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    Corporate Entrepr

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    This document discusses corporate entrepreneurship and innovation within established companies. It defines corporate entrepreneurship and distinguishes it from independent entrepreneurship. It describes the need for corporate entrepreneurship to maintain competitiveness and the different forms it can take, such as new business ventures, strategic renewal, and internal/external corporate venturing. Key aspects that support corporate entrepreneurship are also outlined, like culture, leadership, resources and policies. Barriers like resistance to change are also noted. The importance of innovation and different types are explained.

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    Corporate Entrepr

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    This document discusses corporate entrepreneurship and innovation within established companies. It defines corporate entrepreneurship and distinguishes it from independent entrepreneurship. It describes the need for corporate entrepreneurship to maintain competitiveness and the different forms it can take, such as new business ventures, strategic renewal, and internal/external corporate venturing. Key aspects that support corporate entrepreneurship are also outlined, like culture, leadership, resources and policies. Barriers like resistance to change are also noted. The importance of innovation and different types are explained.

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    This document discusses corporate entrepreneurship and innovation within established companies. It defines corporate entrepreneurship and distinguishes it from independent entrepreneurship. It describes the need for corporate entrepreneurship to maintain competitiveness and the different forms it can take, such as new business ventures, strategic renewal, and internal/external corporate venturing. Key aspects that support corporate entrepreneurship are also outlined, like culture, leadership, resources and policies. Barriers like resistance to change are also noted. The importance of innovation and different types are explained.

    Copyright:

    © All Rights Reserved
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    Download as pptx, pdf, or txt
    4 views73 pages

    Corporate Entrepr

    Uploaded by

    vijayacnkumar
    This document discusses corporate entrepreneurship and innovation within established companies. It defines corporate entrepreneurship and distinguishes it from independent entrepreneurship. It describes the need for corporate entrepreneurship to maintain competitiveness and the different forms it can take, such as new business ventures, strategic renewal, and internal/external corporate venturing. Key aspects that support corporate entrepreneurship are also outlined, like culture, leadership, resources and policies. Barriers like resistance to change are also noted. The importance of innovation and different types are explained.

    Copyright:

    © All Rights Reserved
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    of 73

    CORPORATE

    ENTREPRENEURSHIP

    Ridmi Gajanayake
    B.B.Mgt (Marketing) special,MBA, Dip M(SL)
    Senior Lecturer
    Department of Commerce & Financial Management
    Faculty of Commerce & Management Studies
    University of Kelaniya
    2 Introduction

     Most established companies find it hard to maintain the initial entrepreneurial spirit that
    helped them to make it through during the start-up stage.
     They need further entrepreneurial activities;
    - to grow
    - to attain competitive advantage
    - to keep up talent employees etc.
    The Need for Corporate Entrepreneuring

     Rapid growth in the number of new and sophisticated competitors


     Sense of distrust in the traditional methods of corporate management
     An exodus of some of the best and brightest people from corporations to become small
    business entrepreneurs
     International competition
     Downsizing of major corporations
     An overall desire to improve efficiency and productivity

    3
    Different Views of Corporate Entrepreneurship

     new business creation by individual entrepreneurs, view corporate entrepreneurship as a


    concept that is limited to new venture creation within existing organisations (Burgelman,
    1984)
     the struggle of large firms to renew themselves by carrying out new combinations of
    resources that alter the relationships between them and their environments (Baumol, 1986;
    Burgelman, 1983)
     the process of creating new business within established firms to improve organisational
    profitability and enhance a firm’s competitive position or the strategic renewal of existing
    business (Zahara 1991)
    Different Views of Corporate Entrepreneurship

     Burgelman (1984: 154) conceptualises the definition of corporate entrepreneurship as a


    process of “extending the firm’s domain of competence and corresponding opportunity set
    through internally generated new resource combinations”
     Thus corporate entrepreneurship is conceived of as the effort to extend an organisation’s
    competitive advantage through internally generated innovations that significantly alter the
    balance of competition within an industry or create entirely new industries.
    Objectives of Corporate Entrepreneurship

    – Cultivate innovation and creativity within


    enterprise
    – Creating an entrepreneurial organisation
    – Organising around teams
    – Assessing enterprises as “intelligent
    organisations”
    Characteristics of Corporate Entrepreneurship

    •New business venturing


    •Innovativeness
    •Self renewal
    •Proactiveness
    Forms of Corporate Entrepreneurship

    •An established organization that enters a new business


    •An individual or individuals who champion new product
    ideas within a corporate context
    •A situation, where entrepreneurial philosophy permeates an
    entire organization’s outlook and operation
    INTERNAL FACTORS INFLUENCING
    CORPORATE ENTREPRENEURSHIP

