Academic journal article Advances in Competitiveness Research

Integrating Entrepreneurship and Strategic Management Activities to Gain Wealth: CEOs' Perspectives

Academic journal article Advances in Competitiveness Research

Integrating Entrepreneurship and Strategic Management Activities to Gain Wealth: CEOs' Perspectives

Article excerpt

ABSTRACT

This study explored means and ways that can help CEOs achieve wealth for their firms in the era of globalization. Using a sample of CEOs of MNCs, the findings of this study indicated that the majority of the CEOs agreed that many of the activities undertaken by organizations in an attempt to achieve wealth occur within six domains: Innovations, networks, internationalization, organizational learning, top management team and governance, and growth orientation. Critical challenges facing top management and the suggested recommendations were acknowledged by the participating CEOs.

INTRODUCTION

There is a general agreement regarding positive effects entrepreneurship has on firms' efforts for creating wealth (Lyon, Lumpkin, & Dess, 2000). Entrepreneurship is defined as a context, dependent social process through which individuals and teams create wealth by bringing together unique packages of resources to exploit marketplace opportunities (Ireland, Hirt, Camp, and Sexton, 2001). According to Barringer and Bluedorn (1999), this definition suggests that if a firm gains access to a variety of resources and knows how to leverage them creatively, it gives the firm two core entrepreneurial functions; 1) strategic management which is defined as a context, specific process that includes commitments, decisions, and actions required for a firm to create wealth, and 2) learning how to develop, nurture, and exploit competitive advantages when using the strategic management process. Effective strategic management processes support new behaviors to identify and pursue competitive opportunities that were not previously recognized or exploited (Barney, 1991).

Both strategic management and entrepreneurship are concerned with decisions made by general managers who have the responsibility for a business as a whole. While strategic management is concerned with factors affecting the firm's performance (e.g., strategy, environment, and the sources of sustainable competitive advantage); entrepreneurship (considering independent firms and corporate entrepreneurship) is concerned with processes leading to venture creation. Moreover, entrepreneurship focuses on growth and innovation, while strategic management focuses on competitive advantage. However, the most compelling outcome of integrating entrepreneurship and strategic management is to create wealth (Ireland, Hitt, Camp, and Sexton, 2001).

Hence, entrepreneurial and strategic actions are at the core of wealth creation. Entrepreneurial actions are a fundamental behavior of firms by which they move into new markets, gain new customers, and combine existing resources in new ways (Smith and Gregorio, 2000). As a context, entrepreneurship is concerned primarily with identifying market opportunities and creating a set of resources through which they can be exploited. Entrepreneurship has both attitudinal and behavioral components. Lyon, Lumpkin, & Dess (2000) predicted that as the 21st century dawns, many companies across virtually all industries will consider entrepreneurial actions as essential if they are to survive in a world increasingly driven by accelerating change.

On the other hand, strategic actions are taken to select and implement the firm's strategies. Increasingly, in globally competitive organizations, many strategic actions are framed around the pursuit of entrepreneurial opportunities by taking entrepreneurial actions. Strategic actions provide the context in which innovations are developed and commercialized (Hitt, Ireland, & Hoskisson, 2001). Thus, there are intersections between entrepreneurship and strategic management. The notion of such intersections demonstrates that successful integration between entrepreneurial and strategic actions will improve the firm's ability to grow and create wealth. Wealth creation is concerned with developing sustainable income. The ability to generate growing, sustainable income streams determines whether or not companies can create wealth (Rutledge, 1993). …

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