Chapter 2

Entrepreneurial Intentions
and
Corporate
Hisrich
Entrepreneurship
Peters

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Shepherd
Managerial Versus Entrepreneurial
Decision Making
 Entrepreneurial management is distinct
from traditional management in terms of:
 Strategic orientation.
 Commitment to opportunity.
 Commitment of resources.
 Control of resources.
 Management structure.
 Reward philosophy.
 Growth orientation.
 Entrepreneurial culture.

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Table 2.1 – Distinguishing Entrepreneurially
from Traditionally Managed Firms

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Managerial Versus Entrepreneurial
Decision Making
 Strategic orientation- factors that are
inputs into the formulation of the firm’s
strategy

Entrepreneurial Traditional managment

-Driven by the presence of -To use resources efficiently

opportunities for new entry -Type and resources the firm
-Acquiring necessary has represent a key starting
resources is secondary point for future

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Managerial Versus Entrepreneurial
Decision Making
 Commitment to opportunity
Entrepreneurial
-Committed to take action on
potential opportunities
-Can pursue opportunity
rapidly- making the most
‘window of opportunity’
-Able to withdraw resources
rapidly if find it is not the right
opportunity- minimize losses
Traditional managment
-Place emphasis on
information that derived from
data collection & analysis eg:
return on resources deployed
-Large initial investment will
be made once pursuing
opportunity with intention to
stay longer
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Managerial Versus Entrepreneurial
Decision Making
 Commitment to resources

Entrepreneurial Traditional managment

-Focus on minimize resources -Use resources at large scale

required to pursue particular -Based on past events
opportunity -Not easily reversed
-Put small amt of resources
each step- small risk
-Can change direction rapidly

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Managerial Versus Entrepreneurial
Decision Making
 Control of resources

Entrepreneurial Traditional managment

-Less concerned abour -Focus on ownership of
ownership of resources resources & accumulation of
-Concerned more about further resources
having access to other;s
resources

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Managerial Versus Entrepreneurial
Decision Making
 Management structure
Entrepreneurial
-Few layers of bureaucracy
between top mgt & customer
-Multiple informal
communication channels
-Able to communicate & take
action faster
-More structured both for
internal and external networks
Traditional managment
-Structure well suited with
internal efficiencies of
controlling resources
-Formalized hierarchy
-Higly routinized work
-Layers of middle managment
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Managerial Versus Entrepreneurial
Decision Making
 Reward philisophy

Entrepreneurial Traditional managment

-Focsed on pursuing
opportunities for new entry
that represent new value
-Compensates employees
based on the contibution
toward discovery/ generation
and exploitation of opportunity
-Managed rewards based on
responsibilities that is
determined by amt of
resources each employee
controls

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Managerial Versus Entrepreneurial
Decision Making
 Growth orientation
Entrepreneurial
-Desire to expand firm size
rapidly
 Entrepreneurial culture
Entrepreneurial
-Encourage employees to
generate ideas, experiment &
creative task
Traditional managment
-Prefer slow and steady
growth- manageable growth
Traditional managment
-Intersted in ideas that
revolve around currently
controlled resources- limit the
scope of opportunities
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Managerial Versus Entrepreneurial
Decision Making (cont.)
 Causes for Interest in Corporate
Entrepreneurship
 Increasing interest in “doing your own thing”
and doing it on one’s terms.
 New search for meaning and impatience has
caused more discontent in structured
organizations.
 Organizations are encouraging corporate
entrepreneurship i.e. stimulating, and
capitalizing on, employees who think that
something can be done differently and better.

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Managerial Versus Entrepreneurial
Decision Making (cont.)
 Corporate entrepreneurship is most strongly
reflected in the following endeavors:
 New business venturing (corporate venturing)
- The creation of a new business within an existing
organization- by redefine company’s product, develop
new mkt or form formally autonomous/semiautonomous
units/firm
 Innovativeness
- Product and service innovation, with emphasis on
development and innovation in technology.
- Include new product dev, prod. Improvement, new
production methods and procedures

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Managerial Versus Entrepreneurial
Decision Making (cont.)
 Self-renewal
-Transformation through renewal of the key ideas on
which an organization is built.
- Includes a redefination of buss. Concept, reorganization,
introduction of systemwide changes to increase
innovation
 Proactiveness
- Includes initiative, risk taking, competitive
aggressiveness, and boldness.

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Table 2.3 - Characteristics of an
Entrepreneurial Environment

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Table 2.4 - Leadership Characteristics
of a Corporate Entrepreneur

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