Corporate Entrepreneurship: Top Managers and New Business Creation

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Entrepreneurial Tournaments: Towards Disclosing the Rivalry Process Among Corporate Entrepreneurs

Thus, although the division was still behind in this technology, it had secured the Fiber Optics venture to deal with this threat of substitution on the horizon. And the changes are more than just your product extension. Other external forces8 Concerns about product liability dampen new business creation9 DGM Mike Walker of AMP Sigcom explained how concerns about product liability were hurting the Fiber Optics venture: What if someone looks into the end of the optical cable and damages his or her retina?

The law says if someone could have misused a product, prevent it! We are working on a safety device that could add 25 dollars to a product price of 25 cents! The concept was these little yard long ski slopes that give people the sense of skiing. And you put little polystyrene beads in there to give you the friction. That means your business is going to double. But the corporate lawyers came in and they really gave us hell on that. You sue the owner of the resort, and they do that.

But this is man-made and what testing have you done to show people that this is okay? Another way is to license the patent to competitors who are expected to remain far behind on the learning curve. He said, The courts have not been doing a very good job in the last few years of supporting the patent law and they bring in outside issues. So nobody is infringing. The irony is that nobody is producing either. Government regulations can facilitate or hinder new business creation Government regulations and their resultant bureaucratic procedures can hinder new business creation.

But government regulations can also facilitate new business creation by encouraging the development of new technologies, products, and solutions. Joe Hurley, commercial development director of Monsanto Fab Products, described how a US Department of Transportation study and federal legislation provided the impetus for the Spray Guard initiative: We had a very low-level effort on Spray Guard for a period of time.

If that had not happened, we probably would have dropped it eventually. But that gave us the encouragement to go ahead. We kept in touch with the Congressmen who were pushing for legislation. We knew Senator Danson of Tennessee was a safety nut. He was head of the Commerce Committee where the big truck legislation bill was. Ed Costello [executive vice president of Monsanto] knows him personally; they grew up together.

Starting two years from now, all new equipment must have splash and spray protection. Five years from now, all equipment on the interstate system must have such protection. We want half of it. Buyers are wary of committing to products that they fear might be incompatible with an industry standard that might eventually emerge. This was one of the reasons why Xerox OPD took so much longer to sell its new products, as DGM Greg Gibbons discovered: From the time you call on an account till the time you get that guy to buy your product, the selling cycle is absolutely two years.

It seemed like everybody was doing a few assemblies here and a few hundred over there.

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But we have had mixed feelings about that experience and have chosen to work instead, now, with a cross-section of key customers. And it comes out of pure need. Xerox corporate executives saw things differently. We went into PCs, for example, not because word processing alone was an attractive business; it is.

And I think the outside world sees that we have a very much stronger competitive position in copying — a very large, still growing business — than we had a few years ago. But the trend was there. And the Japanese were bringing costs down. Well, the price now from those plain paper copy inventions has come down more than we thought initially. And had we not recognized those, we would not be the factor we are in that industry. What happened? They went from electromechanical type of technology to electromechanical-electronic type technology.

So we followed that trend and we innovated and increased our market position. There is another wave of technological change going on right now and that is to External business environment 51 go to more robotic, automated production of vehicles. And so we are working on a major strategy now to build harnesses that can be robotically installed in the car body. So by knowing that technological trend, we tooled for it so our new product would be aesthetically pleasing to the customer but at the same time would give us a low-cost manufacturing process that was totally different than the traditional ways of manufacturing the product.

That is, we went away from machined parts to cast parts. So there is where you take a measured market, look at a technology trend, and develop a created market concept off of that base. The real leverage point for the business was external, Stewart said. And then boom, all of a sudden oil prices fell and oil companies who were spending money like crazy stopped spending money.

Because oil recovery using the Prism Separator is not economically attractive when oil prices are low. Dan Stewart also described how an adverse economic environment hurt the Spray Guard initiative at Monsanto Fab Products: We were trying to sell a premium product into an industry that was just coming under tremendous economic stress. It was a combination of the economy and deregulation. It was absolutely the wrong time to introduce something like this. We did not come up with any growth items during this time period of about two years. External advisors can facilitate or hinder new business creation External advisors such as management consultants facilitate or hinder new business creation depending on what their assessments and agendas are.

Their approach is to minimize risk-taking. I think it had some pretty good insights. But customer pressures can also dampen new business creation. Suppliers that do not deliver parts or subassemblies with the necessary quality or speed hinder new business creation. The threat of substitute products and industry rivalry promote it. Concerns about product liability dampen new business creation.

Government regulations either facilitate new business creation by encouraging innovation or hinder it with bureaucratic procedures and delays — sometimes they do both! Industry standards help to build sales volume and create a mass market. As technology changes more rapidly, the risk of missing a technology trend increases.

Adverse economic conditions hurt new business creation by biasing the thinking and actions of top managers toward survival and near-term results. External advisors such as management consultants facilitate or hinder new business creation, depending on their assessments and agendas. But once it was in good shape, it freed up time to get into new products. And you had a lot of time to make changes, and you could afford to be very logistics conscious in terms of what you did. That was the way it was determined that we would run the Xerox Corporation for quite a little while.

First, we went into 54 Internal business environment 55 Table 4. And second, we sent copier people to run these businesses or we had copier people calling the shots. As a result, Timmer paid less attention to new business creation. He was credited with the early feeding and care of only two other new initiatives — Ribbon Coax, which struggled along until Walker re-positioned it successfully as Cable Assemblies after he became DGM, and Tulip Plug, which failed. New business creation is sought when the existing business is maturing or threatened When the existing business is maturing or declining, new business creation is sought as a remedy.

There was no other place to get growth. The division had maintained its heritage position in the 35mm market with external programs such as the Tanaka Printer, but the rate of growth of the 35mm product line had begun to slow down. In order to reverse this trend, a separate department was created for 3M Engineering Products. It worked. Your marketplace is going to pick whatever it needs and is available. New products can increase sales of existing products Rather than cannibalizing the existing business, new products can sometimes have the opposite effect.

This did not happen. And, although this was never anticipated, some of these new accounts purchased the high-priced Standard RF connectors because of availability! And a lot of times new products get you in the door. New business creation is dampened if several new products have been recently launched If several new products have been recently introduced to the market, the emphasis typically is on growing this new business rather than on launching additional new initiatives.

Clay Smith oversaw the launch of several new business initiatives when he was the development manager of AMP Sigcom. And some of these new products, by the way, took off like a rocket. So you have instantaneous backlog and past-due problems. So what Smith is doing is needed. And then slowly modulating a new product effort to get it in there. Both product innovation and process innovation spur new business creation12 The importance of product innovation is obvious.

It creates new products for existing or new markets. The importance of process innovation is commonly under-emphasized. For example, 3M was a master of product innovation but not of process innovation. We used to own 95 percent of the videotape business. All of a sudden, the Japanese14 and a few others came in and made a better tape at substantially lower costs; they drove the price down and eroded our market shares pretty badly.

