Strategic and Global Entrepreneurship

Entrepreneurship

• Entrepreneurship is the willingness to take risks and develop, organize and manage a business venture in a competitive global marketplace .

• An entrepreneur is someone that creates a new business. Entrepreneurs need to have a good understanding of their markets. They find out what customers want and modify their products in line with market requirements.

Strategic Entrepreneurship• Entrepreneurship involves identifying and exploiting

entrepreneurial opportunities. • create the most value entrepreneurial firms need to act

strategically. This calls for an integration of entrepreneurial and strategic thinking

• Strategic entrepreneurship is taking entrepreneurial actions using a strategic perspective/thinking.

• Strategic entrepreneurship-involves engaging in simultaneous opportunities and seeking and to design and implement entrepreneurial strategies to create wealth.

Entrepreneurs Characteristics

• Entrepreneurs demonstrate several characteristics, including those of being optimistic, highly motivated, willing to take risk and responsibility for their projects, and courageous, etc

Entrepreneurial Mind-Set

• The entrepreneurial mindset is defined as ‘a growth-oriented perspective through which individuals promote flexibility, creativity, continuous innovation and renewal’ (Ireland et al., 2003:968).

Entrepreneurial Mind-Set-Creativity

• Strategic entrepreneurship is finding and maintaining a competitive advantage in a globalised world. To successfully compete and survive in a global world, entrepreneurs must focus on new initiatives, on quality and differentiation of products and services is important.

• Globalization removes trade restrictions and tariffs,

it creates new opportunities, and challenges. However, only those who take up the opportunities can be seen as having an entrepreneurial mind-set. Regardless of firm size, entrepreneurs can find a place in the global world.

Competitive Advantage

• Allows smaller entrepreneurial companies to Providing products and services that differ in – features and performance, and thus avoid conflicting with bigger industry firms.

Strategic Entrepreneurship Model

Dimensions of Strategic Entrepreneurship. 1. Entrepreneurial mindset 2. Entrepreneurial culture3. Entrepreneurial leadership 4. Strategic management5. Creativity

Entrepreneurial Culture• Culture refers to attitudes and values which in the

case of entrepreneurship may be linked with autonomy, creativity and sense of responsibility (soft skills) and so on. It also refers to entrepreneurial knowledge and skills and management competencies which have to be acquired (hard skills).

• An entrepreneurial culture is an environment where people are motivated to innovate, create and take risks.

• In a business, an entrepreneurial culture means that employees are encouraged to bring new ideas , create new products and take risks.

Entrepreneurial Culture

• Culture can be defined as the mix of norms, values and beliefs that are shared by a particular community [be it a business community, a cultural (or ethnic) community, a country, or a geographical region].

Entrepreneurial culture Dimensions

• According to J. M. Toulouse (1990), entrepreneurial culture is described by the following set of attitudes:1. Business activities are valued.2. Individual and collective initiatives 3. Determination and perseverance

• 4. Balance between security and risk taking.5. Stability and change

• Entrepreneurship culture is the culture that nurture and develop an entrepreneurial spirit (individuals-group-organization)

Strategic Entrepreneurial

• What Can Top-level managers do to establish an entrepreneurial culture in an organization?

Developing Entrepreneurial Culture

• Entrepreneurial leaders must create a unique organizational culture that supports a global mindset and continuous innovation. Successful 21st century organizations should develop the entrepreneurial skills of administrators, faculty, staff and students by encouraging entrepreneurial thinking and behavior. Entrepreneurial leaders must develop a culture throughout organizations designed to: – Create and communicate a vision that is relevant to the dreams and aspirations of

colleagues and constituents while encouraging individuals to develop their personal goals and vision

– Inspire and motivate others to make the organizational vision a reality by creating a sense of belonging and personal fulfillment

– Develop a global mindset in individuals and organizations that embraces innovation, which includes change, technology, diversity, fun, creativity, collaboration and a strong orientation towards the future

– Empower individuals by helping them develop a more internal locus of control, a higher need for achievement and increased risk taking propensity while tapping into their aspirations, passions, strengths and talents

– Leverage both human capital (knowledge, skills and abilities) and social capital (networks and relationships) at the individual and organizational levels

– Value social responsibility, time and intuition

Business Culture• • helps individuals understand how to treat the customers,• how they should treat each other,• how they should act in their jobs, • how to generally fit in and be successful within the business.• An entrepreneurial culture is supported by people who have

a strong belief in their projects, who will invest their physical, psychological and other resources (also including those of others!) in their venture with a view to succeed.

Entrepreneur Culture

• In most cases, knowledge is transferred to others in the organization to enhance the entrepreneurial competence of the firm.

• Managers need to develop the capabilities of individuals and enable them to expand their knowledge.

Building Entrepreneurial Culture• Sustaining an entrepreneurial culture starts with who you hire. It is

essential to carefully screen prospective employees to ensure that they will fit within your culture.

• An entrepreneurial culture is sustained reward system, autonomy, respect you give to employees, and by consistent communication about vision for the company.

