Printer Friendly

The emotional embeddedness of corporate entrepreneurship: the case of envy.

This article argues for the emotional embeddedness of the entrepreneurial act as a moderator of its social embeddedness. Building on the theoretical grounds of the sociology of emotions, we propose the study of entrepreneurial affect as an element of the socialemotional interaction between the entrepreneur and the others who are influenced by the entrepreneurial process. The empirical context of corporate entrepreneurship is used to illustrate how the emotion cycle around the entrepreneurial act, involving the emotions of corporate entrepreneurs and others, indicates the emotional embeddedness of the latter. The emergence of envy toward members of two venturing programs is used to exemplify Iow levels of emotional and consequently social embeddedness.


This article argues for the emotional embeddedness of the entrepreneurial act in its social context. The entrepreneurship literature so far has focused on the intrapersonal emotions of the entrepreneur and how they affect the entrepreneurial process (i.e., Baron, 2008; Cardon, Wincent, Singh, & Drnovsek, 2009; Cardon, Zietsma, Saparito, Matheme, & Davis, 2005; Goss, 2005; Shepherd, 2003, 2009; Shepherd, Covin, & Kuratko, 2009). We extend this "within-person" view on the role of emotions in the entrepreneurial act to involve the emotions of others. We argue that emotions resulting from and influenced by the interaction between entrepreneurs and non-entrepreneurs in a given social context affect the entrepreneurial process and its outcomes. Bandelj (2009) defines this dimension of embeddedness as emotional. We propose that the level of emotional embeddedness of the entrepreneurial act moderates its level of social embeddedness and the social perceptions created around it.

The social embeddedness of the entrepreneurial act is important in the corporate entrepreneurship context as part of its contagion, institutionalization (Venkataraman, MacMillan, & McGrath, 1992), and rationalization (Burgelman, 1983) in the corporate environment. Entrepreneurial programs lacking sufficient levels of social embeddedness fail to survive in the corporate context (Marx & Lechner, 2005). We draw inferences from this context to gain understanding in the reciprocal influence of emotions (Barsade, Brief, & Spataro, 2003) on the entrepreneurial act. We propose that the enactment of entrepreneurial behavior by entrepreneurs can shape the emotions of other people in the same social setting, who in turn develop and display emotions toward the entrepreneurs, thereby shaping the behavior of the latter. Further, we suggest that the emotions of others may also shape the behavior, emotions, and actions of third parties that observe the dyadic emotional exchange and display between the entrepreneurs and the non-entrepreneurs. We propose that these emotional exchanges, and the type of emotions involved (positive/negative), determine the level of emotional embeddedness the entrepreneurial act can achieve, which, in turn, influences its level of social embeddedness. The article draws its theoretical grounds from the emotional influences (Hareli & Rafaeli, 2008) and the sociology of emotions (Kemper, 2000; Lawler, Thye, & Yoon, 2000) literature.

Involving the emotions of others in understanding the entrepreneurial act implies the presence of social emotions. In order to illustrate the article's proposition, we use the case of envy, a social emotion by nature, which presupposes social interaction and comparison between the envier and the envied. Envy, a prevalent emotion largely overlooked in organizational research (Patient, Lawrence, & Maitlis, 2003), has received significant attention by sociologists and economists. In corporate entrepreneurship literature, Walton (1975) and Kanter and Richardson (1991) provide anecdotal evidence of the emergence of envy toward entrepreneurial programs, but little is known about how envy impacts the entrepreneurial process (Choi, 1993). Turning our attention to envy will allow a more detailed understanding of its impact on the contagion and institutionalization (Venkataraman et al., 1992) of venturing programs. Envy is experienced as an outcome of a negative-upward social comparison with a relevant other (Salovey & Rodin, 1984). We envy the performance of those relevant to us when we assess our performance to be inferior to theirs. There is a semantic difference between jealousy and envy. Jealousy is triggered on the grounds of the belief or suspicion that a desired relationship is in danger of being lost, while envy is triggered by the desire for another's possessions (Smith & Kim, 2007). Longing is also different from envy as it focuses "on the thing itself that one would like to possess, rather than on the person possessing it" (Smith & Kim, p. 47).

The occurrence of envy in organizational settings is likely considering the competitive nature of social interactions in the workplace either through the promotions and remuneration systems used by organizations (Adams, 1963) or through intangible rewards, such as recognition of an employee's performance by the supervisor in front of the rest of the team (Leventhal, 1976). We approach the emergence of envy toward the members of a corporate entrepreneurship activity as an indicator of low levels of emotional embeddedness of the latter in the organizational context. In turn, we approach the absence of envy toward the members of a corporate entrepreneurial activity as an indicator of high levels of emotional embeddedness.

We gain understanding from the empirical setting of two venturing programs, which achieved different levels of embeddedness within their corporate context. The article starts by arguing for the emotional embeddedness of corporate entrepreneurship activities asa moderator of their social embeddedness. The empirical part of the article serves to illustrate how in the case of high levels of envy (low levels of emotional embeddedness) toward members of a venturing program, the social embeddedness of the venturing program was low, while in the case of low levels of envy (high levels of emotional embeddedness), the program achieved higher levels of embeddedness. Appropriate propositions are developed. The article concludes and discusses the analytical importance of considering the emotions of others toward the entrepreneurial act in studying the entrepreneurial phenomena, and its implications for theory and practice.

The Emotional Embeddeness of Corporate Entrepreneurship

Corporate Entrepreneurship as a Socially Embedded Behavior

Sharma and Chrisman's (1999) definition of corporate entrepreneurship, as the set of actions and behaviors through which organizational members create a new organization and instigate renewal or innovation within an organization, implies that the enactment of corporate entrepreneurship is a social process, embedded in a wider set of interactions within the organization. The corporate entrepreneurship practice requires the corporate entrepreneurs (1) to socially interact with other organizational members, who do not necessarily share the same enthusiasm in or have the same understanding of entrepreneurial activities. Van de Ven and Engleman (2004) argued that the legitimization process of corporate entrepreneurship within a corporation has both cognitive and socio-political dimensions. Middle managers, through their negotiation and political behavior, affect their entrepreneurial ventures. In Burgelman's (1983, 1985) work, middle managers have a critical role in negotiating with the existing structural context and its members, attempting to delineate the strategic contexts of the new ventures. Marx and Lechner (2005) proposed that the social context (formal and informal social relationships) affects the survivability rates of strategic initiatives. Any corporate entrepreneurial process is highly dependent on other organizational members and groups in gaining legitimacy and access to resources (i.e., access to intellectual property and to internal champions, and finances) and in achieving a level of integration and embeddedness within the organization.

On the other hand, the complexity of the division of labor (Hage, 1999, p. 612) in an organization provides a representation of how organizational knowledge is "packaged." Specialization, functional differentiation (Damanpour, 1991), professionalism, and job complexity (Zammuto & O'Connor, 1992) categorize organizational members and groups broadly into those directly involved in entrepreneurial activities and those who are not involved but influenced by them. Such a categorization implies the existence of dyadic interactions among the entrepreneurs and the non-entrepreneurs.

Adopting a Granovetterian view, the quality of the interaction between those involved directly in the entrepreneurial activities of an organization and those influenced by the entrepreneurial activities is proposed to affect the embeddedness of the entrepreneurial activities within an organization. Granovetter (1992, p. 33) refers to embeddedness as "the fact that economic action and outcomes, like all social action and outcomes, are affected by actors' dyadic (pairwise) relations and by the structure of the overall network of relations. Asa shorthand, I will refer to these as the relational and the structural aspects of embeddedness." Marx and Lechner (2005) included the cognitive and positional dimensions of embeddedness to conceptualize the social context} In recent developments in the corporate entrepreneurship literature, the cognitive dimension of the interaction between corporate entrepreneurs and others has been proposed (Corbett & Hmieleski, 2007). We propose a shift of attention to its emotional dimension.

Entrepreneurial Affect at the Interpersonal and Intergroup Levels of Analysis

Reviewing the attention affect and emotions have received by entrepreneurship scholars, it can be argued that there is a predominant focus on entrepreneurial affect at the intrapersonal level (e.g., Baron, 1999, 2008; Cardon et al., 2005, 2009; Shepherd, 2003, 2009; Shepherd et al., 2009). However, emotions have a powerful social influence, and entrepreneurial affect is no different in this matter. Baron and Markman (2003) suggested the role emotional intelligence plays in constructing the social competence of entrepreneurs in acquiring resources. Brundin, Patzelt, and Shepherd (2008) outlined the role of positive emotional contagion from the top management in encouraging the involvement of middle and lower level management in corporate entrepreneurial activities.

These studies highlight the social dimension of the emotions developed by or displayed toward the entrepreneurs when interacting with others at a given social setting. Instead of focusing solely on the emotions corporate entrepreneurs experience (Shepherd et al., 2009) and the emotions top management displays toward them (Brundin et al., 2008), we propose the shift of attention to the exchange of emotions between another dyad: the corporate entrepreneurs and other organizational members, who are at the same hierarchical level as the corporate entrepreneurs and who are not involved in the entrepreneurial activities of the parent organization but ate affected by them. The dyadic interaction between entrepreneurs and other organizational members may be modeled at the interpersonal level (individuals A and B) and at the intergroup level (organizational groups A and B). Individuals organized in groups may also conduct entrepreneurial activities on the behalf of the organization (Sharma & Chrisman, 1999).

Elfenbein (2007) provided a detailed review of the interpersonal emotional process and how the emotions of others are recognized by the self and influence our behavior and cognition. In the corporate entrepreneurship context, the emotional displays of other organizational members toward the entrepreneurs are expected to influence the behavior, cognition, and emotions of the latter. George (1990) argued for emotions at the intragroup level of analysis as an aggregation of the group members' self-reports of emotions. Barsade and Gibson (1998) and Bartel and Saavedra (2000) have argued for group affect as a collective property shaped by group features, assuming that progressively group members tend to develop homogeneity with regard to the emotions they develop and express within the group boundaries. At the intergroup level, we expect that the emotional exchanges between a corporate entrepreneurship unit and other organizational units, under the assumption of high levels of group membership and identification (Mackie, Devos, & Smith, 2000), will influence the entrepreneurial process.

