The Nature of Strategic Entrepreneurship and Strategy Implementation

Practice flashcards covering the nature of strategic entrepreneurship, internal innovation, strategy implementation, corporate governance, and ethical responsibilities of business firms as discussed in the lecture notes.

Strategic entrepreneurship

Taking entrepreneurial actions using a strategic perspective while simultaneously focusing on finding opportunities in the external environment to exploit through innovations.

Corporate entrepreneurship

The use or application of entrepreneurship within an established firm, often linked to its survival and success.

Entrepreneurship

The process by which individuals or groups identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control.

Entrepreneurial opportunities

Conditions in which new goods or services can satisfy a need in the market, existing due to competitive imperfections and asymmetrically distributed information.

Creative destruction

A process where entrepreneurship results in the replacement of existing products or methods with new products and production methods.

Innovation (Peter Drucker)

The specific function of entrepreneurship, whether in an existing business, a public service institution, or a new venture.

Invention

The act of creating or developing a new product or process, bringing something new into being based on technical criteria.

Innovation

The process of creating a commercial product from an invention, bringing something new into use based on commercial criteria.

Imitation

The adoption of an innovation by similar firms, usually leading to product or process standardization and lower prices with fewer features.

Entrepreneurs

Individuals, acting independently or as part of an organization, who see an entrepreneurial opportunity and take risks to develop an innovation to pursue it.

Entrepreneurial mind-set

A perspective that values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead to innovations.

Incremental innovations

Innovations that build on existing knowledge bases and provide small improvements in current product lines; they are evolutionary and linear in nature.

Radical innovations

Innovations that provide significant technological breakthroughs and create new knowledge; they are rare due to high difficulty and risk.

Autonomous strategic behavior

A bottom-up process in which product champions pursue new ideas and coordinate their commercialization until market success is achieved.

Product champion

An organizational member with an entrepreneurial vision of a new good or service who seeks to create support for its commercialization by using social capital.

Induced strategic behavior

A top-down process where the firm’s current strategy and structure foster innovations that are highly consistent with that existing strategy.

Processes (Internal Corporate Ventures)

The patterns of interaction, coordination, communication, and decision making employees use to convert innovations into market entries.

Organizational structures

The sets of formal relationships that support organizational processes in the context of internal corporate ventures.

Seeds versus weeds

An innovation dilemma where companies must decide which innovative ideas are likely to bear fruit and which should be cast aside.

Experience versus initiative

The dilemma of choosing between senior managers with credibility but risk-aversion and midlevel employees with enthusiasm for specific problems.

Internal versus external staffing

The choice between internal staff, who know organizational culture but may struggle to think 'outside the box,' and external personnel who require recruiting and training.

Building capabilities versus collaborating

The choice between developing new skills internally or partnering with other companies, which can share costs but create dependencies.

Incremental versus preemptive launch

The decision between a tentative launch that acts as a market test and a large-scale launch that requires more resources but can preempt competition.

Strategy implementation

The action stage of strategic management involving mobilizing workers and managers to put formulated strategies into action.

Corporate design

The process of deciding how an organization should create, use, and combine organizational structure, control systems, and culture to pursue a business model.

Comprehensive implementation programme

An approach used when an organization makes a major change in strategic direction, driving new strategies regardless of environmental reactions.

Incremental implementation programme

An approach used in conditions of great uncertainty, characterized by small changes, flexible timetables, and short time spans.

Selective implementation programme

A compromise approach involving a major programme developed in selective areas only, used when radical change might encounter substantial resistance.

Synergy

Exists in a divisional corporation if the return on investment (ROI) of each division is greater than what the return would be if they were independent.

Shared know-how

A form of synergy involving the leveraging of core competencies by sharing knowledge or skills between combined units.

Logical incrementalism

A concept by J B Quinn suggesting that strategic change may need to proceed in small stages rather than a single, final organization structure.

Strategic change

The proactive management of change in organizations to achieve clearly identified strategic objectives through new patterns of action, belief, and attitudes.

Corporate governance

The set of mechanisms used to manage relationships among stakeholders and to control the strategic direction and performance of organizations.

Board of Directors

Representatives of investors who have both the authority and responsibility to establish business policies and oversee top management.

Social Responsibility of business

The duties and obligations of a business directed towards the welfare of society and the protection of public interest.

Milton Friedman's View

The perspective that a business's only responsibility is to its shareholders and that social responsibility is a 'fundamentally subversive doctrine.'

Economic responsibilities (Archie Carroll)

The management's duty to produce goods and services of value to society so the firm may repay creditors and shareholders.

Legal responsibilities (Archie Carroll)

Responsibilities defined by governments in laws that management is expected to obey, such as non-discriminatory hiring.

Ethical responsibilities (Archie Carroll)

The duty of management to follow generally held beliefs about behavior in society, such as planning for layoffs with the community.

Discretionary responsibilities (Archie Carroll)

Purely voluntary obligations assumed by a corporation, such as philanthropic contributions or providing day-care centers.

Business ethics

Refers either to organizational ethics in a competitive market or to the business itself acting as a distinct entity competitively.

Strategy evaluation

A management process of monitoring company activities and performance outcomes to compare actual performance against desired performance.

Consistency (Rumelt's Criteria)

The qualitative evaluation criterion stating that a strategy must not present mutually inconsistent objectives and policies.

Consonance (Rumelt's Criteria)

The criterion requiring that a strategy represents an adaptive response to the external environment and its critical changes.

Strategic control

A process providing feedback to top management about whether the strategic management processes are appropriate and functioning in the desired direction.

Macro-environment monitoring

The first step of strategic control, focusing on external forces like the economy or legislative changes that influence strategic implementation.