Introduction to Corporate Entrepreneurship
Exam: 18-10-2016
Lecturer: J. Kuilman (JK) and G. Duijsters (GD)
HC 1 -> CH 12
HC 2 -> CH 6
HC 3 -> CH 8
HC 4 -> CH 13
HC 5 -> CH 11
HC 6 -> CH 4 + CH 5
Lecture 1 Why Corporate entrepreneurship (JK)
Entrepreneurship is partly about success and ‘catching the boat..’
For example, we can look at Nokia. Nokia was market leader and
is now bought by Microsoft (otherwise it would probably don’t
exist anymore). Another example is Kodak -> idea’s about the
digital camera but they think photography won’t change..
Technology is most of the time the reason for failure of companies.
We have certain types of technological change
Old vs. new
Competence-enhancing (Bookkeeping on computer) vs. competence-destroying (automatic
bookkeeping)
Incremental (small addings) vs. radical (big changes)
Sustaining vs. distruptive
The established firms have difficulties coping with the latter types of change (radical/disruptive). One
reason for this is the culture. When companies grow successfully, the task complexity is likely to
increase. A more bureaucratic or formalized structure is then needed to minimize control and
coordination cost. This is not always possible because structures and systems can become
increasingly interlinked so organizational change becomes difficult.
The other reason is Inertia, this one is structural.
Social Inertia: is the resistance to change or the endurance of stable relationships in societies
or social groups
Organizational inertia is the tendency of a mature organization to
continue on its current trajectory
Cultural inertia is the tendency for a group of people to cling to
traditions and ways of thinking that have outlived their usefulness
even when better ways are presented -> can be a result of success
(see success syndrome)
Structural inertia: when the systems/structures become
interlinked -> difficult to change
Is Inertia always bad? No, because it can result from accountability and reliability. Those factors are
very important in the business so you need to balance between the traditional business and (radical)
innovation. This balancing is what we call: Structural Ambidexterity.
Definition: The ability of an organisation to be efficient in its managemant of today’s
business and also adaptable for coping with tomorrow’s changing demand
,Another point of view is the Innovator’s Dilemma.
Clayton Christensen: ‘Failure to adapt to disruptive innovation is not the result of bad management,
but a result of good management’.
What does this mean: Your firm is managed very good because
Large companies depend on their existing customers and investors for resources -> have to
manage this well, (and there is not enough data or not enough known for this new product)
You listen closely to these customers and investors and kill ideas for which there is little
need.
This last one is particular related for disruptive innovation.
In the beginning there is no need for this product but this has
to be created.
Lower profit margins
Small market
No reliable market statistics.
Ford: If we had asked what people wanted the answer
wouldn’t be a car but would be ‘a faster horse’.
How can you change the organization with
maintaining the focus on your core business?
In the picture (right) we can see several options
we’ll discuss later in this course but they are all
aimed at fulfilling the needs for customers.
, Assigned Reading: Chapter 12 Exploiting Innovation (Pg. 381)
Innovation, Invention and creativity
Innovation is the heart of entrepreneurship. It is used to create change and opportunities but also for
creating a competitive advantage (or even entirely new industries).
Invention: is development of a product of process. Not all inventors benefited from their inventions
because they were incompetent at introducing it to the marketplace.
Paradigm market shift: radical shifts in how product or services are marketed that whole new
markets can be created that change the way people think about the product or service and create
new customers. -> Most of the time made possible by development in technologies.
Innovation: introduction of something new or novel. It includes invention and paradigm shift but
these are extreme examples and probably the riskiest form of innovation.
Product innovation: improvement in the design and/or functional qualities of a product or
service
Process innovation: revisions to how a product or service is produced so that it is better or
cheaper, for example substitution of a cheaper material in an existing product
Marketing innovation: improvements in the marketing of an existing product or service, or
even a better way of distribution/supporting an existing product or service.
Schumpeter’s 5 types of innovation:
1. Introduction of a new/improved good or service
2. The introduction of a new process
3. The opening up of a new market
4. The identification of new sources of supply of raw materials
5. The creations of new types of industrial organization
Schumpeter emphasized ‘newness’ but Kanter added ‘creative’ to it. Creative: the generation,
acceptance and implementation of new ideas, processes, products and services … (which) involves
creative use as well as original invention.
Mintzberg innovation: the means to break away from established patterns.
Figure 1 innovative intensity
Incremental innovations: making incremental changes to the
product -> usually later in the life cycle.
The frequency is as an important dimension to consider alongside
the scale of the innovation.
