Examining The Need For Corporate Entrepreneurship Commerce Essay

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The study was set out with the aim to examine if corporate entrepreneurship can serve as an effective corporate strategy. Before embarking upon the case study of 3M for the same purpose it was important to understand the literary context of the study which includes operational definitions of important terms like entrepreneurship, corporate entrepreneurship and corporate strategy; role and importance of corporate entrepreneurship and corporate strategy in an organization and the association between corporate entrepreneurship and corporate strategy. The current chapter serves this important purpose as it provides a detailed literature review on the subject.

Literature review has been said as a foundation of research study as it provides the conceptual and theoretical context to the subject under study (Garrad, 2006). It also justifies the selection of research problem by providing its significance and assists a researcher in seeking the knowledge gaps, in designing the research methodology and in predicting the outcome of the study thorough the analysis of previous studies' findings (Fraenkel & Wallen, 2001; Gratton & Jones, 2003; Shaughnessy, 2009).

The chapter is divided into four sections. First section is on entrepreneurship, in which the researcher has provided a brief overview of the meaning, importance and role of entrepreneurship together with the analysis of literature on entrepreneurship as a managerial strategy. The second section describes corporate entrepreneurship in detail including detailed discussion on the proper understanding of this concept and implementation of corporate entrepreneurship in business firms. The third section looks into the meaning and importance of corporate strategy together with the need of the strategic planning and management. The last section is the core of the study in which the association between corporate entrepreneurship and corporate strategy have been examined. The literature in all sections has been reviewed critically based on the objective judgments gained from the wide variety of works relevant to the research.

2.2. Entrepreneurship

2.2.1. What is Entrepreneurship?

There is no universally accepted definition of entrepreneurship and different scholars have defined it in different contexts and have used it with marked variation (Gedeon, 2010). After reviewing the literature on the definition of entrepreneurship, Gedeon (2010) concluded that entrepreneurship is a multi-dimensional concept that ought to be understood in the context of its usage.

Therefore, any study on entrepreneurship ought to explicitly mention the definition of entrepreneurship to clarify the study's perspective on the meaning and application of entrepreneurship (Bruin, & Dupuis, 2003). For this study the selected definition of entrepreneurship is:

Entrepreneurship is the process whereby an individual or a group of individuals use organised efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has (Robbins & Coulter, 2005, p. 40).

The selected definition is in accordance to the UNCTAD's perspective on entrepreneurship. In a report published on the role of entrepreneurship in economic development by UNCTAD (2004), it was asserted that entrepreneurship ought to be considered as process not a static phenomenon. The report further provided that despite the use of a number of economical and social concepts in the existing definitions of entrepreneurship, all definitions can be linked with any of the three major schools of thought on entrepreneurship: Cantillon or Knightian entrepreneurship based on risk seeking; the Schumpeterian entrepreneurship focused on innovativeness and the Kirznerian entrepreneurship concentrated on opportunity seeking. In the present study, the focus is on opportunity seeking by using innovativeness either by an individual or a group of individual.

Though the present study gives special significance to the importance of innovation and uniqueness, it does not follow Schumpeterian school of thought due to a number of reasons. Schumpeter's theory of entrepreneurship is highly focussed on personal entrepreneurship where entrepreneur is portrayed as a great hero and a unique person who can bring remarkable economic development by carrying out acts of innovations (Whelan & O'Gorman, 2007). Such an individualistic view of entrepreneurship has been under severe criticism.

This heroic view of entrepreneur leads the public to believe that, like leaders, entrepreneurs are also born not made which serves as a hurdle in the learning of innovation and entrepreneurship (Dana, 2001). Furthermore, in most cases, the process of innovation in large enterprises is carried out by a team not by an individual (Reich, 1987; Whelan & O'Gorman, 2007). Ebner (2006) and Whelan and O'Gorman (2007) noted that Schumpeter himself recognised this problem and shifted the theoretical paradigm toward a model of research and development in enterprises. However, this shift from individual to enterprise entrepreneurship resulted in conceptual dualism and theoretical inconsistencies (Ebner, 2006).

Another problem with the Schumpeter's view of entrepreneurship is its emphasis on creating change by "getting new things done" (Schumpeter, 1934). This spreads uncertainty and produces disequilibrium throughout an existing system which is exploited by entrepreneur to bring competitive advantage (Lau, Chen & Hu, 2004; Roininen & Ylinenpää, 2009). This view of entrepreneur as creator of change not only makes it almost impossible to let someone learn entrepreneurship (Dana, 2001), but it also requires time and is not suitable for day-to-day development and progress of an organization.

