Corporate entrepreneurship can be defined as the creation of new business opportunities and ideas within an already established business or organization. Though this is a risk-taking venture, the innovation may range from products, processes, administration to technologies. Creative changes can lead to the generation of new products that translates to increased profitability especially when a firm enters a new venture. This provides an alternative source of revenues. Another benefit is that it helps an organization stay afloat in the face of stiff competition from other business rivals. This is especially the case when there’s adoption of new technologies and production of high-quality products that gives it a competitive advantage, and fight new competitors. Besides, a company engaging in corporate entrepreneurship has all its employees working together towards the same goal. The advantage with this is that it creates better understanding between employees, and pool the knowledge together. A knowledge base of information can be set up from this, and help the firm in making informed decisions and risk taking.
Despite the above-mentioned benefits, corporate venturing typically requires investments in the form of equity which is risky (Burns 492). It is also costly for an organization to make investments in mechanisms that creates venture management to look for, evaluate, and generate new ideas. Given the risks involved in embarking on new ventures, the company is also not guaranteed on the success of the new business which could come with significant loss.
Example of corporate entrepreneurship
A notable example of corporate entrepreneurship is the Apple Company. After their Personal Computer (PC) concept was rejected by HP and Atari, Steve Jobs and Steve Wozniak went back to the drawing board and created the Apple Computer, which is widely in use globally. Aside from that, the need for mobile computing has seen the creation of a broad range of Apple phones with different capabilities that suit changing consumer needs. The innovation employed in Apple devices has seen continuous growth in company’s revenues throughout.
Work Cited
Burns, Paul. Entrepreneurship and Small Business (3rd ed.). United Kingdom: Palgrave Macmillan, 2011.
