Summary
Abstract
According to the authors, superior firm performance can be fueled by both advantage-seeking behaviors and opportunity-seeking behaviors. However, the two behaviors ought to take place in a firm at the same time in order to derive the full benefits of strategic entrepreneurship. From the outset, the process of identifying opportunities is quite easy among small firms. However, such firms often find it cumbersome to leverage on the existing competitive advantages owing to their small sizes. As a matter of fact, they can hardly derive and enjoy the benefits associated with economies of scale.
On the other hand, large enterprises that are well established may not be in a position to identify new opportunities even though they can superbly establish a number of competitive advantages in the course of their operations. The authors argue that the concept of Strategic Entrepreneurship is quite unique and a distinctive construct bearing in mind that it can enable business entities to generate wealth when applied appropriately. The article also discusses and analyzes a number of crucial dimensions attached to Strategic Entrepreneurship. For instance, innovation is an important element of strategic entrepreneurship. Firms that are innovative enough have to exercise high levels of innovation in the course of executing their operations.
Key Learning Points
From the article, it is prudent to mention that resources should be strategically managed in order to derive the benefits of strategic entrepreneurship. As much a firm may be well endowed with both human capital and other non-human resources, it may be close to impossible to generate wealth if the available resources are not managed well. In addition, entrepreneurial leadership is a vital ingredient in strategic entrepreneurship.
Leadership provides the much-needed direction in a firm. Nonetheless, it should be an effective form of leadership that can propel growth. Corporate culture is also another key learning point explored in the article. The corporate culture should be entrepreneurial in nature. Moreover, an entrepreneurial mindset can be of much help in a firm that is keen to generate wealth. The authors have developed a strategic entrepreneurship model that can be employed in order to comprehend how the various strategic dimensions can be utilized in the process of producing wealth in a firm.
Relevant Statements to the Session
The relevant statements to the session have been identified in the paper and hence inserted according to their order of relevance:
- Definition and importance of Strategic Entrepreneurship.
- Factors that enhance superior firm performance.
- Merits and demerits of small business ventures in relation to establishing opportunities.
- Merits and demerits of large firms in regards to establishing opportunities.
- Why Strategic Entrepreneurship is a distinct construct.
- How firms can create wealth through Strategic Entrepreneurship.
- Key dimensions of Strategic Entrepreneurship.
- A Strategic Entrepreneurship model that expounds on how these dimensions can generate wealth.
Critical Analysis
The term entrepreneurship has been widely used for some time by academics and practitioners across the globe. However, it is prudent to mention that the term strategic entrepreneurship term (SE) has a more recent origin and is equally more focused in terms of scope. Most entrepreneurial scholars do concur that strategic entrepreneurship refers to extensive changes that take place in established operations where integration between the pursuit for entrepreneurial opportunity and actions in searching for strategic advantage is a key feature and an innovation generator towards a company’s growth and creation of wealth (Ireland, Hitt & Sirmon, 2003).
Nevertheless, Strategic Entrepreneurship may not yield the perceived benefits if other vital dimensions are not made part and parcel of business management. As a matter of fact, Strategic Entrepreneurship should incorporate two major disciplines for it to succeed. The two most probable disciplines that can propel the success of Strategic Entrepreneurship are entrepreneurship itself and Business Management.
Entrepreneurship entails actions and conductive behavioral patterns that can aptly identify and exploit profitable opportunities within a business environment. On the other hand, Business Management comprises a set of actions designed to achieve competitive advantage and better business outcomes. Hence, business management competencies assist in the selection and adoption of relevant knowledge based on facts, among other alternatives that lead to several business advantages.
In other words, Strategic Entrepreneurship should be viewed as a process that guides decision-making and managerial efforts towards identifying the best business opportunities that have the highest potential return (Kansikas, Laakkonen, Sarpo & Kontinen, 2012). Strategic Entrepreneurship assists in exploring the available opportunities through strategic actions.
The Strategic Entrepreneurship dimensions discussed in the article are quite a conventional bearing in mind that they have been applied for several decades. Although these dimensions may still be relevant in contemporary organizations, it is prudent to note that the dynamic nature of modern markets has bypassed and most likely invalidated the efficiency of the discussed dimensions. In any case, all rival companies practice creative innovation on a regular basis while others keenly value and pursue their standards in corporate culture. Unless other innovative dimensions are put into an account and applied accordingly, the perceived ideals of Strategic Entrepreneurship can hardly be realized.
Other scholars have devised alternative dimensions that can strengthen Strategic Entrepreneurship (Luke, Kearins & Martie-Louise, 2011). For example, it is fundamental to relate economic growth and entrepreneurship. In other words, how can the growth of an economy at any given time affect or be in tandem with Strategic Entrepreneurship? How is the aspect of change at the local, regional and international levels relevant to the sustainability factors that fuel Strategic Entrepreneurship? These are some of the loose ends that have not been addressed in the article by the authors.
Risk and uncertainty are indeed instrumental in the anticipated benefits of Strategic Entrepreneurship. Business enterprises do face myriads of risks and uncertainties that can equally affect their creativity in innovation, the entrepreneurial mindset, imagination, and opportunities. The prevalence of inevitable risks and uncertainties demands well-set strategies that can counteract the negative effects (Morrisette & Oberman, 2013). Hence, entrepreneurship should be accompanied by solid strategies that can augment management efforts towards growth and profitability.
