Corporate Entrepreneurship

Citation

Schwartz, R.G. (2004), "Corporate Entrepreneurship", International Journal of Entrepreneurial Behavior & Research, Vol. 10 No. 4, pp. 295-297. https://doi.org/10.1108/13552550410544240

In the USA in the 1970s business development divisions inside major firms worked to develop new ventures outside the corporate structure. Several early entrepreneurship researchers wrote about large firms as incubators for new business, predating the drive to establish free standing business incubators around the world, now numbering well into the thousands sited from Singapore to South Florida. By the mid 1980s the microelectronics revolution had grown at compounded 60 per cent a year increases in worldwide sales and large firm business developments had lost their luster. Keeping entrepreneurial developments going inside a large firm required working outside the box, something large firms did not do very well. In 1985 Pinchott's (1985) book on corporate entrepreneurship, Intrapreneuring. Why You Don't Have to Leave the Corporation to Become an Entrepreneur, was published. The current text book being reviewed is one of a small number that cover this important subject.

Functionally the authors do an excellent job in covering a myriad of important topics: from definitions of entrepreneurship to strategy to human resource management. They provide an overall organizational context for corporate entrepreneurship that while not a prescriptive recipe provides a set of important guidelines for firms to note and organize around. Thus the book is a good overall summary of intrapreneurship and the challenges facing all firms, but particularly in large firms attempting to maintain their entrepreneurial roots or pursuing their need to plant new ones.

The particular challenges facing firms as the book notes is the need to have employees that “fit” the corporate mold versus having those that behave entrepreneurially. Flexibility is necessary inside the corporation in terms of both the definition of entrepreneurship and success. Each firm adapts as necessary to intrapreneurship and no one set of rules works for all firms.

Entrepreneurial intensity is defined and discussed and the point is made that there are many paths to successful new business development. Depending on the firm's resources and its own senior executive view of what is necessary to be done to reinvent the corporation, one of those paths may appear better than another. Security analysts and stock purchasers of public firms make the ultimate decision about the value of the road taken.

The book also deals with the entrepreneurial personality and how it is linked back to the corporation it must work within. Key concepts of champions and sponsors are explored. The authors adopt the Schumpeter view of entrepreneurship, i.e. doing something not obvious to one skilled in the business art. Thus the reader is dealing with innovation and creativity, something that can be a challenge and an opportunity in a large bureaucracy and the over‐abiding cause d'celebre of the book. The book suggests ways to recognize and work with, rather than against, the creative large firm employee and the various entrepreneurial roles that can be played inside the organization.

The dilemma of managing creativity is explored. The various forms of innovation, i.e. continuous versus discontinuous and the relationship to risk are also explored. Somewhat disappointing is the lack of a discussion of companies that innovate well, without examining the various types of product markets they serve. Not distinguishing among no technology consumer products and high technology business products is a failure, not just of the book, but of most of the entrepreneurship literature. There is a rather extended well done discussion of technology push versus market pull and while the authors conclude that “neither approach is better”, how does one come to that conclusion based on the general case, rather than the specific industry case?

Strategy and the role entrepreneurship plays in strategy is also covered. The authors suggest that when “entrepreneurship is introduced to strategy”, the velocity of the firm is “greatly enhanced”. However, the importance of entrepreneurship has to be relative to the industry the firm operates in as the degree of entrepreneurship varies across industries. This topic is left relatively undiscussed and is a key discussion issue missing from the book.

Firms must also maintain their flexibility in terms of their own development and operations efforts. Overall entrepreneurship must permeate all levels of the firm, “learning from failure, as opposed to expecting punishment,” being one of the keys for successful intrapreneurship. The authors indicate that constant growth and flexibility are requirements of successful development. The authors also note that there is no developed (overall) theory of corporate entrepreneurship, perhaps this reviewer suggests, because each industry has its own and that theory has a longitudinal component associated with it? Further, traditional and entrepreneurial practices can and do clash. While the authors suggest that this clash is disruptive and uncomfortable and distracting, it is also true that entrepreneurs themselves can be that. Thus the adoption of an entrepreneurial focus for a firm can and does come with some penalties.

The book has a rather long and somewhat tedious discussion of obstacles, concluding with that “people are the greatest obstacle of all” which is a conclusion that fits all organizations. The authors punctuate their text with general examples that provide little insight for the CEO of a technology‐based firm versus one that presides over a chain of restaurants. This is true whether covering human resource management, control, culture, or entrepreneurial orientation.

Public entrepreneurship is also covered and while public in Europe or the Pacific Rim is different than public in the USA, it is a worthy topic. The authors suggest that “there are many unanswered questions concerning entrepreneurship in the public sector” that would allow for there to be many paths for entrepreneurship in that sector.

Finally, the authors conclude their well written book worthy of an advanced undergraduate or graduate level course with the wisdom that “a sustainable entrepreneurial orientation will drive organizations to new heights in the twenty‐first century … “Entrepreneurial actions are recognized widely as the path to competitive advantage and success in organizations of all types and size”. Such an orientation is necessary for the public sector as well. Without it, entire firms, if not entire countries, will lose their competitive position.