We have a big, big program here now to improve our process to get the costs down in manufacturing. There has been a lot of discussion of that in 3M. Factory costs are becoming a greater and greater percentage of sales. My division is at the high end. It can help to open new markets with new applications as costs and prices are reduced. This potential for new business creation from process innovation remains under-exploited. Further, when the existing business is growing, there is a tendency to neglect new business creation.

However, when the existing business starts maturing, or is under threat, new business creation is sought as a remedy. Introduction of new products, despite the fear that this will cannibalize the existing business, helps in two ways. It pre-empts or answers similar moves by competitors, and it provides access to new customers, some of whom might end up buying existing products because of their availability! The typical corporation has a number of corporate cultures and subcultures; for example, the beliefs shared by members of a functional discipline within the corporation, such as the engineering culture within AMP, or the beliefs shared by employees in a division of the company, such as the subculture of AMP Sigcom employees.

With such an emphasis over many years, AMP and 3M had developed management cultures that supported this activity. The shared beliefs are presented sequentially in the next two chapters, but they are in fact interrelated and this will become clear as these chapters unfold. The shared beliefs concerning the control of new initiatives and the importance of learning from failure are the subject of Chapter 6, which closes with a discussion of how the management culture changes.

The corporate entrepreneur does not have the same right in the eyes of his or her associates because the corporate entrepreneur relies on resources that he neither paid for nor helped to create in the way that the independent entrepreneur did. Consider the experience of Xerox OPD. In lieu of stock options normally available to Xerox managers, a short-term bonus plan was adopted for the top OPD managers. If the plan was bettered by 10 percent, then an additional percent bonus would accrue; if by 20 percent, then an additional percent bonus; and so on.

Bonuses for the other top thirty managers would average about a million dollars each. We really want some millionaires to come out of OPD! The people in other company divisions also resented being excluded. However, the adverse impact was limited for two main reasons. These rewards, along with the intrinsic motivation to pursue new business creation, drove managers in these companies to engage in this activity. Money was neither offered nor seen as a primary motivator. Because when you start paying sums for those things, you motivate people to do extraordinary things that may be funny as all hell.

And they emphasize the wrong things.

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Now I have people that have the kinds of personalities that can sell a patent attorney anything to get a patent done, and if they were going to get rewarded for it, that patent attorney would be busier than anything and the patent may have no bearing on whether our corporation wants to do something with it or not. Even manufacturing people sent in new product ideas.

The Micrographics division was like a great big family and they all wanted the family to succeed. They all got thrills out of seeing new product announcements. Seeing us high on the list in some of the standings within the company. Because thousands of people are there from all across 3M when they get these awards. The program leader and the team get that award. Shared beliefs about rewards, etc. Nevertheless, Monsanto managers shared the belief that there was considerable personal risk in pursuing new initiatives.

They believed there was job security as long as one did not make mistakes. I could be shelved into a staff job if OPET fails. For example, even the disastrous Com initiative at 3M Micrographics did not hurt program manager Mat MacGregor; he was moved to another position. The MacGregor appointment was my mistake.

I put him in the wrong spot. He is doing much better in his current position. We lost time, and there was the opportunity cost, so we were somewhat hurt by it. The probability of success being what it is, not everything works. That fellow, usually, bounces back and ends up getting more offers within the company than he would have gotten before he ever took that job. There are a lot of people in top positions at 3M that had some losers before they moved into a winner. We make a lot of mistakes. But we try to remember them and learn from them. Our system fosters the creative person.

An especially creative mind can get away with almost anything here. We can write a book on the creative, weird nuts we have put up with. Some of them really way out. The technically creative person cannot have freedom if the alternative to succeeding is failure. It was a bad decision, and I was very upset after I learned of it because we violated two principles.

One, you never teach technology that only you have. And two, you never give percent of your capacity to a vendor — that exposes market intelligence as to what the true size is. So that was a really bad decision. Two years later that vendor became a competitor. Is there a time to punish a bad decision? The way our decisions are arrived at, there are a lot of other people that contribute to it, including myself.

And there are means of pulling out of those decisions before they happen. Very rarely do you replace people because they made a mistake. People were carefully developed and promoted, creating a cadre of experienced managers who knew they would be in their jobs long enough to face the consequences of their actions. These companies also shared the belief in high performance, which stretched their managers.

This made sloppy behavior less likely, and made it more apparent to others when it occurred. Further, the managers in these companies believed they had been treated fairly by the company, and were predisposed to reciprocate. Thus, most managers in AMP and 3M were not motivated to become sloppy just because they had been protected against failure. They feel much worse about it themselves than I could ever achieve by punishing them.

Because now you gave them an out. And then they get mad at the company. But this way they feel very badly about it. I remember some of the bad new products that were canceled on me and some of the bad decisions I made. And I did. But that is the difference. Now if they penalized me for the damage, then to hell with them, you know. They did not back me and I am not going to back them. I see people surviving in all sorts of different environments. We just call it a mistake. You feel worse about it than anybody else around.

Both AMP and 3M had the same shared beliefs about job failure — it was viewed as a problem of inappropriate job placement. Better Used Elsewhere. They can also be people who have been around many years and their attitudes or values have changed or the job has outgrown them. As Mike Walker of AMP said, I think what separates our company from a lot of corporations is that we do spend a lot of time with people, in trying to develop them and develop their perceptions of themselves and develop our own perceptions of them — to be fair, and honest, and open, and sincere about it.

It takes time. But look what you get out of it. But out of this we developed a darn good pricing guy, and now a good product manager. Opportunity taboos constrain new business creation Opportunity taboos, the shared beliefs concerning opportunities that are not to be pursued, constrain new business creation. Taboos concerning particular initiatives also constrain new business creation.

They have the technology and the distribution. So we missed out on PET, the greatest success story in food packaging. And we are going to be late on OPET because it has taken a long time to get everyone on board. Opportunities that are considered taboo are generally not pursued, nor even perceived. And those who do perceive and pursue such opportunities are met with more or less organizational resistance, depending on the following shared belief.

Monsanto managers did not have this shared belief. Tell me if it is the right thing to do. And not that D Building will buy it or this will satisfy them. What does Reilly [president] want? Since the shared beliefs among Monsanto managers did not offer them the right to pursue their business convictions, initiatives that were unconventional or unpopular with senior management were either not pursued or encountered organizational resistance.

A good example is the Spray Guard initiative. Several managers had been interested in the concept but none had been willing to champion it, for two main reasons. Second, both the product and the market were alien to the company. If these convictions were at odds with the views of higher-ups, or contrary to the management culture, one had the right to challenge these views and, if necessary, to deviate from them. Tandy was the customer and we were trying to innovate on applied cost. In the words of one of their senior executives, Shared beliefs about rewards, etc.

Several of our top managers have built their careers on successful initiatives that their superiors had at one time asked them to drop! New business creation is facilitated by permitting rule-bending and limiting proscribed behavior Corporate entrepreneurship and new business creation are encouraged if the management culture permits rule-bending and limits what is considered irresponsible behavior to violations of personal integrity and business ethics.

