13-2
Agenda1. Introduction to Corporate Entrepreneurship
2. Innovation
3. Organizing for Corporate Entrepreneurship
13-3
SOURCE: “How failure breeds success”, Business Week, July 10, 2006: 44-45.
Corporate Entrepreneurship
13-4
Corporate EntrepreneurshipEntrepreneurs
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 CapabilitiesFirms 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
Agenda1. 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
InventionInvention
13-8
Innovation Process – cont’dThe 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
InventionInvention
InnovationInnovation
13-9
Innovation Process – cont’dThe 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
InventionInvention
InnovationInnovation
ImitationImitation
13-10
Incremental & Radical Innovation Incremental InnovationIncremental Innovation
Most innovations are incremental
Provides small increments in current product lines
Improves existing knowledge and processes
Can create value
Radical InnovationRadical Innovation
Are rare because of difficulty and risk
Provides significant technological breakthroughs
Creates new knowledge and processes
Can create value
13-12
Agenda1. Introduction to Corporate Entrepreneurship
2. Innovation
3. Organizing for Corporate Entrepreneurship
13-13
Strategic Venturing BehaviorsInduced 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 ChampionOrganizational 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-functionalCross-functionalProduct DevelopmentProduct Development
Team Team
Cross–Functional Product Development Teams
13-16
Cooperative Strategies & M&AUnlikely 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