The survey was set out with the purpose to analyze if corporate entrepreneurship can function as an effectual corporate scheme.
Before shiping upon the instance survey of 3M for the same intent it was of import to understand the literary context of the survey which includes operational definitions of of import footings like entrepreneurship, corporate entrepreneurship and corporate scheme ; function and importance of corporate entrepreneurship and corporate scheme in an organisation and the association between corporate entrepreneurship and corporate scheme. The current chapter serves this of import intent as it provides a elaborate literature reappraisal on the topic.Literature reappraisal has been said as a foundation of research survey as it provides the conceptual and theoretical context to the topic under survey ( Garrad, 2006 ) . It besides justifies the choice of research job by supplying its significance and assists a research worker in seeking the cognition spreads, in planing the research methodological analysis and in foretelling the result of the survey thorough the analysis of old surveies ‘ findings ( Fraenkel & A ; Wallen, 2001 ; Gratton & A ; Jones, 2003 ; Shaughnessy, 2009 ) .The chapter is divided into four subdivisions. First subdivision is on entrepreneurship, in which the research worker has provided a brief overview of the significance, importance and function of entrepreneurship together with the analysis of literature on entrepreneurship as a managerial scheme. The 2nd subdivision describes corporate entrepreneurship in item including elaborate treatment on the proper apprehension of this construct and execution of corporate entrepreneurship in concern houses. The 3rd subdivision looks into the significance and importance of corporate scheme together with the demand of the strategic planning and direction.
The last subdivision is the nucleus of the survey in which the association between corporate entrepreneurship and corporate scheme have been examined. The literature in all subdivisions has been reviewed critically based on the nonsubjective judgements gained from the broad assortment of plants relevant to the research.
What is Entrepreneurship?
There is no universally accepted definition of entrepreneurship and different bookmans have defined it in different contexts and have used it with marked fluctuation ( Gedeon, 2010 ) . After reexamining the literature on the definition of entrepreneurship, Gedeon ( 2010 ) concluded that entrepreneurship is a multi-dimensional construct that ought to be understood in the context of its use.Therefore, any survey on entrepreneurship ought to explicitly reference the definition of entrepreneurship to clear up the survey ‘s position on the significance and application of entrepreneurship ( Bruin, & A ; Dupuis, 2003 ) . For this survey the selected definition of entrepreneurship is:Entrepreneurship is the procedure whereby an person or a group of persons use organised attempts to prosecute chances to make value and turn by carry throughing wants and needs through invention and singularity, no affair what resources the enterpriser presently has ( Robbins & A ; Coulter, 2005, p.
40 ) .The selected definition is in conformity to the UNCTAD ‘s position on entrepreneurship. In a study published on the function of entrepreneurship in economic development by UNCTAD ( 2004 ) , it was asserted that entrepreneurship ought to be considered as procedure non a inactive phenomenon. The study farther provided that despite the usage of a figure of economical and societal constructs in the bing definitions of entrepreneurship, all definitions can be linked with any of the three major schools of idea on entrepreneurship: Cantillon or Knightian entrepreneurship based on hazard seeking ; the Schumpeterian entrepreneurship focused on innovativeness and the Kirznerian entrepreneurship concentrated on chance seeking.
In the present survey, the focal point is on chance seeking by utilizing innovativeness either by an person or a group of single.Though the present survey gives particular significance to the importance of invention and singularity, it does non follow Schumpeterian school of idea due to a figure of grounds. Schumpeter ‘s theory of entrepreneurship is extremely focussed on personal entrepreneurship where enterpriser is portrayed as a great hero and a alone individual who can convey singular economic development by transporting out Acts of the Apostless of inventions ( Whelan & A ; O’Gorman, 2007 ) . Such an individualistic position of entrepreneurship has been under terrible unfavorable judgment.This epic position of enterpriser leads the populace to believe that, like leaders, enterprisers are besides born non made which serves as a hurdle in the acquisition of invention and entrepreneurship ( Dana, 2001 ) .
Furthermore, in most instances, the procedure of invention in big endeavors is carried out by a squad non by an person ( Reich, 1987 ; Whelan & A ; O’Gorman, 2007 ) . Ebner ( 2006 ) and Whelan and O’Gorman ( 2007 ) noted that Schumpeter himself recognised this job and shifted the theoretical paradigm toward a theoretical account of research and development in endeavors. However, this displacement from single to enterprise entrepreneurship resulted in conceptual dualism and theoretical incompatibilities ( Ebner, 2006 ) .Another job with the Schumpeter ‘s position of entrepreneurship is its accent on making alteration by “ acquiring new things done ” ( Schumpeter, 1934 ) . This spreads uncertainness and produces disequilibrium throughout an bing system which is exploited by enterpriser to convey competitory advantage ( Lau, Chen & A ; Hu, 2004 ; Roininen & A ; Ylinenpaa , 2009 ) . This position of enterpriser as Godhead of alteration non merely makes it about impossible to allow person larn entrepreneurship ( Dana, 2001 ) , but it besides requires clip and is non suited for daily development and advancement of an organisation.