Creating an entrepreneurial culture creates a business that will continue to grow by adapting to change and by actively pursuing new opportunities in the market

Entrepreneur Leaders• Entrepreneur Leaders are needed to establish new

ventures and to employ others while developing new products, services and solutions.

• Entrepreneurial leaders individuals, may or may not start a business, but are needed because they behave or act in a proactive manner and move organizations forward.

• In general, entrepreneurial leaders or individuals have the ability to recognize and capitalize on opportunities, innovate, take calculated risks, adapt to rapid changes and organize resources to achieve their goals.

Entrepreneurial Leadership

• Entrepreneurial leadership refers to individual leaders who have the ability to create dynamic, competitive organizations where innovation and change are as common as employee, customers and stakeholder support (McGrath & MacMillan, 2000).

What Makes a Entrepreneurial Culture?

• Leaders/ managers establish an entrepreneurial culture. Entrepreneurial culture inspires individuals and groups to take risks, innovate and to engage in corporate entrepreneurship.

• Entrepreneurial culture occurs when individuals are empowered to create and manage their own businesses.

Class Discussion

• How are administrators and instructors in your organization learning to be more entrepreneurial?

• What advice would you give your

organization do to help individuals learn to be more entrepreneurial?

• Explain how strategic entrepreneurship helps firms create value

Strategic Entrepreneur• To be entrepreneurial, firms must develop an

entrepreneurial mind-set among their managers and employees.

• Managers must emphasize the management of their resources, particularly human capital and social capital.

• Emphasize the importance of knowledge to identify and exploit opportunities as well as to gain and sustain a competitive advantage suggests that firms must have strong human capital.

Strategic Entrepreneurship

• Research shows that by entering global markets that are new to them, firms can learn new technologies and management practices and diffuse this knowledge throughout the entire enterprise. Furthermore, the knowledge firms gain can contribute to their innovations.

Strategic Entrepreneurship

• Research shows that because of its economic importance and individual motives, entrepreneurial activity is increasing across the globe. More women are becoming entrepreneurs because of the economic opportunity entrepreneurship provides and the individual independence it affords. In the United States, for example, women are the nation’s fastest growing group of entrepreneurs.

Strategic Entrepreneurship• Cross-functional teams provide opportunities for

workers to think & act creatively.

• When handled effectively, downsizing can create arrangements through which a firm is able to focus efforts more on key tasks—e.g., those required for innovation.

• Allocating significant levels of resources to R&D can stimulate innovation.

Developing a Global Mindset and Cultivating Continuous Innovation

• Innovation is more than being creative or coming up with ideas. It is the ability to do things differently, which generates change.

• Innovation is about coming up with new ideas, products, collaborations, services and solutions that can be implemented and used.

• According to a study conducted by IBM’s Global Business Services (2006), innovation is vital to growth and sustainability in the current era of rapid change and globalization. Innovation has become essential to the success of individuals as well as new and existing organizations.

INNOVATION

• Innovation strategy should match the culture of an organization

• one of the most essential elements of innovation is risk taking.

• Leaders must realize that innovation is work. It is a constant process (Schramm, 2006), which requires knowledge, focus, persistence and purpose (Drucker, 1985). Innovation also requires the ability to lead and execute continuous change.

Innovation

• Innovation has an impact on firm outcomes.• Innovation is a key source of competitive

success for firms competing in turbulent, competitive markets.

• Innovation is intended to enhance a firm’s strategic competitiveness and financial performance.

• Research shows that firms in global industries that invest more in innovation also achieve greater returns

• that firms generally engage in three types of innovative activity:

• invention, the act of creating or developing a new product (good or service) or process idea

• innovation, the process of creating a commercializable product from invention

• imitation, the adoption of innovation by similar firms, which often leads to standardization of the product or process and lower prices—all of this while maintaining many of the same features

Entrepreneurship opportunities

• Entrepreneurial opportunities represent conditions in which new products or services can satisfy a need in the market. The essence of entrepreneurship is to identify and exploit these opportunities.

Corporate entrepreneurship

• Strategic entrepreneurship is about innovation and entrepreneurship within established organizations. This phenomenon is called corporate entrepreneurship, which is the use or application of entrepreneurship within an established firm.

INTERNATIONAL ENTREPRENEURSHIP

• Research shows that with increasing globalization, a growing number of new ventures are “born global” (i.e., started as an international concern)

• However, the firm has a higher chance of successfully competing in international markets when its top executives have international experience

Global Entrepreneurship

• Does Globalization Impact Entrepreneurship?

Economic effects of globalization

• Economic effects of globalization on Entrepreneurship are: more attention to technology and the uses of IT.

• Political effects of globalization are: less control of governments on educational system and developing human rights.

Globalization & EntrepreneurshipFocus on three things:

1. The discovery of opportunities2. The use of resources to exploit the

opportunities, and3. The engagement with international

competitionTherefore, understanding the effect of globalization on

entrepreneurship can help entrepreneurs and investors gain understand the opportunities and risks in the global environment .

