Intrapreneurship: Exploration and Exploitation of Internal ...

Intrapreneurship Exploration and Exploitation of

Internal Resources

BY KARINA SKOVVANG CHRISTENSEN

A dissertation submitted to

THE AARHUS SCHOOL OF BUSINESS

in partial fulfillment of the requirements for

the PhD degree

in Management

UNIVERSITY OF AARHUS

DENMARK

i

Preface

Changes in the driving forces of the global economy affect the competitive

environment of companies and require new management methods and

tools as well as new ways of organising activities By now it has become

quite clear that companiesrsquo innovativeness development of new

knowledge and exploitation of existing ideas are a top priority for both

politicians and managers

This in turn has driven research into such topics as entrepreneurship

innovation management intrapreneurship knowledge management and

corporate venturing Building on existing knowledge in various fields the

aim of this research is to contribute insights into how new ideas can not

only be fostered within large companies but also be commercialised by

means of the entrepreneurial forces within their formal structures

Corporate entrepreneurship corporate venturing and intrapreneurship are

some of the general terms for organising innovative activities in a way that

combines the advantages of established companies with the creativity and

recklessness of the individual entrepreneur Since these terms also cover

new techniques principles methods and organisational forms ndash and

sometimes well-known management ideas applied in new ways and often

in new combinations ndash they can be difficult to define precisely One

starting point of this research project has therefore been to disentangle the

concepts as they are used in the research literature

ii

This dissertation consists of several separate articles that together represent

my endeavours in the field of intrapreneurship and knowledge

management This is a field of both research and practice and the

dissertation is partly an account of current ideas in the area and partly an

insight into a variety of issues related to how entrepreneurial need is being

managed in different Danish companies

While therefore intrapreneurship is one perspective on companiesrsquo

management of innovative activities this dissertation has taken a starting

point in the management of knowledge to understand how innovativeness

is managed within companies Here knowledge-management activities are

seen neither as a technological solution nor as an isolated task for a specific

department but rather more in terms of inter-relating management domains

and creating space for innovative and entrepreneurial activities This space

could be found either within the existing organisational structures of the

company be supported by processes and activities that cross both

departmental and organisational borders or be established through the

formation of new companies

Reflecting upon the process which has led to the presentation of this

dissertation it seems that the life of a PhD student in many senses offers

experiences that can be summarised in the light of corporate

entrepreneurship This is at least the case if we accept that corporate

entrepreneurship as it will be argued in the dissertation can be seen as

consisting of four organisational perspectives corporate venturing internal

knowledge resources internationalisation and external networks

The current PhD project and dissertation is a corporate venture related to

but separate from the Aarhus School of Business Aarhus University and is

iii

based on existing competencies combined with the exploration of new

ones In the process the internal resources ie the research traditions and

perspectives that I brought with me together with the competencies and

skills from my previous education played a role in forming the research

questions and starting points of the project

Given the global nature of research internationalisation is an important

part of any PhD project This became clear to me in relation to my two

stays abroad which both contributed to my personal development and were

a source of new knowledge The external networks I built up during these

stays have been very helpful in discussing and commenting on previous

drafts of the papers

The process leading to the dissertation is not only manifested in a formal

plan consisting of seminars courses knowledge dissemination change of

academic environment and writing papers My work on the dissertation

can best be understood by dividing it into several stages as shown in figure

A The first period (May 2002 ndash April 2003) was spent participating in

doctoral courses and preparing the thesis proposal The overall theme for

the research project was determined by KNORI (KNowledge-Intensive

ORganisations and Intrapreneurship) a project which provided the funding

for the research but within this I was to find seed and nurture my own

corporate venture

The next phase began in May 2003 when I changed my academic

environment to spend a few weeks at Professor Georg von Kroghrsquos chair at

The University of St Gallen in Switzerland From October 2003 to April

2004 I also had the opportunity to experience daily life at Stanford

iv

University California This period involved the use of internal knowledge

resources and the development and use of external networks

The third phase of the project has been by far the longest most challenging

and most fruitful As regards time it was spread over more than three years

(from May 2004 to October 2007) However as shown in Figure A it was

divided into three periods since I gave birth to two children ndash in 2004 and

2006 ndash before finally finishing the dissertation in 2007

I would like to take the opportunity here to thank everyone who has been

involved in this process in one way or another Thanks are due to the

Ministry of Science Technology and Innovation for providing funding for

the research via the KNORI project I am also grateful for the generous

financial support from the Aarhus School of Business Aarhus University

and the Tuborg Foundation

I am especially grateful to my supervisors Professor John Parm Ulhoslashi and

Professor Anders Drejer without whose lively discussions I would never

have been so stubborn and my dissertation would not be what it is today I

am also grateful for the many inputs from colleagues at the Department of

Management at the Aarhus School of Business Aarhus University I am

especially thankful to Jakob Lauring for general support suggestions and

ideas for improvements to the dissertation I also want to thank my new

colleagues at the School of Management and Economics Aarhus

University for welcoming me and giving me time to finish my PhD

v

Figure A Timeline for the PhD process

The PhD process

Enrolled as a PhD student May 1st 2002

Personal

Publications

Article 1 Published December 2004 Submitted October 2004

Accepted November 2004

Article 2 Published October 2006

Submitted Nov 2005 Accepted July 2006

Article 5 Published June 2004

Submitted March 2004 Accepted April 2004

Article 3Published July 2005

Submitted September 2004 Accepted October 2004

Article 5 SubmittedSeptember

2007

Maternity Leave Magnus September 8th 2004 ndashNovember 7th 2005

Maternity Leave Tobias February 14th 2006 ndash

May 29th 2007

Thesis ProposalApril 11th 2003

PhD dissertation submitted

November 2007

Stanford UniverityOctober 1st 2003 ndash

April 5th 2004

Univerity of St Gallen May 5th ndash May 17th 2003 June 21st ndash June 28th 2003

PhD dissertationfinished

September 2007

vi

The project involved the participation of five companies and I would like

to thank the numerous people who took time to talk to me and helped me

with access in various ways In particular thanks to Allan Krogh Erlandsen

at Bang amp Olufsen Hanne Buje Jensen and Brian Larsen at Crisplant Niels

Gade at Danfoss Drives Morten V Jensen at End2End as well as Poul

Erik Dybdal and Erik Reinholt at Ericsson Telebit for giving me access to

their companies Without their hospitality and the time they and other

employees took to talk to me this dissertation would not have been written

I also want to thank Sine Nissen for being my co-pilot during the data

collection and Mette Line Chemnitz Mie Skovsgaard Nielsen and Lene

Thisgaard for assistance with the transcriptions I am also deeply grateful to

Anders Jacob Raj Andersen Mikkel Gadmar and Christian Nielsen for help

and inspiration I would also like to thank my co-authors in the individual

papers Anders Drejer John P Ulhoslashi Heine Kaasgaard Bang and Per

Nikolaj Bukh for inspiration and the opportunity to work together From

my visits abroad I want to thank Georg von Krogh and his research team at

St Gallen Switzerland for hospitality and for taking good care of me in

May and June 2003 Thanks also to SCANCOR Stanford University and

my colleagues there from October 2003 to April 2004

My family and friends who have supported me during the whole process

have been an infinite source of comfort to me Above all my parents and

my best friend Vibeke Reuter Lapiki were indispensable Finally I want

to thank my husband Per Nikolaj who has listened to my complaints ndash

especially in the most critical periods and when I felt I was being treated

unfairly You were always there to support me During the third part of the

PhD project my two sons Magnus and Tobias were there to make me

vii

focus on my work and cheer me up This more than made up for the many

months of morning sickness and general inaction

Karina Skovvang Christensen

Aarhus University

December 2007

viii

ix

Contents

Preface i

Contentsix

PART I 1

Introduction 1

CHAPTER 1 3

The Background 3 11 Innovativeness in Denmark5

12 The KNORI project 9

13 References11

CHAPTER 2 13

Research scope themes and structure 13

21 Corporate entrepreneurship15

22 The corporate entrepreneurship field 18

23 focus and structure of The dissertation 21

231 The structure of the dissertation 21

232 The research questions 22

233 The articles in the dissertation23

24 References27

CHAPTER 3 31

Methodology 31

31 From Paradigm to research approach32

32 Unit of Analysis 34

x

33 Selection of the case companies37

34 The case companies 40

35 The case study approach 40

351 Definition of a case study41

352 Action research or research in action 42

36 Validity of the methodology 44

361 The use of Multiple Sources of Evidence45

37 The research interviews 46

371 The transcription process49

38 References50

CHAPTER 4 57

A Classification of the Corporate Entrepreneurship Umbrella Labels and Perspectives 57

41 Introduction59

42 Theoretical roots entrepreneurship 61

43 The appropriate label 61

44 Defining corporate entrepreneurship 63

45 Perspectives on corporate entpreneurship64

451 Corporate venturing65

452 Internal (intangible) resources66

453 Internationalisation67

454 External networks and alliances 67

455 Towards a framework for corporate entrepreneurship 68

46 Conclusion 68

47 References70

CHAPTER 5 75

Postscript to article 175 51 Towards a framework for corporate entrepreneurship 76

52 Concluding remarks 78

53 References81

xi

PART II 83

Intrapreneurship from an Internal Resources Perspective 83

CHAPTER 6 87

Losing innovativeness the challenge of being acquired87

61 Introduction89

62 Innovation through acquisition the entrepreneurial challenge 90

621 The case for innovation through acquisitions91

622 Managing the post-acquisition process92

63 Method93

631 The interviews 93

632 The questionnaire 93

64 Innovativeness of Ericsson Telebit from spin-off to integration94

641 Incorporation into LM Ericsson 95

642 Ericsson Telebitrsquos products 96

643 The Market 96

644 From customers to sponsors 97

645 Organisational structure 97

646 Employees 98

65 Discussion of Ericsson Telebitrsquos innovativeness98

651 Creativity99

652 Innovation100

653 The innovation process102

66 Concluding discussion 103

661 Implications for practice104

662 Implications for research 105

67 References106

CHAPTER 7 111

Enabling Intrapreneurship The Case of a Knowledge-Intensive Industrial Company 111

71 Introduction113


73 Methodology116

74 Danfoss Drives117

741 Strategy and the organisation 117

xii

75 Corporate entreprenership at Danfoss Drives 118

751 Rewards118

752 Management support 119

753 Resources 119


755 Risk 122

76 Towards a more complete model 123

761 Communication 124

762 Culture125

763 Process127

77 Conclusion and implications127

78 References128

PART III 131

Managing Internal Knowledge Resources131

CHAPTER 8 139

Understanding Intrapreneurship by means of state-of-the-art knowledge management and

Organisational learning 139

81 On the developing need for intrapreneurship141

82 Innovation management and intrapreneurship 144

821 Innovation management the context of intrapreneurship 145

822 Contingent situations for innovation management 146

823 Intrapreneurs who makes the innovations 148

83 Knowledge in an innovation perspective 149

831 Knowledge management in a knowledge society149

832 Different types of knowledge 150

Level of articulation tacit to explicit 150

Depth of knowledge Dreyfuss and Dreyfuss 151

Location of knowledge 152

Diffusion of knowledge undiffused to diffused 152

Complixity of knowledge 153

84 Understanding intrapreneurship better153

841 The purpose exploitation and exploration 154

842 The content learning leading to innovation 154

843 A framework for intrapreneurship in light of knowledge155

85 References157

xiii

CHAPTER 9 159

Knowledge Management in Perspective(s) An Analysis of Project Management in Two Companies

159

91 Introduction162

92 Knowledge management in practice 163

921 Two perspectives of knowledge management 163

922 Knowledge Management and the perception of Knowledge 165

923 Strategies for knowledge management166

93 The Two Companies and the methodology 167

94 Knowledge Management in the two companies 168

941 Knowledge management at Bang amp Olufsen 168

942 Knowledge Management at Crisplant 170

943 Knowledge Management as Project Management172

95 Knowledge Management in Perspective(s)174

951 Artefact-Oriented Epistemology 174

952 Process-Oriented Epistemology 175

96 Concluding Remarks177

97 References180

PART IV 183

CHAPTER 10 185

Findings and Perspectives185

101 Elements of this dissertation 187

102 main points and contributions 189

103 Synthesising the contributions 191

104 Limitations of the study 196

105 References198

APPENDIX I 201

Case companies201

A1 Ericsson Telebit 204

A2 Danfoss Drives206

A3 Bang amp Olufsen 207

A4 Crisplant210

xiv

A5 End2End212

A6 References215

APPENDIX II 217

English Summary 217

APPENDIX III 221

Dansk resume221

1

PART I

Introduction

This dissertation which focuses on intrapreneurship from different

perspectives is divided into four parts and includes five articles that

constitute the main results of my research as PhD student The overall aim

of the articles which address different aspects of intrapreneurship is to

contribute as building blocks to the larger intrapreneurship mosaic which

is still under development in the research literature (Ireland et al 2005)

