Corporate Entrepreneurship (1).pptx

Section 1 The Entrepreneurial Perspective Chapter 2 Corporate...

Section 1 The Entrepreneurial Perspective Chapter 2 Corporate Entrepreneurship ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Interest in Corporate Entrepreneurship There is an interest in entrepreneurship within organizations. An increasing social interest in “doing your own thing.” The entrepreneurial spirit is critical for innovation and grow.th Hypercompetition forces focus on product, productivity, and costs. Developing corporate entrepreneurship, helps overcome resistance to flexibility, growth, and diversification. Entrepreneurial endeavors consist of four key elements: New business venturing. Organizational innovativeness. Self-renewal. Proactiveness. ©McGraw-Hill Education.  Strategic Orientation and Commitment to Opportunity Both entrepreneurship and strategy have important implications for the performance of the firm. Strategic orientation are those factors that are inputs into the formulation of the firm’s strategy. Entrepreneurial management is driven by opportunity, not resources. Resources do not constrain entrepreneurially managed firms. An entrepreneurial orientation toward opportunity allows firms to rapidly pursue opportunities, seizing windows of opportunity. In contrast, traditional firms emphasize the collecting and analyzing of information. Sometimes missing the window of opportunity. ©McGraw-Hill Education.  Commitment of Resources and Control of An entrepreneurial Resources orientation toward the commitment of resources minimizes resources needed to pursue an opportunity. Traditionally managed firms commit resources on a large scale. Entrepreneurially managed firms are less concerned about ownership of resources than about access to others’ resources. In contrast, traditionally managed firms focus on the ownership and accumulation of resources. They believe they are self-contained if they control their resources. They differ in their entrepreneurial orientation toward the control of resources. ©McGraw-Hill Education.  Management Structure and Reward An entrepreneurialPhilosophy orientation toward management structure is organic with few layers and many communication channels. A traditionally managed firm’s structure is suited for internal efficiencies of allocating controlled resources. Entrepreneurially managed firms focus on pursuing opportunity representing new value for the firm, they have an entrepreneurial philosophy towards rewards. Traditionally managed firms reward based on responsibilities. Determined by the amount of resources an employee ©McGraw-Hill Education.  Growth Orientation and Entrepreneurial A firm with Culturetoward an entrepreneurial orientation growth has a strong desire to expand the firm, rapidly. Traditionally managed firms prefer growth to be slow and steady. Culture distinguishes entrepreneurially and traditionally managed firms. Entrepreneurial orientation toward culture encourages the generation of ideas, experimentation, and creative output. A traditionally managed firm’s culture means employees first assess the resources it controls. Most firms fall somewhere between traditionally managed and entrepreneurially managed. ©McGraw-Hill Education.  Characteristics of an Entrepreneurial Environment Organization operates on frontiers of Multidiscipline teamwork technology. approach. New ideas are Long time horizon. encouraged. Volunteer program. Trial and error is encouraged. Appropriate reward system. Failures are allowed. Sponsors and champions No opportunity available. parameters. Support of top Resources are available management. and accessible. ©McGraw-Hill Education.  Leadership Characteristics of Corporate A corporate Entrepreneurs entrepreneur understands the Corporate entrepreneurs environment. encourage open discussion. They must be a visionary leader – a person Openness leads to a dreaming great dreams. strong coalition of supporters. They must be flexible and create management A corporate options. entrepreneur must be persistent to make a They encourage new venture successful. teamwork, using a multi- disciplined approach. ©McGraw-Hill Education.  Establishing Corporate The first step is to Entrepreneurship secure top management Sixth, learn to be more commitment. productive with fewer Second, identify areas of resources. interest and money Seventh, establish a available. strong support structure. Third, use technology to Eighth, tie rewards to make the company more performance of the flexible. entrepreneurial unit. Fourth, interested Finally, allow successful managers will train units to expand and employees. unsuccessful ones to be Fifth, develop ways to eliminated. get closer to customers. ©McGraw-Hill Education.  Problems and Successful Efforts One study found new ventures started within a corporation performed worse than those started independently. Reasons included the corporation’s lack of long-term commitment, a lack of freedom to make decisions, and a constrained environment. There are successfully implemented corporate entrepreneurship. 3M allows employees to devote a percent of their time to independent projects - the most successful being Post-It notes. Problems are not insurmountable and implementing corporate entrepreneurship can lead to new products, growth, and a new corporate environment and culture. ©McGraw-Hill Education.  Learning From Failure Sometimes initiatives fail to achieve their objectives and are terminated. This represents an opportunity to learn and avoid the same mistakes in the future. Individuals using a dual process model of coping with negative emotions recover more easily. The dual process requires oscillating between two alternate approaches to loss. Loss orientation focuses on the loss event to create an account of the failure. A restoration orientation uses distraction to focus energy on other problems. ©McGraw-Hill Education.  Practical Implications of the Dual Process Knowledge that the feelings of loss are normal may reduce feelings of shame and embarrassment. Realizing the psychological and physiological outcomes caused by the loss are “symptoms” can reduce secondary sources of stress and assist with the choice of treatment. There is a process of recover from a failure to learn, which offers some comfort that feelings of loss will soon diminish. The recovery and learning process can be enhanced by use of the dual process model of copying with negative emotions. ©McGraw-Hill Education.