How corporate venture capital-backed acquisition serves as means of adding value to the acquiring company is one of grave interest. This interest has been facilitated by the lack of research in the area and the growing utility of venture capital as a means of enhancing a company’s bottom line. In this vein, studies have been conducted these studies all utilize qualitative research methodologies. Qualitative research is an important choice in management research. It gives special significance to complex inter-related problems. This paper examines qualitative research as a means of answering the research question as it relates to venture capital.
The current economic climate has made it necessary for many companies to seek alternative and non-traditional funding as a means of assuring its viability. In this vein, corporate venture capital-backed acquisition has been sought as an alternate means of adding value to the acquiring company.
In assessing this, one needs to examine how this phenomenon is facilitated. There has been very little empirical research done in this area. A search of the literature in the area of venture capital and its utility reveals that the general focus of the literature has been on the venture capital keiretsu effect, network effect of venture capital firms, and the effects of mergers on venture capital firms. Examining how corporate venture capital-backed acquisition can add value for an acquiring company will certainly go a long way in creating a clear and concise understanding of the potential of venture capital.
One of the best methods of arriving at a methodological approach to the study of this phenomenon is to examine the methodology utilized by previous researchers who studied similar subjective. In so doing, the researcher has realized that qualitative approaches prove to be most applicable. This synopsis will delineate the rationale behind the choice of qualitative methods as the most suitable method of offering insight into the subject.
Historically qualitative research methods have been often taught of as imprecise methods of research when compared to quantitative methods. These methods have been viewed as highly subjective. This subjectivity serves as the focal point of the claims that qualitative methods of research are not as useful as quantitative methods of research. Over time this perception has changed. Currently, qualitative methods are viewed as alternative methods that can yield a more complete and detailed description of a particular subject.
Qualitative data is viewed as being ‘richer’ than its quantitative counterpart, more time-consuming, and less able to be generalized. This paper will examine some of the different forms of qualitative research.
Types of qualitative research studies
Corbett & Neck (2008) offered one of the most concise definitions and conceptualizations of qualitative methods of research. They offered an operational definition of qualitative methods of research as an inquiry that involves an intricate balance of theory and the ability to view all of the possibilities of the interpretation of data. Essentially, it predicates that a researcher is open to the possibility that the data may be interpreted in different ways.
In so doing, it is prudent that a researcher conducts the data analysis in such a manner as to elaborate on the existing theory and expound on that theory to either create a new theory or to establish a new understanding of the theory in question.
One concrete method of impacting this end is, to begin with, a very broad theoretical construct and ask very specific questions with regards to this construct. The questions will serve to guide the inquiry and will lead to general themes which can then be analyzed.
Eisenhardt (1989) described the process of arriving at a theoretical construct utilizing the case study approach. In this body of work, she delineates some of the features of her method which prove to be quite similar to theory-testing research. However, she does present other features which are unique for the inductive case study method of qualitative research. She described the case study method as one that is iterative and tightly linked to data. This method she claims is appropriate for the study of new topic areas.
Dyer & Wilkins (1991) offered strong criticism of Eisenhardt’s approach in that this method proved inappropriate for the investigation of new topic areas. According to Dyer & Watkins, the classic approach to qualitative study would offer new and improved theoretical understanding and thus result in the development of theories that offered better insight into the dynamics of the topics being studied.
Essentially, they offer collaborative evidence of Merriam’s (1998) conceptualization of the case study approach in that they describe this approach as one which offers detailed descriptions of the particular set of circumstances with the opportunity to analyze those set of circumstances. Moreover, it presents the opportunity for unit analysis and not the complete topic under investigation. There is not enough data obtained utilizing the case study method to develop a clear and concise theory.
Rindova & Kotha (2001) performed a deep case analysis of yahoo and excite to examine how the structural features and patterns of each firm function. In their analysis, they were able to examine the competitive advantages of these firms. The data collected were analyzed using the constant comparative method. This method involves comparing one unit to another to establish the framework on which a theory can be based. They introduced the notion of continuous transformation to describe the inclusive ongoing development required to maintain a competitive advantage in the rapidly advancing field of Internet technology.
After examining the varying methodologies utilized in qualitative research it is prudent to state that qualitative research should be conducted systemically.
Each approach does have merit and proves to be suitable for the constructs being studies, however, a researcher needs to utilize a strategy that is clear and concise—one that will yield results that are both rational and applicable. Qualitative research demands commitment and fieldwork. It is not an alternative to quantitative research, but when used in conjunction with quantitative methods it can prove a more complete answer to many of the inquiries made by researchers. In many cases, just the simple numbers prove inadequate in ascertaining the deeper meaning of experienced phenomenon and some of the methods of qualitative research can augment those findings.
Corbett, A.C. & Neck, H.M. (2008). From Cognitive Scripts to Entrepreneurial Action: The Role of Cognitions in Radical Innovation. (Working Draft).
Eisenhardt, K.M. (1989). Building theories from case study research. Academy of Management Review, 14 (4), 532-550.
Dyer, W. G. and Wilkins, A. L. (1991). Better stories, not better construction to generate better theory: A rejoinder to Eisenhardt. Academy of Management Review, 16 (3), 613-619.
Merriam, S.B. (1998). Qualitative research and case study applications in education (2nd ed.). San Francisco: Jossey-Bass.
Rindova, V.P & Kotha, S (2001). Continuous “morphing”: Competing through dynamic capabilities, form and function. Academy of Management Journal, 44(6), 1263-1280.