Corporate Entrepreneurship
Innovation and strategy in large organizations
Paul burns
1ZSUC0 USE Organizing Entrepreneurship
TU/e
Summary of chapters 1, 3, 5, 6, 7, 8, 9 and 10
including all figures and tables out of the book
Copyright – SE Stalpers
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,Table of contents
Part 1: Entrepreneurship ........................................................................................................................ 3
Chapter 1: The entrepreneurial revolution ........................................................................................ 3
Part 2: Organizational architecture......................................................................................................... 6
Chapter 3: Entrepreneurial architecture ............................................................................................ 6
Chapter 5: Constructing the entrepreneurial culture ......................................................................... 9
Chapter 6: Building the organization structure ................................................................................ 14
Part 3: Management ............................................................................................................................. 19
Chapter 7: Managing the entrepreneurial organization ................................................................... 19
Chapter 8: Encouraging intrapreneurship and corporate venturing ................................................ 23
Part 4: Strategy ..................................................................................................................................... 28
Chapter 9: Developing strategy ........................................................................................................ 28
Chapter 10: Creating competitive advantage in mature markets .................................................... 34
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, Part 1: Entrepreneurship
Chapter 1: The entrepreneurial revolution
The new age of uncertainty
We are living in an increasingly complex world, full of interconnections formed by a truly global market
place linked by technology which allows instant communication. The major themes running through
this new age of uncertainty are complexity and change. This new age of uncertainty has powerful
implications for all organizations. Planning becomes problematic if you cannot predict the future and
strategic management faces completely new challenges as the linear models based on knowledge and
information that have been used for decades seem increasingly unrealistic. Centralized control seems
increasingly unable to cope and traditional views of leadership need to be reconsidered as people
increasingly show they also have power. The ‘new modern dynamic’ view contains that change is nor-
mal, continuous, turbulent, both revolutionary and incremental, uncontrollable and non-linear but full
of opportunities.
From opportunity to austerity
It is the ability to create new sources of competitive advantage quickly, again and again, that is proving
to be the only sustainable source of real competitive advantage. The age of austerity has coincided
with a shift in sources of value being in physical assets to virtual assets – a shift from assets that are
purchased and restrict flexibility to those that can be built up and can increase flexibility. We have
moved from an industrial economy to a knowledge economy driven by new digital technologies. The
new age has also seen companies face new social pressures such as environmental or ethical. All these
issues have become bundled together under the umbrella of Corporate Social Responsibility (CSR).
CSR is seen as increasingly important for large companies for both ethical and commercial reasons.
The entrepreneurial revolution
While we have moved from the age of opportunity to an age of austerity there has been a quiet rev-
olution taking place. Entrepreneurs have emerged as the species most able to cope with the turbu-
lence caused by both opportunity and austerity. Over the last three decades entrepreneurs establish-
ing new firms have done more to create wealth than firms at any time before them. Entrepreneurs
are the creators, the innovators and the leaders who give back to society, as philanthropists, directors
and trustees, and who, more than any other, change the way people live, work, learn, play and lead.
Small, growing firms have outstripped large ones in terms of job generation, year after year. At times
when larger companies retrenched, smaller firms continued to offer job opportunities. But the focus
is not just on small firms, it is also on high-growth firms. Despite being few in number, young, high-
growth businesses (often called gazelles) are disproportionately important to national economies. The
OECD proposed definition of gazelles is: enterprises with 10 or more employees, with an average em-
ployment growth of over 20% for three consecutive years.
Economic, technological and societal influences
A number of other influences have accelerated the trend towards smaller firms. Firstly there has been
the shift in most economies away from manufacturing towards the service sectors where small firms
often flourish because of their ability to deliver a personalized, flexible, tailor-made service at a local
level. The move to a knowledge economy has meant that economies of scale become less important
as a form of competitive advantage. Social and market trends have accelerated the growth of small
firms. Firstly, customers increasingly expect firms to address their particular needs. Secondly people
want to control their own destiny more. Technology has also played its part in this change. It has
influenced the trend in three ways:
- The new technologies that swept the late 20th century business world were pioneered by new,
rapidly growing firms.
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