Corporate Entrepreneurship Definition and Meaning – Major current researches are based on the studies of Joseph A. Schumpeter (1883 – 1950); An Austrian-American economist and political scientist. He was the first economist who determined entrepreneurs as the main agents of economic growth which create new products, find and develop new methods of production, and allocate other innovations to stimulate economic evolution. Also learn, What is Intrapreneurship? This article explains Corporate Entrepreneurship Meaning and Definition. According to the “creative destruction” the entrepreneurs continually displace, substitute, or destroy existing products or methods of production with new ones. The positive outcomes of these processes are the opportunity to create new technologies and new products to satisfy the changes in customer’s needs and the improvement of overall economic activities.
Learn, Understanding, and explain Corporate Entrepreneurship (CE) meaning and definition.
What is Corporate Entrepreneurship (CE)? It is a set of activities to enhance a company’s ability to innovate, take a risk, and seize the opportunities that are allocated in the market. Also, Corporate entrepreneurship is targeting the new business establishment, new market allocation with further business pursuing, or both.
Robert A. Burgelman (1983) refers to CE to the company’s activity in diversification through internal development. The process of such diversification involves new resources to help the firm to extend its activity in the new spheres of opportunities.
Such diversification through internal resources development represents the process of individual entrepreneurship in the corporate one. Thus, corporate entrepreneurship is a result of combining the entrepreneurial activities of multiple participants.
Meaning of Corporate Entrepreneurship:
Corporate entrepreneurship (also know as intrapreneurship) is defined by Guth and Ginsburg as;
“The birth of new business within existing organizations, that is, internal innovation or venturing; and the transformation of organizations through the renewal of the key ideas on which they are built, that is, strategic renewal.”
A large corporation that wants to encourage innovation and creativity within its firm must choose a structure. That will give the new business unit an appropriate amount of freedom while maintaining some degree of control at headquarters. Also learn, What is the Difference Between an Intrapreneur and Entrepreneur?
Burgelman proposes that the use of particular organizational design should determine by;
- The strategic importance of the new business to the corporation, and.
- The relatedness of the unit’s operations to those of the corporation.
A combination of these two factors results in nine organizational designs for corporate entrepreneurship.
Definition of Corporate Entrepreneurship:
Though its definition is somewhat contentious, the concept of corporate entrepreneurship is generally believing to refer to the development of new ideas and opportunities within large or establish 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 CE – 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. As well as learn, Why is “The Language of Business” also called Accounting?
Why the Need for Corporate Entrepreneurship?
Corporate entrepreneurship or Intrapreneurship is an important element in large and medium organizations. Also, Intrapreneurship exists within the organizations. It plays an important role in organizational and economic development. Intrapreneurship leads not only to new ventures, but it also leads to other innovative activities and orientations. Such as the development of new products, technologies, services, strategies, and competitive postures.
In good or bad economic times, companies seek innovations to remain competitive. Intrapreneurs are more intelligent and can perceive the big picture. They are self-motivating and optimistic. These people are action-orient and move quickly to get things done.
A corporate entrepreneur is a person who focuses on innovation and creativity to transform dreams into a profitable reality. A charismatic leader in a company instills an entrepreneurial philosophy in the employees in an organization. These entrepreneurs must have leadership characteristics. They must be visionary and flexible. Entrepreneur encourages teamwork and builds a coalition of support. For the team, performance entrepreneur understands the organization environment they persist continuously trying to give their best.
Now a day’s market is highly competitive, to survive organizations trying to be more innovative. Companies want innovative people to work for them. Intrapreneurial techniques have been using throughout the world, some with failure and some with great success. As well as reading, How to Explain the Most Important Characteristics of Organizational Culture? and. Also learn, What are Factors affecting Organizational Change? External and Internal!
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 consider 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.
Also, 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 the 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 place. Promoting this culture by freely encouraging creativity (and thereby innovation). Also, 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 regarding 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.
Reference:
1. Meaning – //www.mbaknol.com/strategic-management/corporate-entrepreneurship/
2. Definition, Establish and Step – //www.businessdictionary.com/article/726/corporate-entrepreneurship-and-its-importance-in-large-companies/
3. Need – //www.mbaknol.com/modern-management-concepts/the-need-for-corporate-entrepreneurship/
4. Photo Credit URL – //bienveillus.fr/wp-content/uploads/2017/02/Bienveillance-au-Travail.jpg
