4 Models of Corporate Entrepreneurship
Background
In current socio-economic times, innovation is more important than ever, whether in new start-ups or within a corporation. For a corporation to stay ahead of times and sustain a competitive advantage in a fast-changing global consumer market, the challenge is for the management to instill the right corporate entrepreneurship strategy across the organization.
One definition of corporate entrepreneurship (CE) is “...the process by which teams within an established company conceive, foster, launch and manage a new business that is distinct from the parent company but leverages the parent’s assets, market position, capabilities or other resources.”1 CE encompasses innovative products and services creation, new products introduction by innovative and entrepreneurial teams in the organization. It is relevant in all sectors of the economy, be it the private sector or the public sector of different industries such as services, IT, R&D or manufacturing.
Some companies and corporations in the past have implemented various forms and methodologies of corporate governance or entrepreneurship but success stories were far less than failures which led to the study and emergence of the four corporate entrepreneurship models as defined by Wolcott and Lippitz1.
The four models of corporate entrepreneurship are based on research of nearly thirty global companies such as IBM, DuPont, Google and Cargill. From the study, two direct management control factors were identified to have dominant impacts on how CE was approached in the corporation. These two factors form the basis of the two-dimensional matrix for the four CE models, are as follow:
1. Organizational ownership – who, if any, that is responsible for new business development- a focused or diffused group in the corporation
2. Resource authority – Is there allocated funds or ad hoc funds for new ventures and CE development
The four dominant CE models that a company can adopt or practice to instill a CE
In current socio-economic times, innovation is more important than ever, whether in new start-ups or within a corporation. For a corporation to stay ahead of times and sustain a competitive advantage in a fast-changing global consumer market, the challenge is for the management to instill the right corporate entrepreneurship strategy across the organization.
One definition of corporate entrepreneurship (CE) is “...the process by which teams within an established company conceive, foster, launch and manage a new business that is distinct from the parent company but leverages the parent’s assets, market position, capabilities or other resources.”1 CE encompasses innovative products and services creation, new products introduction by innovative and entrepreneurial teams in the organization. It is relevant in all sectors of the economy, be it the private sector or the public sector of different industries such as services, IT, R&D or manufacturing.
Some companies and corporations in the past have implemented various forms and methodologies of corporate governance or entrepreneurship but success stories were far less than failures which led to the study and emergence of the four corporate entrepreneurship models as defined by Wolcott and Lippitz1.
The four models of corporate entrepreneurship are based on research of nearly thirty global companies such as IBM, DuPont, Google and Cargill. From the study, two direct management control factors were identified to have dominant impacts on how CE was approached in the corporation. These two factors form the basis of the two-dimensional matrix for the four CE models, are as follow:
1. Organizational ownership – who, if any, that is responsible for new business development- a focused or diffused group in the corporation
2. Resource authority – Is there allocated funds or ad hoc funds for new ventures and CE development
The four dominant CE models that a company can adopt or practice to instill a CE