Entrepreneurship Chapter 3
Why has corporate entrepreneurship become so popular?
It allows corporations to tap the innovative talents of their own workers and managers it is a strategy that facilitate firms efforts to create innovation and cope effectively with the competitive realities in todays world markets -new global reality requiring innovation, courage, risk taking, and entrepreneurial leadership a process that can facilitate efforts to innovate and can help firms cope with competitive markets
What are issues that businesses face when talking about corporate entrepreneurship?
Problem of competition -changes and improvements are very common in marketplace so ----innovate or obsolete Losing brightest people to independent entrepreneurship -choice more appealing to young and seasoned employees -finance for new ventures is more than ever
What is the preparation for failure?
dealing with failure on a personal level Grief, which triggers behavioral, psychological, and psysiological symptoms, is a negative emotional response to the loss of something important Embrace the likelihood of failure and use the operational edge when dealing with grief
What does control vs autonomy mean?
organizations must establish a process through which individuals in an established firm pursue entrepreneurial opportunities to innovate without regard to the level and nature of currently available resources
What does it mean to encourage innovation in corporate entrepreneurship strategy? types?
radical innovation: -launching of inaugural breakthroughs such as social networking, mobile computing, cloud storage, online dating, and green tech -take experimentation and determined vision incremental innovation: -Systematic evolution of product or service into newer or larger markets -microwave popcorn, frozen yogurt Both require vision and support but the support takes different steps for effective development Also need a champion: a person vision and the ability to share it Both types of innovation require an effort by the top management of the corporation to develop and educate employees concerning innovation and intrapreneurhsip, known as top management support
What do senior vs mid level vs first level managers do?
senior-level managers: -have ratifying, recognizing, and directing roles that in turn are associated with particular managerial actions mid-level managers: -endorse, refine, and shepherd entrepreneurial opportunities, and identify, acquire, and deploy resources needed to persue those opportunities first-level managers: -experimentating roles that correspond to the competence definition subprocess, adjusting roles that correspond to the competence modification subprocess, and conforming roles that correspond to the competence deployment subprocess
What are the linkages in corporate entrepreneurial strategy?
1) individual entrepreneurial cognitions of the organizations members 2) external environmental conditions that invite entrepreneurial activity 3) top managements entrepreneurial strategic vision for the firm 4) organizational architectures that encourage entrepreneurial processes and behavior 5) entrepreneurial processes that are reflected in entrepreneurial behavior 6) organizational outcomes that result from entrepreneurial actions -model suggests that individual entrepreneurial cognitions and external environmental conditions are the intial impetus for adopting a corporate entrepreneurship strategy, and outcomes are assessed to provide justification for the strategy's continuance, modification, or rejections
What is corporate venturing?
The adding of new businesses (or portions of new businesses via equity investments) to the corporation Accomplished through: -internal corporate venturing (innovation within) -cooperative corporate venturing (joining another company) -external corporate venturing (investing in another company)
What is strategic entrepreneurship?
The exhibition of large-scale or otherwise highly consequential innovations that are adopted in the firms pursuit of competitive advantage Using strategic approaches, innovation can be in any of five areas; -strategy -product offering -served markets -internal organization -business model
How can organizations restructure corporate thinking and encourage an entrepreneurial environment?
1) Early identification of potential investors 2) Top management sponsorship of innovative projects 3) Creation of innovation goals in strategic activities 4)Promotion of entrepreneurial thinking through experimentation 5) development of collaboration between innovators and the organization at large
What does the corporate innovation training program consist of ?
1) Entrepreneurial experience -participants are introduced to entrepreneurial revolution taken place 2) innovative thinking -misconceptions about thinking innovatively are reviewed and discussion of most common inhibitors presented 3) Idea acceleration process: -managers generateset of specific ideas on which they would like to work 4) Barriers and facilitators to innovative thinking 5) Sustaining innovation teams 6) Innovation action plan
What are five important practices for establishing innovation-driven organizations?