People felt there was excessive bureaucracy in the company. He described how Monsanto had evolved from a country club atmosphere to a company that had a degree of bureaucracy that he felt was appropriate to its size and complexity. He also believed that skillful managers in any company learn to work around the rules: I can remember, before [CEO] Richard Steele came here, we did not have a good senior management.

We were not a very sophisticated company. And [CEO] Steele changed all that. My own experience is that we now certainly seem to have our share of written rules. Are they a pain in the ass? Are they excessive? Probably not. In running a company like Monsanto you have to have certain standards and I think that the bureaucracy is probably about appropriate to the make-up and size of our company.

Does it get in the way? Does it get in the way to the extent that it has to be worked around? They also agreed that an effective manager gets things done despite the bureaucracy. But the consensus opinion was that the pendulum had swung from no discipline to an excessive reliance on formal rules, procedures, and systems that hurt risk-taking and entrepreneurship.

And a culture of rules and procedures and systems. We worry about what a guy looks like compared to our perception of what a DGM should look like, and forget about what he is doing. But he is a damn smart businessman. He suggested I consider a list that he gave me. I screened that list and recommended my [former] marketing director again. My boss resisted again.

Then HR [Human Resources] got involved and asked me to consider Art Malone [former marketing director for Astroturf when Stewart was DGM] — but there was a concern that he looks young for his age, and also a concern about whether his former peers will accept him as a boss. We ended up with Jim Barr as business director of Fab Products. Ian McVay also said that he got some ribbing from the Monsanto corporate executives on his personal grooming and excess weight: Our senior managers are intelligent.

Very subtle but it does come through. They are broad-gauged and able to conduct themselves with poise and polish in just about any situation. Permitting rule-bending facilitates new business creation The management cultures of AMP and 3M permitted rule-bending, giving their managers greater freedom to pursue their new business convictions. There are no real formal rules except a code of conduct that we sign.

There is an ongoing business responsibility to develop an environment that our people enjoy and are productive in and cause our organization to grow. They rarely come down with big edicts. Grass-roots mentality prevails. Very few policies. If you thoroughly offend the elders, they will ignore you.

That is their way of punishing you! Come and get it! I have done everything the system permits me to do. You are not measured by whether you follow rules. We only disapprove a lack of common sense. Here is an example of rule-bending at AMP. Walker did this after all managers had received instructions from the corporate 76 The management culture data processing people not to purchase personal computers, because the corporate systems and procedures department was trying to develop a policy on their purchase and use. The group controller was surprised when he found out what Walker had done, but Walker showed him the impressive productivity gains that had been achieved with these computers.

Based on this evidence, Walker persuaded both the group controller and the corporate systems and procedures department to authorize additional personal computer purchases not only for his division, but for other divisions as well. And that becomes a mark on your record. When I go afoul of them. In some cases, I go afoul of them because they should be gone afoul of.

That has given us a lot more freedom to do it the way it ought to be done. In order to do what is right for the conditions we are faced with. We have to be very careful about antitrust, and we are pretty religious about EEO [equal employment opportunity] and pollution control, etc. Most of the other rules — work procedures, time to come in the morning, vacations, hiring freeze, etc. We can do anything here as long as it makes sense.

All other Shared beliefs about rewards, etc. It is possible to go around the boss, if necessary. And here are the reasons why it is different. Greatly admired for his rah-rah spirit, this manager had been reprimanded for becoming unruly after he had had one drink too many. He was dismissed immediately. This is a key difference between independent entrepreneurship and corporate entrepreneurship. Cultural taboos concerning opportunities that are not to be pursued constrain new business creation; a shared belief in the right to pursue Shared beliefs about rewards, etc.

Many people believe that control is the antithesis of entrepreneurship and new business creation. Yet, contrary to popular belief, managers in companies with long track records of successful new business creation believe that appropriate control is the essential companion of entrepreneurship. And the corporate people were basically making the decision whether or not a division would move ahead on this strategy or bring that product to the marketplace. In sharp contrast, managers in companies with successful track records of new business creation share the belief that the purpose of control is to test the business convictions of those engaged in new business creation.

Corporate executives ask challenging questions to ensure that division managers are committed to new initiatives for sound business reasons, rather than to satisfy a personal ego or out of a sense of obligation to those who have invested their time and energy in these initiatives. These corporate executives do not tell a division to start a new program or 80 Shared beliefs about control and learning 81 Table 6.

However, only the most committed division managers can endure their unrelenting questions on initiatives that are off target. At the same time, we agonize frequently over whether we are making the proper tradeoffs between quarter-to-quarter performance and long-term performance. Institutional investors are cautious. We surprised them and took a beating this quarter; yet we had the third best year in our history. We have some businesses that go up and down. Shared beliefs that represent a balanced view of the impact of budget cuts and program delays facilitate new business creation Managers in companies with less successful track records of new business creation believe that budget cuts and program delays required for quarterly giving will inevitably hurt their new business initiatives, and they approach this task reluctantly and cynically.

Managers with greater experience in new business creation are not pleased to receive corporate requests for quarterly giving either. But they accept them as a fact of corporate life. But you try. In other words, not just give it your best shot — what are the honestto-God programs, and what will that amount to? Primarily, I use such things as you might expect. Cut down travel costs — I can get a hundred to two hundred thousand dollars that way. We can cancel some advertising and pull half a million dollars out of that. You could pull a million to a million and a half from all these things.

They know how much waste there is in a year in this company. We never get it all out — tighten it up! The last recession, we tightened up fantastically. Managers in companies with long experience in new business creation undertake a careful review of all activity to decide if any new initiatives should be delayed or cut, and by how much. Sometimes we cut out a whole program, or just delay a program. I prefer to cut when it is a very low priority — you have a champion there, but in your own heart you know [chuckling] it would take some unusual circumstances to succeed. Can you get the data out of fewer experiments?

Sometimes we cancel outside research or lay off contract engineers. We can get a million to two million dollars from all these. We found out that we could use a substitute chemical and I think we got a million and a quarter out of it that year. On that one, we generated maybe some lab expense to do it.

Managers with successful track records of new business creation share the belief that new program delays sometimes help by opening up future technology, product, or market options that might not be available if the initiative proceeded on schedule. Experienced managers also know that too much money and other resources can hurt new initiatives as can too little. Fewer resources impose greater discipline, generating focus and a sense of urgency.

Managers in Xerox had a hard time understanding that. Come sunup, the trailer trucks will start arriving with dollar bills and dumping them in. A shared belief in learning from failure helps new business creation8 Managers with long experience in new business creation learn to expect fairly modest success rates. For example, managers in 3M had learned that only about 40 percent of the new initiatives that were introduced to the market eventually succeeded. Failure is normal. What is important is what we learn from it.

That was an outgrowth of non-woven technology, which was being developed for making decorative ribbons. And that became a project. And it was an absolute failure. DGM Mike Walker of AMP Sigcom told this story to emphasize the importance of helping people to learn from failure: As a development manager, I had a new product where all the rods kept cracking on me. How do you do it? What Mike Walker did with this information is crucial. He was motivated to try to improve the number of lots he could get out on the night shift.

