CULTURAL CONTEXT
Appendix 2.4: Mapa dos Sonhos (Author: Fernando Dolabela, 2002)
5.3 Defining the contents of the course
When we decided to open a course in corporate entrepreneurship, my colleague and I had been working on the topic for a few years. We had not done joint research but we discussed regularly and had developed some common understanding. We were able to agree on a definition of corporate entrepreneurship which, given the heterogeneity of the concepts subsumed under the heading, was quite an achievement. When we started discussing the objectives of the course, we both agreed that the profile of our audience should guide us. Our part-time MBAs needed to acquire information, concepts and methods they could readily use in their work environment. To reach this outcome, we had to make sure the participants could easily relate to the contents of the course.
Finally, concerning the specific concepts and messages we wanted to emphasize, we agreed to disagree: we had different perspectives and wanted to stress different aspects.
Our differences and, in some cases, our disagreements would make our teaching more lively.
5.3.1 Defining corporate entrepreneurship
Corporate entrepreneurship is a multifaceted concept that for some refers to a firm-level disposition to strategic daring (Covin and Slevin, 1991; Lumpkin and Dess, 1996; Miller, 1983; Zahra, 1993), for others to the process of new business creation within established companies (Block and MacMillan, 1993; Burgelman, 1984; Vesper, 1985) and for others still, to the adoption of entrepreneurial values and behavior by corporate staff(Pinchot III, 1985; Stevenson and Jarillo, 1990). The literature on corporate entrepreneurship is characterized by a great heterogeneity of purpose and perspective, which stems in part from the multifaceted nature of corporate entrepreneurship but also from the persistence of unsolved ‘definitional issues’ (Sharma and Chrisman, 1999).
Covering the various facets of corporate entrepreneurship in a 12-hour course destined for practitioners seemed neither feasible nor desirable. It was clear to us that the firm-level literature was too abstract for our audience and that the process literature was much closer to their experience and concerns: we thus decided to limit ourselves to this perspective and agreed to adopt Sharma and Chrisman’s (1999, p. 18) definition of corporate entrepre- neurship: ‘Corporate Entrepreneurship is the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization.’
Teaching corporate entrepreneurship the experimental way 85
5.3.2 Setting the objectives of the course
Because of the profile of our audience, our fundamental objective was to provide the par- ticipants with information and models that could help them participate in, elaborate and manage corporate entrepreneurship initiatives.
Corporate entrepreneurship is not only a concept but also a relatively widespread man- agement practice. We thought students should understand how different corporate entre- preneurship programs worked (or not) in reality, and compare and evaluate them.
Self-appraisal was another important objective of the course. We thought the partici- pants should take advantage of the course to position themselves and their company vis- à-vis corporate entrepreneurship. Had they been personally involved in intrapreneurial processes? Did they plan to? Was their company’s culture and organization favorable or not to entrepreneurial initiatives? Why? What could be done to improve this situation?
This effort of self-appraisal, combined with a knowledge of the structure and dynamics of existing corporate entrepreneurship programs, would constitute, we believed, a solid base for their future involvement.
5.3.3 Key concepts and messages
My research on corporate entrepreneurship case studies (Bouchard, 2001; 2002) had led me to realize the great diversity of realities and processes grouped under this heading.
Thus the importance of proper classification tools. The fundamental distinction between spontaneousand inducedcorporate entrepreneurship had to be emphasized and would in fact structure the syllabus of the course (see Table 5.1).
The process of spontaneous entrepreneurship has been well explained and described by R.A. Burgelman (1983) and remains remarkably similar in spite of time, space and context differences. It is not difficult to find interesting articles and case studies to nourish reflection and class discussion on the subject.
Induced corporate entrepreneurship, on the contrary, is a heterogeneous phenomenon whose structure and dynamics vary widely according to the context and the originators’
intentions. It required, according to us, special attention and a comprehensive set of con- ceptual tools in order to be correctly apprehended.
5.3.3.1 Spontaneous versus induced corporate entrepreneurship The study of sponta- neous corporate entrepreneurship is important because it makes students aware that all organizations, even the most bureaucratic, are the locus of emergent, bottom-up processes and that strategic renewal depends as much on autonomous strategic initiatives as it does on top-down change programs (cf. Burgelman, 1983).
Another key message is that just as autonomous initiatives ‘naturally’ emerge, the existing organization – the ‘mainstream’ to use Kanter and North’s terminology (1990) – ‘naturally’
86 Handbook of research in entrepreneurship education
Table 5.1 Spontaneous versus induced corporate entrepreneurship
Spontaneous corporate entrepreneurship Induced corporate entrepreneurship The unplanned process triggered by The programs put in place by companies in
employees who engage spontaneously in order to encourage and support the the development of a new activity within pursuit of business development projects
an established firm by employees and their results
resists these initiatives and often crushes them unless their initiators manage to avoid con- flict and garner appropriate support at each stage of their project. This ‘mainstream’/‘new- stream’ dialectic2is well described in a number of articles and business cases (cf. Burgelman, 1983; Dougherty and Hardy, 1996; Hamel, 2000; Hill et al., 1992) that can be analysed and commented on by the students.
The study of induced corporate entrepreneurship is also essential. In effect, over the last three decades, well-known firms such as Eastman Kodak, Xerox Corporation and Lucent Technologies in the United States, SAS, Siemens Nixdorf in Europe, and less known firms, have elaborated and launched their own formal programs destined to encourage and support entrepreneurial initiatives on the part of their employees. A number of well-written cases describe these attempts in detail: Kanter’s series on ‘entre- preneurial vehicles in established firms’ (Kanter and Richardson, 1991; Kanter et al., 1991a; Kanter et al., 1991b), Lerner and Hunt’s case (1998) on Xerox’s XTV division;
Bartlett and Mohammed’s case (1995) on 3M; Kanter et al.’s case (1997) on Siemens- Nixdorf; Amabile and Whitney’s case (1997) on Procter & Gamble’s CNV; Kanter and Heskett’s (2000) and Chesbrough and Massaro’s cases (2001) on Lucent Technologies NVG; Day et al.’s paper (2001) on Nokia’s NVO. Students can pick one of these and, in small work groups, analyse the structure of the program, its functioning and its human and economic impact. They can then compare and rank the various programs in class.
5.3.3.2 A typology of induced corporate entrepreneurship processes The analysis and comparison of corporate entrepreneurship programs reveals a great heterogeneity of purpose and configuration. We therefore propose a two-axis grid to help the students posi- tion and compare the various programs. This grid combines categories elaborated by Kanter et al. and Birkinshaw (see Figure 5.1).
In their ‘Entrepreneurial Vehicles’ series, Kanter et al. (1990) distinguish corporate entrepreneurship programs whose primary goal is economic(creating new sources of rev- enues) from corporate entrepreneurship programs whose primary goal is cultural (showing the ‘mainstream’ how to be more innovative). While some corporate entrepre- neurship programs have clearly an economic or a cultural goal, most try to combine both benefits and therefore occupy some intermediary position along the cultural–economic continuum.
Birkinshaw (1997) distinguishes focused corporate entrepreneurship from dispersed corporate entrepreneurship. Focused corporate entrepreneurship implies the creation of a distinct and autonomous organizational entity whose primary goal is the creation of new business activities. Dispersed corporate entrepreneurship, on the contrary, relies on the assumption that any employee can become an entrepreneur as long as he or she detects an opportunity and is provided with adequate resources and support. In dis- persed corporate entrepreneurship, corporate entrepreneurs also belong to the ‘main- stream’ and, at least initially, continue to perform their regular job and to report to their regular boss.
Combining the two axes, we created a grid that can be used to position corporate entrepreneurship programs. In the classroom, students use it to compare and discuss the position of the different corporate entrepreneurship programs they have to analyse and assess.
Teaching corporate entrepreneurship the experimental way 87
5.3.3.3 The building blocks of induced corporate entrepreneurship In spite of the great heterogeneity of corporate entrepreneurship programs, it is possible to find basic sim- ilarities in their design principles (Bouchard, 2002). We propose three ‘universal’ design principles or ‘building blocks’ (see Figure 5.2).
‘Providing autonomy’ is the first building block we have identified. Individual autonomy, usually restricted in large organizations, is considered by many as the central component of the entrepreneurial orientation (Lumpkin and Dess, 1996) and a basic ingredient of corporate entrepreneurship processes (Burgelman, 1983; Siegel et al., 1988). All the cor- porate entrepreneurship cases surveyed emphasize the notion of individual autonomy.
Autonomy varies in intensity and kind. At one end of the spectrum, corporate entre- preneurs who belong to a separateentity enjoy a great deal of autonomy. They are free to focus entirely on their project and, in between reviews, to use time and available resources as they wish. At the other end of the spectrum, corporate entrepreneurs who remain part of the existing organization have to meet the obligations their regular job entails.
However, as their project gains in credibility and acceptance, they are progressively granted autonomy under the form of free time and resources.
The second building block of induced corporate entrepreneurship is ‘eliciting personal commitment’. The promoters of corporate entrepreneurship programs believe that per- sonal involvement can thoroughly modify organizational dynamics, turn low morale into enthusiasm and apathy into innovativeness. In all surveyed corporate entrepre- neurship programs, individuals were encouraged to pursue projects to which they iden- tified strongly and personally, and to remain in charge of the projects from inception to completion. Corporate entrepreneurship programs provide different kinds of incentives 88 Handbook of research in entrepreneurship education
Dispersed (Integrated)
CE
Focused (Separate)
CE
Economic goal Cultural
goal
Figure 5.1 Positioning corporate entrepreneurship (CE) programs on a two-axis grid
to would be intrapreneurs, combining intrinsic rewards (such as the excitement and satisfaction deriving from the pursuit of a challenging and creative endeavor) with extrinsic rewards (external visibility, money prizes, prospect of heading one’s own activity, ‘phantom shares’ of the new venture, recognition and career advancement, and so on).
The third building block we identified is ‘controlling through funding’. Most corporate entrepreneurship programs are structured around a stage-by-stage, conditional funding process that disciplines corporate entrepreneurs and balances offtheir autonomy. Thanks to this process, the accomplishments of corporate entrepreneurs can be periodically reviewed, allowing management to reduce or increase commitment to projects as doubts concerning their potential are removed. The great parsimony with which resources are usually granted to corporate entrepreneurs also contributes to contain the cost and there- fore the risk of exploration.
5.3.3.4 A missing building block My 2002 study confirmed what Kanter et al. stated in their 1990 article, that is, that most corporate entrepreneurship programs faced serious problems at some point of their history, problems that often lead to their demise.
Furthermore, similar problems emerged in entirely different settings. Even 3M, so often cited in example in the corporate entrepreneurship literature, faces similar problems albeit in a lighter version (cf. Bartlett and Mohammed, 1997). Though it does not con- stitute a very positive message, this finding has to be shared with the students and dis- cussed with them. We have observed that the students were neither surprised nor shocked by this negative message since, for the most part, they have directly experienced the ten- sions at play between the ‘mainstream’ and the ‘newstream’, and know that the former usually prevails.
These recurrent problems have multiple causes but we believe that the main one is that the originators and managers of corporate entrepreneurship programs simply ignore the differences between independent entrepreneurship and corporate entrepreneurship and, consequently, neglect the all important process of interface management. In effect, contrary to independent entrepreneurs, intrapreneurs are embedded in an existing Teaching corporate entrepreneurship the experimental way 89
PROVIDING AUTONOMY
ELICITING COMMITMENT
CONTROLLING THROUGH
FUNDING
Balanc Contributes to es
Figure 5.2 The three building blocks of corporate entrepreneurship programs
organization and have to constantly negotiate with members of this organization to obtain resources and support, but also to maintain their autonomy.
A key message, therefore, is that ‘managing the interface’ at the macro level (overall cor- porate entrepreneurship program/rest of the organization interface), and at the micro level (single intrapreneurial project/rest of the organization interface) constitutes a criti- cal part of any corporate entrepreneurship process: in fact, we view it as the missing fourth
‘building block’ of corporate entrepreneurship programs (see Figure 5.3).
The practical implications of this fourth block in terms of structure, processes, systems and individual behaviors can be explored and discussed with the students.
In the context of corporate entrepreneurship,strategic alignment is definitely a key notion. As Burgelman (1983) has shown, the autonomous initiative/corporation interface is both organizational and strategic in nature. Though many corporate entrepreneurship programs claim they support any intrapreneurial project as long as it is economically viable, one can observe that projects which lie significantly outside the corporate strategic domain have problems of legitimacy and, consequently, tend to receive less support (unless, of course, their promoters are able to modify top management’s perception of what constitutes the corporation’s strategic domain). Strategic alignment therefore influ- ences the quality and extent of support a project might get from various actors within the corporation; it will also determine whether and how soon a project will be reintegrated in the ‘mainstream’. The message we want to pass to the students is that the difficulties faced by intrapreneurs and the risks they take depend, at least in part, on the level of strategic alignment of their project.