The present survey follows the Kirznerian school of idea. Kirznerian theory of entrepreneurship, with contrast to Schumpeterian entrepreneurship, is based on the development of chances in the bing system instead making new 1s ( Roininen & A ; Ylinenpaa , 2009 ) . The basic responsibility of Kirznerian enterpriser is to stay watchful of the alterations in the market and the unnoticed chances ( Lau, Chen & A ; Hu, 2004 ) .
This position of entrepreneurship encourages instruction and preparation of enterprisers and makes it possible to use entrepreneurship throughout the organisation instead depending on one or two enterprisers ( Dana, 2001 ) .Johnson ( 2001 ) believed that entrepreneurial abilities can be fostered at all the degrees of an organisation. He provided a list of abilities which an person or group of single should larn to attest in order to go an enterpriser which include the ability to take ownership, to do autonomous determinations, to being unfastened to alter, to digest uncertainness, creativeness, to work out job, to capture chances, to pull off hazard, to explicate a vision and to do an impact. Other of import characteristics that an enterpriser must keep are motive, independency, invention, vision and finding.Davidsson ( 2005 ) , however, asserts that the presence of all these abilities as a pre-requisite of entrepreneurship which makes the construct impossible to research. Therefore, importance should non be given to the abilities but to the “ organized attempt ” of the person or group of single to innovatively make value. Johnson ( 2001 ) seemed to hold with this as he pointed out that all the definitions of entrepreneurship have three things in common: capturing thoughts, roll uping available resources and uniting these two to make value for the organisation. Though he was incorrect in asseverating that all definitions contains these three constructs – merely definitions following Kirznerian school of idea can utilize these constructs – he was right in indicating out that the nucleus of entrepreneurship is to make value from available resources by utilizing new thoughts and invention.
2.2.2. Importance of Entrepreneurship in Organizational Context
Entrepreneurship, whether practiced by a individual person in an organisation or by all the members of an organisation, is aimed at making value for the organisation and its importance in an organisation can non be neglected. Though for some, as observed by Johnson ( 2001 ) , its importance is limited to new organisations merely and one time an organisation grows to a peculiar size, entrepreneurship is unneeded. However, Carsrud and Brannback ( 2007 ) and Johnson ( 2001 ) rejected this position and provided the illustrations of a figure of big organisations that are profiting from entrepreneurial attack. They asserted that the size of organisation does non halter development of entrepreneurial behavior in an organisation.
Organizations require entrepreneurship for economic betterment of the organisations at all phases of development. In add-on, the nature of the organisation is besides irrelevant as entrepreneurship has permeated in every field of life from pure concern houses to ocular humanistic disciplines ( Allen, 2003 ; Gabriel, 2008 ) .However the focal point of this survey is concern organisations and, hence, it looks into the function played by entrepreneurship in the development and success of concern houses. One of import characteristic of entrepreneurship is to travel from the resource based attack to value based attack. Gabriel ( 2008 ) held that for entrepreneurship, the said single or group of persons must hold the manifested ability and willingness to make value irrespective of the resources in manus. Therefore, alternatively of looking at what is available, entrepreneur expressions at what upper limit can be achieved from it ( Robbins & A ; Coulter, 2005 ; Johnson, 2001 ) .
This attack is the secret through which enterpriser bring success to organisations.In today ‘s competitory concern universe, the importance of entrepreneurship for concern houses have increased manifolds because entrepreneurship is the key to convey and keep competition in market ( Donselaar, Erken, & A ; Klomp, 2004 ) . In add-on, entrepreneurship has been found to bring forth economic development. Several surveies have shown the relationship between entrepreneurship and economic growing ( e.g.
Carree & A ; Thurik, 2003 ; Barth, Yago, & A ; Zeidman, 2008 ) . It has besides been found to better the productiveness by exciting industry kineticss and invention ( Donselaar, Erken, & A ; Klomp, 2004 ) .It creates new industries and new sectors for production and profit-generation ( Allen & A ; Economy, 2008 ) .Hisrich, Peters and Shepherd ( 2008 ) pointed out that the impact of entrepreneurship on concern houses is non limited to increasing per capita income or productiveness. Entrepreneurship brings alterations in the full civilization of the concern which in bend brings economic growing. However, they remained focussed merely on the new merchandise or new venture development and failed to see the importance of entrepreneurship in brining economic development in bing ventures. They asserted that the focal point on short-term-profit have hindered the creativeness to thrive within organisation.
However, as provided above, entrepreneurship is non merely doing large alterations in the market by presenting new merchandise or by developing new concerns ; it is about doing usage of the available chances in advanced ways and is, hence, every bit of import in brining regular short-run accomplishments ( Dana, 2001 ; Lau, Chen & A ; Hu, 2004 ) .Drucker ( 2007 ) besides held the same position and explained the importance and function of entrepreneurship in the bing concern organisations, public-service organisations and new ventures. He asserted that entrepreneurship is of import for all these organisations and besides pointed out that the treatment on the function of entrepreneurship ought to be started from its importance in bing concern instead new venture. Minniti ( 2007 ) besides pointed out that the construct of entrepreneurship is non limited to new concerns merely ; it can be applied in a figure of activities from seeking the solution of simple day-to-day life jobs to doing managerial determinations.
