Innovation and Corporate Entrepreneurship: A few challenges

Author: Andrzej

Nowadays, as financial markets are integrated and international trade is flourishing, more and more companies become international.

As market competition grows, companies adapt quickly to the changes on the market and the tastes of consumers, requiring flexibility and openness from large companies. The problem is that not every managing board sees it, and still continues to conduct policy as if they owned majority market share. It cannot be denied that in some sectors there is still such a situation, but more and more country economies are developing. As a consequence the markets will still become more competitive.

These needs for change in managing the large companies gave birth to corporate entrepreneurship. In the end of twentieth some researches concentrated on CE as the factor which gives the enterprise the ability to develop the ability thanks to which the innovations can be created.

Kuratko (2007) quotes Zahra (1991) who says “corporate entrepreneurship may be formal or informal activities aimed at creating new businesses in established companies through product and process innovation and market developments. These activities may take place at the corporate, division, functional, or project levels, with the unifying objective of improving a company’s competitive position and financial performance.”

It is worth emphasising the role of innovation in CE due to the fact that all the changes which are introduced in large companies are cannot be included in “old policy box”, this does not work anymore. The key are innovative changes which bring enhancements to the structure of enterprise, logistics, products. As it is commonly known in 21 century technology stands in a very high level and the pace with which is keeps advancing is high, as a consequence the consumers get more and more demanding. This forces the companies to react very quickly and adapt new needs. Shepherd (2004) mentioned very important problem which is “ what are the main problems in managing/creating corporate innovation and entrepreneurship?”

A wide range of factors create obstacles--from inappropriate HRM through bureaucracy to the "stiffness" of a managing board which turns down all projects which might be successful. Shepherd (2004) outlines four problems:

1. Human problem because people and their organisations are focused on and exploit existing practices rather than pay attention to exploring new ideas . The more successful the company is in exploiting existing practices the harder is to convince the managing board finance exploring the new ideas or opportunities
2. The second problem is managing ideas into “good currencies” so new ideas which are innovative and entrepreneurial are implemented. The conceptions of new ideas might be individual but corporate innovation is a group achievement of pushing this idea until it will be put in this good currency.
3. Structural problem. It is very hard to build appropriate infrastructure within the company for entrepreneurship.
4. Various interest of internal and external constituents involved in corporate entrepreneurship.

Are these really the most important problems or are there anymore problems which are as significant as these?

References:

Kuratko, D., F., (2007). Corporate entrepreneurship. Available online. Accesses at 5/04/2008:


Katz, J., A., Shepherd, D.,A., (2004). Corporate Entrepreneurship. Available online. Accesses at 5/04/2008: