Academic journal article Academy of Entrepreneurship Journal

Corporate Entrepreneurship and Entrepreneurial Orientation in Corporate Environment: A Discussion

Academic journal article Academy of Entrepreneurship Journal

Corporate Entrepreneurship and Entrepreneurial Orientation in Corporate Environment: A Discussion

Article excerpt

INTRODUCTION

Corporate entrepreneurship is an exciting topic that generates significant attention in both academic and practitioner circles. It holds the promise of rejuvenating our organizations, reducing bureaucratic red tape, and making us more competitive in the global environment.

Progress in this field, however, has been hindered by the lack of agreement on the definition of corporate entrepreneurship itself and various related terminology (McFadzean, O'Loughlin, & Shaw, 2005). Notwithstanding, an observation is made that practitioners stand to benefit from the application of the accumulated academic knowledge, thereby aiding to the munificent considerations practitioners face daily. As a former practitioner turned academic, present author perceives an opportunity to explore corporate entrepreneurship from a new viewpoint, thereby attempting to marry different perspectives with significant theoretical and practitioner relevance.

Further, it is readily observed that bringing corporate entrepreneurship into an organization is more complex than previously assumed. Corporate entrepreneurship is significantly affected by, and likely represents an outcome of an entrepreneurial organizational culture (i.e., entrepreneurial orientation) as well as enabling conditions such as favorable policies, appropriate structure, vision, and so on. From practitioner perspective, a greater focus is needed in order to develop heightened understanding of enabling conditions that lead to, and facilitate the establishment of, corporate entrepreneurial outcomes.

Building on these observations, employing past research, this paper presents the reader with the framework designed to help with the implementation of CE within a firm or organization. This paper integrates concepts of EO and CE in a complementary fashion, in a manner useful to practitioner audience also.

CORPORATE ENTREPRENEURSHIP

Corporate entrepreneurship (CE) gained tremendous attention from both academics and practitioners due to its demonstrated potential to increase organizational profitability (Zahra, 1995). As managers try to ensure the continued sustainable growth, their attempts at implementing corporate entrepreneurship in their organizations are all too often frustrated by the lack of guidance and related know-how.

It is widely accepted that corporate entrepreneurship (CE) is related to firm performance (PER) (Nihat, 2006; Vozikis, Bruton, Prasad, & Merikas, 1999; Yang, Li-Hua, Zhang, & Wang, 2007; Zahra & Garvis, 2000). For example, Yang et. al.,(2007) found that each of the key dimensions of CE has a differentiated impact on performance of firms in China. Further, Nihat (2006) found that human resource management practices mediate CE--performance relationship. Similar sentiments were also expressed by Zahra and Garvis, (2000) when discussing international CE and firm performance, as well as Vozikis, et al., (1999) who examined the linkage between CE and value creation.

The importance of corporate entrepreneurship is further enhanced with the increased hostility of the global environment. Environmental hostility presents organization's management with the added uncertainty about the conditions that they will face tomorrow. It is observed that entrepreneurial organizations are more effective in hostile environments (Khamalla 1977; Filatotchev, Wright, Buck, & Zhukov, 1999; Zahra, 1993; Zahra, Covin, & Slevin, 1995; Zahra & Garvis, 2000), often attributed to the observation that CE-PER relationship is moderated by the presence of the environmental hostility (Filatotchev, Wright, Buck, & Zhukov, 1999; Zahra, 1993; Zahra, Covin, & Slevin, 1995; Zahra & Garvis, 2000). As global competition increases, it is shown that presence of corporate entrepreneurship helps firms, competing in hostile environments, to "shed past behaviors, adopt policies fostering entrepreneurship and accumulate innovative resource bundles" (John & Charles, 1994, p. …

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