A conceptual framework for evaluating designs for corporate innovation

Journal of Engineering Elsevier

and Technology

Management,

A conceptual framework corporate innovation Cynthia

7 (1991) 197-227

for evaluating

197

designs for

A. Lengnick-Hall

Department University,

of Management, W. Frank Barton School of Business, Wichita, KS 67208-1595, USA

The Wichita State

Abstract Innovation is becoming mandatory for an increasing number of organizations in order to sustain competitive advantage. This paper explores how designs for corporate entrepreneurship fit within other dimensions of a strategy configuration. To do this, first, seven innovation-related problems are diagnosed. The specific problem patterns arising in three representative approaches to corporate innovation efforts (internal research and development, joint ventures, and acquisition) are discussed. Next, issues related to strategy configuration are examined. The problem-accommodating characteristics associated with specific environmental domain choices and with two routes to competitive advantage are proposed. Hypotheses that reflect the problem characteristics of innovation approaches with the problem propensities resulting from organizational choices of domain and competitive advantages are offered. Specific directions for future research, as well as the practical applications of these concepts, are discussed. Keywords. Innovation,

Strategy configuration,

Entrepreneurship,

Competitive

advantage.

1. Theoretical framework Many organizations are facing serious competitive challenges due to the rapid pace of technological change. Industries dependent on highly sophisticated technologies or multinational competition are particularly vulnerable to the need for continuous and rapid alterations in organizational activities (Teece, 1987; Waterman, 1987). These conditions have led management theorists and practitioners alike, to call for more creativity and innovation in product lines, management practices, and production processes (Wheelwright, 1987). While innovation is becoming increasingly important, many questions remain regarding how to achieve corporate entrepreneurship without creating a host of new problems in other organizational activities. This paper offers a framework for addressing these concerns. Galbraith’s (1973) paradigm on information processing provides a useful perspective for the design of innovation strategies. When a firm’s need for

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innovation is low, individual incentives and ad hoc organizational mechanisms such as encouraging diversity, providing slack to permit personal curiosity, reward systems that encourage creativity and risk-taking, and other similar approaches are sufficient. However, as a firm’s competitive position becomes increasingly dependent on an ability to sustain a successful stream of innovations, more systematic and pervasive approaches to innovation are needed. It is at this point that formal designs for corporate entrepreneurship (Burgelman, 1984) such as research and development, internal ventures, joint ventures, and acquisitions are undertaken. Miles et al. (1978) argue that minimal fit among a firm’s strategic choices is mandatory for survival and that a tight fit can offer a route to strategic success. Similarly, Miller and Mintzberg (1988) present a convincing case for the usefulness of looking at strategy configurations. Configurations are defined as the natural clustering of various elements characterizing organizations such that distinct archetypes or composites of attributes are produced. Combined, these composites or configurations describe a broad array of strategy contexts. The advantage of configurations is they represent a synthesis of strategic choices, rather than suggesting an artificial independence among various strategic choices. As Burgelman (1983) concludes, recent empirical studies have found that strategy formulation and strategy implementation are intrinsically intertwined. Arguments supporting configuration approaches to analysis rest on three primary assertions. First, forces of natural selection are assumed to impose constraints on the number of effective organizational forms that can survive in the same environmental setting. Second, relying on the notion of fit or consistency, configurations emerge that reflect mutual complementarity among organizational elements. This complementarity offers the potential for synergy and communality of purpose. Third, empirical evidence (e.g., Chandler, 1962) indicates that for reasons of economics or inertia, few firms undergo continual adaptation of such variety and magnitude that their choices fall outside the boundaries of natural configurations unless they are in the process of achieving a rather revolutionary transition from one configuration to another. Continuous incremental changes typically sacrifice either internal consistency or external alignment for the sake of the other. This paper considers two archetypes of configuration: domain choice (Miles et al., 1978) and source of competitive advantage (Porter, 1985). Both Porter’s generic strategies and Miles et al.‘s defender, prospector, analyzer, and reactor composites have received wide attention in the strategy literature. Together they capture non-redundant elements of important strategic choices at both the corporate and the business unit level. Combined they offer fertile ground for considering how a choice regarding innovation design complements or undermines other elements in the strategic configuration. The assumption underlying this research effort is that complementary choices have both a better

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chance of success and create fewer new problems for the firm to manage. Contradictory choices in innovation design and other elements of configuration, on the other hand, tend to be less successful in generating a stream of innovations. Moreover, if resulting innovations are successful, they tend to trigger actions that may move a firm from one configuration to another. It is important to acknowledge from the outset, however, that organizations do not always have the luxury of selecting a design for innovation that provides a tight fit with all of the contingencies they face. As fit is loosened, the number and magnitude of potential problems increases, thus requiring a firm to develop new capabilities. A tight fit, on the other hand, may reduce the need for investing in new organizational systems or competencies, but may carry a price tag of reduced innovative potential, jeopardized competitive edge, or diminished rate of innovation in a particular industry setting. It is important to recognize that achieving cohesiveness is not always the overriding objective. When selecting a design for corporate entrepreneurship, a firm may choose a particular approach despite the number of difficulties that must be overcome (e.g., challenge to organizational values and culture, exceptional demands on financial resources) in order to attain potential benefits in other areas (e.g., first-mover advantages, sustainable leadership in a technological niche ). Advance warning of potential problems enables a firm to plan for an effective response. If two approaches to innovation are equally attractive based on technology, firm size, industry characteristics, investor preference, and other considerations, then an assessment of potential risks and problem areas could be used to further narrow the formulation of an appropriate design for corporate entrepreneurship. If issues other than fit override the choice of an approach to innovation, then the framework presented in this paper can be used to anticipate potential trouble spots during the innovation process. A given design for corporate entrepreneurship, or innovation approach, might be well suited to the competitive conditions prevailing in one type of enacted environment but poorly suited to the conditions found in another (Hambrick, 1982). Likewise, different sources of competitive advantage are vulnerable to different sets of pitfalls, and thus, might accommodate a particular approach to innovation well or poorly depending on these conditions (Porter, 1985). Clearly, domain choice and competitive posture do not represent an exhaustive list of all contingencies that might or should be considered in selecting an approach to innovation, Technology characteristics (Teece, 1987), size (Drucker, 1985 1, environmental complexity and turbulence (Malekzadeh et al., 1989)) structure (Mintzberg, 1979)) and organizational values (Howard and Moore, 1982) are expected to play an important role in shaping a firm’s innovation strategy. The purpose of this exploration is to examine some of the specific costs of not achieving cohesiveness among designs for entrepreneurship and two configuration contexts. A diagnostic tool for identifying problem areas associated with poor fit is

