Managing Innovation_entrepreneurship and transformation
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Managing Innovation_entrepreneurship and transformation

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Session 4 entrepreneurship and transformation

Session 4 entrepreneurship and transformation

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Managing Innovation_entrepreneurship and transformation Managing Innovation_entrepreneurship and transformation Presentation Transcript

  • Session 4 Entrepreneurship and Transformation Instructor Prof. Dr. Bernhard Katzy Prof.katzy@cetim.org 2012www.CeTIM.orgProf. Dr. Bernhard R. Katzy
  • Innovation Management Innovation System Organization of Innovation innovation Governance Innovation Transformation and entrepreneurship Basic innovation concepts Introduction based on life cases Innovation Theory Innovation Practice Dominant theory, Main issues High tech entrepreneurship… and developments of innovation researchwww.CeTIM.org Prof. Dr. Bernhard Katzy 1
  • Session 4: An overview PRESENTATION OUTLINE • Quick Test • Transforming Organizations • Capturing value from technical innovation and dynamic capabilities • Entrepreneurship in open innovation erawww.CeTIM.org Prof. Dr. Bernhard Katzy 2
  • Session 4 Reading engagement QUICK TEST 2 questions 10 minuteswww.CeTIM.org Prof. Dr. Bernhard Katzy 3
  • Introductory Discussion What is entrepreneurship for you? VIEWS ON ENTREPRENEURSHIP “Entrepreneurship is a normal human capacity, it can be cultivated and developed” (Ludwig von Mises – Human Action) “ The pursuit of opportunity beyond the resources you currently control” (HBR)www.CeTIM.org Prof. Dr. Bernhard Katzy 4
  • Examples of transforming organizations How about these organizations?www.CeTIM.org Prof. Dr. Bernhard Katzy 5
  • Theories for Entrepreneurship Research Entrepreneurship Research Various theories employed to Themes examine the entrepreneurship phenomenon -Agency theory -Opportunity -Social capital theory -Entrepreneurs -Resource-based view -Entrepreneurship Process -Dynamic capability -Firm Creation -Opportunity Recognition -Economic Dynamics -Creation theory -… -… However, so far, a strong theory dedicated to entrepreneurship research is till missingwww.CeTIM.org Prof. Dr. Bernhard Katzy 6
  • Capturing value from technical innovation and dynamic capabilities TRADITIONAL PRODUCT DEVELOPMENT FUNNEL Screen 1 Screen 2 Development Product Projects introduction Pre-development Investigation Source: New product development funnel, Wheelwright and Clarkwww.CeTIM.org Prof. Dr. Bernhard Katzy 7
  • Capturing value from technical innovation and dynamic capabilities CAPTURING TECHNICAL INNOVATION Distribution Competitive Manufacturing Core Technological Know-how Service In Innovation Others Complementary Technology Source: Capturing Value from Technological Innovation: Integration, Strategic Partnering, and Licensing Decisions by David J.Teece 1988www.CeTIM.org Prof. Dr. Bernhard Katzy 8
  • Capturing value from technical innovation and dynamic capabilities CAPTURING TECHNICAL INNOVATION • The competitive potential embedded in new technology is not always captured by the innovator • Channel Selection Issues (Core Capabilities)  Contractual Mode  Integrative Mode  Mixed Modewww.CeTIM.org Prof. Dr. Bernhard Katzy 9
  • Dynamic Capabilities DYNAMIC CAPABILITY  Are what enable a firm to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments (Teece et al., 1997)  Are the firm’s processes that use resources to match and even create market change. Are the organisational and strategic routines to learn routines (Einsenhardt et al. 2000) Process Path -Coordination/Integration Path dependency -Learning -Current position is shaped by the -Reconfiguration and path it travelled transformation -Routines constrain its future behavior Position -Technological assets -Financial assets -Structural assets -……www.CeTIM.org Prof. Dr. Bernhard Katzy 10
  • Dynamic capabilities in details DYNAMIC CAPABILITIES VARY IN DIFFERENT CONTEXT Dynamic capabilities integrate resources  Product development routines for profitable product and services  Strategic decision making  … Dynamic capabilities on reconfiguration resources  replication and brokering routines used to copy, transfer, and recombine resources for new products  Scarce Resource allocation routines  Patching routines to changing market  … others  Knowledge creating routines in industries where cutting- edge knowledge is essential  Alliance and acquisition routines which bring external resources into the firm, like BIO-TECH firms, or CISCO  Exit routines as market undergo changeswww.CeTIM.org Prof. Dr. Bernhard Katzy 11
