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					Chapter 13 –
Strategic Entrepreneurship




                             13-1
Agenda
1. Introduction to Corporate Entrepreneurship
2. Innovation
3. Organizing for Corporate Entrepreneurship




                                                13-2
Corporate Entrepreneurship




     SOURCE: “How failure breeds success”, Business Week, July 10, 2006: 44-45.

                                                                                  13-3
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




                                                         13-4
Corporate Entrepreneurship
Entrepreneurs
   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 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

                                                       13-6
Agenda
1. Introduction to Corporate Entrepreneurship
2. Innovation
3. Organizing for Corporate Entrepreneurship




                                                13-7
Innovation Process
             The act of creating or
 Invention   developing a new product or
             process
             Brings something new into
             being
             Technical criteria are used to
             determine the success of an
             invention




                                              13-8
Innovation Process – cont’d
             The process of creating a
 Invention   commercial product from an
             invention
             Brings something new into use
             Commercial criteria are used to
Innovation   determine the success of an
             innovation




                                               13-9
Innovation Process – cont’d
             The adoption of an innovation
 Invention   by similar firms
             Usually leads to product or
             process standardization
             Products based on imitation
Innovation   often are offered at lower
             prices but with fewer features



 Imitation



                                              13-10
Incremental & Radical Innovation
 Incremental Innovation   Radical Innovation
  Most innovations are    Are rare because of
  incremental              difficulty and risk
  Provides small          Provides significant
  increments in current    technological
  product lines            breakthroughs
  Improves existing       Creates new
  knowledge and            knowledge and
  processes                processes
  Can create value        Can create value




                                                   13-11
Incremental & Radical Innovation
             Fiber-optic   Internet   Online auction   Bubble
Radical         cable      browser     exchanges       wrap              Incremental
Innovation                                                                Innovation




      Laparoscopic   Speech    Polyester       Enterprise       Frozen
       “keyhole”   recognition                  resource        yogurt
        surgery     software                    planning
                                                 (ERP)




                                                                                13-12
Innovation Pyramid




       Source: Kanter, E. R., cited in: Business Week, March, 2007: 3.   13-13
Agenda
1. Introduction to Corporate Entrepreneurship
2. Innovation
3. Organizing for Corporate Entrepreneurship




                                                13-14
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




                                                     13-15
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                                           13-16
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




                                                       13-17
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

    Cross-functional    Products can be more easily
  Product Development   commercialized when cross-
          Team          functional teams work
                        effectively
                                                      13-18
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


                                                      13-19
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




                                                      13-20

				
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posted:10/5/2012
language:English
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