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Ch12 innovation and corporate entrepreneuship

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strategic management chapter 12

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Ch12 innovation and corporate entrepreneuship

  1. 1. 12 Managing Innovation and Fostering Corporate EntrepreneurshipMcGraw-Hill/IrwinStrategic Management: Text and Cases, 4e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. 12 - 2 Managing Innovation• Innovation: using new knowledge to transform organizational processes or create commercially viable products and services• Some Companies, such as Apple, are always innovating popular products, while others are constantly struggling for their one great idea.
  3. 3. 12 - 3 Types of Innovation• Degree of innovativeness - Radical innovation - Incremental innovation
  4. 4. 12 - 4 Continuum of Radical and Incremental InnovationsExhibit 12.1 Continuum of Radical and Incremental Innovations
  5. 5. 12 - 5 Types of Innovation• Degree of innovativeness - Radical innovation - Incremental innovation• Product and process innovations
  6. 6. 12 - 6 Innovation Challenges• Seeds versus Weeds• Experience versus initiative
  7. 7. 12 - 7 Innovation Challenges• Seeds versus Weeds• Experience versus initiative• Internal versus external staffing• Building capabilities versus collaborating• Incremental versus preemptive launch
  8. 8. 12 - 8 Defining the Scope of Innovation• Firms must define the “strategic envelope” (scope of the innovation efforts)• In defining the strategic envelope, a firm should answer several questions. What are these questions?
  9. 9. 12 - 9 Managing Innovation• Firms need to regulate the pace of innovation - Incremental innovation (six months to two years) - Radical innovation (Typically 10 years or more)• Innovation often requires collaborating with others who possess complementary knowledge and skills
  10. 10. 12 - 10 Dispersed Approaches to Corporate Entrepreneurship• Dedication to entrepreneurial principles and practices• Entrepreneurial culture• Product champions
  11. 11. 12 - 11 Corporate Entrepreneurship Determining • Corporate culture howentrepreneurial • Leadershipprojects will be pursued • Structural features that guide and constrain action • • Organizational systems that foster learning and manage rewards
  12. 12. 12 - 12 Entrepreneurial Culture• Always searching for opportunities• Strong entrepreneurial emphasis in all parts of the organization• Strategic entrepreneurial leaders (and related culture)
  13. 13. 12 - 13 Product Champions• Bring entrepreneurial ideas forward• Identify what kind of market exists for the product or service• Find resources to support the venture• Promote the venture concept to upper management
  14. 14. 12 - 14 Business Incubators• Business incubators are designed to “hatch” new businesses• Incubators provide some a number of resources to a new venture
  15. 15. 12 - 15 Measuring the Success of Corporate Entrepreneurship Activities• Comparing strategic and financial CE goals• Positional or technological advantage• Real options analysis (ROA) is an investment tool from the field of finance.
  16. 16. 12 - 16Entrepreneurial Orientation Autonomy Innovativeness Proactiveness Competitive aggressiveness Risk-Taking
  17. 17. 12 - 17 Entrepreneurial Orientation Dimension Definition Autonomy Independent action by an individual or team aimed at bringing forth a business concept or vision and carrying it through to completion. Innovativeness A willingness to introduce novelty through experimentation and creative processes aimed at developing new products and services as well as new processes. Proactiveness A forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand. Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91.Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation
  18. 18. 12 - 18 Entrepreneurial Orientation Dimension Definition Competitive An intense effort to outperform industry rivals. It is aggressiveness characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace. Risk taking Making decisions and taking action without certain knowledge of probable outcomes; some undertakings may also involve making substantial resource commitments in the process of venturing forward. Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91.Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation

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