chapter 13 entrepreneurship - ridwaniskandar blog. define strategic entrepreneurship and corporate...

29
© 2007 Thomson/South 2007 Thomson/South-Western. Western. All rights reserved. All rights reserved. PowerPoint Presentation by Charlie Cook PowerPoint Presentation by Charlie Cook The University of West Alabama The University of West Alabama Strategic Management Strategic Management Competitiveness and Globalization: Competitiveness and Globalization: Concepts and Cases Concepts and Cases Michael A. Hitt R. Duane Ireland Robert E. Hoskisson Seventh edition STRATEGIC ACTIONS: STRATEGY IMPLEMENTATION STRATEGIC ACTIONS: STRATEGY IMPLEMENTATION CHAPTER 13 CHAPTER 13 Entrepreneurship Entrepreneurship Management of Strategy Management of Strategy Concepts and Cases Concepts and Cases

Upload: trantruc

Post on 22-May-2018

232 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

©© 2007 Thomson/South2007 Thomson/South--Western.Western.All rights reserved.All rights reserved.

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookThe University of West AlabamaThe University of West Alabama

Strategic ManagementStrategic ManagementCompetitiveness and Globalization:Competitiveness and Globalization:Concepts and CasesConcepts and Cases

Michael A. Hitt •R. Duane Ireland •Robert E. Hoskisson

Seventh edition

STRATEGIC

ACTIONS:

STRATEGY

IMPLEMENTATION

STRATEGIC

ACTIONS:

STRATEGY

IMPLEMENTATION

CHAPTER 13CHAPTER 13

EntrepreneurshipEntrepreneurship

Management of StrategyManagement of StrategyConcepts and CasesConcepts and Cases

Page 2: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–2

KKNOWLEDGENOWLEDGE OOBJECTIVESBJECTIVES

1.1. Define strategic entrepreneurship and corporateDefine strategic entrepreneurship and corporateentrepreneurship.entrepreneurship.

2.2. Define entrepreneurship and entrepreneurialDefine entrepreneurship and entrepreneurialopportunities and explain their importance.opportunities and explain their importance.

3.3. Define invention, innovation, and imitation and describeDefine invention, innovation, and imitation and describethe relationship among them.the relationship among them.

4.4. Describe entrepreneurs and the entrepreneurial mindDescribe entrepreneurs and the entrepreneurial mind--set.set.

5.5. Explain international entrepreneurship and itsExplain international entrepreneurship and itsimportance.importance.

Studying this chapter should provide you with the strategicmanagement knowledge needed to:

Page 3: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–3

KKNOWLEDGENOWLEDGE OOBJECTIVESBJECTIVES (cont(cont’’d)d)

6.6. Describe how firms internally develop innovations.Describe how firms internally develop innovations.

7.7. Explain how firms use cooperative strategies toExplain how firms use cooperative strategies toinnovate.innovate.

8.8. Describe how firms use acquisitions as a means ofDescribe how firms use acquisitions as a means ofinnovation.innovation.

9.9. Explain how strategic entrepreneurship helps firmsExplain how strategic entrepreneurship helps firmscreate value.create value.

Studying this chapter should provide you with the strategicmanagement knowledge needed to:

Page 4: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–4

Strategic EntrepreneurshipStrategic Entrepreneurship

••Strategic EntrepreneurshipStrategic EntrepreneurshipTaking entrepreneurial actions using a strategicTaking entrepreneurial actions using a strategic

perspective.perspective.Engaging in simultaneous opportunity seeking andEngaging in simultaneous opportunity seeking and

competitive advantage seeking behaviors.competitive advantage seeking behaviors.Designing and implementing entrepreneurialDesigning and implementing entrepreneurial

strategies to create wealth.strategies to create wealth.

••Strategic entrepreneurship actions can be takenStrategic entrepreneurship actions can be takenby:by:IndividualsIndividualsCorporationsCorporations

Page 5: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–5

Strategic Entrepreneurship and InnovationStrategic Entrepreneurship and Innovation

••Entrepreneurship is concerned with:Entrepreneurship is concerned with:The discovery of profitable opportunitiesThe discovery of profitable opportunities

The exploitation of profitable opportunitiesThe exploitation of profitable opportunities

••Firms that encourage entrepreneurship are:Firms that encourage entrepreneurship are:Risk takers.Risk takers.

Committed to innovation.Committed to innovation.

Proactive in creating opportunities rather than waitingProactive in creating opportunities rather than waitingto respond to opportunities created by others.to respond to opportunities created by others.

