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Teaching Note: The Strategic Focus should emphasize the necessity for innovation,
especially among larger firms. Ask students to identify and discuss other instances when
large firms failed to innovate and suffered substantial revenue loss as a result. Ask them
to speculate about what the firms could or should have done to avoid the catastrophic loss
of revenue.
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Explain how strategic entrepreneurship helps firms create value.
CREATING VALUE THROUGH STRATEGIC ENTREPRENEURSHIP
Newer entrepreneurial firms often are more effective than larger firms in identifying
opportunities. These firms tend to be more innovative as well because of their flexibility and
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Teaching Note: Large firms can take several measures to act small and increase their
innovative capacity. These include the following:
• Greater levels of individual autonomy can be created through the restructuring of a
firm into smaller and more manageable units (see Chapter 7).
ANSWERS TO REVIEW QUESTIONS
1. What is strategic entrepreneurship? What is corporate entrepreneurship?
Strategic entrepreneurship is taking entrepreneurial actions using a strategic
perspective. When engaging in strategic entrepreneurship, the firm focuses on finding
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2. What is entrepreneurship, and what are entrepreneurial opportunities? Why are
they important for all aspects of the strategic management process?
Entrepreneurship is the process by which individuals or groups identify and pursue
entrepreneurial opportunities without being immediately constrained by the resources
they currently control. Entrepreneurial opportunities are conditions in which new
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4. What is an entrepreneur, and what is an entrepreneurial mind-set?
Entrepreneurs are individuals, acting independently or as part of an organization,
who see an entrepreneurial opportunity and then take risks to develop an innovation
to pursue it. Often, entrepreneurs are the individuals who receive credit for making
5. What is international entrepreneurship? Why is it important?
International entrepreneurship is “the process of creatively discovering and
exploiting opportunities that lie outside a firm’s domestic markets in the pursuit of
competitive advantage.” As the practices suggested by this definition show,
entrepreneurship is a global phenomenon.
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6. How do firms develop innovations internally?
Increasingly, successful R&D results from integrating the skills available in the
global workforce. Firms seeking internal innovations through their R&D must
understand that “Talent and ideas are flourishing everywhere—from Bangalore to
7. How do firms use cooperative strategies to innovate and to have access to
innovative capabilities?
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It is difficult for a firm to possess all the knowledge required to compete successfully
in its product areas over the long term. Complicating this matter is the fact that the
8. How does a firm acquire other companies to increase the number of innovations
it produces and improve its capability to produce innovations?
Firms complete strategic acquisitions in an effort to continuously strengthen their
ability to innovate. By integrating the capabilities of acquisitions with those it already
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9. How does strategic entrepreneurship help firms create value?
Newer entrepreneurial firms often are more effective than larger firms in identifying
opportunities. Some believe that these firms tend to be more innovative as well
because of their flexibility and willingness to take risks. Alternatively, larger and
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Firms that practice strategic entrepreneurship contribute to a country’s economic
development. In fact, some countries such as Ireland have made dramatic economic
progress by changing the institutional rules for businesses operating in the country.
ADDITIONAL QUESTIONS AND EXERCISES
The following questions and exercises can be presented for in-class discussion or assigned as
homework.
Application Discussion Questions
1. Is the term “corporate entrepreneurship” an oxymoron? In other words, can
corporations—especially large ones—be innovative?
2. Ask students for an example of a product champion supporting an innovation in a
corporation. What were the results of the champion’s efforts?
3. The economies of countries such as Russia and China have historically been operated
through centralized bureaucracies. What can be done to infuse such economies with a
commitment to corporate entrepreneurship and the innovation resulting from it?
4. Have students use the Internet to find an example of two corporate innovations—one
brought about through autonomous strategic behavior and one developed through induced
strategic behavior. Which innovation seems to hold the most promise for commercial
success and why?
5. Are strategic alliances a way to enhance a firm’s technological capacity, or are they used
more commonly to maintain pace with technological developments in a company’s
industry? In other words, are strategic alliances a tool of firms that have a technological
advantage, or are they a tool of technologically disadvantaged companies?
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Ethics Questions
1. Is it ethical for a company to purchase another firm to gain ownership of its product
innovations and innovative capabilities? Why or why not?
2. Do firms encounter ethical issues when they use internal corporate-venturing processes to
produce and manage innovation? If so, what are these issues?
3. Firms that are partners in a strategic alliance may legitimately seek to gain knowledge
from each other. At what point does it become unethical for a firm to gain additional and
competitively relevant knowledge from its partner? Is this point different when a firm
partners with a domestic firm as opposed to a foreign firm? If so, why?
4. Small firms often have innovative products. When is it appropriate for a large firm to buy
a small firm for its product innovations and new product ideas?
INSTRUCTOR’S NOTES FOR MINDTAP
Cengage offers additional online activities, assessments and resources inside MindTap, our online
learning platform. The following activities can be assigned within MindTap for students to
complete.
INSTRUCTOR’S NOTES FOR DIRECTED CASE
Directed Case exercises are a series of multiple choice questions designed to focus on the
concepts from the chapter utilizing the case study analysis steps, such as gaining
familiarity, recognizing symptoms, identifying goals, conducting the analysis, making the
diagnosis and doing the action planning.
Facebook
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INSTRUCTOR’S NOTES FOR EXPERIENTIAL
EXERCISES
The Slippery Slope of Strategic Entrepreneurship
INSTRUCTOR’S NOTES FOR VIDEO EXERCISES
The media quiz offers additional opportunities for students to apply the concepts in the
chapter to a real-world scenario as it is described in news reports. Students will answer
multiple choice questions after viewing the Ford Innovation news story.
Title: Ford Innovation
RT: 4:04
Topic Key: Strategic entrepreneurship, Corporate entrepreneurship, Entrepreneurial
opportunities, Innovation, Entrepreneurial mind-set, International
entrepreneurship
Sheryl Connelly is Ford Motor Company’s Manager of Global Trends. Her primary task
is researching consumer behavior trends for the company to help it garner a competitive
edge in the automotive industry. Because it is impossible to predict the future, Sheryl
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Suggested Discussion Questions and Answers
1. Is there evidence, in this video about Sheryl Connelly, that strategic
entrepreneurship exists at Ford?
2. Does Sheryl Connelly set the stage for corporate entrepreneurship?
3. What entrepreneurial opportunities do you see ahead for Ford?