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presented. This framework considers four representative designs for corporate entrepreneurship. Characteristic “trouble spots” correlated with each of these innovation approaches are considered in light of factors which contribute to their occurrence, and the potential for misfit they offer when joined with specific domain choices and sources of competitive advantage. From a manager’s perspective, therefore, this diagnostic framework permits evaluation of whether a particular innovation approach is a tight or loose fit with two other critical sets of strategic decisions it has made. Further, the diagnostic framework enables a manager to anticipate and plan for expected “trouble spots”. 2. Mapping potential trouble spots A review of the literature on innovation strategies and processes suggests three distinct areas where problems are expected to arise: (1) financial decisions, (2 ) product-related choices (both technology and market-related), and (3) organizational implications (both structural and cultural). Each of these problem areas is described below and is summarized in Fig. 1. It is assumed that even systematic organizational dysfunctions contain an element of uncertainty. Ideally, knowledge of a characteristic flaw could lead to organiza-

ANTECEDENT

CAUSES OF INNOVATION FAILURE

PROBLEMATIC CONSEQUENCES INNOVATION SUCCESS

OF

::.:..... :g.ji ,:ii ?,:y i ,,:: :i.: ;: ,. :./ i/j,/:.:;i_ :;/::,i/. ::. ‘i FINANCIAL ALLOCATION ERRORS :’ i.::: ::/ii ..:/: .., /: :/

FAILURE TO EXPLOIT POTENTIALLY SUCCESSFUL INNOVATION

Fig. 1. Risks associated with innovation.

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tional learning and subsequent changes in organization actions. Unfortunately this ideal response is, at best, an inconsistent event. 2.1. Financial decisions

Resource allocation errors often create problems associated with innovation. Financial problems typically reflect the magnitude, flexibility and time orientation of monetary commitments. The potential for problems is greatest if initial cash outlays are large, if resource flexibility is low, and if the investment commitment is of long duration and based on uncertain information (Schmitt, 1985). When cash commitment is gradual, or if investments can be converted to alternate uses if conditions change, problems arising from financial errors may be lower. Two types of errors are possible. One type results in an overcommitment of resources, thus wasting organizational funds and misdirecting effort. The other results in neglecting to fund some critical aspect of the innovation process, such as underestimating marketing requirements, assuming non-existent synergies and underfunding production activities, or basing quality control estimates on overly optimistic yield projections. 2.2. Product-based

choices

A second type of problem arises from technical and market issues. One type of product-based problem involves over-commitment to an idea that has low market value. This type of error often takes the form of including undesired or unnecessary product features. Porter (1985) discusses this in terms of products having excessive differentiation. Such errors occur because a firm does not understand a buyer’s value chain, or assumes factors that are valued in one market segment are generalizable to other niches, or because of an internal bias reflecting a firm’s judgment about what should be valued in the marketplace. A firm may, for example, design a product that is highly competitive in a specialized market segment, but does not fit broad market interests. If the original segment is too small, or if customers are not willing to pay a sufficient premium to sustain the product, the innovation is a poor strategic investment. Problems also occur if a firm makes good choices, but is unable to implement its strategy in a way that provides competitive advantage. Porter (1985) offers as an example an inability to sufficiently signal value and thus make customers aware of a product’s unique qualities. Different problems arise if a firm’s perspective is too narrow. This occurs if a firm is unfamiliar with the nature of competitive issues in a new product/ market area, or does not understand the value chain that affects product success or failure (Porter, 1985). For example, a firm that attempts to compete solely on the basis of product differentiation in a market moving towards price

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sensitivity, omits a critical characteristic from product scope by neglecting cost considerations. 2.3. Organizational implications Organization-related issues are the third type of problem area to be considered. With organizational problems the threat is to the existing structure and/ or culture of the organization. Organizational problems differ from other types of problems in one important way: the risk of organizational problems often increases with innovation success, since if an innovation is otherwise unsound, it is not likely to require organizational change. Product and financial problems, in contrast, reflect antecedent causes of innovation failure. Organizational problems are seen in firms that neglect structural, cultural or human consequences of increased product diversification and organizational differentiation. Such neglect reduces the long-term benefits from innovation. For example, some firms (e.g., People Express) unnecessarily sacrifice organization stability, coordination, and efficiency in their emphasis on change. Other firms (e.g., Polaroid) adopt a potentially successful innovation without sufficient modification in the existing structure or culture to sustain its effectiveness. An important subset of organizational problems are human resource expectations. Human resource management represents an investment in human capital. If a firm neglects the human resource implications of continuous, sustained innovation, it does so at its peril. While human resources can be quite flexible, and are often key generators of innovation, they must be adequately maintained, rewarded and nurtured if the benefits are to be sustainable (Badawy, 1988). Innovation often means that the knowledge, skills, and abilities required to make a sustained contribution to organizational effectiveness will change. Ignoring such changes or assuming they will occur without deliberate actions is an easy way to undermine an otherwise successful venture. Organization-related problems often provide an incentive for change in the strategic configuration. If, for example, success in an innovation stream leads to a redefinition of the firm’s product-market scope, this might trigger a shift in domain posture from defender to analyzer. Likewise innovation success might enable a firm to broaden its market appeal by introducing cost savings as well as unique features to the product line. Changes in the configuration mean parallel shifts in organization design, organization culture, and the expectations of the firm’s human resources. 3. Designs for corporate entrepreneurship and problem patterns The types of problems an organization must accommodate vary with different designs for corporate entrepreneurship. Some innovation approaches are more vulnerable to product-related problems, while others require accepting

