Page 27 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes 2.2 Entrepreneurial Models

First, though, what exactly is corporate entrepreneurship? We define the term as the process by
which teams within an established company conceive, foster, launch and manage a new business
that is distinct from the parent company but leverages the parent’s assets, market position,
capabilities or other resources. It differs from corporate venture capital, which predominantly
pursues financial investments in external companies. Although it often involves external partners
and capabilities (including acquisitions), it engages significant resources of the established
company, and internal teams typically manage projects. It’s also different from spinouts, which
are generally constructed as stand-alone enterprises that do not require continuous leveraging
of current business activities to realize their potential.

Figure 2.1: Emerging Models of Entrepreneurship

Source: http://sloanreview.mit.edu/files/2008/12/49115-si1-lo6.png

2.2.1 The Opportunist Model

All companies begin as opportunists. Without any designated organizational ownership or
resources, corporate entrepreneurship proceeds (if it does at all) based on the efforts and
serendipity of intrepid “project champions” – people who toil against the odds, creating new
businesses often in spite of the corporation.

The opportunist model works well only in trusting corporate cultures that are open to
experimentation and have diverse social networks behind the official hierarchy (in other words,
places where multiple executives can say “yes”). Without this type of environment, good ideas
can easily fall through organizational cracks or receive insufficient funding. Consequently, the
opportunist approach is undependable for many companies. When organizations get serious
about organic growth, executives realize they need more than a diffused, ad hoc approach. As a
result of its past success with minimally invasive surgical procedures, Zimmer has instituted
more formalized development practices for bringing new businesses to market. As such, the
company has begun to evolve beyond the opportunist model.

2.2.2 The Enabler Model

The basic premise of the enabler model is that employees across an organization will be willing
to develop new concepts if they are given adequate support. Dedicating resources and processes

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