Ch1 the entrepreneurial_revolution
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The document discusses the history and concepts of corporate entrepreneurship. It summarizes key thinkers who developed ideas around entrepreneurship from the 18th century onward. It then defines corporate entrepreneurship as the process by which individuals within an existing organization create new organizations or instigate renewal. The document also discusses different approaches to corporate entrepreneurship like corporate venturing, intrapreneurship, and entrepreneurial transformation. It contrasts traditional management styles with entrepreneurial management.
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Ch1 the entrepreneurial_revolution
- 1. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns CHAPTER 1 The Entrepreneurial Revolution PART 1 THE ENTREPRENEURIAL DNA
- 2. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns The antecedence of modern entrepreneurship 1755 Cantillon 1803, 1815 Jean Baptist Say 1871, 1981 Carl Menger 1983 Ely and Hess 1911/1934, 1928 Schumpeter 1921 Knight 1948, 1952, 1967 Hayek 1975, 1984, 1985 Shapero 1974 Drucker 1973, 1979, 1997, 1999 Kirzner
- 3. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Highlighted Antecedence of Modern Entrepreneurship Date Author Concept 1755 Cantillon Introduced the concept of entrepreneur from ‘entreprendre’ (ability to take change). 1803, 1815 Jean-Baptiste Sya Emphasized the ability of the entrepreneur to ‘marshal’ resources in order or respond to unfulfilled opportunities. 1911/1934, 1928 Schumpeter Envisioned that entrepreneurs proactively ‘created’ opportunity using ‘innovative combination’ which often included ‘creative destruction’ of passive or lethargic economic markets. 1974 Drucker Attributed to entrepreneurs a sense to ‘foresee’ market trends and make a timely response. 1973, 1979, 1997, 1999 Kirzner Attributed to entrepreneurs a sense of ‘alertness’ to identify opportunities an exploit them accordingly.
- 4. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Drucker Views Business has only two basic functions: marketing and innovation. Marketing and innovation produce results. All the rest are costs. (Peter F. Drucker 1997)
- 5. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Entrepreneurs Entrepreneurs use innovation to exploit or create change and opportunity for the purpose of making profit. They do this by shifting economic resources from an area of lower to an area of higher productivity, accepting a high degree of risk and uncertainty in doing so
- 6. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Entrepreneurs Owner-managers in small firms Managers in large firms Entrepreneurs Defined by their actions Not the size of organisation they work in
- 7. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns What Is Corporate Entrepreneurship? • Independent entrepreneurship is the process whereby an individual or group of in individuals acting independently, create a new organization. • Corporate entrepreneurship is the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization.
- 8. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Continue… • Corporate entrepreneurship or Corporate venturing exists within the Research and Development (R&D) department within an organization to support and create value for the other functional departments in the corporation. • Provide outstanding value for consumers which need to be communicated through the marketing and other functional departments as the entire corporate process is essential to creating superior value for customers or end-users.
- 9. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Schools of thought Corporate venturing Concerned with: • The need for larger firms to manage new, entrepreneurial businesses separately from their mainstream activity • Investment by larger firms in strategically important smaller firms • Organisation structures needed to encourage new businesses • Management of disruptive technologies Galbraith (1982), Burgelman (1983), Drucker (1985), Christensen (1997)
- 10. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Corporate Venturing • Refers to corporate entrepreneurial efforts that lead to the creation of new business organizations within the corporate organization. • They may follow from or lead to innovations that exploit new markets, or new product offerings, or both. • These venturing efforts may or may not lead to the formation of new organizational units that are distinct from existing organizational units in a structural sense (e. g., a new division).
- 11. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Schools of thought Intrapreneurship Concerned with: • How individuals may be encouraged to act more entrepreneurially in a large organisation • Systems, structures and cultures that inhibit entrepreneurship • The character and personality of the individual behaving in this way Kanter (1982), Pinchot (1985)
- 12. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns What is intrapreneurship • Pinchot (1985): „Intrapreneuring ... as entrepreneurship inside of the corporation.“ • Knight (1987): An intrapreneur is a employee who: introduces and manages an innovative project within the corporate environment as if he or she were an independent entrepreneur.
- 13. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Schools of thought Bring the market inside Concerned with: • Structural changes needed to encourage entrepreneurial behaviour • Market approach to resource allocation and people management • Spin offs and venture capital operations Hamel (1999), Foster & Kaplan (2001)
- 14. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Schools of thought Entrepreneurial transformation Concerned with: • The need for large firms to adapt to an ever- changing environment • Changes in systems, structure and culture that encourage entrepreneurship • Leadership and strategies that encourage entrepreneurship Peters & Waterman (1982), Ghoshal & Bartlett (1997), Kanter (1989), Tushman & O’Reilly (1996), Burns (2005)
- 15. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Objective of CE To gain competitive advantage by encouraging innovation at all levels in the organization-corporate, division, business unit, functional or project team levels.
- 16. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Traditional Management Control Uniformity Effectiveness Efficiency Conformity Contracts Functional management Training Long-term planning See change as a threat Create certainty Discourage failure Avoid risk Compartmentalised knowledge Discipline
- 17. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Entrepreneurial Management Innovation Opportunity seeking Relationships Drive Question status quo Not controlling Co-operation Rapid transfer of knowledge Strategising at all levels Embrace change Tolerate uncertainty Vision Take risk Allow failure Learning
- 18. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Corporate entrepreneurship: identifying and pursuing discontinuous opportunities...
- 19. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Entrepreneurial architecture Entrepreneurial management is about creating and managing an entrepreneurial architecture – the network of relational contracts within and around an organization - with customers, suppliers and staff. It is based on trust and underpinned by mutual self-interest.
- 20. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Entrepreneurial Management Entrepreneurial Management Knowledge management Learning organisation Innovation and creativity Entrepreneurship Marketing Strategy Leadership Culture
- 21. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Wrap up • Corporate entrepreneurship can be defined as the process whereby an individual or group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization. • Other reasons to develop corporate entrepreneurship are among others retaining and motivating the brightest staff.