Corporate Entrepreneurship: An Empirical Study
of the Importance of Strategic Considerations
in the Creation of Radical Innovation
Astrid Heidemann Lassen
The recognition of the importance of entrepreneurial dynamics in cor-
porate context is increasingly acknowledged in both entrepreneurship
and strategic management literature, as firms today face a reality in
which frame-breaking innovation is an important element of survival.
From this understanding, the concept of Strategic Entrepreneurship
(se) has arisen, arguing a logic of focusing on the intersections be-
tween the two fields. This paper sets out to explore the se construct
empirically. Through seven case studies evolving around radical tech-
nological innovations, evidence is found of the importance of incorpo-
ration of strategic considerations taking place at several different lev-
els of the organization, in order to obtain a desirable balance between
entrepreneurial and strategic forces. An Integrative Model of Strategic
Entrepreneurship is suggested based on this evidence.
Key Words: strategic entrepreneurship, radical innovation, case studies
jel Classification: 031, 032
Introduction
In a reality characterized by intensified global competition, dynamic
change and increasing uncertainty, the need for organizations to become
more innovative in order to survive and grow is increasing rapidly. In
this context, corporate entrepreneurship is more relevant than ever, as a
viable means for existing organizations to continuously explore and ex-
ploit previously unexploited opportunities, thereby moving the organi-
zation (or some subset of individuals) to a new state of being (Stevenson
and Jarillo 1990; Krackhardt 1995).
Researchers have suggested that the pursuit of corporate entrepreneur-
ship requires established companies to strike a fragile balance between
engaging in activities that make use of existing knowledge, while at the
same time challenging themselves to embark upon new adventures, seek-
ing new knowledge and opportunities to rejuvenate themselves (Hannan
and Freeman 1989; Floyd and Woolridge 1999).
Dr Astrid Heidemann Lassen is a Researcher in the Center
for Industrial Production, Aalborg University, Denmark.
Managing Global Transitions 5 (2): 109-131
Radical or breakthrough innovations often lie at the core of en-
trepreneurial activity; corporate entrepreneurial activity therefore differs
dramatically from all else known to the firm (Ahuja and Lampert 2001).
However, engaging in radical innovation as a periodical divergence from
firm strategy in order to pursue corporate entrepreneurship may involve
such a degree of unfamiliarity and risk that firms experience great dif-
ficulties in doing so, and consequently explore, manage and exploit the
innovation poorly.
Focusing on this problematic aspect, a perspective has recently emer-
ged within the field of entrepreneurship, calling for the integration of
strategic advantage-seeking and entrepreneurial opportunity-seeking
behavior. This perspective, called Strategic Entrepreneurship (se) em-
phasizes the importance of managing entrepreneurial resources or ac-
tivities strategically in order to obtain competitive advantage (Hitt, Ire-
land, Camp, and Sexton 2001; Ireland, Hitt, and Sirmon 2003). In this
light, corporate entrepreneurship should be interpreted as an on-going
strategic consideration of entrepreneurial opportunities rather than as
an isolated activity diverging from strategy, and this way as the 'locus
of contact' between the fields of entrepreneurship and strategic manage-
ment (Sandberg 1992).
Most literature on se has to date focused on arguing a logical theo-
retical construct, integrating aspects from the fields of strategic manage-
ment and entrepreneurship based on the understanding that both fields
are concerned with firm growth and wealth creation and hence are often
mutually supportive (Ireland, Kuratko, and Covin 2003). However, the
empirically based understanding remains to be further developed.
Acknowledging and building upon the theoretical contributions of se,
as well as the Schumpeterian perspective on the degree of innovation
involved in entrepreneurial activity, the research presented in this paper
aims at exploring empirical relationships between strategic advantage-
seeking and opportunity-seeking behavior leading to radical innovation
in a corporate context.
Initially a theoretical background of the topic in question will be ac-
counted for, providing the analytical frame of the empirical data. Sec-
ondly, the research method applied will be discussed. Hereafter, the find-
ings of the qualitative research will be discussed in relation to the exist-
ing understanding of se, and conclusions on the research question will
be drawn.
Theoretical Background
The fields of strategic management and entrepreneurship are becom-
ing increasingly intertwined, in a reality where firms need to be able to
manage continuous change and maintain flexibility in order to survive.
Hence, the concept of Strategic Entrepreneurship (se) has seen the light
of day, as a highly relevant topic.
