Samenvatting - Corporate Entrepreneurship (BMSE04)

Corporate Entrepreneurship

Lecture 0: Introduction

Firm Growth and Entrepreneurial Capabilities
Firm growth should not primarily be explained by external market
conditions.
Instead, growth limitations are often the result of a lack of
entrepreneurial capabilities inside the firm.
This idea builds on Edith Penrose (1959), The Theory of the Growth of the
Firm, and is reaffirmed by Tan et al. (2020).
Core argument:
 Firms do not grow because markets allow them to.
 Firms grow because they can recognize, create, and exploit
opportunities internally.
This provides the theoretical foundation for Corporate
Entrepreneurship (CE).

Uncertainty as a Central Context for CE
Modern business environments are characterized by:
 Rapid environmental change
 High uncertainty
 Unpredictable shocks (e.g. COVID-19)
The travel industry example illustrates how firms face extreme
uncertainty, where forecasting is unreliable and traditional planning
breaks down.
Key implication:
Under uncertainty, firms require entrepreneurial decision-making,
rather than purely analytical or predictive approaches.

Entrepreneurial Culture and Structure Under Uncertainty
Organizations that perform well under uncertainty rely on:
 An entrepreneurial culture
 Flexible organizational structures
 Decentralized decision-making
These conditions allow firms to:
 Experiment
 Adapt quickly
 Learn from failure
The Booking.com case illustrates how entrepreneurial structures support
decision-making when outcomes are unclear.

Experimentation as a Core Entrepreneurial Mechanism
Entrepreneurial firms rely on hypothesis testing and experimentation,
rather than intuition.
Key characteristics of an experimental organization:
 Use of the scientific method
 Large-scale experimentation (e.g. thousands of experiments per
year)

,  Acceptance that most experiments fail
 Decisions based on data, not hierarchy
Failure is not treated as an exception but as a normal input for learning
and improvement.
This reinforces the idea that entrepreneurship inside firms is a
continuous learning process.

Failure Culture as an Enabler of CE
In entrepreneurial organizations:
 Failure is expected
 Failures are shared and discussed openly
 Failed experiments generate new hypotheses
This type of culture lowers psychological barriers to experimentation and
increases opportunity discovery.
Key insight:
Without tolerance for failure, Corporate Entrepreneurship cannot function.

Sustainability as an Entrepreneurial Opportunity
Sustainability challenges are not only compliance issues, but also sources
of entrepreneurial opportunity.
Firms increasingly:
 Embed sustainability into products and services
 Use data and experimentation to guide sustainable choices
 Combine commercial value creation with societal impact
This links Corporate Entrepreneurship to later concepts such as Corporate
Social Entrepreneurship and Creating Shared Value.

Definition of Corporate Entrepreneurship
Corporate Entrepreneurship is defined as:
“The process whereby an individual or a group of individuals, in
association with an existing organization, create a new organization or
instigate renewal or innovation within that organization.”
(Sharma & Chrisman, 1999)
This definition emphasizes that CE includes:
 New venture creation inside firms
 Strategic renewal
 Innovation in products, processes, or business models

Entrepreneurship vs Corporate Entrepreneurship
Entrepreneurial behavior is not limited to independent founders.
Corporate Entrepreneurship allows individuals to:
 Innovate within existing organizations
 Share risk and responsibility
 Access resources, infrastructure, and legitimacy
This highlights CE as an alternative entrepreneurial career path.

Why Corporate Entrepreneurship Matters
Corporate Entrepreneurship helps organizations to:
 Overcome growth constraints
 Adapt to uncertainty

,  Sustain competitiveness over time
For individuals, CE enables:
 Entrepreneurial learning without full personal risk
 Development of innovation and opportunity-recognition skills
 Career paths that combine stability with entrepreneurship

, Lecture 1: Entrepreneurship in Established Firms

Three Key Themes
1. Corporate Entrepreneurship
2. CE Behavior, Process and Strategy
3. Role of Managers

1. Corporate Entrepreneurship

Why is CE Important?
The idea of a sustained competitive advantage is obsolete.
Firms must embrace transient advantage, continuously launch new
strategic initiatives and create a portfolio of advantages that can be
built quickly and abandoned just as rapidly (McGrath, 2013).

The figure shows the temporary
nature of competitive
advantages:
Launch → ramp-up → exploit →
reconfigure → disengage.
This explains why CE is essential
for ongoing renewal.




Components of Corporate Entrepreneurship
CE consists of two components (Morris, Kuratko & Covin, 2008):
1. Corporate Venturing
2. Strategic Entrepreneurship

Diagram shows CE branching into venturing activities and strategic
entrepreneurship activities.

Corporate Venturing
Defined as creating, adding to, or investing in new businesses (Kuratko,
2010:132).
Three types of Corporate Venturing:
1. Internal corporate venturing – new business created inside the
company