The first part which serves at the introduction to the dissertation consists

of five chapters Chapter 1 provides a short description of the Danish

Industry and a discussion of some of the main challenges in relation to

innovativeness adoption of new knowledge and intrapreneurship The

chapter also briefly describes the KNORI project (KNowledge intensive

ORganisations and Intrapreneurship) which this dissertation is related to

Chapter 2 presents the overall research field corporate entrepreneurship

and discusses the difference between corporate entrepreneurship and

intrapreneurship This chapter also describes how research interest in

corporate entrepreneurship has evolved over time The research themes

together with the structure of the rest of the dissertation are also presented

in more detail in this chapter Chapter 3 presents the methodology with an

2

emphasis on the selection of cases for the PhD project the validity of the

methodology and various issues regarding the research interviews

Chapter 4 which constitutes the first article in this dissertation develops a

framework for corporate entrepreneurship consisting of an internal

perspective (intrapreneurship) and an external perspective

(exopreneurship) The article further illustrates that intrapreneurship

consists of three organisational perspectives corporate venturing

internationalisation and internal resources This article was the first step in

the PhD project and thus also represents a tentative first insight into the

field Finally chapter 5 serves as a postscript to the article and includes

additional insights

The second part of the dissertation consists of two articles articles two and

three which in different ways address the extrinsic and intrinsic factors that

influence an organisationrsquos internal resources with respect to

intrapreneurship The third part of the dissertation consists of articles four

and five which concern the relations between intrapreneurship and

knowledge management and how knowledge management can support

intrapreneurial management Finally part four concludes the dissertation

REFERENCE

Ireland RD CR Reutzel amp JW Webb 2005 Entrepreneurship

Research in AMJ What Has Been Published and What Might the Future

Hold Academy of Management Journal Vol 48 No 4 pp 556-564

3

CHAPTER 1

The Background

New governments almost always mean new visions At least this was the

case in Denmark at the end of 2001 Although its industrial policy already

encouraged innovation and provided for the establishment and

administrative support of new companies etc the government wanted a

change of mindset in society in the direction of greater creativity and an

entrepreneurial culture

It was realised that growing internationalisation would drive more and

more Danish companies to offshore production or sourcing from low-cost

countries This led to growing anxiety about employment wealth ndashcreation

and the future of Danish society throughout the 1990s Since it was

becoming clear that more and more jobs would be moved to the new EU

countries or further east both Danish politicians and the Danish media

began to focus attention on innovation incubators entrepreneurship and

intrapreneurship

At the same time the Danish media seized on intrapreneurship via the

start-up of new companies based on the competencies of established

companies as the lsquosolutionrsquo to the creation of more jobs in Denmark

However intrapreneurship is more than just starting up new internal or

external ventures Even though the creation of new jobs and companies

might be to the benefit of society as a whole the management of existing

4

companies would no doubt think differently if their most creative and

innovative employees started establishing new companies based on

competencies acquired in their former jobs

Thus from an organisational or corporate perspective intrapreneurship is

more about a companyrsquos ability to sustain creativity innovativeness and the

entrepreneurial spirit among its own employees and channel this towards

the creation of new structures and initiatives that benefit both employees

and the company and probably also create wealth at societal level

Intrapreneurship can be enabled by giving employees time to work on their

own projects and to assist with development salesmarketing production

legal issues etc Furthermore as will be argued in chapter 4

intrapreneurship is part of a more comprehensive research and practice

field corporate entrepreneurship

There has been a tendency in the Danish press to more or less explicitly

equate intrapreneurship with corporate venturing and unlike in the

international literature the term intrapreneurship has been a much more

popular label in the Danish media1 In relation to media interest which to

some extent might also reflect the focus of Danish companies or

government agencies it is notable that even though corporate

entrepreneurship has been of academic interest for many years it was only

1 This can for example be seen from a full text search in the Danish database InfoMedia which covers

most newspapers and a number of popular magazines As of June 30 2007 the term lsquocorporate entrepreneurshiprsquo had appeared 11 times whereas lsquointrapreneurshiprsquo and lsquocorporate venturingrsquo had been used 91 and 81 times respectively According to InfoMedia the first time an article on lsquocorporate entrepreneurshiprsquo lsquointrapreneurshiprsquo and lsquocorporate venturingrsquo was published in a Danish newspaper was

in 2005 1996 and 1999 respectively

5

from 2003 that the Danish media started focusing on intrapreneurship

In one of the first comprehensive studies based on Danish data Evald

(2003) showed that small companies create many jobs by spinning off new

ventures Based on this finding she argues that initiatives should be

focused on the intrapreneurial abilities of small and medium-sized

companies (SMEs) However while the importance of spin-offs and job

creation in small companies should not be underestimated large companies

also have the possibility of supporting entrepreneurship in-house ndash whether

it is called intrapreneurship or corporate entrepreneurship These

companies have both much larger and greater access to different kinds of

resources and are better able than SMEs to take a limited risk by entering

different forms of intrapreneurship

11 INNOVATIVENESS IN DENMARK

Given that Danish industry is largely made up of small and medium-sized

companies Denmark is not likely to adopt the same innovation policy as a

country like the US with its many research institutions and large

technologically advanced companies On the contrary a characteristic of

the innovation process in SMEs is the indirect implementation of

technological breakthroughs unlike in large companies where there is close

contact between research development and production (Erhvervsfremme

Styrelsen 1999) The indirect nature of the innovation process involves a

time lag from technological breakthroughs to their adoption in products or

production processes which is also one of the findings of the so-called

DISCO project (Erhvervsfremme Styrelsen 1999) in its analysis of the

Danish innovation systemrsquos challenges strengths and bottlenecks

6

This is a very general statement of course and there are well-known large

Danish companies eg Novo Nordisk Novozymes Coloplast Danfoss and

Grundfos that are major players in their respective industries and also very

innovative Furthermore Abernathy amp Utterback (1978) among others

have argued that large companies in existing industries are most likely to

innovate incrementally while breakthrough innovations are more likely to

come from either small companies or large companies which apply their

technologies in innovative ways in other business areas

However for most Danish companies ndash especially SMEs ndash the needs of and

requirements for innovation support knowledge transfer and conditions for

intrapreneurship must be addressed from a policymaking perspective

Moreover as is also central to the topic of this dissertation the innovative

capabilities of large established companies are possibly even more

important

As a result of its comparative disadvantage ndash due to the size of the country

ndash the key challenge for Danish industry is sometimes seen as the adoption

of a broader and more interactive understanding of innovation (Nyholm amp

Langkilde 2003 Rosted 2003) Due to their technology-oriented approach

to innovation companies follow what Abernathy amp Utterback (1978) have

identified as product or process innovation cycles and not what Grant

(2002 p 373) with a broad term calls strategic innovation By adopting a

broader view of innovation Danish companies would be better placed to

exploit the potential of strategic innovations where new combinations of

technology customers and services can change the competitive structure of

the industry or even create a new industry as argued by proponents of the

so-called Blue Oceans strategies (Kim amp Mauborgne 2005)

7

Another important characteristic of strategic innovations is the interactive

process that leads to the innovation Within the technological paradigm of

innovation (Sundbo 1998) the development process is seen as linear while

strategic innovations follow an interactive process where ldquonew

combinationsrdquo can only survive if they meet a real market demand The

interactive process involves a closer interfirm relationship with a strong

focus on exploiting the innovative potential of new technologies The

willingness and ability to form these relationships has been found in Danish

industry both in high- and low-tech industries (Erhvervsfremme Styrelsen

1999)

In order for ideas to be commercialised in the shape of new companies or

new business areas for established companies there needs to be a well-

functioning market for venture capital The establishment of such a market

has therefore been a government priority In addition to this the largest

Danish companies have also helped fund new companies through newly

established venture funds often in co-operation with institutional or private

investors whose funding in many cases stems from selling previously

established companies

The development of such funds might be seen as the result of a broader

view of innovation where the strategic and interactive aspect has led to the

return of entrepreneurship as the nucleus of the innovation process Large

corporations now see the entrepreneur as an important part of striking the

right balance between technological development and market demand

Whether it is an intrapreneur (Pinchot 1985) who leads an internal venture

project or an external entrepreneur funded through venture funds or

8

corporate venture capital the importance of entrepreneurship in the pursuit

of innovation is now a fact

One indicator of the importance of entrepreneurial activities in the pursuit

of innovation is the total amount of capital flowing towards venture

investments as shown in Figure 11 According to data from

Vaeligkstfonden2 the total funds available in the venture capital market in

Denmark have risen dramatically from DKK 35 billion in 1998 to DKK

172 billion in 2002 after which it flattened out and actually fell slightly in

2003 when more investors withdrew from the venture market3 By August

31 2007 the total funds available in the venture capital market were

approximately DKK 22 billion

Until 2001 the prime interest of venture funds was in telecommunications

and computer technology but since then the focus has shifted to life

sciences This can be seen by the fact that the total amount of invested

venture capital in life sciences exceeds investments in ICT Furthermore

two new ventures focusing solely on life sciences have been established

while two ventures focusing on ICT have been terminated (Vaeligkstfonden

2002)

2 Data according to rdquoDet danske marked for venturekapital og private equityrdquo published annually by

Vaeligkstfonden Copenhagen

3 LMX Business Development TDC-Innovation Venture IT Velcap Danske Life Science TEMA

Kapital BUHL Randers and Udviklingsparken (continued in the context of Incuba AS)

9

219

201

175

161154

172

150

35

52

118

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

DK

K b

n

Figure 11 Funds available in the venture capital market (Based on

figures from Vaeligkstfonden 2001-2007)

That some of Denmarkrsquos largest corporations have helped create new

companies can be seen from the development of nine corporate venture

capital (CVC) funds in the period from 1998 to 2002 which resulted in a

total of 12 CVC companies in 2002 In comparison only 4 companies were

established in 2006 even though almost five times as much funding was

available than in 1998

12 THE KNORI PROJECT

The KNORI project (KNowledge intensive ORganisations and

Intrapreneurship) stemmed from both the need to create more jobs in small

and medium-sized Danish companies and the focus on technology-oriented

innovations at the beginning of the 1990s as discussed above Thus the

10

project was established4 as part of the Ministry of Science Technology and

Innovationrsquos initiatives to boost the ICT industry KNORI was set up to

study how established organisations in the ICT industry in northern Jutland

could be more dynamic as regards spinning off new ventures developing

new business areas and developing a sustainable ability to innovate Of

course these broad aims could also be approached from other perspectives

this PhD project has thus chosen to address the question from an

intrapreneurial perspective

The KNORI project started with a meeting between the researchers

involved and three key persons in the telecommunications industry in

Northern Jutland It became clear from this meeting that the companies

were just as much competitors as collaborators This meant that it would be

difficult to arrange explicit knowledge sharing between them through

seminars etc as originally envisaged Therefore the scope of the project

was broadened to also focus on companies in other parts of Denmark as

well as industries that were not as closely related but which had similar

challenges

The case companies for this PhD project were to be chosen from the

broadened KNORI base The methodological considerations are discussed

in more detail in chapter 3 but the result was that six companies agreed to

take part in the project and all were invited to an introductory meeting in

4 KNORI was a network project between Harry Boer and Bent Dalum University of Aalborg and Anders

Drejer (University of Aalborg at the project start) and John Parm Ulhoslashi Aarhus School of Business

Aarhus University

11

March 2003 where the framework for corporate entrepreneurship and

preliminary thoughts about intrapreneurial enablers were presented

A second meeting on factors which enable and hinder corporate

entrepreneurship was planned for June 2004 but was cancelled due to

unforeseen circumstances No new date was set for this meeting due both

to the summer holidays and my first maternity leave from the beginning of

September 2004 Since it also became clear that the research opportunities

were not so much related to the companies as a group as to individual

companies it was decided not to include the seminars in the PhD project

13 REFERENCES

Erhvervsfremme Styrelsen 1999 Det danske innovationssystem ndash DISCO-

projekt Rapport nr 9 Sammenfattende rapport Koslashbenhavn

Evald MR 2003 Corporate Venturing i Danmark En undersoslashgelse af

mindre virksomheds knopskudsaktiviteter Center for Smaringvirksomheds-

forskning Syddansk Universitet

Grant RM 2002 Contemporary strategy analysis Concepts techniques

applications (fourth edition) Oxford Blackwell Publishing

Kim WC amp R Mauborgne 2005 Blue Ocean Strategy How to Create

Uncontested Market Space and Make Competition Irrelevant Boston

Harvard Business School Press

Nyholm J amp L Langkilde 2003 Et benchmark studie af innovation og

innovationspolitik ndash hvad kan Danmark laeligre Oslashkonomi- og

12

Erhvervsministeriets enhed for erhvervsoslashkonomisk forskning og analyse

FORA Koslashbenhavn

Pinchot G 1985 Intrapreneuring Why You Donrsquot Have to Leave the

Corporation to Become an Entrepreneur New York Harper amp Row

Rosted J 2003 Tre former for innovation Oslashkonomi- og


FORA Koslashbenhavn

Sundbo J 1998 The Theory of Innovation Entrepreneurs Technology

and Strategy Cheltenham Edvard Elgar Publishing

13

CHAPTER 2

Research scope themes and structure

Business structures are becoming global and the rules of competition are

changing constantly posing new challenges to companies Whether

companies define themselves as being in one or another market they seem

to be forced to adapt and innovate at a constantly increasing pace Change

comes about faster than we expect and the saying that the only constant

thing in the world is change seems truer than ever Furthermore the

boundaries of the firm are becoming more blurred as companies get

involved in different collaborations and tasks from research and

development to business support activities are increasingly outsourced

While the world appears to be constantly changing some companies tend

to stick to the ldquoold waysrdquo of doing business ie preserving the well-known

techniques and business concepts of co-operation while others reorganise

re-create themselves merge and split up become virtual enter new

markets or create unforeseen alliances Thus some companies seem to

ignore changing market conditions while others act on challenges to well-

established business routines and rules of competition

One major driving force for change has been the increasing importance of

knowledge both for everyday life where new innovations are shaping

family structures communication patterns and work-conditions for

business structures and for individual companies entering the so-called

14

knowledge society (Drucker 1993) New conditions for competitive

advantage have appeared where knowledge is the key resource and where

knowledge workers will dominate the workforce (Drucker 1993 2002) ndash

perhaps not in the number of employees but in terms of their influence on

global value creation

A society becoming increasingly dependent on knowledge will probably

introduce changes that we can hardly imagine now Organisations will face

new challenges both internally and externally These challenges are

affected by various factors eg the liberalization of markets markets for

new products new demands from various stakeholders new information

and communication technologies the decoupling of information flows from

the flow of goods and services and integration of product architecture and

technology (Teece 1998)

The responses of companies in the 1980s and to some extent the 1990s

have been characterised by reductions in the workforce downsizing

rightsizing budget cuts and depressed employee morale (Morris and

Kuratko 2002) While the focus has been on the short-term costs of

production no company can afford to rely on such an approach forever

The real challenge for a company wanting to remain a going concern is to

establish a competitive advantage and one way of doing this is continuous

innovation and the creation of new ideas According to Morris and Kuratko

(2002) companies must aspire to adaptability flexibility speed

aggressiveness and innovativeness which they boil down to one word ndash

entrepreneurship

15

21 CORPORATE ENTREPRENEURSHIP

Although intrapreneurship has been presented as the lsquosolutionrsquo to new jobs

and an improvement in companiesrsquo innovativeness it is worth

remembering that it may not be so very different from what we already

know There are countless examples in the management literature of

methods and techniques etc that are simply relaunched under new names

Therefore this dissertation also takes a broader perspective

If we follow the spread of research on corporate entrepreneurship from just

the use of the term in the literature it is remarkable how interest in topics

such as entrepreneurial management corporate entrepreneurship and

intrapreneurship has increased in the last couple of years This is illustrated

in figure 21 which shows the number of hits on intrapreneurship

corporate entrepreneurship and entrepreneurial management from a full-

text search in the database Business Source Premier In figure 22 the same

keywords are searched for in articles published by the Danish business

paper Boslashrsen5

5 Boslashrsen was also searched for the terms lsquointraprenoslashrskabrsquo lsquocorporate entreprenoslashrskabrsquo and

lsquoentreprenant ledelsersquo and the results added to the number of articles found using the English terms

The databases have also been searched for lsquointrapreneuringrsquo lsquointrapreneurialrsquo lsquocorporate venturersquo lsquocorporate venturingrsquo and lsquocorporate incubatorsrsquo There were only a few hits for intrapreneuring and intrapreneurial While interest in corporate venturingventuring (CV) has been increasing significantly it is not included in the figures since it is regarded as a perspective on corporate entrepreneurship and

intrapreneurship as will be argued in Chapter 4 Corporate incubators did not result in any hits

16

05

101520253035404550

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship

Corporate Entrepreneurship

Entrepreneurial management

Total

Figure 21 Number of hits from a full-text search on the terms

ldquointrapreneurshiprdquo ldquocorporate entrepreneurshiprdquo and ldquoentrepreneurial

managementrdquo in the research database Business Source Premier

Figure 21 shows that following Pinchotrsquos introduction of intrapreneurship

in 1983 and his book Intrapreneuring in 1985 interest in the topic has

grown6 However figure 21 also shows that it is other terms that have been

dominant in each of the years covered It is of course difficult to draw

specific conclusions just by counting the number of times a word has been

used in articles in either journalistic or research articles Neither the context

nor the understanding of the concepts are necessarily the same and the

topic covered might even be discussed without ever explicitly mentioning

the term eg intrapreneurship

6 A similar search in the database Social Science Citation Index which contains research cited by others

shows that the number of articles on concepts that have been cited by others has been slightly increasing

since the mid-1980s with the increase being greater since the end of the 1990s

17

0

5

10

15

20

25

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total



managementrdquo in the Danish newspaper Boslashrsen

Seen together the figures in Figure 21 and 22 probably also illustrate the

spread of the terms in research literature and practice New terms are often

claimed to be driven by practice and the more popular part of management

literature But as Abrahamson (1996) has argued scholars have often been

aware of and interested in the new phenomenon for some time before the

explosion of interest in the practitioner-oriented literature and the press

However there is seldom a steep increase in researchersrsquo interest before a

term has gained the interest of practitioners This is in line with figure 22

which shows how intrapreneurship gained the interest of newspapers at

about the same time as the number of research articles rocketed7

7 A similar search of the more popular management research database Emerald shows a similar

development as Boslashrsen It increases slightly from 1994 to 2003 and then gains momentum

18

More directly focusing on articles published in The Academy of

Management Journal (AMJ) from 1963 to 2005 and examining article

topics rather than just counting the number of times the word is used in the

text Ireland et al (2005) found 8 articles on corporate entrepreneurship

Furthermore these articles were distributed regularly over time with a

small increase since 1994 However a similar number of other topics eg

ldquonew venturesrdquo ldquocorporate entrepreneurshiprdquo etc were also published

and the distribution of these articles over time was more similar to the

pattern shown in figure 21 Overall therefore while interest in the topic

has increased it is still an emerging or relatively young field characterised

by a large number of labels (Christensen 2004) the lack of a unifying

definition (Sharma amp Chrisman 1999) and low paradigmatic development

(Ireland et al 2005 Low 2001)

22 THE CORPORATE ENTREPRENEURSHIP FIELD

According to Hornsby et al (1993) research on corporate entrepreneurship

and how corporate entrepreneurship can be enabled can be roughly divided

into two waves The first wave ending at the beginning of the 1990s

focused on the entrepreneur as a person while the second wave started at

the beginning of the 1990s and gained momentum towards the end of the

decade Basically the second wave takes a starting point in William

Gartnerrsquos (1988 1989) suggestion that the research focus should be

changed from the entrepreneur as a person to entrepreneurship as a process

In particular Gartner argued that entrepreneurship is a multidimensional

process of which the entrepreneur is only one element thus moving the

focus more towards organisations which employ entrepreneurs and create

the conditions for their achievements

19

Michael A Hitt Jeffrey S Hornsby R Duane Ireland Donald L Sexton

and Shake A Zahra have been the main trendsetters in this second wave of

development of the field which is characterised by the use of many

different labels eg entrepreneurial management (eg Stevenson amp Jarillo

1990) strategic entrepreneurship (eg Hitt et al 2001) corporate

entrepreneurship (eg Guth amp Ginsberg 1990 Hornsby et al 1993 2002)

internal corporate entrepreneurship (eg Lumpkin amp Dess 1996 and

Schollhammer 1981) intrapreneurship (eg Carrier 1994 and Pinchot

1985) corporate venturing (eg Burgelman 1983 and Chesbrough 2000)

These terms have been used interchangeably to explain almost the same

phenomenon as is discussed in more detail in article 1 (Chapter 4) in this

dissertation

Sharma and Chrisman (1999) illustrate the termual ambiguity by listing a

number of definitions of corporate entrepreneurship suggested in the

literature Based on an analysis of two definitions in three papers ndash

corporate venturing (Biggadike 1979 Ellis amp Taylor 1987) and corporate

entrepreneurship (Burgelman 1983) ndash Sharma and Chrisman (1999) argue

that Burgelmanrsquos (1983) definition of corporate entrepreneurship is a

subset of Biggadikersquos (1979) corporate venturing whereas Ellis and

Taylorrsquos (1987) definition of a corporate venture is a subset of Burgelmanrsquos

(1983) corporate entrepreneurship definition

As is often the case with a plethora of different labels the development of

loosely related methods and theories not only creates uncertainty but also

complicates the applicability and integration of experiences into the

development of the field (cf Sharma amp Chrisman 1999)

20

To some extent it is a general characteristic of management knowledge

that it is spread throughout educational systems and companies by business

schools and global consulting companies (see for example Sahlin-

Andersson amp Engwall 2002) but in the case of the corporate

entrepreneurship literature it might also be because the field is both in its

infancy and characterised by multidisciplinarity Corporate

entrepreneurship has drawn on organisational theories from economics

(Schumpeter 1934 Kirzner 1985) sociology (McClelland 1961)

psychology (Collins and Moore 1964 Brockhaus amp Horwitz 1986) and

strategic management (Hitt et al 2002) and has thus been used to explain

various organisational phenomena from strategy via management in

general to innovation

While lsquocorporate entrepreneurshiprsquo has attracted the most attention

internationally as shown in figure 22 it is lsquointrapreneurshiprsquo that has

gained most interest in Denmark Although this could be seen as a minor

detail as regards the labeling of an otherwise identical concept as will be

argued in chapter 4 it also relates to the boundaries of the firm and thus to

a question of focus On start-ups or on companies that make innovation

possible and where employeesrsquo creativity and entrepreneurial aims are

based

Managerial decisions on the scope and diversity of a companyrsquos activities

affect the horizontal boundaries of the firm which in turn influence the

organisational choices of how and where to innovate starting a corporate

venture exploring internal resources internationalising or forming

external networks Managerial decisions on organisational structure and

design on the other hand are closely linked to the vertical boundaries of

21

the firm and define the organisationrsquos position in the value chain As Grant

(1996) and others argue decisions concerning the boundaries of the firm

are important for the application and integration of (specialist) knowledge

and thus future activities

23 FOCUS AND STRUCTURE OF THE DISSERTATION

The overall topic of this dissertation is exploration and exploitation of

internal resources with respect to intrapreneurship and how this is

affected by the firmrsquos organisation management managerial initiatives and

employees The dissertation is comprised of five different articles that

address this topic from different perspectives

From an early stage it was decided to let the articles develop from the most

interesting data and observations from the case companies This has

resulted in articles on different subtopics within the overall topic drawing

on different theories and different methodologies Although all the articles

have in common that they add to the mosaic within the field of

intrapreneurship they are not connected by a step-by-step research strategy

that leads to a final conclusion

231 The structure of the dissertation

This dissertation is divided into four parts Part I contains chapters one to

five Chapter one has described the background of the dissertation while

chapter two has introduced the field of intrapreneurship and the research

questions The next chapter will present the methodological considerations

chapter four examines and outlines corporate entrepreneurship the scope of

the research is explained and the concept of intrapreneurship is defined

22

finally chapter five serves as a postscript to chapter 4 and includes further

understandings of the issues

Part II contains chapter six and seven and consists of two articles on issues

related to intrapreneurship from an internal resources perspective Part III

contains chapter eight and nine which correspond to article four and five

respectively These articles combine intrapreneurship and knowledge

management and focus on knowledge resources within the internal

resources perspective Together these two parts make up the main body of

the dissertation Finally part IV (chapter ten) comprises a summary of the

articles and the results of the study This chapter also presents conclusions

on how the articles contribute to the research questions

232 The research questions

Although the articles should not be seen as the outcome of a premeditated

research programme together they address the following research

questions

1 What is intrapreneurship and how can it be explored and explained

2 How do different extrinsic and intrinsic factors affect the internal

resource perspective

a Can innovativeness be acquired

b How can various factors influence intrapreneurship

3 How is intrapreneurship and knowledge related And how can the

knowledge resource be addressed within the internal resource

perspective

a How can intrapreneurship be understood in the light of

knowledge management

23

b How can the knowledge resource be managed

233 The articles in the dissertation

Basically the articles take three points of departure which also correspond

to the three main parts of this dissertation This first part presents the

background and includes the first article This article A classification of the

corporate entrepreneurship umbrella labels and perspectives (Chapter 4)

is theoretical and presents and reviews an important body of literature

related to corporate entrepreneurship and also defines intrapreneurship

The next two articles Losing innovativeness the challenge of being

acquired and Enabling intrapreneurship the case of a knowledge-

intensive industrial company (Chapter 6 and 7) in part II are primarily

empirical in nature They address some of the aspects that need to be taken

into account when an organisation exploits intrapreneurship from an

internal resource perspective

The last two articles Understanding intrapreneurship by means of state-of-

the-art knowledge management and organisational learning and

Knowledge management in practice An analysis of project management in

two Danish companies (Chapter 8 and 9) in part III concern the

management of knowledge and how intrapreneurship can be facilitated or

enabled Article 4 is theoretical and links intrapreneurship and knowledge

management while the last article is primarily empirical and presents two

perspectives of the knowledge resource and how to manage them

The five articles that make up the dissertation are shown in table A which

briefly describes the objectives methodology used and conclusions With

regard to the objectives the articles all have in common that they relate to

24

the field of intrapreneurship in that they examine the various managerial

issues that should be taken into account in different situations Article 2 3

and 5 are based on case studies whereas article 1 and 4 take a starting point

in literature reviews

With regard to research question 1 the first article takes a look at corporate

entrepreneurship and sets the scene for the rest of the dissertation The

article explains the difference between corporate entrepreneurship and

intrapreneurship and with it offers a definition of intrapreneurship It also

explains how intrapreneurship gives organisations a greater choice of

organisational perspectives

The second research question is divided into two sub-questions Question

2a is addressed in article 2 which examines what happens to an

entrepreneurial culture when it is incorporated into a mature organisation It

shows that the active use of both extrinsic and intrinsic efforts is needed to

overcome organisational inertia Questing 2b is explored in article 3 which

looks at the impact of managerial initiatives andor intrapreneurial enablers

The results indicate that to encourage intrapreneurship in knowledge-

intensive companies there is a need for intrinsic enablers since the more

extrinsic enabling factors common to industrial companies are seen as only

basic factors

The third research question also consists of two sub-questions the first of

which is addressed in article 4 which takes a starting point in knowledge

management theory and organisational learning theory as well as theories

of intrapreneurship and innovation management This article provides a

framework for understanding the relation between intrapreneurship and

knowledge and the knowledge issues that should be taken into account

25

Finally research question 3b is dealt with in article 5 which examines how

different perspectives affect the way an organisationrsquos knowledge resources

are managed with respect to innovative activities The article shows how

intrapreneurship can be enabled from a knowledge management

perspective by taking a starting point in processes

The focus on the topic of the dissertation narrows from article to article

Thus the first article covers the whole field of corporate intrapreneurship

the articles in part II focus on the internal resource perspective and the last

article focuses only on the knowledge resource

26

Title Objective Method Conclusions

PART I Introduction

Chapter four (article 1)

A classification of the Corporate Entrepreneurship Umbrella Labels and Perspectives

To get an overview of the literature within the area of corporate entrepreneurship and define corporate entrepreneurship and intrapreneurship

Academic research literature review

Corporate Entrepreneurship can be divided into intrapreneurship and exopreneurship which again can be categorised into four perspectives corporate ventures internal resources internationalisation and networks The difference between corporate entrepreneurship and intrapreneurship is a question of the boundaries of the firm

PART II Intrapreneurship the Internal Resource Perspective

Chapter six (article 2)

Losing Innovativeness The Challenge of being Acquired

To study what happens to the employees of an entrepreneurial company when it is taken over by another firm

A case study based on multiple methods interviews observations and a questionnaire

The driving forces (innovation creativity and innovative processes) of a company are likely to disappear when it is incorporated into a mature organisation

Chapter seven (article 3)

Enabling Intrapreneurship The case of a knowledge-intensive industrial company

To study intrapreneurial enablers in a ldquonaturalrdquo setting

An embedded case study based on interviews and observations

The factors enabling intrapreneurship are changing with changing ldquosocietiesrdquo

PART III Managing Internal Knowledge Resources

Chapter eight (article 4)

Understanding Intrapreneurship by Means of State-of-the-art Knowledge Management and Organisational Learning Theory

To enlighten theories of intrapreneurship and innovation by applying state-of-the-art knowledge management theory and organisational learning

Literature review A framework for intrapreneurship and innovation based on knowledge has been developed which defines the task of intrapreneurship as a combination of innovation management and the learning-related concepts of exploitation and exploration

Chapter nine (article 5)

Knowledge Management in Practice An Epistemological Analysis of Project Management in Two Danish Companies

