STRATEGIC

ENTREPRENEURSHIP

PROFESSOR DR. MOHD RAFI BIN YAACOB

FACULTY OF ENTREPRENEURSHIP AND BUSINESS

UNIVERSITI MALAYSIA KELANTAN

INTRODUCTION TO THE
CONCEPT OF STRATEGIC
ENTREPRENEURSHIP
STRATEGY + ENTREPRENEURSHIP

STRATEGIC ENTREPRENEURSHIP
WHAT IS STRATEGY?
ROOT WORD - LATIN
Strategos – means generalship
Adopted and used in English in the early
19 century
as “Strategem”
As time goes by, has changed
“Strategy”
 WHAT IS STRATEGY?

Longman Dictionary of Contemporary English Definition, (3rd. Edition,

1995, pg.1422)
i. the skill of planning in advance the movements of armies or equipment
in a war
ii. a well-planned series of actions for achieving an aim, especially success
against an opponent.
iii. skillful planning in general
WHAT IS STRATEGY?

“the way in which a corporation endeavours to

differentiate itself positively from its competitors,
using its relative corporate strengths to better satisfy
customer needs”
Kenichi Ohmae, The Mind of the Strategist, 1982
 WHAT IS STRATEGY?
The Implicit/Suggested strategy Model of the Past Sustainable Competitive Advantage
Decade

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

• Benchmarking of all activities and achieving best • Activities tailored to strategy

practice

• Aggressive outsourcing and partnering to gain • Clear trade offs and choices vis-à-vis/against
efficiencies competitors

• Advantages rest on a few key success factors, • Competitive advantages arises from fit across
critical resources and core competencies activities

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

Sources : Michael E.Porter, (1996 cited in Kuratko, D. F. &

Hodgetts, R. M., 2004: 532)
WHAT IS ENTREPRENEURSHIP?
WHAT IS ENTREPRENEURSHIP?

Is the process of finding a gap in the market,

creating an innovation of product/service to
fill the gap, and market it with the hope of
creating successful business.
WHO IS ENTREPRENEUR? DEFINITIONS

• Someone who starts a company, arranges business deals

and takes risks in order to make a profit – Longman
dictionary
• Is a person who is willing and able to convert a new
idea or invention into a successful innovation -
Schumpeter
ENTREPRENEUR - FOUNDER

JEFF BEZOS – AMAZON BRIAN CHESKY

ENTREPRENEUR - FOUNDER

ANITA RODDICK – BODY SHOP SOICHIRO HONDA - HONDA

ENTREPRENEUR - FOUNDER
ENTREPRENEUR - FOUNDER

TONY FERNANDES ANTHONY TAN - GRAB

 DEFINITION OF STRATEGIC ENTREPRENEURSHIP

• “Strategy entrepreneurship is the use and/or stimulation (encouragement) of

entrepreneurial activity to achieve strategic goals”, (Kuratko & Audretsch, 2009
cited in Rensburg, 2013).
• Strategic entrepreneurship is still mainly a rather loose amalgam (combination) of
a number of insights from strategy and entrepreneurship (Foss & Lyngsie, 2011,
p. 16).
 DEFINITION OF STRATEGIC ENTREPRENEURSHIP

• “relegating strategic renewal and can be enacted/applied within small medium

size enterprise as well as within large established corporations” (Guth &
Ginsberg, 1990 cited inResburg, 2013).
• The existences of entrepreneurial behaviour in large frim is either the result of a
deliberate or an emergent strategy.
• Burgelman (1993b) described it as the result of induced strategy behaviour or
autonomous strategy behaviour.
 DEFINITION OF STRATEGIC ENTREPRENEURSHIP (IN GENERAL TERM)

Strategic entrepreneurship describing an input-process-

output model that entails: organizational resources,
individual knowledge, and skills, and environmental
factors as inputs.
STRATEGIC ENTREPRENEURSHIP THEORY

Sources : Kyrgidou, L. P. And Mathew Hughes, M. (2009: 53)

 TABLE 1: THE BIRTH AND DEVELOPMENT OF STRATEGIC ENTREPRENEURSHIP

Name of Author Year Issues relate to strategic entrepreneurship

Henry Mintzberg 1973 Introduced 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 examined 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.
 TABLE 1: THE BIRTH OF STRATEGIC ENTREPRENEURSHIP

Name of Author Year Issues relate to strategic entrepreneurship

William.R. 1992 Investigated cross-fertilization opportunities between strategic management and
Sandberg entrepreneurship and posited/suggested six fertile areas; i. innovation; ii.new
business creation; iii.opportunities seeking; iv. risk assumption; v. top
management teams; and vi. group processes used in strategic decisions.