Emotional Cycles and Emotional Embeddedness

The notion of emotions as social entities is longstanding in the sociology of emotions literature (Kemper, 2000; Lawler et al., 2000). Emotions exert influence on social interactions and are social events themselves as they tend to occur in a context of socially shared meanings (Frijda & Mesquita, 1994; Keltner & Haidt, 1999). Emotions are recognized by others and shed light upon the emotional relevance of the environment; they affect interpersonal relationships and evoke responses from others. The social function of emotions has already been studied in organizational settings (e.g., Sutton, 1991; Van Kleef, De Dreu, & Manstead, 2004).

Emotions ate portrayed as coordinating means of social interaction and relationships and as dynamic processes that mediate the individual's relation to a continually changing social environment (Keltner & Haidt, 1999). Frijda and Mesquita (1994) suggested viewing emotions from the outset as dynamically changing structured elements in ongoing interchanges, which both influence and are influenced by the external events as well as by the attitudes and actions of other individuals involved. The social environment and cultural context influence emotions (Frijda & Mesquita). The social environment, by presenting feedback to an individual's emotions, serves as an emotional regulator and provides emotional meaning to events. The cultural context establishes the focality of certain emotionally significant events that represent recurrent themes in the social life of the cultural group concerned.

The existence of emotion cycles is acknowledged by Hareli and Rafaeli (2008), who proposed that emotion cycles depend on the nature of the emotion associated with the initial sender of the emotion (agent), the extent to which other people notice and react to an emotion associated with the agent, and the way the other person is influenced by the agent's emotion. They suggest three mechanisms through which one's emotions may spread to multiple people: (1) mimicking of emotion, producing emotion contagion between agent and others; (2) emotion interpretation and reacting to emotion, evoking an emotion conversation between the agent and others; and (3) drawing inferences, which creates an emotion extension into information about an agent presumed by others.

Individuals agree on the themes conveyed by emotions and through observation these themes can be elicited (Smith & Ellsworth, 1985; Tiedens, Ellsworth, & Mesquita, 2000). Through observation, an emotion as expressed by individual A evokes to individual B (i.e., the observer of the emotion) an emotional script that can produce an emotion complementary or even divergent to the original emotion. Unfolding this process leads to the emergence of a social emotional conversation among the involved parties. Secondary social sharing is an alternative method to make sense of emotions, where individuals who have become aware of emotional scripts themselves share them with other third parties (Rime, Finkenauer, Luminet, Zech, & Philippot, 1998). Either through observation, communication, or secondary sharing, the recipient of an evoked emotion receives signals containing information about the sender of the original emotion. The third-party observers use these signals to forman emotional reaction toward the initial emotional episode. These mechanisms provide the analytic basis to move from the intrapersonal to the dyadic (interpersonal/intergroup) level of analysis of the role of emotions in economic action.

Adopting an interactionist stance in viewing the way emotions are elicited in the corporate entrepreneurship context is in alignment with Granovetter's (1992) argument on the social embeddedness of organizational actors and processes. The behavior and actions of organizational members are highly embedded and interdependent on networks of social interactions. Emotions, as elements of their behavior, are part of this interaction. The corporate entrepreneurs' interactional rituals (Collins, 1990) lead to the generation of positive emotional energy (i.e., pride [Goss, 2005]), which they disseminate to their immediate organizational context. On the other hand, symbolic interactionists (Cooley, 1964; Mead, 1938) argue that in interactions, self and identity are catalysts to emotional arousal. We confirm our view of oneself through others involved in the interactions (Turner & Stets, 2006). Corporate entrepreneurs confirm their identity and their view of themselves through the emotional reactions of other organizational members. Brundin et al. (2008) implied this relationship but only how top management's emotional displays confirm the view the entrepreneurs have about themselves is explored. We propose that other organizational members' (middle-level management) emotions and emotionally driven behaviors toward the corporate entrepreneurs also confirm (or contest) the "feeling of belonging" (Shepherd & Haynie, 2009) corporate entrepreneurs can achieve.

Bandelj (2009) used the analogy of social embeddedness to propose the "emotional embeddedness" of economic action. She argued that interaction-induced emotions challenge economic processes and their outcomes as these emotions ate generated during the interaction and they cannot be completely controlled or anticipated. As an economic process, the corporate entrepreneurship process is proposed to be emotionally embedded in the set of interactions between the corporate entrepreneurs and the other organizational members. The level of emotional embeddedness of an entrepreneurial activity is proposed to influence the level of its social embeddedness in the corporate context. We define low levels of emotional embeddedness in the case where strong negative emotions develop between the entrepreneurs and the non-entrepreneurs, resulting in both parties believing that the entrepreneurial act does not belong in the social context. Reversely, we define as high levels of emotional embeddedness in the case where strong positive emotions develop between the entrepreneurs and the non-entrepreneurs, resulting in both parties believing that the entrepreneurial act belongs in the social context.

Illustrating the Emotional Embeddeness of Corporate Venturing (CV) Activities: The Case of Envy

Considering the limited empirical work in emotional cycles and emotional embeddedness and in order to illustrate the article's main proposition, we draw observations from the empirical context of the CV programs of two multinational corporations (corporation A and corporation V3). Both corporations did not have prior experience in venturing, and the initiation of a CV program represented an internal change. We retrospectively studied the two programs during the summer of 2003, and the data revealed the existence of strong negative emotions (envy) from organizational members toward the venturing programs' members. The two cases were selected for this article because of their instrumental role (Stake, 2000) in illustrating how the emotions of others may impact internal (the "Aster" venturing program of corporation A) and external (the "Verde" venturing program of corporation V) venturing activities. (4) The analytic focus is on the emotion cycle generated by the emotion of envy around the venturing programs' members, and how this cycle influences the embeddedness of the program in the parent corporation.

Data Collection

The article uses data from an extended study on how CV programs are initiated and configured within the parent corporations and how they evolve as organizational entities. (5) Using a qualitative methodology to collect primary data allowed for envy to emerge as a construct not being a priori considered (Glaser & Strauss, 1967) and to gain "research access to situations in which strong or negative emotions may arise" (Patient et al., 2003, p. 1017). Without being prompted, four out of five interviewees in the "Verde" case mentioned the words "envy" of "corporate jealousy" as a factor influencing the evolution of the program. In the "Aster" program, two out of the four interviewees referred to envy but less frequently in comparison with the "Verde" case. (6) Once we observed the occurrence of envy in their accounts, we incorporated a question about envy in the interview guide. However, the interviewees of the other cases avoided elaborating on whether envy occurred around the venturing programs, supporting Stein's (1997) observation that individuals are reluctant to admit that they have experienced envy or that envy exists in their immediate working environment. Table 1 provides an outline of the interviewees' attributes.

For each case of the extended study, we conducted semi-structured interviews with members of the venturing programs (the champions and management staff), with senior corporate managers involved in the configuration of the programs, and with members of other venturing initiatives. Each interview lasted at least 1.5 hours, with the longest interview lasting for 2 hours. (7) The interview guide of the extended study aimed to explore how the CV programs were initiated, how they were configured in terms of resources, their organizational form and their relationship with the rest of the organization, and how the programs influenced the parent organizations. Semi-structured interviews were chosen to allow sufficient openness to emerging themes (Wengraft, 2001).

The primary data used involve stories of and textual references (direct quotations from third parties) to emotional episodes of envy, containing the characters (envier and envied), the circumstances that led to envy, and subsequent interrelated events or actions undertaken by the individuals. Emotional episodes can be used asa natural unit of analysis for understanding human emotions (Parrott, 1991). Secondary data in the form of corporate annual reports and media releases were used to construct the cases and to verify the accuracy of the primary data.

Data Analysis

The data were analyzed in two phases. In the first phase, all interviews were transcribed utilizing field notes and secondary data in order to develop case reports (Yin, 1994) for each program, producing a "thick" description of the data (Langley, 1999). The analysis revealed that the interviewees referred to emotional episodes of intergroup envy; the non-venturing organizational members assuming a strong group identity paid more attention to collective outcomes in assessing their well-being in comparison with the members of the venturing programs (Brewer & Weber, 1994), resulting in feeling envy toward them. The level of envy as perceived by the envied individuals was calculated by counting the frequency the word "envy" or "jealousy" (8) occurred in the transcripts of the seven interviews. We also considered the interviewees' self-evaluation of the significance of envy in the evolution of the venturing program. In the case of the "Aster" program, Brian and Martin assessed the existence of envy as minimal, while in the case of the "Verde" program, the words "envy" and "jealousy" were mentioned by all the interviewees (with higher frequency in Sara's interview), associating it with the emergence of problems for the venturing program. The two cases were ranked to illustrate low ("Aster" program) and high ("Verde" program) levels of perceived envy.

During this phase, the relationship of the interviewees with the episodes of envy was also clarified. The interviewees were the receivers of emotional cues and post-emotional behaviors from groups who experienced envy (i.e., the envied members of the venturing programs: Brian, Martin, James, Andrew, and Colin), those who observed envy emerging in the organizational setting (Sara), and those who observed the existence of resentment toward the venturing programs (Chris). Sara's account is quite influential in the "Verde" case. She was a senior manager (corporate lawyer) involved in designing the governance structure of the CV program. She provides a textured illustration of how envy was expressed by some organizational members and groups, and of their resulting behavior toward the program. In the "Aster" case, Chris, even though he was not a core member of the venturing team, observed the resentment the program received in the first 9 months of its operations due to its popularity. Bartel and Saavedra's (2000) study, using self-reporting and observers' account of individuals' emotional states, methodologically supports the use of observers' accounts of emotions in natural settings.

