1ZSUC0: Organizing Entrepreneurship
Summary 2022
Contents
Introduction to Organizing Entrepreneurship ............................................................................................... 2
Identifying Opportunities by Large Firms ...................................................................................................... 5
Entrepreneurial Strategy in Large Firms........................................................................................................ 8
Entrepreneurial Culture in Large Firms ....................................................................................................... 11
Corporate Intellectual Property Management and Open Innovation......................................................... 14
Design and Corporate Entrepreneurship .................................................................................................... 18
Teams, Teams Diversity, and Team Innovation in the Entrepreneurial Context ........................................ 21
Leadership ................................................................................................................................................... 24
Who is an intrapreneur? ............................................................................................................................. 26
Guest lecture: PepsiCo ................................................................................................................................ 29
Guest Lecture: Össur ................................................................................................................................... 30
1
,Introduction to Organizing Entrepreneurship
It is difficult to engage in and manage corporate entrepreneurship because of the dilemma between old
and new
Barriers to CE initiatives: o No understanding
• Economic barriers: o Routines
o Sunk costs • Social/psychological barriers
o Short-term benefits o Complacency and fear
• Cognitive barriers: • Political barriers
Entrepreneurial Equilibrium (Garvin & Levesque, 2006)
The distinctive features of new businesses present three challenges:
1. Emerging businesses usually lack hard data
2. New businesses require innovation, innovation requires fresh ideas, and fresh ideas require mavericks
3. Poor fit between new businesses and old systems
Why traditional responses fail:
1. Diffused responsibility fizzles out: when every executive shares responsibility for new-business
creation, the CEO expects the employees to be as committed to turning new ideas into new
businesses as they are to expanding mature ones
a. Veteran employees often choose to ignore incentives and suppress new ideas, especially those
that render existing skills obsolete or require new ways of working
b. A new business that doesn’t fit the company’s existing product lines or markets frequently has
trouble finding an organizational home
c. The pressure to create new businesses becomes so dominating that it overwhelms the
organization
2. Centralization isolates: many companies decided that the wisest course was to completely separate
new ventures from existing divisions
a. Because centralized new-venture groups magnify the clash between the old and new cultures,
suspicion and fractious relationships are common, as are the power struggles between new-
business managers and division leaders
b. Centralized groups typically have a long-term mission but a short-term life span
Mature turks: managers who are already successful at running larger businesses but are also known for
their willingness to challenge convention
Balance trial-and-error strategy Balance operational experience Balance new business identity
with rigor and discipline with invention with integration
1. Narrow the range of choices 1. Appoint ‘mature turks’ as 1. Assign both corporate
before diving deep leaders of emerging executives and managers
(brainstorming) businesses from divisions as sponsors of
2. Closely observe small groups 2. Win veterans over by asking new ventures
of consumers to identify them to serve on new 2. Stipulate criteria for handing
their needs (ethnography) businesses’ oversight new businesses over to
3. Use prototypes to test 3. Consider acquiring select existing businesses, either
assumptions on product capabilities instead of quantitative or qualitative,
services, business models developing everything from but agreeable
scratch
2
, 4. Use non-financial milestones 4. Force old and new 3. Mix formal oversight with
to measure progress businesses to share informal support by
5. Know when – and on what operational responsibilities creatively combining dotted-
basis to pull the plug on and solid-line reporting
infant business relationships
Typology (Weiblen & Chesbrough, 2015)
The big corporation has resources, scale, power, and the routines needed to run a proven business
model efficiently.
The startup has none of those, but typically has promising ideas, organizational agility, the willingness to
take risk, and aspirations of rapid growth
Direction of innovation flow
Outside-In Inside-out
Corporate venturing: participate in the Corporate incubation: provide a viable path
success of external innovation and gain to market for promising corporate non-core
strategic insights into non-core markets innovations; ‘misfits’
- main goal: financial returns and - main goal: commercialization of non-
insights and influence core technologies and financial returns
- equity involvement: always - equity involvement: typically
- no. of startups: low - no. of startups: low
- value capture: equity stake - value capture: equity stake
- admission of new startups: due - admission of new startups: corporate
Yes
diligence only
Start-up program (outside-in): insource Startup program (platform): spur
external innovation to stimulate and complementary external innovation to push
generate corporate innovation an existing corporate innovation (the
Equity involvement
- main goal: product innovations and platform)
first-mover advantage - main goal: platform establishment and
- equity involvement: rare future customers
- no. of startups: medium - equity involvement: rare
- value capture: product sales - no. of startups: high
- admission of new startups: open - value capture: platform usage fees
No
- admission of new startups: very open
Traditional models of engaging with startups: influence through equity
• Corporate Venture Capital:
o Being bound to a big player in the industry, as a startup, might limit the startup’s freedom to pivot
and to collaborate with or exit to competitors of that large corporation
o Corporate backing might lead to increased credibility for the startup on the market or provide
access to experts and specialized equipment of the corporation
• Corporate incubation:
o Corporate incubators provide the nascent venture with funding, co-location, expertise, and
contacts
o Many resources, including expensive equipment and customer access, can potentially be shared
o There is a risk of overprotection through corporate backing, which might increase the likelihood of
