STRATEGIC ENTREPRENEURSHIP

TOPIC 1
 INTRODUCTION TO THE CONCEPT
OF STRATEGIC ENTREPRENEURSHIP
Table 1: The birth of strategic entrepreneurship
Name of Author Year Issues relate to strategic entrepreneurship
Mintzberg 1973 Introduce the notion of entrepreneurial strategy making
Schendel&Hofer 1979 Argued that the entrepreneurial choice is at the heart of the concept of strategic
Burgelman 1983 Empirically examine the interrelationship between strategic management and entrepreneurship
inside a large corporation
Covin&Slevin 1989 Posited the concept of entrepreneurial strategy posture examining a firms competitive
orientation on a spectrum from conservative to entrepreneurial
Chittipeddi&Wallett 1991 Reviewed macroscopic trend impacting business and argue that the ethos of entrepreneurship
would pervade winning firms and that ‘the organizational’ archetype of the future will be
entrepreneurial . Its leadership, strategies, and structure will reflect entrepreneurial thinking
with associated traits such as flexibility, innovativeness, and a problem solving actions
orientation.
Day 1992 Examined the research linkages between entrepreneurship, strategy management, and
general management and offers one possible configuration of their interrelation.
Sandberg 1992 Investigated cross-fertilization opportunities between strategy management and
entrepreneurship and posited six fertile areas; innovation; new business creation; opportunities
seeking; risk assumption; top management teams; and group processes used in strategic
decisions.
Barringer&Bluedorn 1999 Studied the relationship between entrepreneurial intensity and five strategic management
practices finding statistically significant results for the impacts of scanning intensity, planning
flexibility, locus of planning and strategic controls.
Meyer & Heppard 2000 Edited the first scholarly book addressing the interface between entrepreneurship and strategy
to uncover the components of a firm’s entrepreneurial ‘dominant logic’ independent of firm size.
The Birth of Strategic Entrepreneurship
 There are three perspectives on the marriage of strategic and
entrepreneurship.
 strategic management is “dominants” over entrepreneurship (Baker
and Pollock, 2007 cited in Rensburg, 2013)
 strategic management is itself a “subset” of entrepreneurship (Browne
& Harms, 2003 cited in Rensburg, 2013)
 Strategic management “intersection” with entrepreneurship
(Rensburg, 2013).
 The former indicates that the entrepreneurship concepts can be explained
by the strategic management domains while the later argues that
strategic management only the division of entrepreneurship field.
 The “intersection” perspective agrees with the overlapping of research’s
areas and suggests that the marriage should be created through
combining the core advantages of each which are the strategic and
entrepreneurship.
The Birth of Strategic Entrepreneurship

 The term of ‘Strategic Entrepreneurship’ was first

pointed out by Herbert & Brazeal (1998 cited in
Rensburg, 2013).
 Researchers in Strategic Entrepreneurship field, studies
on board of directors’ roles, firm resources and
capabilities, and financial implications (Rensburg,2013).
 Other researchers study on the combination of
opportunities seeking behaviour (exploration) and
advantages seeking behaviour (exploitation) and relates
it to wealth creation (Hitt et al. cited in (Rensburg, 2013)
 What is Strategy?

The Implicit Strategy Model of the Past Sustainable Competitive Advantage

Decade

• One ideal competitive position in the • Unique competitive position for the
industry company

• Benchmarking of all activities and • Activities tailored to strategy

achieving best practice

• Aggressive outsourcing and • Clear trade offs and choices vis-à-vis

partnering to gain efficiencies competitors

• Advantages rest on a few key success • Competitive advantages arises from

factors, critical resources and core fit across activities
competencies

• Flexibility and rapid responses to all • Sustainability comes from the activity
competitive and market changes system, not the parts

• Operational effectiveness a given

Sources : Michael E.Porter, (1996 cited in Kuratko, D. F. &
Hodgetts, R. M., 2004: 532)
 Strategic Entrepreneurship and Strategic Management

Source : Wheelen, T. L. and Hunger, J. D. (2000 cited in

Kuratko, D. F. & Hodgetts, R. M., 2004: 521).
 How strategic management relates to strategic
entrepreneurship?

