Hitt M.A., Ireland R.D., Hoskisson R.E. Strategic Management: Competitiveness and Globalization: Concepts
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Part 3: Strategic Actions: Strategy Implementation
current strategy. Thus, the top management team plays a key role
in induced strategic behavior, suggesting that the composition
and the effectiveness of the team are important.
80
Nokia’s joint venture with Intel is an example of induced
innovation. The two firms have specific goals in the development
of new products to support their strategies. Intel has had a stra-
tegic interest in the smartphone market, and Nokia is trying to
overcome Apple’s lead in this market with the iPhone. The stra-
tegic intent of these firms is to develop a market leading prod-
uct in the smartphone market that incorporates more features of
the personal computer and sophisticated software to enrich the
functionality of the product. These actions and approaches are
intended to ensure that both firms are number one in the global
market.
Implementing Internal Innovations
An entrepreneurial mind-set is required to be innovative and to
develop successful internal corporate ventures. Because of envi-
ronmental and market uncertainty, individuals and firms must
be willing to take risks to commercialize innovations. Although they must continuously
attempt to identify opportunities, they must also select and pursue the best opportuni-
ties and do so with discipline. Employing an entrepreneurial mind-set entails not only
developing new products and markets but also execution in order to do these things
effectively. Often, firms provide incentives to managers to be entrepreneurial and to
commercialize innovations.
81
Having processes and structures in place through which a firm can successfully
implement the outcomes of internal corporate ventures and commercialize the inno-
vations is critical. Indeed, the successful introduction of innovations into the mar-
ketplace reflects implementation effectiveness.
82
In the context of internal corporate
ventures, managers must allocate resources, coordinate activities, communicate with
many different parties in the organization, and make a series of decisions to convert
the innovations resulting from either autonomous or induced strategic behaviors into
successful market entries.
83
As we describe in Chapter 11, organizational structures are
the sets of formal relationships that support processes managers use to commercialize
innovations.
Effective integration of the various functions involved in innovation processes—
from engineering to manufacturing and, ultimately, market distribution—is required
to implement the incremental and radical innovations resulting from internal corpo-
rate ventures.
84
Increasingly, product development teams are being used to integrate the
activities associated with different organizational functions. Such integration involves
coordinating and applying the knowledge and skills of different functional areas in order
to maximize innovation.
85
Teams must help to make decisions as to which projects should
be commercialized and which ones should end. Although ending a project is difficult,
sometimes because of emotional commitments to innovation-based projects, effective
teams recognize when conditions change such that the innovation cannot create value as
originally anticipated.
Cross-Functional Product Development Teams
Cross-functional teams facilitate efforts to integrate activities associated with different
organizational functions, such as design, manufacturing, and marketing. These teams
may also include representatives from major suppliers because they can facilitate the
firm’s innovation processes.
86
In addition, new product development processes can be
Nokia is trying to
overcome the iPhone’s
lead in the smartphone
market through a joint
venture with Intel.
Vivek Prakash/Reuters/Landov
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Chapter 13: Strategic Entrepreneurship
completed more quickly and the products more easily commercialized when cross-
functional teams work effectively.
87
Using cross-functional teams, product develop-
ment stages are grouped into parallel or overlapping processes to allow the firm to
tailor its product development efforts to its unique core competencies and to the needs
of the market.
Horizontal organizational structures support the use of cross-functional teams in
their efforts to integrate innovation-based activities across organizational functions.
88
Therefore, instead of being designed around vertical hierarchical functions or depart-
ments, the organization is built around core horizontal processes that are used to pro-
duce and manage innovations. Some of the core horizontal processes that are critical to
innovation efforts are formal; they may be defined and documented as procedures and
practices. More commonly, however, these processes are informal: “They are routines or
ways of working that evolve over time.”
89
Often invisible, informal processes are critical
to successful innovations and are supported properly through horizontal organizational
structures more so than through vertical organizational structures.
Two primary barriers that may prevent the successful use of cross-functional teams
as a means of integrating organizational functions are independent frames of reference
of team members and organizational politics.
