Asia pacific journal of information systems

The Korea Society of Management Information Systems (한국경영정보학회)
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An Empirical Study on the Spin-Off into Internet Business - Emphasis on Factors, Expected Benefits, Strategies -

인터넷 비즈니스 사업으로의 효과적인 스핀오프에 관한 실증연구 - 유발요인, 기대효익, 전략을 중심으로 -

  • 이건창 (성균관대학교 경영학부) ;
  • 정남호 (성균관대학교 경영학부) ;
  • 안광미 (월드컵조직위원회 인터넷과)
  • Published : 2002.09.30
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Abstract

Recently, a lot of companies intend to make spin-offs as the Internet usage is proliferating in the business area. A spin-off means a small but autonomous company which is thought to show higher profitability rather than it stays under the influence of a mother enterprise. To prove our hypotheses, we collected questionnaire data from 104 companies considering spin-offs. From experiments with Factor Analysis, we found that there exist four factors which decision-makers should consider before deciding spin-offs such as competence of unit, competence of mother company, competence of spin-off company, and support of mother company. After massive experiments with Regression Analysis we also found that there are significant three performance factors such as competence of unit, competence of spin-off company, and support of mother company. The survey also asked about three potential strategies that they may have been following for achieving business objectives: Cost leadership, Focus, and Differentiation, Six benefits factors emerged from this study: External competitiveness, Internal competency, Productivity, Change, Cost saving, and Improvement. External competitiveness was the most important benefit, and it predicted a Differentiation and Focus strategy. Productivity and Improvement also predicted a Differentiation strategy. External competitiveness, Change, and Cost saving predicted a Cost leadership strategy. However, organizations followed Differentiation and Focus strategies significantly more than Cost leadership. The assessment thus sheds light on the link between information strategy and spin off. We hope that based on our results, many companies considering a spin-off can make a right decision and expect higher performance in a turbulent business environment.

Keywords

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