To study how different perspectives influence the management of an organisationrsquos knowledge resources

Two embedded case studies based on interviews and observations

Managerial awareness of different approaches to managing knowledge resources gives a greater degree of freedom and helps foster mutual understanding within an organisation

Table A Summary of the six articles in the dissertation

27

24 REFERENCES

Abrahamson E 1996 Management Fashion Academy of Management Review

21(1)254-285

Biggadike R 1979 The risky business of diversification Harvard Business Review

Vol 57 No 3 pp 103-111

Brockhaus RH amp PS Horwitz 1986 The psychology of the entrepreneur In DL

Sexton amp RW Smilar (eds) The art and science of entrepreneurship Cambridge

MA Ballinger

Burgelman RA 1983 A process model of internal corporate venturing in the

diversified major firm Administrative Science Quarterly Vol 28 No 2 pp 223-

244

Carrier C 1994 Intrapreneurship in large firms and SMEs A comparative study

International Small Business Journal Vol 12 No 3 pp 54-61

Chesbrough HW 2000 Designing Corporate Ventures in the Shadow of Private

Venture Capital California Management Review Vol 42 No 3 pp 31-49

Christensen KS 2004 A classification of the corporate entrepreneurship umbressl

labels and perspectives International Journal of Management and Entreprise

Development Vol 1 No 4 pp 301-315

Collins NC amp DG Moore 1964 The Enterprising Man East Lansing MI

Michigan State University

Drucker PF 1993 Post-capitalist society Oxford Butterworth-Heinemann

Drucker PF 2002 Managing in the Next Society Oxford Butterworth-Heinemann

28

Ellis RJ amp NT Taylor 1987 Specifying entrepreneurship In NC Churchill JAn

Hornaday BA Kirchhoff OJ Krasner amp KH Vesper (Eds) Frontiers of

entrepreneurship research Wellesley MA Babson College pp 527-541

Gartner WB 1988 Who is an entrepreneur Is the wrong question American

Journal of Small Business Vol 12 pp 11-32

Gartner WB 1989 Some suggestions for research on entrepreneurial traits and

characteristics Entrepreneurship Theory amp Practice Vol 14 No 1 pp 27-38

Grant RM 1996 Toward a knowledge-based theory of the firm Strategic

Management Journal Vol 17 pp 109-122

Guth WD amp A Ginsberg 1990 Guest editorsrsquo introduction corporate

entrepreneurship Strategic Management Journal Vol 11 pp 5-15

Hitt MA RD Ireland SM Camp amp DL Sexton 2001 Guest Editorsrsquo

Introduction to the Special Issue Strategic Entrepreneurship Entrepreneurial

Straetgies for Wealth Creation Vol 22 pp 479-491

Hitt MA RD Ireland SM Camp amp DL Sexton 2002 Strategic

Entrepreneurship Integrating Entrepreneurial and Strategic Management

Perspectives In MA Hitt RD Ireland SM Camp amp DL Sexton (eds) Strategic

Entrepreneurship Creating a New Mindset Oxford Blackwell Publishers

Hornsby JS DW Naffziger DF Kuratko amp RV Montagno 1993 An Interactive

Model of the Corporate Entrepreneurship Process Entrepreneurship Theory amp

Practice Vol 17 No 2 pp 29-37

Hornsby JS DF Kuratko amp SA Zahra 2002 Middle managers perception of the

internal environment for corporate entrepreneurship assessing a measurement scale

Vol 17 No 3 pp 253-372

29

Ireland RD JW Webb amp JE Coombs 2005 Theory and methodology in

entrepreneurship research In D Ketchen amp DD Bergh (eds) Research

methodology in strategy and management Vol 2 pp 1-32

Kirzner IM 1985 Discovery and the capitalist process Chicago University of

Chicago Press

Low MB 2001 The adolescence of entrepreneurship research Specification of

purpose Entrepreneurship Theory and Practice Vol 26 No 4 pp 17-25

Lumpkin GT amp GG Dess 1996 Clarifying the entrepreneurial orientation

construct and linking it to performance Academy of Management Review Vol 21

pp 135-172

McClelland DC 1961 The Achieving Society New York Free Press

Morris MH amp DF Kuratko 2002 Corporate Entrepreneurship Orlando Florida

Harcourt College Publishers

Pinchot G 1985 Intrapreneuring Why You Donrsquot Have to Leave the Corporation to

Become an Entrepreneur New York Harper amp Row

Sahlin-Andersson K amp L Engwall (eds) 2002 The Expansion of Management

Knowledge Stanford Stanford University Press

Schollhammer H 1981 The efficacy of internal corporate entrepreneurship

strategies In KH Vesper (ed) Frontiers of Entrepreneurship Research Babson

College Wellesley MA

Schumpeter JA 1934 The theory of economic development Harvard University

Press Cambridge MA

30

Sharma P and Chrisman JJ 1999 Toward a reconciliation of the definitional issues

in the field of corporate entrepreneurship Entrepreneurship Theory amp Practice Vol

22 pp 43-68

Stevenson HH amp JC Jarillo 1990 A paradigm of Entrepreneurship

Entrepreneurial Management Strategic Management Journal Vol 11 pp 17-27

Teece DJ 1998 Capturing value from knowledge assets the new economy markets

for know-how and intangible assets California Management Review Vol 40 pp 55-

79

31

CHAPTER 3

Methodology

Since the research themes were initially broadly defined and the field of

intrapreneurship in its infancy it was considered prudent not to preclude any

interesting issues and empirical phenomena that might appear in the course of the

project etc by using a too narrow definition of the intrapreneurship concept (cf

Sharma amp Chrisman 1999) Furthermore as part of the KNORI project (see chapter

1) it was also given that 5-6 companies would participate in the project and form the

empirical basis for the research

The fact that the companies had to be selected early in the project and participate in

workshops organised within the framework of the KNORI ndashproject was a challenge

from the beginning At such an early stage it was not possible to design a detailed

research strategy and it would have been even harder to specify exactly how

activities in the companies could be the basis for empirical research Moreover it was

difficult to know whether comparative studies of the companies were feasible

In consequence it was decided that a qualitative case-based research approach would

be the most appropriate that different methods of collecting data could be used in

different companies and that the companies participating in the KNORI project could

form the basis for different papers that addressed different aspects of the overall

research issues

32

This chapter describes the way the five case companies were selected and provides

some background information on each of them Furthermore the chapter also

presents the overall considerations in relation to the chosen methodology More

details about the methods used in specific studies reported in the three empirical

articles (paper 2 3 and 5) are to be found in the respective articles

31 FROM PARADIGM TO RESEARCH APPROACH

A qualitative-oriented research project is not so much a question of method as one of

methodology ie the general approach to studying the research topics (Silverman

1993) Traditionally however methodology is intimately related to the positioning of

research within various research paradigms The methodological assumptions thus

become intertwined with both ontology and epistemology and become the primary

vehicle for directing the research and influencing its aim and purpose

When different research approaches are characterised within the social sciences a

distinction is often made between contrasting views like subjectivism versus

objectivism nominalism versus realism romanticism versus neopositivsm

constructivism versus non-constructivism constructivism versus positivism

interpretative versus functionalistic humanist versus structuralist etc (see for

example Burrell amp Morgan 1979 Guba amp Lincoln 1994) Such classifications are

widespread and two-by-two-ways classifications eg Burrell amp Morganrsquos (1979)

framework do have some intuitive appeal However as described by Lauring (2007)

the implications of paradigmatic positioning of research have also been criticised by

researchers (eg Deetz 1996 Alvesson 2003) who argue that the classifications do

not reflect contemporary research traditions adequately and that paradigmatic

positioning puts too much emphasis on incommensurability between research

paradigms (Deetz 1996)

33

As a crude distinction between research approaches we find that on the one hand

qualitative studies are most often inspired by some kind of romanticsm

constructivism or at least non-positivism ndash while on the other hand both

quantitative and qualitative studies are characterised either by functionalism

neopositivism or non-constructivism This is by no means a clear-cut distinction but

because non-positivist-inspired research most often aims at understanding

phenomena in practice it seems appropriate to contrast it with research paradigms

based on a functionalistic ontology inasmuch as functionalism is prescriptive and

non-positivism descriptive (see also Andersen amp Skaates 2004)

From this point of view the approach taken in this PhD project is best characterised

as a qualitative non-positivist study without strictly claiming constructivism or

similar concepts This influences the questions asked during an interview etc

because functionalistic questions are concerned with what is effective whereas for

example constructivist questions focus on how things work This is also reflected in

the purpose of this study where a clear functionalistic approach might have implied a

wish to improve effectiveness whereas the qualitative approach taken is mostly

oriented towards improving the understanding of intrapreneurship

A qualitative study requires close contact with the subject involved rather than

objective distance and any insights gained are limited to the particular companies

and issues studied and persons interviewed This does not as we will return to in

section 36 preclude generalisations however Rather the qualitative approach

involves an ongoing reflection on data and a positioning against different theories

such that the data can contribute to and further refine the research questions

34

32 UNIT OF ANALYSIS

In most research areas including intrapreneurship variables and concepts with the

same names are studied at different levels of analysis (Ireland et al 2005) and in

general it is not clear a priori whether the meaning of the variables etc at different

levels are identical As an example Klein et al (1994 p 206) mention Lawless amp

Pricersquos (1992) study of the roles that technology champions and users play during

innovation adoption While the term champion is clearly defined (Lawless amp Price

1992 p 342) the term user is not Are users independent individuals or homogenous

members of technology-adopting organisations and should the model consequently

be tested within a single organisation or across organisations

Ideally for valid and theory-consistent evidence to be provided the following must

be aligned The level of theory ie what is to be explained the level of measurement

ie what is the source of evidence and the unit of analysis ie what is treated as

observations (Klein et al 1994 Kozlowski amp Klein 2000) The empirically-oriented

literature on intrapreneurship entrepreneurship innovation and related areas differ on

what constitutes the level of the analysis (cf Ireland et al 2005 p 560) At the one

extreme is the innovativeness of a country or region often compared with other

countries or regions Even though a questionnaire approach and analysis of register

data is most often used in this connection a whole country could be considered a case

to be analysed

At the other extreme there is the most detailed level of analysis the individual level

where the focus is often on the individualrsquos characteristics (see for example

Brockhaus 1980 Davis 1999 Hisrich 1990) The second most detailed level is the

group level which mainly centres on the collective of individuals and competencies

and on how the different perspectives talents and ideas of different members of the

35

group or project influence for example knowledge-sharing (Cummings 2004) and

group-based rewards (Zenger amp Marshall 2000)

The third level is the organisational level (see for example Zahra et al 1999)

which focuses on how an organisation can create a context where individuals and

groups can be innovative (see for example Covin amp Slevin 1988 Nonaka amp

Takeushi 1995) and creative (Amabile et al 1996) Not surprisingly this level is

also the focal point for much organisational research eg how innovation is sustained

over time (Dougherty amp Hardy 1996) how the availability of resources promote

innovation (Nohria amp Gulati 1996) how corporate strategy influences innovation

(Hitt et al 1996) and how inter-unit co-operation regarding knowledge transfer and

learning contributes to their ability to innovate (see for example Kogut amp Zander

1992 Tsai 2001)

At the fourth level intrapreneurship or corporate entrepreneurship can also be seen as

a matter of inter-organisational co-operation or alliance (see for example Antoncic

2001 Foray 1991) One reason companies often collaborate is because they have

complementary competencies The inter-organisational level thus typically focuses on

the interplay between companies (see for example Smith et al 1995) in the same

way as the group level focuses on the interplay between individuals in a group which

means that the inter-organisational unit can be seen as ldquogrouprdquo However according

to Foray (1991) the difference between intra-company and inter-company co-

operation is that the former depends on the learning and flexibility capacities of

human resources while the latter depends on the capacity of human resources to

become specific Antoncic (2001) finds that communication trust and management

support are important characteristics in both intra- and inter-organisational co-

operation

36

The fifth level of analysis the regional or national level is appropriate for analysing

innovation systems (cf Lundvall 1992) or more broadly a countryrsquos innovative

capability as already attempted in McClelland (1961) where the practical

applications of the research could for example be related to regional policy (see for

example Lundvall 1992 Storper 1997) national policy (see for example Busenitz

et al 2005 Lundvall 1992 Nyholm amp Langkilde 2003) or national culture (see

for example Busenitz et al 2005 Steensma et al 2000)

This dissertation focuses on how organisations can be intrapreneurial and takes a

starting point in the third level of analysis the organisational level as described

above However since the case companies differ substantially in size some variation

in the interpretation of lsquoorganisationrsquo was allowed In this sense it might therefore

be more appropriate to talk about the level of analysis as being the organisational

object anchored in the individual organisation where new knowledge of importance

for the renewal of the organisation is created Irrespective of the level of analysis in a

qualitative study data is collected from individuals When theories are formulated at a

higher level eg the organisational level as in this dissertation it means that actions

must be taken to ensure that the level of measurement and the unit of analysis are

aligned with theory This implies that the interviews should aim at capturing

organisational rather than uniquely individual characteristics One way of ensuring

this is to select lsquorepresentativersquo employees for interviewing and another is to evaluate

responses from individuals relative to others In practice in the articles in this

dissertation (eg paper 3 and 5) we have often chosen to let respondentsrsquo views

represent their respective departments or company rather than themselves as

individuals

37

33 SELECTION OF THE CASE COMPANIES

The articles in the dissertation are based on five different case companies selected for

participation in the KNORI project Although the research project cannot for various

reasons be regarded as a comparative case study of the five companies they were

selected on the basis of methodological considerations similar to a comparative case

study approach

One approach to selecting cases for a comparative case study is Yin (2003) where he

emphasises that there are two ways to select cases for multiple-case studies The

cases should either ldquo(a) predict similar results (a literal replication) or (b) produce

contrasting results (a theoretical replication)rdquo (Yin 2003 p 47) However the aim

of the KNORI project was not to test a predetermined hypothesis or take a starting

point in specific propositions as is implicit in Yinrsquos approach Rather the project was

more oriented towards understanding the concept of intrapreneurship and identifying

challenges and possibilities for knowledge-intensive organisations

Consequently the cases were selected according to Gummessonrsquos (1991) theoretical

sampling ie based on the different ways they represent lsquorealityrsquo The approach taken

was based on the recognition that organisational renewal and innovation could have

different origins according to different understandings of the main production

processes in a company

As a rule a traditional production company is functionally organised where

production salesmarketing and research amp development take place in separate

organisational units (cf Sundbo 2001 p 104) and maybe even in separate physical

locations (as is the case with BampO see appendix 1) Although innovative activities

can potentially be initiated in any department the RampD department is traditionally

the driving force behind product innovations

38

At the other organisational extreme are companies that have no other product than

research and sometimes not even a separate customer-oriented department Here

research can be said to be in the form of production processes which are in

principle integrated with innovative activities These two ways of organising

innovative activities are shown on the right- and left-hand side of figure 31

respectively The arrows connecting the various processes that lead to innovation

production or development with the organisational focal point production process or