• Innovation
• Networks
• Internalization Strategic
Entrepreneurial • Organizational
actions Learning actions
• Top Management
Teams and
governance
• Growth

Source : R. Duane Ireland, Micheal A.Hitt, S. Michael Camp, Wealth Creation

and Donald L.Sexton, (2001 cited in in Kuratko, D. F. &
Hodgetts, R. M., 2004: 531)
 Components of Strategic
Entrepreneurship
Resource Management

Opportunity
Growth identification
Innovation

Strategic
Entrepreneurship
vision Acceptance
of risk
Flexibility

Dynamic capability
Sources : Kyrgidou, L. P. And
Mathew Hughes, M. (2009: 49)
 Components of Strategic Entrepreneurship

 Opportunity identification - suggested to be an important

source of competitive advantage (Hitt et al., 2002), which can
lead to entrepreneurial opportunity creation.
 Innovation or the ability to innovate - one of the distinctive
competencies of entrepreneurial firms (Kirby, 2003). Sonfield
and Luccier (1997) expand on this concept proposing that the
most effective way to position an entrepreneurial firm is to use
risk and innovation.
 Risk - referring to perceived environment (Smircich and
Stubbart, 1985). The entrepreneur does not make a conscious
decision to engage in highly risky projects, but rather their
perception of that situation is of moderate rather than of high
risk (Busenitz and Barney, 1997).

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 Components of Strategic Entrepreneurship

 Flexibility- firms should be able to respond to change quickly,

independent of their current strategy (Eisenhardt et al., 2000).
Flexibility refers to balancing structure with the freedom to
implement and change strategy (Eisenhardt et al., 2000),
which in turn will facilitate quick response to change (Bhide,
1994).
 Vision- Establishing a clear vision and developing strategy that
focuses both on opportunity and advantage within that vision
(Hitt et al., 2001) enhance opportunity identification
 Growth is related not only to innovative and creative ideas,
but also to the structure and strategy to turn such ideas into
profitable ventures resources and dynamic capabilities appear

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 Definition of Strategic
Entrepreneurship
 Strategy entrepreneurship is the use and/or stimulation
of entrepreneurial activity to achieve strategic goals,
(Kuratko & Audretsch, 2009 cited in Rensburg, 2013).
 In addition, strategic entrepreneurship is still mainly a
rather loose amalgam of a number of insights from
strategy and entrepreneurship (Foss & Lyngsie, 2011, p.
16).
 Strategic entrepreneurship describing an input-process-
output model that entails: organizational resources,
individual knowledge, and skills, and environmental
factors as inputs.
 Definition of Strategic
Entrepreneurship
 Guth & Ginsberg (1990), they replace strategic renewal
with strategic entrepreneurship relegating strategic
renewal to sub strategy of strategic entrepreneurship.
Moreover, strategic entrepreneurship can be enacted
within small medium size enterprise as well as within
large established corporations (Resburg, 2013).
 The existences of entrepreneurial behaviour in large
frim is either the result of a deliberate or an emergent
strategy or as Burgelman (1993b) described it the result
of induced strategy behaviour or autonomous strategy
behaviour.
 Strategic Entrepreneurship Theory

Sources : Kyrgidou, L. P. And Mathew Hughes,

M. (2009: 53)
 Conclusion
 Entrepreneurs do not use strategic planning for many reasons
because:
 scarcity of time
 lack of knowledge about how to plan
 lack of expertise in the planning process,
 lack of trust in others.
 Benefits to strategic entrepreneurs are:
 have better financial performance
 more efficient resource allocation
 improved competitive position
 higher employee morale
 more rapid decision making
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