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A COMPETENCY-BASED FRAMEWORK FOR PROMOTING CORPORATE ENTREPRENEURSHIP

J A M E S C . H AY T O N A N D D O N N A J . K E L L E Y
Corporate entrepreneurship, the discovery and pursuit of new opportunities through innovation and venturing, is an important source of competitive advantage. Corporate entrepreneurship involves a diverse set of activities such as innovation in products and processes; the development of internal and external corporate ventures; and the development of new business models, which require an array of roles, behaviors, and individual competencies. In this article, we define individual competencies and distinguish them from other individual difference constructs. We argue that given the unique requirements of corporate entrepreneurship, a competency-based approach to assessing organizational human capital needs is superior to more traditional job-analytic methods. Drawing on existing literature, we outline a competency framework for supporting corporate entrepreneurship and infer the underlying, measurable knowledge, skills, and abilities that contribute to these competencies. We conclude with a discussion of the implications of this framework for the staffing, training and development, and performance-appraisal practices of firms seeking to promote corporate entrepreneurship. 2006 Wiley Periodicals, Inc.

here is a growing consensus in the literature that established firms need to nurture entrepreneurship throughout their operations in order to compete successfully in changing environments (Sathe, 2003). Corporate entrepreneurship is a set of firmwide activities that centers on the discovery and pursuit of new opportunities through innovation, new business creation, or the introduction of new business models. Successful corporate entre-

preneurship involves simultaneous attention to both innovation and exploitation (e.g., Zahra, 1996) and therefore involves an array of activities and processes. These innovations renew companies, enhance their competitive advantage, spur growth, create new employment opportunities, and generate wealth. Corporate entrepreneurship requires the ongoing acquisition and development of new resources and new ways of reconfiguring resources, enabling the firm to pursue

Correspondence to: James C. Hayton, Bocconi UniversityIOSI, Viale Isonzo, 23, 20135 Milano, Italy, Phone: +39 5836 2628, Fax: +39 5836 2634, E-mail: James.Hayton@unibocconi.it
Human Resource Management, Fall 2006, Vol. 45, No. 3, Pp. 407427 2006 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hrm.20118

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new business opportunities (Zahra, Nielsen, & Bogner, 1999).1 Firms may engage in internal innovation in order to introduce new products or services, or to enter new markets; they may rejuvenate themselves by innovating and altering internal processes, structures, or capabilities; they may identify and adapt new ways of competing in existing markets; or they may proactively create entirely new product marour perspective is kets that other companies have not recognized or actively exthat even when ploited (Covin & Miles, 1999). Companies vary significantly in organizations their ability to foster entrepreneurattempt to create ship and exploit new opportunities. Empirical research has identiformal structures or fied a variety of sources of this systems to facilitate difference across firms: for example, the firms external environcorporate ment (Covin & Slevin, 1989; Miller, 1983); organizational culentrepreneurship, ture (Zahra, 1991); and structure (Miller, 1983). the role of This article is founded on the assumption that the competenindividuals remains cies of individual employees, speparamount cific to the pursuit of corporate entrepreneurship, are fundamental to companies ability to nurture and sustain innovation and new venture creation. There is empirical evidence to support the influence of human capital characteristics, of which individual competencies are one class, on entrepreneurship at both the individual level (e.g., Baum & Locke, 2004; Chandler & Hanks, 1998) and the organizational level (e.g., Bantel & Jackson, 1989; Chandler, Honig, & Wiklund, 2005). At the level of the individual entrepreneur, researchers have examined individual characteristics associated with identification of entrepreneurial opportunities and the willingness to start a new venture (e.g., McClelland, 1961). For example, Markman, Baron, and Balkin (2005) identify self-efficacy and perseverance as important correlates of entrepreneurship. Others have identified cognitive biases such as an inflated illusion of control (Simon, Houghton, & Aquino, 2000) and overconfidence (Busenitz & Barney,

1997) as being associated with entrepreneurship at the individual. Some of these individual characteristics, such as traits of optimism and self-efficacy, and social skills (Baron, 1998, 2000; Baron & Markman, 2000) may translate to the context of corporate entrepreneurship. When it comes to examining the role of human capital in promoting corporate entrepreneurship, however, most research has focused on quantity rather than quality. That is, most frequently the research examining human capital in the context of corporate entrepreneurship has looked at the number of qualifications (e.g., first and graduate degrees; Hayton, 2005a), the diversity of qualifications and experience (e.g., Bantel & Jackson, 1989; Hayton, 2005a), the productivity of key research personnel (e.g., Deeds, DeCarolis, & Coombs, 1998), and the education and experience of top management teams (e.g., Chandler et al., 2005). A major gap in the current literature on the connection between human capital and corporate entrepreneurship is a definition of the characteristics of desirable human capital that goes beyond a deep and diverse set of education and experience, which is largely the conclusion of existing research (Bantel & Jackson, 1989; Chandler et al., 2005; Deeds et al., 1998; Hayton, 2005a). We invoke the concept of individual competencies specific to corporate entrepreneurship as an aspect of human capital that can provide a richer description of these human capital needs. We acknowledge that in addition to an organizations resources, human or otherwise, dynamic and hostile external environments (Zahra, 1996) and internal organizational structure and culture (e.g., Miller, 1983) are significant influences of the level of corporate entrepreneurship. However, our perspective is that even when organizations attempt to create formal structures or systems to facilitate corporate entrepreneurship, the role of individuals remains paramount (Arrow, 1962). Corporate entrepreneurship involves organizational learning (e.g., Zahra et al., 1999), an organizational process that is reHuman Resource Management DOI: 10.1002/hrm

