Managing the Internal Corporate Venturing Process

What is induced strategic action? Give an example.

            Induced strategic action is a concept that derives insight from the strategic intent of an organization, which is defined by the top management of the organization. It is the action taken by the middle and level management to implement the strategic intent defined by top management to sustain leadership and performance (Burgelman, 1984). An example of strategic action is an organization’s decision to switch to the production of electric vehicles from gasoline vehicle production.

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What is an autonomous strategic action? Give an example.

            While induced strategic action is derived from an organization’s strategic intent (defined by the top management), autonomous strategic action is not inspired by an organization’s strategy. Autonomous strategic action emerges from the beliefs of some people that some actions can result in path-breaking changes into business, banking on the capabilities of an organization and innovativeness. An example of autonomous strategic action is a car manufacturing company venturing into banking or smartphone production research.

Describe in your own words the five dimensions of the fundamental uncertainty that constrain the ability to predict the value of radically new technologies. Give an example of each.

The following are the five dimensions of fundamental uncertainty that can constrain the ability to predict or foresee the value of radically new technologies (Burgelman, 1984):

  1. The inability to access the effectiveness of practical applicability of technology to real-life problems.
  2. The inability to assess the value proposition that the technology will provide to potential users.
  3. The inability to assess the product life cycle of technology, with technological inventions and innovation taking place often.
  4. The inability to assess the impact of change in the business environment as a result of political, economic, and social factors on technology.
  5. The inability to assess the ecological or environmental impact of technology, which may affect the future prospects of the technology.

Why are autonomous strategic initiatives a challenge for management?

            These initiatives pose a challenge for management since they are not directly related to the core strategy or strategic intent of an organization. They are a result of innovative ideas proposed by individuals. Since they are out of the box ideas and thoughts, there is a probability that their implementation may be successful or result in failure. Leaders have to promote out of the box thinking and take risks to benefit from innovation. A good initiative can increase the fortunes of an organization, while failure can result in huge organizational losses.

What are the nine design alternatives for internal entrepreneurial initiatives? For each design alternative, summarize in two to three statements when it should be utilized.

  1. Direct integration (Burgelman, 1984) – utilizable where a new business has significant strategic importance and operational relatedness. It is necessary that a project that is directly integrated is managed by product champions that are well respected by others within the organization.
  2. New product business department (Burgelman, 1984) – a venture with significant strategic importance and partial operational relatedness. The department should be organized around an entrepreneurial project, where skills and capabilities are available.
  3. Special business units (Burgelman, 1984) – applicable where a new business has significant strategic importance but low operational relatedness. The special business unit should have specific objectives and time horizons to keep it effective.
  4. Micro new ventures department (Burgelman, 1984) – applicable where a venture has uncertain strategic importance, with high operational relatedness. Such a scenario is common in operational divisions, which means that each department needs to have a new ventures department.
  5. New ventures division – applicable where a venture has uncertain strategic importance and is only partly related to the current operations.
  6. Independent business units – applicable where a new venture has undetermined strategic importance and no relationship with the present activities.
  7. Nurturing and contracting – where an idea may not be important to an organization but is related to the present activities and operations. Such an arrangement allows the formation of a friendly competitor.
  8. Contracting – applicable where the necessary capabilities and skills are less related to those available within an organization. The parent company can spin off the unimportant unit but keep a relationship until something of value is developed (Phan et al., 2009).
  9. Complete spin-off (Burgelman, 1984) – applicable where the strategic importance and the operational relatedness of a new venture or idea are not significant. An organization completely sells off the business to another company or the employees through a stock ownership plan.

Regarding ICV, what are the problematic aspects of the core processes at each management level? Refer to Exhibits 1 and 2 on page 956. Describe each of the six individually.

            At the first level, the key processes are technical and need linking, as well as strategic forcing (Burgelman, 1983). For technical and need linking, a problematic aspect is that the need needs to be identified and supported by the technical team. However, the technical team was not able to meet the needs of the market at all times. Moreover, the strategic force needs to be used to push a new idea to the highest level, which is not a good method of championing a new venture.

            In the second stage, the core processes are stewardship and coaching, as well as strategic building (Burgelman, 1984). People were comfortable with the slow-paced exploratory process, which resulted in them not accepting the new fast-paced idea process. Coaching the group leaders was also neglected. Strategic building requires on to be open to witnessing scenarios. When one is focused on their conventional or set methods, they are not open to seeing new opportunities that can help them grow.

            At the third level, the core processes are authorizing and monitoring (Burgelman, 1983). The problematic aspect of monitoring is that corporate management is usually used to a set framework. When a different idea or framework is introduced, the management cannot process it well, which makes monitoring difficult. Moreover, since the management is not confident in the monitoring, it is not comfortable authorizing the new ideas.

For the six core processes listed in Exhibit 3 (page 960) which do you believe will be both easy to implement and effective? Explain your reasoning.

            At the top management level, both monitoring and authorizing will be easy to implement and will be effective. Since the orders come from the top, it will be easy to implement orders and the lower levels of management will make any necessary adjustments to processes to ensure the implementation of given orders.

For the six core processes listed in Exhibit 3 (page 960) which do you believe will be the most effective but difficult to implement? Explain your reasoning.

            While coaching is a highly effective process, it is difficult to implement since it is time-consuming. In addition, the giver and the receiver of coaching have to be at the same level of understanding.

References

Burgelman, R. A. (1984). Managing the internal corporate venturing process. Sloan Management Review (pre-1986), 25(2), 33.

Burgelman, R. A. (1983). A process model of internal corporate venturing in the diversified major firm. Administrative science quarterly, 223-244.

Phan, P. H., Wright, M., Ucbasaran, D., & Tan, W. L. (2009). Corporate entrepreneurship: Current research and future directions. Journal of business venturing, 24(3), 197-205.

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