  • Capturing value from technical innovation and dynamic capabilities ENTREPRENEURIAL DYNAMICS AND DYNAMIC CAPABILITIES Foundational technology, business Entrepreneur idea Initial resource Human Research institutes, base resources high-tech companies Venture capital, Financial resources corporate venture capital Source: Strehle, Katzy, Davila, Learning Capabilities and the Growth of Technology-based new ventureswww.CeTIM.org Prof. Dr. Bernhard Katzy 12
  • Growth is driven by learning, not “more of the same” LEARNING, DYNAMIC CAPABILITIES AND THE OPERATING CORECAPABILITIES, AND THE OPERATING CORE LEARNING, Dynamic capabilities Double-loop learning • Creation, integration, and adaptation of routines • Path dependency Management control system Single-loop learning • Information-based • Documented • Tool-supported Primary processes and operating routines • Execution of known procedures (e.g. order Economic Resources processing) rents • Assurance of current profit Source: Zollo and Winter (2002), Lant and Mezias (1992), Fiol and Lyles (1985), Argyris and Schön (1978)www.CeTIM.org Prof. Dr. Bernhard Katzy 13
  • KNOWLEDGE CODIFICATION IN MANANGEMENT SYSTEMS Budgeting example Learning increase Loose bundle Archive of costs, Frequent Budgeting of bank slips revenues, bank budgeting, self- with IT Tool slips, and notes made on Excel e.g. “SAP” No process Process Evolution of routines MCS1 MCS are suited to observe organizational learning in new ventures 1MCS are ”formal, information-based routines and procedures used by managers to maintain or alter patterns in organizational activities’’ (Simons, Strategic Management Journal, 1994)www.CeTIM.org Prof. Dr. Bernhard Katzy 14
  • The study setting Munich Silicon Valley (44+2* STBNV) (72 STBNV) • Questionnaire and interview with 1 to 3 top managers • Participating companies must be: – Technology-based – In a range of 10 to 150 employees – Founded 1992 or later – Private and independent or publicly-owned – Located in regions with high entrepreneurial activity, here Silicon Valley and Munich * 2 TBNV went bankrupt during the observationwww.CeTIM.org Prof. Dr. Bernhard Katzy 15
  • PATH DEPENDENCY OF GROWTH 3500 3000Revenue (EUR 2500 000) 2000 1500 1000 500 0 Year 0 Year 1 Year 2 Year 3 Year 4 Cluster 1 Cluster 2 Cluster 3www.CeTIM.org Prof. Dr. Bernhard Katzy 16
  • Entrepreneurship in Open Innovation Era OPEN INNOVATION Research licensing Development Other firms’ Market New Market Spin-off Internal Technology Base Current Market External Technology Base Technology insourcing Labor mobility/ Venture Capital/ Numerous Start-ups/ research conducted at Universities/…… Source: The era of open innovation by Henry Chesbrough 2003www.CeTIM.org Prof. Dr. Bernhard Katzy 17
  • Entrepreneurship in Open Innovation Era Corporate investment objective THE CASE OF BELL LAB Strategic Financial - Till the end of 1999, The NVG of Lucent had Link to operational capability invested in 19 ventures which are located in Tight Driving Emergent 4 areas in the left. Advances strategy Exploration of poten of current business -tial new business - The objectives: uncover new vehicles for increasing its growth; develop new Loose Enabling Passive mechanisms for leveraging its unparalled Complements strate- Provides financial technology; increasing comercialisation rate gy of current business returns only of its technology. - Focus on internal ideas Source: Henry W.Chesbrough 2002www.CeTIM.org Prof. Dr. Bernhard Katzy 18
  • Entrepreneurship in Open Innovation Era LUCENT NVGS OPERATING MODEL Source: Henry W.Chesbrough and Stephen J.Socolofwww.CeTIM.org Prof. Dr. Bernhard Katzy 19
  • Readings for session 5: Innovation System S5 Innovation System  Article 1: Michael E. Porter. Clusters and The New Economics of Competition. Harvard Business Review, November- December, 1998.  Article 2: Anna L. Saxenian. Comment on Kenney and von BURG, "Technology, Entrepreneurship and Path dependence: Industrial Clustering in Silicon Valley and Route 128". Industrial and corporate change, Volume8, Number1, 1999. Available on Blackboardwww.CeTIM.org Prof. Dr. Bernhard Katzy 20