The present study follows the Kirznerian school of thought. Kirznerian theory of entrepreneurship, with contrast to Schumpeterian entrepreneurship, is based on the exploitation of opportunities in the existing system rather creating new ones (Roininen & Ylinenpää, 2009). The basic duty of Kirznerian entrepreneur is to remain alert of the changes in the market and the unnoticed opportunities (Lau, Chen & Hu, 2004). This view of entrepreneurship encourages education and training of entrepreneurs and makes it possible to apply entrepreneurship throughout the organization rather depending on one or two entrepreneurs (Dana, 2001).

Johnson (2001) believed that entrepreneurial abilities can be fostered at all the levels of an organization. He provided a list of abilities which an individual or group of individual should learn to manifest in order to become an entrepreneur which include the ability to take ownership, to make self-directed decisions, to being open to change, to tolerate uncertainty, creativity, to solve problem, to capture opportunities, to manage risk, to formulate a vision and to make an impact. Other important features that an entrepreneur must hold are motivation, independence, innovation, vision and determination.

Davidsson (2005), nevertheless, asserts that the presence of all these abilities as a pre-requisite of entrepreneurship which makes the concept impossible to research. Therefore, importance should not be given to the abilities but to the "organised effort" of the individual or group of individual to innovatively create value. Johnson (2001) seemed to agree with this as he pointed out that all the definitions of entrepreneurship have three things in common: capturing ideas, collecting available resources and combining these two to create value for the organization. Though he was wrong in asserting that all definitions contains these three concepts - only definitions following Kirznerian school of thought can use these concepts - he was right in pointing out that the core of entrepreneurship is to create value from available resources by using new ideas and innovation.

2.2.2. Importance of Entrepreneurship in Organizational Context

Entrepreneurship, whether practiced by a single individual in an organization or by all the members of an organization, is aimed at creating value for the organization and its importance in an organization cannot be neglected. Though for some, as observed by Johnson (2001), its importance is limited to new organizations only and once an organization grows to a particular size, entrepreneurship is unnecessary. However, Carsrud and Brannback (2007) and Johnson (2001) rejected this view and provided the examples of a number of large organizations that are benefitting from entrepreneurial approach. They asserted that the size of organization does not hamper development of entrepreneurial behaviour in an organization. Organizations require entrepreneurship for economic improvement of the organizations at all stages of development. In addition, the nature of the organization is also irrelevant as entrepreneurship has permeated in every field of life from pure business firms to visual arts (Allen, 2003; Gabriel, 2008).

However the focus of this study is business organizations and, therefore, it looks into the role played by entrepreneurship in the development and success of business firms. One important feature of entrepreneurship is to move from the resource based approach to value based approach. Gabriel (2008) held that for entrepreneurship, the said individual or group of individuals must have the manifested ability and willingness to create value irrespective of the resources in hand. Thus, instead of looking at what is available, entrepreneur looks at what maximum can be achieved from it (Robbins & Coulter, 2005; Johnson, 2001). This approach is the secret through which entrepreneur bring success to organizations.

In today's competitive business world, the importance of entrepreneurship for business firms have increased manifolds because entrepreneurship is the key to bring and hold competition in market (Donselaar, Erken, & Klomp, 2004). In addition, entrepreneurship has been found to produce economic development. Several studies have shown the relationship between entrepreneurship and economic growth (e.g. Carree & Thurik, 2003; Barth, Yago, & Zeidman, 2008). It has also been found to improve the productivity by stimulating industry dynamics and innovation (Donselaar, Erken, & Klomp, 2004).It creates new industries and new sectors for production and profit-generation (Allen & Economy, 2008).

Hisrich, Peters and Shepherd (2008) pointed out that the impact of entrepreneurship on business firms is not limited to increasing per capita income or productivity. Entrepreneurship brings changes in the entire culture of the business which in turn brings economic growth. However, they remained focussed only on the new product or new venture development and failed to see the importance of entrepreneurship in brining economic development in existing ventures. They asserted that the focus on short-term-profit have hindered the creativity to prosper within organization. However, as provided above, entrepreneurship is not just making big changes in the market by introducing new product or by developing new businesses; it is about making use of the available opportunities in innovative ways and is, therefore, equally important in brining regular short-term achievements (Dana, 2001; Lau, Chen & Hu, 2004).

Drucker (2007) also held the same view and explained the importance and role of entrepreneurship in the existing business organizations, public-service organizations and new ventures. He asserted that entrepreneurship is important for all these organizations and also pointed out that the discussion on the role of entrepreneurship ought to be started from its importance in existing business rather new venture. Minniti (2007) also pointed out that the concept of entrepreneurship is not limited to new businesses only; it can be applied in a number of activities from seeking the solution of simple daily life problems to making managerial decisions.

