CORPORATE ENTREPRENEURSHIP FINAL
2 types of risks that are associated with the timing of an entrepreneurial venture:
1) "sinking the boat" 2) "missing the boat"
3 major challenges faced by the Corporate Entrepreneur:
1) Achieving credibility 2)Obtaining resources 3) Overcoming inertia and Overt Resistance
2 categories of phenomena that represent the major forms of corporate entrepreneurs:
1) Corporate Venturing 2) Strategic Entreptrneurship
4 pure types of corporate venture capital:
1) Driving investment: a strategic rationale for investment and tight operational links between the start-up and the investing company 2) Enabling Investment: a strategic rationale for investment and loose operational links between the start-up and the investing company 3) Emergent Investment: a financial rationale for investment and tight operational links between the start-up and the investing company 4) Passive Investment: a financial rationale for investment and loose operational links between the start-up and the investing company
3 underlying dimensions of entrepreneurship:
1) Innovativeness 2) Risk-taking 3) Proactiveness
entrepreneurial grid has five sample scenarios:
1) Periodic/Incremental 2) Continuous/Incremental 3) Periodic/Discontinuous 4) Dynamic scenario 5) Revolutionary scenario
3 innovation frontiers:
1) Products 2) Services 3) Process
3 reasons that successful entrepreneurs do not quit to start their own venture:
1) Resources 2) Company Size 3) Job Security
3 categories of firms produced by Synectics Analysis:
1) Stars 2) Seekers 3) Spectators
5 forms of strategic entrepreneurship:
1) Strategic Renewal 2) Sustained Regeneration 3) Domain Redefinition 4) Organizational Rejuvenation 5) Business Model Reconstruction
Importance behind understanding the similarities between start-up entrepreneurship and corporate entrepreneurship:
1) corporate entrepreneurship is just a popular management fad 2) vital that executives understand that entrepreneurship is real ( entails risk and failure is likely) 3) virtually all of the research on entrepreneurship has emphasized the start-up-context
The 6 stages of the entrepreneurial process:
1) identify the opportunity 2) define the business concept 3)assess the resource requirements 4) acquire the necessary resources 5) implement and manage the concept 6)harvest the venture
3 different modes of corporate venturing
1) internal corporate venturing 2) cooperative venturing 3) external corporate venturing
By applying the entrepreneurial grid to individual managers, one can characterize how an individual adapts to environmental change into two categories:
1) quickly adapting to environmental change 2) creating a major change in the environment.
The contexts of which the phenomenon of entrepreneurship can occur:
1) start-up ventures 2) small firms 3) mid-sized companies 4) large conglomerates n 5) on-profit organizations 6) public-sector agencies
7 ways entrepreneurship is manifested
1) traditional R&D 2) Ad Hoc Venture Team 3) New Venture Divisions 4) Champion and the Mainstream 5) Acquisitions 6) Outsourcing innovation 7) Hybrid Approaches
5 key Company Capabilities:
1. Adaptability 2. Flexibility 3. Speed 4. Aggressiveness 5. Innovativeness
The 4 Key Elements of Entrepreneurship
1. Entrepreneurship involves a process 2. Entrepreneurs create value where there was none before (within an organization and marketplace) 3. Entrepreneurs out resources together in a unique way (unique combinations of money, people, procedures, technologies, materials, facilities, packaging, distribution channels, and other resources) 4. Entrepreneurship involves opportunity-driven behavior (the pursuit of opportunity without regards to resources currently controlled)
Stages of Greiner's Organizational Life Cycle:
1. Growth through creativity (Crisis of leadership) 2. Growth through direction (Crisis of autonomy) 3. Growth through delegation (Crisis of control) 4. Growth through coordination (Red tape crisis) 5. Growth through collaboration
8 large forces on the external environment:
1. Technological Environment 2. Economic Environment 3. Competitive Environment 4. Labor Environment 5. Resource Environment 6. Customer Environment 7. Legal and Regulatory Environment 8. Global Environment
Synectics studied the innovation practices and performance of _________ major U.S. companies
150
LESS restrictive conceptualization of an entrepreneurial event
Degree of Entrepreneurship = Degree of Innovativeness + Degree of Risk-taking + Degree of Proactiveness (additive function)
MORE restrictive conceptualization of an entrepreneurial event
Degree of Entrepreneurship = Degree of Innovativeness x Degree of Risk-taking x Degree of Proactiveness (multiplicative function)
The ______________________ is a mindset that is instilled into the culture of a company to look outside the box, and reestablish the entrepreneurial vision that inspired the creation of a business
Entrepreneurial Imperative
What does Corporate Entrepreneurship focus on?
Innovation, Strategic Renewal, and Corporate Venturing
the two key environments that must be considered in order to understand modern corporations:
Internal (Resource Based View) and External (Industrial Organization)
Strategic renewal
Involves large structural changes in the business
What does the Entrepreneurial Process create?
