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‘CorporateEntrepreneurship’                    1
INTRODUCTION               2
Business Life Cycle and Entrepreneurship                                                      New Entrepreneurial         ...
Businesses are faced with...   Changing dynamic markets   Globalisation   Shorter product life cycles   High rates of ...
A Possible Response   Some large firms responded to the changing    environment by addressing their necessary    response...
InnovationCreativity and Innovation are NOT synonymous.Innovation = Creativity + Invention + Exploitation             Sour...
Role of Innovation“An enterprise that does not daily innovate inevitably ages anddeclines … even in a successful business ...
Schumpeterian Innovation   Schumpeter (1934). … By recombining the    factors of production to create something new    th...
Dimensions   Birkinshaw (2003) identifies four common    themes in corporate entrepreneurship.       Corporate Venturing...
Hierarchy of terminology in Corporate           Entrepreneurship                          Entrepreneurship  Independent   ...
Hierarchy of terminology in Corporate           Entrepreneurship                          Entrepreneurship  Independent   ...
Why venture?   Growth   Improved financial returns (e.g. ROI)   Image (Corporate renewal)   Technology pressure   Div...
Reasons for venturingReasons for venturing                                   US Co.                  Japanese Co.Maturity ...
Policy Ideas - Venturing                    Joint                         External                   Venture              ...
Intrapreneurs                15
Intrapreneur   Used by Norman Macrae in an article in the    Economist. (Christmas Ed. 1976). Applied term    to managers...
Intrapreneur   Developed by Pinchot (1986)     “ An intrapreneur is an entrepreneur within an      already established o...
Intrapreneur   Gibb (1988) An Intrapreneur is an employee of a    large organisation who has the entrepreneurial    quali...
IntrapreneursMay have thesecharacteristics in commonwith independententrepreneurs                    Ability to work amids...
….. But want ...BUT may differ ….   Want less restrictive but supportive environment   Want recognition   Want their ideas...
Intrapreneurs and entrepreneurs share: .   Entrepreneurial    characteristics   Vision & Flexibility   Action Orientate...
Intrapreneurs need in addition                 An ability in a Multi-disciplinary role                 To understand the...
Corporate Entrepreneurs as ‘Change Masters’   ‘Change Master’ A term used by Rosabeth Moss    Kanter   Three Stages of t...
Intrapreneurs as Change Masters   A term used by Rosabeth Moss Kanter   Three Stages of the journey: Formulate and Sell,...
Rosebeth Moss Kanter’s View   Corporate entrepreneurs are people who    envision something new and make it work.    Being...
Intrapreneurial Behaviour   May be seen as good news     High achievement motivation     High task commitment          ...
Intrapreneurial Behaviour   May be seen as mild irritants     High levels of informal networking     Informal recruitme...
Intrapreneurial Behaviour   May be seen as serious problems     Independence     Non-acceptance of rules and boundaries...
Developing IntrapreneurshipFRAMEWORK CONDITIONS                       Encourage                       Individual          ...
Barriers to an Intrapreneurial Culture   Barriers Include:       Senior management feel alienated       hierarchical na...
Barriers to an Intrapreneurial Culture   Barriers (continued) Include:       Lack of ownership of the problem       Mob...
An ‘Intrapreneurial’ culture needs:   Sponsors   Continuous involvement   Autonomy of the intrepreneurial team   Abili...
An ‘Intrapreneurial’ culture needs:   (needs continued)   A tolerance of risk and failures   Long term objectives   Ma...
Drucker’s Entrepreneurial Practices   Druker suggests some key management    practices are vital in the development of   ...
The final word …..“Intrapreneurs cannot exist if their passionatecommitment is ignored and their visions given topeople wh...
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Jain group day 4 and 5

  1. 1. ‘CorporateEntrepreneurship’ 1
  2. 2. INTRODUCTION 2
  3. 3. Business Life Cycle and Entrepreneurship New Entrepreneurial stage needed ? Sales Entrepreneurial Consolidation Maturity Approach ?Entrepreneurial ? Growth Survival Inception Time 3
  4. 4. Businesses are faced with... Changing dynamic markets Globalisation Shorter product life cycles High rates of technological change Pressures to reduce costs Changes in business organisation (int. & ext.) 4
  5. 5. A Possible Response Some large firms responded to the changing environment by addressing their necessary response to working with a dynamic environment involving attitudes to:  risk  innovation  flexible, rapid response  changes in management and organisation 5
  6. 6. InnovationCreativity and Innovation are NOT synonymous.Innovation = Creativity + Invention + Exploitation Source: Rosenfeld and Serco. 1990 6
  7. 7. Role of Innovation“An enterprise that does not daily innovate inevitably ages anddeclines … even in a successful business the disease ofbureaucracy and complacency is ever present. (Drucker).“Firms create competitive advantage by perceiving ordiscovering new and better ways to compete in an industry andbringing them to market, which is ultimately an act ofinnovation” Michael Porter. The Competitive Advantage ofNations. 7
  8. 8. Schumpeterian Innovation Schumpeter (1934). … By recombining the factors of production to create something new the entrepreneur creates a demand… Innovation could take different forms:  Creation of a new or alternative product  A new method of production  Opening a new market  Capture of a new source of supply  A new organisation 8
  9. 9. Dimensions Birkinshaw (2003) identifies four common themes in corporate entrepreneurship.  Corporate Venturing  Intrapreneuring  Bringing the Market Inside  Entrepreneurial Transformation 9