RampD department indicate that even if the unit of analysis is the single organisation

the expected locus for innovation is different

Figure 31 Production structure and organisation of innovative activities

The middle part of figure 31 shows project-oriented organisations where solutions or

products are developed either for customers or carried out together with them eg in

their own organisation Even though such companies can have both a separate RampD

department and a separate sales force production takes place in development

projects which are often customer-specific and also the source of innovations

Productionprocesses

Developmentproject

Developmentprocesses

Renewal occursin the production

processes

Renewal occurs in the development

projects

Renewal occursin the RD processes

Innovation profitability growth change of industry rules new business unit spin-offs etc

Organisational renewal

39

This typology is of course a very crude generalisation of how innovative activities

are formally organised In reality companies might have characteristics of all three

organisational forms and innovative activities are in no way restricted to specific

departments Furthermore figure 31 illustrates only the formal way of organising

innovation whereas innovations can ldquopop uprdquo in any part of the organisation and

sometimes even be systematic activities that take place despite an organisational

structure that otherwise inhibits them

It should also be noted that the framework in figure 31 is oriented towards

technological innovations whereas non-technical (social) innovations are most often

developed in departments other than RampD In addition with respect to service

companies the role of the lsquoInnovation Departmentrsquo may as observed by Sundbo

(1998 cf Sundbo 2001 p 105) be more of a boundary-spanning unit where new

ideas are collected and promoted among employees and managers

For this dissertation it was decided to approach potential case companies that as far

as possible represented the different organisational forms shown in figure 31 Some

flexibility was allowed in categorising the companies since as discussed above each

company had multiple ways of organising innovation Furthermore given the

explorative nature of the project the research possibilities in each company were

expected to be quite different therefore insights gained through the research process

would probably be more decisive for the specific focus than how the case companies

were originally selected

The original plan was to select the cases from among information and

telecommunications (ICT) companies in northern Jutland since the KNORI project

was based on precisely these types of companies However it became clear from very

early in the selection process that many of these companies were competitors and

that it could therefore be difficult to organise knowledge-sharing seminars if the

40

project only included these companies It was therefore decided to include other

technology-based companies as well as companies in other parts of Jutland

34 THE CASE COMPANIES

The initial contact was with two companies from the north Jutland ICT sector

End2End and Bang amp Olufsen since they were competing in quite different areas

Subsequently Ericsson Telebit Aarhus was also invited to participate in the project

as was FKI Logistics Crisplant also from Aarhus although Crisplant is not an ICT

company in a strict sense Finally on the suggestion of Bang amp Olufsen we

contacted Danfoss Drives in Graasten

In all therefore five companies have participated in the project and were interviewed

according to the same interview guide However Crisplant suffered a cut-back in

business activities shortly after the project started and lacked the resources to

participate fully in the project A sixth company took part in the project up to and

including the introductory meeting but due to a change of strategy in the parent

company it ended operations shortly after the project start

Contact with the companies during the project has varied according to how they

formed the empirical basis for the articles The specific methodological approach

chosen and a brief presentation of the individual companies is given in the articles

Appendix A includes a more detailed presentation of the five case companies

35 THE CASE STUDY APPROACH

The dissertation adopts a qualitative interpretative approach where the main part of

the empirical material for the study consists of research interviews observations from

visits to the companies written material collected from the companies and

41

observations at the meetings for the KNORI project However the most important

data source is the semi-structured research interview

The main strength of the case study approach is the ability to deal with a variety of

evidence documents questionnaires interviews and observations in a flexible

manner In particular this approach is suitable when exploring an emerging field

(Zahra 2007) or when unfamiliar practices are examined in specific companies As

stated by Laurila (1997 p 222-223) the feasibility of case studies is based on the

opportunities they create for observing and describing a complicated research

phenomenon in a way that allows for analytical generalisations (Dyer amp Wikins

1991 Eisenhardt 1989 Tsoukas 1989) of the observations

351 Definition of a case study

Yin (2003 p 13) defines a case study as ldquoan empirical inquiry that investigates a

contemporary phenomenon within a real-life context especially when the boundaries

between phenomenon and context are not clearly evidentrdquo In addition case studies

are usually based on a qualitative methodological point of origin which according

to Denzin and Lincoln (1994 p 4) includes methods that ldquoimply an emphasis on

processes and meanings that are not rigorously examined or measured (if measured at

all) in terms of quality amount intensity or frequencyrdquo

Although the case companies were difficult to compare in a strict sense the basis for

selecting them was that as far as possible they should face lsquosimilarrsquo challenges in

relation to intrapreneurship and as regards participation in KNORI they were also

potentially subject to a similar lsquointerventionrsquo Therefore the project can be said to be

partly based on an ldquoEmbedded Multiple Case Study Designrdquo (cf Yin 2003) the

results of which are potentially more compelling than the results from a single case

study

42

single-case designs multiple-case designs

holistic

(single-unit of analysis)

embedded

(multiple-unit of analysis)

CONTEXT

Case

CONTEXT

CaseEmbedded

Unit of analysis 1

EmbeddedUnit of analysis 2

CONTEXT

Case

CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case

CONTEXT

Case

CONTEXT

Case

Christensen (2005) Chapter 7


Christensen Bukh amp Bang (2007) Chapter 9

Figure 32 Basic types of case study designs (Yin 2003 p 40) including an outline

of the empirical articles in this dissertation

As shown in figure 32 case studies can involve either a single case (eg Christensen

2005 chapter 7 Christensen 2006 chapter 6) or multiple cases (eg Christensen et

al 2007 chapter 9) and they can be either holistic (eg Christensen 2006) or

embedded (eg Christensen 2005 Christensen et al 2007) ie where one or more

unit(s) of analysis is involved (Yin 2003)

352 Action research or research in action

It should be noted that both the study of the companies in the articles and the

summarising conclusions of these articles (see chapter 10) are likely to be influenced

by interaction with the companies during the KNORI project In general research

cannot be carried out independently of the researchersrsquo underlying assumptions about

the nature of knowledge and how it can be acquired (see for example Andersen and

43

Skaates 2004 Guba and Lincoln 1994) What is of more concern here however are

the factors influencing the research process and specifically the interviews carried

out during the KNORI project

One possibility after the companies were approached in Summer 2002 and the first

KNORI meeting in March 2003 was that they might initiate new intrapreneurship-

related projects and that as a result of interaction with the researcher and with each

other at the KNORI meetings their understanding of the intrapreneurship concepts

would be heavily influenced by this process

Thus both the project set-up and the nature of possible research questions suggested

an interventionist approach (cf Joumlnsson amp Lukka 2007) which makes active use of

participant observations Although there are numerous variations interventionist

research covers such methodologies as action research (Lewin 1948) action science

which promotes learning in the client organisation (Argyris et al 1985) and so-

called constructive research approaches (Kasanen et al 1993) The methodology

most often used by researchers is action research which according to Eden and

Huxham (1996 p 526) can be understood as research embodying ldquoresults from an

involvement by the researcher with members of an organisation over a matter which

is of real concern to them (and) in which there is intent by the organisation to take

action based on the interventionrdquo

However considering the limited interaction between the companies at the meetings

and the diverse analytic approaches chosen it was judged that the articles in the

dissertation can be considered as separate studies of related concepts rather than a

tightly integrated research project Furthermore the research carried out in the

companies and reported in the articles is only very slightly influenced by the project

set-up at least not in a manner where the project can be considered as action

research

44

36 VALIDITY OF THE METHODOLOGY

A study which focuses on a few and very different companies in specific business

contexts will always be limited as regards to statistical generalisations hypothesis-

testing etc As could be seen from the brief discussion in section 31 statistical

testing of theoretically-derived hypotheses is not an aim of research projects based on

the qualitative non-positivist approach However this does not diminish the need for

addressing quality criteria of the research

One of the major challenges of case studies based on research interviews is how to

assure some kind of lsquoverificationrsquo of the conclusions Traditionally this is a matter of

validity and reliability where the latter has entered social science research through

the use of research tools such as questionnaires (primarily used in (neo)positivistic

studies) and interview guides (used more broadly in qualitative studies)

In qualitative studies the reliability or consistency of the results interviews

transcription and analyses is ensured by taking special care to minimize errors and

biases eg by not asking leading questions By comparison according to Kvale

(1996 p 238) validity has to do with the conformity of the phenomenon studied and

the way it is studied As Ahrens amp Chapman (2007) point out the question of

reliability takes on a different significance in qualitative studies that are only partly

based on research instruments as is the case in this dissertation which initially used a

loosely structured thematic interview guide and where a questionnaire was used in

one of the companies (see article 2 chapter 6)

Social reality is fundamentally contextndashspecific and interviewees ldquocan and do strive

to undo their history and invent new concepts images and ways in which they want

them to infuse actionrdquo (Ahrens amp Chapman 2007 p 311) On the one hand

therefore there is no hard data eg questionnaire data that can be verified by means

of statistical tests and on the other we have a number of contextual factors

45

including the dialogue with the researcher the interview design and the researcherrsquos

interests which cannot be separated from the data As Ahrens amp Chapman (2007)

also stress this means that we ldquoshould not expect identical results when two

researchers study the same organisation from different points of viewrdquo (Becker 1970

p 20) but we should expect that ldquothe conclusions of one study do not implicitly or

explicitly contradict those of the otherrdquo (ibid) Thus the methodological

considerations in this dissertation will primarily emphasise validity while at the same

time paying due respect to the implications for generalisation and reliability

Returning to the question of generalisations the research interviews carried out in the

companies were inspired by Kvale (1997) who argues that besides reliability and

validity the verification of a case study relates to generalisation This can be obtained

in different ways Analytical generalisation ie taking a specific case out of context

by relating observations to existing theory and through analytic abstraction which

obtains new theoretical insights via an inductive method (Yin 2003 Kvale 1997)

Here the theoretical framework presented in article 1 (Chapter 4) becomes to some

extent the vehicle for analytic generalisation although generalisation per se is not a

major aim of the project The empirical part of the dissertation consists of articles

and as mentioned above the data are not analysed in such a way that consistent

conclusions can be drawn by comparing case studies across all the companies

participating in the KNORI project

361 The use of Multiple Sources of Evidence

One way of ensuring validity is to approach the research questions by means of

different methods using redundancy to lsquotriangulatersquo the data (see for example

Denzin 1989 Yin 20034) Since qualitative studies have often been criticised for

being unreliable one way of improving the rigour of qualitative research is to use

46

multiple sources of evidence so that the results converge to support one explanation

(see for example Andersen amp Skaates 2004 Yin 2003)

Although in a stricter sense triangulation (Denzin 1989 Jick 1979) implies that

different methods are used in combination to study the same phenomenon it is

common to use the term more broadly (see for example Andersen amp Skaates 2004

Patton 1987 Yin 2003) and consider different types of triangulation Data

triangulation investigator triangulation theory triangulation and methodological

triangulation However the use of this broader interpretation of triangulation has

more to do with finding additional evidence to support or question the relations

between the initial data and the argument than of capturing a more objective reality

Here the broad interpretation of triangulation is used the project being based partly

on data triangulation and partly on methodological triangulation including semi-

structured open-ended interviews review of organisational documents and

observation during visits to the companies and at the KNORI meetings On the other

hand intrapreneurship will be addressed from different theoretical angles and the

management of knowledge from different perspectives It should be noted however

that no attempt is made to formally analyse the various sources of information in

order to examine whether they lead to similar conclusions etc

37 THE RESEARCH INTERVIEWS

The primary source of data in the case studies is the research interview which

according to Kvale (1996) is a form of professional conversation for the purpose of

obtaining ldquodescriptions of the life world of the interviewee with respect to

interpreting the meaning of the described phenomenardquo (Kvale 1996 p 5-6) The key

phenomena of interest in this project are intrapreneurship innovativeness strategy

knowledge and the management of knowledge-based processes and an analysis of

47

their potential in specific companies implies an examination of the phenomena in

ldquothe real worldrdquo

The initial aim of the project was to describe analyse and interpret the central themes

or phenomena how they are experienced by the respondents and together with the

interviewee to develop an understanding of them As far as possible the aim of the

questions asked was to validate or invalidate the respondentrsquos statements and the

ambiguities that arose during the interview

In all five companies the interviews were based on more or less the same structure

ie a semi-structured interview guide (see figure 33) Several employees in each

company were interviewed with a focus on four main themes Background

information organisation of innovativeness and intrapreneurial activities innovation

and innovativeness and enablersbarriers The interviews were held in a

conversational style and the respondents were asked to tell the story of the company

how they perceive innovation why the company needs to be innovative where in the

organisation innovations are created how they are organised and which enablers

encourage and support them to be innovative and how The interviews which lasted

an average of one-and-a-half hours were taped and transcribed Field notes were

written at the end of each day

The interviewees were chosen from different positions in the case companies and

where possible from similar functional areas and areas of responsibility In order to

get a broader perspective on the same themes the formal interviews were supported

or validated by more informal conversations with other employees and through

observations In practice the interviews focussed on the areas which the respondents

felt most familiar with and where possible the focus was on intrapreneurial activities

