Corporate Entrepreneurship

1. Corporate Entrepreneurship • Corporate culture • Leadership • Structural features that guide and constrain action • Organizational systems that foster learning and manage rewards • Depends on all of the following: • Whether the company is product or service oriented • Whether the firm’s innovation efforts are aimed at product or process improvements • The extent to which it is high-tech or low-tech

2. Focused Approaches to Corporate Entrepreneurship Autonomous corporate venturing work group • Autonomous corporate venturing (work) group • Frees entrepreneurial team members from constraints imposed by existing norms and routines • Facilitates open-minded creativity • But, does isolate the group from the corporate mainstream • New venture groups (NVGs) • Business incubators

3. Focused approach New Venture Group New Venture Groups (NVGs) • Goal is to identify, evaluate, and cultivate venture opportunities • Typically function as semi-autonomous units with little formal structure • Involvement includes • Innovation and experimentation • Coordinating with other corporate divisions • Identifying potential venture partners • Gathering resources • Launching the venture

4. Focused approach Business Incubators Business Incubators • Business incubators are designed to “hatch” new businesses • Incubators provide some or all of the following functions • Funding • Physical space • Business services • Monitoring • Networking

5. Disbursed Approaches to Corporate Entrepreneurship • Dedication to principles and practices of entrepreneurship is spread throughout the firm • Ability to change is a core capability • Stakeholders can bring new ideas or venture opportunities to anyone in the organization • Two related aspects of dispersed entrepreneurship • Entrepreneurial culture • Product champions

6. Dispersed approach Entrepreneurial Culture Entrepreneurial Culture • Culture of entrepreneurship • Search for venture opportunities permeates every part of the organization • Effect is strongest when it animates all parts of the organization • Strategic leaders and the culture generate a strong impetus • to innovate • Take risks • Seek out new venture opportunities

7. Dispersed approach Product Champions Product Champions • Product (or project) champions • Bring entrepreneurial ideas forward • Identify what kind of market exists for the product or service • Find resources to support the venture • Promote the venture concept to upper management • New project must pass two critical stages • Project definition • Project impetus

8. Measuring the Success of Corporate Entrepreneurship Activities • Techniques used to limit the expense of venturing or to cut losses when entrepreneurial initiatives (CE) appear doomed • Comparing strategic and financial CE goals • Are the products or services offered by the venture accepted in the marketplace? • Are the contributions of the venture to the corporation’s internal competencies and experience valuable? • Is the venture able to sustain its basis of competitive advantage?

9. Measuring the Success of Corporate Entrepreneurship Activities • Techniques used to limit the expense of venturing or to cut losses when entrepreneurial initiatives (CE) appear doomed • Exit champions • Willing to question the viability of a venture project • Demand hard evidence and challenge the belief system that is carrying an idea forward • Hold the line on ventures that appear shaky • Real options • Managing the uncertainty associated with launching new ventures

10. Entrepreneurial Orientation Dimension Definition Autonomy Independent action by an individual or team aimed at bringing forth a business concept or vision and carrying it through to completion. Innovativeness A willingness to introduce novelty through experimentation and creative processes aimed at developing new products and services as well as new processes. Proactiveness A forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand. Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91. Adapted from Exhibit 12.2 Dimensions of Entrepreneurial Orientation

11. Competitive An intense effort to outperform industry rivals. It is characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace. aggressiveness Entrepreneurial Orientation Dimension Definition Risk taking Making decisions and taking action without certain knowledge of probable outcomes; some undertakings may also involve making substantial resource commitments in the process of venturing forward. Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91. Adapted from Exhibit 12.2 Dimensions of Entrepreneurial Orientation

12. Entrepreneurial Orientation • Autonomy • Two techniques often used to promote autonomy • Using skunkworks to foster entrepreneurial thinking • Designing organization structures that support independent action • Innovativeness • Two methods used to enhance competitive position through innovativeness • Fostering creativity and experimentation • Investing in new technology, R&D, and continuous improvement

13. Entrepreneurial Orientation • Proactiveness • Two methods to promote acting proactively • Introducing new products or technological capabilities ahead of the competition • Continuously seeking out new product or service offerings • Competitive aggressiveness • Two ways competitively aggressive firms enhance their entrepreneurial position • Entering markets with drastically lower prices • Copying the business practices or techniques of successful competitors

14. Entrepreneurial Orientation • Risk taking • Three types of risks faced by organizations and their executives • Business risk taking • Financial risk taking • Personal risk taking • Two methods to strengthen competitive position through risk taking • Researching and assessing risk factors to minimize uncertainty • Using techniques that have worked in other domains

15. Individual Entrepreneurship in Ireland • From the Global Entrepreneurship Monitor Project report for 2008 • Ireland continues to have one of the highest rates of early stage entrepreneurs (7.6%) and established owner managers (9%) of the adult population • Ireland has dropped dramatically with respect to nascent entrepreneurs (3.3%) and number of women starting new firms. • Also declining was the number of people who perceived good opportunities (was 94%), as those starting due to need rose from 6% to 19%.

16. Cultural Support for Entrepreneurship • 80% believe that successful entrepreneurs are held in high esteem. Media is generally supportive. • Primary motive: independence, not wealth • Those who have lived outside the country are considerably more involved • Relatively high confidence that they have the skills they need, although few report getting any specific training.

17. Environment for Entrepreneurship • Ireland is classified as “innovation driven” • Finance is the main negative – very difficult to get. • Government – good support programs, but hard to find; too much bureaucracy and regulations. • Technology transfer process too complicated • Entrepreneurship education, commercial and legal infrastructure, and ability to enter markets all adequate.