Chapter Twelve

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Chapter Twelve FOSTERING CORPORATE
ENTREPRENERUSHIP AND NEW VENTURE CREATION

• OBJECTIVES
• Entrepreneurship
• New Venture Creation
• Corporate Entrepreneurship (CE)

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1. ENTREPRENEURSHIP
ENTREPRENEURSHIP INCLUDES

• ? Corporate misconduct is typically not is an
  isolated event or the work of a single rogue
  employee.
• Unethical business practices typically involve
  the cooperation of others (maybe not consciously)
  and reflect the values, attitudes, and behavior
  patterns of the organizational culture.
• Ethical orientation of a leader is generally a
  key factor in promoting ethical behavior.

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1. ENTREPRENEURSHIP
CHANGES IN THE 21ST CENTURY
? Turbulence and uncertainty expected to remain
high. ? Value and value creation are being
reanalyzed. ? What is knowledge or
technology worth? Is it quantifiable? ?
What forms of business are necessary to develop
such valuable assets? ?
Continuation of Global Economy ? Increased
information transfer capabilities. ?
Formation of more regional free-trade
agreements. ? Shifting demographics
? Led to greater competition, greater
uncertainty, and lower profitability.
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1. ENTREPRENEURSHIP
ELEMENT OF ENTREPRENEURIAL ORIENTATIN
DEFINITION
DIMENSION
Autonomy
Independent action by an individual or team aimed
at bringing forth a business concept or vision
and carrying it through to completion.
A willingness to introduce novelty through
experimentation and creative processes aimed at
developing new products and services as well as
new processes.
Innovativeness
A forward-looking perspective characteristic of a
marketplace leader that has the foresight to
seize opportunities in anticipation of future
demand.
Proactiveness
An intense effort to outperform industry rivals.
It is characterized by aggressive response aimed
at improving position or overcoming a threat in a
competitive marketplace.
Competitive Aggressiveness
Making decisions and taking action without
certain knowledge of probable outcomes.
Risk taking
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1. ENTREPRENEURSHIP
CONTINUUM OF RADICAL AND INCREMENTAL INNOVATION
Online Auction Exchanges
Internet Browser
Fiber- optic Cable
Bubble Wrap
RADICAL INNOVATION
INCREMENTAL INNOVATION
Enterprise Resource Planning (ERP)
Frozen Yogurt
Laparoscopic Keyhole Surgery
Speech Recognition Software
Polyester
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1. ENTREPRENEURSHIP
RULES FOR SUCCESSFUL INNOVATION (3M)
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2. CREATING A NEW VENTURE
OPPORTUNITIES WHERE DO THEY COME FROM?

• Past Work Experiences
• Hobbies
• Friends or Family
• Existing Customers in Established Business
• Suppliers
• Technological Developments
• Any form of changesparking innovative ideas

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2. CREATING A NEW VENTURE
FOUR PARTS OF A VIABLE OPPORTUNITY

• Attractive must be demand for the product or
• service.
• Achievable practical and physically possible.
• (No round trips to the
  moonyet.)
• Durable attractive long enough to be
  successful
• and realize a return.
• Value Creation potentially profitable where
• benefits outweigh the costs
  significantly.

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2. CREATING A NEW VENTURE
ADDITIONAL REQUIREMENTS FOR OPPORTUNITIES TO BE
SUCCESSFUL

• ? Available skills, knowledge and experience
• Available and accessible necessary resources
• (i.e., money).

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2. CREATING A NEW VENTURE
SMALL COMPANIES BY INDUSTRY
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2. CREATING A NEW VENTURE
NEW VENTURES AND SMALL BUSINESS
? Strategic Positioning ? Resources ?
Financial ? Human ? Social ? Physical ?
Information ? Entrepreneurial Leadership ?
Vision ? Dedication Drive ? Commitment to
Excellence
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2. CREATING A NEW VENTURE
TRADITIONAL SOURCES OF FINANCING

• ? Self/family/friends/associates
• ? Bank loans (Debt)
• ? Bonds (Debt)
• ? Venture capitalists (Equity)
• ? I.P.O.s Initial Public Offerings (Equity)

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2. CREATING A NEW VENTURE
ALTERNATIVES TO TRADITIONAL FINANCING
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3. CORPORATE ENTREPRENEURSHIP (CE)

• Why it is important in todays business
  environment? ? Source for innovation
• economic vitality, technological
  breakthroughs
• ? For long-term prosperity
• organizational vitality in old large
  organization
• Elements of CE
• ? Risk-taking
• ? Proactiveness
• ? Innovativeness
• in identifying opportunities, in
  improving current business doing,
• obtaining resources and implementing
  strategies