MGT 368 Entrepreneurship

Chapter 4:
Corporate Entrepreneurship

- MD Asif Hossain
Topic for today

 Types of Entrepreneurship Businesses

 Corporate Entrepreneurship Definition
 Why Corporate Entrepreneurship are
important/their Problems
 Corporate Entrepreneurship Environment
Types of Entrepreneurship Business

 1. Small Business Entrepreneurship

 2. Scalable Startup Entrepreneurship
 3. Social Entrepreneurship

 4. Corporate Entrepreneurship

Source: (Hoffman &

Casnocha, 2012)
https://www.youtube.com/watch?v=P_s_NdTNIqU
Start-up Vs SMEs

 Startup is the determination to  SMEs is more structured

grow quickly in a competitive
 SMEs are often paced at a
industry using all of the
slower growth rate and usually
innovation
work with a known formula
 The minds behind a startup are proven to be reliable.
looking to explode onto the
scene
 Being unique & being different
is the key idea behind a startup
company and they typically build
on experience as they grow

Source: Brighterbox.com [2021]

1. Small Business Entrepreneurship

 Definition: Small Business includes grocery stores, Hairdressers, travel

agents, storefront, bKash agents. They are anyone who runs his/her
own business.
 They usually hire local employee/family and make a small profit.
 Their Definition of success- feed the family, live a happy life.
 SMEs accounts for 90.91 % of total business in Bangladesh
(BSCIC,2009)
2. Scalable Startup Entrepreneurship

 These are companies which take an innovative idea/vision and turn it

into large profit by attracting big investments.
 They do so by taking away market share from competitors or creating a
new market.
 From day one, they have the vision of changing the market.
 They hire the best and brightest.
 A lot of these companies are technological/app based. Thus, when they
take off, and they are getting attention from unlimited customers, they
are able to increase profit without incurring significant cost.
 Example: Facebook, Airbnb, even Uber.

Source: Blank & Dorf, 2012

3. Social Entrepreneurship

 Definition: Social entrepreneurs are innovators who

focus on creating products and services that solve
social needs and problems.
 Their goal is to make the world a better place, not
take away market share or profit.
 Example: Grameen Bank
4. Corporate Entrepreneurship

 Definition 1: Development of new ideas and opportunities within

large or established businesses, directly leading to the improvement
of organizational profitability and enhancement of competitive
position or the strategic renewal of an existing business.
 Definition 2: Corporate Entrepreneurship is a process used to
develop new businesses, products, services or processes inside of
an existing organization to create value and generate new revenue
growth through entrepreneurial thought and action.
Examples of Corporate Entrepreneurship

IBM exercises corporate

entrepreneurship through leadership,
strategy development and monitoring

From the inception of Google,

the company has relied on its
employees for innovation
Why Corporate Entrepreneurship is
Important?
 An innovative idea and fund alone cannot guarantee sustainable
growth over a long period of time.
 Therefore, you need an environment with resources, experience,
funds and all necessary tools required to build a framework to
support innovation and new business growth.
 On Social a level there is an increasing interest in "Doing your own
thing" and doing it on your own terms.
Corporate Entrepreneurship- 4 Key
Elements:
 New Business Venturing
 Innovativeness
 Self-Renewal (Re-designing)
 Proactiveness - (Initiative/Risk-taking)
Difference in Entrepreneurial and Traditionally
Managed Firms

Trial & Error in every stages

Setting up the Corporate Entrepreneurship
Environment

 Fostering Environment- Companies are pushing

towards creating a much better work environment to
increase efficiency and foster creativity.
 Example: Skitto Office (Sim Card for young people/
Data focused- Grameen Phone)
Characteristics of an Entrepreneurial
Environment
 The organization operates
on frontiers of technology
 New ideas are encouraged
 Trial and error are
encouraged
 Failures are allowed
 No opportunity parameters
 Resources are available and
accessible
 Has a multidiscipline
teamwork approach
 Long time horizon
 Volunteer program
 Appropriate reward system
 Sponsors and champions
available
Problems of Corporate Entrepreneurship

 New corporate ventures are difficult to blend with the

existing company culture.
 Senior managers are often reluctant in embracing
innovative ideas.
 Bureaucratic organizational structures present a
challenge to corporate entrepreneurship.
 Sometimes Lack of freedom
 Lack of long term support from the organization
 Lack of support in terms of resources.
Need for Leadership Characteristics
in Successful Corporate Entrepreneurship

 Understands the environment

 Is visionary and flexible
 Creates management options
 Encourages teamwork
 Encourages open discussion
 Builds a coalition of supporters
 Persists
Learning from Failure

 Individuals who can more quickly recover from the emotions of failure
can more quickly and effectively learn from the experience and are
often more motivated to try again.
 Using a dual process model, individuals are able to quickly able to cope
with negative emotions.

- Loss Orientation- Moving through the negative emotion through

friends/family etc.
- Restoration Orientation- Distracting yourself from current failures.
Why has there been a shift in moving
towards Entrepreneurship?
 Setting up a business is easier than ever before
 Technological improvement
 Seeking for independence
 More inspiration around us. (Example, Pathao; Daraz)
 Corporations are investing in sub ventures (Corporate
Entrepreneurship) to keep their creative and brightest
people in their organization.

Entrepreneurship
Summary
 Types of Entrepreneurship Businesses (Small Business Entrepreneurship,
Scalable Startup Entrepreneurship, Social Entrepreneurship , Corporate
Entrepreneurship)
 Start-up vs SME
 Corporate Entrepreneurship Definition
 Difference between Entrepreneurially from
Traditionally Managed Firms
 Why Corporate Entrepreneurship are important/their Problems
 Corporate Entrepreneurship Environment
 There has been a shift in Entrepreneurship
ANY QUESTIONS ?
Further Reading

 https://www.bizjournals.com/bizjournals/how-to/growth-
strategies/2014/11/4-reasons-why-people-start-their-own-
businesses.html
 https://www.entrepreneur.com/article/234916
 Chapter 7- Entrepreneurship 10th Edition, Robert D.Hisrich