Three basic approaches to innovation
1. Have a problem and seek a solution: Polaroid
2. Have a solution and seek a problem: Post-it
3. Identify a need and develop a solution: Dyson vacuumcleaner
Mellor (2005): Innovation = Creativity + application or invention + application
Application = entrepreneurship! Entrepreneurship plays a vital role in this process since:
Helps to spot the opportunities
Delivers inventions to marketplace
Exam: 18-10-2016
Lecturer: J. Kuilman (JK) and G. Duijsters (GD)
HC 1 -> CH 12
HC 2 -> CH 6
HC 3 -> CH 8
HC 4 -> CH 13
HC 5 -> CH 11
HC 6 -> CH 4 + CH 5
Lecture 1 Why Corporate entrepreneurship (JK)
Entrepreneurship is partly about success and ‘catching the boat..’
For example, we can look at Nokia. Nokia was market leader and
is now bought by Microsoft (otherwise it would probably don’t
exist anymore). Another example is Kodak -> idea’s about the
digital camera but they think photography won’t change..
Technology is most of the time the reason for failure of companies.
We have certain types of technological change
Old vs. new
Competence-enhancing (Bookkeeping on computer) vs. competence-destroying (automatic
bookkeeping)
Incremental (small addings) vs. radical (big changes)
Sustaining vs. distruptive
The established firms have difficulties coping with the latter types of change (radical/disruptive). One
reason for this is the culture. When companies grow successfully, the task complexity is likely to
increase. A more bureaucratic or formalized structure is then needed to minimize control and
coordination cost. This is not always possible because structures and systems can become
increasingly interlinked so organizational change becomes difficult.
The other reason is Inertia, this one is structural.
Social Inertia: is the resistance to change or the endurance of stable relationships in societies
or social groups
Organizational inertia is the tendency of a mature organization to
continue on its current trajectory
Cultural inertia is the tendency for a group of people to cling to
traditions and ways of thinking that have outlived their usefulness
even when better ways are presented -> can be a result of success
(see success syndrome)
Structural inertia: when the systems/structures become
interlinked -> difficult to change
Is Inertia always bad? No, because it can result from accountability and reliability. Those factors are
very important in the business so you need to balance between the traditional business and (radical)
innovation. This balancing is what we call: Structural Ambidexterity.
Definition: The ability of an organisation to be efficient in its managemant of today’s
business and also adaptable for coping with tomorrow’s changing demand
,Another point of view is the Innovator’s Dilemma.
Clayton Christensen: ‘Failure to adapt to disruptive innovation is not the result of bad management,
but a result of good management’.
What does this mean: Your firm is managed very good because
Large companies depend on their existing customers and investors for resources -> have to
manage this well, (and there is not enough data or not enough known for this new product)
You listen closely to these customers and investors and kill ideas for which there is little
need.
This last one is particular related for disruptive innovation.
In the beginning there is no need for this product but this has
to be created.
Lower profit margins
Small market
No reliable market statistics.
Ford: If we had asked what people wanted the answer
wouldn’t be a car but would be ‘a faster horse’.
How can you change the organization with
maintaining the focus on your core business?
In the picture (right) we can see several options
we’ll discuss later in this course but they are all
aimed at fulfilling the needs for customers.
, Assigned Reading: Chapter 12 Exploiting Innovation (Pg. 381)
Innovation, Invention and creativity
Innovation is the heart of entrepreneurship. It is used to create change and opportunities but also for
creating a competitive advantage (or even entirely new industries).
Invention: is development of a product of process. Not all inventors benefited from their inventions
because they were incompetent at introducing it to the marketplace.
Paradigm market shift: radical shifts in how product or services are marketed that whole new
markets can be created that change the way people think about the product or service and create
new customers. -> Most of the time made possible by development in technologies.
Innovation: introduction of something new or novel. It includes invention and paradigm shift but
these are extreme examples and probably the riskiest form of innovation.
Product innovation: improvement in the design and/or functional qualities of a product or
service
Process innovation: revisions to how a product or service is produced so that it is better or
cheaper, for example substitution of a cheaper material in an existing product
Marketing innovation: improvements in the marketing of an existing product or service, or
even a better way of distribution/supporting an existing product or service.
Schumpeter’s 5 types of innovation:
1. Introduction of a new/improved good or service
2. The introduction of a new process
3. The opening up of a new market
4. The identification of new sources of supply of raw materials
5. The creations of new types of industrial organization
Schumpeter emphasized ‘newness’ but Kanter added ‘creative’ to it. Creative: the generation,
acceptance and implementation of new ideas, processes, products and services … (which) involves
creative use as well as original invention.
Mintzberg innovation: the means to break away from established patterns.
Figure 1 innovative intensity
Incremental innovations: making incremental changes to the
product -> usually later in the life cycle.
The frequency is as an important dimension to consider alongside
the scale of the innovation.
Three basic approaches to innovation
1. Have a problem and seek a solution: Polaroid
2. Have a solution and seek a problem: Post-it
3. Identify a need and develop a solution: Dyson vacuumcleaner
Mellor (2005): Innovation = Creativity + application or invention + application
Application = entrepreneurship! Entrepreneurship plays a vital role in this process since:
Helps to spot the opportunities
Delivers inventions to marketplace