The idea behind se has progressively emerged over the past decades
as a perspective on the intersecting dynamics between entrepreneur-
ship and strategic management; Miles and Snow (1978) consider the en-
trepreneurial problem as a fundamental issue faced by all firms; Steven-
son and Jarillo (1990) and Day (1992) express this idea as entrepreneurial
management; Mintzberg, Lampel, and Ahlstrand (1998) through his dis-
cussion of the entrepreneurial and cognitive schools within the strategic
management literature; Sandberg (1992) views it in terms of corporate
entrepreneurship; Dess, Lumpkin and Covin (1997) as entrepreneurial
strategy making; and McGrath and McMillan (2000) discuss strategy as
discovery and the need for an entrepreneurial mindset. As such, the idea
of interrelatedness between strategic management and entrepreneurship
has through a range of contributions been discussed in different terms,
underlining the need for addressing this intersection explicitly. This need
has in particular been addressed by Hitt, Ireland, Camp and Sexton
(2002), uniting thoughts by various scholars under the term Strategic
Entrepreneurship.
One of the major hurdles in doing so lies in the fact that where strate-
gic management has traditionally been concerned with large corpora-
tions, entrepreneurship has mainly focused on start-up ventures and
small firms. As such, the challenges and opportunities in focus in the
two fields respectively have been at different units of analysis and con-
sequently influenced by different dynamics. Strategic management of
large corporations has been largely concerned with optimizing the use
of existing resources, making judicious allocation decisions and control-
ling correct utilization, while entrepreneurship implies identifying non-
addressed needs, proposing original solutions and creating new organi-
zations. As such, se initially seems to entail a contradiction in terms.
But, there are forces within both fields driving forth thoughts of inte-
gration. Within the field of strategic management there has been a shift
in paradigms, highlighting the dynamic nature of organizations and the
need for all organizations to be entrepreneurial. This is, for example, seen
through the transition towards defining strategy as a perspective rather
than a position, meaning that strategy is seen in wide terms, as the 'the-
ory of the business' (Drucker 1994) and a 'pattern that is consistent in
behavior over time' (Mintzberg, Lampel, and Ahlstrand 1998).
Entrepreneurship literature has also paid increasing attention to ex-
isting companies, through terms such as; intrapreneurship (Pinchot
1985; Kuratko et al. 1993; Antoncic and Hisrich 2001); corporate en-
trepreneurship (Kuratko, Montagno, and Hornsby 1990; Zahra 1991;
1993), internal corporate entrepreneurship (Schollhammer 1982), cor-
porate ventures (MacMillan et al. 1986; Ellis and Taylor 1988); venture
management (Veciana 1996), internal corporate venturing (Burgelman
1984), entrepreneurial posture (Covin and Slevin 1986; 1991) and en-
trepreneurial orientation (Lumpkin and Dess 1996). This paper focuses
on firm level entrepreneurship and is built on the definition of this phe-
nomenon being: 'a scholarly field that seeks to understand how oppor-
tunities to bring into existence future goods and services are discovered,
created and exploited, by whom, and with what consequences' (Shane
and Venkatamaran 2000,218), which is seen through 'emergent activities
and orientation based on the effective combination of autonomy, in-
novativeness, risk-taking, proactiveness and competitive aggressiveness'
(Lumpkin and Dess 1996,162).
A unifying factor between strategic management and entrepreneur-
ship is also found in the fact that researchers in both fields use firm per-
formance as a primary dependent variable. For example, Schollhammer
(1982), Miller (1983), Venkataraman and Ramanujam (1986), Khandwalla
(1987), Guth and Ginsberg (1990), Naman and Slevin (1993), and Lump-
kin and Dess (1996) have all noted that organizational level entrepreneur-
ship can be used to improve competitive positioning and transform or-
ganizations, their markets, and industries as opportunities for value-
creating innovation are developed and exploited. As such, the tradi-
tional barriers between strategic management and entrepreneurship the-
ory have become increasingly transparent, and a need to address the
overlaps in thoughts has become apparent.
When addressing the overlaps between entrepreneurship and strategic
management it is furthermore relevant to focus on the notion of inno-
vation, as there is a very strong relationship between innovation and en-
trepreneurship (Antoncic and Hisrich 2003). Depending on the perspec-
tive applied, innovation can be perceived as either the firm performance
achieved through entrepreneurial behavior, or as the grounds on which
entrepreneurial behavior grows. In this paper the relationship is seen in
the fact that the essence of entrepreneurship is perceived to be newness:
new resources, new customers, new markets, and/ or new combinations
of existing resources, customers or markets. In this sense, opportunity
recognition is highly related to departure from the customary.
The notion of 'newness' has, however, also been treated from dif-
ferent angles in entrepreneurship literature and needs further clarifica-
tion before considering the overlaps with strategic management. Follow-
ing a Kirznerian perspective, entrepreneurial newness is accomplished
through equilibrating actions that are based on the combination of ex-
isting and related resources that revise existing knowledge about mar-
kets and fill out asymmetries (Kirzner 1982). As such, entrepreneurship
is in this perspective placed in the context of exploitation and incremen-
tal innovation. In contrast, a Schumpeterian perspective is the notion of
disequilibrating actions that are based on a combination of existing but
unrelated knowledge that is incompatible with prevailing mental models
(Schumpeter 1934). In this sense, entrepreneurial newness disrupts exist-
ing patterns and structures in order to create new ones. Disequlibrating
actions can produce long-term competitive advantage because they are
complex and will be difficult for competitors to identify and especially
imitate. In this sense, entrepreneurship is connected to exploration and
holds the potential of setting the stage in new arenas of competition, and
leaving competitors far behind.
