What is Corporate Entrepreneurship?

Corporate Entrepreneurship involves the creation of new businesses, products, or services by an established organization. This strategy challenges businesses or teams within a company to think creatively and ingeniously by changing their mindsets to an entrepreneurial mindset. This includes thinking about, identifying, and exploring potential opportunities in their market, products, and services. The purpose of this strategy is to maximize the potential of a company’s assets to remain agile and competitive.

The Difference Between Entrepreneurship and Corporate Entrepreneurship

Entrepreneurialism and corporate entrepreneurship might appear similar but they are two different concepts. While Entrepreneurship is the act of the individual or a group of people who create and manage a business or an enterprise bearing all the risk, corporate entrepreneurship is the creation of products, services, or other innovations for and by an existing business.

The Four Models of Corporate Entrepreneurship

There are four types of corporate entrepreneurship: opportunist, enabler, facilitator and producer. Companies can employ these models in their entirety or combine certain elements from various models to customize their corporate entrepreneurship plans to suit their own needs and objectives. The type of model, or combination of elements from these models the company employs will be based on a variety of factors, including the size of its business, industry as well as its culture and the current state of affairs. Find out more about these four models below.

1. Opportunist

Businesses often employ an opportunist strategy in the start of their business journey. This model focuses on resource production and identifies who owns what within the company. It also encourages employees to look for innovative ideas and opportunities in a proactive manner. The ideal workplace culture for this model is one that is fun and cooperative, allowing organizations to swiftly capitalize on the latest market trends.

2. Enabler

The enabler model is the opposite of that of the opportunist. Here, employers can think up and then act upon their ideas as long as they benefit the business. In contrast to the opportunist model, the enabler model makes use of specific resources to support the business idea when employees have fresh concepts. Here, the company provides the resources and a platform for employees to develop their ideas.

The companies that follow this method may have an entrepreneurial team contracted to develop a business venture. This model is best suited to businesses that allow employees to take part in freely generating ideas and experimenting with innovative ideas.

3. Advocate

The success of the advocate method depends on the development of organizational ownership or the determination and desire of employees from all levels to see company growth. The concept is that this feeling of ownership will motivate employees to develop new business concepts with the intention of scaling them to ensure long-term success.

The companies that follow this model allow their employees to develop ideas for business ventures that are new and disburse funds to businesses to distribute. When a group has completed the business proposal, they present their concept to management for approval, and financing.

4. Producer

Businesses that employ the model of producer typically have an in-house team or one or two people who focus on generating new business ideas. The teams receive specific resources to help with the development of ideas, products and partnerships.

This approach is typically ideal for large companies that have enough resources to new initiatives. The aim of this method is to establish new business units that can create new ways to grow business.

Also read: The Role of Innovative Entrepreneurship in Emerging Markets

Pros and Cons of Corporate Entrepreneurship

The process of fostering innovation within an enterprise of this size isn’t easy due to obstructions like bureaucracy, organizational structures, or a weak culture. Corporate entrepreneurship can provide companies with a path to improvement and growth. But, as with any new strategy corporate entrepreneurship comes with pros and cons.

Pros of Corporate Entrepreneurship

• Increased productivity, growth, and competitive advantage will more often happen.
• Team efficiency and morale of employees generally improve.
• The resources and capital needed to succeed are usually available.
• The retention and recruitment rate can rise and draw more creative employees.
• A culture of continuous learning could be developed and propagated throughout the organization.

Cons of Corporate Entrepreneurship

• Resource allocation may become more difficult.
• Risks and uncertainties could arise when implementing new approaches.
• Some employees may resist change.
• The new strategy might not be in line with the company’s overall strategy.

Notable Examples of Corporate Entrepreneurship

A number of U.S. companies have successfully implemented corporate entrepreneurship. Examples include the innovations of Procter & Gamble (P&G), Google and Intel. In the next section, we will examine the way these companies have used the concepts of corporate entrepreneurialism.

1. Procter & Gamble (P&G)

P&G has established an internal development team, known by the name of Growth Works, which is an illustration of the model used by producers. The team is able to invent new products, as well as encourage collaboration throughout the company. An excellent example of a new product created by this team is the electric Oral-B toothbrush.

2. Google

Google is an example of a company using the enabler model. Google is a thriving company, yet it constantly invests in innovative ideas and continues to run them through every stage of development. A lot of these ideas are used to improve the performance of Google’s core business. Examples of Google innovations are Google Maps, Google Earth Immersive View and AdSense.

3. Intel

Intel is a further example of the producer model. The company owns a venture capital business, Intel Capital, that invests in numerous startups. Another way in which Intel creates new ideas is through its conference on technology, Intel Innovation, which encourages the development of new entrepreneurial ideas that are unique to the company.