Corporate strategy
Module 1 – diversification
Readings session 1
1 – strategic entrepreneurship: a review and research agenda
Strategic entrepreneurship (SE) construct = the simultaneous pursuit / integration
of advantage- (strategic) and opportunity-seeking (entrepreneurial) behaviors /
perspectives in developing and taking actions designed to create wealth.
Advantage seeking behaviors = firm-level activities directed at enhancing,
exploiting, and sustaining a firm’s current advantage over its competitors. These
behaviors are the focus of the strategic management domain, where the
sustainability of competitive advantage is a recognized driver of firm
performance.
Opportunity seeking behaviors = the central focus of the entrepreneurship
domain, which reflect the firm-level entrepreneurial activities necessary for
producing novel products or services that meet previously unmet market needs
and broach new markets.
The primary focus of strategic management (SM) is determining:
- How firms grow and create wealth as a path to developing competitive
advantages.
- What accounts for differentials in firm performance.
There are many extensions to the SE construct, amongst which:
- Collaborative innovation derived from interorganizational relationships is an
important factor.
- Strategic learning – or “an organization’s dynamic capability, consisting of
intraorganizational processes for the dissemination, interpretation, and
implementation of strategic knowledge” – may serve as a mediating construct.
- Reevaluation which led to the following definition: “specific and observable
actions, as well as action repertoires that embody opportunity-seeking and
advantage-seeking behaviors with the intent of creating and capturing value.”
Dimensions for operationalizing SE:
1. Expenditures on R&D.
2. Investment in plants and equipment.
3. Number of new products introduced to markets.
4. Expenditures on new market development.
The original SE model:
1. A firm must have an entrepreneurial mindset = “a growth-oriented perspective
through which individuals promote flexibility, creativity, continuous innovation,
and renewal.”
2. A firm must have an entrepreneurial culture and practice entrepreneurial
leadership.
1
, Corporate strategy
3. The firm must be able to manage and orchestrate its resources strategically
to recognize and exploit opportunities as a foundation for growing, creating
wealth, and developing and maintaining competitive advantages.
4. Firms produce creativity and innovation when they possess the capacity to
combine the entrepreneurial mindset, culture, and leadership and manage their
resource portfolio strategically.
Extensions to the original SE model:
5. Extensions based on profitability and growth.
6. Where the original model has a firm-level focus, other research realized the
potential broader multilevel implications for this framework.
7. Extensions on the benefit of munificence on resource orchestration in
entrepreneurial ventures (mixed results).
8. Extensions by incorporating other theoretical perspectives to study a variety of
phenomena.
a. Agency theory.
b. Governance.
9. Extensions based on the knowledge-based perspective, regarding knowledge
spillover.
10. Extensions based on unique organizational and environmental dynamics.
To summarize, SE is indeed a construct, a model, and an area of study. SE as an area
study has gained the most attention and growth compared to the other two.
Notes session 1
what is corporate strategy about?
• strategic management - advantage seeking
o explaining how firms grow and create value for stakeholders as a path to
a competitive advantage. what accounts for performance differentials
• entrepreneurship - opportunity seeking
2
, Corporate strategy
o the processes of discovering or creating, evaluating, and exploiting
entrepreneurial opportunities
• firm behaviors directed towards sustaining current advantages while
simultaneously pursuing opportunities that create new advantages
• Porter: "you have to make a decision, as it is impossible to do both"
snake vs bird
• if you only look in one direction, you might not see certain dangers coming
companies struggle when going through transitions, sometimes for years. The most
challenging part is to escape becoming trapped in a mindset of success during earlier
phases.
GROFIT means merging strategy and entrepreneurship
3
Module 1 – diversification
Readings session 1
1 – strategic entrepreneurship: a review and research agenda
Strategic entrepreneurship (SE) construct = the simultaneous pursuit / integration
of advantage- (strategic) and opportunity-seeking (entrepreneurial) behaviors /
perspectives in developing and taking actions designed to create wealth.
Advantage seeking behaviors = firm-level activities directed at enhancing,
exploiting, and sustaining a firm’s current advantage over its competitors. These
behaviors are the focus of the strategic management domain, where the
sustainability of competitive advantage is a recognized driver of firm
performance.
Opportunity seeking behaviors = the central focus of the entrepreneurship
domain, which reflect the firm-level entrepreneurial activities necessary for
producing novel products or services that meet previously unmet market needs
and broach new markets.
The primary focus of strategic management (SM) is determining:
- How firms grow and create wealth as a path to developing competitive
advantages.
- What accounts for differentials in firm performance.
There are many extensions to the SE construct, amongst which:
- Collaborative innovation derived from interorganizational relationships is an
important factor.
- Strategic learning – or “an organization’s dynamic capability, consisting of
intraorganizational processes for the dissemination, interpretation, and
implementation of strategic knowledge” – may serve as a mediating construct.
- Reevaluation which led to the following definition: “specific and observable
actions, as well as action repertoires that embody opportunity-seeking and
advantage-seeking behaviors with the intent of creating and capturing value.”
Dimensions for operationalizing SE:
1. Expenditures on R&D.
2. Investment in plants and equipment.
3. Number of new products introduced to markets.
4. Expenditures on new market development.
The original SE model:
1. A firm must have an entrepreneurial mindset = “a growth-oriented perspective
through which individuals promote flexibility, creativity, continuous innovation,
and renewal.”
2. A firm must have an entrepreneurial culture and practice entrepreneurial
leadership.
1
, Corporate strategy
3. The firm must be able to manage and orchestrate its resources strategically
to recognize and exploit opportunities as a foundation for growing, creating
wealth, and developing and maintaining competitive advantages.
4. Firms produce creativity and innovation when they possess the capacity to
combine the entrepreneurial mindset, culture, and leadership and manage their
resource portfolio strategically.
Extensions to the original SE model:
5. Extensions based on profitability and growth.
6. Where the original model has a firm-level focus, other research realized the
potential broader multilevel implications for this framework.
7. Extensions on the benefit of munificence on resource orchestration in
entrepreneurial ventures (mixed results).
8. Extensions by incorporating other theoretical perspectives to study a variety of
phenomena.
a. Agency theory.
b. Governance.
9. Extensions based on the knowledge-based perspective, regarding knowledge
spillover.
10. Extensions based on unique organizational and environmental dynamics.
To summarize, SE is indeed a construct, a model, and an area of study. SE as an area
study has gained the most attention and growth compared to the other two.
Notes session 1
what is corporate strategy about?
• strategic management - advantage seeking
o explaining how firms grow and create value for stakeholders as a path to
a competitive advantage. what accounts for performance differentials
• entrepreneurship - opportunity seeking
2
, Corporate strategy
o the processes of discovering or creating, evaluating, and exploiting
entrepreneurial opportunities
• firm behaviors directed towards sustaining current advantages while
simultaneously pursuing opportunities that create new advantages
• Porter: "you have to make a decision, as it is impossible to do both"
snake vs bird
• if you only look in one direction, you might not see certain dangers coming
companies struggle when going through transitions, sometimes for years. The most
challenging part is to escape becoming trapped in a mindset of success during earlier
phases.
GROFIT means merging strategy and entrepreneurship
3
