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CORPORATE ENTREPRENEURSHIP: THE PATH TO SUSTAINABLE DEVELOPMENT AND LEADING INNOVATION
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3185 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my
CORPORATE ENTREPRENEURSHIP: THE PATH TO SUSTAINABLE DEVELOPMENT AND LEADING INNOVATION
Meera Eeswaran School of Accounting, Finance & Quantitative Studies Faculty of Business & Management Asia Pacific University College of Technology & Innovation [email protected]
Gunaseelan Kannan School of Accounting, Finance & Quantitative Studies Faculty of Business & Management Asia Pacific University College of Technology & Innovation [email protected]
ABSTRACT
It has been said that what entrepreneurship is to the company is what speed is to an athlete. In the quest for sustainable competitive advantage, companies are finding that lower costs, higher quality and better customer service are just not enough. Today, employees are required to be faster, more flexible, more aggressive and more innovative in order to maintain a competitive edge. In short they must be “Entrepreneuristic”. Corporate entrepreneurship has been widely acknowledged by academicians and executives alike as an effective means of revitalizing organizations to improve performance. Spurring entrepreneurial behavior and exploration within established organizations, however, remains a big challenge facing today’s businesses. As organizations grow and age over time, like people in general, they tend to become set in their ways of thinking, learning, managing and decision making. Organizations become less flexible and less willing to sense and seize new opportunities. Given the importance for future sustainable growth, organizations have yet to uncover how they may reconcile conflicting demands and resolve the challenges associated with corporate entrepreneurship’s emphasis on leveraging existing opportunities as well as looking out for new ones ‘out there’. The aim of this Research paper is to address the basic concept of corporate entrepreneurship and to identify emergent opportunities for sustaining and innovating corporate entrepreneurship, in particular. It considers the challenges associated with corporate entrepreneurship and nurturing it into organizations.
Field of Research: Corporate entrepreneurship, sustainable development, innovation, revitalizing organizations.
______3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3186 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my
Introduction An entrepreneur is an individual who takes an initiative, who assumes responsibility and ownership for making things happen is both open to and able to create novelty, who manages the risks attached to the process, who the persistence to see things through to some has identified end point even when faced with obstacles and difficulties. Corporate Entrepreneurship is the process by which individuals inside organizations pursue opportunities without regard to the resources they currently control (Stevenson, Roberts, and Grousbeck, 1999). An entrepreneurial individual connect up discrete pieces of new technical knowledge that would provide a solution to a customer problem and matches this technical capability with the satisfaction of a market and garners resources and skills needed to take the venture to the next stage. This process leads to the birth of new businesses and to the transformation of organizations through a renewal of their key ideas (Guth and Ginsberg, 1990). Corporate entrepreneurship incorporated the innovative and venturing activities of an organization, this does not mean only the leaders of the organization or any other particular individual in an organization, but the entrepreneurship of the whole staff in an organization. Corporate entrepreneurship is becoming a strategy of choice for organizations attempting to maintain a competitive advantage. It has been shown that entrepreneurship plays an important role in improving productivity and promoting economic growth (Covin and Slevin, 1991; Zahra, 1991,1993; Yu, 1998). In bad and good economic times, innovation is requisite for companies seeking to remain competitive especially in uncertain and turbulent times. The essence of entrepreneurship is innovation (Schumpeter, 1934; Drucker, 1985) leading to wealth creation (Khandwalla, 1987) and sustained growth of corporations (Miller, 1983; Naman and Selvin, 1993; Lumpkin and Dess 1996; Ray and Ramachandran 1996). The motive for entrepreneurship lies in the urge to identify sources of existing and emerging customer dissatisfaction and developing solutions to eliminate them (Ramachandran, 2003). But can managers, who are expected to act like entrepreneurs really are trained to do so? According to Neal E. Thornberry (2003) results indicate that many managers can indeed be trained to act like entrepreneurs and that these actions can result in significant new value creation. However, companies who embrace on corporate entrepreneurial development activity also need to be aware of the challenges and problems that can happen, when corporate entrepreneurship instilled into organization.
