The future of industrial new venture departments

Abstract In the companies studied, the primary reason for “failure” of New Venture Departments (NVDs) did not appear to be ineffectiveness in new business development. An NVD was an effective structure for managing new ventures in many companies. The main reasons NVDs became inoperative were that (1) the corporate strategic situation changed and the NVD was no longer needed, and/or (2) the NVD's political position eroded within the company and it was rejected by the existing power structure. The NVD's performance may be a contributing factor to the erosion of its political position but in many companies there were more important factors such as the NVD's sponsor leaving the company, excessively high expectations generated or the NVD appearing to pose a threat to other divisions.