Ch13-1 Chapter 13 Corporate Entrepreneurship and Innovation Corporate Entrepreneurship and Innovation Michael A. Hitt R. Duane Ireland Robert E. Hoskisson Michael A. Hitt R. Duane Ireland Robert E. Hoskisson ©2000 South-Western College Publishing

Ch13-2 Competitiveness Chapter 3 Internal Environment Chapter 2 External Environment The Strategic Management Process Strategic Intent Strategic Mission Strategic Competitiveness Above Average Returns Feedback Strategy Formulation Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 6 Corporate-Level Strategy Chapter 8 International Strategy Chapter 9 Cooperative Strategies Chapter 7 Acquisitions & Restructuring Strategy Implementation Chapter 10 Corporate Governance Chapter 11 Structure & Control Chapter 12 Strategic Leadership Chapter 13 Entrepreneurship & Innovation Entrepreneurship & Innovation Strategic Inputs Strategic Actions Strategic Outcomes

Ch13-3 Defining Entrepreneurship Firm’s capabilities to develop new goods or services and manage the innovation process Corporate Entrepreneurship Creating or developing a new product or process idea Invention Creating a commercializable product from invention Innovation Adoption of innovation by a population of similar firms Imitation

Ch13-4 Successful Entrepreneurship The key to success with entrepreneurship and innovation is moving from the invention of ideas to effective commercialization and acceptance in the marketplace

Ch13-5 TimelyTimely Difficult for competitors to imitate Difficult for competitors to imitate Commercially exploitable with present capabilities Commercially exploitable with present capabilities Innovation and Competitive Advantage CompetitiveAdvantageCompetitiveAdvantage Provides significant value to customers Provides significant value to customers

Ch13-6 Fostering Entrepreneurial Innovation Internal Corporate Venturing Three approaches: Cooperating to Produce Innovation Acquiring Innovative Capability Create it! Co-opt it! Buy it!

Ch13-7 Internal Corporate Venturing Corporate Intrapreneurship can occur as either a bottom-up process or as a top-down process Autonomous strategic behavior is a bottom-up process through which Product Champions pursue new product ideas to commercialization Product Champions are individuals who have an entrepreneurial vision for a new product and seek support for its commercialization

Ch13-8 Structural Context InducedStrategicBehavior Model of Internal Corporate Venturing Concept of Corporate Strategy AutonomousStrategicBehavior Strategic Context

Ch13-9 Internal Corporate Venturing Induced strategic behavior is a top-down process in which the current strategy and structure foster product innovations that are closely associated with the current strategy Environmental uncertainty makes developing entrepreneurship strategy highly complex Requires a decision on which corporate resources to deploy for new technology development and which innovative ideas to bring to market

Ch13-10 Value Appropriation from Innovation Barriers to Integration Different Time Interpersonal Different Goal Formality of Orientation Orientation Orientation Structure Facilitators of Integration Shared Values Leaders’ Vision Effective Budget Allocation Communication Appropriating Value from Innovation Cross- Functional Integration/ Design Teams Time to Market Product Quality Creation of Customer Value

Ch13-11 Cooperating to Produce Innovation Strategic alliances can help to foster innovation by combining the knowledge and resources of two or more partners Firms must focus on building knowledge, identifying core competencies and developing strong human resources to manage these projects Firms can also give away their core competencies by outsourcing to alliance partners rather than developing their own capabilities over time

Ch13-12 Acquiring Innovative Capability Many firms now use acquisitions of other firms as a substitute for developing innovations internally This can reduce risk and lower costly R&D investments The drawback is that firms can eventually lose their ability to generate innovations internally

Ch13-13 Small Firms and Innovation Small firms created most of the new jobs in the U.S. in the 1990s Small firms created most of the new jobs in the U.S. in the 1990s and this will continue in the 21st century While large firms account for over 80% of the world’s R&D spending, individuals or small firms are granted more than half of U.S. patents Many small firms are created when employees leave large firms to start their own businesses, frequently continuing to interact with their former firms to develop innovations and new products