As such, entrepreneurial innovation can be thought of as a continuum
from incremental to radical innovation. Incremental innovation is crit-
ical to sustaining and enhancing shares of mainstream markets (Baden-
Fuller and Pitt 1996) and focuses on improving existing products and
services to meet evermore demanding customer requirements (Bessant
2003). Radical breakthroughs, on the other hand, serve as the basis for
future technologies, products, services and industries (Christensen 1997;
Hamel 2000; Abetti 2000), and are of a highly revolutionary or discon-
tinuous nature. Radical innovation represents a new paradigm that can
generate new wealth whilst transforming or displacing some or all of an
established market (Christensen 1997).
In this paper, a Schumpeterian perspective on entrepreneurial new-
ness is adopted, as radical and disequilibrating innovation is considered
to pose an obvious and interesting contrast to strategic and planning ori-
ented activities, which could provide additional insights into the differ-
ent patterns of growth covered by the term Strategic Entrepreneurship.
For the purpose of this paper, radical innovation is defined following
the definition of O'Connor and Ayers (2005) as the commercialization of
products or technologies that have a strong impact on (1) the market, in
terms of offering wholly new benefits, and (2) the firm, in terms of gen-
erating new business. To specify this somewhat more in detail, Leifer's
definition is also considered, stating that a radically innovative project
must entail at least one of the following: (1) new to the world perfor-
mance features, (2) significant (5-10X) improvement in known features
or (3) significant (30-50%) reduction in cost (Leifer et al. 2000). As a
significant contribution, March (1991) furthermore, made the distinc-
tion between exploitation of existing technology and exploration of new
technology. Adopting this thought, the definition is thereby driven by
the degree of new value added to the marketplace through exploration
of new opportunities.
It is clear that the rationale behind se is highly relevant and well-
argued by both fields. This has led to the development of a model
of Strategic Entrepreneurship by Ireland, Hitt, and Sirmon (2003),
describing the process of combining advantage-seeking behavior and
opportunity-seeking behavior. The outset, the 'entrepreneurial mindset',
the 'entrepreneurial culture' and the 'entrepreneurial leadership', reflects
opportunity-seeking behavior; followed by the advantage-seeking strate-
gic management of financial, human and social capital. Next, creativity
is applied in the development of the actual innovation, which will pro-
vide the competitive advantage and wealth creation. The model serves as
point of departure for the analysis of the empirical data.
Method and Research Question
Using a holistic multi-case design (Yin 1989), case studies in seven es-
tablished firms were carried out. The case firms were selected based on
criteria for corporate entrepreneurship defined through theory and in-
volvement in radical innovation. The case firms are all placed within
high-tech industries, and each evolves around a radical technological in-
novation. The case firms differ in size, age and specific industry, and
this does to some extent influence the circumstances surrounding the
innovation process. However, the essential elements of comparison be-
tween the cases were the fact that they have all achieved a radically inno-
vative performance through the projects which were followed, and the
fact that they can all be characterized as entrepreneurial. As such, the
similarities in entrepreneurial dimensions involved and innovative per-
formance are considered to be a central unifying factor. The differences
between the cases are perceived to be useful in highlighting different an-
gles of the relationship between strategic considerations and corporate
entrepreneurship. By selecting cases based on the involvement in corpo-
rate entrepreneurship rather than industry specific characteristics, Yin's
(1989) recommendations of not falling into the trap of trying to select
a representative set of cases in order to create generalizability were con-
sidered, as no set of qualitative cases is likely to deal satisfactorily with
this. Instead, the intent is to generalize the different qualitative findings
to theoretical patterns. Through the analysis of the cases the central re-
search question of the paper is answered:
Which roles do strategic considerations play in a corporate
context in relation to the recognition and development
of radically innovative opportunities?
The cases are based on between 3 and 10 in-depth qualitative inter-
views with top-management, middle-managers and r&d professionals
over a period of one year. As such, the process of innovation was fol-
lowed through considerations about the past, the present and the future,
made by the interviewees at different points in time during the process.
This research approach is an expression of an explorative and reflective
approach, allowing for a gradual development of the understanding of
the case through a dialectic process between interviewee and interviewer
Validity in the qualitative data is obtained through emphasis not on the
repeatability of the interviews but rather on their quality by focusing on
the careful training of the interviewer, the use of interview protocols and
the quality control of the data-analysis done by sharing the information
and analysis with the interviewee.