    •Compensation and Incentive System


    •Organization Culture
    •Top Management Support
    •Organizational Structure
    •Resource Availability
    •Organization Policies
    •Risk Taking and Failure Tolerance
    BARRIERS TO CORPORATE
    ENTREPRENEURSHIP

    •Resistance to change
    •The Inherent nature of large organizations
    •Lack of Entrepreneurial talent
    •Inappropriate compensation methods
    11
    Hierarchy of Terminology
    in Corporate Entrepreneurship
    Entrepreneurship

    Entrepreneurship
    Independent
    Independent Corporate
    Corporate
    Entrepreneurship
    Entrepreneurship Entrepreneurship
    Entrepreneurship

    Corporate
    Corporate Strategic
    Strategic
    Innovation
    Innovation
    Venturing
    Venturing Renewal
    Renewal

    Internal
    Internal External
    External
    Corporate
    Corporate Corporate
    Corporate
    Venturing
    Venturing Venturing
    Venturing

    (Sharma and Chrisman, 1999)


    12 Independent Vs Corporate Entrepreneurship

     Independent entrepreneurship is the process whereby an individual or group of


    individuals acting independently, create a new organization.

     Corporate entrepreneurship is the process whereby an individual or a group of


    individuals, in association with an existing organization, create a new organization or
    instigate renewal or innovation within that organization (Sharma &Chrisman, 1999).
    13 Strategic Renewal

     Refers to the corporate entrepreneurial efforts that result in significant changes to an


    organization's business or corporate level strategy or structure.
     These changes alter pre- existing relationships within the organization and its external
    environment and in most cases will involve some sort of innovation.
     Renewal activities reside within an existing organization and are not treated as new
    businesses by the organization.
    14 Corporate Venturing

     Refers to corporate entrepreneurial efforts that lead to the creation of new business
    organizations or divisions within the corporate organization.
     They may follow from or lead to innovations that exploit new markets, or new product
    offerings, or both.
     These venturing efforts may or may not lead to the formation of new organizational units
    that are distinct from existing organizational units in a structural sense (e. g., a new
    division).
    15 External
    corporate venturing
     External corporate venturing refers to corporate venturing activities that result in the
    creation of semi-autonomous or autonomous organizational entities that reside outside the
    existing organizational domain.
     Potential outcomes:
    • Joint ventures
    • Spin off (a type of corporate transaction forming a new company or entity)
    • Venture capital initiatives
    16 Internal corporate venturing

     Internal corporate venturing refers to the corporate venturing activities that result in the
    creation of organizational entities that reside within an existing organizational domain.
     Potential outcomes:
    • integration
    • new divisions
    Innovation
    17
     Innovation is the implementation of a new or
    significantly improved product (good or service), or
    process, a new marketing method, or a new
    organisational method in business practices,
    workplace organisation or external relations (OECD,
    2005).
     Innovation is the development and use of new ideas or
    behaviours in organisations (Damanpour and
    Wischnevsky, 2006).
     Innovation is the invention of ideas and its conversion
    to a useful application (Acs & Audretsch, 2003).
    Difference between Creativity and Innovation
    18
     Creativity is defined as the production of novel and
    useful ideas in any domain
     It is an attitude and ability
     It can be learnt

     Innovation is defined as successful implementation


    of creative ideas in any organization
     Creativity of individuals is the starting point for innovation

    • Creativity and innovation are normally complementary activities


    19 Importance of Innovation

     Innovation is the main source of competitive advantage (Drucker, 1985).


     Innovation is an opportunity for entrepreneurial firms to gain rents through the temporary
    establishment of a monopoly and that they are also a key source of long-term
    entrepreneurial success.
     Innovations allow firms to establish competitively dominant positions through patents and
    first mover positions.
    Types of Innovation

     Radical Innovation
     The launching of inaugural breakthroughs.
     These innovations take experimentation and determined vision, which are not necessarily
    managed but must be recognized and nurtured.

     Incremental Innovation
     The systematic evolution of a product or service into newer or larger markets.
     Many times the incremental innovation will take over after a radical innovation introduces a
    breakthrough.

    20
    Reengineering Corporate Thinking

     Steps that will help innovative people to develop an entrepreneurial


    mindset:
    1. Set explicit goals.
    2. Create a system of feedback and positive reinforcement.
    3. Emphasize individual responsibility.
    4. Give rewards based on results.
    5. Do not punish failures.

    21
    Assessing Support for Innovation

     Does the firm encourage entrepreneurial thinking?


     Does the firm provide ways for innovators to stay with their ideas?
     Are people permitted to do the job in their own way, or are they
    constantly stopping to explain their actions and ask for permission?
     Has the firm evolved quick and informal ways to access the
    resources to try new ideas?
     Has the firm developed ways to manage many small and
    experimental innovations?
    22
    Assessing Support for Innovation (cont’d)

     Is the system set up to encourage risk taking and to tolerate


    mistakes?
     Are people in your company more concerned with new ideas or with
    defending their turf?
     How easy is it to form functionally complete, autonomous teams in
    the firm’s corporate environment?