Oh, God, he felt chagrined. He got his pat on the back but he understood what the heck the problem was. Jim McGuire, the president, and Ted Rigby, the corporate planner, had invited me to spend a day with them and some others so they could evaluate my proposal for this study. All the people I met were extremely courteous, but also extremely secretive, and I felt thoroughly checked out. At Xerox, the attitude was just the opposite prior to the time of the study in the early s. There was complacency and arrogance as a result of past success, as a senior Xerox executive said. Our massive sales and service network gave us another huge Shared beliefs about control and learning 87 barrier to entry, and a near-monopoly position in the market.

First, it takes a long time to develop a set of shared beliefs and, once formed, they are resistant to change. The whole company is doing well with external programs now. Changes in the wind The management culture of each of the four companies remained largely unchanged over the three years of this study.

Acta Universitatis Danubius. Œconomica, Vol 12, No 4 (2016)

But a few individuals in some of these companies mentioned certain beliefs that were changing, which signaled potential future changes in their management cultures. At AMP, two managers expressed concern that the company, while still highly innovative, was beginning to exert greater control from the group level, thus endangering autonomy and entrepreneurship in the division. The divisions are not as independent and stand-alone as they once were. There has been a tremendous change at the top. That happens in big companies. We are now thinking of going in sixteen different directions.

At Monsanto, there was some evidence of a trend in the opposite direction. A few people believed corporate executives were making an attempt to give the DGMs greater autonomy and accountability for results. It is also a very fundamental change in corporate philosophy toward greater decentralization. The vast majority of those interviewed for this study did not perceive that the management cultures of these companies were changing; only a few people held the beliefs just mentioned.

If these beliefs became more widely shared over time, however, the management cultures of these companies would change, with consequences for new business creation. Summary Many people believe that controls inevitably hurt new business creation.

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But managers in companies with long track records of successful new business creation know better. They share the belief that the purpose of control is to test the business convictions of those engaged in new business creation, not to make decisions for them. Managers in companies with long track records of successful new business creation share the belief that cuts and delays might hurt new programs, but these actions might also help new business creation — because fewer resources might create a sense of urgency and increase the focus of surviving programs, and a delayed initiative might be better positioned to capitalize on future technology or market developments.

Experienced managers believe failure is a normal outcome in new business creation efforts. This helps them to develop new knowledge and second-generation initiatives. Management culture develops over a long period of time and is resistant to change. Each corporate philosophy has its advantages and limitations. Chapter 9 considers a number of challenges for corporate executives seeking new business creation, including the challenge of pursuing the bigger-isbetter and the small-is-beautiful corporate philosophies simultaneously. The attraction of the bigger-is-better corporate philosophy The bigger-is-better corporate philosophy is focused on a few big opportunities rather than on many smaller ones.

For example, Monsanto corporate executives perceived big, attractive opportunities in biotechnology, which they were attempting to pursue with huge investments — totaling several hundred million dollars — in corporate acquisitions, joint ventures, and research and development programs. Alf Hummel, VP of corporate planning at Monsanto, explained the logic of the bigger-isbetter corporate philosophy: Monsanto is not opportunistic or entrepreneurial.

We try to establish secure positions over an extended period of time. If we think we cannot do that, we leave it alone. Entrepreneurship requires repetitive creativity. It is constantly spinning off small new businesses from a common technological base. They see their future in lots of smaller opportunities. We see our future in fewer, bigger opportunities, such as the two in Agricultural Products we are living off of right now.

It is a difference in basic mindset. Clearing a new chemical today is no different than getting approval for a new drug. Our future lies in biotechnology. Flying Doormat is going to lead to a large closet. This is a key advantage of the bigger-is-better corporate philosophy. One big win e. As in baseball, big new Bigger-is-better corporate philosophy 95 business hits are less certain than singles. When they do occur, big hits can breed arrogance and a false sense of pride, hindering the learning so essential for new business creation.

And number two, wake up. We are living on past success. When was the last time we had a big winner? The bigger-is-better philosophy dampens new business creation in the division The bigger-is-better corporate philosophy dampens new business creation in the division because of the fundamental differences in the scale of thinking, the duration of time, and the amount of resources needed to pursue bigger versus smaller opportunities.

The people in the division felt that these executives were really not interested in the division or its initiatives. Who cares! But I happen to think they are wrong. I really do. The way in which Monsanto corporate executives managed the Fab Products division and later the Engineered Products division of which it became a part illustrates these basic tenets of the bigger-is-better corporate philosophy, and the implications for new business creation.

Principle 1. As they acquire the reputation for one or the other, they get called on to play to their strengths, which builds their strengths further. As Monsanto president Jim Reilly said, People have particular tendencies that lead them to become more of a hard-times manager or a good-times manager. And their displeasure with doing the other shows up instantly. And so you tend to work with what you have got good at.

Vic Thomas — his strength is to cut, prune down. So when Stewart arrived, it was the right time for a growth manager. Stewart had more faith in the product lines of Fab than Thomas did. Monsanto has called me in three times to do that. Stewart was a growth manager, with limited inclination to asset management. His successor, McVay, was 98 The corporate executives a growth manager, with strong asset management skills. If a manager is development oriented, development will take priority. Stewart reported to Courtney, a balanced manager who understands growth and realism.

Courtney reported to Allport, who is not growth oriented — his instincts are those of an operating man. McVay is growth oriented. He reports to Costello, who is powerfully growth oriented. Costello almost insisted on getting McVay as a condition for taking that job. Principle 2. Limited autonomy for the DGM: hampers new business creation4 Corporate executives pursuing the bigger-is-better philosophy grant the DGM only limited operating autonomy, and this hurts new business creation.

Buddy March had the authority to negotiate the marketing agreement — he did need corporate approval for the cross-licensing of technology with the Japanese company Tanaka — and ended up with a big winner. Dan Stewart had no such authority to sign a marketing agreement, and was stalled for one year on corporate approval for the capital needed for the OPET bottle program. I mean it was absolutely ludicrous. And we are standing here studying it, studying it, studying it. They are scaled to thinking in hundreds of millions of dollars of investment and pounds of chemical.

Fab is very, very small and inconsequential for them. I am a smaller part of his plate, so I enjoy a certain amount of autonomy. Depending on what these instructions are, new business creation is either pushed forward or pulled back.

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We went with Gossamer and his wife. I am not sure we should be in any of these businesses. Review and control the division to ensure compliance with the corporate game plan: hinders new business creation Corporate executives pursuing the bigger-is-better philosophy review and control the division to ensure compliance with their game plan. As D Building [where the corporate executives sit] looks at it, the measurement is different for different businesses.

As commercial development director Joe Hurley of Monsanto Fab Products said, The most important goal for the division changes each year. This year it is ROC [return on capital]. The year before that it was income. The budgeting process is where you really control new business development. New business creation requires a consistent emphasis from one year to the next; ever-changing goals and priorities do not help.