Development of Corporate Entrepreneurship (Neal, 2002) Corporate entrepreneurship is quickly becoming a weapon of choice for many of these large companies. Corporate entrepreneurship is an attempt to take both the mindset and skill set demonstrated by successful start up entrepreneurs and inculcate these characteristic into the cultures and activities of a large company. Corporate entrepreneurship can be a powerful antidote to large company staleness, lack of innovation, stagnated top line growth and the inertia that often overtakes the large, mature companies of the world. At the same time, teaching managers to behave like start up entrepreneurs is a tall order, but a number of large companies have all ready embarked on this path. While the idea of corporate 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3187 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my entrepreneurship has been around for a number of years, large companies are looking anew at this concept, in their increasing search for real growth mechanisms. Four broad categories of corporate entrepreneurship have been identified in this paper:
Corporate venturing Corporate venturing involves, staring of business within a business usually emanating from a core competency or process. A bank, for example which has a core competency in transaction processing turns this into a separate business and offers transaction processing to other companies who needs mass processing of information. KFC Holdings Malaysia took its core competency in food and beverage and started a new venture involving education (KFCH International College).
Intrapreneur Intrapreneuring, first espoused by Pinchot (1985) is an attempt to take the mindset and behaviors that external entrepreneurs use to create and build businesses and bring this characteristic to bear inside and existing and usually large corporate setting. Start up entrepreneurs is often credited with being able to recognize and capture opportunities that others have either not seen or not thought worth pursuing. Companies wishing to spur innovation and find new market opportunities are most often interested in trying to inculcate some of these entrepreneurial values into their culture by creating intrapreneurs. In attempt to improve sales and profit, P&G Malaysia the well known retailer tried to create internal entrepreneurs (Business development manager) to spur innovation and new business development. They will select fresh graduates who were carefully screened in their 14 days internship program to serve the organization.
Organization transformation The third type involves “corporate renewal” or company transformation. Building structures and a culture across the organization, to support entrepreneurship, innovation and to stimulate employees to take ownership of the business. Transformation involves innovation, a new arrangement or combination of resources and results in the creation of sustainable economic value. Idris Jala the previous CEO of Malaysian Airlines, moved to Malaysia Airlines from Shell Malaysia to take a challenging role to turnaround the Malaysian airlines. Barely three months later, Idris Jala publicly unveiled his first turnaround plan, Malaysia Airlines would cut losses from RM1.7bil to RM620mil in 2006, achieve a profit of RM50mil in 2007 and a record profit of RM500mil in 2008.
Industry rule-breaking The fourth type of corporate entrepreneurship is a subset of transformation, but involves not only transformation of the enterprise but also the competitive environment of the industry into something significantly different than it was. Stopford and Baden-Fuller (1993) label this behavior as “frame-breaking change”. Many of the aforementioned dot.coms had brought about even more dramatic changes in the rules of industry competition. Amazon and Airasia is 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
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Nurturing Corporate Entrepreneurship There is something quite seductive about the notion of building entrepreneurial thinking and acting inside a large organization. We generally view external or start up entrepreneurs, who become famous and wealthy as a result of their own grit and determination, as people to be envied and perhaps emulated. Having a few of these people inside the organization might bring a breath of fresh air and challenge to the bureaucracy. Start up entrepreneurs is usually passionate to a fault with their idea and are single minded in removing barriers to its realization. Most of us wouldn’t mind a few employees like this in a large company. Start up entrepreneurs is generally more concerned about the results than following the proper processes in getting these results. They find opportunity that others either miss or perceive as unattainable. Most organization loses the entrepreneurial spirit once they cross the start up phase. The transition from an entrepreneurial growth company to a “well managed” business is usually accompanied by a decreasing ability to identify and pursue opportunities. Structure and systems give place initiatives and excitement. Organizations become moronic in the process. Some of the practices that contribute to successful management of resources inhibit the pursuit of opportunity. The assumptions about strategic and operational environments of the firm have been undergoing rapid changes and the mix of the organizational resources necessary to keep pace with them will be different. Most organization does not realize when and what changes are required and how to accomplish them, especially when the managers do not feel compelled. The whole organization should constantly breathe an air of innovation and excitement.
A firm intent on creating a corporate entrepreneurship enabling ecosystem will not only adopt an entrepreneurial strategy, but create an entrepreneurial organization that considers innovation an accepted and appropriate response to organizational problems. It will also develop appropriate practices to manage the process of creation and dissemination of knowledge generated through innovation efforts, and operate effectively as a team in order to fulfill its role of recognizing the value and opportunities presented by specialized knowledge. Such an ecosystem will help the firm reap benefits in terms of capability development and enhancement and the development of new products, services, and processes that enables it to compete effectively in the marketplace and produce superior performance. A top management team that adopts an entrepreneurial strategy and creates a milieu in the firm such strategy displays entrepreneurial leadership (Devarajan, Ramachandran, and Ramnarayan 2003).