Page 6: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–6

Entrepreneurial OpportunitiesEntrepreneurial Opportunities

••Entrepreneurial OpportunitiesEntrepreneurial Opportunities

Conditions in which new products or services canConditions in which new products or services cansatisfy a need in the market.satisfy a need in the market.

••Entrepreneurs or entrepreneurial managers mustEntrepreneurs or entrepreneurial managers mustbe able to:be able to:

Identify opportunities not perceived by others.Identify opportunities not perceived by others.

Take actions to exploit the opportunities.Take actions to exploit the opportunities.

Establish a competitive advantage.Establish a competitive advantage.

Page 7: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–7

Innovation ProcessInnovation Process

••The act of creating or developing aThe act of creating or developing anew product or processnew product or process

••Brings something new into being.Brings something new into being.••Technical criteria are used toTechnical criteria are used to

determine the success of andetermine the success of aninvention.invention.

InventionInvention

Page 8: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–8

Innovation Process (contInnovation Process (cont’’d)d)

••The process of creating aThe process of creating acommercial product from ancommercial product from aninvention.invention.

••Brings something new into use.Brings something new into use.••Commercial criteria are used toCommercial criteria are used to

determine the success of andetermine the success of aninnovation.innovation.

InventionInvention

InnovationInnovation

Page 9: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–9

Innovation Process (contInnovation Process (cont’’d)d)

••The adoption of an innovation byThe adoption of an innovation bysimilar firmssimilar firms

••Usually leads to product orUsually leads to product orprocess standardization.process standardization.

••Products based on imitation oftenProducts based on imitation oftenare offered at lower prices but withare offered at lower prices but withfewer features.fewer features.

InventionInvention

InnovationInnovation

ImitationImitation

Page 10: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–10

The Importance of InnovationThe Importance of Innovation

••InnovationInnovationIs a key outcome firms seek throughIs a key outcome firms seek through

entrepreneurship.entrepreneurship.Is often the source of competitive success.Is often the source of competitive success.

••Corporate EntrepreneurshipCorporate EntrepreneurshipInnovations produced in large established firms.Innovations produced in large established firms.

Page 11: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–11

EntrepreneursEntrepreneurs

••EntrepreneursEntrepreneursIndividuals acting independently or as part of anIndividuals acting independently or as part of an

organization who create a new venture or develop anorganization who create a new venture or develop aninnovation, take risks entering innovations into theinnovation, take risks entering innovations into themarketplace.marketplace.

Can be any manager or employee in an organization.Can be any manager or employee in an organization.

••Entrepreneurial capabilities include:Entrepreneurial capabilities include:Intellectual capitalIntellectual capitalEntrepreneurial mindEntrepreneurial mind--setsetTransfer of entrepreneurial competence to othersTransfer of entrepreneurial competence to othersEffective human capitalEffective human capital

Page 12: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–12

International EntrepreneurshipInternational Entrepreneurship

••Entrepreneurship can:Entrepreneurship can:Fuel economic growthFuel economic growthCreate employmentCreate employmentGenerate prosperity forGenerate prosperity for

citizenscitizens

••There is a strong positiveThere is a strong positiverelationship between the raterelationship between the rateof entrepreneurial activity andof entrepreneurial activity andeconomic development in aeconomic development in anation.nation.

Page 13: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–13

International Entrepreneurship (contInternational Entrepreneurship (cont’’d)d)

••There must be a balanceThere must be a balance(in the culture) between(in the culture) betweenIndividual initiative andIndividual initiative andThe spirit of cooperation andThe spirit of cooperation and

group ownership of innovation.group ownership of innovation.

••Successful entrepreneurial firms:Successful entrepreneurial firms:Provide appropriate autonomy.Provide appropriate autonomy.Offer incentives for individual initiative.Offer incentives for individual initiative.Promote cooperation and group ownership ofPromote cooperation and group ownership of

an innovation.an innovation.

Page 14: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–14

Incremental and Radical InnovationIncremental and Radical Innovation••Incremental InnovationIncremental InnovationIs the usual case forIs the usual case for

innovation ininnovation inorganizations.organizations.

Provides smallProvides smallincrements in currentincrements in currentproduct lines.product lines.

Improves existingImproves existingknowledge andknowledge andprocesses.processes.

Can create value.Can create value.

••Radical InnovationRadical InnovationIs rare because ofIs rare because of

difficulty and risk.difficulty and risk.Provides significantProvides significant

technologicaltechnologicalbreakthroughs.breakthroughs.

Creates newCreates newknowledge andknowledge andprocesses.processes.