Bruce.R.Barringer & 1999 Studied the relationship between entrepreneurial intensity and five strategic
Allen C.Bluedorn management practices finding statistically significant results for the impacts of
scanning intensity, planning flexibility, locus of planning and strategic controls.

G. Dale Meyer & 2000 Edited the first scholarly book addressing the interface/boundary between
Kurta A. Heppard entrepreneurship and strategy to uncover the components of a firm’s
entrepreneurial ‘dominant logic (main means accompany uses to make profits)’
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 BIRTH OF STRATEGIC ENTREPRENEURSHIP

• The entrepreneurship concepts can be explained by the strategic

management domains/fields
• Others argue 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)
 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?
Wealth Creation

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

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

and Donald L.Sexton, (2001 cited in in Kuratko, D. F. &
Hodgetts, R. M., 2004: 531)
MODEL 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)
 6 COMPONENTS OF STRATEGIC
ENTREPRENEURSHIP
• Opportunity identification - be an important means of
competitive advantage (Hitt et al., 2002), leading to
entrepreneurial opportunity creation.

UNIVERSITI MALAYSIA KELANTAN

 6 COMPONENTS OF STRATEGIC
ENTREPRENEURSHIP
• 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.

UNIVERSITI MALAYSIA KELANTAN

 COMPONENTS OF STRATEGIC
ENTREPRENEURSHIP
• Acceptance of 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).

UNIVERSITI MALAYSIA KELANTAN

 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).

UNIVERSITI MALAYSIA KELANTAN

 COMPONENTS OF STRATEGIC
ENTREPRENEURSHIP
• Vision- Establishing a clear vision and developing strategy
that focuses both on opportunity and advantage within that
vision (Hitt et al., 2001) and at the same time to enhance
opportunity identification and minimize threats.

UNIVERSITI MALAYSIA KELANTAN

 COMPONENTS OF STRATEGIC
ENTREPRENEURSHIP
• Growth is related not only to innovative and creative ideas,
but also to the structure and strategise to turn such ideas into
profitable ventures.

UNIVERSITI MALAYSIA KELANTAN

STRATEGIC ENTREPRENEURSHIP IS
INFLUENCED BY

• Resource Management
Effectively and efficiently to manage resources

• Dynamic Capability
Ability to adapt an organisation’s resources
BENEFITS STRATEGIC ENTREPRENEURSHIP

 have better financial performance

 more efficient resource allocation
 improved competitive position
 higher employee morale
 more rapid decision making
 More innovative
 Better in environmental scanning –wider perspsectives
 Can take opportunities and neutralize threats from the environment
WHY?
• 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
Do not think it is important
CONCLUSION

Strategic Entrepreneurship is a new field, where the very essence

of strategy and entrepreneurship is combined. It is very important
for entrepreneurs to know its components and fully embrace its
knowledge and use the right strategy in to determine success and
sustainability of their businesses. In the unpredictable and
competitive business environment which can change drastically,
strategic entrepreneurship is deemed very essential.
 REFERENCES
• Rensburg, D.J.V. (2013). Is Strategic Entrepreneurship a Pleonasm?. Journal of Management and
Strategy, 4, 1, 15-27.
• Kuratko, D. F., & Hodgetts, R. M. (2004). Entrepreneurship: Theory, process, practice. Mason, Ohio:
Thomson/South-Western
• Kyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: Origins, core elements and
research directions. European Business Review, 22, 1, 43-63
• Dollinger, M, J. (2008). “ENTREPRENEURSHIP: Strategies and Resources Fourth Edition”, Kelley School
of Business, Indiana University. MARSH publications, pp. 33-40.
• Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2009). Entrepreneurship. New York: McGraw-Hill Higher
Education.
• Lieberman, M. B., & Montgomery, D. B. (1988). First‐mover advantages. Strategic management
journal, 9(S1), 41-58.
• Zimmerer, T., Scarborough, N. M., & Wilson, D. (2002). Essentials of entrepreneurship and small business
management (Vol. 2). Upper Saddle River, NJ: Prentice Hall.
 REFERENCES
• Barringer, B and Ireland, D (2012) Entrepreneurship – Successfully Launching New Ventures (4th
Ed.). Pearson Education, Global Edition. (B1)
• Dollinger, Marc J., (2003) Entrepreneurship: Strategies and Resources, 3rd Edition, Prentice Hall
International Edition. (B2)
• Wickham, P. A. (2006) Strategic Entrepreneurship. (4th. Ed.). England: Pearson Education Ltd.
(B3)
• Timmons J, Spinelli S, (2007) New Venture Creation: Entrepreneurship for the 21st Century, 7th.
Edition, McGraw Hill International Edition.
• Roberts,M, Stevenson, H., Shalman, W., Marshall, P., and Hamemesh, (2007) New Business
Venture and The Entrepreneur, 6th. Edition, McGraw Hill International Edition.
THANK YOU