Corporate Entrepreneurship and Innovation (ECB3CEI)
Institution
Universiteit Utrecht (UU)
A summary of the required articles for the course 'Corporate Entrepreneurship & Innovation' (CEI) at Utrecht University. The articles included in this summary are: Lumpkin & Dess (1996), Wales et al. (2020), Wolcott & Lippitz (2007), O'Reilly & Tushman (2014), Lerner (2016), Hunt et al., (2019), Pi...
Corporate Entrepreneurship and Innovation (ECB3CEI)
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Corporate Entrepreneurship & Innovation (CEI) - Articles
Utrecht University
1. Lumpkin & Dess (1996) – ‘Clarifying the Entrepreneurial Orientation Construct and Linking It to
Performance’
2. Wales et al. (2020) – ‘Entrepreneurial orientation: The necessity of a multilevel conceptualization’
3. Wolcott & Lippitz (2007) – ‘The Four Models of Corporate Entrepreneurship’
4. O’Reilly & Tushman (2014) – ‘The Ambidextrous Organization’
5. Lerner (2016) – ‘Corporate venturing’
6. Hunt et al. (2019) – ‘Bringing it all back home: corporate venturing and renewal through spin-ins’
7. Pisano (2019) – ‘The Hard Truth About Innovative Cultures’
8. Terwiesch & Ulrich (2010) – ‘Picking the Winners’
9. Perry-Smith & Manucci (2017) – ‘From creativity to innovation: the social network drivers of the
four phases of the idea journey’
10. Dahlander et al. (2020) – ‘Why crowdsourcing fails’
11. Stieler & Henike (2021) – ‘Innovation nudging – A novel approach to foster innovative
engagement in an incumbent company’
12. Grohsjean et al. (2021) – ‘Better Ways to Green-Light New Projects’
1
,1. Lumpkin & Dess (1996)
“Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance”
Introduction
Goal of this research:
a. clarify the nature of entrepreneurial orientation (EO): make a distinction between
entrepreneurship and EO;
b. propose a framework for investigating the relationship between EO and firm performance.
Literature / analysis etc
- Entrepreneurship essential is new entry; entering new or established markets with new or existing
goods or services. Launching a new venture by a start-up firm, through an existing form or through
internal corporate venturing.
- Entrepreneurial Orientation (EO) = the processes, practices and decision-making activities that lead
to new entry. So it involves the intentions and actions of important key players who are part of a
process aimed at the creation of new ventures. Key dimensions/characteristics of EO:
> autonomy
> innovativeness
> risk-taking
> proactiveness
> competitive aggressiveness.
You don’t need ALL of these characteristics for a successful new entry according to the authors. The
importance of these factors for the success of a new entry might be dependent on external factors
(industry/business environment) or internal factors (organisational structure, personality of top
managers/founders).
In this article they say:
- the relationship between EO and performance depends on the context;
- the dimensions of EO may vary independently of each other in a given context (so their presence
varies per context).
Autonomy
= the independent action of an individual or a team in bringing forth an idea or a vision and carrying
it through to completion. Action taken free of organizational constraints.
→ Firms must grant autonomy and encourage organizational players to exercise it. So autonomy is
about enabling employees to be autonomous and the employees being autonomous (2 steps,
enabling and doing/keeping it up).
Innovativeness
= a term’s tendency to engage in and support new ideas, novelty, experimentation, and creative
processes that may result in new products, services, or technological processes. A willingness to
depart from existing technologies or practices, and venture beyond the current way of doing.
→ Categories: technological innovation (product and process development, engineering, research,
technical expertise and industry) and product-market innovation (product design, market research,
advertising, promotion).
2
, Risk taking
= accepting the risks that come with entrepreneurial behaviour. Definition depends on context.
→ Three types of strategic risk:
1. Venturing into the unknown: uncertainty (personal risk, social risk, psychological risk);
2. Committing a relatively largely portion of assets;
3. Borrowing heavily;
2+3: the probability of a loss or negative outcome; the willingness to make large and risky
resource commitments that might lead to costly failures.
→ Firms with EO have risk-taking behavior like heavy debts or large resource commitments to get
high returns by seizing opportunities in the market.
→ Risk propensity = perceived probability of receiving the rewards (risico bereidheid).
Risk perception: the general likelihood of a person to behave more risky or less risky.
Risk preference: the general desire to avoid or pursue risks.
> risk propensity is a mediator of these two.
It's hard to research/measure firm-level risk-taking, because at the level of the firm, risks may be
taken that would not be taken by an individual firm member. For now, usually research is based on
asking managers about the firm’s tendency and the manager’s own preference to engage in risky or
uncertain projects to achieve the firm’s goals.
Proactiveness
= processes aimed at anticipating and acting on future needs by seeking new opportunities,
introducing new products and brands ahead of competition, strategically eliminating dying
operations. Being novel, forward thinking and fast. A proactive firm is a leader rather than a follower.
→ Difference between proactiveness and competitive aggressiveness:
> Proactiveness is about how a firm reacts to market opportunities (so their response to new
things), competitive aggressiveness is how firms react to competitors (aka their response to existing
trends and demands).
> Proactiveness is about meeting demand, competitive aggressiveness is about competing for
demand.
→ Opposite of proactiveness is passiveness.
→ Proactiveness closely related to innovativeness because they’re both about initiating new
activities.
Competitive aggressiveness
= a firm’s tendency to directly and intensely challenge its competitors to outperform industry rivals in
the marketplace.
Propositions + explanation
Proposition 1: Autonomy, innovativeness, risk taking, proactiveness and competitive aggressiveness
are important dimensions of an entrepreneurial orientation (EO).
→ All five dimensions are central to understanding the entrepreneurial process, but the dimensions
may occur in different combinations, depending on the type of entrepreneurial opportunity a firm
pursues. So they might not all be present, or not all at the same level.
Proposition 2: The important dimensions of EO may vary independently of each other in a given
context.
Framework EO: Entrepreneurial Orientation → (mediated/influenced by environmental factors and
organizational factors) → Performance.
3
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