It creates value by putting resources together in a unique way that involves opportunity-driven behavior. It is the ability to create a vision from nothing
2 dimensions of corporate growth strategy that together define a "new business":
Market focus and Product focus
Are the 7 ways entrepreneurship is manifested within established companies mutually exclusive?
No they are not mutually exclusive - all manifestations have no reasons for not being intermingled and attached to new divisions to the major units in a given company
What is the greatest challenge associated with the political factors?
Overcoming inertia and resistance
PDMA Best Practices Survey categories firms into:
The Best and The Rest
Strategic Integration Framework
The primary focus of this model is the ongoing integration of entrepreneurship throughout the entire organization. There are three elements to this model which include an entrepreneurial strategic vision, a pro-entrepreneurship organizational architecture, and entrepreneurial process and behaviors. Each department of the company needs to be thinking about entrepreneurship activities that will better the company in a whole.
Domain Framework ( Guth and Ginsberg)
Their model is saying that there are only two types of processes that are needed for corporate entrepreneurship. These processes are internal innovation and strategic renewal. This model suggests that there are only four domains which include external environment, leadership, organization conduct/form, and organization performance. The primary focus of this model is to show us what domains cause corporate entrepreneurship to occur.
Sustaining Framework
This model is a representation of how an organization can sustain entrepreneurship on an ongoing basis. The model begins with a transformational trigger which is something external or internal to the company that creates a threat or opportunity. The transformational trigger will initiate a strategic change in the company. This model is centered around employees and their incentive to innovative for their company.
imitation
a company is copying another company or is trying to play catch up and adjust to an innovation of another company (the level of risk on this U-shaped grid is high due to limited time for these companies to try and copy these innovations of others)
Innovativeness
a continuous focus on launching new aspects of the business to improve operations
The shape between innovativeness and risk-taking:
a curvilinear function that is shaped like a U
Opportunity
a favorable set of circumstances creating a need or an opening for a new business concept or approach
Synectics
a leading international firm specializing in innovation consulting
Resources Based View (RBV)
a managerial framework used to determine the strategic resources with the potential to deliver comparative advantage to a firm. It is a model that sees resources as key to superior firm performance (Internal Environment = Strengths/Weaknesses)
The less restrictive definition of a "new business" :
a market can be new to the firm or new to the world (market creation) and that new products can be introduced to a firm's current industry or move the firm into a new industry that is pre-existing or newly created by the firm's new product offering.
The Entrepreneurial Imperative is:
a persistent sense of urgency (Urgency = QUICK, Imperative = Mandatory)
Aggressiveness
a proactive approach to eliminating competitors, developing customer service, and growing workforce
This measure of degree of entrepreneurship responds more closely to how individuals generally think of entrepreneurial events:
additive conceptualization
Flexibility
an ability to form strategies that meet all needs set by the diverse market
Business Concept
an innovative approach for capitalizing on an opportunity
Frequency and degree of entrepreneurship:
are directly related to the overall level of entrepreneurship in a company because they measure how often new products or services are being offered and the amount of innovations in the company (this tells us what level of entrepreneurship a company is on)
Financial investment objectives
are primarily seeking attractive financial returns through their investments.
Learning
as acquiring new knowledge and skills that may be useful in existing product or market arenas
Corporate venturing
consists of efforts that result in new organizational development in terms of businesses within a corporation.
dynamically continuous innovation
develops new products or services that is immensely improved from the previous products but does not rattle the market as much as a discontinuous innovation ( risk-taking level of this second innovation is on the lower end of this continuum due to the fact that these innovations are improvements from existing products)
Strategic entrepreneurship
done with the pursuit of a competitive advantage in mind. Strategic entrepreneurship in engaged in in the effort to capitalize on profit gaining opportunities, as management seeks to achieve and maintain a competitively advantageous for the firm.
