L5- Corporate Entrepreneurship & Strategic Renewal Flashcards
entrepreneurial opportunities
the conditions in which new goods/ services can satisfy a need in the market
strategic entrepreneurship
actively searching for opportunities (entrepreneurship) and then internally deciding on the best way to adapt and innovate (strategy) for long-term success.
three types of strategic entrepreneurship
- startups
- corporate entrepreneurship
- venture capital
Bottom Up/ Autonomous Strategic Behavior
Employees at various levels take initiative to drive innovation and pursue entrepreneurial opportunities independently within the company.
Usually involves radical changes
Top Down/ Induced Strategic Behavior (often Incremental)
Leadership directs strategic initiatives, guiding the company towards innovation.
Typically involves incremental, step-by-step changes aligned with existing goals and strategies.
two types of innovation:
- incremental: building on existing knowledge bases, and making small improvements
- radical: significant technological breakthroughs and the creation of knowledge
challenges of corporate entrepreneurship (4)
- focus on existing activities
- resource constraints
- success uncertainty
- sunk costs and long term contracts
strategies to overcome corporate ent. challenges (4)
- cross functional product dev. teams
- resource allocation for exploration
- support and legitimacy
- internal entrepreneurial culture
path dependence
the constraining influence of past stages of development on future decisions.
inertia
persistent resistance to changing organizational features
fitness
the organizational capacity to learn and change behavior/ capabilities to fit to changes in the org. environment.
Hypercompetition is an environmental condition characterized by:
- rapidly escalating competition
- high uncertainty
- heterogeneity of players
- constant change
mainly selection argues that
firms are limited to adapt to changing environments
mainly adaptation argues that
firms can intentionally adapt to changing environments
what’s under mainly selection? (4)
- population ecology
- evolutionary
- resource based
- institutional
what’s under mainly adaptation (4)
- dynamic capabilities
- behavioral
- learning
- strategic choice
structural inertia is under
population ecology
according to population ecology, what does structural inertia rise from?
investments in specialized assets
bounded rationality
political constraints
barriers to exit
evolutionary theory’s approach to strategic renewal
Views strategic renewal as a gradual process over time
Similar to nature, successful strategies endure.
competence trap relates to the ?? theory
resource based view under mainly selection
institutioal theory focuses on
ISOMORPHISM
why do all firms do the same things?
types of isomorphism (3)
- coercive
- normative
- mimetic
coercive isomorphism
same practices due to regulatory policies and political influence, compelling conformity
normative isomorphism
shared industry values and unwritten rules
mimetic isomorphism
firms imitate the strategic behavior of successful counterparts, fostering replication.
dynamic capabilites theory focuses on …
strategic renewal
allowing companies to keep core strengths fresh and adapt to evolving business environments.
what does dynamic capabilities theory assume?
Companies can develop new skills beyond their current abilities
Organizational learning is crucial for companies to become smarter and better over time.
behavioural theory view of organizatons
Behavioral theory views organizations as groups of individuals, each pursuing goals and managing resources. This happens within the confines of bounded rationality.
organizational slack
excess capacity within the organization. This surplus allows for strategic renewal by enabling the intentional allocation to develop new capabilities.
according to learning theory, the primary driver of renewal is…
he capacity to observe, interpret, and use information for reconsidering alignment with the environment.
Absorptive capacity
Absorptive capacity is the firm’s ability to appreciate, assimilate, and apply new external knowledge
learning theory focuses on (key terms)
absorptive capacity
explorative vs. exploitative learning
Strategic choice theory sees strategic renewal as a
dynamic dance between managerial actions and external forces
according to the strategic choice theory, decision makers…
Decision-makers are not merely responding; they are actively leading, adjusting their moves to the changing external factors.
Management can choose from an array of strategic options to implement: ‘degrees of freedom’
renewal trap is under (..) theory
strategic choice theory
flexibility trap
inherent tension between exploration and exploitation because they require different org. structures and processes
strategic flexibility
giving the organization a set of tools to quickly and effectively change its goals when faced with unexpected shifts in the business environment.
types of flexibility are based on:
variety & speed
Structural Flexibility has X speed X variety
structural flexibility has low speed, high variety
Operational flexibility has x speed x variety
operational flexibility has high speed, low variety
the four types of flexibility
- strcuctural
- strategic
- operational
- steady-state
steady state flexibility
Keeps things stable with minimal changes, and when adjustments occur, they’re gradual.
(low speed, low variety)
operational flexibility
Maintains stability with minimal changes, and adjustments, when needed, happen gradually.
Leverages routine capabilities for swift responses to familiar environmental changes, like variations in product volume and use of temporary labor.
structural flexibility
making intentional, slower adjustments to how the organization is set up.
Changes address things like the organization’s structure, managerial roles, alliances, and how products are designed together.
strategic flexibility
Rapidly adjusting strategic goals to address a wide range of external changes.
Strategic change, fundamentally reviewing products, impacting institutional rules.
4 organizational forms to cope with competitive environments
- rigid
- planned
- flexible
- chaotic
going from the direction of rigid to chaotic is called a
reverse trajectory of revitalization
going from the direction of chaotic to rigid is called a
natural trajectory of routinization
what type of flexibility is this?
Quick adjustments to routine capabilities for known changes.
operational flexibility
what type of flexibility is this?
Slower but more comprehensive changes to organizational structure for complex or less predictable environmental changes.
structural flexibility
what type of flexibility is this?
Rapid adjustments in strategic goals to address a wide range of external changes.
strategic flexibility
reverse trajectory of revitalization is when
established routines undergo intentional changes to create innovation and adaptability
natural trajectory of routinization is when
repetitive tasks become standardized within an organization over time
list all types of natural routinization (3)
- strategic focus
- maturation
- stagnation
list all types of reverse revitalization (3)
- professional rev.
- entrepreneurial rev.
- strategic neglect
what’s chaotic -> flexible?
strategic focus
evolving from disorderly to adaptable
what’s flexible -> planned?
maturation
transitioning from adaptable to structured
what’s planned -> rigid?
stagnation
moving from well-structured to inflexible
what’s rigid -> planned?
proffesional rev.
restructuring initially rigid processes to revitalize
what’s planned -> flexible ?
intentional changes to create flexibility, and innovation
what’s flexible -> chaotic?
strategic neglect
devolving from flexibility to chaos due to neglect
when top is passive and middle is passive
emergent renewal
when top is passive and middle is active
facilitated
when top is active and middle is active
transformational
when top is active and middle is passive
directed
Emergent renewal
happens naturally, without intentional planning. Changes occur spontaneously within the organization, adapting to circumstances rather than deliberate design.
