Closing the knowledge gap in corporate entrepreneurship through staged commitment

Corporate entrepreneurship requires senior executives to evaluate proposals for investment and projects from corporate entrepreneurs. Properties of technology make this evaluation difficult, creating a knowledge gap. Whether through opportunism, overconfidence, and overconfidence, corporate entrepreneurs are likely to induce overinvestment in projects, perhaps at the expense of corporate goals. In this paper we analyze this problem using the tools of agency theory, and identify a solution, staged commitment, used and useful in many areas of business.