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All notes on Corporate Entrepreneurship (6013B0501Y)
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WEEK 1Think and discuss
- Why do large organisations engage in M&A?
Access a market (infrastructure), vertically integrate (buy your suppliers or customers),
intellectual property, technology, solve growth problem
- What are some potential issues in developing new innovations in a large organisation?
Potential cannibalization of previous innovations, slower innovations, incremental ones
(iphone).
SEMINAR
- 5 team reviews every week (1 per week) - end of seminars (1 page) → en teoria es pot
fer a classe i acabar-ho a temps.
“In weekly reflection papers, you could further develop your peers’ presented ideas and case
study answers or criticise them in a constructive way. Alternatively, you could relate the
discussed concepts to recent media articles or contemporary phenomena.”
- One 15 minute team presentation. → els temes depenen de la setmana, ja estan fixated
- Essay questions in the exam → TIPS: Should spend 30-40 min per answer. In text
referencing preferred, no need for end of text referencing. Answers will require critical
thinking. Understand the theory and how concepts relate to each other. Avoid the
kitchen sink approach (adding a lot of stuff that is not important or unrelated to the
topic)
- 20 multiple choice questions.
- 5.0 to pass the course
READINGS
BOOK: CHAPTER 1
THE ENTREPRENEURIAL IMPERATIVE IN ESTABLISHED ORGANISATIONS
Entrepreneurs are challenging existing assumptions and creating value in novel ways.
The same can be said for patents issued and the licensing of new products and processes. The
development, application, and enhancement of new technologies are occurring at a
breathtaking pace. Entrepreneurship is redefining what you make, how you make it, where you
sell it and how you distribute it.
1
,Companies cannot be static-they must continually adjust, adapt, and redefine themselves. This
is a fundamental principle in a free market economy. However, in this entrepreneurial age, the
rate at which companies must transform themselves is accelerating.
On the one hand, the nature and relationships among variables that define how companies
operate have changed to the point that different models and theories are required to address
the practical needs of the contemporary executive. As a result, managers have been surfeited
with a whole range of new concepts and tools ranging from total quality management and
business process reengineering to right-sizing, strategic alliances, and self-directed work
teams. We can call this the "new management thinking." On the other hand, many of the basic
lessons and principles of good business practice still apply.
Embattled Corporation→ To understand modern corporations, we must consider their
"external" and "internal" environments. We use the term "external environment" to speak of
everything outside the company, including the competitive, customer, technological, economic,
regulatory,social, labour, and supplier environments (the external environment is all about
change). The internal environment, then, includes the structures, systems, processes, and
culture that make up the climate within which people do the work of a company.
ANALYSING THE EXTERNAL ENVIRONMENT
TECHNOLOGICAL Accelerated development of new technologies; rapid
ENVIRONMENT product obsolescence; greater difficulty in protecting
intellectual property
ECONOMIC ENVIRONMENT Unpredictability of prices, costs, exchange rates, interest
rates, tax incentives, business cycles
COMPETITIVE Aggressive "take no prisoners" competition; highly
ENVIRONMENT innovative competitors; competition from non-traditional
sources with nontraditional tactics; threats from niche
players; competitors who are also customers or partners
LABOUR ENVIRONMENT Growing scarcity of skilled workers; employees
more mobile and less loyal; higher employee
benefit costs; reliance on contract labour
RESOURCE ENVIRONMENT Increasing resource scarcity; resources increasingly
specialised; unknown sources of supply; more rapid
resource obsolescence
CUSTOMER ENVIRONMENT More demanding and complex customers; markets that
are more fragmented and more narrowly segmented;
emphasis on investing in and capturing a customer's
lifetime value
LEGAL AND REGULATORY More aggressive regulation; virtually unlimited product
2
, liability; Environmental regulatory compliance costs;
growing emphasis on free and fair trade; increasing
environmental regulation and associated compliance
costs; mandated employee benefits costs
GLOBAL ENVIRONMENT Real-time communication , production, and distribution
virtually anywhere in the world; more sophisticated
suppliers, customers, and competitors located around the
world; competitive advantage achieved through global
outsourcing and international strategic alliances
Quite simply, the modern corporation finds itself embattled as it struggles to survive, much less
to achieve sustained growth.
3
, The new path to sustainable Competitive Advantage → traditional ways to create value
through cutting costs to lower the price or creating higher value are becoming obsolete since
the external environment is rapidly changing. Companies react fast and try to adapt to new
changes and innovations but end up converging and it is difficult to have a sustainable
competitive advantage.Whatever one company does in these areas is quickly matched by other
companies. There are no simple formulas for success in the new competitive environment, it is
all about experimentation. Turbulence also means opportunity.
Advantage derives from 5 key company capabilities:
- Adaptability (to new technologies, customer needs, regulation…)
- Flexibility (finding solutions that can work well for many stakeholders)
- Speed (act quickly on emerging opportunities)
- Aggressiveness (proactive approach to eliminating competitors)
- Innovativeness (continuous priority placed in launching new products, services,
processes, technologies…)
Companies that meet these characteristics can achieve a competitive advantage and can also
be defined as entrepreneurial.
ENTREPRENEURSHIP → Entrepreneurship is "the process of creating value by bringing
together a unique combination of resources to exploit an opportunity" (Stevenson &
Jarillo-Mossi, 1986).
The abilities to recognize new opportunities in the external environment, evaluate and
prioritise these opportunities, and then translate these opportunities into viable business
concepts lie at the heart of the entrepreneurial process.
CORPORATE ENTREPRENEURSHIP → "Corporate entrepreneurship" is a term used to
describe entrepreneurial behaviour inside established mid-sized and large organisations. Other
popular or related terms include "organisational entrepreneurship," "intrapreneurship," and
"corporate venturing." It is the sum of a company’s innovation, renewal, and venturing efforts.
MANAGEMENT VS. ENTREPRENEURSHIP
Management is the process of setting objectives and coordinating resources, including people,
in order to attain those objectives. In essence, management involves getting things done
through other people. The effective manager is a planner, organiser, communicator,
coordinator, leader, motivator, and controller; and most of all, a facilitator. Managers are
charged with the efficient and effective utilisation of the resources under their control. They
tend to be focused on optimising current operations.
The entrepreneur is preoccupied not with what is, but with what can be. They envision the
future, recognize emerging patterns,identify untapped opportunities, and come up with
innovations to exploit those opportunities.
4
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