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liant upon individual contributions (DeNisi, Hitt, & Jackson, 2003; Itami, 1987). Therefore, employees in firms seeking to promote corporate entrepreneurship need specific individual competencies in order to integrate existing and new knowledge and recognize, evaluate, and capture entrepreneurial opportunities. In this article, we highlight the four competencies that, while residing in individuals, support the organizational goal of recognizing, evaluating, and capturing entrepreneurial opportunities. We define individual competencies such as underlying individual characteristics involving specific combinations of knowledge, skills, and personality characteristics that are described in aggregate behavioral terms such as team player, boundary spanner, or simply leader. In addition to knowledge, competencies incorporate skills and personality characteristics (McEvoy et al., 2005). Spencer and Spencer (1993, p. 9) define competency as an underlying characteristic of an individual that is causally related to . . . superior performance in a job or situation. Others have suggested that competency is who an individual is and what an individual knows and does (Brockbank, Ulrich, & Beatty, 1999, p. 111). Who a person is reflects their individual traits and motives (Spencer & Spencer, 1993). Thus, the concept of competence may be defined as what a person is, knows, and does that is causally related to superior performance (McEvoy et al., 2005). Implicit in the concept of competence is a socially and situationally defined performance criterion (Schippmann et al., 2000). That is, given a specific context, a person may or may not possess sufficient amounts of a given competency (i.e., she is a very effective leader; he is a very poor boundary spanner). When defined as underlying characteristics of people, competencies themselves can only be inferred from observable behaviors. That is, like personality, competence is a latent characteristic, and the true level of a specific competence is only indicated by observable behaviors in the relevant performance domain (e.g., leadership), occupation (e.g., civil engineer), or activity (e.g., parenting). The specific behaviors that are
Human Resource Management DOI: 10.1002/hrm

observed are not themselves competencies, but only indicators of this underlying characteristic of the person. The use of competencies enables firms to more parsimoniously describe complex sets of desired individual characteristics and performance criteria. Parsimony is achieved as a result of the aggregation of a larger set of knowledge, skills, and personality characteristics in a smaller set of key competencies. A common goal is to identify links between these desirable individual characteristics and firm strategic drivers and/or goals (e.g., Becker, Huselid, & Ulrich, 2001). Although prior research has identified a number of individual The use of characteristics of entrepreneurs (e.g., Baum & Locke, 2004; Markcompetencies man et al., 2005), corporate entrepreneurs (sometimes referred to as enables firms to intrapreneurs) face distinct organizational and external environmore ments leading to very different parsimoniously challenges, opportunities, and constraints. To date, although redescribe complex search has identified organizational characteristics (e.g., Miller, sets of desired 1983), environmental characterisindividual tics (e.g., Zahra, 1996), and the general importance of human characteristics and capital (e.g., Hayton, 2005a) to corporate entrepreneurship, and performance even several important social roles criteria. in the process (e.g., Maidique, 1980; Rothwell et al., 1974; Shane, 1994), the specific individual-level competencies of corporate entrepreneurs have not been clearly described in a coherent and complete framework. In addition to filling a gap in our conceptual understanding of the association between human resources and corporate entrepreneurship, such a framework has benefits for HR practice that we will identify in this article.

Individual Competence
A firms intellectual capital is a key, and rich, source of the knowledge flows required to promote corporate entrepreneurship (Chandler et al., 2005; Zahra et al., 1999). Individ-

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ual competencies involve the knowledge required to achieve a given outcome, the skills to implement that knowledge, and the personality characteristics required to motivate the implementation of the knowledge and skills to achieving a desired outcome. The label given to a specific competency reflects the particular outcome or process involved (e.g., leadership competence, boundary-spanning comwe propose that petence, teaching competence, etc.). situationally specific There has been considerable confusion in the literature regardindividual ing the meaning and definition competencies of competence at the individual level. Here we take the view that involve identifiable it is not useful to define compesets or combinations tence as only knowledge, or only skill, or only personality. Defined of individual loosely in this way, the term does not add anything unique. Therecharacteristics, fore, we propose that situationally specific individual competenspecifically cies involve identifiable sets or combinations of individual charknowledge, skills, acteristics, specifically knowland personality edge, skills, and personality characteristics. Competencies, as characteristics. aggregates of knowledge, skills, and personality characteristics, are focused on specific activities, processes, or outcomes (i.e., leadership, teaching, teamwork, etc.). The term as defined here represents a continuum of competence along which an individual may be placed. At the low end, we would describe a person as incompetent with respect to a given activity. At the other end of the continuum, possession of a specific competence (i.e., leadership) implies superior performance in that activity, process, or role (e.g., a highly competent leader). Two features further distinguish competencies from their component elements (knowledge, skills, and abilities). First, competent behavior implies the possession of specific examples of all three elements (e.g., teaching competence requires knowledge of classroom strategies, communications skills, and a motivation to influence others). Sec-

ond, it is possible that the elements are compensatory to some extent (i.e., a low knowledge of classroom strategies can be compensated for by strong communication skills). While competence is typically considered to be synonymous with satisfactory or superior performance (Schippmann et al., 2000), the definition of performance itself is specific to a particular situation and outcome. There is a conceptual congruence between the notion of the behavioral indicators of competence and that of social role behaviors. Roles refer to expected sets of behaviors that are socially defined, and are describable in terms of both the quality and quantity of those behaviors (Ilgen & Hollenbeck, 1991). Roles provide the context and the criteria for assessing whether behaviors meet expectations. Evaluation requires the observation of a set of behaviors and comparison with expectations. Effective role behavior implies competence to perform that role. Specific competencies are indicated by effective observable behaviors in the context of a role. In the case of corporate entrepreneurship competencies, these are indicated by effective observable behaviors in known corporate entrepreneurial roles such as opportunity identification, knowledge brokering, and idea championing. This premise forms the basis for the competence framework that we present in this article. First, we address the general benefits of a competency approach and the specific benefits of this approach with respect to the promotion of corporate entrepreneurship.

Advantages of a Competency-Based Approach


We propose that, due to the unique organizational requirements of corporate entrepreneurship (e.g., employee and organizational flexibility, environmental responsiveness, and a high emphasis on employee discretionary contributions), a competency-based approach is superior to more traditional jobanalysis methods such as task analysis and worker or behavior analysis. A competencybased approach to understanding and describing an organizations human capital
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(and human capital requirements) can serve as either an alternative or a supplement to the more typical, and more well-established, models of job analysis and person specification. The task-based approach to job analysis identifies the tasks, duties, and responsibilities of a given job, and from this both a job description and person specification are derived through inference. Typically, the results of task-oriented job-analytic tools are highly specific to a given job, and differences rather than commonalities across jobs are emphasized (e.g., Harvey, 1991). Once the job has been described in terms of its task elements, the analyst(s) must infer the necessary characteristics of the ideal job incumbent, typically in terms of credentials, qualifications, experience, knowledge, skills, and abilities. In contrast to the task-based approach, worker-based approaches (e.g., the Fleishman Job Analysis System) emphasize the generic work behaviors required rather than the tasks and technologies involved. Commonly used worker-oriented methods of analysis provide a generic and quantifiable description of the job in terms of abstract worker behaviors rather than specific tasks (Harvey, 1991). Regardless of method, the outcomes of both forms of job analysis have in common the identification and description of the characteristics of effective job incumbents in terms of a list of knowledge, skills, abilities, and occasionally traits. This information serves as an input into a multitude of HR decisions including staffing, training, compensation, and performance appraisal. A competency-based approach has one key feature that fundamentally differentiates it from traditional methods of analyzing human capital requirements of organizations. The effective incumbents (or desired characteristics) are described in broader termscompetenciesthat themselves represent aggregates of individual knowledge, skills, and personality characteristics. Therefore, in terms of behavioral/technological specificity (Harvey, 1991), while task analysis is highly specific, worker analysis is moderHuman Resource Management DOI: 10.1002/hrm

