ENM4001

Technological Innovation and

Entrepreneurship
Fall 2023-2024
ASST.PROF.DR. ALPER CAMCI

WEEK 14
Corporate Entrepreneurship (CE)
 The ‘Embattled Corporation’

Corporations are facing dramatic changes in the way they do

business. Four dimensions have been recognised through which
environmental turbulence has created a need for new
management practices:
1.Through customers
2.Through competitors
3.Through technology
4.Through legal, regulatory and ethical standards

Source: Morris, Kuratko and Covin (2011: 6)

 Customers
Technology
• Fragmented markets To change ways they operate
internally and how they
• Increasing customer compete externally based on:
expectations • New information
management; production
• Higher cost of customisation and service delivery;
• Sustainable growth means customer management;
logistics and inventory
learning new skills in serving management; sales force
management; and product
global markets development technologies
The
Embattled
Competitors Corporation

• Increased expenditure in Legal, Regulatory and Ethical

Standards
product development
• Increased accountability,
• Difficult to differentiate
visibility and transparency
• Increased competition Source: Morris, Kuratko and Covin (2011: 6)
to multiple stakeholders
• Increased litigious
• Competitors specialising in environment and regulatory
narrow, profitable niches restrictions
 What is Corporate
Entrepreneurship?

Corporate entrepreneurship is the term used to describe

entrepreneurial behaviour in an established, larger
organisation. It can be defined as:

“the development of new business ideas and

opportunities within large and established corporations”
(Birkinshaw, 2003: 46).
 What’s the Difference?
Independent entrepreneurship is the process whereby an individual
or group of individuals acting independently, create a new
organisation.

Corporate entrepreneurship is the process whereby an individual or

a group of individuals, in association with an existing organisation,
create a new organisation or instigate renewal or innovation within
that organisation.
 Characteristics of Corporate
Entrepreneurship
• The creation of new business units by an established
firm

• The development and implementation of

entrepreneurial strategic thrusts

• The emergence of new ideas from various levels in the

organisation
A Typology of Approaches to Corporate Entrepreneurship

Source: Wolcott and Lippitz (2007)

 Schools of Thought

Birkinshaw (2003) identified four schools of thought

in trying to pull together the corporate
entrepreneurship literature:
•Corporate Venturing
•Intrapreneurship
•Bringing the market inside
•Entrepreneurial transformation
 Corporate Venturing
Concerned with:
• The need for larger firms to manage new,
entrepreneurial businesses separately from
mainstream activity
• Investment by larger firms in strategically important
smaller firms
• Organisation structures needed to encourage new
businesses
Key to success is good ‘strategic fit’:

• Strong relationship with core competencies of venturing

company - effective synergy

or

• Acquiring skills, technologies or customers that

compliment the strategic direction of venturing company -
effective knowledge transfer
 Advantages of Corporate Venturing

• Facilitates innovation and knowledge import

• External sources of finance may be easier to access
• Facilitates creation of semi-autonomous units with
their own cultures, incentives and business models
• Often involves highly motivated staff
 Disadvantages of Corporate Venturing

• Requires investment, normally equity, which can be

risky
• Requires investment in venture mechanisms that set
up venture management and networks that search
out, evaluate and generate deal flows
• Investing company will not be in complete control of
innovation
 Intrapreneurship
Concerned with:
• How individuals may be encouraged to act more
entrepreneurially in a large organisation
• Systems and structures that inhibit initiative
• Challenge those systems and act in entrepreneurial
ways
Pinchot (1985):
“Intrapreneuring ... as entrepreneurship inside of the
corporation.”

Knight (1987):
“An intrapreneur is a employee who:... introduces and manages
an innovative project within the corporate environment, as if he
or she were an independent entrepreneur.”
•Need for achievement, risk orientation, innovativeness and
need for autonomy
•Innovations are enforced in extreme cases by lone fighters
 Intrapreneurs
• Result orientated
• Ambitious
• Competitive
• Questioning
• Self motivated
• Comfortable with change
• Dislike bureaucracy
• Adept at politics
• Clarity of direction
• Good at resolving conflict
• Able to work with others
 Needs of Intrapreneurs
• Buffer to break rules
• High level sponsor
• Protection during difficult times
• Motivation to pursue project
• A culture that ‘tolerates’ intrapreneurship
• Sponsor-intrapreneur mutual trust and respect
 Bringing the Market Inside

Concerned with:
• Structural changes needed to encourage
entrepreneurial behaviour
• Market approach to resource allocation
and people management
• Spin offs and venture capital operations
 Entrepreneurial Transformation
Concerned with:
• The need form large firms to adapt to an
ever-changing environment
• Changes in systems, structures and
cultures that encourage entrepreneurship
– entrepreneurial architecture
• Leadership and strategies that encourage
entrepreneurship
Types of CE Outcomes
• New corporate strategies
• New ventures
• New business models
• New markets
• New product or services
• New internal processes
 Corporate entrepreneurial work environment

Structure

Human
Resource Entrepreneurial Resource
Management Work Environment Controls

Culture Source: Morris et al. (2009: 432)

References
• Birkinshaw, J. (2003). The Paradox of Corporate Entrepreneurship: Post-Enron
Principles for Encouraging Creativity without Crossing the Line. Strategy and
Business Wolcott, R.C. and Lippitz, M. J. (2007). The Four Models of Corporate
Entrepreneurship. MIT Sloan Management Review 49(1): 75-82.
• Knight, R.M. (1987). Corporate Innovation and Entrepreneurship: A Canadian Study.
Journal of Product Innovation Management. 4(4): 284-297.
• Morris, M. H., Kuratko, D. F. and Covin, J. G. (2011). Corporate Entrepreneurship and
Innovation (3rd ed.). USA: Cengage Learning.
• Morris, M. H., van Vuuren, J., Cornwall, J. R. and Scheepers, R. (2009). Properties of
balance: A Pendulum Effect in Corporate Entrepreneurship. Business Horizons 52
• Pinchot, G. (1985). Intrapreneuring: Why You Don’t Have to Leave the Corporation
to Become an Entrepreneur. New York: Harper & Row.