Time was additionally spent on the premises of the firms, observing
the day to day working of each organisation. This enabled the develop-
ment of insights into organisational culture and establishment of impres-
sions from other employees which would have been difficult to obtain
through interviews only.
Relevant documentation was furthermore provided by the respon-
dents both prior to and after the interviews. This included; strategic
documentation, product development roadmaps and funding proposals.
These data have been used to cross reference findings from the interviews
and to provide added historic background on the case studies.
116	Astrid Heidemann Lassen	
table 1 Overview of case firms		
Case	Characteristics of the firm	Innovation
a	Established in 1976. Profile: Develops, manufac- tures and markets professional audio products. Size: 185 employees.	Unique technology within digital signal processing.
b	Established in 1925. Profile: Develops, manu- factures and markets high-design audio/visual products. Size: 2300 employees.	Unique audio power con- version technology.
c	Established in 1956. Profile: Analytical solutions for food and agricultural products. Size: 1100 employees.	Variations of existing tech- nologies applied in unre- lated fields.
d	Established in 1922. Profile: Healthcare firm fo- cused on diabetes care. Size: app. 20,250 employees.	Monitor of intracellular events and protein translo- cation in real time.
e	Established in 2001 as independent spin-in to a British firm. Profile: Wireless communication. Size: 32 employees.	Front edge silicon ip for wireless terminals.
F	Established in 1933. Profile: Refrigeration and air-condition, heating and motion control (case within Heating and Water division). Size: 17,500 employees.	Radical rethinking ofCO2 sensor technology.
G	Established in 2002. Profile: Audio development firm. Size: 5 employees.	Unique 3D sound.
table 2 Radical innovation in cases
Indication of radical innovation in the cases	a b c d e f g
Offering wholly new benefits to the market	.......
Generating new business within the organization	... ...
New to the world performance features	.... .
Significant (5-10X) improvement in known features .......
Significant (30-50%) reduction in cost	. . .
Tables 1 and 2 respectively give an overview of the case firms and illus-
trate the radicalism of the innovation in each of the cases, following the
definitions of Ayers and O'Connor (2005) and Leifer et al. (2000).
Findings and Discussion
Although it is possible to interpret the findings from the case studies
in somewhat different ways, it is suggested in this section that distinctive
and valuable insights arise on the strategic considerations involved in the
recognition and development of radical innovation in the cases. Looking
at the cases in a cross-case perspective three distinct patterns arise. Each
case is not presented separately; instead the observations in the cases are
grouped, adding representative highlights, to allow for reflection on the
central question.
Initiating the analysis, the cases are evaluated in relation to the overall
corporate strategies of the firms in which the cases took place, in order to
create a picture of the possible different strategic patterns to consider in
the continued research. This instantly revealed a high variety between
the cases. Cases b and c were examples of technologies developed in
line with the overall firm strategy. These were based on a consciously in-
tended course of action, and with the strategy being formulated ahead of
the events leading to the innovation. Top-management were instigators
behind the projects, and had clear views on why the innovations were
developed, how they would fit/differ from the existing product portfolio,
and which markets could be targeted or created with this innovation.
A second grouping, consisting of cases d and f, was clearly not related
to the overall firm strategies. These projects were highly influenced by in-
dividual entrepreneurs with great personal involvement in the projects,
and were developed in an atmosphere of conflict where they found re-
sources and leeway on a 'on and off' basis, only due to the ever-changing
opposing internal political agendas.
Cases a, e and g on the other hand were peripherally related to the
firm strategy, and the strategic decision making seemed to develop in the
absence or maybe even in spite of explicit intentions - in this way devel-
oping and revealing the strategy in step with the development of the inno-
vation. A changing range of different individuals, from top-management
to r&d, were involved in the experimentation, conceptualisation and
creation of the innovation at different points in time, and clear formal
procedures did not lead the process.
This initial grouping of the cases provides a useful pattern of very dif-
ferent roles played by strategic considerations in entrepreneurial inno-
vation, which in the following is used as point of departure for the con-
tinued analysis. The three groupings are referred to as 'the pre-defined
journey', 'the personal quest' and 'the infinite journey of opportunity
creation'.
the pre-defined journey
Case b tells the story of how top-management teams from two sources of ex-
isting knowledge realized that through research-cooperation, radically new
knowledge in a mutually beneficial area could be created. Hence, a strategic
partnership was formed, a plan for the entrepreneurial journey was spec-
ified, and the right innovative individuals to undertake the journey were
appointed. This journey was focused on the development of a radically
new technological platform, used in audio power suppliers, audio amplifiers
and audio transducers, which diminishes the loss of effect by more than 10
times. This offered possibilities of supplying customers with far better, much
cheaper and more environmentally safe sound as well as new, smaller and
very different designs of the products in which it was to be implemented. The
technological invention was in focus and the specific project idea had an ob-
vious home when it matured and was ready for commercialization. Thus,
a constructive relationship between the business unit and the project was
established and organizational uncertainty was reduced. The infrastructure
for contacting customers, understanding markets and delivering the inno-
vation was also well understood. The performance of the technology gave
the firm strong advantages in comparison to competitors.