ately specific, and a competency approach is the least specific, facilitating a broad application of the same model throughout an organization. A number of benefits are derived from the aggregate term of competence. First, competencies as aggregates of specific knowledge, skills, and personality characteristics provide useful summaries for a potentially large and diverse set of characteristics. Second, while traditional forms of job analysis are always based in a given job context, the competency-based approach is more broadly linked to the organizational context. A third advantage of the competency approach is that it can be expected to result in a bet- while traditional ter match in terms of person-orforms of job ganization fit than more traditional models (Bowen, Ledford, & analysis are always Nathan, 1991). Using a panel of expert indus- based in a given job trial-organizational psychologists, context, the representing both practitioners and academics, Schippmann et al. competency-based (2000) identify a number of dimensions that differentiate a comapproach is more petency approach from work- and worker-oriented job analysis. They broadly linked to the report that competency modeling organizational approaches are more closely linked to the strategic goals of the context. organization, focus on core competencies, are less focused on jobspecific technical skills, emphasize organizational fit rather than job fit, are more likely to include values and personality orientations, and focus on training and development rather than driving selection decisions (Schippmann et al., 2000). There are several advantages to a competency-based approach to assessing human capital needs that are specific to the promotion of corporate entrepreneurship. First, the breadth and flexibility built into this approach are consistent with the need for strategic flexibility (Sanchez, 1995), particularly for organizations facing dynamic environments (e.g., Bowen et al., 1991; Lawler, 1994; Schippmann et al., 2000). Strategic flexibility and adaptability are important el-

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ements of corporate entrepreneurship activity (e.g., Burgelman & Sayles, 1986). Supportive of this, competencies tend to be broadly defined and therefore more responsive to changes in organizational conditions. Second, at the individual level, the task variety and autonomy that result from designing work around competencies provides support for more enriched and satisfying work, Employees develop increasing the likelihood of intrinsic motivation (Hackman & competencies Oldham, 1976). Involvement in corporate entrepreneurship often through education emerges spontaneously, with role and training, by occupants akin to volunteers. In fact, formal assignment of such sharing experiences responsibilities may have negative consequences upon motivawith others, while tion (e.g., Von Hippel, 1977). In learning by doing, addition, the specific task-level content of these roles is hard to and when learning identify in advance (Kanter, 1985). Therefore, it is not possible vicariously by to capture the human capital requirements of corporate entrepreobserving others neurship in a prespecified list of trials and errors. tasks (Lawler, 1994). However, it is possible to identify a set of central roles that are performed by individuals or teams of individuals in the process of corporate entrepreneurship. We identify these roles in our literature review in the next section. Third, the inherently open-ended nature of competency frameworks increases the discretionary and self-managing nature of work. This open-ended nature occurs because precise task behaviors are not specified; rather, the capability to perform well (competently) a range of equivalent behaviors (e.g., innovation or knowledge brokering) in a variety of situations is the focus of the competencybased approach. This approach promotes rather than constrains individual discretion. At the level of the workgroup, allowing selfmanagement and individual discretion increases the likelihood of consistency across social and technical systems (Emery & Trist, 1960). Early research on sociotechnical systems reveals how the reduction in individual

autonomy leads to a breakdown in coordination that was previously achieved through mutual adjustment (Emery & Trist, 1960). Research into the effects of trust and the building of social capital provides evidence that coordination is strengthened when individuals are perceived to be making discretionary contributions (rather than following procedure) by their counterparts (Perrone, Zaheer, & McEvily, 2003). Entrepreneurs will need to access and integrate different sources of knowledge from across the organization (Galbraith, 1982; Kanter, 1989; Tushman & Nadler, 1986). A competency approach is consistent with processes requiring knowledge sharing and collaborative behaviors underlying corporate entrepreneurship (e.g., Hornsby, Naffziger, Kuratko, & Montagno, 1993). It is consistent because corporate entrepreneurship is less reliant on specific processes with universal application and more reliant on flexible processes, allowing for the building of situation-specific knowledge (Eisenhardt & Martin, 2000) and relying more heavily on judgment and adaptation. Employees develop competencies through education and training, by sharing experiences with others, while learning by doing, and when learning vicariously by observing others trials and errors. They employ their knowledge as they perform and master various tasks, developing unique competencies. Competence building, therefore, combines formal education with tacit knowledge acquired through experience in the industry and unique personal experience outside and within an organization. The challenge for managers in organizations seeking to promote corporate entrepreneurship lies in selecting and developing employees with the appropriate knowledge, skills, and personality characteristics to promote, persist, think creatively, adapt, and take risks. It is therefore useful to identify the set of competencies required to support this strategic goal. Prior literature provides a great deal of assistance in identification of key corporate entrepreneurial roles (e.g., Block & MacMillan, 1993; Maidique, 1980; Schon, 1963; Shane, 1994). To date, this literature
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on corporate entrepreneurship has not been well integrated with the literature on human resource management (Hayton, 2005b). By linking the concept of competencies with the corporate entrepreneurial roles, it is possible to make both theoretical propositions and practical recommendations. We next develop a competency framework that outlines the key competencies and the knowledge, skills, and personality characteristics that underlie them. We follow this with a discussion of how a competency framework such as this can influence HR practices in staffing, development, and performance appraisal in firms seeking to promote corporate entrepreneurship.

complex, however, it is less likely a single individual would play all these different roles, and would therefore need competence in all areas (Maidique, 1980). Further, role occupants may or may not be formally assigned (e.g., Von Hippel, 1977) or compensated on specific roles (Sykes, 1992). Individuals may also assume different roles as needed. We propose that all these roles need to be performed by one or more individuals in order for corporate entrepreneurship to occur (Block & MacMillan, 1993; Burgelman, 1983; Maidique, 1980). These ideas lead to the following propositions: Proposition 1a: Corporate entrepreneurship will be promoted by the simultaneous presence of competence in the four roles of innovating, brokering, championing, and sponsoring. Proposition 1b: In small firms, the four competencies may be colocated within a single individual. As firms increase in size, the corporate entrepreneurship competencies will become dispersed vertically and horizontally across individual employees and functions.