Corporate Entrepreneurship
entrepreneurial behavior that is performed inside established mid-sized and large organizations
Leveraging
exploiting existing corporate competencies in new product or market arenas
The Rest
firms who do not meet the standards- they are much less more likely to utilize a formal strategy for company innovation
Entrepreneurs
function as visionaries, opportunity-seekers, creators, innovators, and calculated risk-takers, leveragers of resources, guerilla thinkers, changers, and adapters (concerned with FUTURE)
Degree of entrepreneurship is used to:
help find what level of entrepreneurship a company is on
Periodic/Discontinuous
high on degree of entrepreneurship and low frequency of entrepreneurship
Revolutionary scenario
high on frequency of entrepreneurship and degree of frequency
Entrepreneurship is a variable that depends on:
how much innovativeness, risk-taking, and pro activeness is involved
Industrial Organization (I/O)
is a field of economics dealing with the strategic behavior of firms, regulatory policy, antitrust policy and market competition. Industrial organization applies the economic theory of price to industries (External Environment = Opportunities/Threats)
Corporate venturing
is a practice in which a firm will take an equity stake in a small, innovative or specialist firm and involves multiple methods in creating, adding to, or investing in new businesses
The entrepreneurial grid:
is a two-dimension matrix that has been created with the number or frequency of entrepreneurial events that occurs within an organization on the vertical axis and on the horizontal axis is the extent or degree to which these events are innovative, risky, or proactive
Frequency
is the amount of times entrepreneurial events take place in a company over a given period of time
continuous innovation
it is an innovation of an already existing product (this type of innovation is on the low end of the risk-taking continuum because it is just improving existing products that the customers and market are used to)
Dynamic scenario
lands in the middle of the grid which means it is at the midpoint of both frequency of entrepreneurship and degree of entrepreneurship
The type of motive that associates with new resource development is _______________________
learning
The type of motive that associates with current resource exploitation is ________________________
leveraging
Continuous/Incremental scenario
located with high frequency of entrepreneurship and low degree of entrepreneurship
internal corporate venturing
new businesses are created and owned by the corporation
A strategic investment
objective means that the firm will invest in an external start up business with less of a focus on the financial returns
Managers
planning, strategizing, organizing, directing, staffing, motivating, evaluating, coordinating, and supervising (concerned with NOW)
cooperative venturing
refers to entrepreneurial activity in which new businesses are created and owned by the corporation together with one or more external development partners (also referred to as joint ventures)
external corporate venturing
refers to entrepreneurial activity in which new businesses are created by parties outside the corporation and subsequently invested in or acquired by the corporation (external ventures are engaged with new, young, start-up companies. Firms often like to compare their level of activity to that of their competitors)
Periodic/Incremental
scenario which is located on both low frequency of entrepreneurship and low degree of entrepreneurship
What is the ultimate objective that managers seek as they sift through the various theories, concepts, technologies, and tools available to them?
sustainable competitive advantage
Spectators
tended to acknowledge the importance of innovation but provided little support for it
Speed
the act of quickly evolving by developing new products and making operational decisions in a short time span
Innovation
the action of incorporating something new into the business model
Adaptability
the capability to adjust in a timely manner to the environmental turbulence without causing disruption of operations
Strategic Renewal
the design of corporate initiative that transform organizations
The degree of entrepreneurship:
the extent to which events are innovative, risky, and proactive
Overt Resistance
the new idea threatens the positions of others or will take resources away from them
Entrepreneurship
the process of creating value by bringing together a unique combination of resources to exploit an opportunity
Management
the process of setting objectives and coordinating resources, including people, in order to attain those objectives
"missing the boat"
the risk in not pursuing a course of action that would have proven profitable (it occurs when an entrepreneur delays acting on a concept for too long)
"sinking the boat"
the risk of an entrepreneur pursing a concept and it does not work out (it occurs when their is a poorly thought-out concept, bad timing, already satisfied marketing, inadequate marketing/ distribution approaches, and inappropriate price levels)
Corporate venture capital investments can be described as internal funds that are invested in external new ventures that fit strategically into your organization:
the two dimensions used to categorize corporate venture capital investments are strategic and financial
The fundamental choice that established companies are being faced with:
they can either become victims of this revolution as aggressive, upstart companies move quickly in undermining their positions in existing markets and in creating whole new markets - or, they can join the revolution
Inertia
this new idea represents change and people are comfortable with the status quo, see no need for change, or feel the new idea will create work for them
The Best (firms)
thought of as companies in the top third of their industry's success rate for new product development initiatives. These firms are also above average in their success rates related to innovation program, percentage of sales, and profits generated from recently introduced products
Internal Innovation
venturing through the creation of new businesses within existing organization
Seekers
were companies that displayed a number of appropriate innovation practice, but came up short in terms of innovation performance and company wide commitment to innovation
Stars
were high-performing companies that had successfully integrated innovation and creativity into their daily business practices
Environmental turbulence
when a change in both the external and internal environment of a company is unpredictable
discontinuous innovation
when a company comes up with a product that shifts the paradigm of the market completely (it is considered to be at a high level of risk-taking, because it is putting out a product that customers have never seen or have bought before)
Corridor Principle
with every venture launched, new and unintended opportunities often arise
Which of the 10 myths of entrepreneurship is it associated with "corridor principle"?
"Most entrepreneurial initiatives fail"
2 possible reference points to be considered when assessing the degree of strategic entrepreneurship
(1st Reference point): How much the firm is transforming itself relative to where it was before. It basically means going back to past strategies, and looking at products, markets, organizational structures, processes, capabilities, or business models and comparing them with where they are at right now and whether or not progress has been made in these (2nd Reference point): How much the firm is transforming itself relative to industry conventions or standards. It is done by looking at the same factors stated above but instead of comparing them to the past performance of your firm, you compare them to the standards of the industry