It was, however, also realized that the new technology held the additional
possibility of being applied and creating profit in a range of unfamiliar mar-
kets, which the firm of origin did not wish to enter itself. Hence, the project
was spun off into a separate firm, which gave the parent firm clear compet-
itive advantages in markets not prior addressed.
The source of the initial opportunity recognition in this first group (cases
b and c) is the top-management; setting the stage for entrepreneurial
innovation based on top-down strategic considerations. The strategic
management of resources (human, social and financial) aligns the in-
novative activity very well with existing products, markets and known
customers, and the management-teams are highly oriented towards op-
portunity recognition within a strategically well-defined context.
Both cases are characterized by being projects aimed at replacing ex-
isting technologies for essentially the same customers and markets, and
the radical innovations consist mainly of offering new features and dra-
matic cost reductions. As such, the main aim of the entrepreneurial in-
novations is to strengthen the firms' position in a familiar market. Ad-
ditional opportunities were discovered and exploited as the innovations
evolved, which indicates a strategic flexibility of the firms, but the main
part of innovation process evolved according to a formal plan, showing
the high influence of strategic planning. This furthermore has the effect
that the innovation processes are largely controllable and risk is reduced
significantly. The competitive advantages gained through the two cases
are considered to be results of an intended advantage-seeking behavior
and deliberate strategic planning of the entrepreneurial innovation.
Relating the knowledge of the characteristics of this group to the
model of se by Ireland, Hitt, and Sirmon (2003), it is found that there
is a high degree of similarities between the model and the empirical evi-
dence; At the outset, the process is initiated based on the entrepreneurial
mind-set of top-management and is made possible by a corporate cul-
ture embracing highly innovative and knowledgeable individuals, who
are assigned to the projects. The strategic management of resources is a
primary activity in the process, taking place before the actual applica-
tion of creativity and development of the innovation. This process leads
to competitive advantages and significant wealth creation largely within
the context it was originally planned to target.
However, the element of entrepreneurial leadership is not clearly
present in the empirical evidence. Entrepreneurial leadership is defined
by Covin and Slevin (2002) as consisting of: the nourishment of an en-
trepreneurial capability, protection of innovations that threaten current
business models, sense-making of opportunities, questioning the dom-
inant logic, revisiting the 'deceptively simple questions' and linking en-
trepreneurship to strategic management. Sense-making of opportuni-
ties and linking entrepreneurship to strategic management are clearly
present, but the remaining elements are not found.
Looking closer at the dominant logic reflected through the cases, a
plausible explanation for the absence of the before-mentioned elements
is reached. Using the metaphor of a journey, it became clear that the des-
tination/performance of the entrepreneurial journey was in focus from
the very outset, and that the boundaries of the journey were clearly
defined through planning. The management of this process was hence
largely within a comfortable zone, because the course of events was pre-
dictable, and no particular risks were necessarily taken. This reflects a
dominant logic of causation; taking a particular effect as given and focus-
ing on selecting between means to cause this effect (Sarasvathy 2001).
This illustrates a view on entrepreneurship as the inevitable outcome
of mechanical forces, stochastic processes, or environmental selection,
rather than as creation of artifacts by imaginative actors fashioning pur-
pose and meaning out of contingent endeavors. Nourishment of en-
trepreneurial capabilities, protection of innovations that threaten cur-
rent business models and questioning the dominant logic of a firm, im-
ply the ability to picture the unforeseen, rather than the planned, as the
driving force of the entrepreneurial capability, and are as such opposing
the dominant logic depicted in the cases. Hence, the leadership portrayed
was strategic to a much higher degree than it was entrepreneurial.
Hence, an approach reflecting se as a 'pre-defined journey' does not
necessarily foster a continuous entrepreneurial ability, which will pro-
vide firms with a foundation for repeatedly exploring new arenas and
the ability to exploit the possibilities emerging. This perspective rather
presents a way of managing processes aimed at combining and exploit-
ing known resources, and is in this sense not departing from the custom-
ary, which is an essential part of entrepreneurship. As such, the opti-
mal balance between entrepreneurship and strategic management is not
reached.
the personal quest
Case d tells the story of a how a few innovative individuals in a large health-
care firm discovered a radically new technique for monitoring and using
protein translocation as a readout for the activity of cellular signaling path-
ways. As such, the technique offered a way of testing and comparing the
effect of millions of different components on protein-based medical products
at a very high speed, and was able to lead healthcare research on the track of
new effective components to substitute old and increasingly ineffective ones.