To be competent means to be able to behave effectively in a particular performance domain, occupation, or activity.

Four Entrepreneurial Competencies


Earlier, we proposed that the behavioral indicators of underlying competencies are consistent with the concept of successful role behaviors. To be competent means to be able to behave effectively in a particular performance domain, occupation, or activity. Similarly, social roles are expected sets of behaviors that are socially defined and may be described in terms of quality and quantity of those behaviors (Ilgen & Hollenbeck, 1991). Therefore, identification of the key roles required to support corporate entrepreneurship will suggest the sets of desirable behaviors. This serves as a useful first step in determining the requisite competencies. A role represents a particular domain within which the effectiveness of behaviors will be assessed. Several important roles have been associated with the success of corporate entrepreneurship. Key roles identified in the literature include: the technical innovator (Block & MacMillan, 1993; Maidique, 1980), the innovation champion (e.g., Maidique, 1980; Schon, 1963; Shane, 1994), the executive champion or sponsor (Maidique, 1980; Rothwell et al., 1974), and the knowledge broker (Hargadon, 1998, 2002; Hargadon & Sutton, 2000). These roles overlap, and a single individual may play more than oneor allof these roles, particularly in smaller organizations. As an organization grows large and
Human Resource Management DOI: 10.1002/hrm

We next identify and discuss the four competencies specific to corporate entrepreneurshipinnovating, brokering, championing, and sponsoringand identify critical underlying knowledge, skill, and personality elements for each. In order to identify the underlying knowledge, skill, and personality elements for each competency in this model, we have thoroughly examined the descriptions of the roles and their antecedents (e.g., Block & MacMillan, 1993; Garud & Van de Ven, 1992; Hargadon, 1998, 2002; Hargadon & Sutton, 2000; Howell & Higgins, 1990; Katz & Tushman, 1979; Maidique, 1980; Rothwell et al., 1974; Schon, 1963; Shane, 1994; Shane & Venkataraman, 1996; Tushman & Nadler, 1986). It is important to note that to date there has not been a single model or framework that has drawn these roles together with a view to identifying the

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necessary human capital characteristics. Our review revealed the specific behaviors involved for each competency. We then searched the relevant management, psychology, and human resource management literatures to find evidence of individual difference variables that are supportive of the relevant behaviors (e.g., Amabile, 1983; Bantel & Jackson, 1989; Bass, 1985; Baum & Locke, 2004; Burt, 1992, 2000; Goleman, 1995; Hoang & Antoncic, 2003; House, 1977; Howell & Higgins, 1990; Kostova & Roth, 2003; Leifer et al., 2000; Nochur & Allen, 1992; Rogers & Shoemaker, 1971; Rothwell et al., 1974; Taggar, 2002). Therefore, our contribution is to piece together many diverse literatures in order to more completely describe the nature of the competencies and link these with empirically described behaviors required for corporate entrepreneurship to occur. We used two criteria in judging which knowledge, skills,

and personality characteristics to include in the framework. First, there was a direct, or easily inferred, link between the underlying characteristic and competence mentioned in the literature and for which there was some empirical support (e.g., between analogic reasoning and brokering: see Hargadon, 1998; between openness, conscientiousness, creativity and innovation: see Taggar, 2002). Second, we have only emphasized connections that we consider to be necessary components of competence in a given role. Table I summarizes the links between specific underlying knowledge, skill, and personality components and each of the four corporate entrepreneurship competencies.

Innovating
The innovating role involves opportunity recognition, defined as having the creative insight about particular knowledge and in-

TABLE

Matrixing Entrepreneurial Competencies with Underlying Knowledge, Skills, and Personality Characteristics
Innovating Brokering Championing Sponsoring

Knowledge Specialized core Multidisciplinary Organizational Skills Cognitive ability Creativity Analogic reasoning Influencing Transformational leadership Emotional intelligence Networking Personality Conscientiousness Openness to experience Confidence Credibility Risk tolerance Tenacity Passion

x x

x x x

x x

x x

x x

x x x x x x

x x x x

x x

x x x x x x

x x

x x x x x

x x x

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formation combinations and what they can mean for usersand the company seeking to serve these customers. Opportunities often arise as an individual works in a particular domain (Shane, 2000). The innovator should therefore be alert and ready to recognize opportunities. Casson (1982) describes this role in terms of a person who sees herself as having superior judgment, through which she is able to see opportunities when others dont. This is consistent with Kirzner (1973, 1985), who highlights the characteristic of entrepreneurial alertness, defined as the ability to respond to gaps or problems left by shifts in the economic environment. While combinations of knowledge provide the underlying foundation of an opportunity, the innovator views and values knowledge as a resource to be deployed (Kirzner, 1985). Innovating frequently requires defining an innovation in technical terms (Maidique, 1980) and thus demands a high degree of specialized knowledgethe specific nature of which depends on the particular business and industry. In addition, individuals who have more resources to draw uponin the form of cognitive ability, education, training, and practical experience are more likely to be innovative. Greater cognitive resources aid in problem identification, formulation, exploration, and problem solving (e.g., Bantel & Jackson, 1989). A broad cognitive base increases the range of alternative problem definitions, possible solutions, and the combination of information. Empirical research supports the proposition that individual characteristics such as education, intelligence, and cognitive style are associated with receptivity to innovative ideas (e.g., Rogers & Shoemaker, 1971) and creativity (e.g., Amabile, 1983). Amabile (1983, 1996) suggests that creativity itself involves domain-relevant skills and knowledge, a high degree of intrinsic motivation, and skillfulness with respect to creativity-relevant processes such as goal setting and response to challenges (Ruscio, Whitney, & Amabile, 1998). Several individual antecedents to creativity have been identified, highlighting two
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personality characteristics: conscientiousness and openness to new experiences, in addition to general cognitive ability (Taggar, 2002). The mediating processes through which conscientiousness and openness to new experiences influence creativity include increasing intrinsic motivation and the promotion of divergent and generative thinking, respectively (Taggar, 2002). Building on this literature, we view innovative competence as a key element in the network of entrepreneurial roles (Maidique, 1980). The innovator role requires an ability to identify new market, organizational, or The innovator role technological opportunities and combine new or existing rerequires an ability sources in unique and creative ways. Competence in this role to identify new will be positively related to the market, degree of domain-specific knowledge, cognitive ability, creativity, organizational, or conscientiousness, and openness to new experience. Conscientechnological tiousness is associated with inopportunities and trinsic motivation and persistence, while openness to new combine new or experience is associated with the willingness to seek new knowl- existing resources edge from diverse sources. These in unique and two personality characteristics are contributing factors to indicreative ways. vidual creativity that, when combined with high levels of cognitive ability and domain-specific knowledge, can be expected to provide the foundation for innovative competence. Proposition 2: Innovative competence is a function of domain-specific knowledge, cognitive ability, and creativity (through conscientiousness and openness to new experience).

