Chapter 13: Strategic Entrepreneurship 435
Many analysts believe that innovation is required to be competitive in global markets
over time. Earlier, we listed the top ten countries for entrepreneurial activity. The United
States was ranked third, but it was among mostly emerging-economy countries trying
to encourage more entrepreneurial activities. The list of the top countries that invest
in and produce the most innovation is different, primarily established countries. And
the United States is number six in this ranking. The top ten innovative countries are:
South Korea, Japan, Germany, Finland, Israel, United States, Sweden, Singapore, France,
and United Kingdom.^132 Thus, the competition is significant, requiring even well-known
and respected firms such as American Express to be innovative if they wish to compete
effectively and survive over time. They must practice strategic entrepreneurship.
SUMMARY
■ Strategic entrepreneurship involves taking entrepreneurial
actions using a strategic perspective. Firms using strategic
entrepreneurship simultaneously engage in opportunity-
seeking and advantage-seeking behaviors. The purpose is
to continuously find new opportunities and quickly develop
innovations and exploit them.
■ Entrepreneurship is a process used by individuals, teams,
and organizations to identify entrepreneurial opportunities
without being immediately constrained by the resources
they control. Corporate entrepreneurship is the application
of entrepreneurship (including the identification of entre-
preneurial opportunities) within ongoing, established organ-
izations. Entrepreneurial opportunities are conditions in
which new goods or services can satisfy a need in the market.
Entrepreneurship positively contributes to individual firms’
performance and stimulates growth in countries’ economies.
■ Firms engage in three types of innovative activities:
■ invention, which is the act of creating a new good or
process
■ innovation, or the process of creating a commercial
product from an invention
■ imitation, which is the adoption of similar innovations by
different firms.
Invention brings something new into being while innovation
brings something new into use.
■ Entrepreneurs see or envision entrepreneurial opportunities
and then take actions to develop innovations and exploit
them. The most successful entrepreneurs (whether they are
establishing their own venture or are working in an estab-
lished organization) have an entrepreneurial mind-set, which is
an orientation that values the potential opportunities available
because of marketplace uncertainties.
■ International entrepreneurship, or the process of identifying
and exploiting entrepreneurial opportunities outside the firm’s
domestic markets, is important to firms around the globe.Evidence suggests that firms capable of effectively engaging
in international entrepreneurship generally outperform those
competing only in their domestic markets.
■ Three basic approaches are used to produce innovation:
■ internal innovation, which involves R&D and forming
internal corporate ventures
■ cooperative strategies such as strategic alliances
■ acquisitions
Autonomous strategic behavior and induced strategic behavior are
the two forms of internal corporate venturing. Autonomous strate-
gic behavior is a bottom-up process through which a product cham-
pion facilitates the commercialization of an innovation. Induced
strategic behavior is a top-down process in which a firm’s current
strategy and structure facilitate the development and implemen-
tation of product or process innovations. Thus, induced strategic
behavior is driven by the organization’s current corporate strategy
and structure, while autonomous strategic behavior can result in a
change to the firm’s current strategy and structure arrangements.
■ Firms create two types of innovations—incremental and
novel—through internal innovation that takes place in the
form of autonomous strategic behavior or induced strategic
behavior. Overall, firms produce more incremental innovations,
but novel innovations have a higher probability of significantly
increasing sales revenue and profits. Cross-functional integra-
tion is often vital to a firm’s efforts to develop and implement
internal corporate venturing activities and to commercialize
the resulting innovation. Cross-functional teams now com-
monly include representatives from external organizations,
such as suppliers. Additionally, integration and innovation
can be facilitated by developing shared values and effectively
using strategic leadership.
■ To gain access to the specialized knowledge required to inno-
vate in the global economy, firms may form a cooperative
relationship, such as a strategic alliance with other companies,
some of which may be competitors.