Scholars have proposed that to succeed in internal corporate venturing (ICV) leaders need to establish the appropriate level of control to balance between discipline that ensures ICV performance, and playfulness that fosters creativity and innovativeness. Our longitudinal study reveals the limitations of this top-down perspective. We found that the parent company’s control can expose the gap between expected ICV performance and reality. ICV unit’s employees can apprise this situation as a threat to the unit's competence and, thus, experience shared negative emotions. We found that the accumulation of these psychological reactions can trigger defensive behaviors such as bottom-up hedonic restructuring and legitimating weak interim ICV performance. Both behaviors decrease the parent company’s control over the ICV unit, and lead to a hazardous disbalance between discipline and playfulness. Our study contributes significantly to the literature on internal corporate venturing by explaining how ICV units’ psychological reactions to the control triggered bottom-up defensive behaviors that jeopardize ICV activities and performance.
