Corporate Entrepreneurship: Meaning, Importance, Types and Models

Can you imagine a scenario where your company’s current products are not the future success story but it lies in some unexplored ideas and entrepreneurial spirit fortified within the company? Amid global uncertainties, where change is constant, corporate entrepreneurship offers a platform to rebuild, invigorate and sustain your business. Are you ready to explore whether this revolutionary approach can transform your organisation into an ongoing innovation powerhouse? Let us dig deeper into the meaning, significance, types, and models of corporate entrepreneurship in this blog.

What is the definition of corporate entrepreneurship?

Corporate Entrepreneurship is the process of endeavouring to identify, encourage, and assist entrepreneurship within an established company. It is the adoption of a start-up venture to create new products or services that become new sources of revenue and leverage the parent company’s assets.

Corporate Entrepreneurship is about making use of a company's resources, market position, and capabilities in the search of risky but possibly rewarding opportunities. It presents the very means through which companies remain relevant in an ever-turbulent business environment since it fuels creativity and agility. 

Corporate Entrepreneurship Examples:

1. Amul’s Value-Added Products: Amul, originally known for milk production, progressively innovated by launching a variety of value-added products such as ice cream, cheese, and butter. These initiatives helped Amul maintain its leadership in the dairy industry while expanding its market presence.

2. Mahindra & Mahindra’s Reva Electric Car: Mahindra’s acquisition of Reva Electric Car Company and consequent development of the e2o electric vehicle demonstrated the company’s commitment to innovation in sustainable mobility, venturing into the electric vehicle market ahead of many competitors.

3. Hindustan Unilever’s Project Shakti: Hindustan Unilever launched Project Shakti, empowering rural women to become micro-entrepreneurs by distributing its products in remote villages. This initiative expanded the company’s reach while promoting social entrepreneurship.

What is the Importance of Corporate Entrepreneurship ?

Corporate entrepreneurship encourages employees to think and act like entrepreneurs within the corporate structure, leading to innovation and the development of new business ventures. The importance of corporate entrepreneurship includes:

1. Drives revenue and organisational growth

Entrepreneurial practices go beyond creating new products. A new revenue stream and market shares can be enhanced by reinventing existing processes, market innovation and customers, and risk-taking in corporate entrepreneurship. All this allows growth.

2. Boosts employee morale and productivity 

When employees adopt an entrepreneurial mindset, they feel deeply involved in the development, leading to higher morale and productivity. Teams with strong entrepreneurial spirit are dynamic, and creative, and excel in problem-solving and project management.

3. Increases employee recruitment and retention 

A lively entrepreneurial culture attracts determined, innovative talent, drawing in those who seek growth and learning opportunities. It also helps retain top performers who are eager to contribute to impactful projects and see their ideas realised.

What are the types of Corporate Entrepreneurship?

Corporate entrepreneurship can be broadly classified into the following:

1. Corporate Venturing: Corporate venturing is concerned with launching new ventures wherein large company entrepreneurship invest and support entrepreneurs instead of equity stake. It is further classified into sub-categories which are:

• Internal Corporate Ventures (ICVs)– These ventures originate within the corporation and are owned by it and typically reside within the same corporate structure. However, as they reside within the same structure, they miss real opportunities that they might get outside it.
• Cooperative Corporate Ventures (CCVs)- Cooperative ventures normally exist as external entities that function beyond the organisational borders of the founding partners.
• External Corporate Ventures (ECVs)– Any innovation created outside the firm is an external corporate venture.

2. Intrapreneurship: Intrapreneurship is the method of creating new enterprises within the established enterprises. It is considered an activity that entrepreneurs use to develop a company for adding innovation.
3. Organisational Transformation: An organisational transformation is altering the organisational system for better economic performance. The objective of this transformation is to enhance the performance of the company. This is applied to align the culture of the organisation with its strategy to achieve a competitive advantage.
4. Industry Rule Bending: Industry Rule Bending involves altering the established rules within an industry. When companies do this, it can have a big impact on the entire industry, opening new opportunities for growth and innovation.

Read More: Importance of Entrepreneurship

What are the models of Corporate Entrepreneurship?

The corporate entrepreneurship models are discussed below:

Large Company Entrepreneurship Example

A notable example of large company entrepreneurship in India is Tata Motors and its development of the Tata Nano. Tata Motors is, a leading automobile manufacturer and aims to revolutionise personal transportation in India by creating the world's most affordable car. The Tata Nano was designed to offer an economical and accessible vehicle for the masses, particularly targeting families that depend on two-wheelers.

This venture was a significant entrepreneurial move within a large company, as it involved rethinking traditional automotive design, manufacturing, and marketing strategies. Although the Nano faced challenges in the market, it remains a strong example of how an established Indian company can innovate and attempt to create new market segments.

Conclusion

 Corporate entrepreneurship plays a lead role in driving innovation and maintaining a competitive edge within established organisations. Companies can stay agile and adaptive in dynamic markets with the promotion of creativity, risk-taking, and strategy implementation. The various types and models of corporate entrepreneurship offer different pathways for growth and transformation that would secure long-term success and sustainability in the business landscape.

FAQs

Q1. List the features of corporate entrepreneurship

Ans. The features of corporate entrepreneurship include:

• risk-taking
• innovation
• creativity
• opportunity recognition
• resource allocation
• adaptability
• identifying and capitalising on market opportunities

Q2. What is the role of an employee in corporate entrepreneurship?

Ans. Employees are pivotal to corporate entrepreneurship. They play a vital role in generating and developing new ideas, taking the initiative to pursue innovative projects, and being willing to experiment and take calculated risks in a culture that supports corporate entrepreneurship.

Q3. What is the principle of corporate entrepreneurship?

Ans. The elements are :

• change initiation
• commitment to employees
• creative resourcing
• entrepreneurial learning
• innovation and creativity
• knowledge leadership
• opportunity alertness
• relationship management
• risk and uncertainty management
• timing of action
• Vision
• Strategic orientation

Q4. What are the benefits of corporate entrepreneurship?

Ans. The benefits of corporate entrepreneurship are:

• Diversifies and increases revenue. By pursuing new opportunities, your business diversifies its revenue streams and can bring in more money.
• Reduces costs
• Makes your business more resilient
• Helps your work culture stand out