Strategic Entrepreneurship - Introduction - PDF

STRATEGIC ENTREPRENEURSHIP FACULTY OF ENTREPRENEURSHIP AND BUSINESS UNIVERSITI MALAYSIA KELANTAN  INTRODUCTION TO THE CONCEPT OF STRATEGIC ENTREPRENEURSHIP TABLE 1: THE BIRTH OF STRATEGIC ENTREPRENEURSHIP Name of Author Year Issues relate to strategic entrepreneurship Mint...

STRATEGIC ENTREPRENEURSHIP FACULTY OF ENTREPRENEURSHIP AND BUSINESS UNIVERSITI MALAYSIA KELANTAN  INTRODUCTION TO THE CONCEPT OF STRATEGIC ENTREPRENEURSHIP TABLE 1: THE BIRTH OF STRATEGIC ENTREPRENEURSHIP Name of Author Year Issues relate to strategic entrepreneurship Mintzberg 1973 Introduce the notion of entrepreneurial strategy making Schendel&Hofer 1979 Argued that the entrepreneurial choice is at the heart of the concept of strategic Burgelman 1983 Empirically examine the interrelationship between strategic management and entrepreneurship inside a large corporation Covin&Slevin 1989 Posited the concept of entrepreneurial strategy posture examining a firms competitive orientation on a spectrum from conservative to entrepreneurial Chittipeddi&Wallett 1991 Reviewed macroscopic trend impacting business and argue that the ethos of entrepreneurship would pervade winning firms and that ‘the organizational’ archetype of the future will be entrepreneurial. Its leadership, strategies, and structure will reflect entrepreneurial thinking with associated traits such as flexibility, innovativeness, and a problem solving actions orientation. Day 1992 Examined the research linkages between entrepreneurship, strategy management, and general management and offers one possible configuration of their interrelation. Sandberg 1992 Investigated cross-fertilization opportunities between strategy management and entrepreneurship and posited six fertile areas; innovation; new business creation; opportunities seeking; risk assumption; top management teams; and group processes used in strategic decisions. Barringer&Bluedorn 1999 Studied the relationship between entrepreneurial intensity and five strategic management practices finding statistically significant results for the impacts of scanning intensity, planning flexibility, locus of planning and strategic controls. Meyer & Heppard 2000 Edited the first scholarly book addressing the interface between entrepreneurship and strategy to uncover the components of a firm’s entrepreneurial ‘dominant logic’ independent of firm size.  THE BIRTH OF STRATEGIC ENTREPRENEURSHIP There are three perspectives on the marriage of strategic and entrepreneurship.  strategic management is “dominants” over entrepreneurship (Baker and Pollock, 2007 cited in Rensburg, 2013)  strategic management is itself a “subset” of entrepreneurship (Browne & Harms, 2003 cited in Rensburg, 2013)  Strategic management “intersection” with entrepreneurship (Rensburg, 2013). The former indicates that the entrepreneurship concepts can be explained by the strategic management domains while the later argues that strategic management only the division of entrepreneurship field.  THE BIRTH OF STRATEGIC ENTREPRENEURSHIP The term of ‘Strategic Entrepreneurship’ was first pointed out by Herbert & Brazeal (1998 cited in Rensburg, 2013). Researchers in Strategic Entrepreneurship field, studies on board of directors’ roles, firm resources and capabilities, and financial implications (Rensburg,2013). Other researchers study on the combination of opportunities seeking behaviour (exploration) and advantages seeking behaviour (exploitation) and relates it to wealth creation (Hitt et al. cited in (Rensburg, 2013)  WHAT IS STRATEGY? The Implicit Strategy Model of the Sustainable Competitive Past Decade Advantage One ideal competitive position Unique competitive position for in the industry the company Benchmarking of all activities Activities tailored to strategy and achieving best practice Aggressive outsourcing and Clear trade offs and choices partnering to gain efficiencies vis-à-vis competitors Advantages rest on a few key Competitive advantages arises success factors, critical from fit across activities resources and core competencies Flexibility and rapid responses Sustainability comes from the to all competitive and market activity system, not the parts changes Sources : Michael E.Porter, (1996 cited in Kuratko, Operational effectiveness a D. F. & Hodgetts, R. M., 2004: 532) given  STRATEGIC ENTREPRENEURSHIP AND STRATEGIC MANAGEMENT Source : Wheelen, T. L. and Hunger, J. D. (2000 cited in Kuratko, D. F. & Hodgetts, R. M., 2004: 521).  