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Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinStrategic Management: Text and Cases, 4e
12
Managing Innovation and Fostering Corporate
Entrepreneurship
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Types of Innovation
• Degree of innovativeness- Radical innovation- Incremental innovation
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Continuum of Radical and Incremental Innovations
Exhibit 12.1 Continuum of Radical and Incremental Innovations
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Types of Innovation
• Degree of innovativeness- Radical innovation- Incremental innovation
• Product and process innovations
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Innovation Challenges
• Seeds versus Weeds
• Experience versus initiative
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Innovation Challenges
• Seeds versus Weeds
• Experience versus initiative
• Internal versus external staffing
• Building capabilities versus collaborating
• Incremental versus preemptive launch
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Defining the Scope of Innovation
• Firms must define the “strategic envelope” (scope of the innovation efforts)
• In defining the strategic envelope, a firm should answer several questions. What are these questions?
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Managing Innovation
• Firms need to regulate the pace of innovation- Incremental innovation (six months to two years)
- Radical innovation (Typically 10 years or more)
• Innovation often requires collaborating with others who possess complementary knowledge and skills
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Dispersed Approaches to Corporate Entrepreneurship
• Dedication to entrepreneurial principles and practices
• Entrepreneurial culture
• Product champions
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Product Champions
• Bring entrepreneurial ideas forward
• Identify what kind of market exists for the product or service
• Find resources to support the venture
• Promote the venture concept to upper management
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Business Incubators
• Business incubators are designed to “hatch” new businesses
• Incubators provide some a number of resources to a new venture
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Entrepreneurial Orientation
Autonomy
Innovativeness
Proactiveness
Competitive aggressiveness
Risk-Taking
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Entrepreneurial Orientation
Dimension Definition
Autonomy Independent action by an individual or team aimed at bringing forth a business concept or vision and carrying it through to completion.
Innovativeness A willingness to introduce novelty through experimentation and creative processes aimed at developing new products and services as well as new processes.
Proactiveness A forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand.
Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91.
Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation
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Entrepreneurial Orientation
Dimension Definition
Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp. 135-72; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp. 770-91.
Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation
Competitive An intense effort to outperform industry rivals. It is characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace.
aggressiveness
Risk taking Making decisions and taking action without certain knowledge of probable outcomes; some undertakings may also involve making substantial resource commitments in the process of venturing forward.