CE3

• Not necessarily inventors of products, services, or processes
• Turn ideas or prototypes into profitable realities

THe Dreamer: Mutual ideas but no plan 

the doers: no ideas but plan to do 

the dreamsrs to do 

• Build a spirited innovation team
• Keep your innovation «underground» until it is ready
• Circumvent bureaucratic orders
• Find a corporate sponsor
• Seek forgiveness instead of permission
• Share the glory with everyone in the team
• (suits)

• Time 
• incentives ( whats in for me as a worker?) 
• seed capital ( prototype but also human capital) 
• idea ownership and power plays ( will someone steal it?) 
• Sponsor ( corporate sponsore to have the power to put the idea up the letter) 
• energy and enthusiasm 
• Urgency ( not to much and not to less) 

The principal ( the firm owner) 

• delegates tasks to the agent 
• homo oeconomicus ( maxim)
• bears entrepreneurial / financial risk 
• long term oriented 
• goal: maximize performance 

THe agent( the employee) 

• perform tasks for the principal 
• homo oeconomicus ( utility maximizer) 
• bears financial consequences of is actions only to a limited extent 
• rather short term oriented 
• goals: salary and job security ( more abour people performance) 

agency relationship

• the principal deleates worj to the agent 
• described with the metaphor of contract
• conflicting foals and desires
• different attitudes toward risk 

agency problem 

• not the same actions are prefered 
• information asymetry
• adverse selection 
• moral hazard 

agency costs

• monitoring expenditures by the principal 
• bonding expenditures by the agent 
• the residual loss

Human Resource Management 
( Stock ownership plans, financial incentive systems) 

+

Psychological ownership 

=> alignment of interests 

=> employees entrepreneurla behavior

• Concerns the relationship between organization and employees
• Captures set of tasks associated with employee…
  • Acquiring
  • Training / developing
  • Organizing
  • Motivating

The old view

• «Personnel»
• Impose rules/procedures on employee recruiting, promotions, and firing

The new view

• Strategic role in developing core competencies
• Achieve sustainable competitive advantage through people
• HRM-related policies can foster or impede entrepreneurshi

• «Corporate Entrepreneurs cannot be assigned or appointed; they must be volunteers who bring a clear vision of what they want to create» (Chambeau & Shays 1984, p. 132)
• Each and every employee is rich in entrepreneurial potential
• How to create a work environment that supports entrepreneurial employees?

• Significant descretion / little structure ( little decision power) 
• Long term orientation ( not next week) 
• results orientation ( the way to get there is on you) 
• employee involvement ( feedback/ openness how design job) 

• reliance on external and internal candidates 
• broad career paths ( possibilities / able to climp up) 
• invest sufficient resources  ( good salary) 
• create diversity ( gender, backround, age etc. because more innovative) 
• innovative approach for hiring

• emphasis on entrepreneural skills 
• individualized training 
• long term career oriented training 

• effectiveness over efficiency ( how to get there ( efficient) is not so important ) 
• include innovative / entrepreneurship criteria 
• involve employees in criteria definition 
• tolerance of failure

• merit based ( not the longer you work here the more you get 
• tailored to individuals 
• emphasis on long term perfrmance 
• innovative elements ( for compensation ) 

• Employees have the opportunity to hold shares
  • Acquisition ( tell te emp that they can buy shares)
  • Gift
• Agents become «real» principals ( because they own shared of the company) 
• Behavioral and attitudinal changes expected

• possibility to aquire company shares 
  • employee discount ( better then the price at the stock amrket) 
  • percentage limited ( otherwise to little control) 
• (not allowed to sell the shares in a recent time, most of the time you can only sell it back to the company ) 

Waht the literature says: 
Advantages: 
- alignment od interests possible 
- real ownership with coting rights and dividends
- incentives tied tocompany performance
- tax advantages

disadvantages: 
- valuation ( disputes about price) 
- costs ( dividendes, buing back shares) 
- dilution of ownership and control rights
- exit ( you can not just fire someone/ or person can not just leave)
- administration  (expremli complex) 
- effect is unclear!!! 