Top management, which believes that corporate entrepreneurship can make a significant difference in a company’s ability to compete and achieve successful performance, will pursue an entrepreneurial strategy. This represents a policy decision to seek competitive advantage through innovation on a sustained basis (Mintzberg, 1983). They will: 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
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Design an organizational context conducive to the autonomous generation of entrepreneurial initiatives, this entails the creation of structures and a culture that facilitates entrepreneurial behavior Provide a sense of overall direction for innovation initiatives through an entrepreneurial vision Ensure that promising ventures receive necessary resources as they move through the uncertain development process
Thus, the role of the top management team, in firms that pursue an entrepreneurial strategy, is to build an organizational setting that stimulates exchange of information between individuals and develop a culture that encourages innovation. The team also fulfils the role of recognizing the value and opportunities presented by specialized knowledge and integrating it to create rents (Alvarez and Busenitz, 2001).
The top management team, in the context of an entrepreneurial organization must function in such a way that it solves problems, particularly in relation to innovation, in a well-honed, effortless and effective manner so that innovation activity thrives in the firm and the value of specialized knowledge created is recognized and integrated to create rents. Deftness is a quality in a group, which permits such functioning (McGrath, MacMillan, and Venkataraman 1995). For a top management team to perform well, clear, shared goals, roles must exist, communication must be accurate, sharing of information rapid, constructive confrontation encouraged, and belief and trust in each other and in the team built.
Organization and Corporate Entrepreneurship Siemens Nixdorf From the field research of (Neal,2003) A man called Heinz Nixdorf was way ahead of his time when he laid the foundation for “Nixdorf Computer AG” in 1952. Not just because he could see what the future would hold for computers, he also knew how to implement all this knowledge within practical applications which provided real benefits. For him, creativity and innovation were his native language, to be lived out every day. In the time leading up to the mid-1980’s he grew his company into the fourth-largest computer group in Europe, playing a pioneering role in many areas. Nixdorf died in 1986 and four years later, Nixdorf Computer AG was taken over by Siemens AG, and the company “Siemens Nixdorf Informations systeme AG” was born. The business succeeded in winning a great number of customers and projects as they had a globally successful name behind it. The company had a strong group of corporate entrepreneurs helming it’s move forward, reorganizing and rationalization within which produced positive operating results in 1992 to 1994, the first great wave of expansion followed in 1995. Product and service propositions were extended, and internationalization driven further forward. In 1996-97 the company experienced massive growth, and business streams such as central retail solutions (Enterprise Solutions) and product solutions for lottery companies came into being. In 1998 saw the formation of the self-contained company “Siemens Nixdorf Retail and Banking Systems GmbH” which now set about sharpening its profile in the banking and retail sectors as 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3190 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my a wholly-owned Siemens subsidiary. Increasing emphasis was placed on the development of software solutions for the company’s two chosen vertical markets, as well as the production of associated systems and equipment. October 1, 1999 the company was acquired by venture capitalist Kohlberg Kravis Roberts and Goldman Sachs Capital Partners. It parted ways with the Siemens Group and was called, Wincor Nixdorf. An independent company with global reach - Today, the company has its own subsidiaries in 34 countries and is represented by partners in more than 60 countries. SNI had approximately 35,000 employees and gross revenues of 8 billion USD. In 1995, they embarked on a two year process which attempted to systematically create corporate entrepreneurs out of 300 line managers. The company chose to create and groom their own entrepreneurs within the organization “Intrapreneurship”. The President of SNI, Gerhard Schulmeyer, embarked on an organization- wide program to turn a rather dull, old-fashioned, conservative, risk-averse culture into a more opportunistic, market- focused, fast, flexible organization. The main goal was of course to compete better with other up and coming IT vendors like IBM and HP. Babson College was approached to design a corporate entrepreneurship program to these 300 unit managers. SNI’s goal was to turn 300 managers into intrapreneurs. Siemens-Nixdorf identifies a number of managers who might have entrepreneurial tendencies. Babson College developed a 5 weeks course, which was conducted for 12 separate groups of newly appointed entrepreneurs, the program was carried out over a 2 years period. Managers who would be directly involved with their markets and be skilled enough to spot high potential new business opportunity. The program asked each manager to work on intense project, which involved the real identification, development and capture of an entrepreneurial business opportunity. The project required the completion of a formal business plan for the new venture, presentation to the executive board and competition for internal venture capital. These managers were also expected to help infect others in the organization with a newly found entrepreneurial attitude. They had to “spread the word”, creating somewhat of a chain reaction, whereby more Intrapreneurs would blossom. These intrapreneurs are accountable for identifying and pursuing, or encouraging the pursuit of, new business opportunities or innovations in current businesses. It was never a smooth-sailing adventure for SNI all the time. The company became increasingly unhappy because they had a lot of smart people who were quite good at seeing new opportunities in the marketplace, but the company was so systematic, budget obsessed, and bureaucratized that it could not capture these opportunities in a timely fashion. Today Siemens Nixdorf has grown strongly as a vendor of integrated services in the past years, above all in European countries outside Germany. Their goal is to keep on improving its global market position and work their way up to become the leaders in their market segments. They intend to tap further international growth potentials through their many businesses and by expanding their comprehensive service network. Perhaps the first question is the most critical one for companies considering teaching managers to be entrepreneurs. SNI now believe beyond any doubt that much of what start up entrepreneurs do can be taught to relatively ordinary but motivated individuals.
