1. Chapter 13 – Strategic Entrepreneurship

2. Agenda Introduction to Corporate Entrepreneurship Innovation
Organizing for Corporate Entrepreneurship

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

4. Entrepreneurship Entrepreneurial Opportunities
Conditions in which new products or services can satisfy a need in the market
Entrepreneurship is concerned with
the discovery of profitable opportunities not perceived by others,
the exploitation of profitable opportunities, and
establish a competitive advantage based on opportunities

5. Corporate Entrepreneurship
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

6. 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

7. Agenda Introduction to Corporate Entrepreneurship Innovation
Organizing for Corporate Entrepreneurship

8. Innovation Process Invention
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

9. Innovation Process – cont’d
Invention
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
Innovation

10. Innovation Process – cont’d
Invention
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
Innovation
Imitation

11. 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

12. Incremental & Radical Innovation
Fiber-optic cable
Internet browser
Online auction exchanges
Bubble wrap
Radical Innovation
Incremental Innovation
Laparoscopic “keyhole” surgery
Speech recognition software
Polyester
Enterprise resource planning (ERP)
Frozen yogurt

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

14. Agenda Introduction to Corporate Entrepreneurship Innovation
Organizing for Corporate Entrepreneurship

15. Internal Corporate Venturing
Set of activities used to create inventions and innovations through internal means
Spending on R&D is linked to success of internal corporate venturing
Successful entrepreneurial firms
Provide appropriate autonomy
Offer incentives for individual initiative
Promote cooperation and group ownership of an innovation

16. 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

17. 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

18. Cross–Functional Product Development Teams
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
The Firm
Cross-functional Product Development Team

19. Barriers to Cross-Functional Teams Effectiveness
Different orientations and perceptions
Individuals from separate functions have different orientations on issues
Perceive product development activities in different ways
Organizational politics
Aggressive competition for resources among different organizational functions
Must achieve cross-functional integration with minimal political conflict

20. 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