Brokering
A second key competence in promoting corporate entrepreneurship is brokering. The primary role of the broker is to access new sources of information and knowledge, transferring this knowledge and com-

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bining different sources, both existing and new. This is similar to the process described more specifically as knowledge brokering (Hargadon, 2002). New opportunities often arise out of this process from linking diverse perspectives and even contradictory ideas; therefore, there is a dynamic relationship between brokering and innovative compeEven though an tence, where the brokering role organization may serves to deliver new information to the innovator and to hire and develop draw information for use elsepeople with diverse where in the brokers network. Breakthrough ideas may arise skills and the ability from basic research exploring new science and technology. to innovate, it is They may emerge from previous technology development and imunlikely an plementation efforts (Schon, 1967). They may also result from individual will combinations of previously unrepossess all the lated technologies. Innovation and new venture development reknowledge needed quires the knowledge broker to for the complexities access and combine diverse sources of knowledge, both existof this process. ing and new, often with a high degree of unfamiliarity (Galbraith, 1982; Hargadon, 2002; Kanter, 1989; Tushman & Nadler, 1986). Even though an organization may hire and develop people with diverse skills and the ability to innovate, it is unlikely an individual will possess all the knowledge needed for the complexities of this process (Tushman & Nadler, 1986). Transforming an idea into a viable business requires several skills that go beyond the expertise of one person (Day, 1994). It is therefore advantageous to exchange knowledge and information among multiple contributors, who collectively provide a range of experiences and deep knowledge (Tushman & Nadler, 1986). In project-based work, teams typically reach outside the project and engage in a mix of communications with various individuals and groups within the organization (Ancona & Caldwell, 1992). This is particularly important for projects demanding a

greater breadth of knowledge and involving highly complex tasks (Katz & Tushman 1979). Brokers identify organizational members with needed knowledge and gain timely access to that knowledge (Tushman & Nadler, 1986). Brokering is consistent with the gatekeeping role identified in the innovation literature. Gatekeeping involves bringing outside information in or integrating information from various internal sources. External gatekeepers acquire, translate, and disseminate information (Tushman & Nadler, 1986). They keep abreast of external technical and market developments and link this information to those within the organization. Internal gatekeepers act as a go-between to coordinate the efforts of the project team and the operating units they depend on. Nochur and Allen (1992) add that communication networks are formed and cultivated over time, and the organization should look to those already known to be gatekeepers and leverage their strengths. Four behaviors are associated with brokering competence: exploration of diverse knowledge domains; learning from these multiple knowledge domains; linking knowledge from diverse domains to solve novel problems; and implementing ideas (Hargadon, 1998, 2002; Hargadon & Sutton, 2000). Several individual characteristics can enhance effective brokering competence (Table I). First, analogical reasoning capabilities contribute to the ability to link knowledge from one domain to a problem to be solved in a distinct domain. Analogical reasoning is a key skill in scientific and technological discovery (Hargadon, 1998). Second, brokering competence requires confidence and credibility, and the ability to build social capital necessary for both acquiring and disseminating new ideas (e.g., Kostova & Roth, 2003). Third, curiosity, creativity, and intrinsic motivation (passion) stimulate the search for new knowledge that may serve to solve future problems (Hargadon & Sutton, 2000). Proposition 3: Brokering competence is the result of a combination of analogical reasoning skills, personal confidence, credibility, netHuman Resource Management DOI: 10.1002/hrm

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working skills, curiosity, creativity and intrinsic motivation.

Championing
A third competence in promoting corporate entrepreneurship is championing. Champions identify with the project, and not only do they take responsibility for its success (Schon, 1963, 1967), but success is often dependent on champions (Burgelman, 1983). Champions inspire and enthuse others with their vision of the potential of an innovation . . . show extraordinary confidence in themselves and their mission, and . . . gain the commitment of others to support the innovation (Howell & Higgins, 1990, p. 320). To a certain extent, championing overlaps the other three competencies. For example, championing can include providing the underlying creative insight about an innovations potential (Day, 1994). On the other hand, there is often a distinction between the inventors or discovers of opportunities, and those who recognize their value and take responsibility for moving it forward (Leifer et al., 2000). We can therefore assume this role can be played by an individual who is not the innovator or broker (e.g., Maidique, 1980) and consider it a distinct competence. Champions, in our model, represent a catalyst for increased sponsorship or impetus behind an innovation (Maidique, 1980, p. 32). They create a vision around an opportunity and ensure continuance of the projectseeing it through to commercialization (Leifer et al., 2000). The specific observable behaviors needed for successful championing are often culturally bound (e.g., Shane, 1995; Shane & Venkataraman, 1996). Therefore, descriptions of these behaviors should be contextspecific. In the United States, there is a preference for organizational mavericks, renegades, and buffers who bypass organizational procedures in order to garner support (Shane & Venkataraman, 1996). Particularly when innovation projects are highly risky and costly, champions will use their power and authority to get their projects supported (Day, 1994). This is in contrast to collectivist
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cultures, where champions who appeal to group norms are preferred (Shane, 1994). When uncertainty avoidance dominates national cultures, adherence to organizational rules and procedures and a rational style are preferred. But regardless of the means, the outcome is the same; the champion ensures there is support for the project. Several individual characteristics support competent championing (Table I). Transformational leadership skills (e.g., Bass, 1985; House, 1977) are important and consistent with competence in championing (Howell & Higgins, 1990; Vecchio, 2003). Transformational leadership skills include articulating a vision, fostering In the United States, acceptance of group goals, and there is a providing individualized support and intellectual stimulation preference for (Podsakoff, MacKenzie, Moorman, & Fetter, 1990). Howell and organizational Higgins (1990) observe that mavericks, championing involves a willingness and ability to influence othrenegades, and ers. Competence in championing also requires an ability to buffers who bypass negotiate a complex sociopolitiorganizational cal environment. Therefore, we can expect emotional intelliprocedures in order gence (Goleman, 1995) to be positively associated with chamto garner support. pioning. Champions rely on informal network relationships (Howell & Higgins, 1990). Those with broad experience and long tenure within an organization will have a greater opportunity to form expansive informal networks through which they can exercise the necessary influence (Nochur & Allen, 1992). They can leverage the trust they have built in their relationships with others and their high credibility in the organization (Hoang & Antoncic, 2003) to compel others to participate in their projects (Burt, 1992, 2000; Hoang & Antoncic, 2003). In a role dominated by the creation and maintenance of diverse formal and informal organizational ties, a champions competence therefore includes social or emotional intelligence, transformational leadership