Entrepreneurship as Management Strategy
Guo ( 2006 ) after detecting that there is deficiency of research analyzing entrepreneurship as direction scheme, conducted a survey on entrepreneurship direction in wellness sector. Though the survey was conducted in the context of wellness services organisations, it provides really of import information sing entrepreneurial direction. He reviewed the literature on managerial function and behavior and found that one of import function of director is as pioneer that involves making advanced schemes to procure resources for the organisation ( Guo, 2006, p. 513 ) .Guo ( 2006 ) besides looked into the association between managerial activities and entrepreneurial activities which overlaps to organize entrepreneurial direction. He provided that advanced managerial scheme must be adopted by entrepreneurial directors in order to efficaciously pull off the organisation. Harmonizing to him, an entrepreneurial director plays the function of interior decorator, strategians, pioneer, hazard taker and communicator in an organisation.
However, there are bookmans who consider entrepreneurship as opposite to direction ( Bachemin, 1989 ; Bouchard, 2001 ; Nieuwenhuizen, 2007 ) . Bachemin ( 1989 ) wrote an article in Black Enterprise where she gave illustrations of the good enterpriser who lost their concern due to bad direction. She explains that entrepreneurship and direction requires different sort of thought and accomplishments and in most of the instances enterprisers do non like to pull off concern. However, Bachemin ‘s statement relies excessively to a great extent on individualistic entrepreneurship, which was the popular subject when this article was written ( Whelan & A ; O’Gorman, 2007 ) . Furthermore, entrepreneurship was seen by her every bit limited to get downing a new concern which once more is a usual error committed by the bookmans, as discussed earlier.
Alternatively of seeking nexus between the accomplishments and thought and the function and duty of enterpriser and director, the better manner is to look at the association between entrepreneurship and managerial scheme of an organisation. If we see entrepreneurship with Kiznerian position concentrating on advanced development of available chances and application of entrepreneurship in the full organisation, instead looking for single enterpriser, entrepreneurship can be seen as an effectual managerial scheme.Entrepreneurship as direction scheme ensures that administrations grow successfully through concentrating on alteration, chance and administration broad direction ( Kobia, & A ; Sikalieh, 2010 ) . As a direction scheme, entrepreneurship can non be treated as a natural trait but as a created phenomenon. Drucker ( 2007 ) pointed out the patterns and policies that ought to be implemented in an organisation for integrating entrepreneurship as its managerial scheme. He asserted that by conveying structural and cultural alterations in the organisation, entrepreneurship can be fostered at all degree of the organisation.
3. Corporate Entrepreneurship
2.3.1. What is Corporate Entrepreneurship?
Like entrepreneurship, corporate entrepreneurship besides suffered from heterogeneousness of significances due to unresolved definitional issue ( Sharma & A ; Chrisman, 1999 ) . After reexamining a figure of definitions of corporate entrepreneurship, the research worker chose the undermentioned definitions for corporate entrepreneurship:Corporate entrepreneurship is an organisational procedure for transforming single thoughts into corporate actions through the direction of uncertainnesss ( Chung & A ; Gibbons, 1997, p.
11 ) .The definition has been used in this survey due to its focal point on corporate action and direction of uncertainnesss. These two footings are really of import for the present survey as the survey has been built in the theoretical context of Kiznerian entrepreneurship. The base of the survey is the belief that entrepreneurship is non a natural God-gifted trait in a human being but an attitude toward the life which can be learned and created at all degree of organisation. Furthermore, entrepreneurship has been viewed as advanced development of bing alterations in the market instead making new ; this advanced development of alterations has been justly put in this definition as direction of uncertainnesss.Harmonizing to Vesper ( 1984 ) , corporate entrepreneurship is characterized by three activities and these include making concern units by an constituted house, development and execution of entrepreneurial strategic pushs and eventually the outgrowth of new thoughts from assorted degrees in the administration.
However, Burns ( 2008 ) asserted that the chief intent of corporate entrepreneurship is to derive competitory advantage by promoting invention at assorted degrees of the administration – corporate, division, concern unit, functional or project squad degree. Both Vesper ( 1984 ) and Burns ( 2008 ) are looking into the internal corporate entrepreneurship with small accent on external orientation of the phenomenon.External corporate entrepreneurship is focussed on the resources dispersed in the external environment ( Ferreira, 2002 ) . By uniting these resources with the internal resources, an organisation can make a alone combination of resources which can supply it competitory advantage over other houses in the market ( Ferreira, 2002 ) . External entrepreneurial attempts include entail amalgamations, joint ventures, corporate ventures etc ( Groenwald, 2010 ) . An effectual amalgamation of internal and external entrepreneurship is what this survey refers to corporate entrepreneurship.
2.3.2. Importance and Scope of Corporate Entrepreneurship
Since past few old ages the involvement in corporate entrepreneurship has been intensified due to a figure of alterations at societal, cultural and concern degrees ( Groenwald, 2010 ) . Globalization is one of the major grounds for increased accent on corporate entrepreneurship. Merrified ( 1993 ) pointed out that globalisation has resulted in the creative activity of hypercompetitive markets where alterations are happening at much higher gait.
