CHOICE OF TYPE OF CORPORATE ENTREPRENEURSHIP: A PROCESS MODEL

INTRODUCTION Corporate entrepreneurship (C.E.) has become a popular and widely studied phenomenon in the last few years as evidenced by the special issue of Strategic Management Journal (Summer 1990) and the appearance of new academic journals (e.g., Academy of Entrepreneurship Journal, Entrepreneurship Theory and Practice, Journal of Business Venturing). The importance of C.E. can be primarily attributed to its impact on the renewed success of some declining firms that successfully transformed themselves through entrepreneurial activities (Miller & Friesen, 1985) and its critical role in the survival of underperforming firms (Gimeno, Folta, Cooper, & Woo, 1997). In addition, there has been a growing interest in C.E. because of its use by companies to enhance the innovativeness of their employees and to enjoy corporate success through the creation of new ventures (Kuratko, Montagno, & Hornsby, 1990). C.E. has been linked with superior firm performance (Zahra & Covin, 1995) and pursuit of competitive advantage (Covin & Miles, 1999). The interest in C.E. has even been extended to its study in multinational corporations (Birkinshaw, 1997). A review of the recent literature and classical articles (see Table 1 for a list of some of the classical articles) on C.E. reveals a disproportionate emphasis on external factors (i.e., organizational and environmental factors). Generally, C.E. is considered more of an organizational property resulting from organizational and environmental factors. In addition, the few studies that examined internal aspects of the organization generally tied the success or lack thereof of entrepreneurial ventures to the entrepreneurs' background/attributes (e.g., Cooper & Bruno, 1975). Although it is necessary to understand the external determinants of C.E. , the premise of the present paper is that internal behavioral factors can also be equally helpful in understanding C.E. Internal behavioral factors simply refer to the critical roles played by managers and employees in determining the types of C.E. exhibited by any firm. Hence, while not denying the impact of external factors and organizational factors, this paper contributes to the literature by showing how levels of individual factors can have a significant impact on the type of C.E. , an organizational property. The theory developed here broadens our understanding of corporate entrepreneurship by illuminating an area of importance that has not been fully developed before. Why is a focus on internal behavioral factors so crucial? Because C.E. is such a complex activity, at a practical level, managers and organizations need more guidelines to direct or redirect resources to establish the desired type of C.E. In addition, although understanding external factors have academic merits, there is more value for practitioners if internal behavioral factors are studied because such factors are more easily changed and controlled. On a theoretical level, researchers need to continually assess and understand the components that actually predict types of C.E. Consequently, internal behavioral factors, which are in the control of management or employees within an organization, are identified and discussed. LITERATURE REVIEW Corporate Entrepreneurship Although the literature abounds with conflicting definitions of entrepreneurship (e.g., Chung & Gibbons, 1997; Stopford & Baden-Fuller, 1994; Zahra, 1996), Sharma & Chrisman's (1999) attempt to propose a converging definition is notable. They define entrepreneurship as encompassing "acts of organizational creation, renewal, or innovation that occur within or outside an existing organization" (Sharma & Chrisman, 1999: 17). As such, corporate entrepreneurship is defined as the "process whereby an individual or group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization" (Sharma & Chrisman, 1999: 18). …