Given the importance of corporate vitality and wealth creation in today’s global economy, corporate creativity has generated considerable attention in research. The need now to pursue corporate entrepreneurship has arisen from a variety of pressing problems including technological changes, innovations and improvements in the marketplace, perceived weaknesses in the traditional methods of corporate management, the loss of entrepreneurial-minded employees who are disenchanted with bureaucratic organisations, and growing levels of international competition.
In his early writings, Schumpeter heavily emphasised the role of the single entrepreneur, as the innovator. Schumpeter described the personal characteristics of the entrepreneur as having high levels of: initiative, authority, imaginative foresight and leadership. He also personified the entrepreneur as a “captain of industry”. In his later writings, he replaces the entrepreneur, as a person, with the impersonal organisation. The entrepreneurial function still remains the same, but the prime mover of progress, the agent that makes new combinations, is now a large scale corporation, not a single person. The economy develops through phases of creative destruction as the innovations of entrepreneurs constantly reform and revolutionise the economy. The entrepreneur (the corporation) exploits inventions, harnesses new technology for producing “new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganising an industry” (Schumpeter 1949:132). In this case, innovation is an end result of a routine work of employers of the large corporation. It is not so much a result of the innate skills of the single entrepreneur or his/her personal characteristics.
In his writings, Schumpeter also argued that the main agents of economic growth are the entrepreneurs who introduce new products, new methods of production, and other innovations that stimulate economic activity. Schumpeter described entrepreneurship as a process of creative destruction, in which the entrepreneur continually displaces or destroys existing products or methods of production with new ones. Schumpeter viewed this process favourably, because innovations typically represent an improvement in terms of product or process utility and as a result create greater buyer interest and overall economic activity.
A favoured example of an entrepreneurial corporation is 3M, one of the world's largest corporations. It has a long history of entrepreneurial behaviour, transcending the tenures of CEOs and top management teams. Similarly, a recent study of the role of entrepreneurship in reformulating Intel Corporation's corporate strategy suggested that entrepreneurial activities were the outcome of the interaction of individuals and groups at multiple levels within the firm.
The observations from this include the conceptualisation of entrepreneurship as a firm-level phenomenon. The main assumption that underlies the notion of corporate entrepreneurship is that it is a behavioural phenomenon and all firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. Entrepreneurial firms are risk-taking, innovative, and proactive. In contrast, conservative firms are risk-averse, are less innovative, and adopt a more wait and see posture. The position of a firm on this continuum is referred to as its entrepreneurial intensity.
Against this backdrop, one of the main themes that have emerged in the corporate entrepreneurship is that a firm's level of entrepreneurial intensity is influenced by both its external and its internal corporate context. Firms in turbulent versus stable environments tend to be more innovative, risk taking, and proactive.
Consistent with research in organisational creativity, corporate entrepreneurship is the outcome of a complex interaction among individuals, groups, and the organisation, and is affected by a large number of variables. However, it seems equally clear that the knowledge base and level of expertise possessed by individuals within the organisation should also be a critical component necessary for corporate entrepreneurship. Indeed, it is argued that the individual is the "prime mover in the process of organisational knowledge creation" and that the quality of tacit knowledge possessed by individuals is critical to the creation of new strategies. Thus, firm-specific tacit knowledge may be used to formulate valuable organisational strategies, but such knowledge can only be developed by repeated experiences with an organisation's routines.
Sharma and Chrisman defined corporate entrepreneurship as the "process whereby an individual or a group of individuals, in association with an existing organisation…instigate renewal or innovation within that organisation". Thus, corporate entrepreneurship is the deployment of new resource combinations to renew an organisation. Corporate entrepreneurship can occur internally, by exploiting the firm's existing stock of resources, or externally, by the acquisition of new resources. However, because most attempts to create value in the external environment through mergers and acquisitions fail, senior managers are increasingly looking inside the firm for new sources of value. Indeed, some have argued that managerial expertise is a key firm resource that, when developed and exploited, has the potential to be a source of sustained competitive advantage.
Human and social capital has been suggested as the "fundamental building blocks" of corporate entrepreneurship. Much of the research grounded in this view focuses on the role that individuals within an organisation play in corporate entrepreneurship. These individuals are sometimes said to be corporate venture champions who are responsible for a particular entrepreneurial process with an organisation. For example, the champion of ideas is an individual who seeks to convince organisational stakeholders that an idea has merit, whereas the resource champion presents the idea to those with the power to allocate the resources needed to complete the project.
Brazeal and Herbert also suggested that top management plays a key role in corporate entrepreneurship. For example, the entrepreneurial process is enabled by the allocation of resources and the articulation of a strategic vision, being roles that are traditionally reserved for top management. In addition, an organisation's top management may foster corporate entrepreneurship "through the building of an entrepreneurial organisational environment and human resource practices that actively promote entrepreneurial activities and thinking". By doing these things, the top manager enhances the firm's ability to produce innovative outcomes. In sum, this individual may play a key role in corporate entrepreneurship in part, because of his or her knowledge of the firm's resources and his or her abilities to influence the social dynamics within the firm.
