Critical evaluation of entrepreneurship and innovation in modern organizations

Creative Business Practices: Entrepreneurship Innovation and the Relevance to the Modern Organization

The work entitled "Globalization of Social Entrepreneurship Opportunities" reports that entrepreneurship "...by new and established companies is a major source of wealth and job creation, economic and technological growth and social transformation. This transformation is made possible by the powerful forces entrepreneurship unleashes, where ordinary people conceive innovative ideas, organize production, assume risk, and engage customers to accumulate wealth or address pressing social causes, often across national borders." (Zahra, 2006)

The work of Donald F. Karatko entitled "Entrepreneurship: Theory, Process and Practice" states that many of today's companies are acknowledging the need for corporate entrepreneurship. (Karatko, 2008, paraphrased) It is stated by Kuratko that this need "has arisen in response to a number of pressing problems which are reported to include such as:

(1) Rapid growth in the number of new and sophisticated competitors;

(2) A sense of distrust in the traditional methods of corporate management;

(3) An exodus of some of the best and brightest people from corporations to become small-business entrepreneurs;

(4) International competition;

(5) Downsizing of major corporations and an overall desire to improve efficiency and productivity. (Kuratko, 2008)

Kuratko states in regards to the problem of competition that this problem has always been an issue for businesses but that more competitors is supporter in the high-tech economy of today's economy. It is reported that another problem relates to the loss of the brightest individuals to independent entrepreneurship, which has risen due to two primary developments:

(1) Status, publicity and economic development; and (2) venture capital growth into a large industry that has the capacity to finance more new ventures than previously. (Karatko, 2008

These enhancements to entrepreneurship have made the choice "more appealing to both young and seasoned employees." (Karatko, 2008 ) The modern organization is stated to be forced to seek "avenues to develop in-house enterpreneuring. To do otherwise is to wait for stagnation, loss of personnel and decline." (Karatko, 2008) This new corporate revolution is stated by Kuratko to be representation of an "appreciation for and a desire to develop innovators within the corporate structure." (Karatko, 2008)

Kuratko states that it is critical to understand the obstacles in order to foster corporate entrepreneurship, as they are "the foundation points for all other motivations efforts." (Karatko, 2008) The following factors are stated to have been identified as factors in large corporations that have demonstrated innovations that are successful in nature:

(1) Atmosphere and vision

(2) Orientation to the market-

(3) Small flat organizations;

(4) Multiple approaches

(5) Interactive learning

(6) Skunk works (a nickname given to small groups that work on their ideas outside of normal organizational time and structure. This is stated to eliminate bureaucracy, permits rapid turnaround, and instills a high level of group identity and loyalty. (Karatko, 2008)

Corporate entrepreneurship is stated by Kuratko to be defined as "vision-directed, organization-wide reliance on entrepreneurial behavior that purposefully and continuously rejuvenates the organization and shapes the scope of its operations through the recognition and exploitation of entrepreneurial opportunity." (2008)

The work of Covin, Ireland and Kuratko is stated to present a model that demonstrates how corporate entrepreneurship strategy is manifested through the process of three elements which include those of:

(1) Entrepreneurial strategic vision;

(2) A pro-entrepreneurship organizational architecture; and (3) Entrepreneurial processes and behavior as exhibited across the organizational hierarchy. (Covin, Ireland and Kuratko, n.d,)

This model has several linkages stated to include those as follows:

(1) Individual entrepreneurial cognitions of the organization's member;

(2) External environmental conditions that invite entrepreneurial activity;

(3) Top management's entrepreneurial strategic vision for the firm;

(4) Organizational architectures that encourage entrepreneurial processes and behavior;

(5) The entrepreneurial processes that are reflected in entrepreneurial behavior; and (6) Organizational outcomes that result from the entrepreneurial actions. (Kuratko,, 2008 )

Becker and Kundsen (2004) write in the work entitled: 'The Role of Entrepreneurship in Economic and Technological development: The Contribution of Schumpeter to Understanding Entrepreneurship" that the discussion of entrepreneurship has focused on "three clusters of issues" stated to include those as follows:

(1) individual-level entrepreneurship,

(2) corporate-level entrepreneurship, and (3) the impact of entrepreneurship. (Becker and Knudsen, 2004)