90
Team members working within a distinct
specialization (e.g., a particular organizational function) may have an independent frame
of reference typically based on common backgrounds and experiences. They are likely
to use the same decision criteria to evaluate issues such as product development efforts
as they do within their functional units. Research suggests that functional departments
vary along four dimensions: time orientation, interpersonal orientation, goal orientation,
and formality of structure.
91
Thus, individuals from different functional departments
having different orientations on these dimensions can be expected to perceive product
development activities in different ways. For example, a design engineer may consider
the characteristics that make a product functional and workable to be the most important
of the product’s characteristics. Alternatively, a person from the marketing function may
hold characteristics that satisfy customer needs most important. These different orienta-
tions can create barriers to effective communication across functions and even produce
conflict in the team at times.
92
Organizational politics is the second potential barrier to effective integration in cross-
functional teams. In some organizations, considerable political activity may center on
allocating resources to different functions. Interunit conflict may result from aggressive
competition for resources among those representing different organizational functions.
This dysfunctional conflict between functions creates a barrier to their integration.
93
Methods must be found to achieve cross-functional integration without excessive politi-
cal conflict and without changing the basic structural characteristics necessary for task
specialization and efficiency.
Facilitating Integration and Innovation
Shared values and effective leadership are important for achieving cross-functional inte-
gration and implementing innovation.
94
Highly effective shared values are framed around
the firm’s vision and mission and become the glue that promotes integration between
functional units. Thus, the firm’s culture promotes unity and internal innovation.
95
Strategic leadership is also highly important for achieving cross-functional inte-
gration and promoting innovation. Leaders set the goals and allocate resources. The
goals include integrated development and commercialization of new goods and services.
Effective strategic leaders also ensure a high-quality communication system to facilitate
cross-functional integration. A critical benefit of effective communication is the sharing
of knowledge among team members. Effective communication thus helps create synergy
and gains team members’ commitment to an innovation throughout the organization.
Shared values and leadership practices shape the communication systems that are formed
to support the development and commercialization of new products.
96
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Creating Value from Internal Innovation
The model in Figure 13.2 shows how firms can create value from the internal corporate
venturing processes they use to develop and commercialize new goods and services.
An entrepreneurial mind-set is necessary so that managers and employees will consis-
tently try to identify entrepreneurial opportunities the firm can pursue by developing
new goods and services and new markets. Cross-functional teams are important for
promoting integrated new product design ideas and commitment to their subsequent
implementation. Effective leadership and shared values promote integration and vision
for innovation and commitment to it. The end result for the firm is the creation of
value for the customers and shareholders by developing and commercializing new
products.
97
We should acknowledge that not all entrepreneurial efforts succeed, even
with effective management. Sometimes managers must exit the market as well to avoid
value decline.
98
In the next two sections, we discuss the other ways firms innovate—by using coop-
erative strategies and by acquiring companies.
Innovation through Cooperative Strategies
Virtually all firms lack the breadth and depth of resources (e.g., human capital and
social capital) in their R&D activities needed to internally develop a sufficient number
of innovations to meet the needs of the market and remain competitive. As such, firms
must be open to using external resources to help produce innovations.
99
Alliances with
other firms can contribute to innovations in several ways. First, they provide informa-
tion on new business opportunities and how to exploit them.
100
In other instances, firms
use cooperative strategies to align what they believe are complementary assets with the
potential to lead to future innovations.
101
Cross-functional
product development
teams
Entrepreneurial
mind-set
Creating value
through innovation
Facilitating integration
and innovation
• Shared values
• Entrepreneurial
leadership
Figure 13.2 Creating Value through Internal Innovation Processes
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Chapter 13: Strategic Entrepreneurship
The rapidly changing technologies of the twenty-first–century competitive landscape,
globalization, and the need to innovate at world-class levels are primary influences on
firms’ decisions to innovate by cooperating with other companies. Evidence shows that
the skills and knowledge contributed by firms forming a cooperative strategy to innovate
tend to be technology-based, a fact suggesting how technologies and their applications
continue to influence the choices firms make while competing in the twenty-first century
competitive landscape.