In the second phase, second-order coding revealed the post-emotional behaviors of the enviers (i.e., resentment, lack of collaborative behavior), the recognition of the envy by the corporate entrepreneurs and their emotional and behavioral reaction (i.e., elitism), and the recognition and interpretation of envy by third-party observers within the organization (i.e., skepticism over the fitness of the venturing program). We carried out this phase in iterative fashion, going back and forth between the data and Hareli and Rafeli's model of emotion cycles to identify the mechanisms (i.e., development of complementary emotions, such as frustration and feeling envied and isolated, interpretation of envy as a threat and as a violation of organizational justice norms, social sharing between enviers and third-party individuals) used by the involved parties in recognizing and sharing emotions. We associated "envy" with specific events (i.e., the introduction of a distinctive remuneration system for the "Verde" program, the media coverage of the "Aster" program by the FT), and relationships (i.e., between the members of the "Verde" program and the members of the technology office in corporation V). In each case, we tried to identify the episodes of envy, the characters involved (who were the enviers and envied groups), and to unfold the emotional cycle of envy around the programs' members (extent and length of cycle). We were also cautious in noticing specific conditions that elicited or prevented envy. In the across-cases analysis, we tried to see similarities across the two cases (i.e., the dimensions of envy), and differences (i.e., the role of the configuration of the two programs in eliciting envy, the extent of the envy cycle) in the way the emotion cycle of envy was unfolded and the consequences it had on the social embeddedness of the venturing programs. Further, as we aimed to link the occurrence of strong negative emotions with the levels of social embeddedness of the venturing programs, we assessed the levels of structural, relational, positional, and cognitive embeddedness of each program, drawing from Marx and Lechner's (2005) propositions and from secondary and primary data.

Empirical Setting

Corporation A is a telecommunications company with a 18,727 million [pounds sterling] group turnover employing 104,700 people worldwide (in 2003). It had a long-lasting commitment to Research and Development (R&D) investments in order to ensure a technological edge in providing its businesses and clients with advanced communication services. Its technological park employed almost 5,000 scientists, generating a portfolio of over 15,000 patents, and managing a research and development (R&D) budget of 268 million [pounds sterling] (1999). However, over the years, the R&D division remained a cost-generating center.

The new Chief Executive Office (CEO) of the R&D division, appointed in 1997, observed that even though the division was producing a vast amount of patents, only a small proportion of them were commercialized. He approached Brian in 1999 to champion an initiative to change the commercialization activity of the division. Brian became the champion and founder of the "Aster" venturing program. His role was to set up the CV program. The new team created around him was primarily composed from individuals who had worked for a few years in the corporation and were aware of its commercialization challenges. Martin joined the team in January 2000, only a month after Brian was asked to champion the program. Chris's team joined the program in late 2000. The venturing program was operationally and financially autonomous but fully integrated into the R&D division. Its operational objective was the creation of a new commercialization process for the division's patents through an incubation process that could eventually spin off as independent ventures. Martin's role was to manage the business development phase of the incubation process of the patents, while Chris managed the external investors' relationships. The scientists of the division were highly involved in the incubation process as champions of their patents.

Corporation V operates in the information news services industry with an operating profit of 126 million [pounds sterling] and employs approximately 15,000 people in 86 countries (in 2003). With a global network of individual and business clients, the organization was highly dependent on information technologies. Historically, corporation V was keen in following developments in external "disruptive technologies" as they represented potential new opportunities to explore. This was in parallel with the R&D activities of its in-house technology office.

In 1992, James, a corporate salesman, noticed that the corporation was highly relying on its network technologies. He started developing an interest in them, and by 1994, he realized that start-up companies, such as Netscape, had developed network technologies (the Internet protocol) similar to these of corporation V. In the scenario that Internet-based technologies were successful and adopted by other companies, James could foresee that the corporation would lose its competitive advantage. He realized that the corporation needed to form a corporate venture capital fund and invest through minority investments in externally developed ventures. He convinced the board and the chief financial officer to allow him to relocate to the Silicon Valley where these start-ups were clustered. In late 1995, he did the first minority equity investment in "Delta" start-up, reaching $848 million market capitalization in the first week of its initial public offering. In 1999, James established a formal corporate venture capital unit in the form of the "Verde" venturing program. Colin and Andrew joined James's team at that time. Andrew had worked before for corporation V in business development, while Colin was a venture capitalist. Colin's role was to establish and oversee the investment process of the program, while Andrew acted as venture portfolio manager. While initially, the "Verde" program's focus was to internalize external technologies, after 1999, James's team focused on the performance for their venture portfolio. Table 2 provides a summary of the programs' configurations.

The Emergence of Envy

Targets and Dimensions of Envy. The situations and the people we encounter in the workplace become the triggers for a cognitive appraisal process (Lazarus, 1991) and a self-evaluation process (Tesser, 1991), resulting in emotional reactions. We evaluate an event based on its novelty, pleasantness, and implications on our well-being (needs, goals, and values) as well as based on our ability to deal with the occurring event within the workplace' s norms and values of justice (Ellsworth & Scherer, 2003). The "relational theme for envy is wanting what someone else has" (Lazarus, p. 254) and envy occurs when "the thing one lacks is in a domain that is central to one's self-concept and the envious person perceives the envied personas similar to him or her" (Cohen-Charash & Mueller, 2007, p. 666). Envy results from a negative upward social comparison as the desired object is of significance to the goals and needs of the self (Salovey & Rodin, 1984).

Both venturing programs introduced a distinctive and highly specialized process, which the parent corporations had not experienced before. Brian and James were differentiating themselves from other organizational members. They enjoyed attention by the top management, frequently accompanied with financial autonomy and considerably high bonuses in comparison with what other divisions and organizational members received. Brian recalls that "there is probably some envy or jealousy just because [the "Aster" program] was a big idea and it was in the FT and all the Board sheets, and yet it was very small." James mentions that "when we did have problems, later on, was when [the "Verde" program] became very successful and all of a sudden making significant salaries, people got jealous."

Such privileges were not necessarily understood or well-perceived by other organizational members and units as James's quote indicates. In the eyes of the others, James's and Brian's teams were a reference point of social comparison to evaluate their well-being. Organizational members form perceptions of similarity and proximity with relevant others when they identify with commonly shared principles in the workplace. Organizational members build expectations on the division of labor and on how their participation and this of their colleagues are rewarded (Shetzer, 1993). In the case of corporation A, the members of the "Aster" program were "rewarded" with recognition and appreciation by the top management and external parties, even within the first year of their participation in the venturing program, regardless of the program' s smallness and newness. In the case of corporation V, the financial rewards the members of the "Verde" program enjoyed after 1999 became the main dimension of social comparison for other organizational members. The social comparison with a reference group is conducted at many levels and includes tangible and intangible areas of concern for the self (Salovey & Rodin, 1984; Tesser, 1991). In the case of organizational relationships, parameters of envy can be the inputs and outcomes of one at the workplace (Adams, 1963). Table 3 provides a summary of the dimensions of social comparison that occurred in the two cases. Drawing from these preliminary observations, it is proposed that:

Proposition 1: The emergence of envy around a corporate entrepreneurial activity is directed at the rewards (tangible and intangible) the activity brings to the corporate entrepreneurs as individuals and as a group.

The Role of Organizational Factors in Eliciting Envy. The organizational context had a significant role in eliciting envy toward the two venturing programs, and especially in the case of the "Verde" program. Brian's and James's quotes mentioned earlier imply that the attributes of the two venturing units had upset other organizational members. In other words, the two programs had violated, to different extent, the other organizational members' preexisting perceptions of justice and what is perceived as fair within the two parent corporations. Table 4 provides a summary of the organizational conditions that elicited envy toward the two venturing programs.

Perceptions on organizational justice are formed regarding the allocation of organizational resources (distributive justice), the procedures used in an organization (procedural justice), and regarding the interaction among employees (interactional justice) (Roch & Shanock, 2006). The

feeling of fairness is informed by the three dimensions of justice and guides everyday social exchanges. Perceptions on organizational justice also inform future expectations on the reciprocity of fairness for all organizational members regardless of their hierarchical status of division of labor, guiding future social interactions.

Perceptions on justice motivate social comparison (Tyler, 1991). Norms regarding distributive (equity) (Adams, 1963) and procedural (equality) (Cohen-Charash, Mueller, & Goldman, 2004) justice monitor the occurrence of envy within an organization (Cohen-Charash & Byrne, 2008). Adams's inequity theory and the association of feelings of injustice and unfairness in the organizational context as triggers of envy have been used in studies examining retiring policies and the behavior of employees toward them (Mollica & DeWitt, 2000).

In the "Verde" case, the perceptions of other organizational members on distributive justice were heavily violated. Sara explains that "at the time, [James] was earning big bonuses because some of the earlier investments they had made had become very successful for us ... earning ad hoc, big bonuses--big by [corporation V]'s standards anyway ... not particularly big by American of other investment standard--and everybody knew about them, so the people who weren't doing this work and weren't getting the bonuses got really hacked off, and that is when it (the envy) started." The quote stresses the importance of the cultural context (in this case, what is perceived as high bonus) (Frijda & Mesquita, 1994) in understanding the focality of the social comparison process and its significance for corporation V's organizational members.

Balancing equity and equality in rewarding corporate entrepreneurs is challenging (Brazeal, 1993; Sykes, 1992). Venture managers tend to demand equity rewards and are indifferent to other kinds of incentives offered to other organizational members. Sara recalls that the members of the "Verde" program "compared themselves against external venture capital companies, and they were therefore not prepared to be bound by the restrictions, as they saw it, of being part of a big corporation. And I think if you ate moving in that kind of world, it is very difficult for them to behave and be rewarded as normal corporate people." The increased levels of risk involved in new ventures "appears to require a reward potential that will make the risk worth taking" (Block & Ornati, 1987, p. 44). However, rewarding venturing managers with monetary rewards makes other organizational members feel cheated (Brazeal, 1993), creating tension within the organization.

Further, perceptions on procedural justice were also challenged as the "Verde" program had access to corporate funds through a system that was not transparent to other organizational units. Access to corporate capital and ownership of financial resources is at the center of envy within organizations (Goel & Thakor, 2005). James, capitalizing on his good relationship with the CFO had managed to secure a generous, as perceived by the other units, operational budget for the "Verde" program. This was not perceived well by other units that did not enjoy similar privileges. Additionally, other organizational units perceived the "Verde" program not to financially contribute to the corporate center and to disseminate its profits:

[The "Verde" program] enjoyed autonomy and there was a fair degree of irritation that they got funding for what they were trying to do and other people couldn't get funding for what they were trying to do. And again, because it was never made really very clear how much funding was made available to them, and how much would be available to other people in the organization, there was a fair degree of irritation that they asked for money and "we asked for money and we didn't get it." (Sara)

In the "Aster" case, Chris observes that the access of the "Aster" team to resources that other organizational units did not have caused high levels of resentment toward the program in the first 9 months of its operations:
   There was a lot of resentment.... it is difficult to express this
   in a sense ... people in [the "Aster" program] appeared to have
   unlimited funding, that they could have a new PC when there were
   cracking down on spending in other parts of [the R&D division].

A violation of the capital hierarchy in a diversified firm creates favorable conditions for social comparison at the intergroup level to flourish, triggering the feeling of inequity, which consequently leads to envy. Structured as a venture capital fund, the "Verde" program was reinvesting its profits by expanding its portfolio. The structure (centralized or decentralized) of the capital allocation system in a diversified corporation has a critical role in the degree of envy generated among divisions. Channeling of resources between units is used in centralized capital allocation systems to minimize the levels of envy among divisions (Goel & Thakor, 2005).

A third contributing factor enhancing the occurrence of envy toward the two venturing programs was the violation of expectations regarding the participation in existing corporate processes. The division of labor, specialization, functional differentiation, professionalism, and the complexity of the job inform organizational members' perceptions and expectations on how labor is compartmented. Due to inertia, these expectations tend not to change, and organizational members use them to draw inferences to realize their self-satisfaction and self-pride (Bandura, 1988). The outcome of this self-evaluation process informs their motivation and commitment to their work role. The introduction of new processes, which may be perceived to overlap existing ones, is interpreted by organizational members as a threat to their self-worth and participation in the organization, triggering a comparative appraisal process.

In both cases, the establishment of the venturing programs involved the introduction of a new process in existing operational domains. In the "Aster" case, the corporation already had experience in commercializing intellectual property (IP) through licensing. However, the venturing program was introducing an incubation process. Organizational members involved in licensing IP might have felt challenged by the incubation process, especially as it was gaining recognition and support from the top management and the scientists of the R&D division. In the case of corporation V, the "Verde" program introduced a less costly anda time-efficient process in gaining access to disruptive technologies. In previous years, this would have been the role of the in-house technology office. The acquisition of externally developed technologies and the pressure to internalize them was not welcomed by the members of the in-house technology office. A non-invented-here syndrome emerged among them and other organizational members, making them feel threatened by the venturing team and inferior:

Actually to an extent, there is a degree of "non-invented-here," which is quite difficult to overcome. And at the time that [James] was trying to push these individual companies within the organization, it was a combination of "non-invented-here," "why should I help [James], because if I help him and his businesses do well, he becomes personally rich and I don't," and "I don't particularly need to be disrupted by this new technology, actually I have got plenty on my plate doing what I am doing." (Sara)

One's self-evaluation can be raised drawing from the reflected glory of the performance of others close to us (feeling pride), or it can be lowered by comparison to the outstanding performance of others close to us (feeling envy) (Tesser & Collins, 1988). Constructing what and who is relevant for us in the workplace is not solely an individual process in actively or passively acquiring comparative information (Greenberg, AshtonJames, & Ashkanasy, 2007). The "Verde" case illustrates how externally imposed conditions, driven by the top management and indirectly from James, created comparative standards around the program and led other organizational members to social comparison rather than reflection. Reversely, in the "Aster" case, the absence of comparative standards between the venturing program and the rest of the R&D division led to low levels of envy toward the programs' members. Drawing from this discussion, it is proposed that:

Proposition 2: The probability of the occurrence of envy toward the members of a corporate entrepreneurship activity increases when the top management positions the corporate entrepreneurship activity in comparative standards within the organization.

Proposition 2a: The probability of the occurrence of envy toward the members of a corporate entrepreneurship activity increases when the configuration and organization of the corporate entrepreneurship activity is associated with violations of the perceived distributive and procedural justice norms of the organization.

Proposition 2b: The probability of the occurrence of envy toward the members of a corporate entrepreneurship activity increases when the corporate entrepreneurs' domain of activity jeopardizes existing organizational processes and the participation of other organizational members in them.

The Contribution of Configuration Factors in Minimizing the Occurrence of Envy. While it is implied in the social comparison literature that individuals can choose to engage in comparison or not (Brickman & Bulman, 1977), the data from the "Aster" case indicate that the way new organizational processes have been designed and embedded in the corporate context by the top and middle management may moderate the construction of comparative or reflective conditions. Table 5 provides an outline of the configuration characteristics of the "Aster" program in minimizing the occurrence of envy, while Table 6 provides an evaluation of the level of social (structural, relational, positional, and cognitive) embeddedness each venturing program achieved.

Comparing the two cases, the "Aster" program appears more integrated in the main function of the R&D division of corporation A, while the "Verde" program was placed in a competitive position with the in-house technology office of the corporation. The human capital used in the two programs illustrates this point. The members of the "Aster" program were internal to the corporation and had worked many years for it, establishing interpersonal contacts and relationships. Brian and his team utilized these strong relations (relational embeddedness) to involve the scientists of the R&D division as champions in the incubation process of their patents. Further, the "Aster" program was cognitively close to the mental frames of the scientists and Chris's team (commercialization of patents), while Brian and his team invested considerable time to explain to the scientists and to the other commercialization teams what the incubation process would involve (cognitive embeddedness). Such actions by Brian and his team were critical in creating a wider set of good-quality social relationships between the "Aster" program and other organizational members. As a consequence, the program became more integrated in the corporate context, as "the culture that was created in [the "Aster" program] started to exhibit itself on the rest of the [R&D division], and a lot of the resentment went away." (Chris)

It was also a program initiated and supported from the top management, and it was structurally designed as part of the R&D division (structural and positional embeddedness). The venturing team intended to make the program embedded in the organizational context and to capitalize on the positive elements of its interdependence to the scientists, resulting in better collaboration and coordination of their social relationships.

On the other hand, in the "Verde" case, the data indicate that there was no intention to embed the venturing program in the corporate context. The program, an autonomous initiative, was configured as an independent, externally oriented entity (positional and structural embeddedness). Even though James and his team had excellent relationships and communication with the top management of corporation V, they did not focus on establishing a wider network of contacts with other middle managers of the organization (relational embeddedness) to rationalize their role to other parts of the organization (Burgelman, 1983), especially after 1999. The top management was not involved in this process either. Consequently, it was difficult for other organizational members to understand the role of the "Verde" program and why technology needed to be acquired through external start-ups and not from the in-house technology office (cognitive embeddedness). Culturally, the "Verde" program was also more entrepreneurial than the test of the corporation, according to Colin. Sara recalls that the disruption the "Verde" program brought within the organization was performed "deliberately" and that "the tensions it created were meant to be creative tensions, and in the end ... they were just tensions." The intentional placement of the venturing program as an independent entity in combination with the privileges it enjoyed enhanced even further the comparative standards toward it, and the levels of interfirm competition (Birkinshaw & Lingblad, 2005). Drawing from these observations, it is proposed that:

Proposition 3: High levels of embeddedness in the configuration of the corporate entrepreneurial activity in the organizational context decrease the occurrence of comparative and competitive conditions toward it and indirectly lower the probability of envy to occur toward the corporate entrepreneurs.

Affective Reactions and Post-Emotional Behaviors by the Enviers

As argued by Ortony, Clore, and Collins (1988) and supported by the data, the emotional state of envy is followed by secondary affective reactions such as frustration, disappointment, resentment, and anxiety. This appears to be the case in the "Verde" program as the members of the technology office did not only want to enjoy the recognition and bonuses the members of the venturing team had, but they also felt anxiety over their future within the organization and disappointment as their contribution to the corporation from previous years was not equally acknowledged.

The experience of envy is followed by behavioral reactions by the enviers toward the venturing team, especially in the case of the "Verde" program. Driven by the desire to destroy the object of envy (Lazarus, 1991) and the desire to destroy good things, if the alternative is that others have them (Smith & Kim, 2007), the data indicate that the members of the technology office and other organizational members refused to collaborate with the venturing team and to support its ventures and rationale, undermining its performance:

People got jealous and then they stopped being co-operative. (James)

Some people who actually could have made a big difference, a couple of main people, some of the people who are in our technology office ... they were very negative about it ("Verde" program), sort of skeptical and more so. And they poisoned quite a lot of people's attitudes toward [the "Verde" program]. I always thought that was partly to do with envy and partly to do with just not believing in it. (Sara)

The whole success of the ("Verde" program) was based on the premise that [corporation V]'s people would help them (CV managers), they would work with them, and they didn't, they just made life as difficult as possible ... then a degree of unwillingness to work with what the venturing team was trying to do, built up--and then the whole thing fell apart really. So for a period there was a fairly uncomfortable culture of envy, and the CV piece was, to an extent, brought up on that. (Sara)

Even though the data do not provide the enviers' facial expressions and moods, Sara's narrative is quite informative on the emotional dynamics (Huy, 1999) elicited from the members of the technology office by the experience of envy. Envy is evoked by degrading the object of envy (their character and/or performance) (Salovey & Rodin, 1984), and retaliation toward the object of envy (Mui, 1995), rivalry, and competition (Lehmann, 2001). The technology officers felt inferior to the corporate entrepreneurs, developing dissonance reduction mechanisms through which they blame the envied for their situation (Elster, 1998). An illustration of this is that organizational members started to question and to undermine the "Verde" program's performance when it was undermined by the economic downturn in early 2001 (according to Sara). They were "sabotaging" (Mui) the legitimacy and rationale of the venturing program but not directly its ventures. While the venturing unit required a minimum level of collaboration from the in-house technology office and other parts of the organization, such collaboration was denied, causing discontinuities to the venturing process.

The experience of envy also prevented the diffusion of the venturing practices in other parts of the organization. Colin explains that the CV program was isolated as a consequence of the envy toward them, preventing any dissemination of learning from the venturing process to other middle-level managers to occur. Walton (1975) reports the expression of envy as a self-limiting dynamic of resentment and resistance to the diffusion of new work structures in a Norwegian firm. Colin characterizes organizational units to behave as empires, where the level of rivalry among them resulting from envy prevents them from sharing good practices as "they want to get the spotlight on themselves."

The data indicate that the post-emotional behaviors of the envier organizational members have negative consequences for the venturing program's legitimacy, as well as for broader organizational processes, such as organizational learning and innovation, and the institutionalization of the entrepreneurial act within the organization. In turn, significant short- and long-term costs (resentment toward venturing) emerged for the organization, resulting from the disruption of the relationships among the organizational units. Drawing from these observations, it is proposed that:

Proposition 4: The emergence of envy toward the corporate entrepreneurs gives rise to emotional behavior of resentment, competition, and degradation toward the corporate entrepreneurship activities which affects its contagion, institutionalization, and rationalization in the organizational context.

The Recognition of Envy by the Venturing Teams

Even though the levels of perceived envy toward the two venturing programs are different, in both cases, the members of the venturing programs (James, Andrew, Colin, Brian, and Martin) recognized that other organizational members felt envy toward them. Hareli and Rafaeli's (2008) argument on the occurrence of emotion cycles was replicated in both cases, according to which the recipient of an emotion can either develop the same emotion as the one expressed by the sender of the initial emotion or to develop a complementary emotion. In both cases, the envied individuals did not develop envy toward their enviers, rather complementary emotions (feeling envied). This is quite expected as the envied individuals had not realized that they were violating any organizational norms or that they were privileged. They were just fulfilling their role as corporate entrepreneurs, supported from the top management.

In the "Aster" case, Brian and Martin, having recognized the emergence of envy toward them, anticipated their enviers' emotional cues by amending some operational aspect of their venturing model reducing the operational cost of the program. Martin recalls: "[envy] was not a very strong thing, but we ... in the same way that everyone in [corporation A] had to tighten its purse strings, we did the same thing." They interpreted the expression of envy toward them as an irregularity forcing them to take action and to moderate their behavior (Hareli & Rafaeli, 2008). Hughes (2007) argued for the constructive role of envy as a legitimate reaction to inequalities, and the members of the "Aster" program tried to reestablish equality by reinforcing their ties with the rest of the organization, exemplifying good citizenship.

In the "Verde" case, James, Colin, and Andrew recognized the occurrence of envy toward them, but they interpreted it as unreasonable reaction to the operations and to the success of the program. As a consequence, they became indifferent regarding their collaboration with others, forming firmer perceptions of superiority and advantage over their enviers. James recalls:
   [Initially, the members of the technology office] had no problems
   at all (with the CV program), they were excited by it, it was
   considered to be fun and creative and fast moving and successful
   and when we did have problems later on was when it became very
   successful and all of a sudden making significant salaries people
   got jealous and then they stopped being co-operative, ... when it
   became obvious that what we were saying was true and that you could
   in fact use software from small companies and you didn't have to
   write this yourself and that meant you could have many less people
   in the company, thousands less people, then they started getting
   much less co-operative because the middle managers realized that it
   was their jobs that were going to go, then they became less
   co-operative. And that's okay because by then (late 1999) we had
   senior sponsorship and senior people knew.

As their enviers were denying any collaboration with the venturing team, the venturing team decided to focus on its portfolio. Colin recognizes that "success within a corporation can breed jealousy, and therefore breed isolation." It became apparent to the team that relying on any collaboration with other organizational units was pointless, distancing themselves even further from the rest of the organization (Gray, 1990). Sara recalls that by early 2000:
   There was a sense that the ["Verde" program], in many ways quite
   rightly, were focusing their efforts on the companies in which they
   had invested, and were not focusing their efforts so much in terms
   of bringing the rest of [corporation V] along with them in what
   they were doing, in being able to say why this particular
   investment in this particular company makes sense.

In turn, this reaction by the venturing team was perceived as a display of elitism by the other organizational members, undermining the social embeddedness of the venturing function in the parent corporation. Drawing from these observations, it is proposed that:

Proposition 5a: The recognition by the corporate entrepreneurs of high levels of envy toward them negatively affects their social interaction and exchange with the enviers, driving the corporate entrepreneurs to decrease the corporate entrepreneurial activity's levels of social embeddedness in the parent corporation.

Proposition 5b: The recognition by the corporate entrepreneurs of low levels of envy toward them positively affects their social interaction and exchange with the enviers, driving the corporate entrepreneurs to increase the corporate entrepreneurial activity's levels of social embeddedness in the parent corporation.

The Recognition of Envy by Third Parties

Drawing from Goffman's (1981) work on "footing" of human discourse, Hareli and Rafaeli (2008) argue that noninvolved third-party observers can become aware of the emotional displays of agents and develop their own emotions, even though they have not been involved in the initial emotional interaction between the agent and the others. This was Sara's case as she observed and recognized envy and the resulting behaviors of both enviers and envied members in corporation V. Considering the "social sharing" process (Rime et al., 1998), Sara's references to the enviers' reactions and quotations could be explained. Gossiping and spreading rumors is one of the behaviors enviers may develop to harm their envied peers (Greenberg & Barling, 1999; Wert & Salovey, 2004). It might be that through gossiping Sara had access to the enviers' direct quotations about the "Verde" program.

The data from the "Verde" and the "Aster" programs are not explicit on whether other top managers became aware of the existence of envy toward the members of the venturing programs. However, Sara's reference to the existence of a "culture of envy" within the organization leads us to argue that the observation of envy was not a single event but a shared notion within the organization that top management might have been aware of. James claims that "senior people knew" why other middle managers and members of the technology office resented to collaborate with his team.

Equally important is whether the observation of envy by the senior management influenced their perceptions and behavior toward the venturing program and its members. Sara implies in one of the quotes mentioned earlier that the occurrence of envy made "important people" within the organization to become skeptical toward the venturing program. While initially the venturing programs was received with enthusiasm by the senior management, the "culture of envy" created around it made them reappraise its role in the organization. Figure 1 illustrates the emotion cycle of envy among the corporate entrepreneurs, their enviers, and the third-party observers.


The emotion cycle unfolds over time with the appraisal of the situation by the enviers and the display of their post-emotional behavior triggering (t1) a secondary appraisal process and post-emotional behavior for the envied corporate entrepreneurs (t2), resulting in the creation of a new situation that is observed by the top management (t3) influencing the cognition and behavior of the latter (t4) toward the entrepreneurial act. There is an ongoing interpretation and reaction to envy, which creates an emotion extension into information about the venturing program's fitness in the organization.

Hareli and Rafaeli (2008) suggested that the extent to which corporate entrepreneurs recognized and reacted to envy might be due to the relative power assigned to them and to others. Hareli and Rafaeli drew from the existing literature on power relationships within organizations (Fiske, 1993; Keltner & Robinson, 1997) to discuss the differences between low- and high-power individuals in being attentive to and influenced by the emotions of an agent. However, in the "Verde" case, the data imply the presence of a "battle of power" between the two groups (i.e., corporate entrepreneurs and members of the technology office) over the ownership of the technology function of the corporation, which made both groups highly attentive and quick to react to the emotional and behavioral displays of others. James's quote on how the technology office managers reacted to "Verde" program's new practices illustrates the conflict over which of the two mental models of acquiring new technologies would become the most dominant. Eventually, the "Verde" program's model gained dominance leading to layoffs in the technology office. In the "Aster" program, such power relationships did not exist between the members of the venturing program and the other organizational members.

A second factor that might have affected the extent of an emotion cycle is argued to be the authenticity and appropriateness of the envier's emotion and the exposure the corporate entrepreneurs had to envy (Hareli & Rafaeli, 2008). In the "Verde" case program, all three envied members of the program recognized envy toward them, and they interpreted the post-emotional behavior of their enviers asa negative contributor to the program' s performance, perceiving the behavior and emotional reaction of their enviers as inappropriate.


The article proposes that the emotional exchanges between the entrepreneurs and the others in a given social context influence the embeddedness of the entrepreneurial act. Drawing from the sociology of emotions literature, the article suggests studying entrepreneurial affect in relation to its social environment. We have expanded our thesis and explained why it is important to consider whose emotions and which mechanisms influence the entrepreneurial process. Our primary contribution is to suggest that the social embeddedness of the entrepreneurial act is moderated by the level of emotional embeddedness it can gain in the social context resulting from the emotion cycles (Hareli & Rafaeli, 2008) developed between the entrepreneurs and the others as an outcome of the entrepreneurial act. We propose that the emotional displays and emotionally driven behaviors of others toward the entrepreneurs moderate the "feeling of belonging" (Shepherd & Haynie, 2009) the entrepreneurs and their actions can achieve in the social context.

Implications for Theory

The importance of our argument is analytical and methodological. Analytically, we have illustrated that the emotional embeddedness of the entrepreneurial act and the entrepreneur impacts their fitness to and sustainability in the social context. The empirical cases of low emotional embeddedness of the two venturing programs and their members in the parent corporation as presented in the article provide an alternative explanation to contingency theory of the low survivability rates of corporate entrepreneurial acts. The two venturing programs did not cease operations only because of their performance. The interaction rituals developed between the venturing programs members and their enviers generated a negative emotional energy or a "culture of envy" as expressed by one of the interviewees (Collins, 1990; Goss, 2005), which undermined the survivability of the programs. Further, the corporate entrepreneurs, feeling envied by their coworkers, contested their feeling of belonging in the organization (Turner & Stets, 2006), causing imbalances in managing their identity (Shepherd & Haynie, 2009). We propose the modeling of the emotional dimension of the exchange relationships entrepreneurs form with significant others (i.e., investors, government, other entrepreneurs, customers, coworkers) in better understanding the sustainability of the entrepreneurial act in the social context.

Methodologically, the article calls for a shift of attention from the intrapersonal level to the interpersonal and the intergroup level in studying entrepreneurial affect. This requires methodological considerations in using research designs that model the multiple interactions entrepreneurs form with significant others, and that capture through self-reports, historical data, and observations the emergence and evolution of emotion cycles influencing the entrepreneurial act. Emphasis should be given to the dynamics of the emotion-sharing processes between the entrepreneurs and the others (i.e., how the mechanisms of spreading emotions impact each other (Hareli & Rafaeli, 2008)), and on capturing the initiating action of the cycle, while following up on a range of reactions of both the entrepreneur and the others. This might call for a more longitudinal approach in studying entrepreneurial affect. Further, studying strong negative emotions, such as envy, bears methodological challenges in gaining access to the empirical setting. The retrospective qualitative methodology we used allowed us to unfold the emotion cycle of envy utilizing the emotional scripts and episodes of the envied individuals and the observers of the emotion. Besides its limitations, the chosen methodology might allow other entrepreneurship scholars to gain access to the emotional exchanges of the entrepreneurs with others. Lastly, by focusing on envy, we contributed to Barsade et al.'s (2003) call to study discrete emotions in organizational life rather than overarching aspects of affect.