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skills, organizational knowledge, credibility, and trustworthiness. Proposition 4: Underlying championing competence are individual characteristics of emotional intelligence, transformational leadership skills, broad organizational experience, credibility, and trustworthiness.

Sponsoring
A fourth competence important for promoting corporate entrepreneurship is sponsoring. Sponsors help entrepreneurs gain access to the resources they need for their ventures (Day, 1994; Garud & Van de Ven, 1992; Tushman & Sponsors differ from Nadler, 1986). They ensure there champions. While a is legitimacy and support for the project (Day, 1994; Galbraith, champion identifies 1982; Roberts & Fusfeld, 1981; Tushman & Nadler, 1986). They and selects projects also provide advice and guidance deserving support, a to the venture on how to best proceed (Garud & Van de Ven, sponsor ensures 1992). Higher-level sponsors can use their power and control over that resources resources to get the support necessary for the projects they value become available. (Day, 1994). Sponsors differ from champions. While a champion identifies and selects projects deserving support, a sponsor ensures that resources become available. Indeed, Maidique (1980, p. 64) distinguishes between the product champion and the executive championthe latter is the individual who has direct or indirect influence over the resource allocation process and who uses this power to channel resources to a new technological innovation. In increasingly diversified businesses, he adds, it becomes less likely that a single person can lead the resource-allocation process. Sponsors effectively absorb some of the risk by providing necessary organizational resources (Maidique, 1980). They are typically higher up in the organizational hierarchy, are likely to have access to a greater range of information about markets, competitors, and opportunities (Cross & Cummings, 2004), and can

better locate specific resources (Lin, 1982). This is particularly important for ventures that are costly and represent new strategic directions (Day, 1994). As Table I indicates, several individual characteristics can enhance the sponsors competence. These relate to their diversity of experience, their power and status in the organization, and their responsibility and enthusiasm (Rothwell et al., 1974). At the heart of sponsoring competence is the deep technological and business knowledge (Maidique, 1980) required to support the business insight necessary for making risky or even uncertain investments. A willingness to accept risk can also enhance the sponsorship competence. In general, entrepreneurial role behaviors in organizations are the result of discretionary actions by employees. Since it is hard to specify entrepreneurial contributions in standard job descriptions, they tend to emerge as extrarole behaviors (Hayton, 2005b). Therefore, in order to encourage corporate entrepreneurship, the ability of executive sponsors to promote discretionary behaviors is of central importance. Podsakoff et al. (1990) note that transformational leadership, mediated by subordinate trust in their supervisor, promotes extrarole citizenship behaviors. Therefore, we expect that sponsoring competence will be enhanced by transformational leadership skills.2 Executive sponsors bridge the technological innovator and the firms owner/ founders. Therefore, as Table 1 indicates, these sponsors must also possess persistence and passion for new venture development (Baum & Locke, 2004). Persistence and passion increase tenacity in the pursuit of highly uncertain and resource-consuming activities. Persistence is necessary when competing for scarce resources within the diversified corporation, particularly when pursuing new markets or perhaps defining them. Proposition 5: The characteristics underlying sponsoring competence include deep technological and business knowledge, risk tolerHuman Resource Management DOI: 10.1002/hrm

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ance, persistence and passion, and transformational leadership skills.

Moderators of the Impact of Individual Competence on Corporate Entrepreneurship


The likelihood that these roles will be distributed across distinct individuals within the organization leaves open the possibility that without some effort at integration, even the presence of needed competencies will not result in increased corporate entrepreneurship. Therefore, we consider these individual competencies to be necessary but not sufficient to achieve increased innovation, venturing, and/or strategic renewal. It is worthwhile considering the factors that would promote integration of the four competencies within organizations. Organizational structure, communications networks, leadership, teamwork, culture, and formal and informal integration mechanisms are all possible factors that may influence the necessary integration of the roles and competencies. For example, organizational cultures that exhibit a balance between individualism and collectivism, acceptance of decentralization of decision making, a long-term orientation, and an external orientation have been found to be supportive of corporate entrepreneurship (e.g., Morris, Davis, & Allen, 1993; Zahra, Hayton, & Salvato, 2004). Therefore, we expect that the presence of a supportive culture will positively moderate the effect of entrepreneurial competencies on corporate entrepreneurship. Similarly, organizational structures that facilitate environmental responsiveness and entrepreneurial alertness (Kirzner, 1973) and, at the same time, promote high levels of internal communication, coordination, and integration are likely to facilitate corporate entrepreneurship (e.g., Morris, 1998). Therefore, flatter, organic organizational structures, extensive use of teams and project-based organization, the presence of formal internal integrating roles, and formal external boundary-spanning roles will all positively moderate the impact of entrepreneurial competencies on corporate entrepreneurship.
Human Resource Management DOI: 10.1002/hrm

Proposition 6a: A supportive organizational culture will positively moderate the effect of individual competencies on corporate entrepreneurship. Proposition 6b: The presence of an organizational structure that is organic, has fewer hierarchical levels, and has extensive integration mechanisms will positively moderate the effect of individual competencies on corporate entrepreneurship.

Implications for Practice


The perspective offered in this article is that corporate entrepreneurship will be facilitated by taking a competency-based approach (rather than a task- or worker-based job analysis) to the specification of human capital needs. To reiterate the rationale for this, the major benefits will include enhanced person-organization fit, enhanced we expect that flexibility within the HR system, the presence of a positive effects on intrinsic motivation, and also greater consissupportive culture tency with the strategic reality that the HR function cannot will positively plan the voluntary, spontaneous, and improvised activities moderate the effect that are central to corporate enof entrepreneurial trepreneurship. This framework raises some competencies on interesting questions for the HR corporate architecture. First, with respect to staffing, it is important to exentrepreneurship. amine where these competencies reside in the organization and which employees or groups possess them. Next is the issue of whether staffing should be internal or external and how organizations can select for the competencies in this framework. With respect to training and career development, there is the question of how these competencies should be developed over time in an internal career ladder. With respect to performance management, there is the question of how this competency framework can be used effectively in promoting corporate entrepreneurship. In this section, we address these issues.

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First is the question of where should these competencies reside in the organization and which employees or groups should possess them? For the purpose of this discussion, we assume an organization that is large and complex, and therefore the corporate entrepreneurial roles are dispersed across actors in the system. We also assume that corporate entrepreneurship relies on spontaneous, Knowledge of where voluntary contributions and improvisation in response to new competent opportunities. Innovation, brokering, chambehaviors are most pioning, and sponsoring compelikely to arise will tencies can be expected to be linked to certain organizational aid in locating positions. Therefore, the need for sponsoring competence is most where assessment likely to be observed at higher and development levels in organizations in positions with greater control over activities should be necessary resources (Maidique, 1980). The demand for innovatargeted. tion competence is more likely to occur at lower levels within the organization, either at the technical core or in the interface with customers or other environmental elements. The need for brokering competence is most likely to arise in formal linking positionsfor example, task-force memberships (Hargadon, 1998, 2002). Championing and brokering competencies, being supported by credibility, personal power, and broad organizational process knowledge, are also most likely to arise in the middle layers of organizations hence, the common association of these corporate entrepreneurial activities with middle management (Howell & Higgins, 1990; Kuratko, Ireland, Covin, & Hornsby, 2005). Interestingly, the types of knowledge required as we move up the hierarchy of corporate entrepreneurial roles reflects a pattern similar to that observed in managerial roles, from an emphasis on technical knowledge in lower-level roles such as innovation, through an emphasis on social knowledge at middle levels of the hierarchy, to an emphasis on conceptual organizational knowledge at high levels within the organization. This

awareness of the broad hierarchical distribution of corporate entrepreneurial roles should guide efforts at development of required competencies. Knowledge of where competent behaviors are most likely to arise will aid in locating where assessment and development activities should be targeted. This also leads to the following theoretical proposition: Proposition 7: Across organizations that are effectively pursuing corporate entrepreneurship, there will be a positive correlation between the ordering of innovation, brokering, championing and sponsoring competencies, and formal hierarchical position. We suggest that the potential for corporate entrepreneurship to occur will be enhanced when the appropriate competencies are also widespread within the relevant level of the organization (e.g., more brokering competencies in task forces, more championing competencies among middle managers, etc.). These competencies should be developed in anticipation of the possibility of entrepreneurial opportunities faced by organizational members. When opportunities arise, the presence of these underlying characteristics will increase the probability of appropriate action. Proposition 8: The more widespread the competencies of innovation, brokering, championing, and sponsoring within the relevant level of an organization, the greater the probability for behaviors supporting corporate entrepreneurship in response to entrepreneurial opportunities. The second major question relates to the issue of make versus buy. Can organizations hope to buy these competencies on the external labor market or must they be developed internally? Because social networks, credibility, and organizational knowledge are important to the boundary-spanning and championing competencies, internal development of these roles becomes more important. Organizational tenure is likely to enhance the creation of needed internal
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networks, credibility, trust, and knowledge of who knows what within the organization (Burt, 1992, 2000; Hoang & Antoncic, 2003; Nochur & Allen, 1992). Therefore, it is important to consider planning the development of these competencies internally rather than trying to acquire them from the external market. Given the high levels of knowledge required for innovative competence, it is likely that this will be a point of entry into a possible corporate entrepreneurship career ladder. That is, since deep and broad technical knowledge is necessary, but not sufficient, for subsequent competence in brokering and championing, technical innovators may later be encouraged to develop the additional organizational knowledge and social capitalbuilding skills (e.g., emotional intelligence, influencing) required for competencies in these roles. However, because the framework identifies competent behavior as resulting from a combination of specific personality characteristics and skills, in addition to knowledge, these should be considered as important elements in the staffing decision. In particular, if consideration is being given to the longterm development of a supply of corporate entrepreneurs, the various personality characteristics identified in each of the competencies should be considered in early staffing decisions. Whether internal or external staffing policies are being considered, the competency framework allows for measurement at two levels of analysis. At the level of the competencies themselves, it is possible to directly assess behaviors indicating competent role performance. The descriptions of competencies already presented should give a reasonable indication of the types of behaviors to be expected. The specific behavioral examples will necessarily be context-driven. The second level of measurement can occur at the element level (i.e., the knowledge, skills, and personality characteristics that have been identified in the framework). The advantage of the competency framework outlined here is that it reduces the inferential leap from individual difHuman Resource Management DOI: 10.1002/hrm

ferences to job performance (Gatewood & Feild, 1998). This is because competencies, while being underlying individual characteristics, are observed only through behaviors, and the definition of competencies provides a direct basis for identification of the behaviors to be observed. For example, competent innovators will demonstrate (situationally specific) examples of innovative activity; competent boundary spanners will be observed bridging diverse knowledge across known organizational and interorganizational domains. The inclusion of personality characteristics within competency frameworks such as this a competency also raises some important issues. The first is, since personality framework implies characteristics are relatively stable characteristics, while many asthat in addition to pects of knowledge and skill can be developed by an organization, knowledge and it is important to include personskills, personality ality measurement in staffing decisions. If personality characterischaracteristics are tics are ignored, according to our framework, competent role bean important haviors may not be observed. Furelement of ther, it is unlikely that needed personality characteristics will be individual capability easily developed within an organization. A second issue that arises to perform. from the inclusion of personality characteristics is the observation that unless reliable and valid measures are used, these personal characteristics should not be used in personnel decision making. This last point leads to another major issue in the application of a competency framework. Competencies, by definition, reflect underlying characteristics of people. In a sense, competencies represent the potential for action. Furthermore, a competency framework implies that in addition to knowledge and skills, personality characteristics are an important element of individual capability to perform. However, personality characteristics are not an appropriate basis for performance evaluation, as the inclusion of such measures tends to lead to bias, dis-

