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Extensive summary of ALL lectures Intro. to Corporate Entrepreneurship
- Instelling
- Tilburg University (UVT)
Extensive summary of all lectures from intro. to corporate entrepreneurship (HC 1-13).
[Meer zien]Voorbeeld 3 van de 33 pagina's
Voorbeeld 3 van de 33 pagina's
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Voorbeeld van de inhoud
Introduction to corporate entrepreneurshipLecture 1: the new age of change and uncertainty, and the implications for big companies.
Entrepreneurship: Thriving in chaos
Leading companies
We know all the success stories of the big companies. But there is something interesting happening, we see
that even these big companies (even companies that have been market leader for many years) are facing
challenges. Nokia for example, in 2007 they were the market leader, but now they’ve almost disappeared
from the market. So even if a company is the global market leader, things can go wrong.
Large, established and so far, successful companies are currently missing the boat. Therefore, they are
realizing that they need to change and focus more on corporate entrepreneurship.
The business landscape in which all companies are operating is highly uncertain.
Cause of change
The causes of change in the current business landscape:
1. Global warming
> Environmental & social sustainability (CSR)
2. Technology
> Shift from industrial to knowledge-based economies
> Global connectivity & communication
• Deconstruction of value chains
• Data monetarization & mining; Artificial Intelligence (AI)
> Decreasing fixed costs in some industries
3. Competition
> Global competition but increasing concentration & consolidation in some industries
> Competition from entrepreneurial smaller firms
> Shift from economies of scale to economies of scope & market niches
4. Social trends
> Corporate scandals and accountability
> Increasing complexity
All these create rapid, dynamic shifts.
Change is the new normal
The current business environment is not predictable; therefore,
the companies have to approach the environment in a
completely new way. The large established companies aren’t
used to this, they need to work in a completely new
environment. Therefore, they need to adjust. That’s why large,
established companies are current missing the boat. There are a
number of factors that contribute to this, these factors will be
discussed in lectures 1-3.
Why? The Success Syndrome
The first factor is the success syndrome. A company, that has
been established in the market for several years and is a
global player and market leader, has already created a good
fit between the products and services which the company is
offering and the preferences of the customers/ market
needs. Based on this good fit the company has been
successful. As a consequence, the company has grown and
has aged, as a result it has a very well-established
organizational culture and has an already established
organizational structures that fits well with the company’s
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,operations. So as long as the markets are stable, they will continue being
successful. But the problem is that the current business environment
isn’t stable, its highly dynamic and changing rapidly. So, these companies
will find it difficult to adjust. This is what we call the success syndrome.
So, what we see it that large established companies are successful when
it comes to sustaining innovation, however they find it very challenging
to adequately address rapid shifts in the market (disruptive innovation).
Leading companies facing enormous challenges
The success syndrome leads to inertia. Due to their success large
established companies become confident and as a result they become
complacent and there is inertia. However, today’s business environment is highly dynamic:
> Hyper Competitive and Constantly Changing Global Business Environment
> Rapid Technological Developments, Rapid pace of Innovation, Disruptive innovations (Ch3)
> New type of competitors –the start-ups
Leading companies find it challenging to keep up with the dynamic innovation and rapid technological
change
Entrepreneurial Start-ups challenge the established companies
PayPal, amazon, Airbnb, booking.com are all start-up that changes the way business is done in their
industries. Large established companies are sometimes referred to as elephants, they’re big and strong,
but they’re also very slow. Start-ups are referred to as small mice, they’re flexible, creative and fast and
disrupt the business environment.
So the main challenge that established companies are facing (and the focus of this course):
How can established companies become more entrepreneurial?
Part 2 of the lecture
Course objectives
> Understand the fundamental concepts of corporate entrepreneurship
> To apply these theoretical insights while discussing ‘real world’ case companies and executive
insights, and therefore obtain a better practical understanding
Lecture 2: Corporate entrepreneurship: imperative and yet a Challenge for established
companies: What are the critical factors
All established companies focus on innovation & entrepreneurship. They all emphasize that innovation and
entrepreneurship are crucial, so we see that companies are very much aware that these two aspects are
important, and they also highlight it on their websites. We see that companies in all sectors put emphasis
on innovation, noy only high-tech companies, but also medium and even low-tech companies. Yet, very few
established companies manage to truly be highly innovative and entrepreneurial.
> Why do established companies find it difficult to be innovative and entrepreneurial?
> How can established companies encourage entrepreneurship and innovation, what they
can/should do?
Part 2 of the lecture
Entrepreneurial intensity
It is an imperative if the leading companies to increase the entrepreneurial intensity. Entrepreneurial
intensity refers to the level of entrepreneurial activities on the one hand which is the degree/scale of
entrepreneurship that the established company is undertaking. And on the other hand, it also looks at the
frequency of entrepreneurial events. It is an imperative for leading companies to increase the
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, entrepreneurial intensity. In other words, it is an imperative for companies to push the frontiers of
entrepreneurial activities/ innovation activities which they undertake.
The challenge
In lecture one we talked about the success syndrome and how established companies will continue being
successful as long as the markets are stable, but the problem is that the current business environment isn’t
stable, its highly dynamic and changing rapidly. So, these companies will find it difficult to adjust.
The main challenge for them is to protect the traditional successful business (e.g. the cash cow), and
simultaneously to engage in radical innovation. Because only by engaging in radical innovation they can
prepare for shifts in the market. Companies find this difficult, since:
> Companies tend to focus on what they’re good at. Innovation and doing something new requires a
different management and organizational approach.
> Established companies tend to build on how they’ve been organizing their activities in the past.
What makes it extremely difficult?
> Big established companies = established managerial procedures, practice measures based on
targets and accountability
> Entrepreneurial companies = creative, entrepreneurial mind-set, dynamic structures, etc.
Management and inertia
Good management is about: good management practices, established procedures and best practices, strict
performance indicators. There is a downside to this, accountability and reliability, and good management
may in some cases lead to inertia. Inertia stifles and kills innovation & entrepreneurship. The success
syndrome often leads to inertia. Companies should find ways to tackle this inertia.
How can established companies encourage entrepreneurship and innovation, what they can/should do?
Can big firms survive?
In order for big companies to survive they should,
> Dismantle the bureaucracies.
> Economies of scale are giving ways to economies of scope, finding the right size for synergy,
market flexibility and, above all, speed.
> Deconstructing themselves and creating new structures, many as autonomous units.
So, the only way for big companies to survive is to deconstruct all well-established organizational practices,
structures and managerial practices. And to make a shift and create space to create dynamic new
structures and even autonomous units
Entrepreneurial orientation: the key
A study that looked at the few successful established companies that managed to become both
entrepreneurial and innovative and they have identified the key drivers for success. They found 5
characteristics, which distinguishes successful big established companies:
1. Innovativeness
2. Risk-taking
3. Pro-activeness
4. Competitive aggressiveness
5. Internal autonomy
The auteurs of the study identified these 5 characteristics with the term entrepreneurial orientation.
Companies that have these 5 characteristics tend to be entrepreneurial. The auteurs also highlight that
building an entrepreneurial orientation is the key factor for success.
Corporate entrepreneurship
Corporate entrepreneurship is about enhancing entrepreneurial activities and innovationial activities is
established companies. The measures an established company has to make to become entrepreneurial are
summarized in the picture below.
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