The development of the invention therefore had the potential of serving new
customers in new ways as well as adding value for old customers. The in-
vention in itself was not a core business area for the firm, but nevertheless
fell within the context of the firm.
The idea originally won resources for project funding through an inter-
nal contest in the firm, but the project was closed down after a change in
management, as it did not match the narrow but very profitable corporate
strategy. The inventor was, however, still highly committed to the project
and placing personal pride in the survival of the idea, as he was convinced
that it held the potential for new market creation and wealth. Using polit-
ical skills and his power as a central research figure, the inventor gradually
convinced management to support the creation of a spin-off firm, which he
would head himself. The spin-off has since then been able to create unique
results in cooperation with a wide range of other healthcare firms.
A second group (cases d and f) is characterized by high personal involve-
ment of particularly entrepreneurial individuals within the firm. The ini-
tial opportunity recognition is made by the individuals and the develop-
ment of the opportunity is also largely dependent on the personal efforts
rather than on a formal process. As such, the entrepreneurial mind-set
of top-management is in these cases less important than that of the in-
dividuals for recognition of the opportunity and development of the in-
novation.
The projects are characterized by being radical new technologies
which fall 'between' existing businesses, meaning that they do not have
obvious homes from the initiating stage, but could possibly end up as
either new business units or in existing divisions that are prepared to ex-
pand the scope. Although the markets served by these innovations would
be new for the firm, they would still be related to the firms' existing con-
texts. However, as the projects in the cases are not clearly aligned with
the overall firm strategies, they face difficulties at all stages of the process,
and they developed in an atmosphere of on-going conflict. The cases de-
pict bottom-up entrepreneurial activities that are carried out as personal
opportunity-seeking quests, rather than advantage-seeking behaviour.
Considering the development of the innovations in light of risk vs.
control, it is found that both cases are considerably risky projects that
are difficult to evaluate in terms of traditional criteria, such as time, need
of resources, potential return on investment etc. As such, the possibili-
ties of control during the process are limited, which constitutes a serious
challenge in relation to the strategic management.
Although top-management in both cases consider themselves to be
entrepreneurial and both firms do have an innovative organizational cul-
ture, it is clear that entrepreneurial activity is allowed only within certain
pre-defined limits, and that projects breaking these boundaries are han-
dled only with great difficultly. This indicates that management apply
a dominant logic of causation, which in this group is causing a con-
flict since the dominant logic of the individual entrepreneurs is not in
line with that of the top-management. The dominant logic of individ-
ual entrepreneurs is based on effectuation (Sarasvathy 2001), where they
as imaginative actors seize contingent opportunities and exploit any and
all means at hand to fulfill a plurality of current and future aspirations,
many of which are shaped and created through the very process of deci-
sion making and are not given a priori.
The opposing forces of the corporate strategy and the entrepreneurial
individual are also seen in relation to competitive advantage. In case d,
the entrepreneurial individual breaks away from the corporate strategy as
the project is spun off, and the competitive edge, which the innovation
could have provided for the parent firm, is now shared with a range of
competitors. Case f is, on the other hand, still living a life in the skunks of
the parent firm, trying to adjust to conformity in such ways that it will be
able to fit into corporate strategy. This, in spite of the fact that the project
has demonstrated the potential of significant improvements in known
features leading to significant cost reductions, and possible application
in a wide cross-sectional selection of the products of the firm, creating
radically new effects in performance of these.
As such, the innovation process depicted through cases d and f devi-
ates noticeably from the one pictured in the model of se (Ireland, Hitt,
and Sirmon 2003). The initiation is based on the entrepreneurial mind-
set of the individual rather than the management of the firm. This is
closely interlinked with the firms' entrepreneurial culture, yet lack of
entrepreneurial leadership. The application of creativity and the devel-
opment of the innovation are central activities in this process, and only
hereafter is the strategic management of resources considered. Due to the
conflicting forces, the competitive advantage and wealth creation gained
by the parent firm on the basis of the innovations is limited.
It is evident that cases d and f demonstrate the exact conflict between
a largely strategically oriented firm and the entrepreneurial forces, which
se wishes to overcome. As such, an approach reflecting corporate en-
trepreneurship as a 'personal quest' is considered to entail the risk of
the entrepreneurial forces creating strong contradictions to the strate-
gic forces of a firm. However, in order for a firm to successfully nourish
an entrepreneurial culture, the ability to embrace and incorporate 'per-
sonal quests' must be present as a means of continuous exploration. The
conflict portrayed by this group is highly relevant for the understand-
ing of se, as it draws attention to the importance of the individual in
entrepreneurship.
the infinite journey of opportunity creation
Case a tells the story of a firm which repeatedly has been able to move in new
directions, leapfrogging competitors, and creating rapid growth. The firm
was started as an entrepreneurial venture by two brothers, based on their
personal interest in how to develop new technological advances for guitar
pedal-effects. When adding a professional management-team, the firm ex-
perienced rapid growth over several years, and became world-leader within
digital signal and effect processing for professional audio environments, for
example recording-studios, tv, and radio stations.
