Lecture Organizational strategies for the 21st century - Chapter 13

Chapter 13 - Corporate entrepreneurship and innovation. Studying this chapter should provide you with the strategic management knowledge needed to: Define strategic entrepreneurship and corporate entrepreneurship; define entrepreneurship and entrepreneurial opportunities and explain their importance; define invention, innovation, and imitation and describe the relationship among them; describe entrepreneurs and the entrepreneurial mind-set;...
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Lecture Organizational strategies for the 21st century - Chapter 13TheStrategicManagementProcess 1 StrategicEntrepreneurship Entrepreneurship is concerned with:  The discovery of profitable opportunities  The exploitation of profitable opportunities Entrepreneurship: the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without the immediate constraint of the resources they currently control Purpose of entrepreneurship:  To create wealth or value 2 StrategicEntrepreneurship Entrepreneurs  Individuals, acting independently or as part of an organization, who perceive an entrepreneurial opportunity and then take risks to develop an innovation to exploit it Entrepreneurial Mind-set  Person who values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead to important innovations Firms that foster entrepreneurship are:  Willing to take risks  Committed to innovation  Proactive in creating opportunities rather than waiting to respond to opportunities created by others 3 StrategicEntrepreneurship Strategic entrepreneurship: taking entrepreneurial actions through a strategic perspective  Entrepreneurship dimension: identifying opportunities in the external environment to exploit through innovations  Strategic dimension: determining the best way to manage the firm’s innovation efforts Corporate entrepreneurship: the use or application of entrepreneurship within an established firm  Critical to the survival and success of established organizations as well as startup entrepreneurial ventures (or “startups”)  Three ways organizations can innovate  Internally  By cooperating (e.g., strategic alliances)  Through acquisitions 4 StrategicEntrepreneurship Firms engage in three types of innovative activities  Invention  The act of creating or developing a new product or process  Brings something new into being  Technical criteria determine the success of an invention  Innovation  Process of creating a commercial product from an invention  Brings something new into use  Commercial criteria determine the success of an innovation  Imitation  Adoption of an innovation by similar firms  Results of imitation  Product or process standardization  Products made with fewer features 5  Products offered at lower prices InternalInnovation With internal innovation firms take deliberate efforts to develop inventions and innovations within the organization Often called internal corporate venturing or intrapreneurship Firm internal innovation is reflected in efforts in research and development (R&D) and patents Firms innovate internally in two ways  Autonomous strategic behavior  Induced strategic behavior Firms produce two major types of internal innovations  Incremental innovations  Radical innovations 6 InternalInnovation Autonomous strategic behavior  A bottom up process in which product champions pursue new ideas, often through a political process, by means of which they develop and coordinate the commercialization of a new good or service until it achieves success in the marketplace  Can facilitate incremental and radical innovations  Primarily - Radical Innovation Induced strategic behavior  A top down process whereby the firm’s current strategy and structure foster innovations that are closely associated with the current strategy and structure  Can facilitate incremental and radical innovations  Primarily - Incremental Innovation 7 InternalInnovation Incremental Innovation  Is evolutionary and linear in nature  Most innovations are incremental  Build on existing knowledge bases and provide small improvements in current product lines/processes  Primarily - induced strategic behavior Radical Innovation  Is revolutionary and nonlinear in nature  Is rare because of difficulty and risk involved  Provide significant technological breakthroughs and creates new knowledge  Requires creativity  Use new technologies to serve newly created markets  Primarily - autonomous strategic ...