Can create value.Can create value.

Page 15: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–15

FIGUREFIGURE 13.113.1 Model of Internal Corporate VenturingModel of Internal Corporate Venturing

Source: Adapted from R. A. Burgelman, 1983, A model of the interactions of strategic behavior,corporate context, and the concept of strategy, Academy of Management Review, 8: 65.

Page 16: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–16

Internal Corporate VenturingInternal Corporate Venturing

••The set of activities used to create inventionsThe set of activities used to create inventionsand innovations through internal means.and innovations through internal means.R&D spending is linked to success in internalR&D spending is linked to success in internal

corporate venturing.corporate venturing.

••Product ChampionProduct ChampionAn organizational member with an entrepreneurialAn organizational member with an entrepreneurial

vision of a new good or service who seeks to createvision of a new good or service who seeks to createsupport for the visionsupport for the vision’’s commercialization.s commercialization.

Page 17: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–17

Internal Corporate Venturing (contInternal Corporate Venturing (cont’’d)d)

••A bottomA bottom--up process in which productup process in which productchampions:champions:Pursue new ideas, often through a political process.Pursue new ideas, often through a political process.

Develop and coordinate the commercialization of aDevelop and coordinate the commercialization of anew good or service until it achieves success in thenew good or service until it achieves success in themarketplace.marketplace.

••Forms of internal corporate venturing:Forms of internal corporate venturing:Autonomous strategic behaviorAutonomous strategic behavior

Induced strategic behaviorInduced strategic behavior

Page 18: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–18

Venturing: Strategic BehaviorsVenturing: Strategic Behaviors

••Autonomous Strategic BehaviorAutonomous Strategic BehaviorBased on a firmBased on a firm’’s knowledge and resources that ares knowledge and resources that are

the sources of the firmthe sources of the firm’’s innovation.s innovation.

A firmA firm’’s technological capabilities and competenciess technological capabilities and competenciesare its basis for new products and processes.are its basis for new products and processes.

••Induced Strategic BehaviorInduced Strategic BehaviorA topA top--down process whereby the firmdown process whereby the firm’’s currents current

strategy and structure foster product innovations.strategy and structure foster product innovations.

The strategy in place is filtered through a matchingThe strategy in place is filtered through a matchingstructural hierarchy.structural hierarchy.

Page 19: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–19

Implementing New Product DevelopmentImplementing New Product Developmentand Internal Venturesand Internal Ventures••To be innovative and develop internal venturesTo be innovative and develop internal ventures

requires:requires:An entrepreneurial mindsetAn entrepreneurial mindsetRisk propensityRisk propensityAn emphasis on executionAn emphasis on execution

••Individuals with an entrepreneurial mindsetIndividuals with an entrepreneurial mindsetEngage the energies of everyone in their domain bothEngage the energies of everyone in their domain both

inside and outside the organization.inside and outside the organization.

Page 20: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–20

CrossCross––Functional Product Development TeamsFunctional Product Development Teams

••Facilitate integration ofFacilitate integration ofactivities associated withactivities associated withdifferent organizationaldifferent organizationalfunctions.functions.Design, manufacturing,Design, manufacturing,

marketing, etc.marketing, etc.

••New product developmentNew product developmentprocesses can be completedprocesses can be completedmore quickly.more quickly.Products can be more easilyProducts can be more easily

commercialized when crosscommercialized when cross--functional teams workfunctional teams workeffectively.effectively.

CrossCross--functionalfunctionalProduct DevelopmentProduct Development

TeamTeam

Page 21: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–21

CrossCross––Functional Product Development TeamsFunctional Product Development Teams

••Product developmentProduct developmentstages are grouped intostages are grouped intoparallel or overlappingparallel or overlappingprocesses, allowing theprocesses, allowing thefirm to tailor its productfirm to tailor its productdevelopment effortsdevelopment efforts

Unique coreUnique corecompetenciescompetencies

Needs of the marketNeeds of the marketCrossCross--functionalfunctional

Product DevelopmentProduct DevelopmentTeamTeam

Page 22: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–22

Barriers to CrossBarriers to Cross--Functional TeamsFunctional TeamsEffectivenessEffectiveness••Different orientations and perceptionsDifferent orientations and perceptionsIndividuals from separate functions have differentIndividuals from separate functions have different

orientations on issues.orientations on issues.••Create differing approaches to product developmentCreate differing approaches to product development

activities.activities.

