ENTR 3312 test 1

Value creators

-Actions or words that add value to the organization

(ch.4b) Dimensions of entrepreneurship

-Characteristics of entrepreneurial companies -Types of entrepreneurship in firms -Where entrepreneurship can have an impact on a firm

Individual values

-Drive individual actions -What's in it for me?

Core values

-Essential and enduring -Set of guiding principles

Star companies have a number of distinguishing characteristics:

-Having CEO's that were heavily involved in fostering innovation; -Defining innovation as critical to long-term company success; -Attaching great importance to the concept of managing change; -Having the words innovation and creativity in their mission statements; -Demonstrating an openness to outside ideas; -Having formal programs for idea generation and problem-solving; -Placing strong emphasis on cross-function communications; -Implementing programs to encourage employees to talk to customers; -Increasing levels of investment in R&D and a strong focus on product development; -Creating budgets allocated exclusively to innovation; -Providing rewards for individual creativity and innovation; -Spending time in meetings that were highly productive.

The Dimensions of Entrepreneurship

-New to the World Products/Services -New to the Market Products/Services -New Product/Service Lines in a Company -Additions to Product/Service Lines -Product Improvements/Revisions -New Applications for Existing Products/Services -Re-positioning of Existing Products/Services -Cost Reductions for Existing Products/Services

Similarities between start-up and corporate entrepreneurship

-Opportunity recognition and definition -A unique business concept (product, service or process) -Driven by an individual champion who works with a team to bring the concept to fruition -Requires that the entrepreneur be able to >balance vision with managerial skill >passion with pragmatism >proactiveness with patience -Concepts that are vulnerable in the formative stage -Entail a window of opportunity in time -Predicated on value creation for customers -Challenged by resistance and obstacles, requiring both perseverance and an ability to formulate innovative solutions -Entail risk and require risk management strategies -Both find an entrepreneur needing to develop creative strategies for leveraging resources -Both involve significant ambiguity -Both require harvesting strategies

Degree of Innovation

-major new process -minor new process -significant revision of existing process -modest improvement of existing process

Three major challenges that face the corporate entrepreneur:

1.Achieving credibility or legitimacy for the concept and the entrepreneurial team. 2.Obtaining resources. 3.Overcoming inertia and resistance.

Steps in strategic planning

1.Develop a vision and mission 2.Set objectives 3.Craft strategy to achieve objectives 4.Implement and execute strategy 5.Monitor, evaluate, and modify as needed

The entrepreneurial process consists of six stages:

1.Identifying the opportunity 2.Defining the business concept 3.Assessing the resource requirements 4.Acquiring the necessary resources 5.Implementing and managing the concept 6.Harvesting the venture

_____% of CEOs do not have a vision

60

____% of CEOs do not have explicit values to describe employees behavior to achieve the mission

80

Value destroyers

Actions that take away value from the organization

Type of Process

Administrative Systems Service Delivery Systems Production Methods Financing Methods Marketing or Sales Approaches Procurement Techniques Compensation Methods Supply Chain Management Distribution Methods Employee Training Programs Pricing Approaches Information Management Systems Customer Support Programs Logistical Approaches Hiring Methods

Core values

Are essential and enduring Are a small set of guiding principles

The evolutionary process of companies:

Companies enter a particular growth stage and prosper until reaching a crisis point

To cultivate an environment of entrepreneurship within an organization, managers must:

Create environments where employees have a sense that resources can be accessed if an idea is sound Find ways to reinforce the ability of anyone in the firm to champion an idea and get it implemented Invest in the development of people

Greiner's 5 stages of a company's evolution

Creativity Direction Delegation Coordination Collaboration OR Startup Growth Maturity Renewal/Decline

sustainable competitive advantage (lecture 3)

Derived from five key company capabilities -Adaptability -Flexibility -Speed -Aggressiveness -Innovation

what is the all-encompassing definition of entrepreneurship

Entrepreneurship is the process of creating wealth or value by bringing together a unique combination of resources to exploit a perceived opportunity

Value proposition

How your firm provides value to customers •What makes the business different in a way that appeals to customers?

