How can established organizations build successful new companies constantly? In their study of nearly 30 companies as diverse as Google, DuPont and Cargill, the authors identified two dimensions under the direct control of management that consistently distinguish how companies approach corporate entrepreneurship. The first is the organizational responsibility: If the primary responsibility for the creation of new businesses are focused in a particular group, or will it be spread all over the … Read more »

How can established organizations build successful new companies constantly? In their study of nearly 30 companies as diverse as Google, DuPont and Cargill, the authors identified two dimensions under the direct control of management that consistently distinguish how companies approach corporate entrepreneurship. The first is the organizational responsibility: If the primary responsibility for the creation of new businesses are focused in a particular group, or will it be spread throughout the organization? The second is resource authority: Will projects from a dedicated corporate pool of money or in an ad hoc manner, to finance about by business unit budgets? Together, the two dimensions generate a matrix with four basic models of corporate entrepreneurship: the opportunist, the Enabler, the lawyer, and the producer. In the opportunistic model (Example: Zimmer Holdings), the company has no conscious approach to corporate entrepreneurship, and new businesses are built mainly from the grassroots efforts of some “project champion.” Enabler company (example: Google), financing and senior executive attention for potential projects. At the law model (example: DuPont), the company strongly evangelizes for corporate entrepreneurship, but business units provide the primary funding. Finally, producer companies (example: Cargill), the creation and support of a full service group with a mandate for corporate entrepreneurship. Each of the four models has a different objective function and a set of challenges. Whichever model is chosen, the key thing to remember is that corporate entrepreneurship must be maintained and managed as a strategic, intentional act.
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from
Robert C. Wolcott,
Michael J. Lippitz
Source: MIT Sloan Management Review
10 pages.
Release Date: 1 October 2007. Prod #: SMR266-PDF-ENG
Four Models of Corporate Entrepreneurship HBR case solution

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