Media Business Venturing : A Study on the Choice of Organizational Mode

In a dynamic environment characterized by constant technological advancement, new business opportunities appear in a variety of forms in the media industries. Adaptation to the changing environment and proactive transformation are crucial to media business success. Media firms need to develop strategic tools that enable new business creation and facilitate capturing opportunities arising from the emerging fields. These new business creation activities are different from the incremental business developments that are usually conducted inside the existing product-market frameworks; they are radical changes gearing towards developing new product-market frameworks. The overall activities of building new business in an established organization are referred to as corporate venturing. Though corporate venturing has received increasing attention in recent years, much less research has been made on the aspects of venturing organizational modes. Nevertheless, in the media industries, while venturing for the emerging opportunities, many firms are confronted with organizational challenges such as: should the new media business be integrated into the firm’s existing operation or should it be independently operated, standing on its own legs, in order to become a viable business? In seeking answers for such questions, both the Industrial Organizational Theories (IO) and Resource-based View (RBV) can provide tools for analysis. The IO—the traditional industrial economics theories—seek to give explanation from an economics perspective. They tend to explain new business venturing as economic activities that aim to minimize costs. The RBV—a more recent internal resource/competence-based theory—seeks to give explanation to the new business venturing from the resource perspective, by focusing on the resource/competence development of the new business. Both the IO and RBV give valuable implications to the choice of venturing organizational mode for new business creation. However, in some circumstances, explanations derived from these two theories may conflict with each other rather than harmonizing. How to understand the different interpretations given by the two theories and what is the relationship between the traditional economics theories and the more recent resource-based theories in the specific context of new media business venturing are the central issues in this dissertation. For such issues, this researcher holds that both the IO and RBV can be used to explain the choice of organizational mode for venturing as each provides insights into different perspectives; thus, an integration of the IO and RBV is needed in an effort to understand the complex phenomena of business venturing. However, depending on whether the venturing incentives are primarily cost/profit-driven or resource/competence development-oriented, the IO and RBV may have different predicting powers. Therefore, a reconciliation of the two theories is required where conflicts occur. Propositions were developed from these contentions, and a case study research strategy was applied. Eight new media venturing cases were investigated within six media companies. Findings from the empirical study indicated that certain ‘economics & resource conditions’associated with the venturing initiatives influenced the choice of new media venturing organizational mode, and the dynamics of organizational mode were also affected by changes in venturing incentives. In addition, the empirical studies found out that several macroenvironmental, media industrial, market and firm specific factors had particular impacts on the new media venturing, which constitute industry-specific characteristics of the media corporate venturing. There are also implications for media management research derived from this study. The nature of media management is multidisciplinary, so a multiplicity of theories may better serve the needs of future media management inquiries. To develop integrated and reconciled frameworks incorporating theories from different fields, in-depth reviews of theories and understandings of the appropriate circumstances that may apply these theories are required