《《Adapting for Innovation Including Divestitures in the Debate》.pdf

Long Range Planning 44 (2011) 4e25 /locate/lrp Adapting for Innovation: Including Divestitures in the Debate Caterina Moschieri and Johanna Mair Existing literature argues that divested units are unwanted and poor performers e 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 in- novative 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 inno- vation and corporate strategy. 2010 Elsevier Ltd. All rights reserved. Introduction Current research on divestitures - understood as the sale or disposal of a business unit by offering it on the market - is characterized by a special tension. On the one hand, empirical studies show that divested units are typically poor performers, with divestitures portrayed as reactions to previous strategic mistakes of multi-business companies or as changes to their earlier decisions.1 On the other hand, there is evidence indicating that companies can divest units that are performing well and retain relationships with them so as to appropriate the value generated by the separated units. One reason to divest a well performing unit is if it is d