Question

1. Consider and explain corporate entrepreneurship and its dimensions. (20MARKS)

Answer 1

Corporate entrepreneurship refers to the process whereby an individual or a group utilizes its entrepreneurial thought and action, in association with an existing organization, creates a new organization, or initiates renewal or innovation within that organization in order to develop new businesses, products, services, or processes. Many organizations find it difficult to maintain the initial entrepreneurial spirit that helped them to sustain all through the start-up stage. Corporations have traditionally faced difficulties in identifying opportunities and turning them into new product lines. The ultimate aim of corporate entrepreneurship is to create value and generate new revenue growth. The reasons for implementing corporate entrepreneurship are:

• To grow and diversify the business.
• To satisfy and retain bright and motivated staff.
• To exploit under-utilized resources in new ways.
• To divest non-core activities.

Entrepreneurship encompasses three dimensions:

1. Corporate venturing refers to the corporate entrepreneurial efforts that lead to the creation of new business ventures. The corporate venturing can be done both internally or externally. Internal corporate venturing is activities are located within existing organizations. Three aspects that may affect the development and performance of the organizations are structural autonomy, the extent of innovation, and the nature of sponsorship. External corporate venturing refers to the Spin-offs and joint ventures which lead to the creation of a new business venture. Spin-offs are entirely independent in nature whereas joint ventures are partially independent. Corporate venture capital funds can also be used to capitalize on innovative ideas.

2. Strategic renewal refers to the new combinations of resources that result in significant changes to an organization’s strategy or structure. It can be done by revitalizing the company's operations by changing the scope of its business, its competitive approach, or both. Organizations should give opportunities to the managers and the employees to come up with strategic initiatives in terms of corporate entrepreneurship, innovation, and creativity. Hence, organizational renewal entails doing business in a completely different way than before.

3. Innovation refers to the new combinations of resources that usually lead to new products and services. Innovativeness, as a component of corporate entrepreneurship, is a commitment of the company to create new products/services, production processes, and organizational systems with an emphasis on development in technology. It transforms the company and its competitive environment in a completely new perspective that what it used to be. They should also be considered as sequences of stages.