Three dimensions characterize an entrepreneurial organization:

Innovation Taking risks Being proactive

A Range of Options:

Innovation as it Applies to Products and Services

Developing a vision

Involves thinking strategically about: •A firm's future business plans •Where the firm wants to go •Creates a roadmap to the future •Decides future positioning •Provides long-term direction Gives the firm a strong identity

mission vs vision statements

Mission statements what is happening here and now •Focused on current business •Current products •Current customers •Technological capabilities Vision statements what we want to happen in the future •Focused on the future of the firm •Markets to be pursued •Future customer focus •Kind of company they want to be

Three Frontiers of Innovation:

Products - unique or improved products Services - new or improved services Processes - new or better ways to accomplish a specific task or function in the firm

Cultivating a climate for CE

Rule #1 - Unreasonable Expectations Rule #2 - Elastic Business Definition Rule #3 - A Cause, Not a Business Rule #4 - New Voices Rule #5 - An Open Market for Ideas Rule #6 - Create an Open Market for Capital Rule #7 - Open a Market for Talent Rule #8 - Low-Risk Experimentation

Departmental mission statement

Spotlights the department's: •Role and scope of activities •Direction which department needs to pursue •Contribution to the firm's overall mission

Ways in which entrepreneurship can be manifested in established companies

Traditional R&D Ad Hoc Venture Teams New Venture Divisions or Groups Champions and the Mainstream Acquisitions Outsourcing Hybrid Forms

this course is a course in a specific _______ ________

business strategy

Spectators

companies that acknowledge the importance of innovation but provide little support for it

seekers

companies that display a number of appropriate innovation practices, but came up short in terms of innovation performance and company-wide commitment to innovation

strategy

deals with a firm's competitive initiatives and business approaches

business model

deals with whether the revenues flowing from a firm's strategy demonstrate that the firm can be profitable and sustainable.

Entrepreneurs

focus less on the current situation and more on what could be

managers

focus more on the current situation and how to improve efficiency and effectiveness tend to become reactive to the changes brought about by the external environment tend to let entrepreneurial fires within the company dwindle and diminish

Corporate Entrepreneurship

fundamentally a management strategy for a business

stars

high performing companies that had successfully integrated innovation and creativity into their daily business practices

Corporate Entrepreneurship

is a term used to describe entrepreneurial behavior inside established mid-sized and large organizations Other popular related terms -Organizational entrepreneurship -Intrapreneurship -Corporate venturing

Organizational politics

is one of the main reasons corporate entrepreneurs leave the company!

management

is the process of achieving stated objectives by coordinating resources,including people

strategic planning

making the decisions and actions that result in the formulation and implementation of a firm's objectives

A company's mission is _____to make a profit—rather it is always what the company will ___ to make a profit

never, do

personal value system

parents religion peers media technology education

Synectics found three categories of innovative firms:

stars/seekers/spectators

Strategy is

the link between the firm and its environment

Innovation

to what extent is the company doing things that are novel, unique, or different? Does the concept address a need that has not previously been addressed? Does it change the way a need is addressed? Is it a dramatic improvement over existing solutions? Does it represent a minor modification or improvement to an existing product? Is it just the geographic transfer of a proven product?

strategy is a about

values/visions/missions

Entrepreneur Myths

•"Entrepreneurs are born, not made" •"Entrepreneurs must be inventors" •"There is a standard profile or prototype of the entrepreneur" •"All you need is luck to be an entrepreneur" •"Entrepreneurs are extreme risk takers (gamblers)" •"Entrepreneurial people are academic and social misfits" •"All entrepreneurs need is money" •"Ignorance is bliss for entrepreneurs" •"Most entrepreneurial initiatives fail" •"Entrepreneurship is unstructured and chaotic"

Strategic planning skills

•Analytical skills •Communication skills •Interpersonal skills •Visionary skills •Decision-making skills •Conflict resolution skills •Priority management skills •Process management skills

A strategy must:

•Be consistent with conditions in the competitive environment •Place realistic requirements on the firm's resources •Be carefully executed