102
Indeed, some believe that because of these conditions, firms
are becoming increasingly dependent on cooperative strategies as a path to successful
competition in the global economy.
103
Even venerable old firms such as Intel and Nokia
have learned that they need help to create innovations necessary to be competitive in
a twenty-first–century environment. Their agreement to jointly develop products that
integrate functions of the smartphones and personal computers is based on their realiza-
tion that they need great capabilities to develop market-leading products in the dynamic
and highly competitive markets in which they participate.
Both entrepreneurial firms and established firms use cooperative strategies (e.g., stra-
tegic alliances and joint ventures) to innovate. An entrepreneurial firm, for example,
may seek investment capital as well as established firms’ distribution capabilities to suc-
cessfully introduce one of its innovative products to the market.
104
Alternatively, more-
established companies may need new technological knowledge and can gain access to
it by forming a cooperative strategy with entrepreneurial ventures.
105
Alliances between
large pharmaceutical firms and biotechnology companies increasingly have been formed
to integrate the knowledge and resources of both to develop new products and bring
them to market.
106
Because of the importance of strategic alliances, particularly in the development
of new technology and in commercializing innovations, firms are beginning to build
networks of alliances that represent a form of social capital to them.
107
Building social
capital in the form of relationships with other firms provides access to the knowledge
and other resources necessary to develop innovations.
108
Knowledge from these alliances
helps firms develop new capabilities.
109
Some firms now even allow other companies to
participate in their internal new product development processes. It is not uncommon, for
example, for firms to have supplier representatives on their cross-functional innovation
teams because of the importance of the suppliers’ input to ensure quality materials for
any new product developed.
110
However, alliances formed for the purpose of innovation are not without risks. In
addition to conflict that is natural when firms try to work together to reach a mutual
goal,
111
cooperative strategy participants also take a risk that a partner will appropriate a
firm’s technology or knowledge and use it to enhance its own competitive abilities.
112
To
prevent or at least minimize this risk, firms, particularly new ventures, need to select their
partners carefully. The ideal partnership is one in which the firms have complementary
skills as well as compatible strategic goals.
113
However, because companies are operating
in a network of firms and thus may be participating in multiple alliances simultaneously,
they encounter challenges in managing the alliances.
114
Research has shown that firms
can become involved in too many alliances, which can harm rather than facilitate their
innovation capabilities.
115
Thus, effectively managing a cooperative strategy to produce
innovation is critical.
As explained in the Strategic Focus, the social networking Internet sites have become
highly popular with the general public and with professionals as well. Furthermore,
entrepreneurs have begun to use them in ways to facilitate their businesses. These sites
provide many opportunities for businesses and especially for gaining access to ideas and
information. Therefore, they can facilitate innovation. Firms can use them to identify
unique product ideas, to do market research, and to access new markets and new custom-
ers. As a result the social networking sites are highly valuable business mechanisms.
Social networks are one of the major innovations
in the first decade of the twenty-first century.
Perhaps the most popular and important
social networking Internet sites are Facebook,
MySpace, Twitter, and LinkedIn. In 2009,
Facebook reached a level of approximately 1.2
million visits per month. MySpace was second
with slightly more than 800,000 monthly visits, followed by Twitter in third place. LinkedIn
was fifth but growing rapidly among professionals. While these are all largely used for
personal social networking, their potential uses are much greater. For example, Facebook is
used by approximately 150 million people globally with more than 50 million unique visitors
monthly. Facebook is used in 170 different countries and territories and appears in
35 different languages. The access to people for many different reasons is substantial—
perhaps larger than through any other single means other than television. In addition
MySpace has 76 million members with the average user spending about 4.4 hours per
month on the site, about 1.7 hours longer than users on the site of its nearest competitor.
The “rage” most recently has been Twitter, which is a microblogging Web site. Its use grew
by 752 percent in 2008 alone. It has attracted a more educated young adult audience.
