Professional Documents
Culture Documents
I.
Survival
Revitalisation
Performance
Innovation
Competitive advantage
Aaltio (2004) advocates the benefits of intrapreneurship for the individual employee:
Work satisfaction
Meaning of work
Start-up ventures
Small firms
Mid-sized companies
Large conglomerates
Non-profit organizations
Public sector agencies
Corporate entrepreneurs face three major challenges linked to the need for inter-organizational
political skills:
Achieving credibility or legitimacy for the concept and the entrepreneurial team.
Obtaining resources.
Overcoming inertia and resistance.
Corporate entrepreneurs remain in the corporate environment rather than starting their own
ventures for three main reasons:
The size of the resource base that they can tap into.
The potential to operate on a fairly significant scope and scale fairly quickly.
The security they enjoy when operating in an existing company.
Create environments where employees have a sense that resources can be accessed if an
idea is sound.
Find ways to reinforce the ability of anyone in the firm to champion an idea and get it
implemented.
Invest in the development of people.
Managers focus more on the current situation and how to improve efficiency and
effectiveness.
Entrepreneurs focus less on the current situation and more on what can be.
II.
Innovativeness
Risk-Taking
Proactiveness
3 Frontiers of Innovation:
Innovativeness: Processes
4 types of innovation:
3 categories of firms:
Stars high performing companies that had successfully integrated innovation and creativity
into their daily business practices.
Seekers display a number of appropriate innovation practices, but came up short in terms
of innovation performance and company-wide commitment to innovation.
Spectators acknowledge the importance of innovation but provide little support for it.
Characteristics of Stars:
Entrepreneurial firms acting on, rather than reacting to their environments. (Miller, 1987)
Seeking new opportunities that may or may not be related to the present line of operations.
Introducing new products and brands ahead of competition.
Strategically eliminating operations that are in the mature or declining stages of the life
cycle.
Internal corporate venturing: new businesses created and owned by the corporation.
Cooperative corporate venturing: new businesses are created and owned by the
corporation together with one or more external development partners.
External corporate venturing: new businesses are created by parties outside the
corporation and subsequently invested in or acquired by the corporation.
Corporate venture capital
Corporate Venture Capital: directly investing corporate funds into external business start-ups
4 types of Corporate Venture Capital:
Driving investments
Enabling investments
Emergent investments
Passive investments
Strategic renewal
Sustained regeneration
Domain redefinition
Organizational rejuvenation
Business model reconstruction
A firms business model is a concise representation of how an interrelated set of decision variables
in the areas of venture strategy, architecture, and economics will be addressed to create sustainable
competitive advantage in defined markets.
A business model should address six basic questions (Morris et al., 2005):
1. How does the firm create value?
2. For whom does the firm create value?
3. What is our source of internal advantage or core competency?
4. How does the firm externally differentiate itself in the marketplace?
5. What is the firms model for making money?
6. What is the managements growth ambition and over what time period?
Open Innovation means that a firm is not solely reliant upon its own innovative resources for new
technology, product, or business development purposes. Rather, the firm acquires critical inputs to
innovation from outside sources.
4 reasons why the companies are increasingly choosing to pursue open innovation models:
1. Importing new ideas is a good way to multiply the building blocks of innovation.
2. Exporting ideas is a good way to raise cash and keep talent.
3. Exporting ideas gives companies a way to measure an innovations real value and to
ascertain whether further investment is warranted.
4. Exporting and importing ideas helps companies clarify what they do best.
III.
Strategic management
McKinseys 7 S model:
Strategy
Structure
Systems
Style
Staff
Skills
Shared values
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Organization Structure
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Structure refers to the formal pattern of how people and jobs are grouped and how the
activities of different people or functions are connected.
Structures are created to bring order and logic to company operations.
Once formalized, the structure is not static. It is continuously changed as management
struggles with the need to balance differentiation of activities and people against integration
of activities and people.