In this of all time altering extremely competitory market, organisation can non last without uninterrupted procedure of entrepreneurship within every degree of organisation. For him, entrepreneurship within organisations refers to betterment in the bing operation together with creative activity of new operations to replace the bing 1s.Kuratko and Hodgetts ( 2007 ) besides reported the positive impact of turning competition in international market on the function of corporate entrepreneurship. However, they found some other of import grounds, excessively, which have raised the importance of corporate entrepreneurship in the organisations. They found that the failure of traditional methods of corporate direction has led the directors and bookmans to seek for some new methods to replace them. As a consequence, corporate entrepreneurship has come to limelight and organisations have started to implement it as a new direction scheme.Aloulou and Fayolle ( 2005 ) noted that the employees are besides demoing greater involvement in advanced direction and are acute to work in more flexible and originative environment. Besides, the turning consciousness among the directors and concern proprietors of the rigidness of traditional concern attacks and the negative impacts of this rigidness on the economic development of the organisations have besides played a important function in foregrounding the importance of corporate entrepreneurship.
Bouchard ( 2001 ) , nevertheless, believe that corporate entrepreneurship has become another concern craze and directors and bookmans are stressing on its benefits without giving consideration to issues it raises. He asserted that a realistic attack is needed to cover with corporate entrepreneurship with focal point on both pros and cons of corporate direction.He pointed out three chief jobs built-in in the construct of corporate entrepreneurship ( Bouchared, 2001 ) . The first job, harmonizing to him, is the struggle between corporate entrepreneurship and corporate direction.
He held that the co-existence of corporate direction and entrepreneurship generates organisational struggle between entrepreneurial entities and established operating division ( horizontal struggle ) and between entrepreneurial entity and top direction ( perpendicular struggle ) .However, Bouchard ‘s claims are based on the traditional position of entrepreneurship as personified and as separate from direction. As provided above, entrepreneurship can non bring forth expected result without doing entrepreneurship the direction scheme of the house. When entrepreneurship is applied as a managerial scheme act uponing all degree of the organisations the opportunities of such struggles will be lesson. However, the possibility of the happening of these struggles ought non to be overlooked. Bouchard ( 2001 ) himself provided a really good scheme to cover with this job.
He held that enterprisers can cover with these struggles by striking their ain balance between the demands of geographic expedition and development and overcome with their ain means the obstructions created by their environment. This would be possible for the enterprisers due to their flexible attack toward directionThe 2nd issue, which he believed to be more of import than the first one, is the hazard of inconsequentiality. The factors behind this inconsequentiality, as identified by Bouchard ( 2001 ) , is the execution of corporate entrepreneurship in few countries of organisation which means the absence of environment needed to boom entrepreneurship and invention within the organisation. Therefore, corporate entrepreneurship ought to be implemented at all degrees of the organisation and consideration should be given to the factors promoting corporate entrepreneurship.The 3rd of import issue with corporate entrepreneurship is related to early backdown ( Bouchard, 2001 ) . He pointed out the fact that in a figure of instances corporate entrepreneurship does non last for more than a twelvemonth. The grounds, noted by him, of early backdown are alteration in the fortunes favoring corporate entrepreneurship, displacement in strategic precedences and top direction inability to to the full benchmark the benefits of corporate entrepreneurship.
A closer expression at the jobs identified by Bouchard ( 2001 ) show that these jobs are non built-in in corporate entrepreneurship – as he asserted – but are associated with the defective execution of corporate entrepreneurship in organisation that arises out of the deficiency of apprehension of the significance and range of entrepreneurship. The nucleus premise of this survey is that execution of corporate entrepreneurship as corporate scheme can work out all these jobs. A elaborate treatment on how the jobs will be solved by corporate entrepreneurship as scheme will be provided in latter subdivisions of the present chapter.
2.3.3. Implementing Corporate Entrepreneurship in an Organization
As provided above, implementing corporate entrepreneurship in an organisation is non a simple undertaking. Implementing corporate entrepreneurship without proper apprehension of the phenomenon can ensue in figure of jobs and can even take to the backdown from corporate entrepreneurship in less than a twelvemonth ( Bouchard, 2001 ) .
The misconceptions related to corporate entrepreneurship have already been discussed. Here, a brief referral to these jobs is adequate. These misconceptions include the popular belief that entrepreneurship is a natural phenomenon which can non be created or taught ; individualistic position of entrepreneurship where merely few people are consider as enterprisers and the full organisation become capable to them, and arrangement of entrepreneurship as opposite to direction. These misconceptions are the chief ground for the improper execution of entrepreneurship.Peter Drucker was possibly the first one to dispute all these misconceptions. He presented entrepreneurship as the chief duty of directors and pointed out the fact that the entrepreneurship is applicable at all degree within the organisation ( Drucker, 2007 ) . Therefore, corporate entrepreneurship can non be implemented by engaging few enterprisers or by taking power from directors and giving it to entrepreneurs.