Smart entrepreneurs are identifying ways to use these social networking sites for business
purposes. For example, they may be useful to access markets. Gary Vaynerchuk used Twitter
to grow his wine distribution business from $5 million (when he took over the business
from his father) to $50 million within three years. He performed an
experiment using a direct mail advertisement, a billboard, and a
Twitter announcement to determine which would bring in more new
customers (at the lowest cost). The direct mail ad brought in 200
new customers (at a cost of $75 each); the billboard brought in 300
new customers (at a cost of $25 each) and the Twitter announcement
brought in 1,800 new customers (at no additional cost). He now
produces short videos on wine for use on Twitter.
Social networking sites are also being used to identify potential
new employees and to make all types of professional and business
contacts. They provide access to new ideas and information that
can be useful for solving problems and even for making strategic
decisions. The access to information and ideas makes these sites
excellent sources in the innovation process. For example, the use of
cross-functional teams and an occasional outsider to develop new
products has been valuable because of the integration of diverse
ideas incorporating multiple and important perspectives. Yet,
social networking sites provide access to many more and diverse
perspectives and ideas. In addition, the opportunity to perform
virtual market tests with a large sample from the market exists with
these sites. Finally, they provide the opportunity to identify new and
different markets for existing and new product ideas. Therefore, if
managed properly, they could be highly valuable in the innovation
process, from the identification of new product ideas, through
market research to market reach (many, many potential customers).
ALL IN A TWITTER ABOUT
MY SPACE IN ORDER TO
BE LINKED IN TO THE
BOOK OF FACES: THE
SOCIAL NETWORKING
PHENOMENON
The demographics of social media usage
are shifting quickly, with adults rapidly
coming online and driving the growth of
newer services such as Twitter.
davidbleekerphotography.com/Alamy
393
Innovation through Acquisitions
Firms sometimes acquire companies to gain access to their innovations and to their
innovative capabilities. One reason companies make these acquisitions is that the
capital market values growth; acquisitions provide a means to rapidly extend one or
more product lines and increase the firm’s revenues.
116
Acquisitions pursued for this
reason should, nonetheless, have a strategic rationale. For example, several large pharma-
ceutical firms have made acquisitions in recent years for several reasons, such as enhanc-
ing growth. However, a primary reason for acquisitions in this industry has been to
acquire innovation—new drugs that can be commercialized. In this way they strengthen
their new product pipeline.
117
Similar to internal corporate venturing and strategic alliances, acquisitions are not a
risk-free approach to innovating. A key risk of acquisitions is that a firm may substitute
an ability to buy innovations for an ability to produce innovations internally. In support
of this contention, research shows that firms engaging in acquisitions introduce fewer
new products into the market.
118
This substitution may take place because firms lose
strategic control and focus instead on financial control of their original and, especially,
of their acquired business units. Yet, careful selection of companies to acquire—ones
with complimentary science and technology knowledge—can enhance innovation if the
knowledge acquired is used effectively.
119
We note in Chapter 7 that companies can also learn new capabilities from firms they
acquire. Thus, firms may gain capabilities to produce innovation from an acquired com-
pany. Additionally, firms that emphasize innovation and carefully select companies for
acquisition that also emphasize innovation are likely to remain innovative.
120
Likewise,
firms must manage well the integration of the acquired firms’ technical capabilities so
that they remain productive and continue to produce innovation after the acquired firm
is merged into the acquiring firm.
121
Cisco has been highly successful with the integration
of acquired technology firms. Cisco managers take great care not to lose key personnel in
the acquired firm, realizing they are the source of many innovations.
This chapter closes with an assessment of how strategic entrepreneurship helps firms
create value for stakeholders through its operations.
Creating Value through Strategic
Entrepreneurship
Newer entrepreneurial firms often are more effective than larger established firms in
the identification of entrepreneurial opportunities.
122
As a consequence, entrepreneurial
ventures often produce more radical innovations than do their larger, more established
counterparts. Entrepreneurial ventures’ strategic flexibility and willingness to take risks
at least partially account for their ability to identify opportunities and then develop radi-
cal innovations to exploit them.
Alternatively, larger and well-established firms often have more resources and capa-
bilities to exploit identified opportunities.
