Conceptualizing Corporate Entrepreneurship Strategy
Our knowledge of corporate entrepreneurship (CE) continues to expand. However, this knowledge remains quite fragmented and non-cumulative. Herein, we conceptualize CE strategy as a useful focal point for integrating and synthesizing key elements within CE's intellectual domain. The components of our CE strategy model include (1) the antecedents of CE strategy (i.e., individual entrepreneurial cognitions of the organization's members and external environmental conditions that invite entrepreneurial activity), (2) the elements of CE strategy (i.e., top management's entrepreneurial strategic vision for the firm, organizational architectures that encourage entrepreneurial processes and behavior, and the generic forms of entrepreneurial process that are reflected in entrepreneurial behavior), and (3) the outcomes of CE strategy (i.e., organizational outcomes resulting from entrepreneurial actions, including the development of competitive capability and strategic repositioning). We discuss how our model contributes to the CE literature, distinguish our model from prior models, and identify challenges future CE research should address.
Introduction
Conditions in the global business environment demand that established firms adopt entrepreneurial strategies (e.g., McGrath & MacMillan, 2000; Morris, Kuratko, & Covin, 2008) as a path to success. According to Cooper, Markman, and Niss (2000, p. 116), for example, "entrepreneurial strategies suggest ways to revitalize existing organizations and make them more innovative." As Amit, Brigham, and Markman (2000) observed, "entrepreneurial strategies allow people to be innovative, creative, and responsible for decisions that they make" (quoted in Meyer & Heppard, 2000, p. 10). From the perspective of organizational strategy, this outcome may be highly desirable. The reason for this is that diffusing strategic capabilities throughout firms and empowering individuals to leverage them is foundational to successfully developing and implementing strategies (Liedtka & Rosenblum, 1996). By pursuing entrepreneurial strategies, firms place themselves in positions to regularly and systematically recognize and exploit entrepreneurial opportunities (Eisenhardt, Brown, & Neck, 2000). In short, what entrepreneurial strategy does or can do for a firm has been a subject of much discussion (Ireland, Hitt, Camp, & Sexton, 2001; Kuratko, Ireland, Covin, & Hornsby, 2005).
Zahra, Jennings, and Kuratko's (1999) review of the corporate entrepreneurship (CE) literature concluded with the observation that a need exists to explore different conceptualizations of firm-level entrepreneurship. Entrepreneurial strategy is arguably a core construct within the CE literature and a specific manifestation of firm-level entrepreneurship. Cooper et al. (2000, p. 120) asserted that "entrepreneurial strategy has begun to be viewed as a potential source of firms' competitive advantage, a way in which established firms can develop capabilities that are central to their continuing success."
In spite of its potential importance, a precise specification of what entrepreneurial strategy is has been elusive for scholars. Hitt stated, "It is difficult to provide a precise definition of entrepreneurial strategy..." (quoted in Meyer & Heppard, 2000, p. 5). Likewise, Eisenhardt commented, "The term entrepreneurial strategy may signal too many different things to people, and trying to label strategies as entrepreneurial can be awkward" (quoted in Meyer & Heppard, 2000, p. 6).
A fair amount of evidence supports Eisenhardt's claim. For example, Amit et al. (2000) defined entrepreneurial strategy as a largely internal, organizational phenomenon: "When we discuss entrepreneurial strategies, we are focusing primarily on the internal organization of the firm rather than on the more complex notion of dynamic competitive strategies" (quoted in Meyer & Heppard, 2000, p. 9). By contrast, Morris et al. (2008, p. 198) state the following: "... the application of entrepreneurial thinking to the firm's core strategy is primarily dealing with the following external questions. Where are the unfulfilled spaces in the marketplace? How can the firm differentiate itself on a sustained basis? Where can we lead the customer?"
To some, such as Russell and Russell (1992, p. 640), entrepreneurial strategy is a possible element of the larger corporate strategy: "... an entrepreneurial strategy involves a persistent, organizationally sanctioned pattern of innovation-related activities and resource allocations that compose one component of the firm's comprehensive corporate strategy." To others, such as Barney (quoted in Meyer & Heppard, 2000, p. 11), "If you define entrepreneurship as the process of creating economic rents, then entrepreneurial strategy and entrepreneurship are essentially synonymous. Any rent-generating strategy is entrepreneurial." Some scholars use the term entrepreneurial strategy to refer to a specific strategy (e.g., Mintzberg & Waters, 1985). Others (e.g., Drucker, 1985; Johnson & Van de Ven, 2002; Kazanjian, Drazin, & Glynn, 2002; Murray, 1984) conceive of entrepreneurial strategy as being manifested in many forms. A net effect of the disparate ways in which entrepreneurial strategy has been depicted in the literature is the failure of this literature to produce satisfyingly cumulative knowledge on the topic. Moreover, those who might seek to enact entrepreneurial strategies in their firms are virtually guaranteed to be confused by the array of ideas in the literature.