Infusion of entrepreneurial thought in the bureaucratic construction of the organisation is the existent corporate entrepreneurship ( Kuratko, Hornsby, Naffziger, & A ; Montagno, 1993 ) .The success narratives of companies like 3M, IBM, and General Electric have established that proper execution of corporate entrepreneurship can be extremely good for organisations ( Kuratko, et al. , 1993 ) . However, it is of import to understand the factors that support the execution of corporate entrepreneurship in the organisation every bit good as the factors impeding this execution.
Srivastva and Agarwal ( 2010 ) conducted a survey on the factors back uping corporate entrepreneurship. They divided the said factors into two wide dimensions – environmental factors and single features. Environmental factors include factors like wages and motive, direction support, resource handiness, organizational construction and hazard taking while single features back uping entrepreneurship include hazard taking prosperity, motive, energy degree, laterality, continuity, and ownership. They designed a questionnaire with the aid of 24 points – based on the above mentioned factors – and conducted statistical analysis on the consequences of the questionnaire to pull out nucleus factors. Seven factors – freedom, wages, authorization, position, squad spirit, leader support and organisational system – have been extracted of which four were found to bring forth important impact on corporate entrepreneurship. These include organisational system, squad spirit, authorization and leader support.All of these factors were environmental which suggests the importance of corporate and organisational execution of corporate entrepreneurship. These factors besides provided that creative activity and direction of corporate entrepreneurship is possible.
The most important factor among the four was found to be organisational system. Therefore, while implementing corporate entrepreneurship, the first precedence of the organisations should be the initiation of entrepreneurial civilization in the organisational system which allows flexibleness and freedom ( Srivastra & A ; Agarwal, 2010 ) . Team spirit and leader support is needed after altering the organisational system to promote entrepreneurship at squad and section degree. Perceived authorization is the least important yet of import factor which highlights the importance of power-sharing in the entrepreneurial organisations.
Therefore, the execution of corporate entrepreneurship in an organisation is a clip devouring procedure. It requires corporate alterations within the construction, policies and patterns of organisation ( Drucker, 2007 ) . These alterations ought to be based on proper appraisal of the organisation ‘s preparedness for required alterations ( Kurtako et al. , 1993 ) . It is besides of import to explicitly advert the aims of the execution of corporate entrepreneurship prior to execution ( Morris, Vuuren, Cornwall, Scheepers, 2009 ) . After implementing corporate entrepreneurship in organisation, the uninterrupted rating of the impact of this execution is of import to analyze the grade to which corporate entrepreneurship has achieved the set aims ( Kurtako, et al.
, 1993 ) .
2.4. Corporate Scheme
2.4.1. What is Corporate Scheme
In Cambridge Advanced Learner ‘s lexicon, scheme is defined as “ a elaborate program for accomplishing success in state of affairs such as war, political relations, concern, industry or athleticss. ” However, it is a general definition of the term and Daniell ( 2006 ) claimed that the best of all time definition of scheme for concern house is,Scheme is the art and scientific discipline of informed action to accomplish a specific vision, an overarching aim, or a higher intent for a concern endeavor ( Daniell, 2006, p.
1 )As can be seen, the focal point of this definition is on action non on the planning, as was the instance in former definition. Daniell ( 2006 ) asserted that schemes are about action and consequences and a really good scheme in paper or head but which has non been implemented is non a scheme in its true sense. One other of import component of this definition is that it clearly mentions the principle for doing a scheme – to accomplish a specific vision, an overarching aim, or a higher intent.Within a concern endeavor, there are several sections and sub-departments, each holding different vision, intent and nonsubjective and, therefore, different schemes.
For case, the ends and aims of selling section can non be similar to the human resource section. However, it is of import for a concern to hold a defined and expressed vision and intent for the full endeavor and the vision and intent of all the sections and sub-departments within an organisation ought to be around that individual vision and intent ( Colley, Doyle & A ; Hardy, 2002 ) . The scheme to accomplish the vision, intent and aims of the full organisation is termed as corporate scheme. It is an collection of all the schemes within an organisation and it links these sub-strategies together to supply a comprehensive and incorporate vision to the organisation, as shown in the figure below ( Cheah, & A ; Garvin, 2004 ) .Figure 2.1: Corporate Strategy Model ( Cheah, & A ; Garvin, 2004, p.
179 )Dransfield ( 2001 ) defined corporate scheme as an organisation ‘s long term programs which will assist the organisation in carry throughing the short-run aims in altering environment. The chief failing of this definition is its position of corporate scheme as a program. As described above, a program without execution is non a scheme.
Furthermore, the definition does non clear up the difference between a corporate scheme and the different concern schemes within an organisation. It does non explicitly advert the comprehension and entirety of corporate scheme ( Cheah & A ; Garvin, 2004 ) .Besides collection of the concern unit schemes, another of import component of corporate scheme is the lucidity of picks for future operations and the clear vision of organisation ‘s present standing ( Brishan, Dye, & A ; Hall, 2011 ) . It non merely defines what a company wants in future but besides mentions the actions needed to carry through those wants ( Bryan, Lyons, & A ; Rosenthal, 1998 ) . After reexamining a figure of definitions of corporate scheme, one definition has been selected for the present survey that incorporates all these elements:Corporate scheme is the form of aims, intents or ends and indispensable policies or programs for accomplishing those ends, stated in a manner as to specify what concern the company is in or is to be in and the sort of company it is or it is to be ( Andrews, 1971, p.
28 as cited in Wilczek, 2008, p. 2 ) .
Importance of Strategic Planning and Management
Strategic be aftering refers to the procedure of scheme preparation while the strategic direction refers to the procedure of implementing and commanding the formulated scheme in an effectual mode. Strategic planning is a continual procedure in an organisation that unifies the direction, employees, stakeholders and clients through common apprehension of the present and the shared vision for the hereafter ( Matthews, 2005 ) . A usual pattern in the bulk of organisations is to carry on one-year strategic be aftering meeting which plays an indispensable function in the development of one-year budget, in the constitution of resource allotment map, in puting fiscal and runing marks, and in arrangement of direction squad on strategic precedences ( Dye & A ; Sibony, 2007 ) .
However, strategic planning will be worthless without a direction procedure to implement and pull off the strategic program ( Transit Cooperative Research Program, 2005 ; Beinhocker, & A ; Kaplan, 2002 ; Dye & A ; Sibony, 2007 ) . Dye and Sibony ( 2007 ) conducted a study of about 800 executives and found that bulk of the executive is non satisfied with the result of the strategic planning procedure. They identified that one of the chief grounds for this dissatisfaction is the absence of a strategic direction system in the organisations of these executives.
Strategic direction is the last stage of the planning procedure ( Gluck, Kaufman, Walleck, McLeod, & A ; Stuckey, 2000 ) which ensures the executing of strategic program ( Dye, & A ; Sibony, 2007 ) . Gluck and co-workers ( 2000 ) observed that strategically managed companies are better than the companies without proper strategic direction system in footings of the thoroughness with which they associate strategic planning into operational determination devising. Furthermore, strategic direction aids in developing a civilization of strategic thought in the full organisation.
By contrast, in the companies holding first-class strategic programs but hapless direction system such thought remains limited to exceed echelon merely ( Gluck et al. , 2000 )One of import benefit of strategic planning and direction is the eventual assessment of the organisation ‘s public presentation ( Colley, Doyle & A ; Hardy, 2002 ) . Alternatively of measuring each concern unit ‘s scheme, director in strategically managed organisation reviews the public presentation of the organisation on the footing of corporate scheme with focal point on cardinal jobs ( Gluck et al. , 2000 ) . In today ‘s globalised universe, the occupation of direction has become much complicated and it is non possible for the directors to carry on in depth rating of all the concern units ‘ public presentation. The importance of strategic planning and direction farther additions with the addition in the size of organisation, merchandise proliferation, variegation, decentalisation, outsourcing and increase in the governmental ordinance and control ( Colley, Doyle & A ; Hardy, 2002 ) .However, it needs to be taken into consideration that strategic planning does non vouch the success of an organisation, it merely heighten the organisation ‘s ability to accomplish the set ends and aims in a timely mode ( Colley, Doyle & A ; Hardy, 2002 ) . In the clip of economic downswing, what saves a company is the direction ‘s ability to grok the alterations in the market and the grade of flexibleness in corporate scheme which allows the alterations in corporate scheme harmonizing to the new chances.
2.5. Relationship between Corporate Entrepreneurship and Corporate Strategy
2.5.1. Similarities and Differences between Corporate Entrepreneurship and Strategy:
Corporate entrepreneurship, as provided above, is non merely associated with the gap of new ventures but besides involves the advanced reclamation of organisation ( Vespar, 1984 ; Groenwald, 2001 ) .
To implement entrepreneurship at corporate degree, it is indispensable to inculcate entrepreneurial thought in the full organisation which requires add-on of entrepreneurship in the construction, map and policies of the full organisation ( Kurtako et al. , 1993 ) . Since corporate scheme plays a critical function in specifying the construction, map and policies of an organisation, alterations in them will in bend impact the corporate scheme. Therefore, one can reason that the execution of corporate entrepreneurship requires extract of entrepreneurship in corporate scheme.It is of import to look at the similarities and differences to understand whether their extract is possible or non ; if the two constructs have similar elements, it will be easier to integrate them together organizing corporate entrepreneurship scheme. One of import similarity between corporate entrepreneurship and corporate scheme lies in the term ‘corporate ‘ . Corporate entrepreneurship refers to the extract of entrepreneurship in the full organisation ( Burns, 2008 ; Kurtko et al.
, 1993 ) while corporate scheme is the scheme of the full organisation ( Cheah & A ; Garvin, 2004 ) . The map of both corporate entrepreneurship and corporate scheme is to supply integrating and coherence in the organisation – the former through the development of the civilization of advanced thought and the latter through the proviso of a common strategic way and vision.Some of the elements of corporate entrepreneurship and corporate scheme are besides similar. Daniell ( 2006 ) observed that the nature of corporate scheme has changed in the current composite, dynamic and altering market. The of import elements of a corporate scheme in today ‘s concern environment are comprehension, flexibleness, creativeness, integrating, motive, duty and effectivity. Three of these elements are besides present in corporate entrepreneurship viz. creativeness, integrating and motive ( Kurtko, et Al.
