical for PKIBS’ innovation. We suggest how these firms become ambidextrous in changing environment. Our findings show that this kind of firms has particular type of ambidexterity due to their specific characteristics. As PKIBS are very dependant on its human capital, governance structure, and the high expectations of their clients, their ambidexterity is structural, but also contextual at the same time. In addition, we suggest 3 types of corporate entrepreneurship models that international PKIBS use to enhance innovation in turbulent environments. We looked at how law firms going through turbulent environments were using corporate entrepreneurship activities as a part of their strategies to be more innovative. Using visual mapping methodology, we developed three types of innovation patterns in the law firms. We suggest that corporate entrepreneurship models depend on successful application of mainly three elements: who participates in corporate entrepreneurship initiatives; what are the formal processes that enhances these initiatives; and what are the policies applied to this type of behaviour.