Becker and Knudsen additionally report "Different typologies of entrepreneurs have been proposed in the five organization journals reviewed here. In an early contribution, Webster (1977) distinguished administrative, and independent entrepreneurs, where the Cantillon-entrepreneur. stands for the entrepreneur who is taking risk and also heeds managerial responsibility. Smith & Miner (1983) identify craftsman- vs. opportunistic entrepreneurs, and Cooper & Dunkelberg (1986) managerial and .craftsman. entrepreneurs. Gartner (1985) presents a review of typologies of entrepreneurs." (Becker and Knudsen, 2004)

It is reported that the antecedent of individual-level entrepreneurship includes those of:

(1) the path to ownership (inheriting, starting, purchasing);

(2) personal history of the entrepreneur including the background of the entrepreneur, if the parents of the entrepreneur owned a business, whether the entrepreneur is an immigrant, the relationship of entrepreneurs to their fathers and the degree of job-hopping in the past. (Becker and Knudsen, 2004)

Corporate entrepreneurship has specific characteristics that serve as a defection and various terms have been used towards this end including: "dispersed entrepreneurship. (Minkes & Foxall 1980 (Kuratko et al. 1990 in: Becker and Knudsen, 2004), and .entrepreneurial orientation. (Lumpkin & Dess 1996 in: Becker and Knudsen, 2004). " It is stated that in order to change the focus to the decision-making at the organizational level requires that entrepreneurship be recognized and understand as "as propensity of an individual to behave creatively.

Birkinshaw (1997) distinguished focused and dispersed corporate entrepreneurship, referring to dedicated organizational units that innovate on the one hand, and a vision in which every employee has a dual capacity for both managerial and entrepreneurial behavior. Stopford & Baden-Fuller (1994) identified paths from individual to corporate entrepreneurship, and Minkes & Foxall (1980) concluded that the interaction between levels of management is important for understanding dispersed entrepreneurship." (Becker and Knudsen, 2004) It is reported that the discussion concerning which characteristics describe entrepreneurship at the corporate level for the most part overlaps those on the individual level including "autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness." (Becker and Knudsen, 2004) Entrepreneurship is distinguished from management at the corporate level. (Becker and Knudsen, 2004)

The work of De Meroe (n.d.) entitled "The Importance of the Innovation and the Intellectual Capital for the Productivity of the Organization" states that the word innovation "offers several definitions according to the study field which is used. In marketing area, innovation can be any change sensed by the user, even if no physical modifications have occurred. In the productive sector, innovation comprehends adoption of novelties materialized into goods, methods and services, original or modified." (De Meroe, nd) It is emphasized in some studies that innovations is the producer of an economic impact that is large in nature and that is inclusive of "big resources and high risk…" (De Meroe, nd)

It is affirmed in Betz (1987) that innovation is "the introduction of new products, methods and services in the commerce and technological innovation means these goods, methods and services based on new technologies. It's observed that the concept of innovation is an economic concept because it refers to commercial appropriation of inventions or refinement of goods utilized by people." (De Meroe, nd)

Porter (1993) holds that innovation in strategic terms "includes not only new technologies but also new methods of doing things that, sometimes, look like commonplace. The innovation may appear in a project of new products, during a production process, during a new marketing approach, a new training or a new organization way. It may involve, practically, any activity of the value chain. So, innovate consists in offering new solutions that correspond to specific necessities of the commerce, as much as with new products, process or services which it's a product innovation when this innovation is inserted in the market and an innovation of process when it's used inside a production process." (De Meroe, nd)

Drucker (1998) states that innovation "is the specific reason of entrepreneurship, as much as an existing business, or public initiation or a new individual enterprise." (De Meroe, nd) Drucker held as well that innovation is the method by which the entrepreneur is able to "…create new wealth generating resources or provides existing resources potentially improved for generating wealth." (De Meroe, nd) From this view, entrepreneurship and innovation are important for large and small businesses alike as well are being important for a new business "as they dispute in competitive scenario of 21st century." (De Meroe, nd)

Schumpeter (1988) According to Schumpeter (1988), innovation means producing things using different methods, accelerating the production process and inducing changes in economy." (De Meroe, nd) As the new combination gradually culminate it is reported that a phenomenon emerges that characterizes the economic development stimulated for innovations. The concept of innovation is stated to be the "…utilization of the product of scientific and technological development, being a basic and essential element for the valorization of national economy and technology, without what, would commit the sustainability of macroeconomic results on medium and long-term and disclaim increments of new and more qualified jobs." (De Meroe, nd)