1993 ) . These three elements can play an of import function in the integrating of the two constructs.However, there are some really of import differences in the two constructs, every bit good. Formulation and execution of corporate scheme is frequently seen as a duty of concern executive direction ( Kurtako et al.
, 2004 ; Dransfield, 2001 ) whereas corporate entrepreneurship can be implemented by any individual within the organisation working at any degree. However this difference can be overcome by giving the duty of preparation to the direction to all people within an organisation. Scholars have already acknowledged the importance of engagement of top direction in the preparation of corporate entrepreneurship in the organisation ( Kurtako et al. , 1993 ; Drucker, 2007 ) .Another of import issue related to the incorporation of corporate entrepreneurship and corporate scheme is the deficiency of consensus among the bookmans on the significance and definition of the corporate entrepreneurship ( Sharma & A ; Chrisman, 1999 ) . Corporate scheme needs to be clear and expressed which can supply a clear way to an organisation and a common purpose and vision to all people working within the organisation ( Brishan, Dye, & A ; Hall, 2011 ) . Due to the deficiency of proper definition of corporate entrepreneurship, it can non supply a clear and cohesive vision to the full organisation ( Bouchard, 2001 ) . To get the better of this difference, it is of import for an organisation to get down from the apprehension of what is corporate entrepreneurship for their organisation and so to bring on the same apprehension of the construct at all degree of organisation before implementing corporate entrepreneurship as a corporate scheme.
2.5.2. Corporate Entrepreneurship Strategy
Corporate entrepreneurship scheme, as defined by Ireland, Kuratko, and Covin ( 2003 ) , is a set of tool, committedness and action framed around entrepreneurial behavior and processes that the concern designs and uses to develop current and future competitory advantage in promising technological or product-market spheres ( as cited in Groenwald, 2010, pp.
113-114 )In simple words, corporate entrepreneurship can be considered as a scheme that administrations can set about to cover with issues like competitory force per unit area, unsure economic conditions and planetary alteration in concern environment through invention and entrepreneurial attack ( Wood, 1988 ) . This scheme shifts the focal point of the organisation toward chase of chance by doing entrepreneurship the kernel of concern operation ( Groenwald, 2010, p. 114 ) . Corporate entrepreneurship scheme is the integrating of entrepreneurial behavior in the strategic vision of an organisation ( Hitt, Ireland, Camp & A ; Sexton, 2001 ) .It is of import to analyze whether or non execution of corporate entrepreneurship as a scheme will alter the procedure of strategic planning and direction in an organisation ( Dess, Lumpkin & A ; McKee, 1999 ) . As provide before, in bulk of the companies a usual pattern is to carry on one-year strategic planning meetings during which corporate scheme is formulated ( Dye & A ; Sibony, 2007 ) . In most of these meetings, the first measure is normally the development of fiscal scheme based on the fiscal place of the company in that twelvemonth ( Dye & A ; Sibony, 2007 ) .
Dess, Lumpkin and McKee ( 1999 ) observed that this fiscal based attack to strategic planning and direction is non suited for the development of entrepreneurial strategic planning and direction. They asserted that the focal point of the traditional attacks to strategic planning is on the development of low-cost schemes which differs significantly from the focal point of the entrepreneurial attack to strategic planning based on distinction. However, they assert that the importance of cost decrease can non be neglected and differentiation-based attack ought to be combined with cost-based attack in order to accomplish better consequences. Since corporate entrepreneurship encourages invention, the development of new and alone combinations of attacks to strategic planning is needed in entrepreneurial organisations.Figure 2.2: Conceptual Model for Corporate Entrepreneurial Strategy ( Ireland, Corvin & A ; Kuratko, 2009 )Ireland, Corvin and Kuratko ( 2009 ) developed a conceptual model for corporate entrepreneurial scheme. The theoretical accounts was better than the other available theoretical accounts of corporate entrepreneurial scheme as it provides it conceptualizes the entrepreneurial orientation as a quality and province of organisation and identifies how this quality and province can be manifested across the organisation, alternatively of concentrating into the behaviour dimension of entrepreneurial orientation, as was done in old theoretical accounts ( Ireland, Corvin & A ; Kuratko, 2009 ) .
Furthermore, it besides provides definite organisational location from where entrepreneurial behavior can emerge and explicitly stipulate the philosophical constituents of corporate entrepreneurial scheme. It acknowledges corporate entrepreneurial scheme as a unique and identifiable scheme for organisation. These four features of this theoretical account non merely do the base above all other theoretical accounts but can besides function as a bluish print for organisations implementing corporate entrepreneurial scheme ( Belousova, Gailly & A ; Basso, 2009 ) .
2.5.3. Professionals and Cons of Corporate Entrepreneurship Strategy
Thornberry ( 2003 ) suggests that in good and bad economic times, invention is a important factor for administrations that are seeking to contend against competitory force per unit area from the industry. Since invention is a cardinal component of corporate entrepreneurship, administrations should unite corporate scheme and corporate entrepreneurship if they want to stay competitory in the planetary concern environment ( Ireland, Covin & A ; Kuratko, 2009 ) .
