Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

CHAPTER 8

Intrapreneurship and

Corportate Venturing

PART 2

LEADING AND MANAGING

THE ENTREPRENEURIAL

ORGANISATION

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Influences on Organisational Architecture

Architecture Strategy

Leadership

Environment

Culture

Structure

and size

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Structures to Encourage

Entrepreneurship

• Intrapreneurship

• Corporate Venturing

• Bring the market inside – spin offs etc.

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Intrapreneurs

• Goal orientated

• Ambitious

• Competitive

• Questioning

• Self motivated

• Dislike bureaucracy

• Comfortable with change

• Adept at politics

• Good at resolving conflict

• Able to work with others

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Needs of Intrapreneurs

• High level sponsor

• Space to break the rules

• Slack to pursue project

• Motivation to pursue project

• A culture that ‘tolerates’ intrapreneurship

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

10 Commandments of Intrapreneurship

1. Come to work prepared to be fired

2. Get round orders that stop your dream

3. Do anything, regardless of your job description, to make your project work

4. Build a network of people to help

5. Build the best team – motivated & flexible

6. Work ‘underground’ as long vas possible

7. Be loyal & truthful to your sponsor

8. Its better to ask forgiveness than permission

9. Be true to your goals, but be realistic

10. Own the project & always persevere

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Encouraging Intrapreneurship

BASIC FACTORS

Commitment

Knowledge resources

Corporate venturing, cross

functional teams, external

networks, internationalisation

Finance &

materials

Hierarchy

Tolerance of lower

risksNo penalisation

Sponsors

INTRAPRENEURIAL FACTORS

REWARD

MANAGEMENT

SUPPORT

RESOURCES

ORGANISATIONAL

STRUCTURE

RISK

Regular pay,

job security

Promotion, autonomy, ‘slack’,

responsibility, recognition, bonus

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Organising New Venture

Developments

Special

Business

Unit

New Product

Business

Department

Direct

Integration

Complete

Spin-off

Independent

Business

Unit

New Venture

DivisionContracting

Micro New

Business

Department

Nurturing

and

Contracting

Strategic Importance

Very important Uncertain Not importantOp

era

tio

nal

Rela

ted

nes

s

Unrelated

Partly

related

Very

related

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Corporate Venturing

Key to success is good ‘strategic fit’:

• Strong relationship with core competencies

of venturing company - effective synergy

or

• Acquiring skills, technologies or customers

that compliment the strategic direction of

venturing company - effective knowledge

transfer

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Advantages of Corporate Venturing

• Facilitates innovation and knowledge import

• External sources of finance may be easier to

access

• Facilitates creation of semi-autonomous

units with their own cultures, incentives and

business models

• Often involves highly motivated staff

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Disadvantages of Corporate Venturing

• Requires investment, normally equity, which

can be risky

• Requires investment in venture mechanisms

that set up venture management and

networks that search out, evaluate and

generate deal flows

• Investing company will not be in complete

control of innovation