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Wipro Ltd From the working paper (Ramachandran, Devarajan & Sougata 2003) Though more organized and structured attempts to foster innovation in every aspect of the company has started only a few years ago, but Wipro Ltd. has a long history of innovation and intrapreneurship. It is an enigma that how a very traditional vegetable oil company incubated so many successful business ventures over the years. Wipro’s first brush with corporate entrepreneurship could be traced way back in late seventies when it started its Information Technology business. In 1977- 78, facing the unfriendly policies of the Government of India headed by Prime Minister Morarji Desai foreign corporations such as Coca Cola and IBM pulled out of India. Ajim Premji, Chairman and Managing Directors Wipro Ltd. immediately recognized that exodus of companies like IBM would create a market for Indian vendors of computers and software. Wipro entered the Infotech area and tasted early success in its Research & Development. In 1980, an energetic, committed team of 15 professional R & D and marketing managers was brought together and in a small laboratory at the Indian Institute of Science (IISc) Bangalore. The team developed the first Indian mini- computer based on Intel 8086 chip. Wipro launched its infotech business with this minicomputer to capitalize on first wave of IT boom. In 1983, Wipro Infotech limited and Wipro Systems limited were formed as two separate companies focusing on computer architecture and software and software product development respectively. A year later, the company released Wipro 456, a spreadsheet program similar to Lotus 123, a top seller in the U.S. at the time. This was followed with Wipro's first personal computer in 1986 powered by Intel 386 microprocessor. Protected by the high tariffs Wipro infotech focused on Indian market and continued to design and develop mini and personal computer fitted with operating systems and application softwares primarily for corporate clients. The company acquired licenses from some of the global hardware and software giants such as Intel for microprocessor, IBM for Unix and Sun Microsystems for servers. It developed about 100 member’s strong R&D team to assimilate the collaborator’s technology and develop architecture suited to Indian market. However, when the Indian government headed by Prime Minister P.V. Narasimha Rao opened the Indian economy in 1991, Wipro's hardware and software were no longer protected by 325 per cent duties. The quality of its hardware and software products was not good enough to take on might of global giants such as IBM, Compaq, Apple Computers and Microsoft. In a smart move, Wipro put its battalion of software programmers to work for the corporations that were streaming into India. As a result the software business got its first real impetus on export. The focus shifted from product software to service software. The real coup de grace was, however, what Wipro did with the 100 member strong R&D team, a highly competent but idle resource in the changed circumstances. The team suddenly faced a situation when its expertise was no longer required by any other division of Wipro. It was forced to look outward. The concept of “Lab on Hire” was conceived by Dr. Sridhar Mitta, the then R&D Chief at Wipro to leverage the technology competencies developed over one decade by providing R&D services to erstwhile technology partners like Intel, Sun, Motorola and Cisco. By virtue of working together in many an occasion in the eighties, this group had the understanding of the partner’s technology platform, 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3192 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my knowledge on networking and design processes. This enabled the company to start the lab on hire business and offer the R&D services to companies like Intel at a much lower cost. The concept was an instantaneous success as it created more value for customers in the way of reducing R&D cost and capture more value for the company by putting to use an idling resource group profitably. This concept was further extended to give rise Offshore Development Centre which maid offshore sourcing a truly great value proposition. Earlier the technology companies modeled their R&D centers on a fixed instead of variable cost structure. This model often restricted a company’s ability to bring a product to market in the lowest cost and shortest time possible because of the static nature of headcounts and budgets. Moreover, with the large amount of testing and verification that were required to bring a technology to market, companies with the static R&D model would very likely miss the opportunity that could be gained when there was a boom. By being at the forefront of outsourced research and development, Wipro could offer its technology customers the chance to be the first to catch opportunities when a boom hit. Over the years the R&D services business grew rapidly and became one of the main revenue earners for Wipro Technology. Later this business was renamed as Technology Solutions vertical with over 8000 member strong team working for a large number of clients that included the who’s who of the global telecommunication industry and contributing close to one quarter of Wipro Technology’s revenue. Pushing the offshore idea a little further Wipro hit upon another business opportunity to manage customer’s IT infrastructure through the Remote Infrastructure Service Model. The services were delivered from an offsite location using high availability and secure infrastructure and industry certified expert skills. The Infrastructure Service was delivered Global Command Centre (GCC) located in Bangalore to the global clients. In the last two decades there were many such cases where Wipro successfully deployed its competencies developed to support an existing business in creating new business opportunities. Another most recent example of corporate entrepreneurship at work in Wipro was how the internal quality initiatives were translated into a quality consulting practice with over 150 `customer touch' Six Sigma projects under way. The business transformation practice would engage in such projects over double that number in the future combined with consultancy in other quality models such as PCMM and CMMi. The internal quality measurements had set the benchmark for other companies and the 21 company took a conscious decision to migrate the benefits to customers' projects and processes, making a viable business in the process. Leveraging the lessons from its internal quality initiatives, the company developed a copyrighted Six Sigma for software methodologies. Wipro Technologies was increasingly getting Quality Consulting assignments where it was drawing out the blueprint for many of its customer organizations to improve their quality standards. This initiative began when Wipro customers wanted help from them to improve their quality. In the process of catering to these occasional demands of their customers, Wipro managers hit upon a very lucrative business opportunity that could leverage their existing competencies. Though the Quality Consulting business of Wipro started in 2002 and was just a little over two- years-old, but the division was fast emerging as a key contributor to the company's revenues. 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
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Within the first 7-8 months of its operation, the division contributed $1 million. During the previous fiscal, this increased to $3.5 million and is on track to double its business to $7 million in the current fiscal. The company was offering quality consulting in the BFSI and manufacturing sectors in the US and additionally to captive BPO centres in India. So far more than a dozen of customers received the expertise of the quality consulting division. From inception till date, this division had about 30-35 engagements and fine-tuned various processes for its clients. These included processes like software testing before roll-out to enable clients to move towards CMM Level 5 or Six Sigma. Wipro's quality team is nearly 150-strong. Of this nearly 55-60 people are purely for the quality consulting business. Apart from spawning many such new businesses Wipro was an incubator for a large number very successful corporate spin outs such as Mindree Consulting started by Ashok Soot and Subroto Bagchi among others, e4e Labs started by Dr. Sridhar Mitta, Exodus started by K.B. Chandrasekhar, Prio started by Ashok Narshiman and many others. The owner driven meritocracy and a very open organization completely devoid of politics in Wipro nurtured an entrepreneurial culture and allowed free space for innovation to take root and flourish. While some of the ideas got the support of the top management and were taken to the market within the umbrage of Wipro, some other ideas did not get blessings of the power that be resulting in spin outs. However, the moot point was Wipro always remained a grooming ground for entrepreneurs. In the recent years after the exodus of some top professionals from Wipro in the pursuit of their entrepreneurial ambitions the company put together a more structured innovation program and methodology to take most outstanding ideas to market on an ongoing basis. It formed the ‘Innovation Council’ in late 2000 to build intellectual property, new products and services and take most outstanding ideas to market. As the company has been attempting to move up the value ladder, there is greater need for bright innovative ideas to flow more frequently. What has been embedded in Wipro culture all these years is brought to surface in the form of a slogan “Innovation is Wipro: Wipro is Innovation”1. The vision is clear - to make Wipro habitually innovative, a place where thousand flowers bloom. The company is trying to manage the duality of simultaneous existence of high degree of individual freedom conducive for creativity and robust organizational processes to direct the innovation for creation of higher shareholder value. It puts together an innovation program towards achieving this vision. At the root of this program lie the repeated individual and collective attempts to find answers to some critical questions such as:
Are we attracting the best talent and keeping the talent challenged and contemporary? Are we creating higher value for our customers? Are we creating relatively higher value? Is creating value for customers sufficient to create value for other stakeholders and the larger community? How do we leverage our learning’s within and without the organization? Are we doing low risk experimenting to filter out “good” ideas from the truly outstanding ones? 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
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Are we taking positions on technology developments and building skills to anticipate tomorrow? In the process of work within the organization are we continuously eliminating redundancy and non-value adds? Are we capturing the benefits of small companies even as we grow rapidly?
The Innovation Council evaluates proposals and provides internal funding for the best ones. The resulting projects develop intellectual property that can be licensed to customers and integrated into their products. The Innovation Council is made up of senior managers but the ideas are gathered ‘bottom-up’. It is the engineers and project managers who are immersed in the technical issues generate the creative long-term ideas. Council’s job is to choose the best ones and sponsor the same, based on its analysis of how the resulting technologies and components will, in turn, provide value to its customers. Wipro’s approach to innovation is pragmatic, a structured process that involves sifting through ideas, identifying themes and setting clear goals. The innovation would go through various stages of approval and commitments of funds. An idea has to meet certain goal sets before going through the next stage of support. This being a very structured process leads to higher hit rates and cost effectiveness. There is also “financial measurement system” to enable Wipro staff share the gains generated by their ideas. Premji has always put emphasis on making Wipro a dynamic, evolving entity continuously innovating and actively seeking change. There has been a constant focus on bench marking and upgrading in Wipro. It keenly follows the companies like Hindustan Lever, Infosys and GE and tries to adopt the best practices. Wipro continuously compares itself with those considered best on various functions. As explained by Premji, “You may decide that Infosys is the best on a campus outlook, that Hindustan Lever is best on the quality of the induction of management trainees, that Sun Micro is best in terms of aggressive selling. You try to understand the process and see how you can bridge the gap or exceed the gap. This is a continuous process. We have councils, consisting of all our financial, human resources, quality and marketing people. They typically meet 4 or 5 times a year, one or two days each time, and significant part of the agenda is sharing what the other is better at. So that improvement of one division is quickly transferred to the rest of the company. We are using processes like six Sigma to keep on fine tuning, reducing cost, increasing productivity and maintaining and improving consistency in the quality of our execution.” This trait of Wipro to continuously explore new ideas and seek change proactively helps company transform itself several times to face the future better by warding of any threats and capitalizing on the emerging opportunities.
Entrepreneuristic & Entrepreneurism Entrepreneuristic Being ‘Entrepreneuristic’. It is a character, ability, the way one carries and presents his or herself. It is a strive, with one aim in mind, ‘success’ in the path being pursued. It does not have to be a character that someone is inborn with, it can be instilled and nurtured. Nurturing an entrepreneur had been explained in an earlier section of this paper. It is a characteristic of not only an entrepreneur, but all employees alike in an organisation. All employees should be 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3195 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my trained not only to carry out their day to days tasks stated in their job description, but to identify business opportunities and come up with ideas in taking the company to the next level. It is not only the duty of an entrepreneur (the person leading the organisation) to be able to seize opportunities and act on them. It is a holistic effort and collaboration of the entire organisation to do so. There are many who claim that CEO’s, COO’s, CFO’s and the Chairman of organisations tend to ‘Play God’ when it comes to raising ideas; with a thought that their idea is one that is workable, sensible and ideal, all at the same time. More like a suggestion, it becomes an idea that is demanded to be accepted and complied with.
The five main characteristics of an Entrepreneur are as follows:
1. Discipline Plenty of business experts claim that you can’t get anywhere as an entrepreneur without vision or creativity, but that’s simply not the truth. Instead, the one characteristics that no entrepreneur can be successful without is discipline. To build an idea into a business, you have to have the discipline to spend time slogging through the least fun parts of running a business (like the bookkeeping), rather than taking that time to do something fun. When you’re in-charge, there is no one to keep you at work except yourself — and there is no short-term consequences for skipping out early.
2. Staying calm Things can go wrong when you run your own business. Most entrepreneurs go through crises with their businesses — and more than a few wind up with outright failures on their hands. But when you’re responsible for a business, you have to be able to keep calm in any situation. Any other reaction — whether you lose your temper, frustrated or flustered — compounds the problem. Instead, a good entrepreneur must have the ability to keep his cool in an emergency or crisis. It may not make the problem easier to solve, but it certainly will not make it harder. If an entrepreneur can handle failure without frustration or anger, he or she can move past it to find success.
3. Attention to Detail Restricting your attention to the big picture can be even more problematic than ‘sweating the small stuff’. As an entrepreneur, unless venture capital has magically dropped out of the sky, a small expense can be a killer. Attention to detail that can make a small business successful when it has competition. Attention to detail can be difficult to maintain — going over ledgers can be tedious even when you aren’t trying to pay close attention — but keeping your eye on a long-term vision is just asking for a problem to sneak in under a radar.
4. Risk Tolerance Nothing is ‘for sure’ in the line of business. Even if a product tests well, the market can change, the warehouse can burn down and a whole slew of other misfortune can befall a 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3196 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my
small business. It is absolutely risky to run a business of your own and while you can get some insurance, it is not like most investment options. Even worse, if something does go wrong, it’s the entrepreneur’s responsibility — no matter the actual cause. An entrepreneur has to be willing to accept big risks, with some level of comfort.
5. Balance You can take any characteristic too far. There is a point at which attention to detail can become obsession or calm can become unemotional response. As an entrepreneur, you have to be able to balance your characteristics, getting the most of them without going over the edge. But balance for an entrepreneur goes far beyond keeping your characteristics in check, though. Just as an entrepreneur doesn’t have a boss to keep him at work when necessary, he does not have one to send him home when he is done. If you are working for yourself, you have to decide how to balance your work and home life — and if you have a day job to add into the equation, balance just gets more complicated.
The above characteristics have to be not only of the entrepreneur, but all employees alike of an organisation. Each characteristic contributes individually to the success of the business as a whole, once combined together. Collectively, an entrepreneur becomes Entrepreneuristic.
Entrepreneurism Entrepreneurism, this is more like a culture. It is a culture that is created across the board, throughout a nation. It can be defined as a set of shared attitudes, values, goals, and practices that characterizes an institution, organization, or group. “Contrary to traditional belief, entrepreneurism is not just about making money, nor is it merely about starting up a venture or owning a small business — it is a way of life, applicable to all human economic activities. Living on a planet with finite resources, humanity is sustainable only if there is constant pursuit of innovation and creativity, not just for personal gain but also for the common good.” Kao, R.W.Y., Kao, K.R. and Kao, R.R. (2002) Today, there are more and more entrepreneurs being born throughout the world, in developed countries as well as developing countries. It is important that a culture like this is created throughout an organisation. In Malaysia, there are many avenues for entrepreneurs for starting out as well as for a start-up. There are institutes, conferences, programmes that provide exposure to what entrepreneurship is all about.
Some examples of initiatives and encouraging events in Malaysia in terms of creating awareness as well as education in corporate entrepreneurship are as follows:-
Global Entrepreneurship Week A Global Entrepreneurship Week (GEW) was held in Malaysia between 14th to 20th November 2011. GEW is an initiative to inspire young people to embrace innovation, imagination and creativity. Countries across six continents come together to connect young people everywhere through local, national and global activities designed to help them explore their potential as 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3197 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my self-starters and innovators. GEW is a movement around a new generation unleashing their ideas to seek out better ways through developing young people’s knowledge, skills and networks, they can grow innovative, sustainable enterprises, having a positive impact on their lives, their families and communities.
In relation to this event, President Barack Obama, United States of America made a comment as follows:-
“Entrepreneurs are the engine of job creation in America, generating millions of good jobs. Many begin with nothing more than a good idea, and translate new product and services into vibrant businesses. To secure our Nation’s future prosperity, we must ensure that our entrepreneurs have the tools they need to survive and thrive.”
Entrepreneurship Institute Malaysia (EIM) Besides that, there is the Entrepreneurship Institute Malaysia (EIM), a professional development institution that was set up to provide membership for entrepreneurs & corporate intrapreneurs throughout the globe. Their mission is centred on “Connecting Theory with Practice” as they believe Entrepreneurship can be caught as well as taught. EIM offers professional training programmes leading to qualifications for young entrepreneurs who seek a better understanding of entrepreneurial business practices, strategic systems and for the more experienced entrepreneurs and corporate intrapreneurs who want to learn and improve their ability to manage entrepreneurial ventures and new corporate start-ups. Also, Microsoft has just produced a full-length documentary film called, “Ctrl+Alt+Compete,” which was directed by Brian Giberson. The Microsoft Malaysia office screened this movie on 18 January 2012.