The case evolves around the development of digital signal-processing
equipment, which revolutionized possibilities in audio products, and the
case pictures how re-thinking a technological platform from hardware to
software meant that the firm was able to expand existing markets, move
into different markets, and direct the creation of new markets. This em-
bodied a high organizational uncertainty and implied that the strategic
context of the firm had to be reset. This was done through a process where
the project was initially spun off into a separate venture and later integrated
again, as the innovation and its possibilities had matured and become more
manageable in connection with existing resources. The management of the
firm considers the abilities to explore and integrate new knowledge on an
on-going basis, and the willingness to break existing frames of conduct as
core competences of the firm. This spirit is highly reflected in the employees.
One of the main difficulties experienced by the firm is how to make sure
that the ability to create cutting edge innovations does not overshadow the
focus on and the ability to exploit all innovations to the fullest.
The third group, consisting of cases a, e and g, showed a very different
pattern from the two prior groups. Slightly different roads were followed
by the three cases in the group, but essentially the patterns for opportu-
nity recognition and development were highly similar.
The initial opportunity recognition did not have an obvious starting
point as a top-down or bottom-up initiative. Instead a changing range
of individuals from top-management to r&d were involved, and the
opportunity recognition consisted of thoughts about the technological
possibilities, the markets that could be targeted, as well as markets that
could be created. The projects were as such not held to a specific plan
based on the existing strategy, but rather expanded and created the strat-
egy as the possibilities of the innovation became clear. The top-down
management was reflected as leadership rather than management and
the significance of self-organized groups around motivating individuals
was defining. These individuals were in some cases members of the top-
management, but in others individuals with specific insight into marked
and/or technological conditions. As such, the actual management took
place in the groups and through the motivating key individual. This ap-
proach highlighted a culture with high focus on the capabilities and re-
sponsibilities of the individual, and the symbolic 'hero' in the firms was
the highly knowledgeable developer with the ability to depart from the
customary.
The type of innovation engaged in was predominantly highly ex-
Volume 5 • Number 2 • Summer 2007
ploratory and thus subject to risk. The risk management, however, did
not use planning and control parameters as the primary tool to re-
duce this risk. Instead, risks were reduced through deliberate sharing of
knowledge across a wide spectrum of people, discussing many different
angles of the projects continuously. This approach reflects a dominant
logic of effectuation, where a set of means is created and focus is placed
on selecting between the range of possible effects that can be created with
this set of means. This brings a unique 'rationality' to the management
applied in the absence of preexistent goals and high uncertainty.
Effectuation-logic was also reflected through the strategic manage-
ment of resources, as considerations on human- social- and financial
resources were highly interlinked with the top-management's efforts to
create a balance between being market oriented and exploring unknown
arenas. The competitive advantages were achieved by establishing sev-
eral different rhythms in the firm, for example one focusing on exploit-
ing existing cash-cows and one focusing on the exploration and creation
of new initiatives. The entrepreneurial activities in case firms a, e and
g were as such perceived to be 'infinite journeys of opportunity cre-
ation' rather than isolated events initiated at strategically planned points
in time.
Seen in relation to se, this group reveals a very high ability to inte-
grate strategic and entrepreneurial forces. An approach reflecting cor-
porate entrepreneurship as an 'infinite journey of opportunity creation'
therefore illustrates the thoughts put forward in se.
However, the model of the innovation process seen through this group
evolved somewhat differently than the process suggested in the model
of se by Ireland, Hitt and Sirmon (2003). The entrepreneurial mindset
in the organization was an integrated part of the entrepreneurial cul-
ture, and as such, the two elements did not stand out from one another;
the shared system of values and beliefs that shaped the firms' struc-
tural arrangements and the actions of their members continuously re-
inforced the entrepreneurial mindset and vice versa. The integrated en-
trepreneurial orientation in the firms provided the essential foundation
for initiation of the opportunity recognition as well as the development
of the innovation.
A strong influential factor was the entrepreneurial leadership, which
created a frame of innovation and creativity in the firm, consisting of
development of opposing scenarios, a flexible use of resources, and a dy-
namic changeability in structures and processes. The entrepreneurial
leadership was found to be expressed through, respectively, the self-
management by the individual, the top-management, and the dynamics
of self-organization at group-level. This approach ensured that leader-
ship and strategic management of resources is not merely a concern of
the top-management, but is an integrated part of the way, in which the
entrepreneurial individuals in the organization perceive and develop op-
portunities.
