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Proceeding Corporate Entrepreneurship: The See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/267368726 CORPORATE ENTREPRENEURSHIP: THE PATH TO SUSTAINABLE DEVELOPMENT AND LEADING INNOVATION Article CITATIONS READS 0 469 2 authors: Meera Eeswaran Gunaseelan Kannan Asia Pacific University of Technology and Innovation Asia Pacific University of Technology and Innovation 1 PUBLICATION 0 CITATIONS 1 PUBLICATION 0 CITATIONS SEE PROFILE SEE PROFILE Some of the authors of this publication are also working on these related projects: Accounting Education & Employability: Bridging the Gap View project All content following this page was uploaded by Gunaseelan Kannan on 26 August 2016. The user has requested enhancement of the downloaded file. 3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC 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
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