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Chapter #1 - Corporate Entrepreneurship& Innovation...

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Unformatted text preview: Corporate Entrepreneurship & Innovation Michael H. Morris Donald F. Kuratko Jeffrey G. Covin Copyright (c) 2007 by Donald F. Kuratko All rights reserved. “Wealth in the new regime flows directly from innovation, not optimization; that is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown.” ~Kevin Kelly, “New Rules for the New Economy,” Wired Copyright (c) 2007 by Donald F. Kuratko All rights reserved. Chapter 1 The New The Entrepreneurial Imperative Imperative Turbulent Environments and the Embattled Corporation E The changing domain of the external The environment environment •Technological •Legal Technological •Economic •Regulatory •Competitive •Global •Labor •Customer •Resource •Social Resource •Customer •Supplier “Managers face shortened decision windows and diminishing opportunity streams, meaning they must act quickly or find themselves missing out on opportunities” Turbulent Environments and the Embattled Corporation Customers Fragmented markets and rapidly rising customer expectations are forcing firms to customize their products, cultivate longer-term customer relationships and learn new skills in serving global markets E Technology Firms have to change the ways they operate internally and how they compete externally based on: -New information management technologies -New production and service delivery technologies -New customer management technologies The Embattled Corporation Competitors Lead customers to entirely new market spaces Quickly mimic which makes it harder to differentiate Attack firms’ most profitable areas of business by specializing in narrow, profitable niches Legal, Regulatory and Ethical Standards Firms are increasingly accountable to multiple forcing management to make difficult choices and deliver results while behaving responsibly Increasingly litigious environment Increasing regulatory restrictions E The New Path to Sustainable Competitive Advantage Achieving a sustainable competitive advantage Achieving derives from five key company capabilities derives Adaptability Flexibility Speed Aggressiveness Innovativeness “Entrepreneurship is the core source of sustainable advantage” E What is Entrepreneurship? Seven perspectives on the nature of Seven entrepreneurship entrepreneurship Creation of wealth Creation of enterprise Creation of innovation Creation of change Creation of employment Creation of value Creation of growth E What is Entrepreneurship? The most common key words found in The the definition of entrepreneurship the Starting / Founding / Creating New Business / New Venture Innovation / New Products / New Market Pursuit of Opportunity Risk-taking / Risk Management / Uncertainty Profit-seeking / Personal Benefit E What is Entrepreneurship? An encompassing definition of An entrepreneurship entrepreneurship “Entrepreneurship is the process Entrepreneurship of creating value by bringing together a unique combination of resources to exploit an opportunity.” opportunity.” E What is Entrepreneurship? Entrepreneurship involves a process Entrepreneurs create value where there Entrepreneurs was none before was Entrepreneurs put resources together in Entrepreneurs a unique way unique Entrepreneurship is opportunity-driven Entrepreneurship behavior behavior E What is Corporate Entrepreneurship? “Corporate entrepreneurship is a term Corporate used to describe entrepreneurial behavior inside established mid-sized and large organizations.” and Other popular related terms Organizational entrepreneurship Intrapreneurship Corporate venturing E Management Versus Entrepreneurship “Management is the process of Management setting objectives and coordinating resources, including people, in order to attain them.” attain E Management Versus Entrepreneurship Managers focus more on the current situation and how to improve efficiency and effectiveness efficiency Entrepreneurs focus less on the current situation and more on what can be situation E Management Versus Entrepreneurship The Manager The Entrepreneur • Visionary • Opportunity-seeker • Creator The Entrepreneurial Manager • Planner • Strategist • Organizer • Staffer • Motivator • Budgeter • Evaluator • Coordinator • Supervisor • Innovator • Calculated Risk-taker • Resource Leverager • Change Agent • Active and Adaptive Concept Implementer Why Companies Lose their Entrepreneurial Way: The Organizational Life Cycle Greiner’s 5 stages of a company’s evolution Creativity Startup Direction Growth Maturity Delegation Renewal/death Coordination Collaboration E E Why Companies Lose their Entrepreneurial Way: The Organizational Life Cycle The evolutionary process of companies: Next Stage Crisis Point Companies enter a particular growth stage and prosper until reaching a crisis point Begin Decline Failure Acquisition Candidate Why Companies Lose their Entrepreneurial Way: The Organizational Life Cycle E Start up and early growth Growth through direction Growth through delegation Growth through coordination Growth through collaboration The Entrepreneurial Imperative: A Persistent Sense of Urgency E Managers within an organization tend Managers to become reactive by responding to the changes brought about by the external environment but let entrepreneurial fires within the company dwindle and diminish company The Entrepreneurial Imperative: A Persistent Sense of Urgency Managers must ask themselves the following questions to avoid Managers inevitable diminishing returns and refocus on new directives and entrepreneurial avenues: entrepreneurial How much more cost savings can the company wring out of How E its current business? Are managers within the firm working harder and harder for smaller and small efficiency gains? harder How much more revenue growth can the company squeeze How out of its current business? Is the company paying more and more for customer acquisition and market share gains? more The Entrepreneurial Imperative: A Persistent Sense of Urgency • How much longer can the company keep How propping up its share price through share buybacks, spin-offs, and other forms of financial engineering? engineering? • How many more scale economies can the How company gain from mergers and acquisitions? company • How different are the strategies of the four or five How largest competitors in the industry from the company’s strategy? E E A Model of Corporate Entrepreneurship Copyright (c) 2007 by Donald F. Kuratko All rights reserved. ...
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