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satisfaction of rater and rate, and ineffective feedback (e.g., Tziner & Kopelman, 2002; Wiersma & Latham, 1986). Therefore, if a competency framework such as the one proposed here is used to guide performance appraisal, it will be most effective to focus upon specific behaviors derived from the description of the relevant competency. These specific observable behaviors can be inferred directly from the framework. Thus, a competence framework can be used to directly derive behavCompetency iorally based performance-appraisal mechanisms, which are frameworks expected to be more valid, reliable, and acceptable to raters and enhance ratees (e.g., Tziner & Kopelman, employees 2002; Wiersma & Latham, 1986).
understanding of the

Conclusions
challenges facing their companies and

In this article, we have proposed a competency-based approach to identifying the human capital rehow their behavior quired to support corporate entrepreneurship. We believe that a contributes to firm competency-based approach is success. superior to the alternative traditional job-analytic approach for several reasons. First, only the broad behavioral requirements for corporate entrepreneurship are knowable in advance. Second, it is difficult to anticipate who in an organization will identify new opportunities or who will champion and sponsor new initiatives. Third, entrepreneurial activities may occur infrequently and erratically and are likely to be missed by more traditional methods of job analysis. Fourth, corporate entrepreneurship activities are most likely to be entered into voluntarily, and any specification of entrepreneurial responsibilities could just as likely inhibit as promote desired behaviors (Von Hippel, 1977). Rather than building these tasks into formal job descriptions, it may be more appropriate to ensure that salient employee groups have the desired competenciesthe potential to engage in corporate entrepreneurship roles should the opportunity arise. Competency frameworks enhance employ-

ees understanding of the challenges facing their companies and how their behavior contributes to firm success. There are two clear implications for our proposed competency-based model for corporate entrepreneurship. First, these competencies need to be developed across the organization. The model suggests that broad organizational knowledge and connections with social networks are central to each of the entrepreneurial roles. This implies that entrepreneurial capabilities must be nurtured over time and cannot easily be bought. The analogy here is that there must be an internal corporate entrepreneurship ladder for individuals to participate, gain experience, and be rewarded for entrepreneurial contributions as innovators, brokers, champions, and sponsors. A second implication of this competency model is that management should be proactive in nurturing these competencies and honing them through careful integration to develop an organizationwide entrepreneurial capability. Since only some elements of the competencies can be bought, and some must be developed in-house, a systematic approach that links staffing with development must be established. Such an approach would start with the identification of the areas in the organization where innovation is desired or most likely to occur. The person specifications of candidates would then include individual characteristics that are expected to predict success in entrepreneurial roles in addition to more immediately desirable job-specific characteristics. The development plan for such individuals would include cross-organizational experiences and the opportunity to acquire cross-functional and perhaps even interorganizational experiences that help build the necessary stocks of knowledge that support entrepreneurial competencies as identified in the framework. In addition to a comprehensive approach to the acquisition and development of the components of competence, the competency-based framework helps to establish support systems such as performance-assessment, incentive, and communication programs that
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are necessary to reinforce the exercise of competent behavior. To date, the direct link between individual employee characteristics and corporate entrepreneurship has received limited attention (e.g., Bantel & Jackson, 1989; Chandler et al., 2005; Deeds et al., 1998; Hayton, 2005a). Our proposed competency-based model suggests the specific,

measurable individual characteristics that are anticipated to be supportive of organizational-level outcomes. The propositions offered in this article should be empirically tested. However, we hope our proposed competency-based model serves as a useful first step in future studies of the microprocesses associated with nurturing corporate entrepreneurship.

JAMES C. HAYTON is an assistant professor at Bocconi University in Milan, Italy. He received his PhD from Georgia State University in 2002. His research focuses on the links between human capital, human resource management systems, and corporate entrepreneurship and has been published in Human Resource Management, the Journal of Business Venturing, Entrepreneurship Theory and Practice, Organizational Research Methods, Human Resource Management Review, R&D Management, the European Management Journal, the International Journal of Technology Management, and the Journal of Management Education. He also serves on the editorial boards of Human Resource Management Review and Entrepreneurship Theory and Practice and is an active member of the Human Resources Division of the Academy of Management. DONNA J. KELLEY is an assistant professor of entrepreneurship at Babson College. She received her PhD from Rensselaer Polytechnic Institute. She also has an MBA and a BA in chemistry. Prior to joining Babson, she worked as a chemist for James River Graphics and for Stanley Home Products. Dr. Kelleys publications include research on the patent, alliance, and product innovation activities of technology-based startups, focusing on computer hardware and telecommunications firms. She has also published research on management practices for innovation and corporate entrepreneurship in large, established organizations. Her current research streams include: (1) the characteristics of breakthrough patents, (2) innovation and entrepreneurship in new ventures and established organizations in Korea, and (3) the corporate entrepreneurship process in large, established organizations, with a special interest in how organizations develop practices for managing entrepreneurial projects. Dr. Kelley teaches courses on entrepreneurship, corporate entrepreneurship, managing growing businesses, and developing business plans.

NOTES
1. Corporate entrepreneurship is the process of searching for and exploiting the entrepreneurial opportunities that arise from asymmetries of market or technological knowledge. Exploitation of new opportunities occurs through starting new ventures inside or outside of the existing organization, or transforming the organization through strategic renewal (Guth & Ginsberg, 1990). Corporate entrepreneurship requires that firms take risks and be innovative and proactive (Miller, 1983). The reward is superior product market and financial performance
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(Antoncic & Hisrich, 2001; Chandler, Keller, & Lyon, 2000; Loof & Heshmati, 2002; Zahra & Covin, 1995). 2. Champions must be able to build networks and exert their influence upward and downward in the organization. However, the majority of a sponsors influence will be exerted downward. Further, because sponsors may use formal resource control and authority to influence the division of resources needed to support entrepreneurial projects, emotional intelligence and influence become less salient for this role. Therefore, we only emphasize these characteristics as being important for the competence of champions.

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