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Corporate Entrepreneurship


Though its definition is somewhat contentious, the concept of corporate entrepreneurship is generally believed to refer to the development of new ideas and opportunities within large or established businesses, directly leading to the improvement of organizational profitability and an enhancement of competitive position or the strategic renewal of an existing business.

Within that system, the notion of innovation is at the very core of corporate entrepreneurship – the two inseparably bound together and responsible for driving calculated and beneficial risk-taking. Taking it one step further, corporate entrepreneurship may even significantly alter the balance of competition within an industry or create entirely new industries through this act of internal innovation.

Why should established organizations consider corporate entrepreneurship?

Corporate entrepreneurship is especially crucial for large companies, enabling these organizations – that are traditionally averse to risk-taking – to innovate, driving leaders and teams toward an increased level of corporate enterprising. In addition to the obvious benefits obtained through innovation, this approach also provides the organizational benefit of setting the stage for leadership continuity.

In a simpler view, corporate entrepreneurship can also be considered a means of organizational renewal. For in addition to its focus on innovation, there also exists an equal drive toward venturing. These two work in unison as the company undertakes innovations across the entire organizational spectrum, from product and process to technology and administration. In addition, venturing is a primary component in the process, pushing larger companies to enhance their overall competitiveness in the marketplace by taking bigger risks. Examples of these risks, as seen in a large-scale organization, may include: redefinition of the business concept, reorganization, and the introduction of system-wide changes for innovation.

Setting up the corporate entrepreneurship environment

In modern business, one of the primary tasks of the business leader is to foster an environment in which entrepreneurial thinking is encouraged and readily takes places. Promoting this culture by freely encouraging creativity (and thereby innovation), business leaders motivated toward corporate entrepreneurship must continuously strive to exude and build trust, embracing the risk to fail and inspiring those around them to take similar calculated risks.

But there is more to an environment of corporate entrepreneurship than simply inciting inspiration. It also relies heavily on a system of continuous analysis and feedback, potentially including the following two steps:

Step 1
Set a broad direction for achievement, reevaluating it periodically for any new information that may have surfaced in regard to changes in the business environment, including competitive products and markets in which the firm is operating. Constant evaluation is essential at this stage as even the most finely-tuned direction can still lead to catastrophic failure if the approach is no longer working.

Step 2
Reinforce efforts across the entire organization that coincide with the current plan for achievement. The task of a leader or senior manager is often that of the analyst, continuously promoting strategy while making adjustments based on their beliefs related to organizational goals and the feedback they receive from business units. As these business units continue to experiment with existing products and services, as well as innovate and develop new ones, senior executives can magnify the stated goals to reinforce those business unit initiatives and thereby achieve the highest degree of success.

The Benefits of Corporate Entrepreneurship

The Research and Development department integrated in a company is the most common form of corporate entrepreneurship. It is responsible with creating efficient methods of improving other departments’ activity as well as providing spectacular value for the customers.

Corporate entrepreneurship develops new commercial activities in order to meet the market needs and wants. It initiates the process of creating value with an already established company. Employees of the department have the responsibility to conceive, start and manage a new business that is different from the parent organization. So, the new actions help the social entity improve its market position and it enlarges its capabilities and resources.

The business environment is very challenging and the main factor that influences it is represented by customers. A changing market with new trends appearing every day leads to an increase in choices, which means competition is very strong. That is why companies must develop new products and services in order to survive. Since developing products that can’t be brought on the market is just a waste of time, the innovations that companies make must be created in order to fit and improve the existing activities.

However this approach prevents new products from appearing which can lead to missed opportunities. Moreover, these constraints limit the possibility a company has to bring what it desires on the market. The fear of failure is what stops organizations implementing new projects.

One of the reasons why corporate entrepreneurship exists is that companies have to face a large number of competitors who are entering each market due to the customers increased demanding. In these circumstances firms have to do anything that is possible to maintain their position and satisfy their clients’ needs. They must become more flexible and improve their capacity of innovating.

Due to the changing and competitive business environment, managers should not rely on their past company behavior because new industry trends appear all the time, so they must rise to their clients expectations. Employees are encouraged to be creative, and that is how they bring valuable knowledge to the organization. Making informed decisions and taking risks becomes easier under these circumstances.

In order to become the top player in the market, a company must remain competitive and it must use knowledge as a way to increase performance and profitability. Case studies and research are highly recommended in these situations because they can help discovering problems nobody knew about.

注:“contentious”同“controversial”;“periodically”同“at regulary intervals”

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