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greater pressure on the firm’s existing configuration. Some innovation approaches are more likely to foster omission errors, others are more vulnerable to errors of commission. Three representative designs for corporate entrepreneurship are discussed: (1) research and development (including centralized R&D and various forms of intrapreneurship), (2) joint ventures, and (3) acquisition of new technology or knowledge. These three approaches were selected because they represent important distinctions along a continuum from designs for entrepreneurship that are managed entirely within the boundaries of an organization, to methods that blend the resources of two or more firms during the innovation process, to approaches that rely on obtaining the outcomes of entrepreneurship conducted by an external organization. The internal versus external dimension is acknowledged by Drucker (1985)) Howard and Moore (1982) and Marquis (1972) as among the most critical features distinguishing one approach to innovation from another. The “make or buy” distinction carries with it implications for control of the innovation process, exit options, and share of the rewards that accompany success. Moreover, entrepreneurship designs that are internally based primarily reflect a firm’s strengths and weaknesses. As more external factors are involved in the corporate entrepreneurship efforts, environmental threats, opportunities and linkages become increasingly important to consider. While this enhances the repertoire of knowledge, skills, and abilities available in the innovation process, the level of complexity for managing that process is simultaneously increased. A review of the literature suggests a number of strong correlations between the type of problems likely to be encountered and the design for entrepreneurship selected (see, for example, Malekzadeh et al., 1989). These relationships are presented in Table 1 and discussed in greater detail below. 3.1. Research and development Internal research and development can be undertaken through either a traditional research and development unit or through entrepreneurial efforts of diverse employees (also known as internal ventures or intrapreneurship). With R&D units and with internal ventures the entire innovation process is carried out in-house. An R&D unit typically consists of specialists who focus on innovation and the creation of knowledge as their primary objective (Johnson, 1984). These specialists, usually concentrated in one area of the organization, generate not only new products and ideas but also develop new manufacturing processes, uses, or packaging for existing products. An internal venture, or intrapreneurship approach is characterized by employees working beyond their normal responsibilities to develop a specific potential product or process. This approach differs from traditional R&D in two

1

Omission of critical product feature(s)

LOW *Lower costs are associated with po tential failure (exit costs are reduced). *Resource allocations generally specified early.

MODERATE .Marketing expertise draws from several different sources. *Broader base for potential customer information and market research.

LOW *Many checks and balances on investment choices. *May be some duplication of activity. *Resources generally drawn from existing corporate funds, so past performance can lead to opportunistic approach to future.

HIGH *May be isolated from marketing, manufacturing, or other units and not receive needed information. -Ability to fully understand the customer’s value chain due to structural separation.

LOW *Primary advantage associated with reduced entry barriers and existing operation. *This approach forces commitment to a particular technology/product/ solution, but can be based on observed operation.

HIGH *Unanticipated implementation costs are common. *Potential for escalating commitment to a course of action regardless of outcome is fairly high.

LOW aGenerally undertaken by firms having more slack in financial resources than in other resource areas. *Initial investment requirements are known. .Payback often begins relatively early with successful acquisition.

MODERATE .Partners are often able to obtain external capital, making this method appropriate for firms with limited financial resources. -Expected funding is often negotiated up-front.

entrepreneurship

HIGH *Routine allocation procedures may create difficulty accommodating exceptional requests. *Champion approach facilitates gaining needed resources. *Long time for return on investment.

designs for corporate Acquisition

of representative Joint venture

characteristics

R&D/intrapreneurship

problem-related

Financial overextension or overcommitment to inappropriate ventures

Underfunding

Type of risk

Hypothesized

TABLE

Exceptional demands on human resources

Required shift in organizational values

Need for organizational restructuring

Inclusion of unnecessary or inappropriate product feature (5)

MODERATE *Parent may try to impose its preferences or competencies on unrelated areas of operation.

HIGH *Integrating firms with structurally diverse capabilities may disrupt the structure of an undifferentiated firm, or shift the balance in a structurally diverse firm.

HIGH *Clash of values between parent and acquired firm is likely. *Flexibility of acquired unit may be jeopardized.

MODERATE *Attractive failure is intangibles and skills that are difficult to obtain via internal development within reasonable time and cost constraints. *Duplication of roles creates problems.

MODERATE *Efforts to use “best” features of all partners may lead to excessive product features or differentiation.

MODERATE *Less rigid solutions than with acquisition. *Potential conflict over control issues may lead to poor compromise solutions. *More convenient with multibusiness partner, but more complex. HIGH *Creates problems if business or strategic objectives of partners shift. *Trust is a crucial issue.

HIGH *Less stable than internal or purely external development options (dual allegiance ) . *Careful and in-depth analysis of direct and indirect outcomes is needed for success.

HIGH *May rely heavily on existing strengths or capabilities which may not apply to new market, product, or technology area. *Potential for overconcern with “relatedness” in product or market development.

MODERATE *Products and technologies that are a poor fit are generally weeded out; related products fare better. *Forcing established procedures on a new venture can be a severe handicap. *New business can redefine relatedness.

MODERATE *Long planning horizon generally required. *Multiple competing approaches is generally accepted mode. lIntrapreneurial values may clash with more mature production environment. *Required diversity may be a problem.

MODERATE *Need for coordination across functional areas creates boundary spanning pressures. *Personal career risks of failure; but often employer benefits most from success. *Many persistent and “heroic” qualities needed.

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respects (Bart, 1988). First, employees are dedicated to a particular project outcome rather than to innovation in general. Second, employees are often responsible for all functional activities and for all phases of the innovation process. Time devoted to innovative ideas is “stolen” from regular duties at the early stages of development. At later stages, employees are temporarily reassigned. Internal ventures are often separated from the rest of the company. Separation provides greater independence, freedom from short-term pressures, different rewards, improved visibility, and access to key decision-makers (Roberts and Froman, 1978). This separation facilitates problem solving, but can lead to inaccurate, often optimistic, analysis (Killing, 1980). Resource commitment is higher in R&D units on a per project basis, but may be lower for overall corporate entrepreneurship activities. Corporate-level involvement typically begins later, therefore, early investments are drawn from organizational slack. The project can be disbanded at many points along the way, leading to greater cost controllability (Roberts and Froman, 1972). Combined, these characteristics limit some of the financial risks associated with internal research and development. R&D units and intrapreneurship approaches require constant funding regardless of whether current innovations are successful. Initial cash outlay is minimal for a particular project start-up, since the lab and various personnel are funded on an on-going basis. While there is a high probability that some activities will result in an economic payoff (Baldridge and Burnham, 1975), there is a corresponding high probability that many investments will have no positive results. Thus the overall cash requirements for internally based approaches to innovation are often high. Investing in competing ideas directed toward a single goal decrease the probability of omitting important product features, but raises overall costs (Marquis, 1972). However, investing in several competing ideas that respond to a particular need decreases the probability of omitting important product features, yet raises financial requirements. A firm’s ability to choose correctly among these trade-offs is directly related to the financial risks of innovation (Marquis, 1972). Internal routes to corporate entrepreneurship can focus on a wide range of products and processes. This may or may not be an advantage. If basic research is emphasized, resultant products may have little relationship to a firm’s existing market or manufacturing capabilities (Marquis, 1972 ) . Research that is unrelated to current competencies can lead to omission of critical product features (Gilmore and Coddington, 1966). If a strategic change reflecting such differences is not initiated, these products or processes are unlikely to contribute to competitive advantage (Roberts and Berry, 1985).Consequently, corporate level communication between participants in the innovation process and other parts of the organization is required for successful innovation. Integration of this sort is not without costs. Increased relatedness of new products may come at the expense of a decreased rate of innovation (Jaikumar,

