1.0 Introduction In many years, companies have been operating using traditional practices to access growth through use of new technology, acquisitions, corporate Research and Development (R& D) and Venture capital invesment. With the advent of new technology, many businessese were witnessed taking very early strides towads growing businesses by taking its advantage. However, this was never the case as many could not achieve what they wanted to as most of these initiatives did not fit well in the prevailing market value chains (Ireland et al 2006). The purpose of this report is therefore to take take a critical analysis on the concept of corporate venturing and how it is being applied in different organisations in the contemporary society.
2.0 The development of the entrepreneur’s corporate venture Despite the fact that corporate venturing being considered an opportunity for many businesses both small and large to explore and exploit different opportunities on their way by making use of the available competencies, this for over years has never been the case with large companies (Hornsby et al 2002). This is because many companies seem to be content with their achivement and product growth and the steady expansion of the business that provide prospect for long-term gain with very little caution that, that might never be the case in the long-run especially when the product or the busisness reaches its maturity.
The stand by many managers in large companies not to embrace corporate venturing, is the paradox surrounding the trade-offs that exist between the benefits that could be accrued from exploiting the different opportunities and the capacity to exploit them. However, with the emerging competition in the world of businesses, the only way that a buisness can be ahead of others is by eencouraging innovation.
Innovation in many businesses today is being promoted by the intrapreneuship culture which is a strategy to encourage and promote entrepreneural talents among individuals and that can be used by the business to develop more competitive and successful products and services in the market. It is from this perspective that different managers are now taking a very different stand which encourages and promotes innovation for the business (Ireland et al 2006).
Commonly praticed approaches to creating an intrapreneural culture for the business include listening always to the innovative ideas from individuals, acting with speed in enacting a given innovative idea, sharing credits, breaking the precedent traditions and igniting the entrepreneurs. The development of the entrepreneur’s corporate venture today is at a stage where clear articulation of mandate, envisioning new opportunities, connecting with other people’s needs, roadmap the system of solutions and crafting viable and effective business plans (Kenney & Mujtaba 2007). Different companies have applied the new approach to corporate venture which is intrapreneurship and seemed to record very good results in terms of growth and market competitiveness.
Among those companies that have been put on the limelight and that are being considered as very stable environment for entrepreneurship is the B-schools 3M Company under the leadership of L. D DeSimone who is the Chairman and the CEO. Unlike other many other companies, the 3M Company is considered one of the most innovative companies. This is after allowing flexibility in research, creativity and innovation. For example its researchers are allowed to take about 15 percent of their time to work on unapproved projects.
This has continued to help the company innovate more businesses and growing the businesses in general (Gnyawali & Grant 1997). The other case that has demonstrated new approach to corporate venture is the Intuit Company under Bill Harris has its president and CEO. After the Intuit business had grown from $5 million to $500 million, like the case of Thermo Electron Company, the CEO decided to break the business into eight core-product units headed by respective managers.
However, to realize the company market objective, innovation was considered paramount. With this regard therefore entrepreneurial thinking and reasoning was encouraged in the business so as to help the company respond accordingly to the market needs.