later failure
3
Summary 2022
Contents
Introduction to Organizing Entrepreneurship ............................................................................................... 2
Identifying Opportunities by Large Firms ...................................................................................................... 5
Entrepreneurial Strategy in Large Firms........................................................................................................ 8
Entrepreneurial Culture in Large Firms ....................................................................................................... 11
Corporate Intellectual Property Management and Open Innovation......................................................... 14
Design and Corporate Entrepreneurship .................................................................................................... 18
Teams, Teams Diversity, and Team Innovation in the Entrepreneurial Context ........................................ 21
Leadership ................................................................................................................................................... 24
Who is an intrapreneur? ............................................................................................................................. 26
Guest lecture: PepsiCo ................................................................................................................................ 29
Guest Lecture: Össur ................................................................................................................................... 30
1
,Introduction to Organizing Entrepreneurship
It is difficult to engage in and manage corporate entrepreneurship because of the dilemma between old
and new
Barriers to CE initiatives: o No understanding
• Economic barriers: o Routines
o Sunk costs • Social/psychological barriers
o Short-term benefits o Complacency and fear
• Cognitive barriers: • Political barriers
Entrepreneurial Equilibrium (Garvin & Levesque, 2006)
The distinctive features of new businesses present three challenges:
1. Emerging businesses usually lack hard data
2. New businesses require innovation, innovation requires fresh ideas, and fresh ideas require mavericks
3. Poor fit between new businesses and old systems
Why traditional responses fail:
1. Diffused responsibility fizzles out: when every executive shares responsibility for new-business
creation, the CEO expects the employees to be as committed to turning new ideas into new
businesses as they are to expanding mature ones
a. Veteran employees often choose to ignore incentives and suppress new ideas, especially those
that render existing skills obsolete or require new ways of working
b. A new business that doesn’t fit the company’s existing product lines or markets frequently has
trouble finding an organizational home
c. The pressure to create new businesses becomes so dominating that it overwhelms the
organization
2. Centralization isolates: many companies decided that the wisest course was to completely separate
new ventures from existing divisions
a. Because centralized new-venture groups magnify the clash between the old and new cultures,
suspicion and fractious relationships are common, as are the power struggles between new-
business managers and division leaders
b. Centralized groups typically have a long-term mission but a short-term life span
Mature turks: managers who are already successful at running larger businesses but are also known for
their willingness to challenge convention
Balance trial-and-error strategy Balance operational experience Balance new business identity
with rigor and discipline with invention with integration
1. Narrow the range of choices 1. Appoint ‘mature turks’ as 1. Assign both corporate
before diving deep leaders of emerging executives and managers
(brainstorming) businesses from divisions as sponsors of
2. Closely observe small groups 2. Win veterans over by asking new ventures
of consumers to identify them to serve on new 2. Stipulate criteria for handing
their needs (ethnography) businesses’ oversight new businesses over to
3. Use prototypes to test 3. Consider acquiring select existing businesses, either
assumptions on product capabilities instead of quantitative or qualitative,
services, business models developing everything from but agreeable
scratch
2
, 4. Use non-financial milestones 4. Force old and new 3. Mix formal oversight with
to measure progress businesses to share informal support by
5. Know when – and on what operational responsibilities creatively combining dotted-
basis to pull the plug on and solid-line reporting
infant business relationships
Typology (Weiblen & Chesbrough, 2015)
The big corporation has resources, scale, power, and the routines needed to run a proven business
model efficiently.
The startup has none of those, but typically has promising ideas, organizational agility, the willingness to
take risk, and aspirations of rapid growth
Direction of innovation flow
Outside-In Inside-out
Corporate venturing: participate in the Corporate incubation: provide a viable path
success of external innovation and gain to market for promising corporate non-core
strategic insights into non-core markets innovations; ‘misfits’
- main goal: financial returns and - main goal: commercialization of non-
insights and influence core technologies and financial returns
- equity involvement: always - equity involvement: typically
- no. of startups: low - no. of startups: low
- value capture: equity stake - value capture: equity stake
- admission of new startups: due - admission of new startups: corporate
Yes
diligence only
Start-up program (outside-in): insource Startup program (platform): spur
external innovation to stimulate and complementary external innovation to push
generate corporate innovation an existing corporate innovation (the
Equity involvement
- main goal: product innovations and platform)
first-mover advantage - main goal: platform establishment and
- equity involvement: rare future customers
- no. of startups: medium - equity involvement: rare
- value capture: product sales - no. of startups: high
- admission of new startups: open - value capture: platform usage fees
No
- admission of new startups: very open
Traditional models of engaging with startups: influence through equity
• Corporate Venture Capital:
o Being bound to a big player in the industry, as a startup, might limit the startup’s freedom to pivot
and to collaborate with or exit to competitors of that large corporation
o Corporate backing might lead to increased credibility for the startup on the market or provide
access to experts and specialized equipment of the corporation
• Corporate incubation:
o Corporate incubators provide the nascent venture with funding, co-location, expertise, and
contacts
o Many resources, including expensive equipment and customer access, can potentially be shared
o There is a risk of overprotection through corporate backing, which might increase the likelihood of
later failure
3