2.2.3. Entrepreneurship as Management Strategy

Guo (2006) after observing that there is lack of research examining entrepreneurship as management strategy, conducted a study on entrepreneurship management in health sector. Though the study was conducted in the context of health services organizations, it provides very important information regarding entrepreneurial management. He reviewed the literature on managerial role and behaviour and found that one important role of manager is as innovator that involves creating innovative strategies to secure resources for the organization (Guo, 2006, p. 513).

Guo (2006) also looked into the association between managerial activities and entrepreneurial activities which overlaps to form entrepreneurial management. He provided that innovative managerial strategy must be adopted by entrepreneurial managers in order to effectively manage the organization. According to him, an entrepreneurial manager plays the role of designer, strategists, innovator, risk taker and communicator in an organization.

However, there are scholars who consider entrepreneurship as opposite to management (Bachemin, 1989; Bouchard, 2001; Nieuwenhuizen, 2007). Bachemin (1989) wrote an article in Black Enterprise where she gave examples of the good entrepreneur who lost their business due to bad management. She explains that entrepreneurship and management requires different kind of thinking and skills and in most of the cases entrepreneurs do not like to manage business. However, Bachemin's argument relies too heavily on individualistic entrepreneurship, which was the popular theme when this article was written (Whelan & O'Gorman, 2007). Furthermore, entrepreneurship was seen by her as limited to starting a new business which again is a usual mistake committed by the scholars, as discussed earlier.

Instead of searching link between the skills and thinking and the role and responsibility of entrepreneur and manager, the better way is to look at the association between entrepreneurship and managerial strategy of an organization. If we see entrepreneurship with Kiznerian view focusing on innovative exploitation of available opportunities and application of entrepreneurship in the entire organization, rather looking for individual entrepreneur, entrepreneurship can be seen as an effective managerial strategy.

Entrepreneurship as management strategy ensures that organisations grow successfully through focusing on change, opportunity and organisation wide management (Kobia, & Sikalieh, 2010). As a management strategy, entrepreneurship cannot be treated as a natural trait but as a created phenomenon. Drucker (2007) pointed out the practices and policies that ought to be implemented in an organization for incorporating entrepreneurship as its managerial strategy. He asserted that by bringing structural and cultural changes in the organization, entrepreneurship can be fostered at all level of the organization.

2.3. Corporate Entrepreneurship

2.3.1. What is Corporate Entrepreneurship?

Like entrepreneurship, corporate entrepreneurship also suffered from heterogeneity of meanings due to unsolved definitional issue (Sharma & Chrisman, 1999). After reviewing a number of definitions of corporate entrepreneurship, the researcher chose the following definitions for corporate entrepreneurship:

Corporate entrepreneurship is an organizational process for transforming individual ideas into collective actions through the management of uncertainties (Chung & Gibbons, 1997, p. 11).

The definition has been used in this study due to its focus on collective action and management of uncertainties. These two terms are very important for the present study as the study has been built in the theoretical context of Kiznerian entrepreneurship. The base of the study is the belief that entrepreneurship is not a natural God-gifted trait in a human being but an attitude toward the life which can be learned and created at all level of organization. Furthermore, entrepreneurship has been viewed as innovative exploitation of existing changes in the market rather creating new; this innovative exploitation of changes has been rightly put in this definition as management of uncertainties.

According to Vesper (1984), corporate entrepreneurship is characterized by three activities and these include creating business units by an established firm, development and implementation of entrepreneurial strategic thrusts and finally the emergence of new ideas from various levels in the organisation. However, Burns (2008) asserted that the main purpose of corporate entrepreneurship is to gain competitive advantage by encouraging innovation at various levels of the organisation - corporate, division, business unit, functional or project team level. Both Vesper (1984) and Burns (2008) are looking into the internal corporate entrepreneurship with little emphasis on external orientation of the phenomenon.

External corporate entrepreneurship is focussed on the resources dispersed in the external environment (Ferreira, 2002). By combining these resources with the internal resources, an organization can create a unique combination of resources which can provide it competitive advantage over other firms in the market (Ferreira, 2002). External entrepreneurial efforts include entail mergers, joint ventures, corporate ventures etc (Groenwald, 2010). An effective merger of internal and external entrepreneurship is what this study refers to corporate entrepreneurship.