Here are the kinds of questions I get asked in a review: Why are you in the Astroturf business? How big would Astroturf ever be? Is that a realistic projection? What are the underlying premises? The genius of an Ed Costello or a Jim Reilly is that they can ask the absolutely essential questions. Polite, yes, but the instructions were clear — do as I say.

Principle 5. Make decisions for new business initiatives in the division: impairs new business creation Corporate executives pursuing the bigger-is-better philosophy view themselves as the real corporate entrepreneurs. This impairs new business creation in the division. One top manager in Fab Products spoke for many others in the division when he said, Spray Guard was included in the LRP [Long Range Plan] that was reviewed by the corporate executives, but we low-keyed the breakage problem.

When their micromanagement does not work, they swing the other way. They leave the division alone with little or no guidance, because they think this is necessary to foster entrepreneurship in the division. Or they do so because a powerful DGM succeeds in getting corporate executives to leave him alone. The experience of Xerox OPD illustrates how this can happen, and the dysfunctional consequences. A corporate entrepreneur like Gibbons could not be questioned on every decision or expected to have a logical explanation for every action, Nash said.

I think very few people combine being entrepreneurial and a professional manager. In fact, I know practically nobody. Because the so-called professional manager is really taught to be very objective, to question everything. Gibbons was independently wealthy and had standing offers to return to Silicon Valley to do another start-up, which gave him tremendous clout with corporate executives. This is what he said at the start of his second full calendar year as DGM: Bigger-is-better corporate philosophy The venture capitalists who made an incredible amount of money on Shugart want me badly to do another start-up.

What risk would be excessive? Gibbons apparently felt that he had nothing to lose and everything to gain by shooting for the moon. And every product, every program comes up to the PRC for approval. I fought very, very hard that that absolutely was the wrong way to do it. I maintain that these decisions should be taken down at the lowest possible levels in the organization. One, for speed; and two, for quality of decision-making.

Without corporate approval, Gibbons authorized Tim Skinner, VP of manufacturing for Xerox OPD, to build a highly automated manufacturing facility for this new product to ensure the lowest possible manufacturing cost. Gibbons described how he commissioned Skinner for this task: The Saber factory is the most impressive fully automated factory for this product in the world. One of The corporate executives the problems in Xerox [at the time of the study in the early s] is that we ask people to justify things that are very hard to justify.

I wanted the most highly automated factory, and they did an incredible job. And the way I did it is, I had one conversation with Tim Skinner. I want it. That was the sum total of the direction I gave him. I just assumed that I could do anything I wanted to do. When the job was offered to me, I just took it. OPD was stripped of its operating autonomy and made a cost center that was responsible for just the Memorywriter typewriter, the PC, and the Fax Machine. The systems business — Ethernet and the Star professional workstation — was transferred out of the division.

The extent of emphasis on new business creation varied accordingly, from limited to aggressive to none. Summary The bigger-is-better corporate philosophy is focused on a few, big new business opportunities rather than on many smaller ones. Its advantage is Bigger-is-better corporate philosophy that one big winner can generate more new business than many smaller wins.

One disadvantage of the bigger-is-better corporate philosophy is that success is less likely when pursuing one big opportunity than when pursuing several smaller ones, for the same reason that home runs are rarer than singles in baseball. Because corporate executives view themselves as the real corporate entrepreneurs, they 5 micromanage new business initiatives in the division. This leads to excessive risk-taking by the DGM, without adequate corporate guidance or control, and with adverse consequences.

The attraction of the small-is-beautiful corporate philosophy The small-is-beautiful corporate philosophy encourages the pursuit of many small opportunities because it assumes that the division, not corporate headquarters, is the primary center for corporate entrepreneurship. It is assumed that every business is a growth business,1 and that innovation and entrepreneurship can create repeated waves of growth in so-called mature businesses. Corporate is not going to give you any money. The ways in which corporate executives managed the AMP Sigcom and the 3M Micrographics divisions illustrate these basic tenets of the small-is-beautiful philosophy and how they facilitate new business creation in the division.

Appoint a growth manager as DGM: promotes new business creation Corporate executives pursuing the small-is-beautiful philosophy appoint a growth manager as DGM, and this promotes new business creation. AMP president Jim McGuire said the company typically selected a growth manager, but a turnaround manager was appointed when necessary: Looking at the universe, I agree with the notion that different managers are best suited to different stages of the business life-cycle.

Once in a while we have things that border on the turnaround situation. Sometimes, we will move some people in at the level below the DGM. Because of the technology of our products, the performance characteristics and the applications, it requires more of an engineering background in this division. A manufacturing background would be more appropriate for one of our high tonnage divisions.

Autonomy for the DGM: helps new business creation Corporate executives pursuing the small-is-beautiful corporate philosophy give the DGM a great deal of operating autonomy to run the business, and this facilitates new business creation in the division. For acquisitions you always need corporate approval, no matter what size the acquisition is. For capital, I need to go up. So they get started. My capital approval limit of one million dollars applies to one particular project. Now, we can play the game of splitting it up [chuckles] and we do that sometimes.

It still shows up in the annual budget, of course. We can sign for millions of dollars. Buddy March recalled that both 3M and Xerox had wanted to acquire Filmsort, the company that he previously headed up. March said he chose 3M because of the autonomy the company gave to its DGMs, and he Small-is-beautiful corporate philosophy attributed the success of 3M Micrographics in part to the discretion he enjoyed as DGM.

Not in running the routine business. Greater autonomy is not a license to hide Corporate executives pursuing the small-is-beautiful philosophy give the DGM a great deal of operating autonomy because they trust him. But this does not mean that he can undertake new business initiatives without keeping the executives fully informed. For this purpose, a systematic qualitative grounded theory methodology GTM was used.

During a five-month period, corporate entrepreneurs from one of the chief Iranian research institutes were systematically interviewed. Based on the research results, in addition to endorsing the existence of such a rivalry process among corporate entrepreneurs, the GTM model extends the literature of CE by examining the previously unaddressed part of the process, i. Keywords: corporate entrepreneurship; entrepreneurial competition; entrepreneurial tournaments; tournament theory; grounded theory methodology.

Highlighting the entrepreneurial process is vital since firstly, economic ideologies claim that the market, as the heart of the economy, is governed by chains of cause and effect, which are moderated by entrepreneurs, and as a result, entrepreneurial behaviours should be carefully studied Kirzner, Secondly, almost half of all entrepreneurial initiatives are doomed to failure.

Therefore, scrutinising the entrepreneurial process with the aim of diagnosing impediments to progress and creating fruitful entrepreneurial ventures, is crucial. Some of these initiatives are briefly discussed as follows. As one of the pioneers in understanding the process, Burgelman integrated the literature on entrepreneurship in organisations from a strategic viewpoint and provided a conceptual integration of CE.

The study drew attention to the main prerequisites for fruitful CE, such as organisational structure and learning. The research led to the development of a framework, based on which corporate entrepreneurs were considered to be in mutual relationships with three principal variables: strategic, external and internal variables. Among the internal variables, several factors are considered, for example: personal fitness, knowledge and experience, opportunity, initial encouragement, need for reassignment and change, resources, planning horizons, support and so on.

