Adapting for innovation: including divestitures in the debate

Caterina Moschieri*, Johanna Mair

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

Existing literature argues that divested units are unwanted and poor performers - yet evidence suggests that companies do divest well performing units, and often retain a relationship with them, especially in the quest for innovation. This article presents an exploratory case study to examine how a company structures the divestiture of an innovative unit and how it can benefit from the innovation the unit generates. The analysis focuses on how an established company can use divestiture as a strategy to enhance the innovation of its units, and capture its value, by structuring, maintaining and nurturing a special relationship with the unbundled unit. Under new organizational arrangement, resources can be transferred from the parent to the unit, while the parent retains access to the innovation developed within the unit. This study proposes a framework that offers corporate change agents and strategists a new perspective on how to integrate innovation and corporate strategy.
Original languageEnglish
Pages (from-to)4-25
Number of pages22
JournalLong Range Planning
Volume44
Issue number1
DOIs
Publication statusPublished - Feb 2011

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