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1986). Further, integration places additional task burdens on an R&D unit or individual intrapreneurs (Westwood, 1984). These factors increase the average length of time for a return from an internally derived innovation. Biggadike (1979) suggests that it often takes eight years before a positive return on investment is realized. Selecting an appropriate R&D or intrapreneurship mission is one way to prevent wasted capabilities (Schmitt, 1985). Potential creative capabilities of a firm are at times intentionally restricted to focus only on product advances that fall within the organizations current realm or financial capabilities. While this may enhance the existing domain position, such an approach dramatically restricts a firm’s access to new markets or new technology. Undue focus on existing products and processes can make firms slow to respond to environmental change and thereby uncompetitive (Jaikumar, 1986). Increased visibility and personal commitment is particularly common with intrapreneurship approaches. Often this personal involvement leads to increased emotional investment and places high demands on human resources. Projects unrelated to current activities can take a long time to staff (Hardymon et al., 1983). Related projects can require heroic efforts from organizational “champions” (Schon, 1963) leading to problems in performance evaluation and control of intrapreneurs (Burgelman, 1984 ). If too much time is spent on “pet” projects, the core mission of the organization may suffer. Despite an initial separation of internal venture projects from the rest of the organization, organization climate concerns remain. If successful, reintegration of the product within an existing portfolio is the usual expectation. If the structure and administrative processes developed for an internal venture are not compatible with the host organization’s design, a potential exists for major organization change, or serious organization conflict (Baldridge and Burnham, 1975). If a new venture is related to existing products, then political opportunism, and turf problems are common (Bart, 1988). In summary, a research and development (or internally based) approach to corporate entrepreneurship uses existing organization skills, and permits innovation efforts to consider functional capabilities and constraints, thus reducing organizational problems. In addition, R&D entails a fairly low risk of long-term over-commitment to an unsuitable product since existing organizational biases dominate the weeding-out process (Baldridge and Burnham, 1976; Moth and Morse, 1977). The risk of underfunding is high. Planned investments often neglect costs related to overcoming entry barriers (Porter, 1985 ) and related products often suffer from assumed technological certainty or assumed synergy-based economies (Drucker, 1985). Required cross-functional communication at early stages of development (Burgelman, 1983) can spark excitement. The same factors can reduce the potential for including unneeded features or omitting important features. Despite this, research and development involves a fairly high potential for developing a product or process

which either fits the firm’s interests but is not market-competitive, or one that is abandoned prematurely due to a perceived lack of fit with the organization’s current strategy that might have proved valuable over the long term. If an innovation is successful, problems associated with changes in organizational values, human expectations, and the need for organizational restructuring are high. 3.2. Joint ventures A joint venture approach to innovation involves two or more firms pooling their resources to achieve innovation (Schillaci, 1987). Required cash outlay varies among the partners. Often a substantial cash contribution is required from one firm to gain the expertise or scarce non-fiscal resources of another firm. Thus, resource problems generally accrue to firms that can afford them, and the overall financial risk is relatively low (Killing, 1980). Joint ventures allow each partner to make unique contributions. No partner is required to have all the needed skills or resources. Each partner can concentrate in those areas where they possess the greatest relative competence while diversifying into attractive, yet unfamiliar, business areas (Harrigan, 1985). Joint ventures provide easier and quicker competitive access to new products and markets than do internal designs for corporate entrepreneurship (Harrigan, 1985 ) . Joint ventures require specific corporate choices early in the innovation process. Since firms contribute diverse competencies, problems associated with inadequate product or market development expertise, and with omitting critical features of product design, production or distribution are lower than with internal approaches to innovation. However, problems associated with the inclusion of unnecessary product or service features and thus attaining too much differentiation (Porter, 1985) remain moderate since firms may each seek to include what they consider their “best” characteristics. The greatest problems relate to future organization stability and demands on human resources (Schillaci, 1987). Often joint ventures involve a new competitive orientation which, if successful, leads to a change in strategic direction. This challenges a firm’s core values. Since problem-solving is undertaken with an external company, managers have less control than with internal modes of innovation. As Harrigan (1985) points out, primary barriers to forming joint ventures are strategic in nature, and firms must accept high levels of uncertainty surrounding the management and operation of joint venture activities. This uncertainty also contributes to high demands on human resources, since employees in joint ventures must be adept boundary spanners and must accept the lack of a traditional home base. In summary, joint ventures allow firms to develop new capabilities while capitalizing on their existing competencies. The potential for product failure and poor product fit are lower than with the types of innovation methods pre-

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viously discussed. Risks of adverse organizational consequences are much greater both because of complex external linkages, and because problem solving is not constrained by organization values and capabilities (Roberts and Berry, 1985). Joint ventures are precursors of major organization change if the venture is successful. If the joint venture is unsuccessful, the exit costs are lower than with other forms of corporate entrepreneurship.

3.3. Acquisition

Acquisition involves innovation through the purchase or stock merger of existing firms. The greatest uncertainties surround clarification of purpose, since with acquisition, firms purchase existing solution and implementation processes (Marquis, 1972 ). The acquired business has an on-going structure, administrative processes and culture which must be accommodated if the acquisition is to provide the intended benefits. Acquisitions require large initial cash outlays compared to the more incremental investments associated with R&D or joint ventures (Ebeling and Doorley, 1983). Even in uncontested acquisitions, the purchasing company offers a premium over market value to secure the purchase (Parsons, 1984). Early acquisition costs are known with great certainty, yet implementation costs are easily underestimated (Ebeling and Doorley, 1983). Financial consequences of an unsuccessful acquisition are large and immediate. More significantly, joining firms with unique cultures and practices presents substantial organizational problems that cannot be erased by intensive preacquisition preparation (Parsons, 1984). Since the incentive for innovationderived acquisition is a capability the purchasing firm does not presently have, the probability of significant cultural differences between the two companies is great (Roberts and Berry, 1985). Communication capabilities are often strained by new jargon and diverse assumptions. Organizational values may generate resistance due to a “not invented here” syndrome. In addition, human resources are often threatened by a potential reduction in force reflecting newly redundant activities. If the purpose of an acquisition is to gain a human resource capability (e.g., a management team) or a key individual (e.g., a research scientist), inequities may be created in encouraging those key people to stay with the organization after the acquisition (Killing, 1980). In summary, achieving innovation through acquisition generally provides greater certainty regarding product, market and technology choices than any of the other innovation methods. This certainty is obtained though greater initial financial risk and through greater long term organizational, value-.based and human resource problems.

