Corporate Entrepreneurship- Definition, Examples, Types, Advantages: Many people wish to know about corporate entrepreneurship and how it is different compared with other sorts of entrepreneurship. Corporate entrepreneurship can be defined as all types of entrepreneurship that are performed under established companies. The name also knows it of intrapreneurship in the business world. We will say that every company in this universe wants to have organic growth, but very few perform the necessary actions.
Corporate Entrepreneurship- Definition, Examples, Types, Advantages
If you think that an innovative process is enough for reaching new heights, then there is a need to think again. A company should create a framework that not only supports innovation but also provides growth to the business. Corporate entrepreneurship is the answer to all the things that we have asked in the upper section. So let’s go through the complete article and decide what we are talking about.
What is corporate entrepreneurship?
In simple language, corporate entrepreneurship is a procedure utilized for creating new business, solutions or services inside a present company for giving values and creating new sort of revenues using the thoughts and actions of an entrepreneurial. This process creates the foundation for boosting revenue and innovation in the company. There is an exact idea about the resources and environment required for support and motivation is provided by corporate entrepreneurship.
It can motivate the entrepreneurs to take the necessary action and take the company to the required goals. The main motive of this process is creating ideas with having disruptive nature instead of making little bit changes. Additionally, it creates an environment where innovations are led by company employees instead of being applied by management.
Why is corporate entrepreneurship necessary in 2021?
If we talk about the present world, innovation work as the bloodline of a company as the business will run out for sure if it lacks there. However, bigger organizations face lots of difficulties in making innovative environments because of culture and structures. However, applying corporate entrepreneurship techniques give them a systematic method for making the innovation capabilities better.
It can turn out to be a great blessing in the long run for all types of organizations. Let’s look at the major reasons on why corporate entrepreneurship is necessary for companies in 2021:
- Revenue Growth
The time has become very competitive, and it is essential to follow the path of corporate entrepreneurship to have a consistent trend of innovations in their portfolio. Moreover, it will result in giving a huge boost to the revenue and growth of the company. After all, every company wants to stay on top in terms of revenue and following this sort of program will be helpful for sure.
- Boosting Productivity
Following corporate entrepreneurship techniques lets the employees deal with new opportunities in style and work to complete those tasks. Productivity becomes well when the contributions of clients get valued by the organization. Additionally, their morale gets up once they start following these entrepreneurship programs.
- Give highly competitive advantage
It is a well-proven fact that employees are the most useful asset of a company if we think about the opportunities and dangers available in the market. It gives available insights and is considered a very useful source for getting an edge over the others.
Major Types of corporate entrepreneurship?
It is important to understand the different forms of corporate entrepreneurship. Many people won’t care about them as entrepreneurs, but it shouldn’t be missed. Allow us to tell us about the major categories of corporate entrepreneurship in detail below:
- Corporate Venturing
The biggest part of this entrepreneurship type is corporate venturing, which begins a new company inside an existing organization. For example, Reliance Company begins as a textile business, but they begin the jewellery business after a few years. In that case, it is considered as corporate venturing where they utilized their present resources. Therefore, we can say it is simply about reaching a new market or developing new products in the existed market.
It is considered an activity that entrepreneurs use for developing a company for adding innovation. Intrapreneurship is created to set the employees’ minds and behaviour to create a culture of creativity. If you met an entrepreneur before, we are pretty assured you must have realized how proactive and self-motivated they are. They take action for pursuing an innovative service that can be very useful for sure.
- Organizational Transformation
An organizational transformation can be defined as an expanded version of full business that alters the main pattern for better economic performance. The major motive of this transformation is boosting the performance of the company. A few top examples of this category are downsizing, minimizing cost, and de-layering. It is strongly suggested never to change an organisation’s organisational system, but few businesses should be revitalizing for effective transformation.
- Changing Industry Rules
There are very few organizations trying to develop new opportunities by making few modifications in the industry. This form is known as the Industry Rule Bending that target modification of rules in the working environment. The name also knows of Frame-Breaking Change because using this standard affects the entire industry. There are a tremendous set of opportunities regarding growth and innovation is created by this form of standard. An organization can achieve huge success by following the rules adequately.
Advantages of corporate entrepreneurship?
There are two sides of every coin that everyone needs to take into consideration before moving further. The same goes for corporate entrepreneurship that comes with both pros and cons. We will discuss the advantages of corporate entrepreneurship first:
- Resources Availability
The most incredible advantage of corporate entrepreneurship is it gives a solid set of resources at the disposal. Start-ups mostly have a common issue, i.e. lack of money or capital. However, a corporate entrepreneur stays ahead of the others and has an abundance of resources.
