Bài giảng Strategic Management - Chapter 12: Managing Innovation and Fostering Corporate Entrepreneurship

Managing Innovation and Fostering Corporate Entrepreneurshipchapter 12Managing InnovationInnovation allows forTransformation of organizational processesCreation of new & commercially viable products & servicesInnovation requires new knowledge fromThe latest technologyThe results of experimentsCreative insightsCompetitive information12-*Managing InnovationTypes of innovation includeProduct innovationCreates new product designsApplies technology to develop new products for end-usersCommon during early stages of an industry’s life cycle Associated with a differentiation strategy12-*Managing InnovationTypes of innovation also includeProcess innovationImproves the efficiency of an organizational processImproves materials utilization, shortens cycle time, increases qualityCommon during later stages of an industry’s lifecycleAssociated with overall cost leadership strategies12-*Managing InnovationOther types of innovation includeRadical innovationA major departure from existing practicesUsually as a result of technological changeCan be highly disruptiveCan transform or revolutionize a whole industryIncremental innovationCan enhance existing practicesMake small improvements in products & processesCan create evolutionary applications of earlier innovations; provide new capabilities12-*Managing Innovation: Improving the ProcessCultivating innovation skillsDiscovery skills allow leaders to see the potential in innovationsCreative intelligence allows individuals to develop more creative, higher potential innovations by means ofAssociating patterns, information & insightsQuestioning common wisdomObserving behaviorExperimenting with new possibilitiesNetworking with a diverse set of individuals12-*Managing Innovation: Improving the ProcessDefining the scope of innovationDefining the strategic envelopeFocus on a common technology?Focus on a market theme?Evaluating resultsHow much will the innovation initiative cost?How likely is it to actually become commercially viable?How much value will it add; what will it be worth if it works?What will be learned if it does not pan out?12-*Managing Innovation: Improving the ProcessManaging the pace of innovationIncremental innovations May take six months or two years; May use a milestone approach, goals & deadlinesRadical innovations May take 10 years or more; May involve open ended experimentation & time-consuming mistakes“Time pacing” allows for control of the innovation process12-*Managing Innovation: Improving the ProcessStaffing to capture value from innovationEffective human resource management practices for innovation projects includeUse experienced players from diverse areasRequire employees serve in the new venture group as part of career developmentOnce people have new venture experience, transfer them to mainstream management positions to revitalize core businessesSeparate individual performance from innovation performance so failure is not a stigma12-*Corporate EntrepreneurshipFocused approaches to corporate entrepreneurshipAutonomous corporate venturing workgroup separated from the rest of the firmFrees entrepreneurial team members from constraints imposed by existing norms & routines; facilitates open-minded creativityDoes isolate the group from the corporate mainstream viaNew venture groupsBusiness incubators12-*Corporate EntrepreneurshipDispersed approaches to corporate entrepreneurshipEntrepreneurship is spread throughout the firmAbility to change is a core capabilityStakeholders can bring new ideas or venture opportunities to anyone in the organizationHas three related aspectsAn entrepreneurial cultureResource allotments to support entrepreneurial activitiesProduct champions12-*Corporate Entrepreneurship: Measuring SuccessExit champions help avoid costly defeats byQuestioning the viability of a venture projectReducing ambiguity by gathering hard dataDeveloping a strong case for why a project should be killedReasserting decision-making criteria to guide venture decisionsRisking loss of status while opposing popular projectsSaving a corporation’s finances & reputation12-*Corporate Entrepreneurship: Measuring SuccessReal options analysis is an investment toolHelps manage the uncertainty associated with launching new venturesROA helps the firm decide whether toInvest additional funds to accelerate the activityDelay further investment in order to learn moreShrink the scale of the activityAbandon the activityRequires a series of go or no-go decisions12-*Entrepreneurial OrientationAn entrepreneurial orientation involvesStrategy making practices used to identify & launch new venturesA unique frame of mindA perspective toward entrepreneurshipReflected in a firm’s ongoing processesReflected in the corporate cultureThat permeates decision-making styles & practices of the firm’s members12-*Entrepreneurial Orientation12-*Exhibit 12.3 Dimensions of Entrepreneurial OrientationSources: Dess, G.G. & Lumkin, G.T. 2005. The Role of Entrepreneurial Orientation in Stimulating Effective Corporate Entrepreneurship. Academy of Management Executive, 19(1): 147-156; Covin, J.G. & Slevin, D.P. 1991. A Conceptual Model of Entrepreneurship as Firm Behavior. Entrepreneurship Theory & Practice, Fall: 7-25; Lumpkin, G.T. & Dess, G.G. 1996. Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance. Academy of Management Review, 21: 135-172; Miller, D. 1983. The Correlates of Entrepreneurship in Three Types of Firms. Management Science, 29: 770-791.