••Organizational PoliticsOrganizational PoliticsCause aggressive competition for resources amongCause aggressive competition for resources among

different organizational functions.different organizational functions.••Organizations must achieve crossOrganizations must achieve cross--functional integration withfunctional integration with

minimal political conflict.minimal political conflict.

Page 23: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–23

Facilitating Integration and InnovationFacilitating Integration and Innovation

••Shared ValuesShared ValuesAre framed around the firmAre framed around the firm’’s strategic intent ands strategic intent and

mission.mission.Become the glue that promotes integration betweenBecome the glue that promotes integration between

functional units.functional units.

••Effective LeadershipEffective LeadershipSets goals and allocates resourcesSets goals and allocates resources

••Goals include integrated development and commercializationGoals include integrated development and commercializationof new goods and servicesof new goods and services

••Effective CommunicationEffective Communication

Page 24: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–24

FIGUREFIGURE 13.213.2 Creating Value through Internal Innovation ProcessesCreating Value through Internal Innovation Processes

Page 25: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–25

Cooperative Strategies for EntrepreneurshipCooperative Strategies for Entrepreneurshipand Innovationand Innovation••Cooperation and integration of knowledge andCooperation and integration of knowledge and

resources is required to successfullyresources is required to successfullycommercialize inventions.commercialize inventions.Entrepreneurial firms need investment capital andEntrepreneurial firms need investment capital and

distribution capabilities.distribution capabilities.

Established companies need the technologicalEstablished companies need the technologicalknowledge possessed by entrepreneurial firms.knowledge possessed by entrepreneurial firms.

••Firms innovate through the sharing theirFirms innovate through the sharing theirknowledge and skills in a cooperativeknowledge and skills in a cooperativerelationship.relationship.

Page 26: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–26

Acquisitions to Buy InnovationAcquisitions to Buy Innovation

••AcquisitionsAcquisitionsCan rapidly extend the product line.Can rapidly extend the product line.

Can quickly increase the firmCan quickly increase the firm’’s revenues.s revenues.

••Key risks of acquisitionsKey risks of acquisitionsThe firm may substitute the ability to buy innovationsThe firm may substitute the ability to buy innovations

for an ability to produce innovations internally.for an ability to produce innovations internally.

The firm may lose intensity in R&D efforts.The firm may lose intensity in R&D efforts.

The firm may lose its ability to produce patents.The firm may lose its ability to produce patents.

Page 27: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–27

Capital for Entrepreneurial VenturesCapital for Entrepreneurial Ventures

••Venture Capital FirmsVenture Capital Firms

Seek high returns on their investment.Seek high returns on their investment.

Value the competence of the entrepreneur or theValue the competence of the entrepreneur or thehuman capital in the firm.human capital in the firm.

Place weight on the expected scope of competitivePlace weight on the expected scope of competitiverivalry the firm is likely to experience.rivalry the firm is likely to experience.

Evaluate the degree of instability in the marketEvaluate the degree of instability in the marketaddressed.addressed.

Page 28: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–28

Capital for Entrepreneurial VenturesCapital for Entrepreneurial Ventures

••Initial Public Offerings (IPOs)Initial Public Offerings (IPOs)

Are new stock priced to reflect the firmAre new stock priced to reflect the firm’’s highs highpotential.potential.

Often yield much larger equity investments than canOften yield much larger equity investments than canbe obtained from venture capitalists.be obtained from venture capitalists.

Investment bankers frequently play major roles in theInvestment bankers frequently play major roles in thedevelopment and offering ofdevelopment and offering of IPOsIPOs..

Firms that have previously received venture capitalFirms that have previously received venture capitalbacking usually receive greater returns frombacking usually receive greater returns from IPOsIPOs..

Page 29: CHAPTER 13 Entrepreneurship - ridwaniskandar Blog. Define strategic entrepreneurship and corporate entrepreneurship. 2. Define entrepreneurship and entrepreneurial opportunities and

© 2007 Thomson/South-Western. All rights reserved. 13–29

Creating Value through StrategicCreating Value through StrategicEntrepreneurshipEntrepreneurship

••Be effective in identifying opportunities.Be effective in identifying opportunities.

••Be flexible and willing to take risks.Be flexible and willing to take risks.

••Have sufficient resources and capabilities to exploitHave sufficient resources and capabilities to exploitidentified opportunities.identified opportunities.

••Sustain a competitive advantage while identifying andSustain a competitive advantage while identifying andexploiting opportunities.exploiting opportunities.

••Develop an entrepreneurial mindDevelop an entrepreneurial mind--set among managersset among managersand employees.and employees.

••Seek to enter and compete in international markets.Seek to enter and compete in international markets.