Components of structure:
1. Differentiation is about the ways decision-making authority is distributed, tasks are
grouped and people are assigned to tasks
2. Integration refers to the ways in which people and functions are coordinated
Key questions and decisions to be made:
Types of structure:
Simple structure
Mechanistic structure
Organic structure
Divisional structure
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Concept of Cycling:
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Is the initiative consistent with the corporations existing scope of business operations?
Can the initiative be employed to transition the corporation to new and more attractive
business domains?
Does the initiative create options for the corporation to move in new strategic directions
where the attractiveness of these new directions is currently unknown?
Will the initiative potentially enhance the corporations competitiveness in its chosen
product-market domains or favourably reposition the corporation within those domains?
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IV.
Organizational Roles
Function: job, a set of tasks, responsibilities with a specific title and goal. Positioned in a
context and connected with other functions;
Role: what and how a person should act;
Type: specific characteristics of a person based on a psychological or sociological model.
Eagles have vision, ideas; do not fit in a tight job description; want to become an
intrapreneur;
Dead wood employees who are not productive; keep their seat warm;
Committed, Indifferent, Dissident regarding companies goals.
Primary motives
o Managers higher salary; corporate rewards
o Entrepreneurs believe in own ideas; self-motivators; freedom;
Risk attitude
o Managers confident of taking risks; calculated risk
o Entrepreneur moderate risk taker; invest heavily; not afraid for losing the job
Status
o Managers - status symbols of his management position (private parking place, bigger
office, private secretary
o Entrepreneur not interested in status; very simple office; freedom;
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Initiator - come up with an idea; makes the start; also serves as the Champion;
Sponsor top management that protects the intrapreneurial team; facilitate the resources
including financial;
Champion the intrapreneur; goes over all the stages; developing the project; putting on
the market; loner; jack of all trades
Innovation Midwife kind of a diplomat; connecting the sponsor and the professional who
comes up with an opportunity, idea or initiative; translating cultures
Supporter colleague that believe and invest in your idea;
Reactor come up with critical questions to test the viability of the idea or initiative;
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Researcher/analyser
Interpreter/strategist
Visionary/inventory
Catalyst or leader
Endorser
Team player
Resource provider
Problem solver
Coordinator
Negotiator
Politician
Change manager
Missionary
Opportunist
Critic/judge
Has this person been challenged and yet proceeded anyway? Is the person willing to handle
controversy?
Does the person have a deep personal commitment to innovation and innovate people?
Can you gain the respect of this person?
How important is another step up the corporate ladder to this person?
Does this person know when to fight, when to give up gracefully, and when it really does not
matter?
Does the person understand clearly the corporate decision making structure?
Does this person have the respect of other key corporate decision makers and have access
to them?
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Questions
1. Q: Which of the following key company capabilities does NOT generate sustainable
competitive advantage?
A: Dependability.
2. Q: Consider the following statements about the key roles of managers and entrepreneurs:
I. Managers are planners, staffers, evaluators, and change agents.
II. Entrepreneurs are strategists, visionaries, creators, and
budgeters.
A: Both statements are false.
3. Q: What is a similarity between independent and corporate entrepreneurship?
A: Entrepreneur and intrapreneur must have a unique business concept.
4. Q: What is a difference between independent and corporate entrepreneurship?
A: ?
5. Q: What is NOT one of the three types of Corporate Entrepreneurship discussed in Sharma
and Chrisman (1999), ET&P article?
A: Innovation
6. Q: Which degree of innovation describes the implementation of a new administrative
system, e.g., SAP?
A: Major new process.
7. Q: Which of the following dimensions characterize an entrepreneurial organization?
A: Risk-taking, innovativeness, proactiveness
8. Q: A firm seeks growth in new markets with current products. Which strategy is the firm
pursuing?
A: Market development strategy
9. Q: Consider the following statements about the modes of corporate venturing:
I. Internal corporate venturing describes new businesses that are created and owned
by the corporation.
II. External corporate venturing describes investing corporate funds into external
business start-ups.
A: Both statements are true.
10. Q: What type of corporate investment is an enabling investment (Chesborough, 2002, HBR)?
A: Strategic objective, loosely linked to operations.
11. Q: How many principles does the concept of corporate effectuation contain?
A: 5
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