The attention of research given to the entrepreneurship environment indicates the recognition of the importance of certain underlying conditions in the fostering of entrepreneurial activities in a region. Quite clearly and notably, the environments that are most favorable to entrepreneurs and entrepreneurial activity are those that work together to firstly attract, then to hold the focus of the entrepreneur.
In his early writings, Schumpeter heavily emphasised the role of the single entrepreneur, as the innovator. Schumpeter described the personal characteristics of the entrepreneur as having high levels of: initiative, authority, imaginative foresight and leadership. He also personified the entrepreneur as a “captain of industry”. In his later writings, he replaces the entrepreneur, as a person, with the impersonal organisation. The entrepreneurial function still remains the same, but the prime mover of progress, the agent that makes new combinations, is now a large scale corporation, not a single person. The economy develops through phases of creative destruction as the innovations of entrepreneurs constantly reform and revolutionise the economy. The entrepreneur (the corporation) exploits inventions, harnesses new technology for producing “new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganising an industry” (Schumpeter 1949:132). In this case, innovation is an end result of a routine work of employers of the large corporation. It is not so much a result of the innate skills of the single entrepreneur or his/her personal characteristics.
In his writings, Schumpeter also argued that the main agents of economic growth are the entrepreneurs who introduce new products, new methods of production, and other innovations that stimulate economic activity. Schumpeter described entrepreneurship as a process of creative destruction, in which the entrepreneur continually displaces or destroys existing products or methods of production with new ones. Schumpeter viewed this process favourably, because innovations typically represent an improvement in terms of product or process utility and as a result create greater buyer interest and overall economic activity.
A favoured example of an entrepreneurial corporation is 3M, one of the world's largest corporations. It has a long history of entrepreneurial behaviour, transcending the tenures of CEOs and top management teams. Similarly, a recent study of the role of entrepreneurship in reformulating Intel Corporation's corporate strategy suggested that entrepreneurial activities were the outcome of the interaction of individuals and groups at multiple levels within the firm.
The observations from this include the conceptualisation of entrepreneurship as a firm-level phenomenon. The main assumption that underlies the notion of corporate entrepreneurship is that it is a behavioural phenomenon and all firms fall along a conceptual continuum that ranges from highly conservative to highly entrepreneurial. Entrepreneurial firms are risk-taking, innovative, and proactive. In contrast, conservative firms are risk-averse, are less innovative, and adopt a more wait and see posture. The position of a firm on this continuum is referred to as its entrepreneurial intensity.
Against this backdrop, one of the main themes that have emerged in the corporate entrepreneurship is that a firm's level of entrepreneurial intensity is influenced by both its external and its internal corporate context. Firms in turbulent versus stable environments tend to be more innovative, risk taking, and proactive.
Consistent with research in organisational creativity, corporate entrepreneurship is the outcome of a complex interaction among individuals, groups, and the organisation, and is affected by a large number of variables. However, it seems equally clear that the knowledge base and level of expertise possessed by individuals within the organisation should also be a critical component necessary for corporate entrepreneurship. Indeed, it is argued that the individual is the "prime mover in the process of organisational knowledge creation" and that the quality of tacit knowledge possessed by individuals is critical to the creation of new strategies. Thus, firm-specific tacit knowledge may be used to formulate valuable organisational strategies, but such knowledge can only be developed by repeated experiences with an organisation's routines.
Sharma and Chrisman defined corporate entrepreneurship as the "process whereby an individual or a group of individuals, in association with an existing organisation…instigate renewal or innovation within that organisation". Thus, corporate entrepreneurship is the deployment of new resource combinations to renew an organisation. Corporate entrepreneurship can occur internally, by exploiting the firm's existing stock of resources, or externally, by the acquisition of new resources. However, because most attempts to create value in the external environment through mergers and acquisitions fail, senior managers are increasingly looking inside the firm for new sources of value. Indeed, some have argued that managerial expertise is a key firm resource that, when developed and exploited, has the potential to be a source of sustained competitive advantage.
Human and social capital has been suggested as the "fundamental building blocks" of corporate entrepreneurship. Much of the research grounded in this view focuses on the role that individuals within an organisation play in corporate entrepreneurship. These individuals are sometimes said to be corporate venture champions who are responsible for a particular entrepreneurial process with an organisation. For example, the champion of ideas is an individual who seeks to convince organisational stakeholders that an idea has merit, whereas the resource champion presents the idea to those with the power to allocate the resources needed to complete the project.
Brazeal and Herbert also suggested that top management plays a key role in corporate entrepreneurship. For example, the entrepreneurial process is enabled by the allocation of resources and the articulation of a strategic vision, being roles that are traditionally reserved for top management. In addition, an organisation's top management may foster corporate entrepreneurship "through the building of an entrepreneurial organisational environment and human resource practices that actively promote entrepreneurial activities and thinking". By doing these things, the top manager enhances the firm's ability to produce innovative outcomes. In sum, this individual may play a key role in corporate entrepreneurship in part, because of his or her knowledge of the firm's resources and his or her abilities to influence the social dynamics within the firm.
The attention of research given to the entrepreneurship environment indicates the recognition of the importance of certain underlying conditions in the fostering of entrepreneurial activities in a region. Quite clearly and notably, the environments that are most favorable to entrepreneurs and entrepreneurial activity are those that work together to firstly attract, then to hold the focus of the entrepreneur.
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