Implications for Practitioners

The entrepreneur has a critical role in managing the emotional embeddedness of their actions and ventures by being attentive to the emotional reactions of others. This requires an emotionally intelligent individual (Goleman, 1995) who can identify, anticipate, and manage successfully not only positive but also negative emotions toward them and their actions. As part of their championing roles, corporate entrepreneurs have a crucial role in proactively identifying significant others and socializing their activities to them, in an effort to develop positive emotional exchanges between the entrepreneurial act and other parts of the organization. They need to ensure that for entrepreneurship initiatives to survive in ah organization they do not only require gaining the top management's support but also to create conditions of relational, cognitive, structural, positional (Marx & Lechner, 2005), and emotional (Bandelj, 2009) embeddedness for these initiatives in the corporate context.

Top management has a crucial role in mediating the emotional embeddedness of an entrepreneurial act by creating reflective and not comparative conditions toward it. Choices over the configuration (level of autonomy, remuneration policy, and financial governance) of a venturing program can have critical consequences in upsetting longstanding perceptions of organizational justice in the organization. Top management needs to consider creating reflection conditions around entrepreneurial activities in ah attempt to enhance their diffusion in other parts of the organization. This can be accomplished by integrating the entrepreneurial activity and by creating conditions of mutualism and collaboration with existing organizational process. The data indicate that this is more essential in the case of configuring external venturing programs than internal programs. Further, top management also needs to be attentive to the emotional displays of other organizational members toward the corporate entrepreneurs in intervening and effectively managing them before they create costs for the organization. As part of their leading role, top management needs to enhance its emotional aperture (Sanchez-Burks & Huy, 2009), a key meta-emotional recognition ability that leaders need to develop and use in order to respond effectively to collectively shared emotions developed around emerging situations within an organization.

Direction for Future Research

Besides the small number of interviews used in this article, some significant observations emerged regarding the impact of the emotions of others on the entrepreneurial act. The theoretical propositions put forward suggest relationships (Yin, 1994) explaining the role the negative emotions of others have in moderating the social embeddedness of a CV activity and to suggest the regulative role top management has in moderating this relationship. The propositions still need to be tested across organizational and national contexts in order to be generalized to the populations as the social and cultural context influence emotions (Frijda & Mesquita, 1994). They can also be further tested at the individual entrepreneurship context in order to gain understanding on whether similar mechanisms determine the emotion cycle in the interpersonal relationships of the entrepreneurs with others and impact the social embeddedness of their acts.

The research design used in the extended study did not allow capturing the enviers' perspective. In order to overcome this limitation, we have been cautious in interpreting the data by triangulating the events and relationships mentioned across the interviews in each case and by being vigilant on the chronological order of the events which led to envy. Besides the methodological challenges in interviewing individuals who admit feeing envy (Stein, 1997), this begs for designing research projects that achieve high levels of trust to emerge over time between the researcher and the interviewees for the profiles of the enviers to be revealed and for these individuals to participate in the research inquiry. Involving the emotional scripts of the enviers in our analysis would have allowed us to analytically test further the propositions put forward. The enviers might have provided a different insight in how the venturing programs' members elicited envy through their elitism or their distinctiveness (Shepherd & Haynie, 2009).

The article focused on a negative emotion. An interesting extension of this study would be to explore whether positive emotions toward a corporate entrepreneurial act enhance its emotional embeddedness in the corporate context and how that can lead to the diffusion of entrepreneurial behavior in other parts of the organization. More theoretical and empirical work is needed toward this direction.

The article also suggests the role top management has in mediating the emotional interactions between the corporate entrepreneurs and the other organizational members. More theoretical and empirical work on the mechanisms of this process is needed by looking at how top management can better mediate the emotional impact of organizational changes caused by entrepreneurial initiatives and by looking at how they can channel envy into constructive opportunities for the organization. Huy's (1999) work on the emotional capability of an organization to sustain and manage radical organizational change can guide such an exploration.


Adams, J.S. (1963). Toward an understanding of inequity. Journal of Abnormal and Social Psychology, 67(5), 422-436.

Bandelj, N. (2009). Emotions in economic action and interaction. Theory and Society, 38(4), 347-366.

Bandura, A. (1988). Self-regulation of motivation and action through goal systems. In V. Hamilton, G.H. Bower, & N.H. Frijda (Eds.), Cognitive perspectives on emotion and motivation (pp. 37-61). Dordrecht: Kluwer Academic Publishers.

Baron, R.A. (1999). Counterfactual thinking and venture formation: The potential effects of thinking about what might have been. Journal of Business Venturing, 15(2), 79-91.

Baron, R.A. (2008). The role of affect in the entrepreneurial process. Academy of Management Review, 33(2), 328-340.

Baron, R.A. & Markman, G.D. (2003). Beyond social capital: The role of entrepreneurs' social competence in their financial success. Journal of Business Venturing, 18(1), 41-60.

Barsade, S.G., Brief, A.R, & Spataro, S.E. (2003). The affective revolution in organizational behavior: The emergence of a paradigm. In J. Greenberg (Ed.), Organizational behavior: The state of the science (2nd ed., pp. 3-52). London: Lawrence Erlbaum Associates Publishers.

Barsade, S.G. & Gibson, D.E. (1998). Group emotion: A view from top and bottom. In M.A. Neale, E.A. Mannix & D.H. Gruenfeld (Eds.), Research on managing groups and teams (Vol. 1, pp. 81-102). Greenwich, CT: JAI Press.

Bartel, C.A. & Saavedra, R. (2000). The collective construction of work group moods. Administrative Science Quarterly, 45(2), 197-231.

Birkinshaw, J. & Lingblad, M. (2005). Intra-firm competition and charter evolution in the multi-business firm. Organization Science, 16(6), 674-686.

Block, Z. & Ornati, O.A. (1987). Compensating corporate venture managers. Journal of Business Venturing, 2(1), 41-51.

Brazeal, D.V. (1993). Organizing for internally developed corporate ventures. Journal of Business Venturing, 8(1), 75-90.

Brewer, M.B. & Weber, J.G. (1994). Self-evaluation effects of interpersonal versus intergroup social comparison. Journal of Personality and Social Psychology, 66(2), 268-275.

Brickman, P. & Bulman, R.J. (1977). Pleasure and pain in social comparison. In J.M. Suls & R.L. Miller (Eds.), Social comparison processes: Theoretical and empirical perspectives (pp. 149-186). Washington, DC: Hemisphere.

Brundin, E., Patzelt, H., & Shepherd, D.A. (2008). Managers' emotional displays and employees' willingness to act entrepreneurially. Journal of Business Venturing, 23(2), 221-243.

Burgelman, R.A. (1983). A process model of internal corporate venturing in the diversified major firm. Administrative Science Quarterly, 28(2), 223-244.

Burgelman, R.A. (1985). Managing the new venture division: Research findings and implications for strategic management. Strategic Management Journal, 6(1), 39-54.

Cardon, M.S., Wincent, J., Singh, J., & Drnovsek, M. (2009). The nature and experience of entrepreneurial passion. Academy of Management Review, 34(3), 511-532.

Cardon, M.S., Zietsma, C., Saparito, P., Matheme, B.P., & Davis, C. (2005). A tale of passion: New insights into entrepreneurship from a parenthood metaphor. Journal of Business Venturing, 20(1), 23-45.

Choi, Y.B. (1993). Entrepreneurship and envy. Constitutional Political Economy, 4(3), 331-347.

Cohen-Charash, Y. & Byrne, Z.S. (2008). Affect and justice: Current knowledge and future directions. In N.M. Ashkanasy & C.L. Cooper (Eds.), Research companion to emotions in organizations (pp. 360-391). Cheltenham, U.K.: Edward Elgar Publishing.

Cohen-Charash, Y. & Mueller, J.S. (2007). Does perceived unfairness exacerbate of mitigate interpersonal counterproductive work behaviors related to envy? Journal of Applied Psychology, 92(3), 666-680.

Cohen-Charash, Y., Mueller, J.S., & Goldman, M. (2004, August). When do we help and when do we harm? Effects of outcome favorability and procedural justice on envy and behavior. Paper presented at the annual meeting of the Academy of Management, New Orleans, LA.

Collins, R. (1990). Stratification, emotional energy and transient emotions. In T. Kemper (Ed.), Research agendas in the sociology of emotions (pp. 27-57). Albany, NY: State University New York.

Cooley, C.H. (1964). Human nature and the social order. New York: Schocken Books. (Original work published 1902.)

Corbett, A.C. & Hmieleski, K.M. (2007). The conflicting cognitions of corporate entrepreneurs. Entrepreneurship Theory and Practice, 31(1), 103-121.

Damanpour, F. (1991). Organizational innovation: A meta-analysis of effects of determinants and moderators. Academy of Management Journal, 34(3), 555-590.

Eisenhardt, K.M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532-550.

Elfenbein, H.A. (2007). Emotions in organizations: A review and theoretical integration. Academy of Management Annals, 1, 371-457.

Ellsworth, P.C. & Scherer, K.R. (2003). Appraisal processes in emotion. In R.J. Davidson, K.R. Scherer & H.H. Goldsmith (Eds.), Handbook of affective sciences (pp. 572-595). Oxford: Oxford University Press.

Elster, J. (1998). Emotions and economic theory. Journal of Economic Literature, 36(1), 47-74.

Fiske, S.T. (1993). Controlling other people: The impact of power on stereotyping. American Psychologist, 48(6), 621-628.

Frijda, N.H. & Mesquita, B. (1994). The social roles and functions of emotions. In S. Kitayama & H.R. Markus (Eds.), Emotion and culture: Empirical studies of mutual influence (pp. 51-87). Washington, DC: American Psychological Association.

George, J.M. (1990). Personality, affect, and behavior in groups. Journal of Applied Psychology, 75(2), 107-116.

Glaser, B.G. & Strauss, A. (1967). The discovery of grounded theory. Chicago, IL: Aldine.

Goel, A.M. & Thakor, A.V. (2005). Green with envy: Implications for corporate investment distortions. Journal of Business, 78(6), 2255-2288.

Goffman, E. (1981). Footings. In E. Goffman (Ed.), Forms of talk (pp. 124-160). Philadelphia, PA: University of Pennsylvania Press.

