Chapter 2 notes PDF

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Dr. Joette Wisinski. This is the lecture based on the second chapter of the required textbook. This lecture goes into the different kinds of business and what makes a good business owner....

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Chapter 2 Section 1 The Entrepreneurial Perspective Interest in Corporate Entrepreneurship There is an interest in entrepreneurship within organizations - An increasing social interest in doing your own thing - The entrepreneurial spirit is critical for innovation and growth - Hypercompetition forces focus on product, productivity, and costs Developing corporate entrepreneurship helps overcome resistance to flexibility, growth, and diversification. Entrepreneurial endeavors consist of four key elements: 1. New business venturing 2. Organizational innovativeness 3. Self-renewal 4. Proactiveness Strategic Orientation and Commitment to Opportunity Both entrepreneurship and strategy have important implications for the performance of the firm. Strategic orientation are those factors that are inputs into the formulation of the firm’s strategy. - Entrepreneurial management is driven by opportunity, not resources - Resources do not constrain entrepreneurially managed firms An entrepreneurial orientation toward opportunity allows firms to rapidly pursue opportunities, seizing windows of opportunity - In contrast, traditional firms emphasize the collecting and analyzing of information - Sometimes missing the window of opportunity Characteristics of an Entrepreneurial Environment - Organization operates on frontiers of technology - New ideas are encouraged - Trial and error is encouraged - Failures are allowed - No opportunity parameters - Resources are available and accessible - Multidisciplinary teamwork approach - Long time horizon - Volunteer program - Appropriate reward system - Sponsors and champions available - Support of top management Leadership Characteristics of Corporate Entrepreneurs - A corporate entrepreneur understands the environment - They must be a visionary leader- a person dreaming great dreams - They must be flexible and create management options - They encourage teamwork, using a multi-disciplined approach - Corporate entrepreneurs encourage open discussion - Openness leads to a strong coalition of supporters - A corporate entrepreneur must be persistent to make a new venture successful

Establishing Corporate Entrepreneurship 1. Secure top management commitment 2. Identify areas of interest and money available 3. Use technology to make the company more flexible 4. Interested managers will train employees 5. Develop ways to get closer to customers 6. Learn to be more productive with fewer resources 7. Establish a strong support structure 8. Tie rewards to performance of the entrepreneurial unit 9. Allow successful units to expand and unsuccessful ones to be eliminated Problems and Successful Efforts One study found new ventures started within a corporation performed worse than those started independently - Reasons included the corporation’s lack of long term commitment, a lack of freedom to make decisions, and a constrained environment There are successfully implemented corporate entrepreneurship. - 3M allows employees to devote a percent of their time to independent projects, the most successful being Post-It notes Problems are not insurmountable and implementing corporate entrepreneurship can lead to new products, growth, and a new corporate environment and culture Learning from Failure Sometimes initiatives fail to achieve their objectives and are terminated. This represents an opportunity to learn and avoid the same mistakes in the future Individuals using a dual process model of coping with negative emotions recover more easily - The dual process requires oscillating between two alternate approaches to loss - Loss orientation focuses on the loss event to create an account of failure - A restoration orientation uses distraction to focus energy on other problems Practical Implications of the Dual Process Knowledge that the feelings of loss are normal may reduce feelings of shame and embarrassment. Realizing the psychological and physiological outcomes caused by the loss are “symptoms” can reduce secondary sources of stress and assist with the choice of treatment. There is a process of recovery from a failure to learn, which offers some comfort that feelings of loss will soon diminish. The recovery and learning process can be enhanced by use of the dual process model of coping with negative emotions. Recovery from loss offers and opportunity to learn more about entrepreneurship....