Entrepreneurship and entrepreneurs are normally discussed in the context of new venture creation. Recently, however, the importance of entrepreneurship has been recognized within the corporate environment. Corporate entrepreneurship can be defined as the development of new products, services, and innovative technology within as large, mature organization. Sometimes this is referred to as intrapreneurship indicating that the activity place within an existing business.
In the corporate environment entrepreneurship is not an all or nothing phenomenon. Parts of the corporation may be mature, stable, and oriented toward professional administrative management; however, other parts of the firm, new product development groups, venture teams, applied research task forces may be quite entrepreneurial. These parts of the firm possess entrepreneurial mindset and try to recreate for the corporation the environment that stimulates innovation and creativity. The entrepreneurâ€™s patterns define the entrepreneurial process by asking the following questions.
Where is the opportunity? Entrepreneurial teams are sensitive to changes in market conditions and buyer preferences. They monitor improvements in product manufacturing technology and product quality characteristics. These teams are empowered by the corporation to take political action to mobilize the firm.
How can we take advantage? The action-oriented venture group must be able to act quickly to gain an advantage once opportunities are identified. These groups are risk-takers. Corporations must be wiling to tolerate and accept failure since many, if not most, products never prove to be commercially successful. But the payoffs can be large, too. Members of venture group understand that their jobs are not on the line with every risk they take.
What resources do we need? Entrepreneurial teams make imaginative use of limited resources. They borrow people, equipment, material, and money from other pars of the corporation where these resources exist. Project development for venture groups is a multistage process. Commitment of major resources may be appropriate only as progress to commercialization is made.
How do we control our resources? When entrepreneurial groups receive their borrowed and formal appropriations from the firm, the emphasis is on the result that can be obtained. Is allows the new venture e more flexibility in how to use their resources. Since the team as limited resources and may exist on a temporary basis, entrepreneurs avoid owning equipment or hiring people. This is valuable because the teams can have greater resource specialization (they cam get exactly what hey need) and avoid the risk of obsolescence.
What structure is best? Entrepreneurs within a large corporation prefer a flat organizational structure with multiple lateral networks. These lateral networks are groups of colleagues who can help the entrepreneurs get things done. They facilitate coordination and provide a buffer between the administrationâ€™s need for stability, hierarchy and orders, and the entrepreneurâ€™s challenge to hierarchy d desire for dependence.
It has come into being because society has come to recognize the value, importance, and productivity of the entrepreneurial business unit. The awesome capabilities of small to mid-sized companies to adapt to changes, to bring new product to market, to generate jobs and to create wealth has been recognized.
The rise of family income in the under-50 age bracket has created accumulated capital which enables one of the partners to go out and take a risk. The shift to a service economy poses low capital requirements for small but emerging industries. Further more, college graduates are redefining the relationship between work, risk, and fulfillment. College graduates are thinking in terms of risk and the entrepreneur alternative looks more and more promising.