Goleman, D.P. (1995). Emotional intelligence: Why it can matter more than IQ for character, health and lifelong achievement. New York: Bantam Books.

Goss, D. (2005). Schumpeter's legacy? Interaction and emotions in the sociology of entrepreneurship. Entrepreneurship Theory and Practice, 29(2), 205-218.

Granovetter, M. (1992). Problems of explanation in economic sociology. In N. Nohria & R.G. Eccles (Eds.), Networks and organizations: Structure, form and action (pp. 25-56). Boston: Harvard Business School Press.

Gray, J.A. (1990). Brain systems that mediate both emotion and cognition. Cognition and Emotion, 4(3), 269-288.

Greenberg, J., Ashton-James, C.E., & Ashkanasy, N. (2007). Social comparison processes in organizations. Organizational Behavior and Human Decision Processes, 102(1), 22-41.

Greenberg, L. & Barling, J. (1999). Predicting employee aggression against coworkers, subordinates and supervisors: The roles of person behaviors and perceived workplace factors. Journal of Organizational Behavior, 20(6), 897-913.

Gulati, R. & Garguilo, M. (1999). Where do interorganizational networks come from? American Journal of Sociology, 104(5), 1439-1493.

Hage, J.T. (1999). Organizational innovation and organizational change. Annual Review of Sociology, 25, 597-622.

Hareli, S. & Rafaeli, A. (2008). Emotion cycles: On the social influences of emotion in organizations. In B. Staw (Ed.), Research in organizational behavior (Vol. 28, pp. 35-59). Oxford: Elsevier.

Hughes, C. (2007). The equality of social envies. Sociology, 41(2), 347-363.

Huy, Q.N. (1999). Emotional capability, emotional intelligence, and radical change. Academy of Management Review, 24(2), 325-345.

Kanter, R.M. & Richardson, L. (1991). Engines of progress: Designing and running entrepreneurial vehicles in established companies--The enter-prize program at Ohio Bell, 1985-1990. Journal of Business Venturing, 6(2), 209-229.

Keltner, D. & Haidt, J. (1999). Social functions of emotions at four levels of analysis. Cognition and Emotion, 13(5), 505-521.

Keltner, D. & Robinson, R.J. (1997). Defending the status quo: Power and bias in social conflict. Personality and Social Psychology Bulletin, 23(10), 1066-1077.

Kemper, T.D. (2000). Social models in the explanation of emotions. In M. Lewis & J. Haviland-Jones (Eds.), Handbook of emotions (pp. 45-58). New York: Guildford Press.

Kuratko, D.F., Ireland, R.D., Covin, J.G., & Hornsby, J.S. (2005). A model of middle level managers' entrepreneurial behavior. Entrepreneurship Theory and Practice, 29(6), 699-716.

Langley, A. (1999). Strategies for theorizing from process data. Academy of Management Review, 24(4), 691-710.

Lawler, E.J., Thye, S.R., & Yoon, J. (2000). Emotion and group cohesion in productive exchange. American Journal of Sociology, 106(3), 616-657.

Lazarus, R.S. (1991). Emotions and adaptation. New York: Oxford University Press.

Lehmann, D.R. (2001). The impact of altruism and envy on competitive behavior and satisfaction. International Journal of Research in Marketing, 18(1-2), 5-17.

Leventhal, G.S. (1976). The distribution of rewards and resources in groups and organizations. In L. Berkowitz & E. Walster (Eds.), Advances in experimental social psychology (Vol. 9, pp. 91-131). San Diego, CA: Academic Press.

Mackie, D.M., Devos, T., & Smith, E.R. (2000). Intergroup emotions: Explaining offensive action tendencies in ah intergroup context. Journal of Personality and Social Psychology, 79(4), 602-616.

Marx, K. & Lechner, C. (2005). The role of the social context for strategy making: Examining the impact of embeddedness on the performance of strategic initiatives. In S.W. Floyd, J. Roos, C.D. Jacobs, & F.W. Kellermanns (Eds.), Innovating strategy process (pp. 135-148). Oxford: Blackwell Publishing.

Mead, G.H. (1938). The philosophy of the act. Chicago: University of Chicago Press.

Miles, M.P. & Covin, J.G. (2002). Exploring the practice of corporate venturing: Some common forms and their organizational implications. Entrepreneurship Theory and Practice, 26(3), 21-40.

Mollica, K.A. & DeWitt, R.L. (2000). When others retire early: What about me'? Academy of Management Journal, 43(6), 1068-1075.

Mui, V.-L. (1995). The economics of envy. Journal of Economic Behavior and Organization, 26(3), 311-336.

Nahapiet, J. & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242-266.

Ortony, A., Clore, G.L., & Collins, A. (1988). The cognitive structure of emotions. Cambridge: Cambridge University Press.

Parrott, W.G. (1991). The emotional experience of envy and jealousy. In P. Salovey (Ed.), The psychology of jealousy and envy, (pp. 3-30). New York: The Guilford Press.

Patient, D., Lawrence, T.B., & Maitlis, S. (2003). Understanding workplace envy through narrative fiction. Organization Studies, 24(7), 1015-1044.

Rime, B., Finkenauer, C., Luminet, O., Zech, E., & Philippot, P. (1998). Social sharing of emotion: New evidence and new questions. In W. Stroebe & M. Hewstone (Eds.), European Review of Social Psychology (Vol. 9, pp. 145-189). Chichester, UK: Wiley.

Roch, S.G. & Shanock, L.R. (2006). Organizational justice in an exchange framework: Clarifying organizational justice distinctions. Journal of Management, 32(2), 299-322.

Rubin, I.S. & Rubin, H.J. (2004). Qualitative interviewing: The art of hearing data. Thousand Oaks, CA: Sage Publications.

Salovey, P. & Rodin, J. (1984). Some antecedents and consequences of social comparison jealousy. Journal of Personality and Social Psychology, 47(4), 780-792.

Sanchez-Burks, J. & Huy, Q.N. (2009). Emotional aperture and strategic change: The accurate recognition of collective emotions. Organization Science, 20(1), 22-34.

Sharma, P. & Chrisman, J.J. (1999). Toward a reconciliation of the definitional issues in the field of corporate entrepreneurship. Entrepreneurship Theory and Practice, 23(3), 11-27.

Shepherd, D.A. (2003). Learning from business failure: Propositions about the grief recovery process for the self-employed. Academy of Management Review, 28(2), 318-329.

Shepherd, D.A. (2009). Grief recovery from the loss of a family business: A multi- and meso-level theory. Journal of Business Venturing, 24(1), 81-97.

Shepherd, D.A., Covin, J.G., & Kuratko, D.F. (2009). Project failure from corporate entrepreneurship: Managing the grief process. Journal of Business Venturing, 24(6), 588-600.

Shepherd, D.A. & Haynie, M.J. (2009). Birds of a feather don't always flock together: Identity management in entrepreneurship. Journal of Business Venturing, 24(4), 316-337.

Shetzer, L. (1993). A social information processing model of employee participation. Organization Science, 4(2), 252-268.

Smith, C.A. & Ellsworth, P.C. (1985). Patterns on cognitive appraisal in emotions. Journal of Personality and Social Psychology, 48(4), 813-838.

Smith, R.H. & Kim, S.H. (2007). Comprehending envy. Psychological Bulletin, 133(1), 46-64.

Stake, R.E. (2000). Case studies. In N.K. Denzin & Y.S. Lincoln (Eds.), Handbook of qualitative research (2nd ed., pp. 435-454). Thousand Oaks, CA: Sage Publications.

Stein, M. (1997). Envy and leadership. European Journal of Work and Organizational Psychology, 6(4), 453-465.

Sutton, R.I. (1991). Maintaining norms about expressed emotions: The case of bill collectors. Administrative Science Quarterly, 36(2), 245-268.

Sykes, H.B. (1992). Incentive compensation for corporate venture personnel. Journal of Business Venturing, 7(4), 253-265.

Tesser, A. (1991). Emotion in social comparison and reflection processes. In J.M. Suls & T.A. Wills (Eds.), Social comparison: Contemporary theory and research (pp. 115-145). Hillsdale, NJ: Erlbaum.

Tesser, A. & Collins, J.E. (1988). Emotion in social reflection and comparison situations, intuitive, systematic and exploratory approaches. Journal of Personality and Social Psychology, 55(5), 695-709.

Tiedens, L.Z., Ellsworth, P.C., & Mesquita, B. (2000). Stereotypes if sentiments and status: Emotional expectations for high and low status group members. Personality and Social Psychology, 80(1), 560-575.

Turner, J.H. & Stets, J.E. (2006). Sociological theories of human emotions. Annual Review of Sociology, 32, 25-52.

Tyler, T.R. (1991). Using procedures to justify outcomes: Testing the viability of a procedural justice strategy for managing conflict and allocating resources in work organizations. Basic and Applied Social Psychology, 12(3), 259-279.

Van de Ven, A. & Engleman, R.M. (2004). Central problems in managing corporate innovation and entrepreneurship. In J.A. Katz & D.A. Shepherd (Eds.), Advances in entrepreneurship, firm performance and growth (Vol. 7, pp. 47-72). Oxford: Elsevier.

Van Kleef, G.A., De Dreu, C.K.W., & Manstead, A.S.R. (2004). The interpersonal effects of anger and happiness in negotiations. Journal of Personality and Social Psychology, 86(1), 57-76.

Venkataraman, S., MacMillan, I.C., & McGrath, R.G. (1992). Progress in research on corporate venturing. In D.L. Sexton & J.D. Kassarda (Eds.), The state of art of the art of entrepreneurship (pp. 487-519). Boston, MA: PWS-Kent Publishing Company.

Walton, R.E. (1975). The diffusion of new work structures: Explaining why success didn't take. Organizational Dynamics, 3(3), 3-22.

Wengraft, T. (2001). Qualitative research interviewing: Biographic narrative and semi-structured methods. Thousand Oaks, CA: Sage Publications.

Wert, S.R. & Salovey, P. (2004). A social comparison account of gossip. Review of General Psychology, 8(2), 122-137.

Yin, R.K. (1994). Case study research: Design and methods (2nd ed.). Thousand Oaks, CA: Sage Publications.

Zammuto, R. & O'Connor, E. (1992). Gaining advanced manufacturing technologies benefits: The roles of organizational design and culture. Academy of Management Review, 17(4), 701-728.