HOW STRATEGIC MANAGEMENT RELATES TO STRATEGIC ENTREPRENEURSHIP? Innovation Networks Internalizatio Entrepreneuri n Strategic al actions Organization actions al Learning Top Management Teams and governance Growth Wealth Creation Source : R. Duane Ireland, Micheal A.Hitt, S. Michael Camp, and Donald L.Sexton, (2001 cited in in Kuratko, D. F. & Hodgetts, R. M., 2004: 531)  COMPONENTS OF STRATEGIC ENTREPRENEURSHIP Resource Management Opportunit y Growth identificati Innovatio on n Strategic Entrepreneurs hip vision Acceptan ce of risk Flexibilit y Dynamic capability Sources : Kyrgidou, L. P. And Mathew Hughes, M. (2009: 49)  COMPONENTS OF STRATEGIC ENTREPRENEURSHIP Opportunity identification - suggested to be an important source of competitive advantage (Hitt et al., 2002), which can lead to entrepreneurial opportunity creation. Innovation or the ability to innovate - one of the distinctive competencies of entrepreneurial firms (Kirby, 2003). Sonfield and Luccier (1997) expand on this concept proposing that the most effective way to position an entrepreneurial firm is to use risk and innovation. Risk - referring to perceived environment (Smircich and Stubbart, 1985). The entrepreneur does not make a conscious decision to engage in highly risky projects, but rather their perception of that situation is of moderate rather than of high risk (Busenitz and Barney, 1997). UNIVERSITI MALAYSIA KELANTAN  COMPONENTS OF STRATEGIC ENTREPRENEURSHIP Flexibility- firms should be able to respond to change quickly, independent of their current strategy (Eisenhardt et al., 2000). Flexibility refers to balancing structure with the freedom to implement and change strategy (Eisenhardt et al., 2000), which in turn will facilitate quick response to change (Bhide, 1994). Vision- Establishing a clear vision and developing strategy that focuses both on opportunity and advantage within that vision (Hitt et al., 2001) enhance opportunity identification Growth is related not only to innovative and creative ideas, but also to the structure and strategy to turn such ideas into profitable ventures resources and dynamic capabilities appear UNIVERSITI MALAYSIA KELANTAN  DEFINITION OF STRATEGIC ENTREPRENEURSHIP Strategy entrepreneurship is the use and/or stimulation of entrepreneurial activity to achieve strategic goals, (Kuratko & Audretsch, 2009 cited in Rensburg, 2013). In addition, strategic entrepreneurship is still mainly a rather loose amalgam of a number of insights from strategy and entrepreneurship (Foss & Lyngsie, 2011, p. 16). Strategic entrepreneurship describing an input-process- output model that entails: organizational resources, individual knowledge, and skills, and environmental factors as inputs.  DEFINITION OF STRATEGIC ENTREPRENEURSHIP Guth & Ginsberg (1990), they replace strategic renewal with strategic entrepreneurship relegating strategic renewal to sub strategy of strategic entrepreneurship. Moreover, strategic entrepreneurship can be enacted within small medium size enterprise as well as within large established corporations (Resburg, 2013). The existences of entrepreneurial behaviour in large frim is either the result of a deliberate or an emergent strategy or as Burgelman (1993b) described it the result of induced strategy behaviour or autonomous strategy behaviour. STRATEGIC ENTREPRENEURSHIP THEORY Sources : Kyrgidou, L. P. And Mathew Hughes, M. (2009: 53)  CONCLUSION Entrepreneurs do not use strategic planning for many reasons because:  scarcity of time  lack of knowledge about how to plan  lack of expertise in the planning process,  lack of trust in others. Benefits to strategic entrepreneurs are:  have better financial performance  more efficient resource allocation  improved competitive position  higher employee morale  more rapid decision making UNIVERSITI MALAYSIA KELANTAN  REFERENCES Rensburg, D.J.V. (2013). Is Strategic Entrepreneurship a Pleonasm?. Journal of Management and Strategy, 4, 1, 15-27. Kuratko, D. F., & Hodgetts, R. M. (2004). Entrepreneurship: Theory, process, practice. Mason, Ohio: Thomson/South-Western Kyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: Origins, core elements and research directions. European Business Review, 22, 1, 43-63 Dollinger, M, J. (2008). “ENTREPRENEURSHIP: Strategies and Resources Fourth Edition”, Kelley School of Business, Indiana University. MARSH publications, pp. 33-40. Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2009). Entrepreneurship. New York: McGraw-Hill Higher Education. Lieberman, M. B., & Montgomery, D. B. (1988). First‐mover advantages. Strategic management journal, 9(S1), 41-58. Zimmerer, T., Scarborough, N. M., & Wilson, D. (2002). Essentials of entrepreneurship and small business management (Vol. 2). Upper Saddle River, NJ: Prentice Hall. Barringer, B and Ireland, D (2012) Entrepreneurship – Successfully Launching New Ventures (4th Ed.). Pearson Education, Global Edition. (B1) Dollinger, Marc J., (2003) Entrepreneurship: Strategies and Resources, 3rd Edition, Prentice Hall International Edition. (B2)