13-1 Chapter 13 – Strategic Entrepreneurship

13-2 Agenda 1.Introduction to Corporate Entrepreneurship 2.Innovation 3.Organizing for Corporate Entrepreneurship

13-3 SOURCE: “How failure breeds success”, Business Week, July 10, 2006: Corporate Entrepreneurship

13-4 Corporate Entrepreneurship Entrepreneurs  Individuals acting independently or as part of an organization who create a new venture or develop an innovation and take risks entering innovations into the marketplace  Can be any manager or employee in an organization Corporate entrepreneurship  Process whereby an individual or a group in an existing organization creates a new venture or develops an innovation

13-5 Entrepreneurial Capabilities Firms that encourage entrepreneurship are:  Risk takers  Committed to innovation  Proactive in creating opportunities rather than waiting to respond to opportunities created by others Entrepreneurial capabilities include:  Intellectual & human capital  Entrepreneurial mind-set  Transfer of entrepreneurial competence to others in the organization

13-6 Agenda 1.Introduction to Corporate Entrepreneurship 2.Innovation 3.Organizing for Corporate Entrepreneurship

13-7 Innovation Process (Schumpeter) The act of creating or developing a new product or process Brings something new into being Technical criteria are used to determine the success of an invention Invention

13-8 Innovation Process – cont’d The process of creating a commercial product from an invention Brings something new into use Commercial criteria are used to determine the success of an innovation Invention Innovation

13-9 Innovation Process – cont’d The adoption of an innovation by similar firms Usually leads to product or process standardization Products based on imitation often are offered at lower prices but with fewer features Invention Innovation Imitation

13-10 Incremental & Radical Innovation Incremental Innovation  Most innovations are incremental  Provides small increments in current product lines  Improves existing knowledge and processes  Can create value Radical Innovation  Are rare because of difficulty and risk  Provides significant technological breakthroughs  Creates new knowledge and processes  Can create value

13-11 Innovation Pyramid Source: Kanter, E. R., cited in: Business Week, March, 2007: 3.

13-12 Agenda 1.Introduction to Corporate Entrepreneurship 2.Innovation 3.Organizing for Corporate Entrepreneurship

13-13 Strategic Venturing Behaviors Induced Strategic Behavior  A top-down process whereby the firm’s current strategy and structure foster product innovations  The strategy in place is filtered through a matching structural hierarchy  Innovations are associated closely with that strategy and structure Autonomous Strategic Behavior  Bottom-up process based on a firm’s wellsprings of knowledge and resources  A firm’s technological capabilities and competencies are its basis for new products and processes

13-14 Product Champion Organizational member with an entrepreneurial vision of a new product or service and who seeks to create support for its commercialization Play critical role in moving innovations forward “Sell” new business ideas to the organization Particularly important for autonomous strategic behavior

13-15 Facilitate integration of activities associated with different organizational functions (design, manufacturing, marketing, etc.) New product development processes can be completed more quickly Products can be more easily commercialized when cross- functional teams work effectively Cross-functional Product Development Team Cross–Functional Product Development Teams

13-16 Cooperative Strategies & M&A Unlikely that firms possess all the knowledge and resources required for it to be entrepreneurial and innovative in a dynamic, competitive market To gain access to other organization’s knowledge and resources and to commercialize innovations, firms  Enter into strategic alliances and/or networks of alliances  Engage in acquisitions of other organizations