(1.) We use the term "corporate entrepreneurs" as equivalent to the "middle managers" construct used by Kuratko, Ireland, Covin, and Hornsby (2005) and Burgelman (1985). They are organizational members who, individually or collectively, enact entrepreneurial opportunities on the behalf of the parent organization.

(2.) "Positional embeddedness refers to the position a particular unit occupies in the network, independent of the characteristics of its partner (Gulati & Gargiulo, 1999)... cognitive embeddedness refers to similarity in the mental representations, interpretations, mental models, and worldviews shared by the focal group with the other actors in an organization (Nahapiet & Ghosal, 1998)" Marx and Lechner (2005, p. 138).

(3.) Pseudonymous have been used to secure the anonymity of the corporations and the interviewees.

(4.) The "Aster" venturing program was initiated in December 1999 and spun off in May 2003. The "Verde" program was initiated asa formal venturing vehicle in 1997 and spun off in 2001.

(5.) The extended study involved four CV programs and their parent corporation, constituting four case studies. A theoretical sampling technique (Eisenhardt, 1989) was employed to identify the cases combining two types of corporate venturing activities (internal and external) and two types of organizational contexts (preexistence or absence of entrepreneurship focus) (Miles & Covin, 2002).

(6.) James was the first to be interviewed in the "Verde" case. Sara's interview followed and then Andrew' s and Colin's. We interviewed Brian and Martin after we had interviewed Sara.

(7.) Out of the 18 individuals interviewed during the extended study, five individuals preferred a telephone interview because of time and traveling commitments. The rest of the interviews took place at the offices of the individuals or other premises. For the telephone interviews, a brief interview guide was provided prior to the interview (Rubin & Rubin, 2004). All interviews were tape-recorded. Each participant was interviewed individually. Fieldwork notes were kept.

(8.) We analytically approached the occurrence of the word "jealousy" in the context of these interviews as equivalent to "corporate jealousy" rather than "personal jealousy."

Marina G. Biniari is a lecturer of corporate entrepreneurship at the Hunter Centre for Entrepreneurship at the Strathclyde Business School, University of Strathclyde, Glasgow, UK.

The financial support of the Carnegie Trust for Scottish Universities needs to be acknowledged in conducting the fieldwork and writing up of this article.

Please send correspondence to: Marina G. Biniari, tel.: +44 141 548 4345; e-mail: marina.biniari@

DOI: 10.1111/j.1540-6520.2010.00437.x
Table 1
Interviewees' Attributes

          Association with        Core responsibility in
          venturing program       the venturing program

"Aster" venturing program
of corporation A

Brian     Founder                 Manager and creative

Martin    Head of business        Business development and
          development             evaluation

Chris     His team merged with    External investors'
          Aster in 2000           relationships

"Verde" venturing program
of corporation V

James     Founder                 Executive director

Andrew    Partner                 Verde's portfolio manager

Colin     Partner                 Verde's investment
                                  process manager

Sara      Corporate lawyer        Governance structure of
          (not a member of        Verde program

          Association with        Duration of involvement
          venturing program       in venturing program

"Aster" venturing program
of corporation A

Brian     Founder                 1999-time of interview

Martin    Head of business        200(1-time of interview

Chris     His team merged with    2000-time of interview
          Aster in 2000

"Verde" venturing program
of corporation V

James     Founder                 1994-time of interview

Andrew    Partner                 1999-time of interview

Colin     Partner                 Early 2000-time of

Sara      Corporate lawyer        1997-time of interview
          (not a member of

          Association with
          venturing program       Employment background

"Aster" venturing program
of corporation A

Brian     Founder                 Joined corporation A in

Martin    Head of business        Started his career in
          development             corporation A as a
                                  scientist, left the
                                  corporation to develop
                                  his own ventures, and
                                  rejoined in 2000

Chris     His team merged with    Joined corporation A in
          Aster in 2000           1985 as a scientist
                                  involved in

"Verde" venturing program
of corporation V

James     Founder                 Joined corporation V in

Andrew    Partner                 Joined corporation V in

Colin     Partner                 Private equity firm

Sara      Corporate lawyer        Private law firm
          (not a member of

Table 2
Corporate Venturing Program's Characteristics

                                             Level of
        Characteristics of                   perceived
Case    venturing units                      envy

Aster   Corporate initiative to reinforce    Low
        commercialization of R&D
        division's IP

Verde   Minority equity investments to       High
        external start ups

        Organizational structure    Financial governance and
Case    of venturing units          remuneration system

Aster   * Autonomous unit within    * Budget allocation from
        the R&D division            the CEO of the R&D
        * Direct cooperation to
        the R&D division            * Similar bonuses scheme
                                    as other corporate

Verde   * Autonomous unit           * Budget allocation for
                                    operational and
        * No direct cooperation     investment needs from the
        with other business         CFO
                                    * Establishment of
                                    distinctive reward/bonus
                                    system, similar to a
                                    venture capitalist firm

        Composition of
Case    venturing team

Aster   * Founder: corporate

        * Team: corporate
        managers identified and
        selected by the champion
        of the CV team

Verde   * Founder: corporate

        * Team: corporate and
        noncorporate managers/
        the noncorporate managers
        had venture capitalists'

R&D, research and development; CEO, chief executive
officer; IP, intellectual property; CFO, chief
financial officer; CV corporate venturing.

Table 3
Antecedents of Envy

        Level of
        perceived   Dimensions of
Case    envy        social comparison

Aster   Low         * Intangible rewards:
                    internal recognition,
                    media attention,
                    admiration from the board

Verde   High        * Intangible rewards:
                    internal recognition,
                    media attention,
                    admiration from the
                    board, access to

                    * Tangible rewards:
                    bonuses, secured
                    corporate funds, options
                    in the ventures

Table 4
Organizational Conditions Eliciting Envy

Case    Level of    Conditions increasing envy

Aster   Low         * Violation of procedural
                    justice perceptions: the
                    program achieved internal
                    recognition and media
                    attention besides its
                    newness and smallness

                    * Violation of
                    distributive justice
                    perceptions: the program
                    had privileged access to

Verde   High        * Violation of
                    distribution and
                    procedural justice

                    1. Financial governance
                    of corporate venturing
                    team: the venturing team
                    had secured access to
                    corporate funds without
                    other divisions being
                    informed of actual amount
                    or on what grounds the
                    funds were allocated

                    2. Distinctive
                    remuneration system for
                    the corporate venturing
                    team: similar to the
                    venture capital firms'
                    remuneration system

                    * Uncertainty of
                    participation of the
                    venturing program in the
                    technology acquisition
                    process: "noninvented
                    here" approach toward the
                    venturing program's
                    acquired ventures

                    * Intentional competition
                    between routines in the
                    technology acquisition
                    process: newly acquired
                    technologies by the
                    venturing program's
                    ventures perceived as
                    destructive by the
                    in-house technology

Table 5
Configuration Characteristics of the Venturing Programs
Decreasing Envy

Case    Level of    Conditions preventing envy
Aster   Low         * Intra-organizational
                    association between new and
                    existing routines: corporate
                    venturing managers
                    collaborated closely with
                    non-venturing organizational
                    members in the identification
                    and development phase of new

                    * Integration of corporate
                    venturing activities: the
                    venturing program's incubation
                    process was diffused and
                    adopted by other
                    organizational members

Verde   High        * Low level of integration of
                    the venturing program:
                    configured as an autonomous
                    entity not coordinating its
                    activities with the in-house
                    technology office

                    * Intentional variation around
                    the technology acquisition
                    process: corporate tactic to
                    generate tension within the
                    corporate technology group

Table 6
The Level of Social Embeddedness of Each Venturing Program
in the Parent Corporation

Case    Structural embeddedness     Relational embeddedness

Aster   * Part of the R&D           * Designed to introduce
        division throughout its     commercial capabilities
        existence as a CV program   and extract value from
                                    existing IP capabilities
        * Aster's
        commercialization process   * High dependence on R&D
        was fully integrated in     division's scientists on
        the R&D division            sourcing IP
                                    * High dependence on
                                    internal champions from
                                    corporation to incubate
                                    and launch new businesses

                                    * Aster program initiated
                                    and approved from the R&D
                                    division's CEO

Verde   * Part of a corporate       * Designed to challenge
        division but never fully    existing innovation
        integrated in it            capabilities and
                                    processes and provoke
        * Autonomous business       competition among
        unit regarding its          innovation routines
        investment decisions
                                    * High dependence on
        * Financially independent   external venture
        unit                        capitalists and

                                    * No dependence or
                                    relationship with
                                    internal corporate units
                                    to integrate the
                                    portfolio's ventures

                                    * "Verde" program was
                                    initiated by James and
                                    required a lot of
                                    negotiation with top
                                    management to be

Case    Positional embeddedness     Cognitive embeddedness

Aster   * 2000: part of the R&D     * The "Aster" program
        division                    developed distinctive
                                    cultural traits from the
        * 2003: spun off to         rest of the corporation,
        continue as a venture       related though with the
        capital firm but still      intent cultural change
        maintaining an active       from the CEO of the R&D
        role with corporation A     division
        in investing in its IP
        and commercializing its

Verde   * 1995: part of             * 1995: The corporate
        corporation V but           culture facilitated the
        operating autonomously      emergence and adoption of
                                    the "Verde" program as
        * 1997: operating as        corporate activity
        autonomous business
        entity besides its          * 1997: The "Verde"
        typical reporting to the    program had developed a
        corporation                 more entrepreneurial
                                    culture than the rest of
        * 2001: spun off as a       the corporation and its
        venture capital firm and    members perceived it as a
        did not continue            distinctive entity
        investing on the behalf
        of corporation V, but it
        managed its venture

Case    Social embeddedness

Aster   High

Verde   Initially medium and
        after 1997, low

R&D, research and development; CEO, chief executive officer; IP,
intellectual property; CV, corporate venturing.
COPYRIGHT 2012 Sage Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2012 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Biniari, Marina G.
Publication:Entrepreneurship: Theory and Practice
Geographic Code:1USA
Date:Jan 1, 2012
Previous Article:The role of mixed emotions in the risk perception of novice and serial entrepreneurs.
Next Article:Perceptions of entrepreneurial passion and employees' commitment to entrepreneurial ventures.

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |