Entrepreneurial definition of entrepreneurship that focuses on creating

Entrepreneurial competences

Different authors accompany diverse competences with successful
entrepreneurs, among them being: identification and utilisation of the new
opportunities, creativity, innovation and risk taking. An entrepreneur is a
person who creates a new company or investment (Gartner, 1988, Low and MacMillan, 1988) and is
actively involved in the management of the company (Gartner et al., 1994). It
is a person who recognizes an opportunity and creates a company for its implementation
(Bygrave and Hofer, 1991). According to Baron (1998), the entrepreneur is
capable of making changes, introducing a new way of doing things, exploring new
opportunities and realizing ideas. For Ahmad and Hoffman (2007), the
entrepreneur is a person seeking a way to generate value by creating or
expanding economic activity through identifying and utilizing new products,
processes, or markets. Among the authors who have identified the competence for
creation, recognition and utilisation of the new opportunities as important
trait of the successful entrepreneur are: Schumpeter (1934), Kirzner (1978),
Drucker (1985), Buchanan and Vanberg (1991), Shane (2000).

The Joint
research centre of the European commission developed the entrepreneurship
competence framework – EntreComp as an effort of the European Union to develop
common understanding of the entrepreneurship as a competence among its citizens
(Bacigalupo et al., 2016). It aims to facilitate learning and exchanges between
member states and to have a positive impact on the mobility, employment and
active participation of citizens in society and the economy.

EntreComp
defines entrepreneurship as universal competence, which applies to all areas of
life: from personal development to active participation in society, competence
required for entering the labour market or self-employment, but also for taking
various actions in the sphere of culture, social life or business.

It is
based on a broad definition of entrepreneurship that focuses on creating
cultural, social or economic value, covering various types of entrepreneurship,
including corporate entrepreneurship. The EntreComp framework consists of three
areas of competences: “Ideas and Opportunities”,
“Resources” and “Action” (Bacigalupo et al., 2016). Each
area consists of five individual competences and all together are integral
parts of entrepreneurship as overall competence.

 

Corporate
entrepreneurship

The name
corporate entrepreneurship is used to describe entrepreneurial behaviour in
medium and large companies. It unites entrepreneurial efforts with company
resources in order to create and realize innovative activities in the form of
product, service, process or business model (Sathe, 2003).

The simplest
forms of the concept of corporate entrepreneurship emerged in the 1970s as a
result of certain changes in the market paradigm, the economy and the corporate
culture. The roots of the corporate entrepreneurship can undoubtedly be found
in entrepreneurship. The author who introduced the name corporate
entrepreneurship and corporate entrepreneur in 1978 is Gifford Pinchot.
According to Pinchot, corporate entrepreneurship recognizes the following two
aspects:

1. Corporate
entrepreneurship is a set of good business practices that give full entitlement
to persons in large companies that have entrepreneurial qualities to innovate
quickly, not only for the sake of the company but also for the benefit of the
customers.

2. Corporate
entrepreneurship encompasses individual and / or team activities with
entrepreneurial behaviour, serving the interests of large companies and supply
chains, with or without official assistance (Pinchot, 2010).

Entrepreneurship
is closely linked to individuals who, either in their own company or in the
company for which they work, use the opportunities independently of the
resources under their direct control (Stevenson and Jarillo, 1990). Thus, a
person can manifest entrepreneurial behaviour without having ownership or being
shareholder of the company (Ahmad and Hoffman, 2007). Such behaviour is called corporate
entrepreneurship or intrapreneurship.

Corporate
entrepreneurship is defined as a new type of behaviour that includes intentions
and activities other than the usual ways of doing business (Antoncic and
Hisrich, 2001, 2003). This category plays an important role in the innovation
and competitiveness of already existing and large companies (Pinchot, 1985,
Zahra, 1991). For example, Pinchot (1985) emphasizes the need for generators of
ideas and initiators in large companies and suggests that innovation does not
occur without a dedicated and passionate small group of individuals, i.e. the corporate
entrepreneurs (Pinchot, 1985).

In one of their
publications on corporate entrepreneurship, Nielsen et al. (1985) suggest that
corporate entrepreneurship is most appropriate for large corporations and is
most applicable in a dynamic environment. Antoncic and Hisrich (2003) emphasize
the key elements of corporate entrepreneurship: new investments and businesses,
product and service innovation, process innovation, risk-taking (potential losses,
costs associated with new opportunities) and proactivity. The two economists
see these elements as independent, but at the same time interconnected.

Ireland et al.
(2009) emphasize the importance of the strategy for corporate entrepreneurship
that the company should create. They developed a model of corporate
entrepreneurship strategy, which consists of the following elements: (i) the
foundation of a corporate entrepreneurship strategy (for example, individual
knowledge of the conditions that support entrepreneurial activity); (ii)
elements (for example, the entrepreneurial vision of the top management, the
organizational structure that supports entrepreneurship), and (iii)
organizational outcomes deriving from entrepreneurial activities. Thus, the
strategy for corporate entrepreneurship can be defined as “the company’s
reliance on entrepreneurial behaviour guided by the company vision, which
deliberately and continuously leads to renewal of the company and forms the
scope of its operation through recognition and utilization of entrepreneurial
opportunities” (p. 21).

 

Similarities and differences between corporate and individual
entrepreneurship and barriers for introduction

The definition of entrepreneurship
as utilizing opportunities independently of the available resources (Stevenson
and Jarillo, 1990) applies both to corporate and individual entrepreneurship. Lukeš
(2012) presents the similarities between corporate and individual
entrepreneurship: both forms include opportunities recognition and the
existence of a unique idea in the form of a new product, service, or process, understanding
that the entrepreneur will encounter resistance and obstacles, which requires
persistence to deal with them, the ability to formulate innovative solutions
and development of creative strategies for optimal utilization of the resources.
Finally, the two forms involve great uncertainty and require risk management
strategies and an entrepreneur’s ability to balance the vision with managerial
skills, the passion for pragmatism and patience with pro-activity.

However, there are differences
between corporate and individual entrepreneurs. Corporate entrepreneurs carry
smaller risks, and receive consequently smaller rewards as they are not owners
of company’s capital. As the large companies are not so susceptible to external
influences as the smaller one, they provide more room for errors, thus
protecting the individual. Also, large companies provide larger space for new
ideas as well as better access to a variety of resources that allows fast
business growth.

Certainly, entrepreneurial
behaviour in large companies is followed by obstacles. For example, there is a
great interdependence of corporate entrepreneurs with many other factors, such
as rules, procedures and bureaucracy that make the decision-making process
rather slow (Morris and Kuratko, 2002). In large corporations there are
standardized rules and procedures that enable managers to increase their
efficiency in their key areas of operation. They focus on long-term planning,
efficient resource utilization and defining future steps based on previous
experience. But in these companies, time often brings lethargy that diminishes
the desire to exit the comfort zone, and thus the motivation to make an attempt
to introduce something new. This situation results in the creation of strategic,
systemic, behavioural, as well as political barriers for introduction of
corporate entrepreneurship (Lumpkin, 2007, Morris and Kuratko, 2002).

 

Managerial support of
the corporate entrepreneurship

Managerial
support refers to the managers’ willingness to facilitate and promote entrepreneurial
activity in the corporation (Kuratko et al., 2005). This support can take various
forms, including support of the innovative ideas, provisioning of the necessary
resources or expertise. Managers directly control and evaluate the work of
their subordinates, allowing them certain level of access to the resources and
information, clarifying the goals and objectives, giving an opinion on their
ideas and influencing their work in many other ways. Managers play three
important roles in supporting new ideas. For one, they make an environment that
supports the creation and communication of ideas. Secondly, they help employees
to develop their knowledge and problem solving skills in order to increase the
quality and the effect of the emerged ideas. And finally, managers
“sell” the good ideas to the higher level managers and explore the
possibilities for wider use of certain ideas throughout the whole corporation (Robinson
and Schroeder, 2006).

Literature
recognizes the support of managers as a factor that affects the creativity of
employees (Amabile et al., 2004). Scott and Bruce (1994) confirm the positive
role of the link between the leader and the team member in support of
innovative behaviour. Kuratko et al. (2005) find that by increasing the
entrepreneurial behaviour of managers, employees manifest greater satisfaction
with their superiors, promoting them as supporters of entrepreneurial behaviour
in corporations as well. Finally, Lukeš et al. (2009) show the importance of
perceived managerial support as a factor of promoting innovation in
corporations. In other words, even if the organization manifests positive
attitude towards innovation, it cannot be implemented  if the support from managers is missing.
Therefore, support of the new ideas and innovation should receive due attention
from top management, if the development of the corporation in the direction of
entrepreneurial behaviour is desired.