Defining Global Entrepreneurship

• Global entrepreneurship is a process whereby companies are inclined to act more entrepreneurial due to the effects of globalization. This process requires entrepreneurs to alter their operations while applying innovative marketing strategies and emphasizing on quality or product specialization

Maintaining a Competitive Advantage in International Entrepreneurship

• What could a firm/organization do to maintain a competitive advantage in a Global Entrepreneurship?

• Internal Innovation• Research & Development

INNOVATION

• In most cases, innovation is developed through Research and Development (R&D).

• Research shows that R&D is the most critical factor in gaining and sustaining a competitive advantage in some industries (e.g., pharmaceuticals).

Types of Innovations• Incremental and Radical Innovation• • Most innovations are incremental. That is, they

build on existing knowledge bases and provide small improvements in the current product lines.

• Alternatively, radical innovations usually provide new significant technology and create new knowledge. Radical innovations are rare because of the difficulty and risk involved in developing them.

Internal Corporate Venturing• Internal corporate venturing represents the set of activities used to

create inventions and innovations within an organization

Internal corporate venturing involves two types of behaviors:

• Autonomous strategic behavior is a bottom-up process which enables product champions to pursue new product ideas and sponsor them through a political process until they achieve commercial success.

• • Induced strategic behavior is a top-down process where product

and process ideas are developed within the context of a firm’s existing strategy, structure, and strategic vision.

• Autonomous strategic behavior is based on a firm’s knowledge and resources that are the sources of a firm’s innovation, so a firm’s capabilities and competencies are the basis for new products and processes.

• Product champions play a critical role in advancing innovations within the firm.

• A product champion is a member of an organization who has an entrepreneurial vision (or mental image) of a new good or service and seeks to create support for its commercialization.

Induced Strategic Behavior

• • The second approach to creating internal corporate

venturing is induced strategic behavior, a top-down process where the current strategy and structure foster product innovations that are associated closely with the firm’s current strategy and structure.

• In other words, strategy is filtered through the firm’s existing structural hierarchy, a process that leads to internal innovations that are highly consistent with the firm’s current strategies.

IMPLEMENTING INTERNAL INNOVATIONS

• Cross-Functional Product Development Teams• • Cross-functional teams facilitate efforts to

integrate activities associated with different organizational functions (e.g., design, manufacturing, and marketing).

• In addition, new product development processes can be completed more quickly and the products more easily commercialized when cross-functional teams work effectively.

Barriers to Cross-Functional Teams• There are two primary barriers that may prevent the use of cross-

functional teams as a means of integrating organizational functions:

• (1) Independent mind-set of team members • (2) organizational politics.

• Organizational Politics may center on allocating resources to different functions.

• Inter-unit conflict may result from aggressive competition for resources among those representing different organizational functions.

• Individuals from different functional departments have different orientations on these dimensions and will view product development activities in different ways.

Facilitating Integration and Innovation

• Shared values and effective leadership are important to achieving

cross-functional integration and implementing innovation. Highly effective shared values are framed around the firm’s vision and mission, and they become the glue that promotes integration between functional units. Thus, the firm’s culture should promote unity and internal innovation.

• Strategic leadership is also highly important for achieving cross-

functional integration and promoting innovation. Leaders set goals and allocate resources.

• The goals include integrated development and commercialization of new goods and services. Effective strategic leaders also ensure a high-quality communication system to facilitate cross-functional integration.

How can firms create value from the internal processes?

• Promote an entrepreneurial mind-set is necessary so that managers and employees will consistently try to identify entrepreneurial opportunities the firm can pursue by developing new goods and services and new markets.

• • Create Cross-functional teams promote integrated new product

ideas and commitment to their implementation.

• Promote effective leadership and shared values , which promote integration and vision for innovation and commitment to it.

• Focus on the creation of value for the customers and shareholders by developing new products

Creating Value from Innovation

• An entrepreneurial mind-set must be developed so that managers and employees seek to identify and exploit opportunities for new goods and services and new markets.

• Cross-functional teams are important to promote integrated new product, design, ideas, and commitment

summary

• Entrepreneurs and small businesses are no longer limited to domestic markets. In fact, it is becoming a must for locally oriented entrepreneurs to participate and compete in the international market

Globalization

• Globalization is an inevitable multi-dimensional process, and a new historical experience which traversed (rises) economic borders to cultural, and political space. It affects different aspects of education system such as economy, culture, and politic.

Effects of Globalization on Entrepreneurship

• Economic effects of globalization on entrepreneurship are: more attention to technology and the uses of IT. Political effects of globalization are: less control of governments on educational system and developing human rights. The cultural effects of globalization are: developing the culture of western countries and shortening the local culture. It can be a risk to the values of religion and nationality for schools in their curriculum.

• Globalization is not only an economical phenomena but it is the most important aspect of economy. Some of the researchers believed globalization of economy could be transmitted to the politic, culture

and society

Corporate Entrepreneurship?

• Define the term as the process by which teams within an established company conceive, foster, launch and manage a new business that is distinct from the parent company but leverages the parent’s assets, market position, capabilities or other re-sources