MBAX 6100 Entrepreneurship

1
MBAX 6100Entrepreneurship Small Business
Management

• Frank MoyesLeeds College of Business
• University of ColoradoBoulder, Colorado

2
Todays Agenda

• Corporate Entrepreneurship
• Is this a good market?
• Read
• Building Breakthrough Businesses
• Understanding Obstacles
• M-3 Is This a Good Market?
• Entrepreneurial market research bring laptops.
  Joseph Yue

3
Next Weeks Schedule

• Corporate Entrepreneurship Creativity
  Innovation
• Case Emerging Business Opportunities at IBM
• Read
• Bringing Silicon Valley Inside
• Feasibility M-4 Is This a Good Industry?
• Read a magazine you would never, ever read
  identify a business opportunity
• Entrepreneurship Interview
• Hand in paper
• Be ready to discuss in class

4
Corporate Entrepreneurship

• Week 5 Obstacles to corporate entrepreneurship
• Week 6 Innovation in corporations
• Week 7 You as an Intrapreneur

5
What is Corporate Entrepreneurship?
Innovation

• Formal or informal activities aimed at creating
  new businesses in established companies through
  product and process innovations and market
  developments. Zahra
• centers on reenergizing and enhancing the
  firms ability to acquire innovative skills and
  capabilities. Morris Kuratko
• Cost-effective innovation or intrapreneurship
  Pinchot

6
What Are Companies Good At?
0
7
Why Should Companies Be Great Places to Be
Innovative?
8
Why Do Companies Need Rules?

• Consistent actions
• Guide behavior
• Help make decisions
• Treat employees fairly
• Provide consistent quality service

9
What Criteria Used to Make Investment Decisions

• Tradition set of shared assumptions
• Typically based on technology, not opportunity,
  eg Corning fiber optics in the 1960s
• Instinct is to protect existing business, e.g.
  must purchase from other parts of business

10
What is the Process for Making Decisions

• Traditional evaluation techniques (ROI, market
  share, quick payback)?
• Need for control - very structured approval
  process Why?
• Detailed business plan that must follow dont
  like surprises
• Leads to paralysis by analysis

11
How Do Corporations Deal With Uncertainty?
12
Definitions of an Entrepreneur

• Entrepreneurs are societies rejects, instead of
  becoming hobos, criminals or professors, the
  start their own business. Thereau
• Traits of entrepreneurs are closest to juvenile
  delinquents.
• Progress depends upon unreasonable men. GB Shaw
• If Im in control, Im probably going to slow.
  Mario Andretti
• Road less traveled, Robert Frost
• If you aint makin waves, you aint kickin
  hard enough.

13
What Have We Learned About Entrepreneurs?
14
What Are Entrepreneurial Ventures Good At?
15
How Start-up Actually Happens
Pinchot Pellman, Intrapreneurship in Action
16
How Reconcile the Companys Need for Rules
Creativitys Need to Break the Rules?
0
17
What Are the Obstacles to Corporate
Entrepreneurship?

• Systems
• Organization Structures
• Strategic directions
• Policies Procedures
• People
• Culture

Morris Kuratko, Corporate Entrepreneurship
18
What Are the Personal Obstacles of the Corporate
Entrepreneur?

• Too busy with current job
• Lack of managerial skills
• Dont understand financial dynamics
• Selling skills
• Old dog who cant learn new tricks
• Style of management
• Lack political savvy
• Lack a sense of urgency
• Fear of failure

Morris Kuratko, Corporate Entrepreneurship
19
The Bureaucratic Trap
0
Plusses
Process control Efficiency
Warning Signals
Source of Bureaucracy
Rule- following culture
Focus on structure processes
Processes rigid structure
Minuses
Channeled communication
- Loss of flexibility - Stunted innovation -
Wrong products - Predictable strategy
Brown Eisenhardt. Competing on the Edge
Strategy as Structured Chaos
20
Similarities Between Start-up Corporate
Entrepreneurs

• Opportunity recognition with a defined window
• Driven by passionate individual who uses a team
  to commercialize a concept
• Encounter resistance obstacles requiring
  persuasiveness
• Must convince people to invest
• Leverage resources
• Ambiguity

21
Differences Between Start-up Corporate
Entrepreneurs
Corporate
Start-up

• Entrepreneur takes the risk
• Entrepreneur owns concept
• Unlimited rewards
• One error may mean failure
• Independence of entrepreneur
• Experimentation flexibility
• Quick decision making
• Resource limitations

• Corporation assumes risk
• Corporation owns no equity
• Clear limits
• More room for errors
• Interdependence of entrepreneur
• Rules, procedures, bureaucracy
• Long approval cycles
• Access to finances, RD, sales force,
  distribution channels

22
What Issues Do Corporations Face When They Want
to Be Intrapreneurial?
0

• How establish effective reward systems
• How treat failure
• Types of people who work well in large
  organizations
• Define success as running a larger organization,
  corner office corporate kite
• Traditional evaluation techniques dont work
  (ROI, market share, quick payback)?
• Instincts are to protect existing businesses
• Is patient capital possible? Phil Knight Took 18
  years to be an overnight success.