AMERICAN

INTERNATIONAL
UNIVERSITY - BANGLADESH

Faculty of Business Administration

Course: Corporate Entrepreneurship and

Entrepreneurial Management
Write Up

On

“Entrepreneurial Management, Corporate Entrepreneurship &

Strategic Entrepreneurship”

Submitted To:
Professor S. M. ZAKARIA

Submitted By:
Name: Nayan Paul ID: 20-91648-1

Email: [email protected]

Date of Submission: 15th November, 2020

Topic-1: How do you explain entrepreneurial management? What are the vital issues which
are continually juggling the heart of interpleural management?

Answer:

Entrepreneurial Management:

The Achievement of the right balance between change through continuous innovation and
stability through efficiency is one of the biggest managerial challenges today. Entrepreneurial
management by definition is opportunity driven without regards of availability of resources and
potential obstacles, which requires a great level of propensity to change.

Contemporary definitions of entrepreneurial management tend to center around the pursuit of

an opportunity; their common characteristics are that they define entrepreneurial management
as a “mode of management” that is proactive, opportunity-driven, and action-oriented. In this
regard, entrepreneurial management style is evidenced by the firm’s strategic decisions and
operating management philosophies.

An entrepreneurial management tries to establish and balance the innovation abilities of the
organization with the efficient and effective use of resources. It can both initiate changes and
react to changes quickly and flexibly. In the course of the entrepreneurial process, the
entrepreneurial manager creates new value through identifying new opportunities, attracting
the resources needed to pursue those opportunities, and building an organization to manage
those

An entrepreneurial manager seizes any promising business opportunity irrespective of the level
and nature of resources currently controlled. Consequently, an entrepreneurial manager is
someone who acts with ambition beyond that supportable by the resources currently under his
or her control, in relentless pursuit of an opportunity.
Vital Issues

Vision, Mission and Values

 Vision Statement: A vision statement describes the organization as it would appear in a

future successful state. When developing a vision statement, try to answer this
question: If the organization were to achieve all of its strategic goals, what would it look
like 10 years from now? An effective vision statement is inspirational and aspirational. It
creates a mental image of the future state that the organization wishes to achieve. A
vision statement should challenge and inspire employees.

 Mission Statement: A mission statement explains the company’s reason for existence. It
describes the company what it does and its overall intention. The mission statement
supports the vision and serves to communicate purpose and direction to employees,
customers, vendors and other stakeholders.

 Values: A values statement describes what the organization believes in and how it will
behave. Values create a compass for the company and its employees. This compass
guide decision-making and establishes a standard that actions can be assessed against.
A values statement defines the deeply held beliefs and principles of the organizational
culture.

Goals & objective:

Goal & Adjective: Management Strong determination in pursuing the business goals Creativity
and Innovation Business vision Entrepreneurial thinking Risk assessment Adaptability to change:
external changes Financial and economic expertise Ability to assess risk Problem solving.

An entrepreneur will always have a set of business goals in his/her mind to leverage the
organization. According to business needs, these goals may differ. For startups, the initial goal
will be to get the right resources to kickstart the company, while for existing businesses; the
goal could be to keep the company operating at full capacity, taking care of the revenue and
profits. Even though the objectives and mottos of entrepreneurs change with time, there are
some common business goals that are unavoidable.

Goals and Objectives Checklist

1. How determined am I to see this succeed?

2. Am I willing to invest my own money and work long hours for no pay, sacrificing
personal time and lifestyle, maybe for years?
3. What's going to happen to me if this venture doesn't work out?
4. If it does succeed, how many employees will this company eventually have?
5. What will be its annual revenues in a year? Five years?
6. What will be its market share in that time frame?
7. Will it be a niche marketer, or will it sell a broad spectrum of good and services?
8. What are my plans for geographic expansion? Local? National? Global?
9. Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to
others?
10. If I delegate, what sorts of tasks will I share? Sales? Technical? Others?
11. How comfortable am I taking direction from others? Could I work with partners or
investors who demand input into the company's management?
12. Is it going to remain independent and privately owned, or will it eventually be acquired
or go public?

Growth Strategy

Growth, growth, and growth for entrepreneurs, the word ‘growth’ means more than one thing.
It may be growth in revenue, expansion of business across the state and country, increase in
number of people in workforce, acquiring knowledge or new clients, building on the features of
a service or product, more engagement with target audience and community, and marketing
strategies etc. ‘Growth’ as a goal is thus, very challenging and fulfilling at the same time for a
businessperson.
Hire People with Trust & Delegate Strategically: Hiring and retaining a skilled workforce
Employees are the key to success of any existing company or a startup. If the workforce is
inexperienced, then it will have a negative impact on the working of the organization and vice-
versa. It is important to hire the right workforce that possesses the necessary skill set to
perform tasks. One of the business goals for an entrepreneur is to attract and retain top-notch
employees and to train them regularly for additional skills so that when the company grows,
the employees would be able to catch up with its pace.

Being Careful with Raising Money: Too many entrepreneurs view raising venture capital as an
end in itself,” Angelo Santinelli, an adjunct professor of entrepreneurship at Babson
College, told CardHub in a recent interview.  “They place too much emphasis on the signaling
benefits of raising capital and think short-term rather than long-term about issues of control,
dilution and strategic direction of the business.”
Raising capital is not the goal; building a fundamentally sound company that is successful in the
long term is the true objective.  And in order to meet it, we must think long and hard about our
funding needs before accepting money from a professional investor or leveraging expensive
loans and lines of credit.  Rashly jumping at financing opportunities can lead to all sorts of
unintended consequences, after all.

Market Penetration & Development: Once We establish a good product and a solid customer
base, expanding into adjacent markets and figuring out how to maximize profits from existing
customers are natural next steps that come with relatively low risk, yet have the potential to
provide significant growth.  The way in which we approach this type of expansion and when we
do it will depend on our industry as well as the amount of capital required.

Seek Strategic Partnerships & Acquisitions: While young companies typically don’t have the
capital needed to buy out the competition or purchase key cogs in their supply chain,
Entrepreneur can use strategic partnerships with higher-profile businesses in order to build
brand awareness and stature in the industry.  Then, as their company matures and either reaps
profits or goes through another round of financing, they may be able to make acquisitions in
order to bring their business into a new space or reduce costs in the long term.

Financing strategy:
Financial stability Every firm has financial liabilities, which may include business loans, payment
to be made for inventory, gadgets, staff etc. In midst of all these, the organisation has to have a
healthy annual turnover and profit. Balancing both can say a lot about the financial position of a
company. For a businessperson, reaching a point of financial stability is one of the greatest
goals, after which, he/he may want to scale-up profits. Sign up for our exclusive newsletters.
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Conclusion:
Entrepreneurs, who work to implement an idea for a venture, get a lot of advice from those
around them, and encounter various possibilities and opportunities. These factors may distract
the entrepreneurs from the goal and cause them to move from one subject to the other, and
ultimately, not achieve even one meaningful goal. Hence the importance of the vision: to
choose the same advice, opportunities, and paths that will lead to the realization of the vision
without deviating from the track that will lead to success.
Topic-2: “An economy is the effect for which entrepreneurship is the cause for the economic
growth of a country” -Discuss.

Answer:

Entrepreneurs are frequently thought of as national assets to be cultivated, motivated, and

remunerated to the greatest possible extent. Great entrepreneurs have the ability to change
the way we live and work. If successful, their innovations may improve standards of living, and
in addition to creating wealth with entrepreneurial ventures, they also create jobs and
contribute to a growing economy.

Entrepreneurs Spur Economic Growth

New products and services created by entrepreneurs can produce a cascading effect, where it
stimulates related businesses or sectors that need to support the new venture, furthering
economic development.

For example, a few information technology companies made up the IT industry in India during
the 1990s. The industry quickly expanded and many other sectors benefited from it. Businesses
in associated industries—such as call center operations, network maintenance companies, and
hardware providers—flourished.

Education and training institutes nurtured a new class of IT workers who were offered better,
high-paying jobs. Infrastructure development organizations and even real estate companies
capitalized on this growth as workers migrated to cities where employment was growing.

Similarly, future development efforts in underdeveloped countries require robust logistics

support, capital investments, and a qualified workforce. From the highly qualified programmer
to the construction worker, entrepreneurship benefits a large part of the economy.
Entrepreneurs Add to National Income
Entrepreneurial ventures help generate new wealth. Existing businesses may remain confined
to existing markets and may hit the glass ceiling in terms of income. New and improved
products, services or technology from entrepreneurs enable new markets to be developed and
new wealth to be created.

Additionally, increased employment and higher earnings contribute to better national income
in the form of higher tax revenue and higher government spending. This revenue can be used
by the government to invest in other, struggling sectors and human capital. Although it may
make a few existing players redundant, the government can soften the blow by redirecting
surplus wealth to retrain workers.

Entrepreneurs Create Social Change

Through offering unique goods and services, entrepreneurs break away from tradition and
reduce dependence on obsolete systems and technologies. This results in an improved quality
of life, improved morale, and greater economic freedom.

For example, the water supply in a water-scarce region will, at times, force people to stop
working to collect water. This will impact their business, productivity, and income. Imagine an
innovative and automatic pump that can fill people's water containers automatically. This type
of innovation ensures people are able to focus on their jobs without worrying about a basic
necessity like water. More time to devote to work translates to economic growth.

For a more contemporary example, smartphones and apps have revolutionized work and play
across the globe. Smartphones are not exclusive to wealthy countries or people. As the growth
of the smartphone market continues, technological entrepreneurship can have a profound,
long-lasting impact on the world.

Moreover, the globalization of technology means entrepreneurs in lesser-developed countries

have access to the same tools as their counterparts in richer countries. They also have the
advantage of a lower cost of living, so a young entrepreneur from an underdeveloped country
can compete with a multi-million-dollar existing product from a developed country.

Community Development
Entrepreneurs regularly nurture ventures by other like-minded individuals. They also invest in
community projects and provide financial support to local charities. This enables further
development beyond their own ventures.

Some famous entrepreneurs, such as Bill Gates, have used their money to finance good causes,
from education to public health.2 The qualities that make one an entrepreneur are the same
qualities that help motivate entrepreneurs to pay it forward.

Is All Entrepreneurship Good?

Are there any drawbacks to cultivating entrepreneurs and entrepreneurship? Is there a limit to
the number of entrepreneurs a society can hold?

Italy may provide an example of a place where high levels of self-employment have proved to
be inefficient for economic development. Research has shown that Italy has experienced large
negative impacts on the growth of its economy because of self-employment.3 There may be
truth in the old saying, "too many chefs and not enough cooks spoil the soup." 

The Role of Government

Regulation plays a crucial role in nurturing entrepreneurship. Unregulated entrepreneurship
may lead to unwanted social outcomes including unfair market practices, pervasive corruption,
and criminal activity.

Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest them
own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and
the public. This mobilizes public wealth and allows people to benefit from the success of
entrepreneurs and growing businesses. This kind of pooled capital that results in wealth
creation and distribution is one of the basic imperatives and goals of economic development.
Generation of employment: Entrepreneurs are by nature and definition job creators, as
opposed to job seekers. The simple translation is that when we become an entrepreneur,
there is one less job seeker in the economy, and then we provide employment for multiple
other job seekers. This kind of job creation by new and existing businesses is again is one of the
basic goals of economic development. This is why the Govt. of India has launched initiatives
such as Startup India to promote and support new startups, and also others like the Make in
India initiative to attract foreign companies and their FDI into the Indian economy. All this in
turn creates a lot of job opportunities, and is helping in augmenting our standards to a global
level.

Balanced Regional Development: Entrepreneurs setting up new businesses and industrial

units help with regional development by locating in less developed and backward areas. The
growth of industries and business in these areas leads to infrastructure improvements like
better roads and rail links, airports, stable electricity and water supply, schools, hospitals,
shopping malls and other public and private services that would not otherwise be available.
Every new business that locates in a less developed area will create both direct and indirect
jobs, helping lift regional economies in many different ways. The combined spending by all the
new employees of the new businesses and the supporting jobs in other businesses adds to the
local and regional economic output. Both central and state governments promote this kind of
regional development by providing registered MSME businesses various benefits and
concessions.
Topic-3: What are the characteristics of corporate entrepreneurship, Discuss the need for
corporate and entrepreneuring.

Answer:

To cultivate and build successful corporate entrepreneurship in organizations, individuals

working at the organization should inherit or possess certain characteristics and traits. These
skills and competencies enable them to achieve the outcomes of a successful entrepreneurship
and to involve effectively in corporate entrepreneurship activities. As similar to definition of
corporate entrepreneurship, researchers have explained various characteristics of individuals in
different occasions and no agreement have been reached over key characteristics. Various
researches have been conducted on this area analysis of such studies are explained here.

Findings of a study done by Lumpkin and Des in Dess in 1996 explained corporate
entrepreneurship in terms of entrepreneurial orientation and they determined main
characteristics as innovativeness, proactiveness, risk taking, autonomy and competitive
aggressiveness. In contrast to this study Zahra suggested three main characteristics, which are
venturing, innovation and self-renewal. Brockhaus and Horwitz also suggested some other set
of characteristics supporting corporate entrepreneurship, which are locus of control, risk taking
propensity, and achievement motivation. In addition to these characteristics, other important
characteristics determined by other researchers include; energy level, conformity, need for
autonomy, dominance, personal control and desire to build something of one’s. Since there is
no universal set of characteristics, certain set of characteristics are explained in detail in this
section and these characteristics are found as common characteristics highlighted by most of
the researchers.

Innovativeness
Arguably innovation is the most crucial element of the corporate entrepreneurship and all most
all researchers have talked about the importance of innovation towards corporate
entrepreneurship. Researchers have stressed on importance innovativeness characteristic of
individuals in product and service innovation within organizations and Antoncid and Hisrich
(2001) suggested that if employees of firma are innovative, it would drive firm towards
corporate entrepreneurship. According to James C. Hayton, innovativeness in corporate
entrepreneurship is defined as “a predisposition to engage in creativity and experimentation
through the introduction of new products”.

Pinchot (1985) suggested that, at that time the important factor missing in corporate
innovation was intrapreneurs or corporate entrepreneurs. He defined intrapreneurs as “those
who take hands-on responsibility for creating innovation of any kind within an organization;
they may be the creator or inventors but are always the dreamers who figure out how to turn
an idea into a profitable reality” (Zhang, 2010). One of the key roles of intrapreneurs is to
finding creative methods or ways to improve the speed and cost-effectiveness of technology
transfer from internal R&D to the marketplace. To achieve this they are need to be innovative
to come up with new ideas on how to sustain competitive advantage in a highly dynamic
business environment. This may include individual’s ability to deliver creative ideas about new
product/service development and also process related innovations to improve company’s
efficiency and enhance productivity.

Proactiveness

According to Bateman and Crant. proactive personality trait refers to individual’s capability to
influence one’s environmental and bring about change. Moreover, proactiveness of an
individual would make him strong to face challenges and motivates plays a vital role in
implementing effective environmental changes. Furthermore, Bateman and Jauhari stated that
“people are not always passive recipients of environmental constraints on their behavior;
rather, they can intentionally and directly change their current circumstances”. Researchers
have positively related proactive personality with individual innovation, taking charge, problem
prevention, voice and issue selling credibility. Since these are crucial elements of corporate
entrepreneurial behavior, it is clearly evident that there is a positive relationship between
proactiveness of individuals and corporate entrepreneurial behavior.

Need for achievement and internal locus of control

The need for achievement is one of the important characteristics of a corporate entrepreneur
which makes him distinguished from other non-corporate entrepreneurs. Individual’s hunger to
achieve high goals and hard working in achieving firm’s mission effectively develops the firm’s
ability to develop wealth creation and finally it encourages creating new businesses and
ventures within existing organizations. In addition to need for achievement, internal locus of
control is another important characteristic of corporate entrepreneurs. Individuals who have
strong belief on that they have the control on over their destiny, vitally affects their
performance positively. Such confidence self-motivates individuals to take beneficial decisions
that would achieve goals of corporate entrepreneurship and this belief motivates them to
tackle any hurdles they may face in the process of corporate entrepreneurship.

Risk taking

Individual’s willingness to take risks and ability tolerate in the times of failure is considered as
one of the fundamental characteristics to be a corporate entrepreneur. Individuals who bear
the risk of profit or loss are ready to take brave actions by venturing into new businesses and
investing significantly heavy resources in unknown environments (A. Zahra, 2000). All
entrepreneurial activities such as venturing, innovation and strategic renewal involves certain
degree of risk as any of such activity would require effort, time and most importantly financial
investments. According to Lin and Colleagues (2008), risk taking style managers enriches the
corporate entrepreneurship behavior within firms. Furthermore, in a corporate entrepreneurial
environment, individuals work on converting intelligent ideas to innovative products even
without permission or approval from top management.
Other characteristics

In addition to above discussed individual characteristics, scholars have also stressed on some
other fundamental individual characteristics that qualifies them to engage with corporate
entrepreneurial activities. Self-renewal is one of the important characteristic, which refers to
individual’s interest or ability to renew or redefine the usual methods of business process and
transforming to more innovative methods that enhances ability to gain competitive advantage
Other important characteristics include feedback seeking and effective communication skills,
which are highly useful when it comes to work as groups and interact with each other. Such
personal traits would help to convince team and top management about the individual’s
innovative ideas and to attain support at organizational level. Furthermore, knowledge,
experience and flexibility to adjust changes in environment and managerial structure are also
considered as crucial individual characteristics.

Firm-Level Antecedents and Corporate Entrepreneurship

According to findings of various researches done on corporate entrepreneurship, it indicates

the existence and importance of firm level antecedents that impact on corporate
entrepreneurship. Exploratory study done by Kuratko (1990) suggested five distinct internal
factors that support corporate entrepreneurship, which are reward and resource availability,
organizational structure and boundaries, risk taking and time availability (Burgers, 2011). In
addition to Kuratko’s findings, study conducted by Fortune 500 CEO’s observed tangible and
intangible factors within organization that foster corporate entrepreneurship. Their study found
that factors such as communication, scanning, integration, and differentiation and control
influences firm’s ability to foster corporate entrepreneurship (Scheepers, 2008).

Rewarding System

Scholars suggested that when implementing an effective reward system, organization should
consider certain factors, which includes; consider goals, feedback from employees, stress
individual responsibility and result based incentives. To support the idea suggested by the
above researchers, Fry (1993) stated “even though monetary rewards may not be especially
important to entrepreneurial individual, some mechanism of rewarding innovation must be
evident if innovation is to continue.

By implementing an effective reward system that value achievements of employees would

promote motivation among employees to take risks associated with activities of corporate
entrepreneurship. According to expectancy theory individual’s maximum effort requires that
the individual should believe that by accomplishing goals it would lead to a reward (Devarajan,
2005). Therefore, organizations should provide rewards in an appropriate way to show
employees that creative works and high-level performances are recognized and appreciated by
management. Rewards could be presented as options from where deserving employees could
choose desired rewards.

Management Support

Management support means the willingness of top management to facilitate required

resources and support to promote corporate entrepreneurial activities within organization.
Many researchers have stressed on the importance of management support and they have
suggested that management involvement, commitment, championing innovative ideas,
providing necessary resources, rewarding venture activities and institutionalizing
entrepreneurial activities within firm are important for corporate entrepreneurship.
Furthermore Steven & Jarillo stated that by providing necessary training to individuals and
trusting those within the firm in detecting opportunities would have a positive impact on firm’s
corporate entrepreneurial behavior.

According to Guth & Ginsberg organizational values are also important in promoting corporate
entrepreneurship within firms. They suggested that the corporate entrepreneurial behavior
within a firm critically depends on the values/beliefs and organizational vision. Leadership of
the firm should support innovative behavior of individuals when they propose promising
innovative ideas that could venture new business opportunities within the existing
organization. This idea was supported by findings of study done by Pearce et al and they found
that leaders who act entrepreneurially had a positive influence on their subordinates and such
leaders encourage corporate entrepreneurship behavior within the firm.

Resources

Resources of the organization and their availability when required play a vital role in promoting
corporate entrepreneurial behavior within organization. According to Pinchot (1985), in order
to behave corporate entrepreneurial ways, individuals should be allowed access company’s
resources to be utilized in various corporate entrepreneurial activities. Furthermore, he stated
that individuals should have enough time to work on innovative ideas to make them reality and
employees should be assigned with reasonable workload so that they could work on other
activities to solve important problems. Moreover, employees should be provided with
necessary resources to conduct experiments on new findings and this includes any required
equipment/devices and satisfactory environmental settings. The resource-based view (RBV)
suggests that availability of resources in a company is a crucial factor in determining
competitive advantage (Kuratko, 2007). Companies should manage their resources to build
unique capabilities to be exceeding competitor’s capability to provide better solutions to
customers.

Supportive organizational structure

Supportive organizational structure is an important antecedent highlighted by many authors in

their literatures. Authors have suggested that organizational structure should provide
appropriate administrative mechanisms for idea evaluation, choosing, and implementing
productive ideas. Moreover, they argued that the bureaucratic nature of organizational
structure would gradually build boundaries that hinder individual’s ability to convert their
innovative ideas to innovative products/services Therefore organizational structure should be
implemented in a way that avoids having standard operating procedures for all major job
related activities and rigid performance standards should be avoided as much as possible.

Other firm level antecedents

In addition to above discussed antecedents there are other important antecedents that affect
corporate entrepreneurial behavior. One of them is empowered, autonomous employees,
which refers to extent to which employees are give power to make decisions on working on
their own works in a manner they believe to be most effective Strategic leadership and their
support for corporate entrepreneurship also play a vital role in fostering this strategy within
firms. This involves manager’s willingness to facilitate necessary resources to corporate
entrepreneurial activities and to encourage subordinates to participate in such activities. Last
but not least, risk taking is also considered as a key element. Risk taking involves firm’s
willingness to spend resources in exploiting opportunities and launching projects with uncertain
outcomes.

Contributions of Corporate Entrepreneurship

Corporate entrepreneurship plays a vital role in enhancing company’s ability to sustain

competitive advantage. Zahra & Kuratko stressed on the importance of corporate
entrepreneurship by stating that it improves competitive positioning and transform
corporations and strengthen their markets by fostering creativeness within firms. A key benefit
organization could gain via corporate entrepreneurship is to drive firm with diverse strategies
with unique combinations. And also, corporate entrepreneurship could improve the overall
performance of the firm, growth and profitability. Furthermore, it increases the company’s
proactiveness and willingness to take risks by investing on new product development and
integrating innovative technologies in various processes of business. A study done by Zahra and
Covin in 1995 showed that there is a strong relationship between corporate entrepreneurship
and financial performance. Based on the findings of their study they suggested that companies
should focus on ways to encourage potential individuals who show corporate entrepreneurial
qualities.

According to general definition of corporate entrepreneurship, it refers to activities that

enhance new product and service development and especially development of new business
models and business ventures. Companies, who encourage corporate entrepreneurship
behavior within their firms, enjoy improved internal efficiencies, higher employee morale which
all leads to improvements in financial performance. In corporate entrepreneurial companies,
managers tend to implement new management trends to overtake old methodologies which
are found to be boring and frustrating. Such changes in management bring them success and
effective changes in structure and systems will show significant results over longer time period.

All researches done on the arena of corporate entrepreneurship have suggested that firms
should encourage corporate entrepreneurship to attain positive results in a long run. Most of
the studies are focused on examining the impact of corporate entrepreneurship on financial
performance of the firm and how it motivates individuals to work on sustaining financial
improvements. However financial improvements are not only the benefits contributed by
corporate entrepreneurship but it involves certain non-financial benefits too. Lumpkin and Dess
argued that in addition to financial performances (market share growth, sales growth, financial
profitability etc.), outcomes of corporate entrepreneurship also includes valuable non-financial
benefits that assist firm to sustain financial improvements.

According to Lumpkin and Dess, satisfaction and commitment of organizational members in

achieving company’s vision are crucial non-financial benefits to organization from corporate
entrepreneurship. Dover (defined job satisfaction as a pleasurable or favorable emotional state
derived from an evaluation of one’s job or job experiences. In contrast to this, affective
commitment is defined as degree of employee’s emotional attachment to his or her
organization. Both the job satisfaction and commitment have a positive influence on motivation
and leads to greater organizational effectiveness. Most importantly researchers, Handle and
Cutting have positively related both to corporate entrepreneurship.
Topic-4: Give a brief resume a on strategic entrepreneurship, why is it important for
entrepreneurial management.

Answer:

Strategic Entrepreneurship:

Strategic management and entrepreneurship are concerned with creating value and wealth. In
the main, entrepreneurship contributes to a firm’s efforts to create value and subsequently
wealth primarily by identifying op-opportunities that can be exploited in a marketplace, while
strategic management contributes to value-and wealth-creation efforts primarily by forming
the competitive advantages that are the foundation on which a firm competes in a market
place. Therefore, entrepreneurship involves identifying and exploiting opportunities, and
strategic management involves creating and sustaining one or more competitive advantages as
the path through which opportunities are exploited. Thus, both strategic management and
concerned about growth, creating value for customers, and subsequently creating wealth for
own-ers” (Hitt & Ireland, 2005, p. 228). A significant amount of scholarship focuses on the need
for firm outcomes to create wealth only or primarily for shareholders. SE expands the scope to
which a firm’s wealth-creating outcomes can apply to
multiple stakeholders, including society at large(Schendel & Hitt, 2007).SE allows those leading
and managing firms to simultaneously address the dual challenges of exploiting current
competitive advantages (the purview of strategic management) while exploring for
opportunities (the purview of entrepreneurship)for which future competitive advantages can
be developed and used as the path to value and wealth creation. Because “concentrating on
either strategy or entrepreneurship to the exclusion of the other enhances the probability of
firm in effectiveness or even failure” (Ketchen et al., 2007, p.372), SE involves both
entrepreneurship’s opportunity-seeking behaviors and strategic management’s advantage-
seeking behaviors and is useful for all organizations, including family-oriented firms (Sirmon &
Hitt, 2003; Webb, Ketchen,
&Ireland, 2010). Relatively speaking, successfullyusing SE challenges large, established firms tol
earn how to become more entrepreneurial and challenges smaller entrepreneurial ventures to
learn how to become more strategic.