2.3.2. Importance and Scope of Corporate Entrepreneurship

Since past few years the interest in corporate entrepreneurship has been intensified due to a number of changes at social, cultural and business levels (Groenwald, 2010). Globalization is one of the major reasons for increased emphasis on corporate entrepreneurship. Merrified (1993) pointed out that globalization has resulted in the creation of hypercompetitive markets where changes are occurring at much higher pace. In this ever changing highly competitive market, organization cannot survive without continuous process of entrepreneurship within every level of organization. For him, entrepreneurship within organizations refers to improvement in the existing operation together with creation of new operations to replace the existing ones.

Kuratko and Hodgetts (2007) also reported the positive impact of growing competition in international market on the role of corporate entrepreneurship. However, they found some other important reasons, too, which have raised the importance of corporate entrepreneurship in the organizations. They found that the failure of traditional methods of corporate management has led the managers and scholars to search for some new methods to replace them. As a result, corporate entrepreneurship has come to limelight and organizations have started to implement it as a new management strategy.

Aloulou and Fayolle (2005) noted that the employees are also showing greater interest in innovative management and are keen to work in more flexible and creative environment. Besides, the growing awareness among the managers and business owners of the rigidity of traditional business approaches and the negative impacts of this rigidity on the economic development of the organizations have also played a significant role in highlighting the importance of corporate entrepreneurship.

Bouchard (2001), however, believe that corporate entrepreneurship has become another business fad and managers and scholars are emphasizing on its benefits without giving consideration to issues it raises. He asserted that a realistic approach is needed to deal with corporate entrepreneurship with focus on both pros and cons of corporate management.

He pointed out three main problems inherent in the concept of corporate entrepreneurship (Bouchared, 2001). The first problem, according to him, is the conflict between corporate entrepreneurship and corporate management. He held that the co-existence of corporate management and entrepreneurship generates organizational conflict between entrepreneurial entities and established operating division (horizontal conflict) and between entrepreneurial entity and top management (vertical conflict).

However, Bouchard's claims are based on the traditional view of entrepreneurship as personified and as separate from management. As provided above, entrepreneurship cannot produce expected outcome without making entrepreneurship the management strategy of the firm. When entrepreneurship is applied as a managerial strategy influencing all level of the organizations the chances of such conflicts will be lesson. Nevertheless, the possibility of the occurrence of these conflicts ought not to be overlooked. Bouchard (2001) himself provided a very good strategy to deal with this problem. He held that entrepreneurs can deal with these conflicts by striking their own balance between the requirements of exploration and exploitation and overcome with their own means the obstacles created by their environment. This would be possible for the entrepreneurs due to their flexible approach toward management

The second issue, which he believed to be more important than the first one, is the risk of inconsequentiality. The factors behind this inconsequentiality, as identified by Bouchard (2001), is the implementation of corporate entrepreneurship in few areas of organization which means the absence of environment needed to flourish entrepreneurship and innovation within the organization. Therefore, corporate entrepreneurship ought to be implemented at all levels of the organization and consideration should be given to the factors encouraging corporate entrepreneurship.

The third important issue with corporate entrepreneurship is related to early withdrawal (Bouchard, 2001). He pointed out the fact that in a number of cases corporate entrepreneurship does not last for more than a year. The reasons, noted by him, of early withdrawal are change in the circumstances favouring corporate entrepreneurship, shift in strategic priorities and top management inability to fully benchmark the benefits of corporate entrepreneurship.

A closer look at the problems identified by Bouchard (2001) show that these problems are not inherent in corporate entrepreneurship - as he asserted - but are associated with the faulty implementation of corporate entrepreneurship in organization that arises out of the lack of understanding of the meaning and scope of entrepreneurship. The core assumption of this study is that implementation of corporate entrepreneurship as corporate strategy can solve all these problems. A detailed discussion on how the problems will be solved by corporate entrepreneurship as strategy will be provided in latter sections of the present chapter.

2.3.3. Implementing Corporate Entrepreneurship in an Organization

As provided above, implementing corporate entrepreneurship in an organization is not a simple task. Implementing corporate entrepreneurship without proper understanding of the phenomenon can result in number of problems and can even led to the withdrawal from corporate entrepreneurship in less than a year (Bouchard, 2001).

The misconceptions related to corporate entrepreneurship have already been discussed. Here, a brief referral to these problems is enough. These misconceptions include the popular belief that entrepreneurship is a natural phenomenon which cannot be created or taught; individualistic view of entrepreneurship where only few people are consider as entrepreneurs and the entire organization become subject to them, and placement of entrepreneurship as opposite to management. These misconceptions are the main reason for the improper implementation of entrepreneurship.