The positive economic growth of a country demands the effective allocation of resources that are available. Besides, embracing creative innovation in the utilization of resources is a practical undertaking that a national enterprise should pursue. Strategic Entrepreneurship plays a key role in this process by seeking matching new combinations of resources in pursuit of profits under uncertainty. Institutions that support economic freedom allow such trials to occur at low transaction costs, thereby positively influencing total factor productivity. It is sometimes necessary to test these ideas by a single data set in order to prove their validity.
The authors point out in this article that entrepreneurship in the form of start-ups and strategic entrepreneurship exercised by established companies have often been linked to the growth process, just as institutional characteristics. However, few studies have simultaneously considered both determinants (as they do in this article), perhaps because of the difficulties involved in characterizing institutions and entrepreneurship in the same model.
It is still a major challenge to gather and validate reliable data on entrepreneurship. While entrepreneurship is greatly impacted by strategic resource management, the results partially support the intuition that the institutions of economic freedom and economic liberal policies promote the development of Strategic Entrepreneurship (Van Rensburg, 2013).
There is adequate evidence that when entrepreneurship is strategically thought out, it might contribute to an important economic goal. Organizational culture is learned and established from a group experience. Thus, where there is a defined group of individuals with a history, a culture must exist. Basically, corporate culture is a result of the common experiences and the influence of the founder. The myth of the founder is also scantly explored in the article as part of the Strategic Entrepreneurship dimensions.
To a large extent, corporate culture should be viewed by organizational managers as a strategic resource. Some researchers have suggested that organizational culture is a strategically important resource since it guarantees the existence and success of organizations (Kyrgidou & Hughes, 2010). This has been being supported by several studies that have found connections between the corporate culture of an organization and its overall strategic results, such as knowledge management, innovative capacity, and strategic management of IT platform.
From a strategic dimension or perspective, the culture of an organization sometimes acts as a robust source of motivation for workers. In addition, corporate culture should be viewed as a major catalyst towards production especially when an organization operates in a multicultural business environment. In any case, Strategic Entrepreneurship should be flexibly applied in groups and teams that are diverse. The authors in the article have not given a lot of weight to the contribution of workplace diversity in Strategic Entrepreneurship. However, a multicultural business environment can also be a barrier towards the growth of an organization even when creative innovation of products or services is implemented.
The macro-environment presents both opportunities and threats even though every organization has its own strengths and weaknesses. Therefore, an organization needs effective and strategic administration that is well structured. As already hinted out strategic planning and strategic decisions are characterized by risks and uncertainties that are generated by rapid and unpredictable change.
The “business world” lives between the ups and downs caused by constant changes that take place within the internal and external environments. In order to remain competitive, an organization must embrace strategic management that allows a clear and coherent vision of its objectives and goals at all levels of operations. By relying on the “entrepreneurial spirit” in the determination of strategic planning, an organization can gain from market differentiation. There is a need to establish new ways of analyzing markets in the process of pursuing strategic entrepreneurship (Chang & Wang, 2013).
Practical Implications
The subject of strategic Entrepreneurship can be applied in a number of scenarios within the business environment. First, the knowledge gained from this subject matter can be used to comprehend how business enterprises identify and exploit business opportunities, generate surplus revenue and secure competitive advantages at the workplace. Better still; the knowledge gained from this analysis can be applied in appraising the overall performance of a firm especially in terms of the management strategies in place. Moreover, a thorough and impeccable application of strategic entrepreneurship can be practically used to improve the profitability and revenue base of an organization through the creation of wealth.
The Learner Log Book (LLB) exercise has enlightened me that distinct differences exist between entrepreneurship and strategic entrepreneurship. While the latter concept is a recent development in the field of business, basic entrepreneurship has been practiced for several decades. In addition, strategic entrepreneurship is primarily meant to create additional wealth in an organization.
References
Chang, H., & Wang, H. (2013). A Case Study on the Model of Strategic Entrepreneurship. International Journal of Organizational Innovation, 5(4), 30-44.
Ireland, R.D., Hitt, M.A., & Sirmon, D.G. (2003). A Model of strategic Entrepreneurship: The Construct and its Dimension. Journal of Management, 29(6), 963-989.
Kansikas, J., Laakkonen, A., Sarpo, V., & Kontinen, T. (2012). Entrepreneurial leadership and familiness as resources for strategic entrepreneurship. International Journal of Entrepreneurial Behaviour & Research, 18(2), 141-158.
Kyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: Origins, core elements and research directions. European Business Review, 22(1), 43-63.
Luke, B., Kearins, K., & Martie-Louise, V. (2011). Developing a conceptual framework of strategic entrepreneurship. International Journal of Entrepreneurial Behaviour & Research, 17(3), 314-337.
Morrisette, S., & Oberman, W. (2013). Shifting strategic imperatives: A stages of leadership perspective on the adoption of corporate entrepreneurship. Journal of Applied Management and Entrepreneurship, 18(2), 59-82.
Van Rensburg, D., J. (2013). Is strategic entrepreneurship a pleonasm? Journal of Management and Strategy, 4(1), 15-16.