Corporate Entrepreneur

•Company assumes the risks, other than career risk •Company owns the concept, and the intellectual rights surrounding the concept •Corporate Entrepreneur may have little or no equity in the company •Clear limits are placed on the financial rewards corporate entrepreneurs can receive •More room for errors, company can absorb failure •More insulated from outside influence •Interdependence of the champion with many others; may also have to share credit with any number of people •Rules, procedures and bureaucracy hinder the entrepreneur's ability to maneuver •Longer approval cycles •Job security •Dependable benefit package •Extensive network for bouncing around ideas •Potential for sizeable scale and scope fairly quickly •Access to finances, R&D, production facilities for trial runs, an established sales force, an existing brand, distribution channels that are in place, existing databases and market research resources, and an established customer base

the role of values

•Core values •Value proposition •Building blocks of individual skills •The unseen part of an organization's culture

Seven perspectives on the nature of entrepreneurship

•Creation of wealth •Creation of enterprise •Creation of innovation •Creation of change •Creation of employment •Creation of value •Creation of growth

characteristics of missions

•Defines current business activities •Highlights boundaries of current business •Conveys -Who we are -What we do -Where we are now •Company specific •Clear and understandable •Brief and easy to remember •Tells the who, what, why and how the firm does business •Single strategic focus

Benefits of strategic planning

•Enhances a firm's ability to prevent problems •Emphasizes group-based strategic decisions based on best available alternatives •Reduces gaps/overlays in business activities •Reduces resistance to change

individual entrepreneur

•Entrepreneur takes the risk •Entrepreneur "owns" the concept or innovative idea •Entrepreneur owns all or much of the business •Potential rewards for the entrepreneur are theoretically unlimited •One misstep can mean failure •Vulnerable to outside influence •Independence of the entrepreneur; although the successful entrepreneur is typically backed by a strong team •Flexibility in changing course, experimenting or trying new directions •Speed of decision-making •Little security •No safety net •Few people to talk to •Limited scale and scope initially •Severe resource limitations

What is entrepreneurship?

•Entrepreneurship involves a process •Entrepreneurs create value where there was none before •Entrepreneurs put resources together in a unique or different way •Entrepreneurship is opportunity-driven behavior

Visions should be

•Exciting •Challenging •Arousing a sense of purpose •Encouraging employee buy-in •Galvanizing people in the firm

Creating missions and values

•Gather lots of data •Decide how you will win •Make them: -Inspirational -Achievable -Understandable •Establish your values based on behaviors that can be -Emulated -Measured -Rewarded •Values should compel action

Strategic decisions involve:

•Greater risk, costs, and profit potential •Greater need for flexibility •Longer time horizons

The importance of vision

•Helps managers look beyond today •Helps managers to think strategically •It helps incorporate new technologies •Addresses changing customer needs

Individual vs Organizational Values

•How can we deal with differences between individual values and organizational values? •What happens when people don't follow the company's values? •How can external factors have an effect on an employee's values? •As an employee, what can you do when your values differ from the company's values? •Is there a range of acceptance in displaying values?

Managers must ask themselves the following questions to refocuson new directives and entrepreneurial avenues:

•How much more cost savings can the company wring out of its current business? •Are managers working harder and harder for smaller and small efficiency gains? •How much more revenue growth can the firm squeeze out of its current business? •Is the firm paying more and more for customer acquisition and market share gains?

organizational vision

•It's the dream of an organization. •It stretches the imagination and motivates people to rethink what is possible. •It's an attempt to articulate what a desired future for an organization would look like

mission statements

•Specifies unique purpose of the firm •Identifies scope of operations •Describes product, market, and areas of emphasis •Reflects values and priorities •Expresses approach to social responsibility

Entrepreneurship can occur in:

•Start-up ventures •Small firms •Mid-sized companies •Large conglomerates •Non-profits •Public sector agencies

"value" means

•That quality of a thing according to which it is thought of as being: -More or less desirable -Worth something -Has merit

Why do corporate entrepreneurs work within the corporation instead of striking out on their own?

•The size of the resource base that they can tap into •The potential to operate on a fairly significant scope and scale fairly quickly •The security they enjoy when operating in an existing company

individual values

•What we personally value •What's in it for me (WIIFM)? •A building block of skills

questions to ask when strategic planning

•Where are we now? •Where do we want to go? •How do we get there?