48

Figure 33 Common interview guide for the basic data collection

A total of 19 persons (6 engineers 6 functional managers 5 project managers and 2

from HR departments) were interviewed based on the interview guide shown in

figure 33 As far as possible the interviews involved employees in different

positions within the individual company but in the same positions across the

A Background information

bull Name background education how long with the company role in the company

bull Important events during the history of the company ndash eg acquisitions spin-offs central employeescustomers and change strategy

bull The company as a place to work

B Organization of innovativeness and intrapreneurial activities

bull Is the company innovative What does this mean examples

bull What is central in relation to innovation what drives innovation

bull Organisation of the innovative activities

C Innovation and innovativeness

bull How do you perceive innovation ndash eg product process strategy or administrative

bull Events in relation to innovation ndash eg employees ldquoheroesrdquo etc

bull Why is it necessary to be innovative ndash eg market techonology knowledge-creation and history

bull The possibility to plan innovation ndash whywhy not

bull Special characteristics of working with innovation

bull Where in the company are innovations created the type of innovation

bull Innovation in collaboration with customers

D Enablers of and barriers to innovation

bull The culture ndash eg describe your daily work How is your job different from others

bull Do you use specific models How is your job different from others

bull Rewards ndash eg financial recognition and ldquofreedomrdquo

bull Does management support your ideas Can you work on them Do others support your ideas

bull Resources ndash eg time financial materials etc

bull The organizational structure

bull When do you announce your ideas Do you normally work on them in advance Are there rules for when an idea can become a project in the departmentat the company level Who decides whether something is a good idea or not What happens when a project turns out to be a failure

bull Communication ndash eg how does communication work Do you have problems with communicationmisunderstandings because of language Company-specific language Improvements

bull Other things

49

companies Three interviews per company were planned prior to each of the visits

but at some companies more interviews were arranged during the visit

In relation to article 5 (Christensen et al 2007) additional interviews were carried

out according to a semi-structured interview guide focussing on the management of

knowledge-based resources In total 10 interviews five in each company were

conducted with employees holding different positions but similar responsibilities

across the companies

371 The transcription process

All formal interviews were taped and transcribed Initially it was planned to analyse

the data systematically using a content analysis approach implying that the

transcription would be separated into different parts (clauses) which would be

classified into content categories (see for example Gerbner et al 1969 and Weber

1985) Even though content analysis is often presented as a technique for the analysis

of archival data in the form of documents (see for example Miles and Huberman

1994 p 54-55) according to Weber (1985) the method can also be used more

broadly to analyse any written text including transcriptions Since this method

provides a firm ground for assessing reliability and validity in a traditional sense it

was thought that this method could be used to increase reliability

There are different techniques for text analysis ranging from simple hand-coding to

advanced computer programs However as Weber (1985 p 69) emphasizes ldquothere is

no single ldquoright wayrdquo to do content analysisrdquo The coding in this project was based on

the classification of the intrapreneurship literature presented in article 1 and on a

study of the factors enabling intrapreneurship (see article 3) a coding structure was

subsequently developed and systematically applied in most of the interviews

50

Classical content analysis assumes that relevant theories have been specified the

themes or research questions to be investigated are substantive and that the main

coding categories have been theoretically justified ( see for example Stone et al

1966 Weber 1985) in a way that has already determined or described codes as a

starting point (cf Ryan amp Bernard 2000 p 785) Early in the research process it

was realised that on the one hand this was difficult to reconcile with the general

methodological approach in the dissertation and on the other that it was difficult to

control how the categorisation was determined beforehand and how it would affect

the reliability and validity of the data when they are reduced and classified into fewer

categories (cf Weber 1985) It was therefore decided not to use content analysis to

interpret the interview data Nonetheless familiarity with the data together with the

linking of specific interview data and for example the various enablers and barriers

to innovativeness still proved useful when the articles were written

38 REFERENCES

Ahrens T amp C S Chapman 2007 Doing qualitative Field Research in Management

Accounting Positioning data to contribute to theory In C S Chapman A G

Hopwood amp M D Shields (eds) Handbook of Management Accounting Research

Amsterdam Elsevier

Alvesson M 2003 Beyond neopositivists romantics and localists A reflexive

approach to interviews in organisational research Academy of Management Review

Vol 28 No1 pp 13-33

Amabile T M R Conti H Coon J Lazenby amp M Herron 1996 Assessing the

work environment for creativity Academy of Management Journal Vol 39 No 5

pp 1154-1184

51

Argyris C R Putnam amp S D McLain 1985 Action Science San Francisco

Jossey-Bass

Andersen P H amp M A Skaates 2004 Ensuring validity in qualitative international

business research In Welch C amp R Marschan-Piekkari (eds) Handbook of

Qualitative Research Methods for International Business Edward Elgar Publishers

Antoncic B 2001 Organizational processes in intrapreneurship a conceptual

integration Journal of Enterprise Culture Vol 9 No 2 pp 221-235

Becker H S 1970 Sociological Work Methods and Substance Chicago Aldine

Brockhaus R H 1980 Risk-Taking Propensity of Entrepreneurs Academy of

Management Journal Vol 23 No 3 pp 509-520

Burrell G amp G Morgan 1979 Sociological Paradigms and Organizational

Analysis Aldershot England Ashgate Publishing

Busenitz L W C Goacutemes amp J W Spencer 2000 Country institutional profiles

Unlocking entrepreneurial phenomena Academy of Management Journal Vol 43

No 5 pp 994-1003

Covin J G amp D Slevin 1988 The influence of organization structure on the utility

of an entrepreneurial top management style Journal of Management Studies Vol 25

No 3 pp 217-234

Cummings J N (2004) Work groups structural diversity and knowledge sharing in

a global organization Management Science Vol 50 No 3 pp 352-364

Davis K S 1999 Decision criteria in the evaluation of potential intrapreneurs

Journal of Engineering and Technology Managment Vol 16 pp 295-327

52

Deetz S 1996 Describing differences in approaches to organization science Re-

thinking Burell and Morgan and their legacy Organization Science Vol 7 No 2

pp 191-207

Denzin N K 1989 Strategies of Multiple Triangulation In N K Denzin The

Research Act (3rd edition) Englewood Cliff NJ Prentice Hall pp 235-247

Denzin NK amp YS Lincoln 1994 Handbook of qualitative research Thousand

Oaks CA Sage

Dougherty D amp C Hardy 1996 Sustained product innovation in large mature

organizations Overcoming innovation-to-organization problems Academy of


Dyer WG amp Wilkins AL 1991 Better stories not better constructs to generate a

better theory a rejoinder to Eisenhardt Academy of Management Review Vol 16

No 3 pp 613-619

Eden C amp C Huxham 1996 Action research for the study of organizations In

Handbook of Organization Studies Stewart R C Hardy amp W North (eds) London

Sage

Eisenhardt KM 1989 Building Theories from Case Study Research Academy of

Management Review Vol 14 No 4 pp 532-550

Foray D 1991 The secrets of industry are in the air Industrial cooperation and the

organizational dynamics of the innovative firm Research Policy Vol 20 No 5 pp

393-405

Gerbner G O R Holsti K Krippendorff W J Paisley P J Stone (eds) 1969

The Analysis of Communication Content New York John Willey amp Sons

53

Guba E G amp Y S Lincoln 1994 Competing paradigms in qualitative research In

N K Denzin og Y S Lincoln Handbook of qualitative research Thousand Oaks

CA Sage 105-117

Gummesson E 1991 Qualitative Methods in Management Research Newbury Park

California Sage

Hisrich RD 1990 EntrepreneurshipIntrapreneurship American Psychologist Vol

45 No 2 pp 209-222

Hitt M A R E Hoskisson R A Johnson amp D D Moesel 1996 The market for

corporate control and firm innovation Academy of Management Journal Vol 39

No 5 pp 1084-1119

Ireland R D C R Reutzel amp J W Webb 2005 Entrepreneurship research in AMJ

What has been published and what might the future hold Academy of Management

Journal Vol 48 No 4 pp 556-564

Jick T D 1979 Mixing Qualitative and Quantitative Methods Triangulation in

Action Administrative Science Quarterly Vol 24 No 4 pp 602-611

Joumlnsson S amp K Lukka 2007 There and Back Again Doing Interventionist

Research in Management Accounting In Handbook of Management Accounting

Research CS Chapman AG Hopwood amp MD Shields (eds) Amsterdam

Elsevier

Kasanen E K Lukka amp A Siitonen 1993 The constructive approach in

management accounting research Journal of Management Accounting Research

Vol 9 pp 241-264

Klein K J F Dansereau amp R J Hall 1994 Levels issues in theory development

data collection and analysis Academy of Management Review Vol 19 pp 195-229

54

Kogut B amp U Zander 1992 Knowledge of the firm combinative capacity and the

replication of technology Organization Science Vol 3 pp 383-397

Kozlowski S amp K Klein 2000 A level approach to theory and research in

organizations Contextual temporal and emergent processes In Multilevel Theory

Research and Methods in Organizations Foundations extensions and new

directions K J Klein (ed) San Francisco Jossey-Bass

Kvale S 1997 InterView En introduction til det kvalitative forskningsinterview

Koslashbenhavn Hans Reitzels Forlag

Laurila J 1997 The thin line between advanced and conventional new technology

A case study on paper industry management Journal of Management Studies Vol

34 No 2 pp 221-239

Lauring J 2005 Naringr organisationer bliver mangfoldige Om vidensdeling og

interaktion i etnisk mangfoldinge organsationer phd-afhandling Institut for Ledelse

Handelshoslashjskolen i Aringrhus

Lawless M W amp L L Price 1992 An agency perspective on new technology

champions Organizational Science Vol 3 pp 342-355

Lewin K 1946 Action research and minority problems In Resolving Social

Conflicts Selected papers on Group Dynamics by Kurt Lewin G W Lewin (ed)

New York Harper amp Brothers

Lundvall B Aring (ed) 1992 National Systems of Innovation London Pinter

McClelland D C 1961 The Achieving Society New York The Free Press

Miles M B amp A M Huberman 1994 An Expanded Sourcebook Qualitative Data

Analysis Second Edition Thousand Oaks CA SAGE Publications

55

Nohria N amp R Gulati 1996 Is slack good or bad for innovation Academy of


Nonaka I amp H Takeuchi 1995 The Knowledge-Creating Company Oxford

University Press


innovationspolitik ndash hvad kan Danmark laeligre Oslashkonomi- og Erhvervsministeriets

enhed for erhvervsoslashkonomisk forskning og analyse FORA Koslashbenhavn

Patton M Q 1987 How to use qualitative methods in evaluation Newbury Park

CA SAGE Publications

Ryan GW amp H R Bernard 2000 Data Management and Analysis Methods In

Handbook of Qualitative Research (second edition) NK Denzin amp Y S Lincoln

(eds) Thousand Oaks Sage Publications pp 769-802

Sharma P amp J J Chrisman 1999 Toward a reconciliation of the definitional issues

in the field of corporate entreprenruship Entrepreneurship Theory and Practice Vol

22 pp 43-68

Silverman D 1993 Interpreting qualitative data London Sage

Smith K G S J Carroll amp S J Ashford 1995 Intra- and interorganizational

cooperation Toward a research agenda Academy of Management Journal Vol 38

No 1 pp 7-23

Steensma H K L Marino K M Weaver amp P H Dickson 2000 The influence of

national culture on the formation of technology alliances by entrepreneurial firms

Academy of Management Journal Vol 43 No 5 pp 951-973

56

Stone R J D C Dunphy M S Smith amp D M Ogilvie (eds) 1966 The General

Inquirer A computer approach to content analysis Cambridge MIT Press

Storper M 1997 The regional world New York Guilford Press

Sundbo J 1998 The Organisation of Innovation in Services Copenhagen Roskilde

University Press

Sundbo J 2001The strategic management of innovation A sociological and

economic analysis Cheltenham Edvar Elgar

Tsai W 2001 Knowledge transfer in intraorganizational networks effects of

network position and absorptive capacity on business unit innovation and

performance Academy of Management Journal Vol 44 No 5 pp 996-1004

Tsoukas H 1989 The validity of idiographic research explanations Academy of


Weber PR 1985 Basic Content Analysis Beverly Hills CA SAGE Publications

Yin R K 2003 (3rd edition) Case Study Research Design and Methods London

SAGE Publications

Zahra S A 2007 Contextualizing theory building in entrepreneurship research

Journal of Business Venturing Vol 22 pp 443-452

Zahra S A D F Jennings amp D F Kuratko 1999 The Antecedents and

Consequenses of Firm-Level Entrepreneurship The State of the Field

Entrepreneurship Theory amp Practice Vol 24 No 2 pp 45-65

Zenger T R amp C R Marshall 2000 Determinants of incentive intensity in group-

based rewards Academy of Management Journal Vol 43 No 2 pp 149-163

57

CHAPTER 4

A Classification of the Corporate Entrepreneurship Umbrella Labels and

Perspectives

Originally published in

Christensen Karina Skovvang 2004 A Classification of the Corporate

Entrepreneurship Umbrella Labels and Perspectives International Journal of

Management and Enterprise Development Vol 1 No 4 pp 301-315

The article was later improved and published in a Danish Journal

Christensen Karina Skovvang 2005 Corporate Entreprenoslashrskab Begreber og

Perspektiver Ledelse amp Erhvervsoslashkonomi Vol 61 No 1 13-26

Int J Management Enterprise Development Vol 1 No 4 2004 301

Copyright copy 2004 Inderscience Enterprises Ltd

A classification of the corporate entrepreneurship umbrella labels and perspectives

Karina Skovvang Christensen Department of Organisation and Management The Aarhus School of Business Haslegaardsvej 10 Aarhus V Denmark E-mail KaSCasbdk Corresponding author

Abstract The concept of corporate entrepreneurship has been confusingly used by researchers to explain various organisational phenomena such as ways of managing strategy and innovation The abundant use of labels and perspectives interchangeably has consequently led to lack of clarity This article reviews the literature in order to provide an overview and categorisation of corporate entrepreneurship The aim is to clarify the concept by identifying the key perspectives Since there is no unifying theoretical base for the entrepreneurship phenomena ndash due to for example its interdisciplinary grounding in economics sociology and psychology ndash a framework for corporate entrepreneurship is developed consisting of intrapreneurship and exopreneurship These are further broken down into four complementary perspectives corporate venturing internal resources internationalisation and external networks It is hoped that these four perspectives together will give the reader a clearer understanding of corporate entrepreneurship and thereby improve the basis for managerial decisions

Keywords corporate entrepreneurship strategic entrepreneurship intrapreneurship exopreneurship corporate venturing internal resources internationalisation networks framework