A brief synopsis of the documentary film is as follows:
“There are literally thousands of start-ups being formed or in their infancy right now. Have you ever wondered what it’s like to start a company as an entrepreneur, to have to deal with the headaches of forming a company, its employees, getting funding by doing presentations and even dealing with the potential failure? The film gives viewers an inside look at the difficultly facing new start-ups through the eyes of five CEO’s (founders), their teams and the brutal truth and struggles they face. The film also features notable faces in the tech industry, like the lovely Veronica Belmont, Simon Sinek and the always cool, Cliff Bleszinski.
Conclusion and Findings Not all companies need to embrace a concept of corporate entrepreneurship. Some companies are doing quite well running their businesses in a planned, effective, and efficient manner. But some companies need a jolt, an infusion of creativity, especially if they are operating in rapidly changing or turbulent environments. New ventures were probably built because someone saw an opportunity, and that someone quickly put people and resources together in order to 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3198 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my capture that opportunity. Large, slow moving, bureaucratic organization operating in an increasingly turbulent environment that needs to do the most amount of entrepreneurial soul searching. These are the companies that must build themselves to be more opportunity- focused in both mind and body, in both vision and structure. Spearheading the company to move towards encouraging corporate entrepreneurship has its challenges though. But embarking on a course of creating a more entrepreneurial culture is always much more difficult than an organization realizes. It could mean major changes in an organization’s culture and values, challenging the traditional reward and motivations schemes. People should be allowed to make mistake and learn from them. If you don’t try, you won’t know as they say! Even though Corporate Entrepreneurship can be thought and people can be groomed to develop their potential, they should also be willing to take the risk. They have to step out of their career ladder and leave the typical career path behind. These are people who usually jump at the chance to create something new. Thus, choosing and hiring the right people is pertinent. It is important to garner the support of upper middle managers. Unfortunately there are times when these groups of people do not welcome change. They were the most threatened about trying to be corporate entrepreneurs, to step out of their comfortable shoes and walk around bare feet, to experience the realities and un-pruned track of a new venture. Creativity is in abundance in every organization. People, by nature, are creative. All of us have great ideas on a daily basis. But ideas are not opportunities. Entrepreneurs must be creative in the in the art of the deal, putting the people, resources, and energy together, shaping the deal and executing it. This requires skills. It requires an understanding of markets and marketing, finances, systems, people management, and most importantly, an understanding of one’s own strengths and weaknesses. So as we can see that corporate entrepreneurship is not about business as usual. It is about unusual businesses or unusual approaches to business.
REFERENCES
1) Antoncic, B. & Hisrich, R.D. (2005), “Corporate Entrepreneurship Contingencies and Organizational Wealth Creation ”, Journal of Manpower, Vol. 26, No. 6, PP529-543 2) Chen, J., Zhu, Z. & Anquan, W. (2004), “A System For Corporate Entrepreneurship”, Journal of Management Development, Vol. 23, No. 6, PP518-520 3) Ferriera, J. (2002), “Corporate Entrepreneurship: A Strategic And Structural Perspective” 4) Hainonen, J. & Poikkijoki, S.A. (2006), “An Entrepreneurial-Directed Approach to Entrepreneurship Education: Mission Impossible?”, Journal of Management Development, Vol. 25, No. 1, PP80-94 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC
3199 RESEARCH ( 3rd ICBER 2012 ) PROCEEDING 12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my
5) Johnson, D. (2001), “What Is Innovation and Entrepreneurship? Lesson For Larger Organizations ”, Industrial and Commercial Training, MCB University Press, Vol. 33, No. 4, PP135-140 6) McFadzen, E., O’Loughlin, A. & Shaw, E. (2005), “Corporate Entrepreneurship And Innovation: The Missing Link”, European Journal of Innovation Management, Vol. 8, No. 3, PP350-372 7) Ramachandran, K., Devarajan, T.P. & Ray, S. (2004), “Corporate Entrepreneurship: How?”, Working Paper Series, Indian School of Business 8) Thornberry, N.E. (2003), “Corporate Entrepreneurship: Teaching Managers to Be Entrepreneurs”, Journal of Management Development, Vol. 22, No. 4, PP329-344 9) Kao, R.W.Y., Kao, K.R. and Kao, R.R. (2002 ), “Entrepreneurism: A Philosophy and A Sensible Alternative for the Market Economy”
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