123
Younger, entrepreneurial firms generally
excel in the opportunity-seeking dimension of strategic entrepreneurship while more
Sources: L. Safko, 2009, The twitter about Twitter, Fast Company, http://fastcompany.com, June 13; M. Conlin & D.
MacMillan, 2009, Managing the tweets, BusinessWeek, June 1, 20–21; A. Yee, 2009, Social network rankings: Who’s
hot and who’s not, ebiz, http://www.ebizq.net, April 13; J. F. Rayport, 2009, Social networks are the new web portals,
BusinessWeek, http://www.businessweek.com, January 21; J. Owyang, 2009, A collection of social network stats for
2009, Web Strategist, http://www.web-strategist.com, January 11; K. E. Klein, 2008, Are social networking sites useful for
business? BusinessWeek, http://www.businessweek.com, August 6.
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established firms generally excel in the advantage-
seeking dimension. However, to compete effectively
in the twenty-first century competitive landscape,
firms must not only identify and exploit opportu-
nities but do so while achieving and sustaining a
competitive advantage.
124
Thus, on a relative basis,
newer entrepreneurial firms must learn how to
gain a competitive advantage (advantage-seeking
behaviors), and older, more established firms must
relearn how to identify entrepreneurial opportuni-
ties (opportunity-seeking skills).
In some large organizations, action is being
taken to deal with these matters. For example, an
increasing number of widely known, large firms,
including Williams-Sonoma, Inc., Wendy’s
International, AstraZeneca, and Choice Hotels,
have created a new, top-level managerial position commonly called president or
executive vice president of emerging brands. The essential responsibility for people
holding these positions is to find entrepreneurial opportunities for their firms. If a
decision is made to pursue one or more of the identified opportunities, this person
also leads the analysis to determine whether the innovations should be internally
developed, pursued through a cooperative venture, or acquired. The objective is to
help firms develop successful incremental and radical innovations.
To be entrepreneurial, firms must develop an entrepreneurial mind-set among their
managers and employees. Managers must emphasize the management of their resources,
particularly human capital and social capital.
125
The importance of knowledge to identify
and exploit opportunities as well as to gain and sustain a competitive advantage sug-
gests that firms must have strong human capital.
126
Social capital is critical for access to
complementary resources from partners in order to compete effectively in domestic and
international markets.
127
Many entrepreneurial opportunities continue to surface in international markets, a
reality that is contributing to firms’ willingness to engage in international entrepreneur-
ship. By entering global markets that are new to them, firms can learn new technologies
and management practices and diffuse this knowledge throughout the entire enterprise.
Furthermore, the knowledge firms gain can contribute to their innovations. Research
has shown that firms operating in international markets tend to be more innovative.
128
Entrepreneurial ventures and large firms now regularly enter international markets.
Both types of firms must also be innovative to compete effectively. Thus, by developing
resources (human and social capital), taking advantage of opportunities in domestic and
international markets, and using the resources and knowledge gained in these markets
to be innovative, firms achieve competitive advantages.
129
In so doing, they create value
for their customers and shareholders.
Firms practicing strategic entrepreneurship contribute to a country’s economic
development. In fact, some countries have made dramatic economic progress by chang-
ing the institutional rules for businesses operating in the country. This approach could
be construed as a form of institutional entrepreneurship. Likewise, firms that seek to
establish their technology as a standard, also representing institutional entrepreneur-
ship, are engaging in strategic entrepreneurship because creating a standard produces a
competitive advantage for the firm.
130
Research shows that because of its economic importance and individual motives,
entrepreneurial activity is increasing around the globe. Furthermore, more women are
becoming entrepreneurs because of the economic opportunity entrepreneurship provides
and the individual independence it affords. Recent research showed that about one-third
Established companies
such as Williams-
Sonoma are seeking to
identify and capitalize
on entrepreneurial
opportunities by
devoting top managers
to the development of
emerging brands.
Spencer Platt/Getty Images
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Chapter 13: Strategic Entrepreneurship
of all entrepreneurs are now women.
131
In the United States, for example, women are the
nation’s fastest-growing group of entrepreneurs.
132
In future years, entrepreneurial activ-
ity may increase the wealth of less-affluent countries and continue to contribute to the
economic development of the more-affluent countries. Regardless, the entrepreneurial
ventures and large, established firms that choose to practice strategic entrepreneurship
are likely to be the winners in the twenty-first century.
133
After identifying opportunities, entrepreneurs must develop capabilities that will
become the basis of their firm’s core competencies and competitive advantages. The
process of identifying opportunities is entrepreneurial, but this activity alone is not
sufficient to create maximum wealth or even to survive over time.
134
As we learned
in Chapter 3, to successfully exploit opportunities, a firm must develop capabili-
ties that are valuable, rare, difficult to imitate, and nonsubstitutable. When capabili-
ties satisfy these four criteria, the firm has one or more competitive advantages to
exploit the identified opportunities (as described in Chapter 3). Without a competi-
tive advantage, the firm’s success will be only temporary (as explained in Chapter 1).
An innovation may be valuable and rare early in its life, if a market perspective is
used in its development. However, competitive actions must be taken to introduce
the new product to the market and protect its position in the market against competi-
tors to gain a competitive advantage.
135
These actions combined represent strategic
entrepreneurship.
SUMMARY
Strategic entrepreneurship is taking entrepreneurial actions •
using a strategic perspective. Firms engaging in strategic
entrepreneurship simultaneously engage in opportunity-
seeking and advantage-seeking behaviors. The purpose is
to continuously find new opportunities and quickly develop
innovations to exploit them.
Entrepreneurship is a process used by individuals, teams,
•
and organizations to identify entrepreneurial opportunities
without being immediately constrained by the resources
they control. Corporate entrepreneurship is the application
of entrepreneurship (including the identification of entrepre-
neurial opportunities) within ongoing, established organiza-
tions. Entrepreneurial opportunities are conditions in which
new goods or services can satisfy a need in the market.
Increasingly, entrepreneurship positively contributes to indi-
vidual firms’ performance and stimulates growth in countries’
economies.
Firms engage in three types of innovative activities: (1) inven-
•
tion, which is the act of creating a new good or process,
(2) innovation, or the process of creating a commercial prod-
uct from an invention, and (3) imitation, which is the adop-
tion of similar innovations by different firms. Invention brings
something new into being while innovation brings something
new into use.
Entrepreneurs see or envision entrepreneurial opportuni-
•
ties and then take actions to develop innovations to exploit
them. The most successful entrepreneurs (whether they are
establishing their own venture or are working in an ongoing
organization) have an entrepreneurial mind-set, which is an
orientation that values the potential opportunities available
because of marketplace uncertainties.
International entrepreneurship, or the process of identify- •
ing and exploiting entrepreneurial opportunities outside the
firm’s domestic markets, is important to firms around the
globe. Evidence suggests that firms capable of effectively
engaging in international entrepreneurship outperform those
competing only in their domestic markets.
Three basic approaches are used to produce innovation:
•
(1) internal innovation, which involves R&D and forming
internal corporate ventures, (2) cooperative strategies such
as strategic alliances, and (3) acquisitions. Autonomous stra-
tegic behavior and induced strategic behavior are the two
forms of internal corporate venturing. Autonomous strategic
behavior is a bottom-up process through which a product
champion facilitates the commercialization of an innovative
good or service. Induced strategic behavior is a top-down
process in which a firm’s current strategy and structure
facilitate the development and implementation of product
or process innovations. Thus, induced strategic behavior is
driven by the organization’s current corporate strategy and
structure while autonomous strategic behavior can result
in a change to the firm’s current strategy and structure
arrangements.
Firms create two types of innovations—incremental and
•
radical—through internal innovation that takes place in the
form of autonomous strategic behavior or induced strategic
396
behavior. Overall, firms produce more incremental innova-
tions but radical innovations have a higher probability of sig-
nificantly increasing sales revenue and profits. Cross-functional
integration is often vital to a firm’s efforts to develop and
implement internal corporate venturing activities and to
commercialize the resulting innovation. The cross-functional
teams now commonly include representatives from external
organizations such as suppliers. Additionally, integration and
innovation can be facilitated by developing shared values and
effectively using strategic leadership.