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4. Two elements of configuration Two contingencies seem particularly important to defining an organization’s strategy configuration. These are: domain strategy (Miles et al., 1978)) and source of competitive advantage (Porter, 1985). These two elements encompass different perspectives on a firm’s risk posture and its strategic strengths and weaknesses. Each of these contingencies captures a composite view of a number of important elements of strategy formulation and strategy implementation (Quinn et al., 1988). A firm’s choice of competitive advantage (Porter, 1985) incorporates choices regarding value chain assessments, an analysis of industry structure, and an understanding of a firm’s strengths and weaknesses. A firm’s domain choice encompasses its selected relationship with a specific environment array, its willingness to change dimensions of product and market scope, elements of organization structure and design, and the architecture of the policies and procedures that guide organizational activities. Together, these two archetypes describe strategy configurations that comprehensively define feasible options and, in addition, offer a rich understanding of the variety of forms and approaches that may be possible in different circumstances. A fundamental assumption of this paper is that the types of problems a firm can best accommodate are an outcome of its domain posture and its competitive approach (Gatewood and Boulton, 1987; Miller, 1986; Porter, 1985). Stated differently each of the entrepreneurship designs fits more or less easily under different strategic configurations. 4.1. Problem areas and domain strategy Domain strategy refers to the firm’s posture with respect to product or market areas in which it competes. Miles and Snow (1978) identified three successful domain positions: Defender, Prospector, and Analyzer. Miller and Mintzberg (1988) and Jelinek (1986) argue that these archetypes are particularly useful examples of strategy configuration. The utility of this typology is additionally supported by Hambrick’s (1982) empirical research. An innovation-related problem analysis for each of these types of domain strategies is presented in Table 2 and discussed in greater detail below. Defenders

A Defender strategy focuses on protecting a portion of the market. Such firms grow through market penetration and product development rather than through expansion into new product or market areas. Defenders must protect their resource and organization base. The greatest risk to Defenders comes from ineffectiveness and an inability to exploit new opportunities (Miles and Snow, 1978). How do the seven problem areas identified previously interact with defender

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strategies? Defenders rely on internal strengths to erect barriers to entry, insure efficient production, minimize product failure and maintain sources of product differentiation. Problems related to products and technology are particularly serious. Omission of critical product features may narrow the domain. Defining a segment inaccurately and including unimportant features can raise costs unnecessarily and thereby leave the domain open to encroachment (Miles and Snow, 1978). Defenders are threatened by major organization change since efficiency is key to competitive position (Miller, 1986). Consequently, most Defenders avoid organizational problems when possible. Financial risk presents less concern. Defenders are generally mature, so have an established financial base, or a track record that enables borrowing. These features suggest concern with product focus, greater likelihood of omission rather than commission errors with regard to financial risk, and a high level of concern with organizational problems, coupled with organization features that limit organizational restructuring. Combining these characteristics with the problem vulnerabilities of various innovation approaches yields the following proportions. If a Defender uses R&D, primary problem areas are underfunding and a vulnerability to technology or product omission errors. These problems are particularly serious for Defenders. If a Defender relies on internal venturing, problems are more likely to arise from resource overcommitments, since successful internal ventures often require large-scale planned investments that become emotionally difficult to undo once a project is underway (Burgelman, 1984). Defenders using internal ventures are also vulnerable to a need to restructure the organization or a lack of responsiveness to value shifts. Joint ventures offer a good fit with regard to financial and product concerns, but present problems with reintegration. Human resource needs may go unrecognized with joint ventures. If a Defender relies on acquisitions to achieve innovation there is potential for either overfunding or underfunding, since Defenders are often reluctant to invest large amounts in creating new opportunities (Miles et al., 1978) and since unanticipated implementation costs are common in acquisitions. There is a tendency to include inappropriate product features, since acquisition is a route to areas that a firm has little prior experience managing. With acquisition, the primary problem areas surround a need for structural change and value reorientation since acquisitions are vulnerable in this area and since Defenders are poorly equipped to accomplish these actions. Prospectors

Prospector firms enact a considerably more dynamic environment than Defenders, and devote their energy to finding and exploiting new product and market opportunities. Such firms avoid long-term commitments to single products or technologies. Prospector organizations are flexible and learn how to facilitate and coordinate numerous and diverse operations. These firms often

Inclusion of unnecessary or inappropriate product features

Omission of critical product feature(s)

Analyzer cf - MODERATE V - HIGH *Focus on balance may lead to equal resource allocations but not equitably matching need and availability. *Underfunding stable areas leads to resource depletion; underfunding new areas limits future options. V - MODERATE cf - LOW .Emphasis on profit maximization and on balance makes resource overcommitment less likely.

cf - MODERATE V - MODERATE *Internal needs may outweigh knowledge of and response to market demands. .Product characteristics may change yet focus on balance may slow corporate recognition. V - HIGH cf MODERATE *Efforts toward balance rather than external demand may include a reluctance to exit businesses or let go of competencies that are no longer valuable.

V - HIGH cf - HIGH *Less than maximum efficiency coupled with high demand (growth, product & market development) makes shortages likely. *Underutilization is common.

V - HIGH cf - HIGH eMany demands and often little communality or synergy across areas means innovation. *Low reserves. .Misutilization is a common error. V-LOW cf MODERATE *Technical flexibility coupled with market scanning makes matching product and market needs is an interactive process. *Errors of omission can easily be corrected. cf - LOW V-LOW *Most innovations are market-driven, therefore inclusion of unwanted or unneeded features is unlikely.

cf - MODERATE V - HIGH #Low investment in creating new “options” since existing solutions are working well. *Historical investment rules may not fit existing environmental conditions.

cf - LOW V - MODERATE *Some potential for continued investment in obsolete product lines (cash trap),

cf - MODERATE V - HIGH *Can occur as market needs change and niche becomes segmented. *Vulnerable point if new product or technology is introduced from outside industry boundaries.

cf - MODERATE V MODERATE *Excessive differentiation can result from using existing solutions to resolve new classes of problems.

for domain archetypes” Prospector

characteristics

Defender

problem-related

Financial overextension or overcommitment to inappropriate ventures

Underfunding

Type of risk

Hypothesized

TABLE 2

W g

V - HIGH cf - MODERATE *Once lost, equilibrium is very difficult to restore. *Complex mechanisms are needed to maintain internal coordination; this increases linkage switching costs.

V - HIGH cf - MODERATE .Value/skill diversity is key to successful balance. The most likely shift is dominance of one area over another. *Excessive conflict could lead to a ricochet decision-making pattern.

V 1 MODERATE cf - HIGH *Coordination needs, information processing demands, tension between satisfactory efficiency and adequate effectiveness place heavy demands on human resources with little organizational slack or resources to serve as a buffer.

V-LOW cf - HIGH *Purpose of this structure is to avoid long-term commitment to a single technology or product/market domain. *The need for frequent restructuring is high, but easily accommodated.

V - HIGH cf - LOW . Most values are organization process related (e.g., growth, flexibility, importance of imbedding technology in people) innovation is likely to reinforce these values.

cf - MODERATE V - MODERATE 4ontinuous change may prove stressful over time, particularly if most efforts are successful, and therefore, coupled with high growth.

cf - MODERATE V - HIGH *Most innovation is related to existing capabilities, so in the short-run, the existing structure presents a tight fit with needs. *Radical change may require a radical restructuring; this may be difficult to recognize.

cf - LOW V - HIGH l Would only occur if the basis for competitive advantage changed drastically. *A shift in source of advantage would require a major revision of engineering and administrative solutions.

cf - LOW V-LOW *Generally defender firms have a large resource base and substantial organizational slack; this capacity limits excessive demands on personnel.

“cf: contributing factors stemming from the configuration choice; V: vulnerability to this type of risk.

Exceptional demands on human resources

Required shift in organizational values

Need for organizational restructuring

214

sacrifice production efficiency for rapid response time. Prospectors are particularly vulnerable to low profits, overextended resources, and improper utilization of assets (Miles and Snow, 1978). The problem pattern seen in Prospector firms is quite different from that observed in Defender organizations. Prospectors must be able to facilitate change. These firms are externally oriented and cannot rely solely on organizational expertise to develop creative ideas. Prospectors can survive choosing a wrong product better than making a poor competitive showing with the right product. Therefore, including unnecessary product features is less damaging than omitting a critical characteristic. Prospectors can tolerate moderate levels of financial risk, since these firms are accustomed to fluctuating cash flows and high leverage positions. However, since many cash-using activities are generally pursued simultaneously, there is a high risk of both underfunding specific projects and financial overcommitment across all projects. Prospectors can accommodate organizational changes and demands fairly easily, since members are accustomed to frequent modifications in structure and culture. Combined, these features reflect a preference for external over internal sources of innovative ideas (since product-related uncertainty is reduced), and a willingness to accept high levels of either organizational or financial risk over time. Looking at problem characteristics as well as the vulnerable aspects of Prospectors yields the following propositions. If a Prospector uses R&D to achieve innovation, underfunding is a primary problem. Wasted resources due to overcommitment are only slightly less likely since a poor showing is unacceptable and Prospectors are prone to entering new markets in a big way (Miles et al., 1978). A Prospector’s capacity for organizational and human resource flexibility is more than adequate. Product errors are more likely related to omission than to commission, and both types should be manageable. Prospectors using internal ventures present a good fit financially, since internal ventures are less vulnerable to underfunding at the early stages, and less likely to generate overcommitment of resources in the long term. While organizational change is a likely outcome, it is easily accommodated. Joint ventures also offer a good fit financially since given creative funding opportunities. An expected problem is a tendency to loss focus, given extensive demands on organizational values and on human resources from joint venture activities, and little depth in organizational abilities. Acquisitions present a good fit financially and in terms of product problems, but organizational skills in the design and human resource management areas may be severely taxed since success leads to escalating demands in both areas. Analyzers

The third successful domain approach is that of an Analyzer. Analyzer firms try to increase profits within controlled levels of uncertainty. Analyzers must manage the most complex organizations, since they must balance stability and

215

efficiency with flexibility and change. This means Analyzers have the capability accommodating structural reorganization and shifts in values, but they often reduce the need by creating self-contained units. The primary risk to Analyzers is becoming unbalanced (Miles and Snow, 1978). They need sufficient stability to insure coordination effectiveness, yet sufficient flexibility to accommodate changes in product and market focus. The demands on human resources are high, yet, these expectations are usually considered routine. Analyzer portfolios often allow financial risk in any one area, but require overall financial predictability and moderate leverage. Miles and Snow (1978) indicate that Analyzers typically have a fairly low investment in research and development, suggesting a potential for characteristic underfunding. Analyzers expect products to offer potential for synergy, but, at the same time, to permit diverse sources of competitive advantage. Familiarity across product lines reduces the likelihood of both critical omissions in product features and of including inappropriate product characteristics, but can curtail the rate of innovation. Therefore, Analyzers can accept moderate levels of most types of problems, but are not suited to accommodate high levels of any single type of problem. They have neither the financial resources nor the organizational strength to tolerate high resource risks. Since they must make shrewd product decisions, they can ill afford high levels of either omission or commission errors in products. Often both internal and external expertise are useful for innovation success. These factors coupled with the problem vulnerabilities characteristic of innovation approaches lead to the following propositions. Similar to Defenders, if an Analyzer adopts an R&D approach to innovation, primary problems are underfunding and a vulnerability to technology or product omission errors. If an Analyzer relies on internal venturing, problems arise from resource overcommitments since the need for investment is easily underestimated. A need for restructuring may remain unrecognized until serious costs problems erupt, and pressure toward new values may be neglected as long as possible. This pattern is not unlike the reluctance to alter organizational structure to conform to diversification pressures that Chandler (1962) describes, These factors can lead to a serious problem with balance. A joint venture approach offers a good fit with regard to financial and product concerns, but offers similar pressures toward disequilibrium. If an Analyzer relies on acquisitions to achieve innovation, a major problem area is a need for structural change and value reorientation. The organizational needs of acquisitions may force a homeostatic reshuffling for Analyzer organizations. 4.2. Problem areas and source of competitive advantage Porter (1985, p. 165) argues that technology is one of the principle drivers of the value chain. Therefore, a firm’s source of competitive advantage would

Inclusion of unnecessary or inappropriate product features

Omission of critical product feature(s)

cf - MODERATE V - MODERATE *Emphasis on control may undermine resources needed for first-mover advantages. *Early follower strategies are unlikely to be underfunded. cf - MODERATE V - MODERATE *Emphasis on scale economies, experience curve effects, and capacity utilization, and therefore a concern with size, may lead to excessive resource commitments relative to potential benefits. V - HIGH cf LOW *Focus on standard products and services means that key features are known with great certainty, yet any errors in this area are costly.

cf - LOW V - MODERATE *Market-pull orientation reduces the likelihood that unneeded features will be included. If this does occur, costs are increased.

cf - MODERATE V - HIGH *Differentiation generally is costly, leading to escalating and competing resource demands. Firms often do not fully exploit all options for controlling costs.

cf - MODERATE V HIGH *Search for uniqueness increases the uncertainty surrounding identification of key product features versus desired or optional product features, yet poor decisions are costly.

cf - MODERATE V - HIGH *Technology-push orientation increases the probability that organizational preferences will translate into product features. This may result from differences between actual use and intended use by consumers.

advantage”

cf - LOW V - HIGH *Since the creation of unique value is key, the expectation for resource commitment to innovative activity is strong.

by source of competitive Cost leadership

characteristics

Differentiation

problem-related

Financial overextension or overcommitment to inappropriate ventures

Underfunding

Type of risk

Hypothesized

TABLE 3

“cfi contributing

to this type of risk.

V - MODERATE cf - MODERATE *Process-orientation in human resource management policies can constrain implementation of new ideas. New interaction requirements are a likely result.

cf - MODERATE V - MODERATE *Outcome-orientation in human resource management policies can constrain the generation of alternatives to existing solutions. New KSAs are a likely requirement. choice; V: vulnerability

cf - HIGH V - MODERATE *Potential for maintaining false perception of cost drivers is a negative consequence of reluctance to make needed changes in organizational preferences. *Innovation can challenge an exclusive focus on manufacturing in ways that may be healthy for an organization.

cf - MODERATE V - MODERATE *Different types of uniqueness may require different values and competencies.

from the configuration

V - MODERATE cf - HIGH *Innovation may lead to reconfiguration of the value chain. *Integration is particularly vulnerable to innovation and subsequent redesign.

cf - HIGH V-LOW *Reconfiguration of the value chain is the primary way to enhance differentiation. This frequently involves organizational redesign and restructured linkages among organizational activities.

factors stemming

Exceptional demands on human resources

Required shift in organizational values

Need for organizational restructuring

218

seem to play a substantial role in defining the risks and benefits associated with particular designs for corporate innovation. Miller and Mintzberg (1988) agree that a firm’s source of competitive advantage is a primary determinant of its strategy configuration. The proposed risk-accommodating characteristics of firms that rely on differentiation and firms that rely on cost leadership to achieve competitive advantage are presented in Table 3 and discussed below.

Differentiation A firm relies on differentiation as a source of competitive advantage to the extent that it provides something unique that is valued by its customers (Porter, 1985, p. 119). In these firms innovation is directed toward uniqueness. Porter (1985) argues that policy choices are the single most prevalent drivers of uniqueness. The need to understand the value chain of potential customers is primary, and organizational policies influence how well or how poorly this is accomplished. Moreover, policies generally limit the probability of underfunding. The potential for overextended resources is greater, particularly since differentiator firms rarely fully exploit all avenues to lower costs. The potential for undermining an adequate control of costs is one of the more serious risks associated with this strategy (Miller, 1986). For firms relying on differentiation, errors in creating uniqueness and value are the most problematic. While information that narrows the gap between actual use and intended use can expand the number of features a customer believes are desirable (Day, 1986), excessive or misplaced differentiation are serious strategic flaws. An ability to reconfigure the value chain is a basic business requirement for these organizations. Often this involves organizational redesign. Therefore, while the need for organizational restructuring is fairly high, this activity is fairly easily accomplished. Shifts in values are more difficult to accommodate. Financial problems are more likely related to overcommitment than to underfunding. This leads to the following propositions when considering the problem characteristics of various innovation approaches. Across the board, financial problems are typically low for firms relying on differentiation as a source of competitive advantage. A differentiator relying on R&D is vulnerable to producterrors. Internal “experts” may argue for features that are unique but not valued, while external market analysts may suggest features that are popular in a small market segment but have limited appeal to the wider industry. Internal ventures create a potential for substantial organizational and value-related problems. Joint ventures create difficulty in maintaining values and in providing adequate support for human resources. Both internal ventures and joint ventures present problems regarding product choices. Acquisitions give rise to organizational and value concerns.

219

Cost leadership

A firm relying on cost leadership as a source of competitive advantage sets out to be the low-cost producer in its industry (Porter, 1985, p. 12). In these firms, innovation is often directed toward improved process efficiency or improved product reliability and durability. Such firms have a broad scope and typically serve a number of industry segments. While sources of cost advantage vary from one industry setting to another, innovation is generally directed toward efficiency and toward broad customer appeal. Porter (1985) argues that linkages and integration capabilities are often key cost drivers. This suggests that cost leaders are particularly vulnerable to restructuring. It is not unusual for innovation to lead to a reconfiguration of the value chain. Such a change is frequently more efficiently pursued with a revised organizational structure. Thus, organizational problems are common with any innovation approach, yet it can also be argued that this is beneficial for cost leader firms. One of the pitfalls noted for firms pursuing a cost leader advantage is an excessive focus on manufacturing activities. Innovation can challenge this value, and in so doing, create a healthier organization. Since cost leaders adopt fairly standardized products, the risk of omitting a crucial product characteristic is low. However, unnecessary features may be included due to an internal orientation, and the added cost of including inappropriate features can erode the leadership position. Financially, these firms are controlled and planning-oriented (Miller, 1986). This both helps and hinders financial risk. An emphasis on anticipated scale economies or capacity utilization, can contribute to an excessive commitment of resources to a given innovative effort. Concern with control can undermine resource allocations to uncertain projects that may yield first mover advantages. However the relatively high and predictable resource generating capabilities of these firms reduces problems associated with resource scarcity. The following propositions are offered after a problem analysis of cost leaders and different approaches to innovation. A cost leader may experience some underfunding difficulties relying on R&D as a primary means to innovation. Yet, R&D presents a particularly good fit in terms of product problems and organizational problems. Internal ventures suggest a fairly high level of organizational and value-related problems, but lower probabilities of financial problems. Joint ventures may disrupt organizational values and place problematic demands on human resources. Similarly to internal ventures, acquisition suggests major problems areas in organizational restructuring needs and human resource expectations, but few product-related or financial crises. 5. Hypotheses and conclusions No innovation strategy eliminates problems. However, it is possible to identify the kind of problems that a firm is best able to tolerate and to avoid strat-