• No stock ownership
• «Just» financial incentives
• Many options
• Performance-based pay
• Variable salary
• Phantom shares
•  Bonus bank
• Etc.

• Pre-defined personal and financial goals
• Max. 5 goals per year
• Defined in personal communicatio

• if you reach dies goals you have variable salary 33-34% 
  thy variable salary can be given in cash, shares or share options on top. did it work? yes they liked it 

advantages from the literature: 
- no dilusion od ownership( control rights
incentive tied to comany performance valuatin 
can be long term oriented
criteria can be deifined rater easily 
individual

AGAINST
- increase P-A proble
- can set wrong incentives ( find good incentives is really hard) 
- unethical behaviour & windoe dressing
- crowd out  intrinsic motivation 
administration / monitoring / bureaucracy
. cultural effect ( geldgel bonus) 
can be expensive

criteria: 
- revenue ( company or dividion/team 
- supervisor, multiple criteria ( success, amout projects created, non measurement creteria
- costumer evaluation
- number of priducts 

creative non financial incentives research: 
- personalized innovator or corporate entr jackets/ shirts ( RECOGNITION)
- Small cash awards for failures ( dare ot trx) 
- parking sports for the corporate entrepreneur of the month
- hero biografie on the magazin/ website 

• it is mine ""
• "The state in which individuals feel as though the target of ownership or a piece of it is 'theirs'" 
• The target can be of material or immaterial nature
• Legal/formal ownership is not necessary
•  An employee is a “psychological owner” when s/he believes that the company, or a part of it, his HIS/HER

Starting point: Psychological ownership 

Outcome ( what do people do if they have PO?) 

• extra role behavior 
• intention to stay 
• assuming responsibility 
• citizenship behavior
• job satisfaction 
• affective xommitment 
• innovative behavior
• entrepreneurial behavior? 

• The firm as part of one’s identity / one’s Self •
• Human beings want to enhance their Self (wants to feel well so wants to achieve it )
• A man’s Self is the sum total of all that he can call his . . . All these things give the same emotions. If they wax and prosper, he feels triumphant; if they dwindle and die, he feels cast down

• Enhance the performance of the business
• Alignment of goals: principal and agent (psychological principal)
• Entrepreneurial behavior as main path to achieve this goa
• ( someone who feels like an owner of a business will act like an owner of the business) 

Psychological Ownership -> Entrepreneurial behavior .> firm performance 

• feeling od responsibility 
• empowerment ( how can I improve sth? ) 
• strive for efficacy 

•  Does psychological ownership turn agents into so-called "psychological principals"?
• Does a psychological owner really behave like a real owner?
  •  Both parties would share the ultimate goal of company performance
  • Interests aligned
  • Entrepreneurial behavior is a means to contribute to this goal
  • Monitoring would lose in effectance when P.O. is high

Model 

PO- > ( Moderator: Monitoring) - > Entrepreneurial behaviour - > company performance 

if PO is high the Monitoring effect is lower. 
you dont really need the mnitoring then 

• Territoriality behaviors ( dont like if others ate in their revier)
• Reluctance to share knowledge and ideas ( my Idea and i want to follow it)
• Failure to delegate responsibility ( i can do it te best) 
• Conflicts ( bec. upper reasons) 
• Burden of responsibility ( people feel pressure to help business, hgh pressure, burnout) 
• Destructive behavior ( leaving and steal ideas)

• self - efficacy/ effectance / “A central feature of possession is the ability to affect and control the object in whatever way one wishes”( can control object, shake it etc. )
• self identity / “Ownership helps people define themselves, express their self-identity to others, and maintain the continuity of the self across time»
• having a place / place to feel at home, shape and decorate it hoe you want