Chapter 1

1. Chapter 1 The New Entrepreneurial Imperative

2. “Wealth in the new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown.”~Kevin Kelly,“New Rules for the New Economy,” Wired

3. Question 1: Why must companies not remain static? How has this changed in recent years?

4. Question 2: What is the “new management thinking”? Does this new way of thinking invalidate basic principles of good business?

5. Question 3 & 4: What is a firm’s external environment? What is a firm’s internal environment?

6. Turbulent Environments and the Embattled Corporation • Technological • Economic • Competitive • Labor • Resource • Customer • Legal • Regulatory • Global • Customer • Social • Supplier “Managers face shortened decision windows and diminishing opportunity streams, meaning they must act quickly or find themselves missing out on opportunities” The changing domain of the external environment

7. Question 5: How does market turbulence challenge businesses? How does it reward businesses?

8. Turbulent Environments and the Embattled Corporation Customers Fragmented markets and rapidly rising customer expectations are forcing firms to customize their products, cultivate longer-term customer relationships and learn new skills in serving global markets • Technology • Firms have to change the ways they operate internally and how they compete externally based on: • -New information management technologies • -New production and service • delivery technologies • -New customer management • technologies The Embattled Corporation Competitors Lead customers to entirely new market spaces Quickly mimic which makes it harder to differentiate Attack firms’ most profitable areas of business by specializing in narrow, profitable niches Legal, Regulatory and Ethical Standards Firms are increasingly accountable to multiple forcing management to make difficult choices and deliver results while behaving responsibly Increasingly litigious environment Increasing regulatory restrictions

9. Question 6: What is the ultimate goal for businesses?

10. Question 7: How are firms able to achieve this goal? What are the five capabilities that support this?

11. The New Path to Sustainable Competitive Advantage Entrepreneurship is the core source of “sustainable competitive advantage” Achieving a sustainable competitive advantage derives from five key company capabilities • Adaptability • Flexibility • Speed • Aggressiveness • Innovativeness

12. What is Entrepreneurship? 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

13. Question 8: What is entrepreneurship? What is corporate entrepreneurship? How do they differ?

14. What is Entrepreneurship? An encompassing definition of entrepreneurship: “Entrepreneurship is the process of creating value by bringing together a unique combination of resources to exploit an opportunity.”

15. What is Entrepreneurship? Entrepreneurship involves a process Entrepreneurs create value where there was none before Entrepreneurs put resources together in a unique way Entrepreneurship is opportunity-driven behavior

16. What is Corporate Entrepreneurship? “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

17. Management Versus Entrepreneurship “Management is the process of setting objectives and coordinating resources, including people, in order to attain them.”

18. Management Versus Entrepreneurship Managers focus more on the current situation and how to improve efficiency and effectiveness Entrepreneurs focus less on the current situation and more on what can be

19. Question 9: What are some of the key roles of a manager? What are some of the key roles of an entrepreneur? How could they be integrated?

20. Management Versus Entrepreneurship The Manager The Entrepreneur • Planner • Strategist • Organizer • Staffer • Motivator • Budgeter • Evaluator • Coordinator • Supervisor • Visionary • Opportunity-seeker • Creator • Innovator • Calculated Risk-taker • Resource Leverager • Change Agent • Active and Adaptive Concept Implementer The Entrepreneurial Manager

21. Why Companies Lose their Entrepreneurial Way:The Organizational Life Cycle Greiner’s 5 stages of a company’s evolution • Creativity • Direction • Delegation • Coordination • Collaboration

22. Why Companies Lose their Entrepreneurial Way: The Organizational Life Cycle Next Stage Crisis Point Begin Decline Companies enter a particular growth stage and prosper until reaching a crisis point Failure Acquisition Candidate The evolutionary process of companies:

23. Question 10: What are the stages of the organizational life cycle? How can firm’s fail at each stage? How can they succeed?

24. Why Companies Lose their Entrepreneurial Way: The Organizational Life Cycle Start up and early growth Growth through direction Growth through delegation Growth through coordination Growth through collaboration

25. Why Companies Lose their Entrepreneurial Way: The Organizational Life Cycle (Source: Adapted from Larry E. Greiner, “Evolution and Revolution as Organizations Grow” Harvard Business Review, July-August, 1972 p. 45)

26. Question 11: What is the main challenge at the final stage?

27. The Entrepreneurial Imperative: A Persistent Sense of Urgency Managers within an organization tend to become reactive by responding to the changes brought about by the external environment but let entrepreneurial fires within the company dwindle and diminish

28. The Entrepreneurial Imperative: A Persistent Sense of Urgency Managers must ask themselves the following questions to avoid inevitable diminishing returns and refocus on new directives and entrepreneurial avenues: How much more cost savings can the company wring out of its current business? Are managers within the firm working harder and harder for smaller and small efficiency gains? How much more revenue growth can the company squeeze out of its current business? Is the company paying more and more for customer acquisition and market share gains?

29. The Entrepreneurial Imperative: A Persistent Sense of Urgency • How much longer can the company keep propping up its share price through share buybacks, spin-offs, and other forms of financial engineering? Is top management reaching the limits of its ability to push up the share price without actually creating new wealth? • How many more scale economies can the company gain from mergers and acquisitions? Are the costs of integration beginning to overwhelm the savings obtained from slashing shared overhead costs? • How different are the strategies of the four or five largest competitors in the industry from the company’s strategy? Is it getting harder and harder to differentiate the company from its competitors?

30. Question 12: Do you agree or disagree that the “conventional” management practice has run its course? Why or why not?

31. A Model of Corporate Entrepreneurship