corporate entrepreneurship

Chapter 13Corporate Entrepreneurship and Innovation Corporate Entrepreneurship and Innovation Michael A... Chapter 3Internal Environment Chapter 2 External Management Process Strategic I

Chapter 13

Corporate Entrepreneurship

and Innovation

Corporate Entrepreneurship

and Innovation

Michael A Hitt

R Duane Ireland Robert E Hoskisson

Michael A Hitt

R Duane Ireland Robert E Hoskisson

Chapter 3

Internal Environment

Chapter 2

External

Management

Process

Strategic Intent

Strategic Mission

Strategy Formulation

Chapter 4

Business-Level

Strategy

Chapter 5

Competitive Dynamics

Chapter 6

Corporate-Level Strategy

Chapter 8

International Strategy

Chapter 9

Cooperative Strategies

Chapter 7

Acquisitions &

Restructuring

Strategy Implementation

Chapter 10

Corporate Governance

Chapter 11

Structure

& Control

Chapter 12

Strategic Leadership

Chapter 13

Entrepreneurship

& Innovation

Entrepreneurship

& Innovation

Defining Entrepreneurship

Firm’s capabilities to develop new goods or

services and manage the innovation process

Corporate Entrepreneurship

Creating or developing a new product or process idea

Invention

Creating a commercializable product from invention

Innovation

Adoption of innovation by a population of similar firms

Imitation

Successful Entrepreneurship

The key to success with entrepreneurship and

innovation is moving from the invention of ideas

to effective commercialization and acceptance in

the marketplace

Difficult for competitors to imitate

Difficult for competitors to imitate

Commercially exploitable

with present capabilities

Commercially exploitable

with present capabilities

Innovation and Competitive Advantage

Competitive Advantage

Competitive Advantage

Provides significant

value to customers

Provides significant

value to customers

Fostering Entrepreneurial Innovation

Internal Corporate Venturing

Three approaches:

Cooperating to Produce Innovation

Acquiring Innovative Capability

Create it!

Co-opt it!

Buy it!

Internal Corporate Venturing

bottom-up process or as a top-down process

Autonomous strategic behavior is a bottom-up process through which Product Champions pursue new product ideas to commercialization

Product Champions are individuals who have an

entrepreneurial vision for a new product and seek

support for its commercialization

Structural Context

Model of Internal Corporate Venturing

Concept of Corporate Strategy

Strategic Context

Internal Corporate Venturing

Induced strategic behavior is a top-down process

in which the current strategy and structure foster

product innovations that are closely associated

with the current strategy

Environmental uncertainty makes developing

entrepreneurship strategy highly complex

Requires a decision on which corporate resources

to deploy for new technology development and

which innovative ideas to bring to market

Value Appropriation

from Innovation

Barriers to Integration

Different Time

Interpersonal

Different Goal

Formality of

Orientation

Orientation

Orientatio

n Structure

Facilitators of

Integration

Shared Values

Appropriating Value from Innovation

Cross-Functional Integration/

Design Teams

Time to Market

Product Quality Creation of Customer

Cooperating to Produce Innovation

Strategic alliances can help to foster innovation by

combining the knowledge and resources of two or

more partners

Firms must focus on building knowledge, identifying

core competencies and developing strong human

resources to manage these projects

Firms can also give away their core competencies by

outsourcing to alliance partners rather than developing

their own capabilities over time

Acquiring Innovative Capability

Many firms now use acquisitions of other firms as

a substitute for developing innovations internally

This can reduce risk and lower costly R&D

investments

The drawback is that firms can eventually lose

their ability to generate innovations internally

Small Firms and Innovation

Small firms created most of the new jobs in the U.S

in the 1990s

in the 1990s and this will continue in the 21st

century

While large firms account for over 80% of the world’s

R&D spending, individuals or small firms are granted

more than half of U.S patents

Many small firms are created when employees leave

large firms to start their own businesses, frequently

continuing to interact with their former firms to develop innovations and new products