Academic journal article Entrepreneurship: Theory and Practice

Corporate Entrepreneurship, Knowledge, and Competence Development

Academic journal article Entrepreneurship: Theory and Practice

Corporate Entrepreneurship, Knowledge, and Competence Development

Article excerpt

The importance of corporate entrepreneurship (CE) for successful organizational performance and renewal has been the subject of interest in the literature over the past three decades. In one of the earliest studies, Peterson and Berger (1971) show that entrepreneurial activities help companies to develop new businesses that create revenue streams. CE activities also enhance a company's success by promoting product and process innovations (Burgelman, 1983a, 1991). Similarly, in one of the most influential studies, Miller (1983) defines CE as embodying risk taking, pro-activeness, and radical product innovations. These CE activities can improve organizational growth and profitability and, depending on the company's competitive environment, their impact may increase over time (e.g., Brazeal, 1993; Kanter, 1985; Zahra, 1991, 1993a, 1993b; Zahra & Covin, 1995). The empirical evidence is compelling that CE improves company performance by increasing the firm's pro-activeness and willingness to take risks, and by pioneering the development of new products, processes, and services (Kuratko, Montagno, & Hornsby, 1990; Lumpkin & Dess, 1996; Zahra, Covin, & Zahra, 1998; Zahra & Pearce, 1994). Given this firmly established base for the effectiveness of CE, we believe that research should now focus on identifying the underlying processes that determine the contributions of CE to a company's performance.

In this paper, we argue that formal and informal CE activities can enrich a company's performance by creating new knowledge that becomes a foundation for building new competencies or revitalizing existing ones. The knowledge-creation process within CE activities and the subsequent strategic use of this knowledge are tightly linked to the firm's learning and unlearning processes (Stopford & Baden-Fuller, 1990; Zahra & Das, 1993b). Executives, intrapreneurs, and CE champions, therefore, need to understand the dynamics of organizational learning, appreciate the nature of the knowledge created by and within CE activities, and use this knowledge to develop new competencies or improve existing ones. Thus, some of the most profound contributions of CE activities may lie in its links with the larger organizational learning processes that increase the company's competencies in assessing its markets or creating and commercializing new knowledge-intensive products, processes, or services (Burgelman, 1983a, 1983b, 1983c; Kanter, 1985; Zahra, 1995). In many areas, CE activities can create new knowledge that can improve the firm's ability to respond to changes in its markets by enhancing the company's competencies and thus determine the results of competitive rivalries among firms. Consequently, understanding the processes associated with a company's knowledge creation and exploitation within CE activities is the subject of this paper.

OBJECTIVES AND CONTRIBUTIONS

Three key concerns in contemporary management research also justify our focus on the development of knowledge within CE activities. The first is the growing recognition of the importance of new knowledge generation in the process of self-renewal by established companies (Brown, 1991; Stopford & Baden-Fuller, 1990). This process typically requires the unlearning of old skills while learning new ones. Organizational renewal demands the acquisition and use of new knowledge while shedding old routines, systems, and structures (Zahra, 1993a; Zahra & Garvis, 1999). Yet, both learning and unlearning are time-consuming, complex processes. Cultivating the knowledge created from an organization's learning and unlearning processes is an important managerial challenge, one that requires the resolution of challenging political, financial, organizational, and strategic issues (Brown, 1991; Dougherty & Heller, 1994). Exploiting the knowledge developed in CE activities is important for successful organizational renewal (Stopford & Baden-Fuller, 1990). …

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