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Chapter- 2 Corporate Entrepreneurship

10 th edition. Chapter- 2 Corporate Entrepreneurship. Causes for Interest in Corporate Entrepreneurship. Corporate entrepreneurship – entrepreneurial action within an established organization. Increasing interest in “doing your own thing” and doing it on one’s terms.

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Chapter- 2 Corporate Entrepreneurship

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  1. 10th edition Chapter- 2 Corporate Entrepreneurship

  2. Causes for Interest in Corporate Entrepreneurship • Corporate entrepreneurship – entrepreneurial action within an established organization. • Increasing interest in “doing your own thing” and doing it on one’s terms. • New search for meaning and impatience has caused more discontent in structured organizations. • Organizations are encouraging corporate entrepreneurship i.e. stimulating, and capitalizing on, employees who think that something can be done differently and better.

  3. Managerial Versus EntrepreneurialDecision Making (cont.) • Corporate entrepreneurship is most strongly reflected in the following endeavors: • New business venturing (corporate venturing) - The creation of a new business within an existing organization. • Innovativeness - Product and service innovation, with emphasis on development and innovation in technology. • Self-renewal - Transformation through renewal of the key ideas on which an organization is built. • Proactiveness - Includes initiative, risk taking, competitive aggressiveness, and boldness.

  4. Managerial Versus EntrepreneurialDecision Making • Entrepreneurial management is distinct from traditional management in terms of: • Strategic orientation. (Opportunity based) • Commitment to opportunity. • Commitment of resources. (Lean start up) • Control of resources. (how to access it, not owning) • Management structure. (Organic, more flexible) • Reward philosophy. (opportunity focused rather than responsibility) • Growth orientation. • Entrepreneurial culture.

  5. Lean startup • A methodology for developing businesses and products, which aims to shorten product development cycles by adopting a combination of business-hypothesis-driven experimentation, iterative product releases, and validated learning. • The central hypothesis of the lean startup methodology is that if startup companies invest their time into iteratively building products or services to meet the needs of early customers, they can reduce the market risks and sidestep the need for large amounts of initial project funding and expensive product launches and failures.

  6. Lean start up process

  7. Lean start-up • https://www.youtube.com/watch?v=sobxOzRjAGg

  8. Table 2.1 – Distinguishing Entrepreneurially from Traditionally Managed Firms

  9. Table 2.3 - Characteristics of an Entrepreneurial Environment

  10. Table 2.4 - Leadership Characteristics of a Corporate Entrepreneur

  11. Establishing Corporate Entrepreneurship in the Organization Step one: Secure a commitment to corporate entrepreneurship in the organization by top, upper, and middle management levels. Establish initial framework and embrace the concept. Identify, select, and train corporate entrepreneurs.

  12. Step two: Identify ideas and areas that top management is interested in supporting. Identify amount of risk money available to develop the concept. Establish overall program expectations and target results of each corporate venture. Establish mentor/sponsor system. Step three: Use of technology to ensure organizational flexibility. Establishing Corporate Entrepreneurship in the Organization (cont.)

  13. Step four: Identify interested managers to train employees and share their experiences. Step five: Develop ways for the organization to get closer to its customers. Step six: Learn to be more productive with fewer resources. Establishing Corporate Entrepreneurship in the Organization (cont.)

  14. Step seven: Establish a strong support structure for corporate entrepreneurship. Step eight: Tie rewards to the performance of the entrepreneurial unit. Finally: Implement an evaluation system that allows successful entrepreneurial units to expand and unsuccessful ones to be eliminated. Establishing Corporate Entrepreneurship in the Organization (cont.)

  15. Problems and Successful Efforts A study found that new ventures started within a corporation performed worse than those started independently by entrepreneurs. Reasons cited: Corporation’s difficulty in maintaining a long-term commitment. A lack of freedom to make autonomous decisions. A constrained environment. On average, independent start-ups become: Profitable twice as fast. End up twice as profitable. Establishing Corporate Entrepreneurship in the Organization (cont.)

  16. Corporate entrepreneurship of CAF https://www.youtube.com/watch?v=v_t6o-gWWns

  17. Quick warm up…. • Work with your Business pitch group: • Think about the problem that you want to solve. • Which three factors will be the most crucial to build your solution? • How will you measure (exact numerical number) the success of your idea to the market? • What feedback mechanism will you introduce to check the progress of your idea to the market?

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