- Minimal Set-up
A very difficulty that entrepreneurs have to face is setting up the business as it asks for lots of effort and time. On the other hand, a great advantage that most corporate entrepreneurs get is knowing the business’s technical aspects and having information about the setup process.
- Recognizing Brand
Recognition is one of the most critical aspects in an industry that every entrepreneur needs to perform for the success of a business. As a starter, it needs to be passed down for correct utilization. There is a need for years of hard work to reach this height that corporate entrepreneurship can give to entrepreneurs.
If we talk about corporate entrepreneurs, they will probably have a support or development team to boost sales on a different level. The main reason behind them is most of them are already equipped with potential contacts to target the potential companies or clients.
Disadvantages of corporate entrepreneurship?
We can’t complete the article without mentioning the cons of this entrepreneurship. Go through the disadvantages of corporate entrepreneurship in detail below:
- Long Approval Cycles
The biggest obstacle that corporate entrepreneurs face is its long approval cycles. It needs to understand that they can’t decide on their own, and there is a need for having approval from the company first. So it wastes lots of time that might not be a suitable choice for many people.
- Limited Financial Rewards
There is a limit on what corporate entrepreneurs can receive regarding rewards from the company’s side. It might affect the morale of company’s morale that no one wants at all.
- Hindering Ability for Maneuverability
As you have seen in the post, some procedures and rules can affect an entrepreneur’s ability to manoeuvre through the organization. Although it is a minor issue to consider, it still creates problems a few times for the entrepreneurs.
Relationship between corporate entrepreneurship and strategic management?
Suppose you have even little bit knowledge about the entrepreneurship world. In that case, it is pretty assured you must be aware that strategic management targets boost the competitiveness in an organization. Indeed, there is a certain limit on what we can achieve by mixing the present products as these models would become obsolete. That’s why managers need to look for new business approaches within a present business for incredible innovations.
However, there is a strong need to find the balance between the strategy and entrepreneurship for great results. It needs to be taken into consideration for establishing a strong connection.
It is compulsory to have entrepreneurial spirit for companies of every size to ensure growth and survival in the corporate entrepreneurship environment. If we talk about strategy, it is all about making choices regarding the organisation’s long-term vision. Following corporate entrepreneurship offers a diversity of choice and assists in implementing effective strategies based on modifying the competitive arena.
- Three Stages
There are mainly three different manners corporate relationship has a relation with strategic management. First, the main purpose of corporate entrepreneurship is to develop new products or solutions within a present organization. Secondly, strategic renewal is based on increasing profitability using different sorts of resources. Thirdly, a company’s resources are reconfigured using a variety of innovations to give an edge over the competitors. Finally, it let the organization got transform into a new company.
- Learning New Events
The next thing that will prove the relation between corporate entrepreneurship and strategic management is environmental scanning. It is the managerial process where people learn about new events and trends in the competitive world for those who don’t know. This strategic management task helps in identifying the competitive dangers of business. It goes toe to toe with the entrepreneurial processes.
Also See: Top 20 Features of Entrepreneurship
How to set up a corporate entrepreneurship environment?
One of the most difficult tasks to perform in a competitive business is creating an environment where corporate entrepreneurship gets encouraged. Promoting this culture isn’t an easy task as it demands lots of creativity. It can be easily done by following the steps we have mentioned below:
- You should move towards a broader path for achieving goals. Therefore, it is essential to identify the work from time to time for grabbing any new detail. It can be adopting new changes in the work culture or making new policies for better results. Regular evaluation is the most important thing to do in this case because the approach must move to the right path.
- All the efforts should be reinforced across the complete company to make it compatible with the present plan for success. It is mainly performed either by a senior manager or an official as an analyst. Promoting this strategy regularly while making the right modifications can give superb results for sure.
Businesses need to experiment with present products regularly for better innovation. Therefore, developing new products should be the main priority of this initiative without establishing a new company.
Examples of corporate entrepreneurship?
There are many companies who have utilized this technique for achieving more. Let’s have a look at the few top examples of corporate entrepreneurship in detail below:
Google is the premier example of corporate entrepreneurship as they have expanded their operations within the existed company. As a result, they have revolutionized the business and acquired over 180 companies in the past two decades. It proves they are fully aware of technique for making new companies out of present ventures.
If we talk about corporate entrepreneurship, 3M is also a terrific example of learning lots of things. They have created lots of ambitious products by using this technique. It ranges from products used in medical equipment to the automobile world to many more. They make the present products better and add new products to bring innovation and passion to the culture.
These are the only few examples of corporate entrepreneurship as many other companies like Grameen Bank and Xerox have utilized this technique brilliantly over the years. Young entrepreneurs can surely learn from them and apply techniques that they have used for achieving great in this field.