Scholars reported a figure of of import benefits of implementing entrepreneurial schemes in organisation. Entrepreneurial schemes renew the bing house in a manner to do them more advanced and competitory ( Ireland, Covin and Kuratko, 2009 ) . They are found to bring on creativeness in the people working in an organisation and set up the sense of authorization and duty in them ( Meyer & A ; Heppard, 2000 ; Srivastva & A ; Agarwal, 2010 ) .
Implementing corporate entrepreneurship as a scheme besides helps in covering with a figure of issues normally encountered by the house desiring to implement entrepreneurship at corporate degree. As discussed above, three of import issues sing execution of entrepreneurship at corporate degree are struggle between corporate entrepreneurship and corporate direction ; inconsequentiality due to absence of factors back uping execution ; and early backdown from the corporate entrepreneurship ( Bouchard, 2001 ) . Since preparation of scheme is the duty of direction, execution of corporate entrepreneurship as scheme will guarantee the engagement of direction in the preparation and execution of entrepreneurial schemes in the house ( Kurtako et al. , 2004, Drucker, 2007 ) .
One of import property of strategic direction is to measure the effectivity of corporate scheme to analyze whether it is successful in accomplishing the set end and aims and to find and take the factors impeding the execution of the planned scheme ( Colley, Doyle & A ; Hardy, 2002 ) . This enables an organisation to avoid inconsequentiality of corporate scheme and to advance alteration of the scheme alternatively of backdown. Therefore, alternatively of doing a expansive displacement from one corporate scheme to other corporate scheme, strategic direction aid the organisation in doing of import alterations in the organisation construction and map needed to associate the corporate scheme with operational determination devising ( Gluck et al. , 2000 ) .
Furthermore, by prosecuting entrepreneurial scheme organisation assures the long term execution of entrepreneurship at corporate degree ( Ireland, Covin and Kuratko, 2009 ) . Entrepreneurial organisation has a scheme to regularly seek for the entrepreneurial chances to work them ( Eisenhardt, Brown, & A ; Neck, 2000 ) . All these factors lessen the opportunities of inconsequentiality and early backdown of corporate entrepreneurship when pursed as a long term corporate scheme. However scheme and entrepreneurship do non needfully take to successful concern creative activity. This is so because a proper concern context must be created and the right procedure installed, monitored and influenced decently for new concern creative activity to thrive ( Sathe, 2003 ) .However, there is one of import disadvantage of implementing corporate entrepreneurship as scheme that may take to the early backdown from the corporate entrepreneurial scheme.
Corporate entrepreneurial scheme can non be formulated without top-level directors ‘ entrepreneurial strategic vision ( Ireland, Covin & A ; Kuratko, 2009 ) . Serra and Ferreira ( 2010 ) claimed CEO enterpriser as the nucleus strategic pillar of the organisation pursing corporate entrepreneurial scheme. They observed that the replacing of enterpriser leads to the alteration in strategic focal point from entrepreneurship.
Bouchard ( 2001 ) besides pointed that one of the major grounds for early backdown from the corporate entrepreneurship is the alteration in top direction. This is an of import disadvantage which needed to be considered while implementing corporate entrepreneurship as a scheme.
2.5.4 Corporate Entrepreneurial Strategy and Competitive Advantage
A figure of bookmans have claimed that the chase of corporate entrepreneurial scheme favours accomplishment of competitory advantage ( e.g.
Russell, 1999 ; Covin and Miles, 1999 ; Copper, Markman & A ; Niss, 2000 ; Ireland, Covin & A ; Kuratko, 2009 ) . Ireland, Covin and Kuratko ( 2009 ) pointed out that the chief hinderance in accomplishing competitory advantage is the para of an organisation in relation to its rivals. Corporate entrepreneurship removes that para and allows the chase of advanced alterations in construction, engineering, merchandise and concern schemes of the organisation ( Ireland, Covin & A ; Kuratko, 2009 ) . Corporate entrepreneurship scheme ensures that the administration relies on invention and entrepreneurial behavior that renews the administration and shapes its operations so as to accomplish competitory advantage ( Covin and Miles, 1999 ; Copper, Markman & A ; Niss, 2000 ) . It encourages the development of alone combination of schemes that guarantee distinction and cost decrease – both at the same clip – and, in this manner, provide several advantage to house ( Dess, Lumpkin & A ; McKee, 1999 ) .
Corporate entrepreneurial scheme non merely aids an organisation in prosecuting competitory advantage but besides assist the organisation in prolonging the achieved competitory advantage ( Ireland, Covin & A ; Kuratko, 2009 ) . This is possible by the long-run execution and extract of entrepreneurial thought at all degree of the organisation peculiarly the top direction. Development of the civilization of invention in an organisation provides the flexibleness to the people working in that organisation to seek their best for the development and growing of organisation which ensures the effectual use of all human and fiscal resources within the organisation and development of the chances in the market ( Ireland, Covin & A ; Kuratko, 2009 ) .