1) Set explicit innovation goals -need to be mutually agreed on by the employee and management so that steps can be achieved 2) Create a system of feedback and positive reinforcement -necessary for potential innovators or creators of ideas to realize that acceptance and reward exist 3) Emphasize individual responsibility -confidence, trust, and accountability are key 4) Provide rewards for innovative ideas -systems should enhance and encourage others to risk and to achieve 5) Do not punish failures -real learning takes place when failed projects are examined closely for what can be learned by individuals
What are the five critical steps of a corporate entrepreneurship strategy ?
1) developing the vision 2) encouraging innovation 3) structuring for an entrepreneurial climate 4) preparing individual managers for corporate innovation 5) developing venture teams -
How managers should facilitate innovations?
1) encourage, not mandate, innovative activity - use financial rewards and strong company recognition rather than rules 2) Proper control of human resource policies -managers need to remain in positions long enough to allow them to learn an industry and a particular division rather than move managers around 3) commitment to innovative projects long enough for momentum to occur 4) bet on people, not analysis
What is the corporate entrepreneurship assessment instrument (CEAI)?
A questionnaire designed to measure the key entrepreneurial climate factors Factors: 1) management support -encourages employees to believe that innovation is part of the role set for all organization members 2) Autonomy/work discretion -have discretion to the extent that they are able to make decisions about performing their own work in the way they believe most effective 3) Rewards/reinforcement - enhance motivation of individuals to engage in innovative behavior 4) Time availability -individuals must have time to incubate ideas -moderate workload 5) Organizational boundaries -prevent people from looking at problems outside their own jobs -must be encouraged to look at the organization from a broad perspective
what factors are exhibited in large corporations that have had successful innovations?
Atmosphere and vision -innovative atmosphere Orientation to the market -companies tie visions to realities of marketplace Small, flat organizations -keep total org. flat and project team small Multiple approaches -several projects can proceed in parallel development Interactive learning -learning ideas within an innovative environment that cut across traditional lines in the organization Skunk works -every highly innovative enterprise uses groups that function outside traditional lines of authority -eliminates bureaucracy, permits rapid turnaround, instill high level of group identity
What are the advantages of developing a corporate entrepreneurial philosophy?
Atmosphere leads to the development of new products and services, helping the organization expand and grow Creates a workforce that can help the enterprise maintain its competitive posture Promotes a climate conducive to high achievers and helps the enterprise motivate and keep its best people
What does intracapital mean?
Capital set aside for the corporate entrepreneur to use whenever investment money is needed for further research ideas
What is an I-Team?
Composed of two or more people who formally create and share ownership of a new organization leader: innovation champion small business operating within a large business, and its strength is its focus on design issues for innovative activities
What is the new "corporate revolution" taking place thanks to the infusion of entrepreneurial thinking into large bureaucratic structures?
Corporate entrepreneurship, corporate innovation, or intrapreneurship
How are firms that exhibit corporate entrepreneurship viewed as?
Dynamic, flexible entities prepared to take advantage of new business opportunities when they arise
Define corporate entrepreneurship or intrapreneurship
Entrepreneurial activities that receive organizational sanction and resource commitments for the purpose of innovative results within an established corporation
How do you prepare management?
Execs must create an understanding of the innovation process for their employees Senior managers should determine if corporate innovation and entrepreneurial behavior are understood by firms employee Key decision makers must find ways to explain the purpose of using corporate innovation process to thos from whom entrepreneurial behaviors are expected
How do you structure the work environment for innovation?
Invest heavily in innovative envrionment top level manager job: -create a work environment that is highly conducive to innovation and entrepreneurial behaviors Internal work environment: -dictate perceived costs and benefits with taking personal risks, challenging current practices, devoting time to unproven approaches, perservering in face of orgnization resistance
How could top managers hamper innovations?
If they do not believe that entre. ideas can be nurtured they may find it difficult to implement policies that endorse unstructured activity
What is collective entrepreneurship?
Individual skills integrated into a group wherein the collective capacity to innovate becomes something greater than the sum of its parts
What does it mean to develop the vision in corporate entrepreneurship strategy?
Share the vision of innovation that the corporate leaders wish to achieve clearly articulated by organizations leaders; specific objectives are then developed by the managers and employ critical for a strategy that seeks high achievement