    23
    Rules for an Innovative Environment
    24

    1. Encourage action.
    2. Use informal meetings whenever possible.
    3. Tolerate failure and use it as a learning experience.
    4. Persist in getting an idea to market.
    5. Reward innovation for innovation’s sake.
    6. Plan the physical layout of the enterprise to encourage informal
    communication.
    7. Expect clever bootlegging of ideas—secretly working on new ideas on
    company time as well as personal time.
    8. Put people on small teams for future-oriented projects.
    9. Encourage personnel to avoid rigid procedures and bureaucratic red tape.
    10. Reward and promote innovative personnel.
    Encouraging an Intrapreneurial Environment

     Steps to help restructure corporate thinking and encourage an


    intrapreneurial environment:

    1. Early identification of potential intrapreneurs


    2. Top management sponsorship of intrapreneurial projects
    3. Creation of both diversity and order in strategic activities
    4. Promotion of intrapreneurship through experimentation
    5. Development of collaboration between intrapreneurial participants
    and the organization at large
    25
    The Need for Corporate Entrepreneuring

     Rapid growth in the number of new and sophisticated competitors


     Sense of distrust in the traditional methods of corporate
    management
     An exodus of some of the best and brightest people from
    corporations to become small business entrepreneurs
     International competition
     Downsizing of major corporations
     An overall desire to improve efficiency and productivity
    26
    Successful Innovative Companies

     Factors in large corporations that are successful innovators:


     Atmosphere and vision
     Orientation to the market
     Small, flat organizations
     Multiple approaches
     Interactive learning
     Skunkworks

    27
    Conceptualizing a Corporate
    Entrepreneurial Strategy

     Critical steps of a corporate entrepreneurial strategy:


     Developing the vision
     Encouraging innovation
     Structuring for an intrapreneurial climate
     Developing individual managers for corporate
    entrepreneurship
     Developing venture teams.
    28
    Figure
    3.3 Shared Vision
    29

    Source: Jon Arild Johannessen, “A Systematic Approach to the Problem of Rooting a


    Vision in the Basic Components of an Organization,” Entrepreneurship, Innovation,
    3M’s Innovation Rules

     Don’t kill a project


     Tolerate failure
     Keep divisions small
     Motivate the champions
     Stay close to the customer
     Share the wealth

    30
    Structuring for a Corporate
    Entrepreneurial Environment

     Reestablishing the drive to innovate:

     Invest heavily in entrepreneurial activities that allow new ideas to flourish in an


    innovative environment.
     Provide nurturing and information-sharing activities.
     Employee perception of an innovative environment is critical.
     Corporate Venturing

     Institutionalizing the process of embracing the goal of growth through development of


    innovative products, processes, and technologies with an emphasis on long-term
    prosperity.
    31
    Preparing for Failure

     “Learning from Failure”


     Recognizing the importance of managing the grief process that
    occurs from project failure.
     Understanding how organizational routines and rituals are likely
    to influence the grief recovery.
     Ensuring that the organization’s social support system can
    encourage greater learning, foster motivational outcomes, and
    increase coping self-efficacy in affected individuals.
    32
    Developing Individual Managers
    for Corporate Entrepreneurship
     Corporate Entrepreneurship Training Program
    (Corporate Breakthrough Training)
    1. The Breakthrough Experience
    2. Breakthrough Thinking
    3. Idea Acceleration Process
    4. Barriers and Facilitators to Innovative Thinking
    5. Sustaining Breakthrough Teams
    6. The Breakthrough Plan
    33
    Corporate Entrepreneurship
    Assessment Instrument (CEAI)
     Key Internal Climate Factors in an Organization’s
    Readiness for Entrepreneurial Activity
     Management support
     Autonomy/work discretion
     Rewards/reinforcement
     Time availability
     Internal organizational boundaries

    34
    Facilitating Corporate Entrepreneurial Behavior

     Organizations foster entrepreneurial behavior by:


     Encouraging—not mandating—innovative activity
     Human resource policies for “selected rotation”
     Committing to projects long enough for momentum to occur.
     Bet on people, not on analysis.
     Rewarding Entrepreneuring:
     Allow inventor to take charge of the new venture
     Grant discretionary time to work on future projects 35
     Make intracapital available for future research ideas
    Corporate Entrepreneurship at IBM

     Emerging Business Opportunity (EBO) Program’s Key


    Rules:
     Think big . . . really big.
     Bring in the A-team.
     Start small.
     Establish unique measurement techniques.

    36
    37

    Thank You
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