Hayton , in pursuit of a theoretical explanation for the effect of HRM in providing a proper atmosphere for emerging CE, developed two interdependent themes: encouragement of discretionary entrepreneurial contributions and acceptance of risk. CE has also been investigated in the governmental sector. In addition, the roles of some components have been emphasised as important for encouraging fruitful CE, for example: the political component, complexity, control, rewards and motivations and so forth.

Kuratko , by proposing an extensive model of CE shows how the process of CE functions, including external triggers, strategies, organisational factors, managerial factors, individual elements, outcomes and consequences. Salary increases and promotions, for instance, are mentioned as the managerial outcomes of the process.

However, none of the above-mentioned models or studies has considered how corporate entrepreneurs within an organisation compete with one another. The current research presumes that despite the existence of competition amongst corporate entrepreneurs in an organisation, such entrepreneurial competitions or tournaments have not been maturely defined or investigated; they have merely been mentioned by a few authors, e.

A number of authors have investigated competition among employees, e. In this regard, Gill and Prowse found that competition in a promoted tournament for winning a prize is a ubiquitous phenomenon in the labour market. Delfgaauw, Dur, Sol and Verbeke , by observing Dutch retail chain stores, deduced that conducting a sales competition among employees has a significant effect on sales growth, and that employees are not motivated only by the aim of gaining more rewards, but also, by winning the competition, as predicted by so-called tournament theory.

Based on the theory, employees of an organisation at the same level participate in competitions or tournaments for promotion, and they engage in a rivalry process to further their career. At the end of each tournament there will be only one winner, who will be greatly rewarded — the so-called winner-takes-all outcome. Although there will be only one winner, interestingly, other employees enthusiastically engage in the tournaments. On the other hand, there are unique dissimilarities between employees and corporate entrepreneurs or even between one corporate entrepreneur and another.

Zahra and Covin and Zahra have comprehensively considered these differences. Takii argues that because entrepreneurs simultaneously recognise similar opportunities, they constantly find themselves in a dynamic competition based on grasping those opportunities. Current research with a multidisciplinary approach goes further and applies tournament theory to CE, assuming that corporate entrepreneurs in an organisation participate in a series of rivalry tournaments, in a similar way to the employees. The rivalry tournaments between corporate entrepreneurs in an organisation are triggered by a combination of organisational and personal requirements.

In addition, the research supposes that at the end of each entrepreneurial tournament there will be just one winner, a corporate entrepreneur who will be highly compensated and probably given an opportunity for promotion. If the above-mentioned hypotheses are accurate, we still know little about the process of entrepreneurial tournaments, and even less about the strategies that are applied by corporate entrepreneurs to win these tournaments. Thus, the four main hypotheses of this research are presented as follows:. The remaining sections of the paper are organised as follows: First, the literature on the concept of entrepreneurship is reviewed together with the literature from which the notion of CE and its elements is derived.

Second, tournament theory is discussed as the theoretical foundation of the study and its aims, and entrepreneurial tournaments are illustrated. Third, statistical populations and the method of gathering data are explained in the methodology section. In the final section, the results and their implications are presented. Klein and Bullock argue that entrepreneurship is theoretically rooted in the theory of economic development proposed by Schumpeter ; , the explanations of profit and the firm given by Knight , the market process discussed by Kirzner ; ; and the theory of technological adoption and diffusion proposed by Schultz ; ; In one sense, entrepreneurship is seen as the respected heritage of the Austrian school of economics, which emphasised the study of the actions of individuals.

Based on this school of thought, the market is a dynamic process that is determined by entrepreneurs. Kuratko defines the term as a dynamic process of vision, change and creation, which requires passion and energy in the direction of creating and implementing new ideas. Furthermore, an entrepreneur accepts risk, needs to think creatively and requires a sufficiency of resources and an efficient mechanism for recognising opportunities.

From time to time, CE is expressed as organisational venturing. The two main criteria for distinguishing corporate entrepreneurs are established entrepreneurial intention EI , and entrepreneurial orientation EO. Douglas and Fitzsimmons argue that the EI of corporate entrepreneurs is to some extent different from other kinds. Accordingly, it would be more precise if the intentions of corporate entrepreneurs were separately investigated.

It is notable that the self-reliance of corporate entrepreneurs also differs from that of other types of entrepreneurs. In this regard, corporate entrepreneurs are eager to accept direction and guidance from their superintendents, but SME entrepreneurs tend to be more self-reliant. Many authors believe that EO has become a central concept in the domain of entrepreneurship.

Lumpkin and Dess define EO as the process of strategy-making. Anderson and Eshima refer to EO as a behavioural tendency and a strategic decision-making practice. Since the main aim of the research is to formulate the rivalry process among corporate entrepreneurs by focusing on inter-organisational tournaments, it is necessary to have a clear image of an entrepreneurial tournament based on the literature.

Consequently, in this section, the nature of entrepreneurial competitions and entrepreneurial tournaments will be briefly discussed. Haanes and Fjeldstad discuss three levels of resource competitions: i entrepreneurial competition, ii contractual-level competition and iii operational competition. In the first level of competition some qualities are desirable and need to be acquired by entrepreneurs, for instance, know-how in basic technology, the ability to learn from ongoing projects, the ability and willingness to experiment and the ability to solve new problems and come up with innovative solutions.

Schumpeter discusses the fact that entrepreneurial competitions combine resources in a new way. Kling , p. Thus, entrepreneurial competitions are necessary for a dynamic and productive industry. In the entrepreneurship literature, competition refers to a contest among entrepreneurs; however, the notion of inter-organisational competition between corporate entrepreneurs has been neglected. Nevertheless, the term has been partially quoted by a small number of authors during the past 20 years, e.

For instance, Low, Venkataraman and Srivatsan tried to enhance the classroom experience of entrepreneurship using solid theory. The research aimed to investigate the usefulness of an entrepreneurial game for both research and teaching. The authors found that similar opportunities are simultaneously identified by different entrepreneurs and, since one successful result tends to bring about another, so other entrepreneurs are deprived of access to resources. As a result, there is a continuous dynamic competition amongst entrepreneurs to increase revenue and obtain resources. In other words, entrepreneurship seems to be a continual competitive tournament.

Gattiker and Ulhoi believe that an adequate network is a requirement for obtaining secure resources within an entrepreneurial tournament. Since the aims of this study were initially established based on the principles of tournament theory, the theory is briefly presented here. Describing this phenomenon was problematic for both classical and neoclassical economists. Why a CEO is so highly paid in comparison with other employees was a question that attracted the attention of labour economists, and as a result, after some investigation, Lazear and Rosen introduced the concept of tournament theory.

The winner of the competition or tournament will perhaps be chosen as the next CEO of the organisation. Furthermore, the theory supposes that employees could be further motivated by greater rewards.

