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Chapter 2. The Unique Nature of Corporate Entrepreneurship. Question 1: What are the six (6) steps of the entrepreneurial process?. Entrepreneurial Realities: Understanding the Process. This process consists of six stages: Identifying the opportunity Defining the business concept

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chapter 2

Chapter 2

The Unique Nature of Corporate Entrepreneurship

entrepreneurial realities understanding the process
Entrepreneurial Realities: Understanding the Process
  • This process consists of six stages:
  • Identifying the opportunity
  • Defining the business concept
  • Assessing the resource requirements
  • Acquiring the necessary resources
  • Implementing and managing the concept
  • Harvesting the venture
Question 2: What are three (3) key questions that an entrepreneurial manager must consider when looking for opportunities?
entrepreneurial realities understanding the process1
Entrepreneurial Realities: Understanding the Process
  • Identifying the opportunity
    • An opportunity is “a favorable set of circumstances creating a need or an opening for a new business concept or approach”
    • Most new product failures are the result of little to no market demand or need, no matter the innovative, state-of-the-art advances
    • Key opportunity-based questions facing managers: (1) source(s) of opportunity; (2) size of opportunity; and (3) sustainability of opportunity
entrepreneurial realities understanding the process2
Entrepreneurial Realities: Understanding the Process
  • Defining the business concept
    • A business concept is “an innovative approach for capitalizing on an opportunity”
      • New product or service
      • New process for accomplishing a task
    • A good business concept should:
      • Fulfill a user’s need(s)
      • Unique
      • Not easy to imitate
      • Reasonably implemented
      • Profitable
Question 3: What are some non-financial resources required or recommended for entrepreneurial success?
entrepreneurial realities understanding the process3
Entrepreneurial Realities: Understanding the Process
  • Assessing the Resource Requirement
    • Money is necessary, but not sufficient to an entrepreneurial venture
    • Entrepreneurial success if often a function of other resources
      • Insight/opportunity recognition abilities
      • Contact network (e.g., customers, suppliers, etc.)
      • Prior knowledge/skills
      • Motivated employees/team members
      • Many other things…
question 4 what is resource leveraging how can it help entrepreneurs develop a concept
Question 4: What is “resource leveraging”? How can it help entrepreneurs develop a concept?
entrepreneurial realities understanding the process4
Entrepreneurial Realities: Understanding the Process
  • Acquiring the Necessary Resources
    • Beyond simply purchasing resources, entrepreneurs obtain resources in novel ways (e.g. resource leveraging)
    • Their unconventional ability to acquire resources without letting go of precious financial capital
    • Resources developed by entrepreneurs are more likely to create advantages(Barney, 1986)
    • Lessens risk and increases the firm’s flexibility
entrepreneurial realities understanding the process5
Entrepreneurial Realities: Understanding the Process
  • Implementing and Managing the Concept
    • Typically a hectic, uncertain, and ambiguous proposition
    • Important to have tolerance and adaptability
    • Given a significant time horizon for most innovations, successful entrepreneurs often set intermediate targets to track progress; “firefighting” mentality = loose sight of overall goal
entrepreneurial realities understanding the process6
Entrepreneurial Realities: Understanding the Process
  • Harvesting the venture
    • Product/service life cycles decreasing and resources are becoming more quickly obsolete
    • Threats to business are increasing, but so are opportunities
    • Harvesting a venture involves how returns will be realized, over what time period, and the eventual outcome of the venture
      • E.g., absorbed/purchased other business entity, spun off, replaced, eliminated, “die”, etc.

The Entrepreneurial Context is never defined, thus,entrepreneurship can occur in:

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

How Corporate Entrepreneurship Differs

“Entrepreneurship is the process of creating value by bringing together a unique combination of resources to exploit an opportunity.”


Question 6: What are some of the similarities between traditional start-up entrepreneurs and corporate entrepreneurs? What are some of the differences?

how corporate entrepreneurship differs
How Corporate Entrepreneurship Differs
  • Similarities between start-up and corporate entrepreneurship
  • Both involve opportunity recognition and definition
  • Both require a unique business concept that takes the form of a product, service or process
  • Both are driven by an individual champion who works with a team to bring the concept to fruition
  • Both require that the entrepreneur be able to balance vision with managerial skill, passion with pragmatism, and proactiveness with patience
  • Both involve concepts that are most vulnerable in the formative stage, and that require adaptation over time

Similarities (continued):

  • Both entail a window of opportunity within which the concept can be successfully capitalized upon
  • Both are predicated on value creation and accountability to a customer
  • Both find the entrepreneur encountering resistance and obstacles, necessitating both perseverance and an ability to formulate innovative solutions
  • Both entail risk and require risk management strategies
  • Both find the entrepreneur needing to develop creative strategies for leveraging resources
  • Both involve significant ambiguity
  • Both require harvesting strategies

Question 7: How might these differences help or hinder corporate entrepreneurship? In other words, what differences make CE easier or harder for entrepreneurial managers?

question 8 what role does company politics or political skill play on corporate entrepreneurship
Question 8: What role does company politics or political skill play on corporate entrepreneurship?

How Corporate Entrepreneurship Differs

Corporate entrepreneurs face three major challenges linked to the need for interorganizational political skills:

  • Achieving credibility or legitimacy for the concept and the entrepreneurial team
  • Obtaining resources
  • Overcoming inertia and resistance

Question 9: What are the three (3) main reasons successful corporate innovators continue to work for established businesses as opposed to starting their own venture? How can that help managers identify ways to keep entrepreneurial employees and encourage entrepreneurial attitudes and behaviors?


How Corporate Entrepreneurship Differs

Corporate entrepreneurs remain in the corporate environment rather than starting their own ventures for three main reasons:

  • 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
  • Organizational politics is one of the main reasons corporate entrepreneurs leave the company

How Corporate Entrepreneurship Differs

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

  • Create environments where employees have a sense that resources can be accessed if a 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
Question 10: What are the seven (7) primary ways entrepreneurship appears in organizations? Briefly describe them.
where to find entrepreneurship within a company
Where to Find Entrepreneurship within a Company
  • Seven Ways in Which Entrepreneurship is Manifested in Established Companies
    • Traditional R&D
    • Ad Hoc Venture Teams
    • New Venture Divisions or Groups
    • Champions and the Mainstream
    • Acquisitions
    • Outsourcing
    • Hybrid Forms

Question 11: According to the Guth and Ginsburg (1990) model, what two types of processes are within the domain of corporate entrepreneurship? What are the four (4) factors that drive their activity and performance?

general frameworks for understanding corporate entrepreneurship
General Frameworks for Understanding Corporate Entrepreneurship

Fitting Corporate Entrepreneurship Into Strategic Management






























Innovation / Venturing

Strategic Renewal

within Established

of Established



Source: William D. Guth and Ari Ginsberg, “Corporate Entrepreneurship,” Strategic Management Journal 11 (Summer 1990): 5-15.

general frameworks for understanding corporate entrepreneurship1

(Individual Comparison)

Perceived Decision





Management Support

Resources (i.e. time availability)

Supportive Organizational Structure

Risk Taking



















(Firm Comparison)

General Frameworks for Understanding Corporate Entrepreneurship

A Model of Sustained Corporate Entrepreneurship


Question 12: What are the three (3) main drivers of corporate entrepreneurship activity according to Ireland, Covin, and Kuratko (2009)? And FYI, Duane Ireland is a proud TTU alumni!