An Integrative Model of Strategic Entrepreneurship
Considering the different patterns in relation to se, it has become ev-
ident that the process of the 'pre-defined journey' corresponds highly
to the process illustrated in the model of se; the organizational mind-
set and culture is innovative, and the specific innovations developed are
products of intended planning through a primary process of strategic
management of the existing resources of the organizations.
However, lacking from this picture is the entrepreneurial leadership al-
lowing for questioning of the dominant logic, protection of innovations
that might threaten the current business models, and innovations based
on emergent strategies. As such, the 'pre-defined journey' approach is
not fully able to capture the exploratory nature of entrepreneurship, but
remains predominantly focused on the strategic exploitation of the ex-
isting.
The 'personal quest' approach illustrates exactly the conflicts caused
by the lack of entrepreneurial leadership in the before-mentioned ap-
proach, when an entrepreneurial individual seeks to explore new venues.
The approach reflecting an 'infinite journey of opportunity creation',
however, captures the logic underlying se; the integration of emergent
activities based on the effective combination of autonomy, innovativeness,
risk-taking, pro-activeness and competitive aggressiveness (Lumpkin and
Dess 1996) with advantage-seeking behavior through strategy as discov-
ery (McGrath and McMillan 2000). This shows an integration of the
entrepreneurial culture, the entrepreneurial leadership and the strategic
management of resources in such a way that both opportunity-seeking
behavior and advantage-seeking behavior become a concern of the entire
organization. The level of responsibilities allocated to group-level stands
out and indicates that this level is of primary importance for the success-
ful integration of the two opposing forces.
Based on this understanding, a revisit of the model on se by Ireland,
Hitt, and Sirmon (2003) is suggested and an illustration, which high-
Frame of innovation and creativity
f Entrepreneurial A
V mindset J
( )
Entrepreneurial
I leadership J
Entrepreneurial
V culture J
( )
f Managing
resources
strategically
figure 1 An integrative model of Strategic Entrepreneurship
lights an iterative integration rather than a sequential development of
the Strategic Entrepreneurship process, is proposed (see figure 1).
The Integrative Model of Strategic Entrepreneurship calls for a con-
tinuous organizational readiness to explore new arenas and recognize
possibilities, and the ability to act on and exploit the recognized possi-
bility. This requires an integration of entrepreneurial as well as strategic
considerations made at the individual level, the group-level and at level
of top-management, as strategic decisions are the result of much more
than the characteristics of a top management team. The entrepreneurial
mindset and the entrepreneurial culture found in the firm become mu-
tually reinforcing, and the entrepreneurial leadership and the strategic
management of resources stimulates this posture and is likewise in re-
verse influenced by it. Especially the development of an se conscious-
ness at group-level is considered to be of essential importance, as the
empirical evidence shows that this is where the actual development of
innovations takes place and where an understanding of direction must
ensure that disequlibrating activities are undertaken yet not overshad-
owing exploitation. Also, it is at this level, in the everyday interactions
between actors, that a corporate culture of se is created and reinforced
on the base of the joint knowledge, experience, cognitive skills, and other
resources of the organization. As such, group processes in strategic deci-
sions and the effectiveness hereof must be in focus.
Conclusion
This paper closes as it began; reflecting on the fragile balance between
strategic advantage-seeking behavior and entrepreneurial opportunity-
seeking behavior. The research presented has shown that the construct
of Strategic Entrepreneurship is not implemented without difficulties in
reaching the right level of balance between entrepreneurial forces and
strategic forces. In answer to the research question, three different roles
played by strategic considerations influencing the patterns of recogni-
tion and development of radically innovative opportunities were iden-
tified. It was suggested that strategy as a pre-planned behavior does not
entirely capture the emergent and exploratory nature of entrepreneur-
ship. Instead, firms which do manage to successfully integrate advantage-
seeking behavior and opportunity-seeking behavior, apply a dominant
logic of effectuation and incorporate advantage-seeking considerations
from several different levels of the organization. These results gave in-
spiration to the development of an Integrative Model of Strategic En-
trepreneurship, highlighting the necessity of perceiving se as a continu-
ous organization-wide attitude rather than a periodical divergence from
corporate strategy allowing for entrepreneurship within well-defined
boundaries.
The contributions of this paper are considered to be both theoretically
and practically valuable. Theoretically, the paper contributes to the de-
velopment and further underpinning of the field of se, as the empirical
evidence points to distinct forms of strategic considerations involved in
successful entrepreneurial activities in a corporate context. On a prac-
tical level, the insight into which strategic considerations are made in
connection to the successful recognition of radically innovative opportu-
nities adds to the existing body of knowledge on management practices
of corporate entrepreneurship.
Further research opportunities for the se construct include testing of
the generalizability of the three patterns found in this research, using
quantitative research methods, as well as paying explicit attention to the
types of performance and wealth creation connected to the different pat-
terns. By effectively doing so, a more solid empirical understanding of
the se construct can be created, providing useful insights to academia as
well as practitioners.
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