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Therefore, the organisation tries to create incentives DeVaro, Assigning a higher prize motivates employees to engage in the tournament more eagerly and to struggle more enthusiastically. In this regard, Eriksson submitted the theory to experimental testing by analysing 2, Danish executives.

Not always, but commonly, a very high reward is considered to be one of the main drivers of winning a tournament. The scope of the research was restricted to the individual level, and neither teams nor departments were considered. A qualitative methodology was chosen for addressing the aims of the research. During the s Glaser and Strauss introduced the grounded theory methodology GTM as a response to the need for developing a systematic procedure for exploring phenomena in the domain of sociology. The data in the GTM are commonly gathered by conducting interviews, via phone calls, online or face-to-face.

The GTM is not commonly considered as a methodology for developing existing theories or opinions, due to the fact that the GTM tries to generate a novel theory from the grounded data. It is notable that in the current research, tournament theory has been used to develop hypotheses, not to form the theory. In addition, tournament theory offers no explanation at all for the rivalry process. The GTM starts with asking broad-spectrum general queries of the statistical population, about the process that is being investigated.

The statistical sample consists of individuals who have been recognised as appropriate for the aim of the research as they have experienced the processes and phenomena involved. The interviews are followed by open-ended questions and, based on the GTM approach, questioning should be continued until saturation is reached, e. Depending on the complexity of the process, saturation can be achieved at the 25 th interview or thereafter. In the present study, theoretical saturation was achieved at the 32 nd interview.

The content of the questions should be around the key issue and its related subjects. For instance, asking questions aimed at identifying the elements that have led to the emergence of the phenomenon — core phenomenon , investigating how and why the process is influenced — causal conditions, what actions have been taken by participants to deal with the situation — strategy, or even scrutinising the outcomes from implementing the strategies — consequences.

These categories are presented as follows: i causal conditions, ii phenomenon, iii context, iv intervening conditions, v strategies, and vi consequences. In the next step, the gathered data are analysed through three rounds of coding: i open coding, ii axial coding and iii selective coding. During the research, when a new dimension of the phenomenon was revealed, the corporate entrepreneurs were sometimes interviewed more than twice.

In this study, each entrepreneur was interviewed at least twice. These interviews were conducted over a five-month period using face-to-face interviews, phone calls and if necessary, emails. During the study period two research assistants facilitated the questioning procedure, which was also an efficient strategy for tackling possible biases. Semi-structured interviews were undertaken in accordance with Zorn cited in Johnstone, , p. Each single interview lasted about minutes. Eventually, the gathered data were entered into an Excel file to be later categorised based on the steps of the GTM.

For the aim of investigating and formulating the rivalry process between corporate entrepreneurs by using GTM, a corporation with some specific features should be investigated. Firstly, research on CE should be conducted within corporations, large firms or big business. Simply, a corporation can be defined as a legal entity that is officially registered by the government and includes groups of relationships and resources, with the main purpose of creating value for its stakeholders. However, in the context of CE, a corporation is defined as an organisation with more than employees, although the number may change from country to county.

Secondly, corporate entrepreneurs should be chosen who have experienced the rivalry process. In addition, they must be available to be interviewed during the various rounds of the GTM. The centre has more than employees. These features are considered to be crucial for this research.

Accordingly, two departments of the ITRC with a background of entrepreneurship and strategy were chosen: the Department of Business and Entrepreneurship and the Department of Strategy. Before conducting interviews, a sample consisting of 16 corporate entrepreneurs was identified, using the characteristics of corporate entrepreneurs described by Zahra and Covin Chief Information Technology Officer. Research and Development Associate. Based on the GTM the data gathered from interviews should be analysed via three different rounds of coding.

As a rule, during open coding a bunch of text is encircled and then labelled. Following the procedures of GTM, the typed texts should be labelled sentence by sentence. In this research, open coding involved extracting labels, and categories. This is demanding work but inspires the most original ideas. Continuous comparative analysis should be performed in this level to ensure consistency in the data, and in the methods by which the data are categorised. For example, during open coding when new content is revealed which is not consistent with other categories, this may be an indication that it should be categorised under a new label.

When choosing the names of the labels and categorising them using an appropriate approach, the names of categories should make sense. Examples of categories used in this research are entrepreneurial intellectuality of experience , alertness and heuristics. After labelling a large quantity of raw qualitative data and by extracting reflective notes — memoing — the core categories should become apparent.

In addition, by observing the memos, the researchers must think about the possible ways that these memos can explain the process under investigation. Finally, after reading the manuscripts from the interviews several times, the open coding is considered complete if there are no new categories. The second round of the coding procedure is known as axial coding. In this level of coding the probable relationships among the categories which have emerged from the open coding are carefully considered.

Based on this, the following terms are defined:. The causal conditions are factors such as an efficient organisational reward system or the rewards given to the winners of tournaments. This is the phenomenon which strategies have later been developed to deal with. In this case it will be the process by which a corporate entrepreneur has been successful in an entrepreneurial tournament.

In this level, diagramming can be utilised as the best solution. Lines in the shape of arrows aid the researcher in deducing relationships. In fact, this method is suitable for explaining how the process works. The extracted model is presented in Figure 1.

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Around the core category a storyline is developed, which is supported by strategies for accomplishing success in the tournament, and other blocks of theory. At this stage, there is no visualisation or diagramming, only a storyline. At the selective coding stage, the whole story together with the main storyline of the phenomenon should be developed, as an overall explanation of the generated theory. The storyline is a paragraph of interpretation about the generated theory that explains how the core process really functions.

The storyline is presented in the results section. A corporate entrepreneurial tournament is a dynamic rivalry process amongst corporate entrepreneurs in an organisation. Such tournaments are triggered by a combination of organisational and personal factors. To achieve success in an entrepreneurial tournament, and to benefit from its rewards, is the leading motivation for entrepreneurs to participate in such tournaments.

This achievement of success requires effective strategies. It does not matter if the adopted strategies are ipso facto detrimental or desirable; the strategies have only to be efficient. Furthermore, the adopted strategies are affected by the intervening conditions and by the context of each tournament. In this regard, the intervening conditions do not necessarily remain constant between each tournament, though they do not usually change during a given tournament.

Examples of these conditions are cultural values, the agility of the organisation, the organisational life cycle and so on. In addition, the features of the context in which a tournament emerges affect the strategies, for instance the duration, participants and sensation of the tournament. Eventually, at the end of a corporate entrepreneurial tournament, there will be only one winner, who will be significantly rewarded. However, the consequences of winning a tournament are not always favourable. In fact, winning a corporate entrepreneurial tournament has its own advantages and disadvantages, for example: obtaining a significant promotion, a significant increase in salary or abusing the illegitimate power obtained.

The model extracted from the GTM depicting the details of the blocks of the theory is presented in Figure 1. The reliability of the theory was considered in different ways. Firstly, the synthesised data was restricted to corporate entrepreneurs who have achieved success at least once in an entrepreneurial tournament. Secondly, to prevent bias, two research assistants were involved in the research, and both were completely aware of the theme of the research and the concepts of CE.

