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The Four Models of Corporate Entrepreneurship
Profitable organic growth is complex.
By the time a business begins to decline, research shows that less than 5% of companies are recovering growth rates of at least 1% above Gross Domestic Product.
The invention of new businesses provide more powerful solutions
How does an established organization create successful new businesses on an ongoing basis?
For example, the iPod should be a product of Sony Corp. However, the Japanese brand had heritage, brand, and technology, but Steve Jobs of Apple Inc was the one who managed to recognize the potential in digital music, creating a new product.
Four models
The opportunistic model
Tends to work well only when there is trust in corporate cultures that are open to experimentation as well as having different social networks behind the official hierarchy. Without this environment, good ideas can easily go unnoticed in the organization or get underfunded
The facilitating model
The premise that it has is that the workers of the organization will be willing to develop new concepts. The dedication of both resources and processes enables teams to search for opportunities on their own as they adjust to the organization's strategic framework
The defender model
In this, the company assigns organizational ownership for the creation of new business creation, as well as providing only modest budgets to a core group
The producer model
Its objective is to encourage latent entrepreneurs, as well as protect those projects that are emerging, as well as foster collaboration between units, create businesses that are disruptive and create pathways for executives to continue their careers outside of business units
To choose the correct model
It is necessary to evolve from an opportunistic model to any of the forms of corporate entrepreneurship, generally, it begins with the growth mandate and a vision which is broad and is communicated to the organization
After establishing the vision, it is necessary to define the specific objectives
There are cases where a corporation can use different models in different functions as well as different levels
Wolcott, R. & Lippitz, M. (2007). The Four Models of Corporate Entrepreneurship. MIT Sloan. [Website]. Recovered from:
https://sloanreview.mit.edu/article/the-four-models-of-corporate-entrepreneurship/