To gain access to the specialized knowledge commonly
•
required to innovate in the complex global economy, firms
may form a cooperative relationship such as a strategic alliance
with other companies, some of which may be competitors.
Acquisitions are another means firms use to obtain innova- •
tion. Innovation can be acquired through direct acquisition,
or firms can learn new capabilities from an acquisition,
thereby enriching their internal innovation abilities.
The practice of strategic entrepreneurship by all types of
•
firms, large and small, new and more established, creates
value for all stakeholders, especially for shareholders and
customers. Strategic entrepreneurship also contributes to the
economic development of countries.
What is strategic entrepreneurship? What is corporate entre-1.
preneurship?
What is entrepreneurship, and what are entrepreneurial 2.
opportunities? Why are they important for firms competing
in the twenty-first–century competitive landscape?
What are invention, innovation, and imitation? How are 3.
these concepts interrelated?
What is an entrepreneur, and what is an entrepreneurial 4.
mind-set?
What is international entrepreneurship? Why is it important?5.
How do firms develop innovations internally?6.
How do firms use cooperative strategies to innovate and to 7.
have access to innovative capabilities?
How does a firm acquire other companies to increase the 8.
number of innovations it produces and improve its capability
to produce innovations?
How does strategic entrepreneurship help firms to create 9.
value?
REVIEW QUESTIONS
EXPERIENTIAL EXERCISES
EXERCISE 1: DO YOU WANT TO BE AN
ENTREPRENEUR?
Would you make a good entrepreneur? In this exercise, we will
explore how individual attributes and characteristics contribute to
entrepreneurial success. If you believe that you have the traits of
a successful entrepreneur, would you be more effective working
within a large firm or starting your own business? Complete the
first stage of the exercise individually, then meet in small groups
to discuss your answers.
Individual
Brainstorm a list of personal attributes or characteristics that could
help (or hinder) a person’s success as an entrepreneur. Next, evalu-
ate the importance of each item on your list. Finally, compare your
prioritized list against your personal characteristics. Do you think that
you are a good candidate to be an entrepreneur? Why or why not?
Group
First, compare each person’s list of attributes and characteristics.
Combine similar items and create a composite list. Second, as
a group, evaluate the importance of each item on the list. It is
not important to rank order the characteristics. Rather, sort them
into the categories “very important,” “somewhat important,” and
“minimally important.” Then, discuss within your group which
team member seems to be the best suited to be an entrepre-
neur. Create a brief profile of how to describe that person if he
or she were applying for a job at an innovative company such as
Google, Intel, or Motorola.
Whole Class
The instructor will ask for student volunteers to present their inter-
view profiles.
EXERCISE 2: THE SOCIAL NATURE OF
ENTREPRENEURSHIP
Entrepreneurship is said to be as much about social connections
and networks as it is about the fundamentals of running a new
venture. The relationships that an entrepreneur can count upon
are also a key resource for financial capital, human capital, men-
toring, and legal advice.
A popular blog covering social media and Web 2.0, http://
mashable.com, recently identified what it considered to be the
top 10 social networks for entrepreneurs (http://mashable.com,
March 12, 2009):
1. Entrepreneur Connect
2. PartnerUp
3. StartupNation
4. LinkedIn
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Chapter 13: Strategic Entrepreneurship
5. Biznik
6. Perfect Business
7. Go Big Network
8. Cofoundr
9. The Funded
10. Young Entrepreneur
In teams, choose one of the sites from the list; each team
must select a different site. Then, spend some time reading the
posts on that site to get a feel for the types of information that is
presented. After your review, prepare a 10-minute presentation
to the class on your network site, paying attention to address the
following, at a minimum:
Provide an overview of the site—what it is used for, how 1.
popular is it, features, types of conversations, etc.
What is unique about this site? Why does it attract followers? 2.
What technologies are enabled here—RSS, Twitter, etc.?
Describe the target audience for this site. Who would use 3.
it and what types of information are available to entrepre-
neurs?
How do you think this site maintains it presence? Does it sup-4.
port itself with ad revenue, corporate sponsor, a not-for-profit
sponsor, etc.?
Would this site be useful for corporate entrepreneurs as well 5.
as startup entrepreneurs? If so, how?
VIDEO CASE
THE DNA OF THE ENTREPRENEUR
Dame Anita Roddick/Founder/The Body Shop International
Dame Anita Roddick, founder of The Body Shop International,
talks about the skill set required for an entrepreneur to grow a
business. Roddick founded her firm in 1976 with no experience
or training, but due to life experiences and economic necessity
created a very successful firm dedicated to the pursuit of social
and environmental causes.
Before you watch the video consider the following concepts
and questions and be prepared to discuss them in class:
Concepts
Entrepreneur •
Entrepreneurial mind-set •
Entrepreneurial opportunities •
Questions
Research Dame Anita Roddick and describe her as an entre-1.
preneur.
What do you think about entrepreneurs who are interested 2.
in personal wealth creation vs. those with aspirations about
building a business that may not lead to personal wealth
creation?
Can large organizations encourage entrepreneurship within 3.
their existing structures?
Are you a future entrepreneur? Why or why not?4.
NOTES
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D. J. Miller, M. J. Fern, & L. B. Cardinal,
2007, The use of knowledge for
technological innovation within diversified
firms, Academy of Management Journal,
50: 308–326.
2. R. D. Ireland & J. W. Webb, 2007,
Strategic entrepreneurship: Creating
competitive advantage through
streams of innovation, Business
Horizons, 50(4): 49–59; M. A. Hitt,
R. D. Ireland, S. M. Camp, & D. L. Sexton,
2002, Strategic entrepreneurship:
Integrating entrepreneurial and
strategic management perspectives, in
M. A. Hitt, R. D. Ireland, S. M. Camp,
& D. L. Sexton (eds.), Strategic
Entrepreneurship: Creating a New
Mindset, Oxford, UK: Blackwell
Publishers, 1–16; M. A. Hitt,
R. D. Ireland, S. M. Camp, & D. L. Sexton,
2001, Strategic entrepreneurship:
Entrepreneurial strategies for wealth
creation, Strategic Management Journal,
22 (Special Issue): 479–491.
3. R. Durand, O. Bruyaka & V. Mangematin,
2008, Do science and money go together?
The case of the French biotech industry,
Strategic Management Journal, 29:
1281–1299; R. K. Sinha & C. H. Noble,
2008, The adoption of radical manufacturing
technologies and firm survival, Strategic
Management Journal, 29: 943–962.
4. E. Levitas & M. A. McFadyen, 2009,
Managing liquidity in research-intensive
firms: Signalling and cash flow effects of
patents and alliance activities, Strategic
Management Journal, 30: 659–678.
5. J. L. Morrow, D. G. Sirmon, M. A. Hitt, &
T. R. Holcomb, 2007, Creating value in
the face of declining performance: Firm
strategies and organizational recovery,
Strategic Management Journal, 28:
271–283; K. G. Smith, C. J. Collins, &
K. D. Clark, 2005, Existing knowledge,
knowledge creation capability, and
the rate of new product introduction
in high-technology firms, Academy of
Management Journal, 48: 346–357.
6. D. F. Kuratko, 2007, Entrepreneurial
leadership in the 21st century, Journal of
Leadership and Organizational Studies,
13(4): 1–11; R. D. Ireland, M. A. Hitt, &
D. G. Sirmon, 2003, A model of strategic
entrepreneurship: The construct and its
dimensions, Journal of Management, 29:
963–989.
7. B. R. Barringer & R. D. Ireland, 2008,
Entrepreneurship: Successfully Launching
New Ventures, Upper Saddle River, NJ:
Pearson Prentice Hall, 5; D. T. Holt,
M. W. Rutherford, & G. R. Clohessy, 2007,
Corporate entrepreneurship: An empirical
look at individual characteristics, context
and process, Journal of Leadership and
Organizational Studies, 13(4): 40–54.
8. M. H. Morris, S. Coombes, & M.
Schindehutte, 2007, Antecedents and
outcomes of entrepreneurial and market
orientations in a non-profit context: