Week 7 Flashcards
Why diversify?
Spread the risk
Why can acquisitions be successful?
Because firms gain access to knowledge that has the potential to meaningfully contribute to enhanced innovative outputs in other operations held by the firm
Define Strategic entrepreneurship
Strategic entrepreneurship involves taking entrepreneurial actions using a strategic perspective
What’s the main responsibility of top level managers focusing on emerging brands or innovation?
Verify that their firms is consistently finding entrepreneurial opportunities.
Define corporate entrepreneurship
Corporate entrepreneurship is the use or application of entrepreneurship within an established firm
Define entrepreneurial opportunities
Conditions in which new goods or services can satisfy a need in the market
Name the three types of innovative activities according to joseph schumpeter
- Invention is the act of creating or developing a new produt or process.
- Innovation is a process used to create a commercial product from an invention;
- Imitation is the adoption of a similar innovation by different firms.
Firms invest in Research and development to produce two types of innovations:
Incremental and novel
What are incremental innovations?
Incremental innovations build on existing knowledge bases and provide small improvements in current products
What are novel/ breakthrough innovations
Novel or breakthrough innovations usually provide significant technological changes and create new knowledge
Define internal corporate venturing
Internal corporate venturing is the set of activities firms use to develop internal inventions and especially innovations
Define Autonomous strategic behaviour
Autonomous strategic behaviour is a bottom-up process in which product champions pursue new ideas, often through a political process, by means of which they develop and coordinate the actions required to innovate and to bring the innovation to the market.
Define a product champion
An individual with an entrepreneurial mindset who seeks to create support for developing an innovation.
What’s induced strategic behaviour?
A top-down process whereby the firm’s current strategy and structure foster innovations that are closely associated with that strategy and structure.
What do cross-functional product development teams facilitate?
Efforts to integrate activities associated with different organisational functions, such as design, manufacturing, and marketing
How can innovation be achieved through cooperative strategies?
Alliances with other firms can contribute to innovations:
- They provide info on new business opportunities and the innovations that might be developed to exploit them
- Firms use cooperative strategies to align what they believe are complementary assets with the potential to lead to future innovations
- Combining complementary assets through alliances has the potential to result in breakthrough innovations.
What are the risks of innovation through cooperative strategies;
The conflict is natural when firms try to work together to reach a mutual goal
Members of an alliance also take a risk that a partner will appropriate their technology or knowledge and use it for its own benefit.
What does the ideal partnership look like in innovation through strategic cooperation?
The ideal partnership is one in which the firms have complementary skills as well as compatible strategic goals.
How does innovation through acquisition work?
Firms sometimes acquire companies to gain access to their innovations and to their innovative capabilities
What are the risks of innovation through Acquisition?
A firm may substitute an ability to buy innovations for an ability to develop them internally.
This may result when a firm concentrates on financial controls to identify, evaluate, and then manage acquisitions.
Define path dependance (strategic renewal)
Path dependance is the influence of past stages in organizational development on future decisions and actions.
Define strategic renewal
Strategic renewal can be understood as the adaptive choices and actions a firm undertakes to alter its path dependance and maintain a dynamic strategic fit with changing environments over time
Name the two theories that explain organizational renewal:
Selection
Adaptation
Explain the selection theory that explains organizational renewal:
The selection perspective has a deterministic approach to viewing the interaction between firms and their environment. From a selection perspective, firms are assumed to be limited in their ability and agility for adaptation.
Explain the population ecology theory
Views renewal at the level of populations of firms.
Define Relative intertia
Relative intertia is the notion that organizations internal rate of change is too slow to respond to the rate of change in the external environment.
Define Hyper competition
Hyper competition is an environmental condition characterized by rapidly escalating competition, highly uncertainty, heterogeneity of players and constant disequilibrium and change.
Explain the resource-based theory
Views the firm as a bundle of tangible and intangible resources and tacit know-how that must be identified, selected, developed and deployed to generate superior performance