Input-Process-Output Model of Strategic Entrepreneurship

The processes and actions that comprise SE generate several potential outcomes. Of course,
the ultimate outcome is either forming a new venture firm or achieving competitive success (by
creating value for customers of an established firm). Overtime both of these outcomes are
intended to create value for those holding equity in the firm. Creating wealth for owners is
typically interpretedas “financial wealth,” which is a primary goal. However,
owners/entrepreneurs may also achieve other forms of wealth, such as “socio emotional
wealth” (Berrone, Cruz, Gomez-Mejia, & Larraza-Kintana, 2010) and personal happiness. Yet we
also expect the outcome(s) of SE to benefit society. Importantly, increasing the wealth of
owners should contribute positively to additional eco-nomic activity (e.g., job creation,
technological advancement, and economic stability and growth)and thereby benefit society,
and there is potential for other social benefits as well. To achieve these longer term and major
outcomes, several interim outcomes are likely to be critical, such as creating new technologies
or developing innovations with value-creating potential. In addition, an interim and critically
important outcome is achieving a competitive advantage. In fact, long-term survival is unlikely
for a firm that is unable to achieve at least competitive parity. Innovation often con-tributes
to a competitive advantage, butthere areother activities necessary to achieving such anadvanta
ge (e.g., managing resources wisely and effectively as described in the previous section). Below,
we discuss several of these outcomes.

Importance of strategic entrepreneurship in entrepreneurial management

Individual Benefits:

Individual entrepreneurs gain value when engaging in strategic entrepreneurship. For example,

they gain satisfaction in developing an independent business and creating value for customers.
In addition, increases to the entrepreneur’s financial wealth result from venture success. Thus,
starting a new venture and operating it successfully likely
satisfies several of the entrepreneur’s needs, including self-actualization. Individual
entrepreneurs also learn when they develop and implement a new venture; as a result, they
build their personal knowledge stocks.

Organizational Benefits: Technology and Innovation:

Creating new technology and innovation is crucial for many firms, regardless of their size or
age. Of course, for a new entrepreneurial firm, it may be critical to break into an established
market or to create a new market, developing a product that is highly differentiated from
existing products and one that creates substantial value for customers. Often, this new product
will be based on a highly novel, or what is sometimes referred to as a radi-
cal, innovation. In fact, the disequilibrium towhich Schumpeter (1942) referred requires anovel
innovation. Yet after firms have captured a market leading position with an innovative product,
they often then try to incrementally improve that product in order to stay ahead of competitors
that are trying to imitate and improve the product to gain competitive parity or, ideally,
competitive advantage.

Societal Benefits:

Certainly, increasing owners’ wealth can have positive societal benefits because it injects more

financial capital into the economy and there by promotes economic growth. Indeed, many
have argued that entrepreneurial activity is a major contributor to economic development and
growth, creating new jobs and en-hanced market valuations . Yet entrepreneurial activity
can provide other benefits to society as well.

Entrepreneurial activity can also have other societal benefits. For example, an enhanced focus

on and resources allocated to entrepreneurial activity could increase the opportunities for
women to pursue entrepreneurial undertakings. In fact, if the limitations are loosened and
barriers to engaging in entrepreneurial activity for women and other disadvantaged groups are
overcome, the resulting growth in entrepreneurial activity
couldeventually facilitate positive societal change byempowering more women and individuals f
romunderprivileged families to become entrepreneurs and to gain access to the economic
benefits that flow from successful entrepreneurial activities. Thus, overall,
entrepreneurial activity can help to build new economic, social, institutional, and cultural
environments and thereby provide significant benefits to society.

Conclusion:
The dynamic and complex competitive environments that have become increasingly common
produce multiple challenges for firms seeking to create value and wealth. Uncertainty and
ambiguity are but two of the outcomes in the current
business environment. Strategic management and entrepreneurship are organizational
processes firms use to reduce and/or take advantage of un-
certainty and ambiguity and create more valueandwealth. In essence, the intent of strategicma
nagement is to develop and successfully exploit competitive advantages.

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