Corporate Entrepreneurship at GE and Intel
John Zimmerman, Zayed University, U.A.E Abstract This is the first of three planned articles concerning Corporate Entrepreneurship (CE). The author is a former entrepreneur practitioner who secured an earned doctorate from Pepperdine University in 2008, and who now teaches at Zayed University in the United Arab Emirates. In this article the author explores the concept of Corporate Entrepreneurship (CE) using case study methodology to connect previous scholarly research with data collected from successful companies. The paper discusses the problem of sustaining CE as organizations mature using Hayek’s Theory of Cultural Evolution as a framework. The author suggests that corporate entrepreneurship, often called intrapreneurship, while critical for sustaining competitiveness and increasing stakeholder value, often poses a dilemma for large organizations. The different processes and strategies these companies use to attempt to sustain CE are outlined together with suggestions for integrating corporate entrepreneurship into any organization’s culture, strategy, and management process. Finally, recommendations are provided as to how organizational leaders can successfully integrate corporate entrepreneurship into any organization’s strategy and management systems. Keywords: General Electric, GE, Intel, Corporate Entrepreneurship, Hayek
Introduction At their inception, all organizations must have engaged in some form of entrepreneurship, otherwise they would not exist. The irony is that as new ventures progress from formation to become larger entities, they often implement policies, procedures, and rules that result in bureaucratic structures that, while needed to control and manage growth, often impede the innovation and creativity vital to maintain the competitive advantage initially created by entrepreneurial activity (Ireland, Kurato, & Morris, 2006). Kenney and Mujtaba (2007) rightly connect this phenomenon to Hayek’s Theory of Cultural Evolution. Hayek contends that as civilization advances from small, confined groups to more complex societies, rules and structure are spontaneously created to facilitate the complexities associated with this growth. Hayek maintained that the contradiction of this phenomenon is that this bureaucracy eventually stifles evolutionary progression, leading to the society’s failure. This process is analogous to the evolution we can observe in some businesses. For any organization to sustain success it must engage in some form of entrepreneurial activity in order to continue to effectively compete in the marketplace and continue to increase stakeholder value. Therein lies the dilemma of Corporate Entrepreneurship (CE), how can growing organizations nurture an environment for entrepreneurial activity, given that such organizations must have a certain level of policies, procedures, and processes in order to manage and control their activities. This paper attempts to compare and contrast the CE practices of two successful corporations, General Electric Company and Intel Corporation in order to understand their CE approach and its implications for dealing with the CE dilemma. First let us define some terms. The term entrepreneurship has been employed for well over 200 years, yet there seems to be no single accepted scholarly definition of the phenomenon. For the purpose of this work we have selected one definition that appears to capture its essence. Entrepreneurship is “the process of creating value by bringing together a unique combination of resources to exploit an opportunity” (Stevenson & Jarillo-Mossi, 1986, p. 10). It is helpful to deconstruct this definition into four elements. Entrepreneurship is a process consisting of stages. Second, entrepreneurial activity has the goal of creating value. Third, entrepreneurship involves assembling resources needed to create value in some unique...