Chapter 13 Strategic Entrepreneurship Hitt, Ireland, and Hoskisson

Chapter 13

Strategic Entrepreneurship

Hitt, Ireland, and Hoskisson

Copyright © 2008 Cengage

Strategic entrepreneurship

Taking entrepreneurial actions using a strategic perspective.

Firms engaging in strategic entrepreneurship simultaneously engage in opportunity-seeking and advantage-seeking behaviors. The purpose is to continuously find new

opportunities and quickly develop innovations to exploit them.


Definitions

Entrepreneurship A process used by individuals and groups to identify

entrepreneurial opportunities without being immediately constrained by the resources they control.

Corporate entrepreneurship Applying entrepreneurship (including the identification

of entrepreneurial opportunities) within ongoing, established organizations.

Entrepreneurial opportunities Conditions in which new goods or services can satisfy

a need in the market. Increasingly, entrepreneurship positively contributes to individual firms’ performance and stimulates growth in countries’ economies.


Innovative activity

Firms engage in three types of innovative activity Invention - the act of creating a new good

or process Innovation - the process of creating a

commercial product from an invention Imitation - the adoption of an similar

innovations by different firms. Invention brings something new into being while innovation brings something new into use.


Entrepreneurs

Entrepreneurs see or envision entrepreneurial opportunities and then take actions to develop innovations to exploit them.

The most successful entrepreneurs have an entrepreneurial mind-set, which is an orientation that values the potential opportunities available because of marketplace uncertainties.


International entrepreneurship The process of identifying and exploiting

entrepreneurial opportunities outside the firm’s domestic markets has become important to firms around the globe.

Evidence suggests that firms capable of effectively engaging in international entrepreneurship outperform those competing only in their domestic markets.


Producing innovation

3 basic approaches used to produce innovation internal innovation

R&D and forming internal corporate ventures cooperative strategies such as strategic

alliances acquisitions


2 types of innovation

Firms create two types of innovation—incremental and radical—through internal innovation that takes place in the form of autonomous strategic behavior or induced strategic behavior.


Cooperative relationship

To gain access to the specialized knowledge that often is required to innovate in the complex global economy, firms may form a cooperative relationship such as a strategic alliance with other companies, some of which may be competitors.


Acquisitions

Acquisitions are another means firms use to obtain innovation. Innovation can be acquired through direct acquisition, or firms can learn new capabilities from an acquisition, thereby enriching their internal innovation abilities.


Creating value

The practice of strategic entrepreneurship by all types of firms, large and small, new and more established, creates value for all stakeholders, especially for shareholders and customers. Strategic entrepreneurship also contributes to the economic development of countries.

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Chapter 13 Strategic Entrepreneurship Hitt, Ireland, and Hoskisson