CE

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J. N.
Diese Lernkarten bieten einen umfassenden Überblick über unternehmerische Strategien und das Konzept der Organisationalen Ambidexterität auf Universitätsniveau. Sie behandeln Themen wie Unternehmensgründung, Risikomanagement, und die Integration von Innovationsstrategien in bestehende Geschäftsmodelle. Besonders nützlich sind sie für Studierende und Unternehmer, die lernen möchten, wie man neue Geschäftsfelder erschließt und gleichzeitig bestehende Ressourcen effizient nutzt, um sowohl kurzfristige als auch langfristige Ziele zu erreichen.
Flashcards
109
Students
3
Language
German
Category
Micro-Economics
Level
University
Created / Updated
01.03.2023 / 14.06.2023

Flashcards

Nokia 

  • Since 1960s: industrial conglomerate  producing tires, shoes, paper products, computers, cables, televisions, plastics,
  •  1980s and 1990s: big losses in the television division and a severe recession in Finland
  • 1992: new CEO Jorma Ollila makes strategic decision to only focus on telecommunications
  • 1998: largest mobile phone manufacturer in the world

Nokia issues 

  • Organizational structure & over bureaucracy
  • innovation without commercialization 
  • little focus on user experience
  • culture aund communication

Nokia, 

organizational structure and bzreaucracy

  • During growth period: decentralized, fluid, improvisational structure with freedom for people
  • Matrix structure since 2004 •
    • Not fitting for one of the fastest-moving industries
    • Bad coordination: software lease & lease back, incompatible address book features
  • 2009: restructuring of the matrix organization
    • “Solutions” becomes a third dimension •
    • Organization becomes even more rigid and top-heavy
    • Many “yeses” versus one “no”
  • Nokia Headquartes POWER POINT PLACES ( just meeting without a decision) 
  • Suppliers offering novel solutions had to wait months while Nokia managers went through rounds after round of meeting 

Take home: If you grow you have to adapt moving dinamic industry

Nokia 

Innovation without commercialization 

Portfolio of 30’000 patents • Prototype device with large color touchscreen set above a single button 7 years before the iPhone • 2005: Nokia 770 Internet Tablet • iPad launched 2010

  • they were innovative but didnt indtoduce the products because the old ones have been good sellers 

further issues

  • little focus on user experience 
  • communication ( mails about how bad it is going, no trust anymore) 
  •  

what is corporate entrepreneurship' 

It describes entrepreneurial behavior inside established organizations, indicating how entrepreneurial a firm as a whole is. 

Definition of corporate entrepreneurship 

It describes entrepreneurial behavior inside established organizations, indicating how entrepreneurial a firm as a whole 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.
  • An organization is entrepreneurial if it develops a higher than average number of new products and/or new markets.
  • 1) the birth of new businesses within existing organizations, i.e. internal innovation or venturing, and (2) the transformation of organizations t

Corporate vs. Start up Eship: both: 

 

  • Involve opportunity recognition, evaluation, and exploitation
  • Require a unique product, service, or process
  • Imply encountering resistance and obstacles
  • Entail risk and uncertainty
  • Entail a window of opportunity

corporate vs. start up Eship: Differences 

Start up Entrepreneurship / corporate entrepreneurship 

  • entrepreneur "owns" the concept od innovative idea / Company owns the concept and usually intelectual rights
  • entrepreneur owns all/much of the business / Enrepreneur may have no /little equity in the company 
  • potential rewards for the entrepreneur unlimited / clear limits on the financial rewards for corporate entrepreneurs
  • one misstep can mean failure / more room for errors; company can absorb failure 
  • flexibility in changing course, experimenting, or trying new directions / rules, procedures, and bureaucracy
  • severe resource limitations / access to finances, R&D, production facilities, sales force, distribution channel, costumer base 

corporate entrepreneurship : combining 2 Worlds 

Advantage of young firms 

  • “Start-up advantage": high level of motivation and effort
  • Flexible structures and good communication
  • Direct and quick decision processes
  • Cost advantages
  • Orientation towards the clients' needs
  • Charismatic entrepreneurs
  • „Can do“ attitude

corporate entrepreneurship : combining 2 Worlds 

Advantage o established firms 

  • Established processes and organization
  •  Know-how, networks, and resources
  • Economies of scale
  • Established brand / better marketing
  • Know about young firm's advantages

Forms of (corporate) Entrepreneurship 

independent entrepreneurship 

corporate Entrepreneurship 

  • strategic Entrepreneurship " innovate for competitive advantafe" ( class 4) 
  • corporate Venturing " Bring new business to the corporation" ( Class 3) 

What is " Corporate entreprneurship? 

Why is it important 

the global entrepreneurial revolution 

  •  Existing assumptions challenged
  • Value creation in novel ways anywhere
  • New product and service introduction at a record rate
  • Redefined: what you make, how you make it, where you sell it, how you distribute it

in a nutshell: 

  • The pace and magnitude of change are significantly greater than ever before
  • Performance and survival at stake
    • Act quickly or miss out opportunities
    • External forces force internal changes
  • Established companies can either become victims of this revolution or join it

Why is corporate entrepnreneurship important ? 

relovution 

in a nutshell

in a nutshell: 

  • The pace and magnitude of change are significantly greater than ever before
  • Performance and survival at stake
    • Act quickly or miss out opportunities
    • External forces force internal changes
  • Established companies can either become victims of this revolution or join it

Why is corporate entrepnreneurship important ? 

relovution 

Implicaitons 

  • Sustainable competitive advantage needed •
  • What is not working
    • Be static and rely on previous success •
    • Too much exploitation
    • Bureaucracy, hierarchy, and «command-and-control»
    •  
  • What is needed
    • Continually adjust, adapt, and redefine
    • Adaptability, flexibility, speed, aggressiveness, innovativeness
    • Sense that turbulence and change mean opportunity
    • Corporate entrepreneurship!

Corporate Entrepreneurship: Positive Outcomes

  • counter the threat of new entrants
  • Satisfy and retain motivated employees
  • Utilise under-exploited resources
  • Divest from non-core activities
  • Grow and diversify business activities

=> Entrepreneurship and innovation on the firm level as a key to long-term growth and performance.

A Conceptual Overview 

Employees’ entrepreneurial behavior (individual level)

  • Creation of entrepreneurial atmosphere
  • Support of subordinates
  • Generation of own ideas •
  • Implementation of entrepreneurial actions

Corporate Entrepreneurship (firm level) 

  •  New products
  • New markets
  • New services
  • Corporate venturing
  • Renewal from within

Company performance 

  • (Financial) performance
  • Growth
  • Success across generations
  • Competitive advantages
  • Survival

 

Joseph Schumpeter’s Theory 

The Theory of Economic Development« (1911)

  •  Interested in how capitalism administers existing structures, but also how it creates and destroys them
  •  Economic development is a dynamic process: it is a disturbance of the economic status quo

Central Theme: «Creative Destruction»

Entreprenurs as a desequillibrium force 

  •  Bring the economy out of the equilibrium by means of "creative destruction“
  • “Process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one“

Central Theme: «Creative Destruction»

• “Creative destruction” in detail

  • Occurs when an entrepreneur sets up a new business
  • By destroying existing market structures and shifting market shares to itself, wealth is redistributed
  • “Creative destruction process”: creation of innovations and new wealth combined with the destruction of market structures

Creative Destruction An exapmmple

1. the old ( blockbuster

2. Innovation ( Netflix) 

3. Entrepreneurial rents 

4. Imitation 

5. Growth ( rents get shared over all immitators) 

Schumpeters 5 Types of innovation

  • Introduction of a new or improved product/service
  •  Introduction of a new method of production (Fliessband) 
  • Opening of a new market (REdbull Energy drink) 
  • Utilization of a new source of supply for raw materials ( Öl) 
  • New organizational concepts for an industry (Amazon) 

Sources of Schumpeterian Opportunities 

Technological change ( Internet)

  • Makes it possible to allocate resources in different and potentially more productive ways
  • reduce transaction costs 

changes in attitude/ values ( dont get in a strangers car- uber) 

Political and regulatory changes ( flight to long distance drives) 

  • Re-allocate resources to new uses in ways that are more profitable or to re-distribute wealth from one member of society to another
  • Example: deregulation / privatization

Class 2 Entrepreneurial Orientation 

What is EO? 

  • Core concept of firm-level corporate entrepreneurship
  • Firm-level strategic orientation which captures an organization's strategy-making practices, managerial philosophies, and firm behaviors that are entrepreneurial in nature (Anderson et al., 2009)
  • “The processes, practices, and decisionmaking activities that lead to new entry”

It allows to assess how entreorenurial a business is in a very nuanced way 

EOs Independent Dimensions 

Miler

Lunkin

Zellweger 

Miller 1983: 3 Dimensions that a firm needs to have 

  • Innovativeness 
  • risk taking
  • Proactiveness

Lunkin & Dess 1996

  • Innovativeness 
  • risk taking 
  • proactivesess
  • autonomy 
  • competitive agressiveness 

Zellweger & Sieger 2012 

  • internal innovativeness 
  • external innovativeness 
  • control risk 
  • performance hazard risk
  • ownership risk 
  • proactiveness
  • Internal autonomy 
  • external autonomy 
  • competitive aggressiveness 

EO Measurement 

Questions with oposite statements. choose the one that sutes you better 

 

3x risk 

3x innovativeness 

3x proactiveness 

See folie Class 2

EO Dimensions 

Autonomy 

definisiton 

  • „The freedom granted to individuals and teams who can exercise their creativity and champion promising ideas that is needed for entrepreneurship to occur“ (Lumpkin & Dess 1996) 
  • Taking actions free of organizational constraints

Dimensions

  • Internal dimension: empowering individuals and teams
  • External dimension: autonomy from stakeholders such as banks, suppliers, customers, financial markets

Innovativeness 

  • ideas are not enough for innovation to occur
  • a busienss opportunity needs to be shaped and materialized 
  • engage in and support new ideas, producs, services or technological processes

Innovation: The successful implementation of creative ideas to exploit an opportunity within an organisation. 

Types of Innovation 

what step? 

Types 

  • product and service innovaiton
  • product process innovation
  • delivery process innovation 

Types : 

  • Invention; Nover, untried revolutionary producs, service or process (Birne) 
  • Extension; New use or different application of product that already exist ( facebook) 
  • Duplikaiton; creative replication of an existing concept ( pepsi coce)
  • Synthesis; Combination of existing factors and concepts nto a new formula ( recombination) 
  •  

Innovative form 

  • continuour innovation; incremental, stepwise innovation (cola)
  • dynamically continuous innovation; dramatic improvement over state of the art solution ( TV) 
  • discoutinous innovaitn; Breakthrough innovation, addresses need not adresses before ( Internet) 

categories of innovation

Radical innovation vs incremental innovation 

Radical innovation: 

  • fundamental rethink
  • disruptive technologies
  • nurtured for long periods 
  • worse initial performance 
  • capture new markets
  • can create new standadrs

Incremental Innovation 

  • steady improvements 
  • sustaining technologies 
  • can be repidly implemented 
  • immediate gians
  • develop customer loyalty 
  • may hiner radical change 

Product vs market innovation 

where to play , how to win matrix 

CORE: optimizing existing products for existing customers

  • use existing products and assets, serve existing markets and costumers

Adjacent: expanding from existing business into " new to the company " business 

  • add incremental products and assets, enter adjacent markets and costumers

Transformational(developing breakthroughs and inventing things for markets that dont yet exist

  • develop new producs, create new markets 

Innovativeness in the EO Context

internal and external innoaiton 

Internal innovation ( not spectacular but very important) 

  • Invisible and "unspectacular" innovation often within the firm 
  • Examples: reporting systems, management systems, governance structure, leadership styles

External innvovation 

  • innovation in the original sense 
  • Examples: new markets, products, techonological processes 
  • innovation 

Risk taking 

  • The degree to which managers are willing to make large and risky resource commitments – i.e. those which have a reasonable chance of costly failures“ (Miller & Friesen 1978, p. 932)
  • Positively associated with proactiveness

3 dimensions of risk taking 

Control risk 

  • risk of losing control over the company ( i.e. leverage) 

Performance hazard risk 

  • risk of organizational failure induced by opertative business decisions 
  • wheter a projects failure will threaten firm survival
  • ( All budget in one prototjpe very risky)

Ownership risk

  • having invested most personal wealth in only one undiversified asset 

Risk Taking vs types on innovation 

Risk high; Innvoaiton low 

  • Imitation

Risk semi Inovation semi 

  • continous ( Coce) 
  • dynamically continuos ( bit more innovation) TV

Risk high, Innovaiton high: 

  • Discntinuous ( internet) 

Proactiveness and competitive aggressiveness 

Proaciveness

  • „Processes aimed at anticipating and acting on future needs by seeking new opportunities […], introduction of new products and brands ahead of competition, strategically eliminating operations which are in the mature or declining stages of life cycle“
  • Acting on rather than reacting to environments
  • Potential first-mover advantages ( be the first to exploit it) 

Proactive: premium league asia 

Proactiveness and competitive aggressiveness 

competitive aggressiveness

  • “Refers to a firm’s propensity to directly and intensely challenge its competitors to achieve entry or improve position, that is, to outperform industry rivals in the marketplace” (Lumpkin & Dess, 1996)
  • Can be reactive (imitation of product/service)
  • Non-traditional methods of competition (e.g., distribution, marketing) SIXT COMERCIALS 

Capture Value form Innovation 

degree f behaviour change required

degree of product change involved 

behaviour change low and product change low 

  • easy sells;

limited product changes, significant behaviour changes 

  • sure failure 

significant product changes, limited behaviur changesn ( google ) 

  • smash hits 

significant product and behaviour changes ( self scan) 

  • long hauls 

EO: The more the better? 

EO and performance 

proactiveness is importand 

innovation middle

U shaped, risk taking, too much is not goof and less is not good 

Study