Finally, those corporate entrepreneurs who participated in the research reviewed the generated model to see if it was consistent with the given statements. However, these authors considered neither how the decision to act entrepreneurially is made, nor what strategies are used by corporate entrepreneurs to improve the performance of the corporation.

The GTM model depicts that participating and accomplishing an entrepreneurial tournaments, entrepreneurial decisions, and applied strategies within entrepreneurial tournaments are highly affected by intervening and causal condition. This subject was not clearly investigated in previous CE models.

In this regard, the model shows that to accelerate and facilitate entrepreneurial decisions, the managers can emphasise on providing better organisational conditions e. In other words, a series of initiatives to win an entrepreneurial tournament is comprehensively illustrated by the model developed in this research, within the strategies block of the theory. The GTM model discloses not only these strategies, but also reveals that some of the applied strategies can be detrimental.

For example, lobbying or establishing informal networks in the workplace to be informed of top managerial decisions sooner than other entrepreneurs, if the others do at all. As tournament theory predicts, compensation mechanisms have always performed an important role in initiating any tournament. This notion is endorsed by the causal conditions of the grounded model. In this regard, Hayton and Kelley suggested a competency-based approach toward motivating CE instead of the traditional forms of job analyses. The GTM model goes further than the current boundaries and shows that not only organisational compensation mechanisms are crucial for a dynamic entrepreneurial tournament, but also allow entrepreneurs to follow tournaments more closely, especially when a notable reward or prize is set for each tournament.

Alertness or awareness of opportunities that other entrepreneurs are not fully aware of Kirzner, has always appeared as an important factor in any entrepreneurial process. Its influence has been confirmed by this research, also. In fact, based on the conducted interviews, alertness as a way of understanding the distribution of opportunities and putting them into practice has been mentioned as a factor that can trigger corporate entrepreneurs to initiate a tournament.

Risk-taking behaviours have constantly been cited as a determining factor for corporate entrepreneurial activities. With that in mind, Hayton , in pursuit of a theoretical explanation for the effect of HRM in providing a better atmosphere for emerging CE, developed two interdependent themes: encouragement of discretionary entrepreneurial contributions and acceptance of risk. The model in this research shows that the risk-taking behaviour dimension is not only important, but also has an important role in initiating an entrepreneurial tournament.

The outcomes of the research endorse this aspect also; for instance, the research shows that accessibility of resources is an intervening condition that determines the extent to which a corporate entrepreneur decides to initiate an entrepreneurial venture. Furthermore, efficient use of organisational resources is categorised as an efficient strategy , which is essential for a productive entrepreneurial tournament.

Networking is discussed as one of the main categories of intangible resources and the importance of such resources has been discussed using the resource-based view RBV. However, few studies determine how exactly entrepreneurial networks function, especially within entrepreneurial tournaments. Apart from the research indorsing the importance of networking to entrepreneurs, which was recognised as an intervening condition, the GTM model finds out that the quality of networks, formal and informal, can be vital to entrepreneurs. In addition, the model depicts that networking can be applied by entrepreneurs as an efficient strategy to accomplish a successful tournament.

Based on the interviews, networking has been used for sharing knowledge, reducing operating cost, accessing advanced technologies, recognising opportunities, evaluating entrepreneurial ideas, funding NSD and NPD projects and so on. As a result, the quality of entrepreneurial networks can define the intensity of entrepreneurial activities within a tournament.

Adhering to organisational values is crucial for corporate entrepreneurs Burgelman, , and in this regard, one of the main intervening conditions of the model was recognised as adhering to organisational values. Nowadays, it is understood that CE is a process that engages more than one division of the organisation. As Burgelman argued: CE needs more than one participant because it is a multilayered activity. In this regard, the results of the research recognise networking , both internal and external organisational networking , as a strategy that has apparently been adopted by corporate entrepreneurs.

The research has also provided some managerial implications. One of the main concerns of HR managers should always be to motivate entrepreneurs to participate in tournaments, and not to quit their jobs. In fact, organisational desertion is a common phenomenon, especially for corporate entrepreneurs who are to some extent already mentally predisposed to quit the organisation and launch their own business start-up. In this research, entrepreneurial tournaments were discussed as an opportunity to tackle this problem. One basic limitation is related to the chosen methodology; it is common at the end of qualitative research for the theory to be examined with new data, to determine to what extent the theory remains consistent.

Iran has some particular macroeconomic and social capital characteristics, such as the level of entrepreneurial activities and the current state of the economy, which have probably influenced the generality of the results. Hereby I would like to acknowledge the help of the participants of the ITRC and the reviewers of the Journal of Entrepreneurship, Management and Innovation without whose insightful comments the research could not have been completed. In addition, I want to express my gratitude to those practitioners of Corporate Entrepreneurship CE who have opened ways to us to realise the value of CE.

Mohammad Zarei, has a M. His research interests include strategies of corporate entrepreneurship CE and microeconomic studies. Publishing partner. Abstract The notions and motivations of inter-organisational rivalries among employees have to some extent been highlighted by classical theories of management such as tournament theory. Thus, the four main hypotheses of this research are presented as follows: 1 What factors trigger entrepreneurial tournaments within an organisation? Entrepreneurial orientation EO Many authors believe that EO has become a central concept in the domain of entrepreneurship.

Defining an entrepreneurial tournament Since the main aim of the research is to formulate the rivalry process among corporate entrepreneurs by focusing on inter-organisational tournaments, it is necessary to have a clear image of an entrepreneurial tournament based on the literature. Entrepreneurial competitions Haanes and Fjeldstad discuss three levels of resource competitions: i entrepreneurial competition, ii contractual-level competition and iii operational competition.

Tournament theory Since the aims of this study were initially established based on the principles of tournament theory, the theory is briefly presented here. Statistical population For the aim of investigating and formulating the rivalry process between corporate entrepreneurs by using GTM, a corporation with some specific features should be investigated.

Table 1. Analysis the coding paradigm of GTM Based on the GTM the data gathered from interviews should be analysed via three different rounds of coding. Open coding As a rule, during open coding a bunch of text is encircled and then labelled. Axial coding The second round of the coding procedure is known as axial coding. Figure 1. Acknowledgments Hereby I would like to acknowledge the help of the participants of the ITRC and the reviewers of the Journal of Entrepreneurship, Management and Innovation without whose insightful comments the research could not have been completed.

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Journal of Business Venturing, 16 5 , Austin, J. Social and commercial entrepreneurship: Same, different, or both?. Entrepreneurship Theory and Practice,30 1 , Azevedo, R. Examining tournament theory in academe: Implications for the field of human resource development. Middle East Journal of Management, 1 1 , Barney, J. Academy of Management Review, 26 1 , Baumol, W. Entrepreneurship: Productive, unproductive, and destructive. Journal of Political Economy, 98 5 , — Bowen, G. Naturalistic inquiry and the saturation concept: A research note. Qualitative Research,8 1 ,

Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation
Corporate Entrepreneurship: Top Managers and New Business Creation Corporate Entrepreneurship: Top Managers and New Business Creation

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