220

egies leading to problems a firm is least able to resolve. The first step in such a process is to identify the viable composite clusters of strategy configuration that reflect both domain choice and source of competitive advantage. Based on expansions of Miles et al. (1978) and Porter’s (1985) work by research such as Malekzadeh et al. (1989 ), Gilbert and Strubel(l989)) Dess and Davis (1984)) and Karnani (1984) it is clear that not all possible combinations of domain choice and source of competitive advantage are viable. Seven composite configurations have received both empirical and conceptual support. These are: (1) creative firms that adopt prospector strategies and base their competitive position on high levels of differentiation (generally accompanied by high cost ) ) (2) reliability firms that unite defender strategies with high levels of differentiation, (3) economizer firms which combine defender strategies with cost leadership, (4) cost effectiveness firms that combine defender strategies with both differentiation and cost leadership advantages, (5) cost conscious firms that combine analyzer strategies with cost leadership advantages, (8) quality-oriented firms that combine analyzer strategies with differentiation advantages, and (7) optimizer firms that combine analyzer domain choice with both differentiation and cost-based sources of competitive advantage. Other combinations, such as prospectors relying on cost leadership as the source of competitive advantage, contain internal inconsistencies that make success unlikely. These seven composite forms provide the mechanism for adding designs for corporate entrepreneurship to the viable strategic configurations. Figure 2 summarizes the composite assessment of problems associated with each innovation approach and the respective vulnerabilities of specific choices of domain, and competitive advantage. An innovation strategy can be selected by identifying the types of problems prevalent in each representative design for corporate innovation and comparing that problem pattern with the financial, product, and organizational related strengths and vulnerabilities inherent in a firm’s choice of domain and source of competitive advantage. Consider, for example, the combination of prospector and differentiation. We see that both Prospector characteristics and a differentiation strategy create a number of factors that suggest many potential problem areas regarding financial resource allocations and the selection of appropriate product features. Problems associated with implementation issues are less likely and less difficult to accommodate. When we look at the problem characteristics of research and development, joint venture and acquisition approaches to corporate entrepreneurship, we see that a joint venture option offers fewer problems in particularly vulnerable areas than are presented by either R&D or acquisition approaches. Therefore, it is hypothesized that for these firms, a joint venture

221

PROBLEM AREAS

Prospector

Underfundmg

COMPFTITIVF

ADVANTAGE

Differentfation e

Fig. 2. Hypothesized entrepreneurship.

relationships

between

strategy

configurations

and designs

for corporate

approach to corporate entrepreneurship represents the best fit with existing elements of the strategy configuration. As suggested in the beginning of this paper, a firm can then choose an innovation strategy that presents a good fit with the existing configuration, or it can develop capabilities that facilitate solutions to problems resulting from misfit. It should be remembered, however, that fit is not always feasible or necessarily optimal as a decision rule for selecting innovation designs.

“BFST FIT

LNTRFPRFNFUBStlP

DFslGN FORCORPORAJX

BFST FIT

Fig. 2. Continued.

One caveat should be noted. Both domain choice and source of competitive advantage represent complex and multidimensional strategy decisions. Given the nature of configurations, these choices are not expected to be independent variables. The scope and complexity of these two archetypes is such that equal weight across interactions seems the most reasonable assumption. However, this premise has not been tested. Each of the composite patterns depicted in Fig. 2. can be restated as a testable hypothesis of strategic fit:

223

Analyzer

PROBLEM AREAS Underfunding

w

Overcomm~t $

cm&

Feature Omlt

@mJ

Too Many Feat

w

Reslruchirlng

B

Value Shift

DOMAIN

CHOICE

Analyzer

PROBLEM AREAS Underfunding

w

Overcommlt $

m

Feature Om,t

m

Too Many Feat

w

Restructunng

w

.COMPFTlTlVF

ADVANTAGF

Dtkxentlation w

a-3

Value Shlfl Csw2 HRDemands

B

q

high

t2

moderate

q

IOW

)

Fig. 2. Continued.

Hypothesis 1.

Creative firms that adopt prospector strategies and base their competitive position on high levels of differentiation will be able to sustain innovation activities with fewer problems if a joint venture approach is the principle design for achieving corporate entrepreneurship.

Hypothesis 2.

Reliability firms that unite defender strategies with high levels of differentiation will be able to sustain innovation activ-

224

PROBLEM AREAS

Analyzer

Underfundmg

high

q mderate

Qlow

(

Fig. 2. Continued.

ities with fewer problems if a joint venture approach is the principle design for achieving corporate entrepreneurship. Hypothesis 3.

Economizer firms which combine defender strategies with cost leadership will be able to sustain innovation activities with fewer problems if a joint venture approach is the principle design for achieving corporate entrepreneurship.

Hypothesis 4.

Cost effectiveness firms that combine defender strategies with both differentiation and cost leadership advantages will be able to sustain innovation activities with fewer problems if an acquisition approach is the principle design for achieving corporate entrepreneurship.

Hypothesis 5.

Cost conscious firms that combine analyzer strategies with cost leadership advantages will be able to sustain innovation activities with fewer problems if a research and development approach is the principle design for achieving corporate entrepreneurship.

Hypothesis 6.

Quality-oriented firms that combine analyzer strategies with differentiation advantages will be able to sustain innovation activities with fewer problems if a research and development approach is the principle design for achieving corporate entrepreneurship.

225

Hypothesis 7.

Optimizer firms that combine analyzer domain choice with both differentiation and cost-based sources of competitive advantage will be able to sustain innovation activities with fewer problems if a joint venture approach is the principle design for achieving corporate entrepreneurship.

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