  10. 10. Hierarchy of terminology in Corporate Entrepreneurship Entrepreneurship Independent CorporateEntrepreneurship Entrepreneurship After: Sharma and Chrisman (1999) 10
  11. 11. Hierarchy of terminology in Corporate Entrepreneurship Entrepreneurship Independent CorporateEntrepreneurship Entrepreneurship Corp. Venturing Innovation Strategic RenewalInt.. Corp. Venturing Ext.. Corp. Venturing After: Sharma and Chrisman (1999) 11
  12. 12. Why venture? Growth Improved financial returns (e.g. ROI) Image (Corporate renewal) Technology pressure Diversification 12
  13. 13. Reasons for venturingReasons for venturing US Co. Japanese Co.Maturity of the base business 70 57To meet strategic goals 76 73To provide challenges to managers 46 15To develop future managers 30 17To survive 35 28To provide employment 3 24 Source: Zenas Block & Ian MacMillan ‘Corporate Venturing’, Harvard Business Press 1993 13
  14. 14. Policy Ideas - Venturing Joint External Venture Environment Ext. Co. Merger Int. Suppliers venture Encourage Contractors Entrepreneurship Buy stake CustomersSpin out Acquisition Take stake 14
  15. 15. Intrapreneurs 15
  16. 16. Intrapreneur Used by Norman Macrae in an article in the Economist. (Christmas Ed. 1976). Applied term to managers, professionals and artisans who set up small businesses within old and existing organisations. Some texts suggest that Pinchot was the person who first used the term 16
  17. 17. Intrapreneur Developed by Pinchot (1986)  “ An intrapreneur is an entrepreneur within an already established organisation”. Used to describe entrepreneurism within a large organisation, rather than establishment of small businesses within a large organisation. 17
  18. 18. Intrapreneur Gibb (1988) An Intrapreneur is an employee of a large organisation who has the entrepreneurial qualities of drive, creativity, vision and ambition. Gibb goes on to state that these people differ from entrepreneurs as they wish to retain the security of the large organisation. A number of authors define Intrapreneur and related terms. See Sharma and Chrisman (1999). 18
  19. 19. IntrapreneursMay have thesecharacteristics in commonwith independententrepreneurs Ability to work amidst confusion Ability to anticipate change Ability to make intuitive leaps High energy levels Creativity in problem solving Action orientation 19
  20. 20. ….. But want ...BUT may differ …. Want less restrictive but supportive environment Want recognition Want their ideas to be a vehicle for advancement Want the security (pay cheque, pension etc) 20
  21. 21. Intrapreneurs and entrepreneurs share: . Entrepreneurial characteristics Vision & Flexibility Action Orientated Dedicated Persistent / overcome failure Self determined goal setters Source: Pinchot 1986. Intrapreneuring. Harper & Row. 21
  22. 22. Intrapreneurs need in addition  An ability in a Multi-disciplinary role  To understand the environment  To encourage open discussion  Be able to create management options  To build a coalition of supporters. Source: Pinchot 1986. Intrapreneuring. Harper & Row. 22
  23. 23. Corporate Entrepreneurs as ‘Change Masters’ ‘Change Master’ A term used by Rosabeth Moss Kanter Three Stages of the journey:  Formulate and Sell,  Power to advance,  Maintain Momentum. 23
  24. 24. Intrapreneurs as Change Masters A term used by Rosabeth Moss Kanter Three Stages of the journey: Formulate and Sell, Power to advance, maintain Momentum. Skills: Personal and Interpersonal Step outside of conventional thinking Often ‘generalists’ with ‘kaleidoscopic thinking, vision communicators, persistent individuals, coalition & team builders, willing to share credit 24
  25. 25. Rosebeth Moss Kanter’s View Corporate entrepreneurs are people who envision something new and make it work. Being a corporate entrepreneur, what I call a ‘change master’ is much more challenging and fun than being a non- entrepreneur. It requires more of a person, but it gives back more self-satisfaction.  Rosabeth Moss Kanter (1988). Handbook for Creative and Innovative Managers. McGraw Hill. 25
  26. 26. Intrapreneurial Behaviour May be seen as good news  High achievement motivation  High task commitment 26
  27. 27. Intrapreneurial Behaviour May be seen as mild irritants  High levels of informal networking  Informal recruitment (This could be a major problem) 27
  28. 28. Intrapreneurial Behaviour May be seen as serious problems  Independence  Non-acceptance of rules and boundaries  Non-compliance with planning and control systems  Conflict with authority 28
  29. 29. Developing IntrapreneurshipFRAMEWORK CONDITIONS Encourage Individual Intrapreneurs Encourage Entrepreneurial Enterprise Encourage General Entrepreneurial Culture 29
  30. 30. Barriers to an Intrapreneurial Culture Barriers Include:  Senior management feel alienated  hierarchical nature of the organisation  Corporate culture  Short term performance requirements  Planning procedures  Source Gibb 1990 30
  31. 31. Barriers to an Intrapreneurial Culture Barriers (continued) Include:  Lack of ownership of the problem  Mobility of managers  lack of flexibility in the organisation  methods of compensation  Source Gibb 1990 31
  32. 32. An ‘Intrapreneurial’ culture needs: Sponsors Continuous involvement Autonomy of the intrepreneurial team Ability to cross boundaries  See Pinchot (1986) 32
  33. 33. An ‘Intrapreneurial’ culture needs: (needs continued) A tolerance of risk and failures Long term objectives Making resources available Introducing suitable compensation schemes.  See Pinchot (1986) 33
  34. 34. Drucker’s Entrepreneurial Practices Druker suggests some key management practices are vital in the development of ‘entrepreneurship’ in an existing business.  Management focuses on opportunity  Generation and maintenance of entrepreneurial spirit  Top-down and cross functional interaction  Source Drucker, P. Innovation & Entrepreneurship. Pan 1986 34
  35. 35. The final word …..“Intrapreneurs cannot exist if their passionatecommitment is ignored and their visions given topeople who don’t understand them. Withoutintrapreneurs, innovation flounders Source Pinchot (1986) 35

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