Wk11: Forces working against Corporate Entrepreneurship

Question 1

What are the different constraints to corporate entrepreneurship?

Answer 1

• Systems
• Structures
• Strategic Direction
• Policies & Procedures
• People
• Culture

Question 2

Wrt CE constraints

Explain system constraints

Answer 2

Maturing, large organisations favour order, stbility & coordination.
System constraints include:
* Misdirected reward & evaluation systems (Expecting innovaton but rewarding risk-averse conservative behaviour)
* Inflexible budgeting systems
* Overly rigid planning systems
* Arbitrary cost-allocation systems

Question 3

Wrt CE constraints

Explain Structural constraints.

Answer 3

• Too many hierarchical levels
• Top-down autocratic management
• Narrow span of control (Limits employee perspective, thus limiting creativity/entrepreneurship)
• Responsibility without authority (Creates cynical employees managers since they don’t have the authority to action their entreprenuerial ideas
• Restrictive communication channels

Question 4

Wrt CE constraints

Explain Strategic direction constraints

Answer 4

• No innovative organisational goals
• No formal strategies for entrepreneurship
• No strategic vision
• No commitment from executives towards innovation and thus no good role models for the rest of the organisation

Question 5

Wrt CE constraints

Explain Policies & Procedures

Answer 5

• Policies and procedures favour consistency and order rather than novelty
• Long, complex approval cycles for new products
• Overly complex red-tape and documentation requirements
• Unrealistic performance measures and expectations put onto new projects

Question 6

Wrt CE constraints

Discuss People

Answer 6

Most important aspect in increasing Corporate entrepreneurial intensity is changing people’s attitudes and perceptions about it.
Why do people impact CE?
* They are resistant to change (especially if they are not involved or don’t understand the change)
* Fear of failure/punishment from management
* Narrow minded views of organisation
* Complacency (People get comfortable with their routines)
* Turf-protection (Trying to sieze control of an idea)
* Short-term orientation (Distracted by current work demands/expectations)
* Lack sufficient skills to manage entrepreneurial change

Question 7

Wrt CE constraints

Explain Culture.

Answer 7

Organisational culture requires strong set of well defined values aligning with entrepreneurship values.
Factors hampering entrepreneurial culture:
* Ill defined values
* Disagreement about values within the company
* Values not aligning with entrepreneurial concepts such as innovativeness, risk-taking and proactiveness.

Question 8

How do you overcome constraints to Corporate entrepreneurship?

Answer 8

• Building social capital- building up your influence & power by acquiring inventory of trust, gratitude and obligations that can be cashed in when the project needs them (Sharing information & building influence networks)
• Gaining legitimacy- Prove to executives that you have the ability to succeed through influence, previous trackrecord of success, and initial small success.
• Political tactics- Rule-oriented, rule evading, personal politics, educational, organisational interaction politics
• Acquiring resources- borrowing, begging, scavenging, amplifying resources (Benefits include lower cost of project, lower risk due to smaller initial investment and greater return on asset if successful)

Question 9

What are the limitations faced by corporate entrepreneurs?

Answer 9

• Lack of political savvy
• insufficient incentives
• Lack of time
• No reputation of success for product or entrepreneur
• Lack of sponsor
• Corporate inertia (Energy/enthusiasm is not shared by other staff)
• Lack of financial credibility (Unable to provide realistic estimates of project’s potential returns on investment)
• Lack of seed capital to get started
• No open ownership (Managers/executives try to take control as soon as project shows signs of success)

Question 10

Ethical dilemmas facing corporate entrepreneurs?

Answer 10

• Some companies have culture of excessive individualism and success at the expense of others. (Known as “Wilding”)
• Entrepreneur might act unethically due to personal values or organisational values.
• Entrepreneurs can be moral, immoral and amoral.