Finance investor versus corporate management :who defines technology strategy?

Abstract

Background : The contours of today’s corporate landscape are strongly shaped by finance investors who own businesses, either in part or fully. This thesis analyses the processes of cooperation and interaction between businesses and finance investors regarding technology strategy. In addition to the question of the direct influence finance investors might have on technology strategy, indirect influences are also investigated. An evaluation of the finance investors’ capabilities and responsibilities is carried out in parallel to understand what “real potential” investors have to influence the technology strategy of companies in their portfolio. This work addresses a gap in current existing literature and research in this area as the elements of direct involvement of investors in technology strategy of firms they own are not yet studied in depth.

Methodology : A purely qualitative approach of case study research was chosen as the method most suitable for obtaining the desired insights. A pilot project involving two cases, confirmed the efficacy of the semi-structured questionnaire for conducting in-depth interviews. A further 12 case studies were carried out with companies that were selected following defined criteria to ensure the reproducibility of results. The final work has a fundament of 14 cases, consisting of 43 interviews with finance investors and portfolio company representatives.

Conclusion : Finance investors consider the technology strategy of their portfolio companies to be vital as it impacts the market value of the company and financial results. Besides the financial impact of technology strategy, finance investors show no specific interest in technology strategy nor are they likely to have major expertise in this area. Responsibility for driving technology strategy is clearly in the hands of the corporate managers. But finance investors do exert strong indirect influence by controlling and steering budgets, investments, etc. and also through their consultancy role in the organisational development process.