The challenges of managing innovation drive the various comprehensions of individuals about innovation and frequently the word invention is substituted. Innovation is stated to be the process "of turning opportunities into new ideas and putting into practice through extensive use. (De Meroe, nd, paraphrased) Innovation, in the work of Drucker (1998) does not have to be necessarily a "technique; it doesn't' need even to be a 'thing'." (De Meroe, nd) Stated as the reason for the constant question for innovation is the "demand for keeping the organization competitive…" (De Meroe, nd)

Innovation, according to Manas (2001) must be incorporated in a systemic and constant way of the process and culture of the company." Any organization that desires successfully to reach an advanced stage of innovation must necessarily "develop itself into an integrated machine, as a living organism, capable of creating, solving problems, changing and adapting to any innovation." (De Meroe, nd)

The work of Cavalcanti et al. (2001) holds that in keeping the competitiveness of the company and the company's survival instinct in the contemporary world of business is to "…be alert to changes, being flexible, noticing technological innovation and, most of all, understanding that information and knowledge are strategic factors." (De Meroe, nd)

Montana (2001) holds that an innovative process is that which enables "an efficient and effective management." (De Meroe, nd) Effective management is comprised by five stages:

(1) discover signs of opportunities,

(2) select ways according to the company's global strategy,

(3) supply resources for the chosen options,

(4) implement innovation since the initial idea until the final presentation of the product; and (5) review the anterior phases. (De Meroe, nd)

Organizational capacity to survive in the active sectors is linked to the "increase of its technological capacity and innovation is the base for making the competitiveness." (De Meroe, nd) In other words technology is required as a determinant for the development of business therefore to begin organizational growth begins with identifying deficiencies of the organizational structure and in acknowledging the importance of technological innovation in the atmosphere characterized by effectiveness." (De Meroe, nd, paraphrased)

De Meroe (n.d.) states that it is therefore "…possible to affirm that the dispute of activities sectors for conquest of new consumers request the utilization of advanced technologies, which provide the raise of the productivity, quality improvement and costs reduction, facts which characterize innovation, in process, products or services as a decisive factor to obtainment and maintenance of competitiveness." (De Meroe, nd) The main result companies seek through entrepreneurship is that of innovation. Research results imply that companies competing in global sectors tend to have more invested in innovation and have better outcomes. Investors are stated to quite often react in a positive manner to a new product, which results in an increase in the price of the shares of the company. The result is that innovation is a critical resource for high performing organizations. (De Meroe, nd, paraphrased)

One way that innovation can be effectively applied is in the area of human resources or the appreciation of human capital in that "…new ideas has been put into practice and proving the importance of investing in innovation, renewal and updating of ideas and acts. As reported in the introduction of this article, knowledge is a new strategy to gain entrepreneurial competitiveness, and this knowledge is in the human capital, in the innovative ideas and thoughts of the experts which develop it day after day." (De Meroe, nd) Manas (2001) writes that a basic component for organizational competitiveness is that of human resources as it is important to appreciate human capital and that appreciation is part of the organizational strategy. Thus the "…fusion of ideas with human potential becomes in innovation when it serves to marketing aspects (prices, timing, adequate communication, commercial support) and financial aspects (workflow and sufficient resources, market research, product development and basic engineering)." (De Meroe, nd)

De Meroe writes that the capital of innovation "…is referred by a renew capacity and the results of innovation by commercial rights protected by law, intellectual property and other intangible assets used for creating new products and services and put on the market. Otherwise the process capital contemplates process, techniques and programs used by the organization's workers with the objective of increasing services or production." (2004)

A question that is central to the estimation of the potential of the company to innovate is the "organizational structure verification" in that it is necessary to analyze "if the organizational structure really makes it easier if students knowledge an innovation creation." De Meroe, nd) The organization needs a "…flexible structure, with a systemic vision, gathering its contributors according to respective abilities and respecting individual competences in accomplishing process/activities." (De Meroe, nd)

The work of Brewer and Brown ( ) entitled "Principles of Management Text's Coverage of Entrepreneurship Creativity/Innovation and Technology" state that directors and managers that participated in a conference on entrepreneurship and innovation identified five primary themes that concerned directors and managers in new product development. Those five are stated to include: