Session 1
Lecture
Intrapreneurship
How can you create a new business and grow? New business creating in an established firm.
Intrapreneurship are formal or informal activities aimed at creating new businesses in
established companies through product and process innovation and market developments.
These activities may take place at the corporate, division (business), functional or project
level, with the unifying objective of improving a company’s competitive position and financial
performance.
If firms want to grow and be relevant in the future, you have to come up with new business.
You understand that the environment is changing and you respond to this.
Firms operate in turbulent external environments: environment in technology, customer,
competition, legal and regulatory, and resource. To survive in the long-run, companies must
embrace (reactively and proactively) environmental change. Intrapreneurship is a key driver
of corporate growth.
Example Nestlé
Example: Intrapreneurship
They pushed for a high end machine because there
was a significant growing market segment that was
willing to pay for this high-end machines. To respond
to this trend, they made this machine. After this the
business grew very much.
1
, Example Lego
Example: Intrapreneurship
They renewed themselves in the last 15 years. They
figured that there is a market for adult consumers, and
that is the Lego architecture line.
Example: Intrapreneurship
Example Nintendo
They figured there was a switch to online games. To they
invented mobile games Pokémon go. The driver of change
was competition
Example Amazon
Example: Intrapreneurship
One of the most valuable firms in the world,
while they are only 30 years old. Along the
time they diversified among other
businesses. There biggest business is cloud
with online webservices. Afterwards they
started with online streaming. Later they
put e-readers on the market, this is a
technological change.
2
, Successful companies are “ambidextro
Successful companies are “ambidextrous”
Interpreneurship is not the only important thing. Ambidextrous is
the ability to use the left and right part of your body. Only a few
Exploration of Exploi
are ambidextrous by birth. Successful firms need to be good
New in two Exi
Businesses Busin
things and that is not easy to be good in both. They need to be
good in exploiting of existing business and at the same time
explore new businesses.
Ambidextrous firms need managers (exploitation)
and entrepreneurs (exploration)
Ambidextrous firms need managers (exploitation) and entrepreneurs (exploration)
MANAGER ENTREPRENEUR
• Planner • Visionary
• Strategist • Opportunity-seeker
• Organizer • Creator
• Director • Innovator
• Staffer • Calculated risk-taker
• Motivator • Resource leverager
• Budgeter • Guerrilla thinker
• Evaluator • Change agent
• Coordinator • Adaptive implementer
• Supervisor of new ideas
Morris, Kuratko and Covin (2008)
Ambidexterity: an empirical test
Hypothesis: best performing firms have a balanced portfolio of exploration and exploitation
activities. They improve current businesses and explore new businesses.
Empirical approach. Panel data (1996-2003) on 168 US, EU and Japanese firms in five
sectors (pharma, chemicals, IT hardware, (non-) electrical machinery), they got all their
patents. They did a calculation of exploration share = % of firm patents in new technology
domains. They expected that the best performing firms have a percentage between 30-40%.
3
, To get the firms financial performance they used the Tobin’s Q, which is the market value
divided by the book value. Next to that they used control variables like R&D expenses, patent
Ambidexterity: An empirical test
stock and prior performance.
Belderbos, Faems, Leten and Van Looy (2010)
Next to the linear term they added the quadratically term to check is there is a non-linear
Ambidexterity: An empirical test
term.
𝑌 = 𝑎𝑋 − 𝑏𝑋 !
87% of sample firms under-invest in exploration
Tobin’s Q
0% 100 %
Share of Exploration
Belderbos, Faems, Leten and Van Looy (2010)
The optimal level is 30% of exploration and so the intrapreneurship part and the other to
70% of exploitation. Though even big, large firms are under-investing as they are obsessed
with profitability and less with surviving in the long-run.
4
Lecture
Intrapreneurship
How can you create a new business and grow? New business creating in an established firm.
Intrapreneurship are formal or informal activities aimed at creating new businesses in
established companies through product and process innovation and market developments.
These activities may take place at the corporate, division (business), functional or project
level, with the unifying objective of improving a company’s competitive position and financial
performance.
If firms want to grow and be relevant in the future, you have to come up with new business.
You understand that the environment is changing and you respond to this.
Firms operate in turbulent external environments: environment in technology, customer,
competition, legal and regulatory, and resource. To survive in the long-run, companies must
embrace (reactively and proactively) environmental change. Intrapreneurship is a key driver
of corporate growth.
Example Nestlé
Example: Intrapreneurship
They pushed for a high end machine because there
was a significant growing market segment that was
willing to pay for this high-end machines. To respond
to this trend, they made this machine. After this the
business grew very much.
1
, Example Lego
Example: Intrapreneurship
They renewed themselves in the last 15 years. They
figured that there is a market for adult consumers, and
that is the Lego architecture line.
Example: Intrapreneurship
Example Nintendo
They figured there was a switch to online games. To they
invented mobile games Pokémon go. The driver of change
was competition
Example Amazon
Example: Intrapreneurship
One of the most valuable firms in the world,
while they are only 30 years old. Along the
time they diversified among other
businesses. There biggest business is cloud
with online webservices. Afterwards they
started with online streaming. Later they
put e-readers on the market, this is a
technological change.
2
, Successful companies are “ambidextro
Successful companies are “ambidextrous”
Interpreneurship is not the only important thing. Ambidextrous is
the ability to use the left and right part of your body. Only a few
Exploration of Exploi
are ambidextrous by birth. Successful firms need to be good
New in two Exi
Businesses Busin
things and that is not easy to be good in both. They need to be
good in exploiting of existing business and at the same time
explore new businesses.
Ambidextrous firms need managers (exploitation)
and entrepreneurs (exploration)
Ambidextrous firms need managers (exploitation) and entrepreneurs (exploration)
MANAGER ENTREPRENEUR
• Planner • Visionary
• Strategist • Opportunity-seeker
• Organizer • Creator
• Director • Innovator
• Staffer • Calculated risk-taker
• Motivator • Resource leverager
• Budgeter • Guerrilla thinker
• Evaluator • Change agent
• Coordinator • Adaptive implementer
• Supervisor of new ideas
Morris, Kuratko and Covin (2008)
Ambidexterity: an empirical test
Hypothesis: best performing firms have a balanced portfolio of exploration and exploitation
activities. They improve current businesses and explore new businesses.
Empirical approach. Panel data (1996-2003) on 168 US, EU and Japanese firms in five
sectors (pharma, chemicals, IT hardware, (non-) electrical machinery), they got all their
patents. They did a calculation of exploration share = % of firm patents in new technology
domains. They expected that the best performing firms have a percentage between 30-40%.
3
, To get the firms financial performance they used the Tobin’s Q, which is the market value
divided by the book value. Next to that they used control variables like R&D expenses, patent
Ambidexterity: An empirical test
stock and prior performance.
Belderbos, Faems, Leten and Van Looy (2010)
Next to the linear term they added the quadratically term to check is there is a non-linear
Ambidexterity: An empirical test
term.
𝑌 = 𝑎𝑋 − 𝑏𝑋 !
87% of sample firms under-invest in exploration
Tobin’s Q
0% 100 %
Share of Exploration
Belderbos, Faems, Leten and Van Looy (2010)
The optimal level is 30% of exploration and so the intrapreneurship part and the other to
70% of exploitation. Though even big, large firms are under-investing as they are obsessed
with profitability and less with surviving in the long-run.
4