Before examining its component parts, we think it is important to place our model contextually. In this regard, we can note that we do not seek to use this model to represent how entrepreneurship commonly intervenes or interfaces with an organization's strategic processes. As Burgelman (1983) cogently argued, entrepreneurial initiatives commonly occur as unplanned by-products of an organization's deliberate and spontaneous actions. Thus, the occurrence of autonomous entrepreneurial actions within a firm's strategic processes or the validation of such initiatives through those processes does not necessarily signify the presence of a CE strategy. Rather, consistent with the strategic entrepreneurship concept (Ireland & Webb, 2007b; Ireland, Hitt, & Sirmon, 2003), we argue that CE strategy implies that a firm's strategic intent (Hamel & Prahalad, 1989) is to continuously and deliberately leverage entrepreneurial opportunities (Shane & Venkataraman, 2000) for growth- and advantage-seeking purposes. Thus, while evidence of entrepreneurial initiatives can be located in many and perhaps most established organizations, the mere presence or ubiquity of those initiatives should not be interpreted as evidence that a CE strategy is in use. As we are proposing the concept, CE strategy implies a level of purposefulness and intentionality with respect to entrepreneurial initiatives that is anything other than inevitable.
Given the evidence cited earlier and the status of the field's knowledge about corporate entrepreneurship as strategy, we seek to present a model of corporate entrepreneurial strategy (herein labeled CE strategy to distinguish it from the strategy of independent new ventures). We define CE strategy as a vision-directed, organization-wide reliance on entrepreneurial behavior that purposefully and continuously rejuvenates the organization and shapes the scope of its operations through the recognition and exploitation of entrepreneurial opportunity. (1) The specific purpose of our work is to outline a model depicting (1) the individual (i.e., person-based) and environmental antecedents of a CE strategy, (2) the most salient elements of a CE strategy (and the relationships among these elements), and (3) the organizational outcomes associated with using a CE strategy. In the context we are describing here then, we seek to depict corporate entrepreneurship as a distinct, identifiable type of strategy, bring a significant degree of clarity to the matter of how CE strategy might be conceptualized and, thereby, provide a useful reference point for future theoretical explorations and managerial actions.
Our paper proceeds as follows. We first discuss the principal ways in which our model of CE strategy is distinct from existing models of entrepreneurial phenomena in established organizations. We then introduce the key constructs of CE strategy and propose specific linkages between the various components of CE strategy as well as linkages between those CE strategy components and their antecedents and consequences. The paper closes with summary comments as well as suggestions for future research.
Prior Models of Entrepreneurial Phenomena in Established Organizations
Sharma and Chrisman (1999, p. 18) define CE as "the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization." Various models of CE appear in the scholarly literature. The proposed model of CE strategy is distinct from prior models of entrepreneurial phenomena in established organizations in four important aspects--the behavioral dimension, the locus of entrepreneurship, the philosophical justification, and CE as a unique and identifiable strategy. We briefly consider nine prior models. (2) These models are summarized in Table 1. They are reviewed on the basis of five criteria--the focal entrepreneurial phenomenon, the locus of entrepreneurship, the relationship between the entrepreneurial phenomenon and strategy, the causally adjacent antecedents of the entrepreneurial phenomenon, and the causally adjacent outcomes of the entrepreneurial phenomenon.
Guth and Ginsberg's (1990) model depicts some possible determinants and effects of the CE phenomena of corporate venturing and strategic renewal. Their model is very general in that it does not distinguish between the causes and effects of these two entrepreneurial phenomena that, they argue, constitute CE's domain. Importantly, in the Guth and Ginsberg (1990) model, CE is not portrayed as a strategy but as a set of phenomena that exist separate from strategy. Along with structure, process, and core values and beliefs, strategy is identified as an organizational-level driver of CE in this model.
The specific CE phenomena of internal corporate venturing and strategic renewal are the foci of Burgelman's (1983) and Floyd and Lane's (2000) models, respectively. Both of these models are process-focused. That is, they depict how the venturing and renewal processes manifest themselves within organizations, with a particular focus on the roles and behaviors of various levels of management within the entrepreneurial phenomena of interest. Why the entrepreneurial phenomena of venturing or renewal come about as well as their ultimate effects are not of particular concern in these conceptualizations. In essence, the Burgelman (1983) and Floyd and Lane (2000) models illuminate the workings within the venturing and renewal boxes, as depicted in the Guth and Ginsberg (1990) model. As with the Guth and Ginsberg model, strategy is exogenous to Burgelman's and Floyd and Lane's depictions of how the venturing and renewal processes, respectively, operate.
An alternative representation of the domain of CE is adopted in the Dess et al. (2003) model of how knowledge is created through four types of CE activity. Specifically, rather than adopting Guth and Ginsberg's (1990) categorization scheme of corporate venturing and strategic renewal for describing the phenomena of CE, Dess et al. base their CE model on the four forms of CE proposed by Covin and Miles (1999)--namely, sustained regeneration, organizational rejuvenation, strategic renewal, and domain redefinition. The Dess et al. model outlines how acquisitive and experimental learning processes mediate the relationships between the aforementioned CE forms and the emergence of specific types of knowledge (i.e., technical, integrative, and exploitive). Firm strategy is neither an explicit nor implied component of the Dess et al. model. Rather, this model is tightly focused on exploring the causal interrelationships between specific CE forms and organizational learning.
The Hornsby et al. (1993) model of the determinants of new venture championing behavior is similar to the Burgelman (1983) model in that it focuses on the specific CE phenomenon of internal corporate venturing. The Hornsby et al. model, however, is more limited in scope, focusing on what causes individuals to "act intrapreneurially." This sole focus on the individual (albeit within a larger organizational context) clearly distinguishes the Hornsby et al. model from the current model's focus on CE as an identifiable, distinct strategy.
Variations on the Hornsby et al. (1993) model have been proposed by Kuratko et al. (2004) and Kuratko, Ireland, et al. (2005). Specifically, the Kuratko et al. (2004) model extends that of Hornsby et al. by depicting individuals' and organizations' evaluations of entrepreneurial outcomes as determinants of future individual-level entrepreneurial behavior. The Kuratko, Ireland, et al. (2005) model retains this evaluative process component and is focused more specifically on the antecedents and outcomes of middle-level managers' entrepreneurial behavior. As with the Hornsby et al. model, neither of these latter models is intended to depict CE as a strategic construct.
Covin and Slevin's (1991) and Lumpkin and Dess's (1996) models have the greatest similarity to the one we present in this paper. These authors modeled the antecedents and/or consequences of the organizational-level phenomenon of entrepreneurial orientation (EO), defined by Lumpkin and Dess (p. 136) as "the processes, practices, and decision-making activities that lead to new entry." The current model of a CE strategy differs from these two commonly cited models of EO in four important ways--(1) by conceptualizing EO as an organizational state or quality, (2) by specifying organizational locations from which entrepreneurial behavior and processes may emerge, (3) by explicitly specifying a philosophical component of a CE strategy, and (4) by specifying that organizations can pursue entrepreneurship as a separate and identifiable strategy.
First, EO is an organizational state or quality that is defined in terms of several behavioral dimensions. Based on the pioneering work of Miller (1983), Covin and Slevin (1991) defined EO as implying the presence of organizational behavior reflecting risktaking, innovativeness, and proactiveness. Lumpkin and Dess's (1996) model of EO adds competitive aggressiveness and autonomy to this list of attributes. By contrast, the CE strategy model shown in Figure 1 specifies not what the behavioral dimensions of EO are, but how the organizational state or quality that is EO is manifested across the organization by implementing a particular strategy. As such, an EO is subsumed within our model of CE strategy. However, unlike the current CE strategy model, existing EO models do not specify where to look for evidence of entrepreneurship within the organization.
Second, and similar to the preceding point, existing EO models identify no specific locus or loci of entrepreneurship. In particular, the question of where within the organization entrepreneurial behavioral and processes originate is not addressed. Rather, it is simply noted that in entrepreneurial organizations, "particular [entrepreneurial] behavioral patterns are recurring" (Covin & Slevin, 1991, p. …
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