Impact of relatedness, uncertainty and slack on corporate entrepreneurship decisions

Abstract

Purpose. The purpose of this study is to evaluate the effect of opportunity relatedness and uncertainty on the decision of a corporate entrepreneur to pursue a venturing opportunity. Design/methodology/approach. The study uses a conjoint experimental design to reveal the structure of respondents’ decision policies. Data were gathered from 47 useable replies from corporate entrepreneurs and were analyzed with hierarchical linear modeling (HLM). Findings. Results show that product relatedness, market relatedness, perceived certainty about expected outcomes and slack resources all have a positive effect on the willingness of a corporate entrepreneur to pursue a new venture idea. Moreover, slack was found to diminish the positive effect of product relatedness on the likelihood to pursue a venturing opportunity. Practical implications. By providing a better understanding of decision-making schemas of corporate entrepreneurs, the findings of this study help improve the practice of entrepreneurship at the organizational level. In order to make more accurate opportunity assessments, corporate entrepreneurs need to be aware of their cognitive strategies and need to factor in the salient criteria affecting such assessments. Originality/value. This paper adds to the limited understanding of corporate-level decision-making with regard to pursuing venturing opportunities. More specifically, the paper adds new insights regarding how relatedness and uncertainty affect new venture opportunity assessments in the presence (or lack thereof) of slack resources.