Peter Drucker was perhaps the first one to challenge all these misconceptions. He presented entrepreneurship as the main responsibility of managers and pointed out the fact that the entrepreneurship is applicable at all level within the organization (Drucker, 2007). Therefore, corporate entrepreneurship cannot be implemented by hiring few entrepreneurs or by taking power from managers and giving it to entrepreneurs. Infusion of entrepreneurial thinking in the bureaucratic structure of the organization is the real corporate entrepreneurship (Kuratko, Hornsby, Naffziger, & Montagno, 1993).

The success stories of companies like 3M, IBM, and General Electric have established that proper implementation of corporate entrepreneurship can be highly beneficial for organizations (Kuratko, et al., 1993). However, it is important to understand the factors that support the implementation of corporate entrepreneurship in the organization as well as the factors hindering this implementation.

Srivastva and Agarwal (2010) conducted a study on the factors supporting corporate entrepreneurship. They divided the said factors into two broad dimensions - environmental factors and individual characteristics. Environmental factors include factors like reward and motivation, management support, resource availability, organisational structure and risk taking while individual characteristics supporting entrepreneurship include risk taking prosperity, motivation, energy level, dominance, persistence, and ownership. They designed a questionnaire with the help of 24 items - based on the above mentioned factors - and conducted statistical analysis on the results of the questionnaire to extract core factors. Seven factors - freedom, reward, empowerment, perspective, team spirit, leader support and organizational system - have been extracted of which four were found to produce significant impact on corporate entrepreneurship. These include organizational system, team spirit, empowerment and leader support.

All of these factors were environmental which suggests the importance of collective and organizational implementation of corporate entrepreneurship. These factors also provided that creation and management of corporate entrepreneurship is possible. The most significant factor among the four was found to be organizational system. Thus, while implementing corporate entrepreneurship, the first priority of the organizations should be the induction of entrepreneurial culture in the organizational system which allows flexibility and freedom (Srivastra & Agarwal, 2010). Team spirit and leader support is needed after changing the organizational system to encourage entrepreneurship at team and department level. Perceived empowerment is the least significant yet important factor which highlights the importance of power-sharing in the entrepreneurial organizations.

Thus, the implementation of corporate entrepreneurship in an organization is a time consuming process. It requires collective changes within the structure, policies and practices of organization (Drucker, 2007). These changes ought to be based on proper assessment of the organization's readiness for required changes (Kurtako et al., 1993). It is also important to explicitly mention the objectives of the implementation of corporate entrepreneurship prior to implementation (Morris, Vuuren, Cornwall, Scheepers, 2009). After implementing corporate entrepreneurship in organization, the continuous evaluation of the impact of this implementation is important to examine the degree to which corporate entrepreneurship has achieved the set objectives (Kurtako, et al., 1993).

2.4. Corporate Strategy

2.4.1. What is Corporate Strategy

In Cambridge Advanced Learner's dictionary, strategy is defined as "a detailed plan for achieving success in situation such as war, politics, business, industry or sports." However, it is a general definition of the term and Daniell (2006) claimed that the best ever definition of strategy for business firm is,

Strategy is the art and science of informed action to achieve a specific vision, an overarching objective, or a higher purpose for a business enterprise (Daniell, 2006, p. 1)

As can be seen, the focus of this definition is on action not on the planning, as was the case in former definition. Daniell (2006) asserted that strategies are about action and results and a very good strategy in paper or mind but which has not been implemented is not a strategy in its true sense. One other important element of this definition is that it clearly mentions the rationale for making a strategy - to achieve a specific vision, an overarching objective, or a higher purpose.

Within a business enterprise, there are several departments and sub-departments, each having different vision, purpose and objective and, thus, different strategies. For instance, the goals and objectives of marketing department cannot be similar to the human resource department. However, it is important for a business to have a defined and explicit vision and purpose for the entire enterprise and the vision and purpose of all the departments and sub-departments within an organization ought to be around that single vision and purpose (Colley, Doyle & Hardy, 2002). The strategy to achieve the vision, purpose and objectives of the entire organization is termed as corporate strategy. It is an aggregation of all the strategies within an organization and it links these sub-strategies together to provide a comprehensive and integrated vision to the organization, as shown in the figure below (Cheah, & Garvin, 2004).

Figure 2.1: Corporate Strategy Model (Cheah, & Garvin, 2004, p. 179)

Dransfield (2001) defined corporate strategy as an organization's long term plans which will help the organization in fulfilling the short-term objectives in changing environment. The main weakness of this definition is its view of corporate strategy as a plan. As described above, a plan without implementation is not a strategy. Furthermore, the definition does not clarify the difference between a corporate strategy and the different business strategies within an organization. It does not explicitly mention the comprehension and entireness of corporate strategy (Cheah & Garvin, 2004).

Besides aggregation of the business unit strategies, another important element of corporate strategy is the clarity of choices for future operations and the clear vision of organization's present standing (Brishan, Dye, & Hall, 2011). It not only defines what a company wants in future but also mentions the actions needed to fulfil those wants (Bryan, Lyons, & Rosenthal, 1998). After reviewing a number of definitions of corporate strategy, one definition has been selected for the present study that incorporates all these elements:

Corporate strategy is the pattern of objectives, purposes or goals and essential policies or plans for achieving those goals, stated in a way as to define what business the company is in or is to be in and the kind of company it is or it is to be (Andrews, 1971, p. 28 as cited in Wilczek, 2008, p. 2).

2.4.2. Importance of Strategic Planning and Management

Strategic planning refers to the process of strategy formulation while the strategic management refers to the process of implementing and controlling the formulated strategy in an effective manner. Strategic planning is a continual process in an organization that unifies the management, employees, stakeholders and customers through common understanding of the present and the shared vision for the future (Matthews, 2005). A usual practice in the majority of organizations is to conduct annual strategic planning meeting which plays an essential role in the development of annual budget, in the establishment of resource allocation map, in setting financial and operating targets, and in placement of management team on strategic priorities (Dye & Sibony, 2007).

However, strategic planning will be worthless without a management process to implement and manage the strategic plan (Transit Cooperative Research Program, 2005; Beinhocker, & Kaplan, 2002; Dye & Sibony, 2007). Dye and Sibony (2007) conducted a survey of about 800 executives and found that majority of the executive is not satisfied with the outcome of the strategic planning process. They identified that one of the main reasons for this dissatisfaction is the absence of a strategic management system in the organizations of these executives.

Strategic management is the last phase of the planning process (Gluck, Kaufman, Walleck, McLeod, & Stuckey, 2000) which ensures the execution of strategic plan (Dye, & Sibony, 2007). Gluck and colleagues (2000) observed that strategically managed companies are better than the companies without proper strategic management system in terms of the thoroughness with which they associate strategic planning into operational decision making. Furthermore, strategic management assists in developing a culture of strategic thinking in the entire organization. By contrast, in the companies having excellent strategic plans but poor management system such thinking remains limited to top echelon only (Gluck et al., 2000)

One important benefit of strategic planning and management is the eventual appraisal of the organization's performance (Colley, Doyle & Hardy, 2002). Instead of evaluating each business unit's strategy, manager in strategically managed organization reviews the performance of the organization on the basis of corporate strategy with focus on key problems (Gluck et al., 2000). In today's globalised world, the job of management has become much complicated and it is not possible for the managers to conduct in depth evaluation of all the business units' performance. The importance of strategic planning and management further increases with the increase in the size of organization, product proliferation, diversification, decentralization, outsourcing and increase in the governmental regulation and control (Colley, Doyle & Hardy, 2002).

However, it needs to be taken into consideration that strategic planning does not guarantee the success of an organization, it only enhance the organization's ability to achieve the set goals and objectives in a timely manner (Colley, Doyle & Hardy, 2002). In the time of economic downturn, what saves a company is the management's ability to comprehend the changes in the market and the degree of flexibility in corporate strategy which allows the changes in corporate strategy according to the new opportunities.

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 not only associated with the opening of new ventures but also involves the innovative renewal of organization (Vespar, 1984; Groenwald, 2001). To implement entrepreneurship at corporate level, it is essential to infuse entrepreneurial thinking in the entire organization which requires addition of entrepreneurship in the structure, function and policies of the entire organization (Kurtako et al., 1993). Since corporate strategy plays a vital role in defining the structure, function and policies of an organization, changes in them will in turn impact the corporate strategy. Therefore, one can conclude that the implementation of corporate entrepreneurship requires infusion of entrepreneurship in corporate strategy.

It is important to look at the similarities and differences to understand whether their infusion is possible or not; if the two concepts have similar elements, it will be easier to incorporate them together forming corporate entrepreneurship strategy. One important similarity between corporate entrepreneurship and corporate strategy lies in the term 'corporate'. Corporate entrepreneurship refers to the infusion of entrepreneurship in the entire organization (Burns, 2008; Kurtko et al., 1993) while corporate strategy is the strategy of the entire organization (Cheah & Garvin, 2004). The function of both corporate entrepreneurship and corporate strategy is to provide integration and cohesiveness in the organization - the former through the development of the culture of innovative thinking and the latter through the provision of a common strategic direction and vision.

Some of the elements of corporate entrepreneurship and corporate strategy are also similar. Daniell (2006) observed that the nature of corporate strategy has changed in the current complex, dynamic and changing market. The important elements of a corporate strategy in today's business environment are comprehension, flexibility, creativity, integration, motivation, responsibility and effectiveness. Three of these elements are also present in corporate entrepreneurship namely creativity, integration and motivation (Kurtko, et al. 1993). These three elements can play an important role in the integration of the two concepts.

However, there are some very important differences in the two concepts, as well. Formulation and implementation of corporate strategy is often seen as a responsibility of business executive management (Kurtako et al., 2004; Dransfield, 2001) whereas corporate entrepreneurship can be implemented by any person within the organization working at any level. However this difference can be overcome by giving the responsibility of formulation to the management to all people within an organization. Scholars have already acknowledged the importance of involvement of top management in the formulation of corporate entrepreneurship in the organization (Kurtako et al., 1993; Drucker, 2007).

Another important issue related to the incorporation of corporate entrepreneurship and corporate strategy is the lack of consensus among the scholars on the meaning and definition of the corporate entrepreneurship (Sharma & Chrisman, 1999). Corporate strategy needs to be clear and explicit which can provide a clear direction to an organization and a common aim and vision to all people working within the organization (Brishan, Dye, & Hall, 2011). Due to the lack of proper definition of corporate entrepreneurship, it cannot provide a clear and cohesive vision to the entire organization (Bouchard, 2001). To overcome this difference, it is important for an organization to start from the understanding of what is corporate entrepreneurship for their organization and then to induce the same understanding of the concept at all level of organization before implementing corporate entrepreneurship as a corporate strategy.

2.5.2. Corporate Entrepreneurship Strategy

Corporate entrepreneurship strategy, as defined by Ireland, Kuratko, and Covin (2003), is a set of tool, commitment and action framed around entrepreneurial behaviour and processes that the business designs and uses to develop current and future competitive advantage in promising technological or product-market arenas (as cited in Groenwald, 2010, pp. 113-114)

In simple words, corporate entrepreneurship can be considered as a strategy that organisations can undertake to deal with issues like competitive pressure, uncertain economic conditions and global change in business environment through innovation and entrepreneurial approach (Wood, 1988). This strategy shifts the focus of the organization toward pursuit of opportunity by making entrepreneurship the essence of business functioning (Groenwald, 2010, p. 114). Corporate entrepreneurship strategy is the integration of entrepreneurial behaviour in the strategic vision of an organization (Hitt, Ireland, Camp & Sexton, 2001).

It is important to examine whether or not implementation of corporate entrepreneurship as a strategy will change the process of strategic planning and management in an organization (Dess, Lumpkin & McKee, 1999). As provide earlier, in majority of the companies a usual practice is to conduct annual strategic planning meetings during which corporate strategy is formulated (Dye & Sibony, 2007). In most of these meetings, the first step is usually the development of financial strategy based on the financial position of the company in that year (Dye & Sibony, 2007).

Dess, Lumpkin and McKee (1999) observed that this financial based approach to strategic planning and management is not suitable for the development of entrepreneurial strategic planning and management. They asserted that the focus of the traditional approaches to strategic planning is on the development of low-cost strategies which differs significantly from the focus of the entrepreneurial approach to strategic planning based on differentiation. However, they assert that the importance of cost reduction cannot be neglected and differentiation-based approach ought to be combined with cost-based approach in order to achieve better results. Since corporate entrepreneurship encourages innovation, the development of new and unique combinations of approaches to strategic planning is needed in entrepreneurial organizations.

Figure 2.2: Conceptual Model for Corporate Entrepreneurial Strategy (Ireland, Corvin & Kuratko, 2009)

Ireland, Corvin and Kuratko (2009) developed a conceptual framework for corporate entrepreneurial strategy. The models was better than the other available models of corporate entrepreneurial strategy as it provides it conceptualizes the entrepreneurial orientation as a quality and state of organization and identifies how this quality and state can be manifested across the organization, instead of focusing into the behaviour dimension of entrepreneurial orientation, as was done in previous models (Ireland, Corvin & Kuratko, 2009). Furthermore, it also provides definite organizational location from where entrepreneurial behaviour can emerge and explicitly specify the philosophical components of corporate entrepreneurial strategy. It acknowledges corporate entrepreneurial strategy as a unique and identifiable strategy for organization. These four characteristics of this model not only make the stand above all other models but can also serve as a blue print for organizations implementing corporate entrepreneurial strategy (Belousova, Gailly & Basso, 2009).

2.5.3. Pros and Cons of Corporate Entrepreneurship Strategy

Thornberry (2003) suggests that in good and bad economic times, innovation is a significant factor for organisations that are seeking to fight against competitive pressure from the industry. Since innovation is a key element of corporate entrepreneurship, organisations should combine corporate strategy and corporate entrepreneurship if they want to remain competitive in the global business environment (Ireland, Covin & Kuratko, 2009).

Scholars reported a number of important benefits of implementing entrepreneurial strategies in organization. Entrepreneurial strategies renew the existing firm in a way to make them more innovative and competitive (Ireland, Covin and Kuratko, 2009). They are found to induce creativity in the people working in an organization and establish the sense of empowerment and responsibility in them (Meyer & Heppard, 2000; Srivastva & Agarwal, 2010).

Implementing corporate entrepreneurship as a strategy also helps in dealing with a number of issues usually encountered by the firm wanting to implement entrepreneurship at corporate level. As discussed above, three important issues regarding implementation of entrepreneurship at corporate level are conflict between corporate entrepreneurship and corporate management; inconsequentiality due to absence of factors supporting implementation; and early withdrawal from the corporate entrepreneurship (Bouchard, 2001). Since formulation of strategy is the responsibility of management, implementation of corporate entrepreneurship as strategy will ensures the involvement of management in the formulation and implementation of entrepreneurial strategies in the firm (Kurtako et al., 2004, Drucker, 2007).

One important attribute of strategic management is to evaluate the effectiveness of corporate strategy to examine whether it is successful in achieving the set goal and objectives and to determine and remove the factors hindering the implementation of the planned strategy (Colley, Doyle & Hardy, 2002). This enables an organization to avoid inconsequentiality of corporate strategy and to promote revision of the strategy instead of withdrawal. Thus, instead of making a grand shift from one corporate strategy to other corporate strategy, strategic management aid the organization in making important changes in the organization structure and function needed to link the corporate strategy with operational decision making (Gluck et al., 2000).

Furthermore, by pursuing entrepreneurial strategy organization assures the long term implementation of entrepreneurship at corporate level (Ireland, Covin and Kuratko, 2009). Entrepreneurial organization has a strategy to regularly seek for the entrepreneurial opportunities to exploit them (Eisenhardt, Brown, & Neck, 2000). All these factors lessen the chances of inconsequentiality and early withdrawal of corporate entrepreneurship when pursed as a long term corporate strategy. However strategy and entrepreneurship do not necessarily lead to successful business creation. This is so because a proper business context must be created and the right process installed, monitored and influenced properly for new business creation to prosper (Sathe, 2003).

However, there is one important disadvantage of implementing corporate entrepreneurship as strategy that may lead to the early withdrawal from the corporate entrepreneurial strategy. Corporate entrepreneurial strategy cannot be formulated without top-level managers' entrepreneurial strategic vision (Ireland, Covin & Kuratko, 2009). Serra and Ferreira (2010) claimed CEO entrepreneur as the core strategic pillar of the organization pursing corporate entrepreneurial strategy. They observed that the replacement of entrepreneur leads to the change in strategic focus from entrepreneurship. Bouchard (2001) also pointed that one of the major reasons for early withdrawal from the corporate entrepreneurship is the change in top management. This is an important disadvantage which needed to be considered while implementing corporate entrepreneurship as a strategy.

2.5.4 Corporate Entrepreneurial Strategy and Competitive Advantage

A number of scholars have claimed that the pursuit of corporate entrepreneurial strategy favours achievement of competitive advantage (e.g. Russell, 1999; Covin and Miles, 1999; Copper, Markman & Niss, 2000; Ireland, Covin & Kuratko, 2009). Ireland, Covin and Kuratko (2009) pointed out that the main hindrance in achieving competitive advantage is the parity of an organization in relation to its competitors. Corporate entrepreneurship removes that parity and allows the pursuit of innovative changes in structure, technology, product and business strategies of the organization (Ireland, Covin & Kuratko, 2009). Corporate entrepreneurship strategy ensures that the organisation relies on innovation and entrepreneurial behaviour that renews the organisation and shapes its operations so as to achieve competitive advantage (Covin and Miles, 1999; Copper, Markman & Niss, 2000). It encourages the development of unique combination of strategies that ensure differentiation and cost reduction - both at the same time - and, in this way, provide respective advantage to firm (Dess, Lumpkin & McKee, 1999).

Corporate entrepreneurial strategy not only aids an organization in pursuing competitive advantage but also assist the organization in sustaining the achieved competitive advantage (Ireland, Covin & Kuratko, 2009). This is possible by the long-term implementation and infusion of entrepreneurial thinking at all level of the organization particularly the top management. Development of the culture of innovation in an organization provides the flexibility to the people working in that organization to try their best for the development and growth of organization which ensures the effective utilization of all human and financial resources within the organization and exploitation of the opportunities in the market (Ireland, Covin & Kuratko, 2009).