Reference to this paper should be made as follows Christensen KS (2004) lsquoA classification of the corporate entrepreneurship umbrella labels and perspectivesrsquo Int J Management Enterprise Development Vol 1 No 4 pp301ndash315

Biographical note Karina Skovvang Christensen is a PhD student MSc (Econ) at the Department of Organisation and Management Aarhus School of Business Denmark Her primary research area is intrapreneurship in knowledge-intensive companies with a focus on how knowledge resources can enable organisational and strategic renewal She is co-author of the book Knowledge Management ndash Establishing a Practice Field (in Danish) and has published articles on knowledge management and related subjects

1 Introduction

Technological and market changes seem to occur faster than we expect and Peter Druckerrsquos old saying that the only constant thing in business is change seems truer than

302 KS Christensen

ever Fast-changing business environments changing business structures and rules of competition are becoming part of the ordinary life of most companies as these are prerequisites for staying in business

Over the past two decades companies in the 1980s and to some extent the 1990s have been characterised by reductions in the workforce downsizing rightsizing budget cuts and the low morale of their workforce [1] While the main focus has been on short-term costs of operations no company can afford to rely on such an approach forever The real challenge for a company to remain a going concern is to establish a competitive advantage The only way to accomplish that is through differentiation and continuous innovation ndash whether it is related to the creation of new products and services production organisational processes or business models According to for example Morris and Kuratko [1] the answer to todayrsquos hyper-competitive environments is adaptability flexibility speed aggressiveness and innovativeness which they boil down to one word ndash entrepreneurship

Companies have been faced by increasing demands for both faster product development and more features in smaller products and higher and uniform quality stability and lower prices despite the inherent incompatibility of such demands The former relates to an entrepreneurial and flexible company while the latter require a well-structured and effective organisation However many large companies seem to find it very difficult to integrate the entrepreneurial spirit in a well-structured or bureaucratic organisation and must therefore think non-traditionally to cope with these increasing paradoxes Some companies tend to stick to the lsquoold waysrsquo of doing business ie preserving the well-known techniques business concepts and ways of cooperation while others reorganise re-create themselves merge and split up become virtual enter new markets and create unforeseen alliances Thus some firms apparently ignore changing market conditions while others act on challenges to the well-established business routines and rules of competition

Researchers and proactive companies have recently become particularly interested in topics such as entrepreneurial management corporate entrepreneurship strategic entrepreneurship and intrapreneurship This may in part be due to the lsquore-labellingrsquo [2] of existing concepts but it has also paved the way for the emergence of new practices and theories However Guth and Ginsberg [3 p 6] argue that lsquodespite the growing interest in corporate entrepreneurship there appears to be nothing near a consensus on what it isrsquo Consequently there are theoretical inconsistencies on how the concepts should be understood What all the proposed concepts seem to have in common however is that entrepreneurial activities can renew established organisations and that this can typically be achieved through innovation and venturing activities [3] that give the firm access to different skills capabilities and resources [4] The lack of consensus may be a symbol of the different labels or it may merely illustrate the opposite ie lsquolabelsrsquo do not solve the issue

This article proposes a categorisation of the concept of corporate entrepreneurship spanning both an internal perspective (intrapreneurship) and an external perspective (exopreneurship) The special case of spin-offs or new business creation (entrepreneurship) is seen as either a potential outcome of corporate entrepreneurship activities ndash not a perspective per se ndash or outside the scope of corporate entrepreneurship Section 2 discusses the theoretical roots of entrepreneurship in order to gain an understanding of the sources that have influenced entrepreneurship and thereby corporate

A classification of the corporate entrepreneurship umbrella 303

entrepreneurship The next section looks at the different labels for and perspectives on corporate entrepreneurship the aim of which is to clarify the topic and put it into perspective This is followed by a proposed framework consisting of four different approaches to strategic corporate entrepreneurship corporate venturing internal resources internationalisation and networks The article concludes with recommendations for using this framework in future research and practice

2 Theoretical roots entrepreneurship

The aim of this section is to help clarify the different approaches to entrepreneurship and thus to some extent explain the different perspectives on corporate entrepreneurship The theoretical roots of entrepreneurship builds on Stevenson and Jarillo [5] who argue that the management literature on entrepreneurship is often based on classical entrepreneurship literature which can be divided into three main categories the effects of entrepreneurship (what happens when entrepreneurs act) the causes of entrepreneurship (why entrepreneurs act) and entrepreneurial management (how entrepreneurs act) The main differences are due to the different theoretical backgrounds of the researchers Economists have dominated the effects of entrepreneurship such as the Chicago tradition [6ndash8] the German tradition [9] and the Austrian tradition [10ndash12] In contrast studies on the causes of entrepreneurship are dominated by psychologists [13ndash15] and sociologists [16] and studies on entrepreneurial management have mainly been considered from a practical point of view Despite the differences in perspectives however there are several similarities and overlaps ndash especially in the definitions of entrepreneurship which are dominated by the effect studies with their focus on what initiated entrepreneurship Nonetheless the different disciplines are based on different basic assumptions and thus emphasise different aspects of the phenomenon ndash again adding to the confusion related to entrepreneurship

This categorisation by Stevenson and Jarillo [5] is only one among several other approaches to understanding the concept of entrepreneurship [17] However Alvarez and Barney [18] argue that the theory of entrepreneurship continues to lack a unifying base from which to explain predict and empirically examine the phenomenon Instead they emphasise that researchers from other fields use entrepreneurship as a means for extending their own theoretical frameworks which means that the phenomenon is explored from several different perspectives Unfortunately the extension of the concept to cover corporate entrepreneurship makes it even fuzzier because corporate entrepreneurship is more complex since it also challenges organisational strategy structures and processes [1920] Compared with the causes and effects of entrepreneurship scholars paid little attention to the corporate management dimension until two or three decades ago when the management literature began to take a more serious look at entrepreneurship

3 The appropriate label

The concept of entrepreneurship within existing organisations has evolved over the last thirty years [21ndash24] especially over the last two decades and is known under many

304 KS Christensen

different lsquolabelsrsquo including corporate entrepreneurship [125ndash30] internal corporate entrepreneurship [31ndash34] intrapreneurship [35ndash40] entrepreneurial management [5] and strategic entrepreneurship [4142] Corporate entrepreneurship seems to have gained the most attention as a concept as is evident from special issues of journals eg Strategic Management Journal in 1990 (Corporate Entrepreneurship) 2001(Entrepreneurial Strategies for Wealth Creation) and Entrepreneurship Theory amp Practice 1999 (Corporate Entrepreneurship in a Global Economy)

As emphasised by Hornsby et al [30] the concepts are often used interchangeably although the various labels of the concept have different associations For instance the term lsquomanagementrsquo in lsquoentrepreneurial managementrsquo indicates that entrepreneurial behaviour or entrepreneurship is to some extent controllable However lsquothe causes of entrepreneurshiprsquo researchers [16] have proposed and sometimes emphasised that entrepreneurship should be seen as a function of human characteristics that not everyone possesses and that entrepreneurship is often related to processes that traditionally cannot be controlled or at least lose their efficiency effectiveness and uniqueness when controlled [16] It does not seem reasonable either that entrepreneurship is entirely controllable An organisation can encourage entrepreneurial activities by bringing together people possessing special and different skills and knowledge and applying their specialities to a common end product by the creation of new combinations [9]

Morris and Kuratko [1 p62] argue that by using lsquothe term corporate entrepreneurship [it] indicate[s] that the fundamentals do not change only the contextrsquo whereas they say that the fundamentals do change when the concept is changed to intrapreneurship A counterargument is that in lsquocorporate entrepreneurshiprsquo the term lsquocorporatersquo is often associated with large corporations [543] whereas entrepreneurial activities are also important in small and medium-sized organisations [13738] In this context lsquointrapreneurshiprsquo which does not indicate anything about the size of the company is shorthand for intracorporate entrepreneurship [35] which simply indicates entrepreneurship within an existing organisation

Based on the above intrapreneurship seems to be the most appropriate label for the concept of entrepreneurship within an existing company as long as the company is only dealing with internal resources in its own possession However there are also several opportunities to be entrepreneurial and innovative and develop new knowledge and competencies outside the boundaries of a company ndash which Chang [44] calls exopreneurship Chang [44 p187] points out that lsquoexopreneurship is the generation of innovation outside the boundary of organisation using external agents known as exopreneursrsquo which means that an organisation acquires innovation through external networks such as joint ventures external venture capital subcontracting and strategic alliances The differences are clear ndash entrepreneurs innovate for themselves intrapreneurs innovate on behalf of an existing organisation while exopreneurs are part of an external network The motivations for innovation are therefore different

The left-hand side of the Figure 1 shows that there may be a relation between an established company and a new independent venture as the latter may be a spin off of the former Pinchot [35] even argues that many entrepreneurs develop their skills and competencies within an established organisation before creating their own venture Intrapreneurship which can be defined as a companyrsquos legal possession of resources is shown in the middle of the figure The right-hand side of the figure goes beyond the


borders of the organisation and illustrates exopreneurship or entrepreneurial activities through external networks of which the company does not possess full ownership

Figure 1 Relationship between corporate entrepreneurship entrepreneurship intrapreneurship and exopreneurship

4 Defining corporate entrepreneurship

The three approaches to entrepreneurship and strategic management have resulted in many definitions of corporate entrepreneurship over the past 20ndash30 years Morris and Kuratko [1 p31] define corporate entrepreneurship as lsquoa term used to describe entrepreneurial behaviour inside established mid-sized and large organisationsrsquo Corporate entrepreneurship can also be seen as the process whereby an individual or a group creates a new venture within an existing organisation revitalises and renews an organisation or innovates [1945] Zahrarsquos [46 p262] definition of corporate entrepreneurship suggests lsquoa formal or informal activity aimed at creating new business in established firms through product and process innovations and market developmentsrsquo whereas Sathe [47] defined corporate entrepreneurship as a process of organisational renewal

Guth and Ginsberg [3] classify corporate entrepreneurship into two strategic managerial choices corporate venturing and the transformation of organisations through strategic renewal By corporate venturing is meant intraprising [35] or new business creation within existing organisations [25] that may or may not result in strategic renewal while the latter implies the creation of new wealth through new combinations of resources Corporate venturing is one way to achieve strategic renewal making acquisitions resulting in new combinations is another whereas actions like lsquorefocusing a business competitively making major changes in marketing or distribution redirecting product development and reshaping operationsrsquo [3 p6] are also examples of strategic renewal

Thornberry [48] breaks corporate entrepreneurship down even further identifying four strategic types corporate venturing intrapreneuring organisational transformation and industry rule breaking This is almost similar to Stopford and Baden-Fullerrsquos [28] categorisation which identifies three types of corporate entrepreneurship Intrapreneurship which they define as a part of corporate venturing transformation and

306 KS Christensen

renewal of existing organisations and changing the rules of competition for the industry as suggested by Schumpeter [9] Compared with Guth and Ginsbergrsquos [3] framework the differences are industry role breakingchanging the industry rules of competition which is considered beyond a companyrsquos direct influence because the company cannot plan it Since it is highly market-dependent it may be a result of corporate venturing and strategic renewal rather than a process Corporate entrepreneurship is therefore seen as corporate initiatives that enable entrepreneurship in relation to an existing company

5 Perspectives on corporate entrepreneurship

Many scholars seem to agree that corporate entrepreneurship is an overall term for all other lsquolabelsrsquo and perspectives Figure 2 illustrate the corporate entrepreneurship umbrella and divides it into four perspectives (1) corporate venturing (2) internal resources (3) internationalisation and (4) external networks These perspectives indicate four domains in which a company can make an effort to be more innovative However even though they are very different they are all rooted in organisational resources The classification takes into account both what is within and beyond the organisational boundaries and the dotted line in Figure 2 indicates what is beyond the organisational boundaries

Figure 2 Relationships between the perspectives on corporate entrepreneurship

Corporate venturing is a means of planning for organisational ambiguity in entrepreneurial action by separating one or a group of intrapreneurs from the organisational structure [25274549] By contrast internal resources operate within the overall organisational structure and from this perspective corporate entrepreneurship focuses on bringing together organisational resources in a way that generates innovations and competitive advantage [1850ndash52] Internationalisation as a perspective on corporate entrepreneurship relates to the relatively higher risk of entering foreign markets These often differ from the domestic market in terms of political economic legal and cultural


dimensions This means the company has to develop new knowledge and competencies [4253ndash55] which in turn reinforces the need for entrepreneurial abilities The last perspective on corporate entrepreneurship in this classification is external networks and alliances The main reason why companies enter an external network or alliance is to gain access to resources that they do not possess themselves [4256]

In the special issue of Strategic Management Journal in 2001 Michael Hitt R Duane Ireland S Michael Camp and Donald L Sexton also categorise corporate entrepreneurship into four organisational activities external networks resources and organisational learning innovation and internationalisation Ireland et al [42] expand the domains from the special issue with lsquotop management teams and governancersquo and lsquogrowthrsquo It is argued that top management teams and governance are essential as their influence on strategic goals are significant [5758] and lsquogrowthrsquo is the essence of entrepreneurship [59ndash61] However as suggested in this framework the perspectives are not the same because unlike Hitt et al [41] Ireland et al [42] and Hitt et al [62] this classification considers lsquotop management teams and governancersquo as an initiative that can enable outcomes like new processes products or services growth strategic renewal or the creation of new business As previously mentioned lsquogrowthrsquo is regarded as an outcome of combinations of a perspective and one or more enablers ndash such as top management teams and governance and reward systems

In the literature the concept of innovation is very broad and often confused with invention [63] Some researchers describe innovation as a process [63ndash66] while for others it is the result or commercialisation of a companyrsquos entrepreneurial activities [414267] Notwithstanding this multiple use of the term lsquoinnovationrsquo is here seen as the outcome In order to increase the understanding of the four perspectives on corporate entrepreneurship they are briefly described below

51 Corporate venturing

In 1985 Robert A Burgelman introduced the term New Venture Division to describe the small new businesses set up by one or a group of intrapreneurs and which formed the link between corporate entrepreneurship and the creation of new businesses A number of scholars [4968] have pointed out that the activities described by Burgelman [27] can actually be dated back to the 1960s where large companies like 3M and Dupont took their first step into venturing Today these activities are mainly described as Corporate Venturing but as argued by Sharma and Chrisman [45] the continuous development of new definitions has led to confusion

The main reason for creating corporate ventures is the isolation and nurturing of innovative ideas that cannot survive in the bureaucratic structures and formal procedures of a large company Dedicating resources to corporate venturing allows the company to follow different routes in the pursuit of innovations with the RampD department concentrating on radical technological inventions while the corporate ventures explore market opportunities for both radical and incremental innovations A number of scholars [4969] have argued that corporate venturing is one of the main roads to innovation in the future economy as markets become more and more saturated The ability to identify and exploit market opportunities is the core of entrepreneurship and forms a major part of the reason for investing in corporate ventures The type of innovation created by corporate venturing is often related to strategic innovations since the technology is invented as part

308 KS Christensen

of the corporationrsquos research and development programme but commercialisation in new markets is carried out through a corporate venture Intuitively the need for major investments in product innovation makes it less suitable for corporate venturing but due to the capital structures and knowledge networks in some industries investment in corporate venturing is seen as a promising business model in the pursuit of product innovation

52 Internal (intangible) resources

Another perspective on corporate entrepreneurship though one which might seem less evident is internal resources However the focus on internal resources can be dated back to 1959 where Edith Penrose stated that a companyrsquos return is largely based on the resources it possesses Since then however the balance of internal resources has change from tangible to intangible resources Today tangible resources are easily accessible or easy to imitate which mean that it is no longer a sufficient way to gain a competitive advantage Therefore intangible resources such as core competencies [70] and sustained competitive advantage [51] have been crucial since the beginning of the 1990s

The main reason for focusing on internal resources in relation to corporate entrepreneurship is that many companies possess a bundle of unexploited resources ndash mainly intangible knowledge resources held by employees The knowledge resources are a mixture of skills experience competencies and capabilities that cannot easily be articulated and therefore cannot be transferred at armrsquos length or imitated by others This makes the perspective of internal resources very important in relation to corporate entrepreneurship as emphasised by Peter Drucker lsquo[t]he basic economic resources hellip is and will be knowledgersquo [71 p7]

The strength of the company is to bring together employees possessing different specialised knowledge resources and to enable the creation of new knowledge resources or combination of existing ones to generate innovations and competitive advantage [51] Alvarez and Barney [18] argue that knowledge specialists often need an organisation to make sense out of their knowledge resources since they lack the ability to see how these can achieve an entrepreneurial profit or generate wealth They state that intrapreneurs possess a broader knowledge base than specialists which allows them to see how specialised knowledge resources can be applied to and integrated with the rest of the company and the market in order to achieve an entrepreneurial profit

Brush et al [52] point out that the ability to share knowledge resources influences efforts to develop the initial resource base necessary for long-term innovation A companyrsquos ability to bring together these heterogeneous knowledge resources is therefore crucial to enabling innovation within organisational boundaries It is therefore important for a company to be able to disseminate data and information to those parts of the organisation where it may be turned into useful knowledge

The internal resource perspective thus constitutes a big potential for corporate entrepreneurship Continuous knowledge creation sharing and dissemination and the identification and exploitation of new possibilities are a way of maintaining a sustained competitive advantage and keeping organisational competencies up-to-date


53 Internationalisation

The economic landscape has undergone substantial changes over the last few decades [7273] Internationalisation ie when a company extends its market scope beyond the domestic market [4254] has become an important driver of corporate entrepreneurship in many companies not only because of the innovative process of discovering and exploiting international opportunities for the purpose of achieving a competitive advantage [74] but also because of the significant potential returns when the market expands [75] Internationalisation can take different forms eg exporting and foreign direct investments but the main difference between internationalisation and external networks as described in the next paragraph is ownership Internationalisation is integrated within the borders of the same legal organisation even though people are geographically diversified However common ownership means that resources and information flow freely and the return whether it be new technology products processes services market opportunity etc is owned by a single company

The corporate entrepreneurship perspective on internationalisation should primarily be seen as an opportunity to expand the potential market scope Lu and Beamish [55] stress that internationalisation is an entrepreneurial activity since compared with domestic expansion entering a foreign market is risky in terms of the capital investment involved or in terms of distributor opportunism asset appropriation and devaluation with respect to exports in relation to direct foreign investment and exporting They find that when companies start exporting or make direct foreign investment profitability declines because it does not pay the rent of the extra costs Gradually however performance improves as new knowledge and capabilities are developed as competitiveness is enhanced and as market opportunities are captured by the companyrsquos investment activities in international markets and the return becomes positive

Being in more markets stimulates innovation and the development of a global mindset through the improvement or development of new knowledge resources capabilities and innovative skills and enhances the economies of scale and scope [75]

54 External networks and alliances

A consensus has emerged among both strategy and entrepreneurship scholars that networks play an important role for growth and innovation [76] Networks are patterned relationships between individuals and groups [77] and are critical for an organisationrsquos acquisition of resources [78] and with it the survival of the organisation In relation to corporate entrepreneurship the main purpose of entering a network is to gain access to the resources needed (but which the company does not possess) and to learn new competencies outside the companyrsquos core competences [5670] However alliances with selected customers or universities may also be related to the core of for example product development and technology development Organisational networks can take many forms eg RampD partnerships licensing marketing agreements subcontracting joint ventures and strategic alliances

From a corporate entrepreneurship point of view another purpose of entering networks or alliances may be flexibility ndash especially for the well-structured large organisation where everything has to be cross-checked before something new can be tried out in the market Networks or alliances with small partners make it possible to

310 KS Christensen

produce only a few units of a product and test it in the market before gearing the large-scale production plant to streamlined production In this way the organisation gets some of the flexibility and agility of a small company while maintaining the massive streamlined organisation that is crucial for stability

55 Towards a framework for corporate entrepreneurship

Figure 3 summarises the theoretical framework for corporate entrepreneurship developed in the previous sections The upper half of the figure shows the four perspectives or domains of research in the area ndash corporate venturing internal resources internationalisation and networks It has been argued that the concept of corporate entrepreneurship could be theorised and conceptualised from each of the four perspectives which can also be categorised into intrapreneurship and exopreneurship

The lower part of the framework accentuates the possible outcome of corporate entrepreneurship It is very difficult to predict this beforehand Some activities will hardly influence the organisation whereas other activities lead to organisational renewal and yet again some others transform the organisation to something lsquonewrsquo significantly different from what it was before But even though corporate entrepreneurship initiatives result in some form of organisational renewal only in a very few cases will it change the rules of competition

Figure 3 The proposed framework for corporate entrepreneurship

6 Conclusion

This study as a discussion and classification of labels and a clarification of the overall concept of corporate entrepreneurship contributes to the corporate entrepreneurship


literature by providing useful insights (for newcomers) The breadth of corporate entrepreneurship has been illustrated and a framework in clarification has been proposed Further research in each of the four perspectives is needed in order to understand the different ways in which corporate entrepreneurship is enabled and how entrepreneurial activities should be organised ndash especially within the internal resource perspective which is less developed than the others Future research should be structured according to the proposed framework in Figure 3 to make it possible to compare the enablers and the ways of organising across different perspectives on corporate entrepreneurship

The classification provides a nuanced multi-faceted view of corporate entrepreneurship by describing different bases for managerial decisions in relation to corporate entrepreneurship since this can mean different things depending on the perspective The four perspectives taken into account may contribute to a greater insight into the meaningful context-dependent relations in a company It is important to realise that the perspectives are not mutually exclusive ndash rather they should be seen as complementary However the merits of intrapreneurship or exopreneurship vary with market contexts and the resources under the firmrsquos control [79]

The four perspectives on corporate entrepreneurship all relate to managerial opportunities However enabling corporate entrepreneurship by for example creating a new organisational structure may not be sufficient Chesbrough and Rosenbloom [80] argue that companies also need to be open to new ways of commercialisation when new opportunities do not fit well into their current business model

Knowledge seems to be the only factor to play a crucial role in all perspectives even though it plays different roles across the perspectives in forming the basis for innovative activities corporate entrepreneurship and business models Knowledge resources as an integration mechanism supports Druckerrsquos [71] view of knowledge as the resource in the knowledge society It also points to the fact that a companyrsquos ability to generate knowledge resources [81] is crucial to its competitiveness [82] and innovativeness However knowledge resources are also a potential source of cognitive bias as a company is often biased by earlier success

In order to be innovative managing organisational knowledge is thus critical in relation to developing new combinations of knowledge resources etcIt adds a new dimension to the existing literature on corporate entrepreneurship that up to now has mainly described the different roles and characteristics of the entrepreneurintrapreneur A knowledge-based view of corporate entrepreneurship and knowledge resources as an integration mechanism are therefore very interesting topics for further research

Acknowledgements

The author would like to thank Anders Drejer Anders Jacob Raj Andersen Per Nikolaj Bukh Mikkel Gadmar Bengt Johannisson and John Parm Ulhoslashi for comments on previous drafts

312 KS Christensen

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Publishers Orlando Florida 2 Latour B (1999) Pandorarsquos Hope Essays on the Reality of Science Studies Harvard

University Press Cambridge MA 3 Guth WD and Ginsberg A (1990) lsquoGuest editors introduction corporate

entrepreneurshiprsquo Strategic Management Journal Vol 11 pp5ndash15 4 McGrath RG MacMillan IC and Venkatraman S (1995) lsquoGlobal dimensions of new

competenciesrsquo in Birley S and MacMillan IC (Eds) International Entrepreneurship Routledge New York

5 Stevenson HH and Jarillo JC (1990) lsquoA paradigm of entrepreneurship entrepreneurial managementrsquo Strategic Management Journal Vol 11 special issue pp17ndash27

6 Knight F (1964 [1921]) Risk Uncertainty and Profit Augustus M Kelley New York 7 Schultz TW (1975) lsquoThe value of the ability to deal with disequilibriarsquo Journal of

Economic Literature Vol 13 No 3 pp827ndash846 8 Schultz TW (1980) lsquoInvestment in entrepreneurial abilityrsquo Scandinavian Journal of

Economics Vol 82 pp437ndash448 9 Schumpeter JA (1934) The Theory of Economic Development Harvard University Press

Cambridge AS 10 Mises LV (1949) Human Action A Treatise on Economics William Hodge and Company

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Chicago 12 Kirzner IM (1997) lsquoEntrepreneurial discovery and the competitive market process an

austrian approachrsquo Journal of Economic Literature Vol XXXV March pp60ndash85 13 Collins NC and Moore DG (1964) The Enterprising Man East Lansing MI Michigan

State University 14 Brockhaus RH (1980) lsquoRisk-taking propensity of entrepreneursrsquo Academy of Management

Journal Vol 23 pp509ndash520 15 Brockhaus RH and Horwitz PS (1986) lsquoThe psychology of the entrepreneurrsquo in Sexton

DL and Smilar RW (Eds) The Art and Science of Entrepreneurship Cambridge Ballinger MA

16 McClelland DC (1961) The Achieving Society The Free Press New York 17 Sundbo J (1998) The Theory of Innovation Entrepreneurs Technology and Strategy

Edvard Elgar Publishing 18 Alvarez SA and Barney JB (2002) lsquoResource-based theory and the entrepreneurial firmrsquo

in Hitt MA Ireland RD Camp MS and Sexton DL (Eds) Strategic Entrepreneurship Creation a New Mindset Blackwell Publisher Oxford

19 Dess GD Lumpkin GT and McGee JE (1999) lsquoLinking corporate entrepreneurship to strategy structure and process suggested research directionsrsquo Entrepreneurship Theory and Practice Vol 23 No 3 pp85ndash102

20 Morris MH and Kuratko DF (2002) Corporate Entrepreneurship Harcourt College Publishers Orlando Florida

21 Peterson R and Berger D (1972) lsquoEntrepreneurship in organisationsrsquo Administrative Science Quarterly Vol 16 pp97ndash106

22 Hill RM and Hlavacek JD (1972) lsquoThe venture team a new concept in marketing organisationsrsquo Journal of Marketing Vol 36 pp44ndash50

23 Hanan M (1976) lsquoVenturing corporations think small to stay strongrsquo Harvard Business Review Vol 54 pp139ndash148


24 Quinn JB (1979) lsquoTechnological innovation entrepreneurship and strategyrsquo Sloan Management Review Vol 20 pp19ndash30

25 Burgelman RA (1983) lsquoA process model of internal corporate venturing in the diversified major firmrsquo Administrative Science Quarterly Vol 28 No 2 pp223ndash241

26 Burgelman RA (1984) lsquoDesigns for corporate entrepreneurship in established firmsrsquo California Management Review Vol 26 No 3 pp154ndash166

27 Burgelman RA (1985) lsquoManaging the new venture division research findings and implications for strategic managementrsquo Strategic Management Journal Vol 6 No 1 pp39ndash55

28 Stopford J and Baden-Fuller CF (1994) lsquoCreating corporate entrepreneurshiprsquo Strategic Management Journal Vol 15 No 7 pp521ndash536

29 Barrett H and Weinstein A (1999) lsquoThe effect of market orientation and organisational flexibility on corporate entrepreneurshiprsquo Entrepreneurship Theory and Practice Vol 23 No 1 pp57ndash73

30 Hornsby JS Kuratko DF and Zahra SA (2002) lsquoMiddle managers perception of the internal environment for corporate entrepreneurship assessing a measurement scalersquo Journal of Business Venturing Vol 17 No 3 pp253ndash273

31 Schollhammer H (1981) lsquoThe efficacy of internal corporate entrepreneurship strategiesrsquo in Vesper KH (Eds) Frontiers of Entrepreneurship Research Babson College Wellesley MA

32 Schollhammer H (1982) lsquoInternal corporate entrepreneurshiprsquo in Kent C Sexton D and Vesper K (Eds) Encyclopedia Entrepreneurship Prentice-Hall Inc Engelwood Cliffs NJ

33 Jones GR and JE Butler (1992) lsquoManaging internal corporate entrepreneurship an agency theory perspectiversquo Journal of Management Vol 18 No 4 pp733ndash749

34 Lumpkin GT and Dess GG (1996) lsquoClarifying the entrepreneurial orientation construct and linking it to performancersquo Academy of Management Review Vol 21 pp135ndash172

35 Pinchot G (1985) Intrapreneuring Why You Donrsquot Have to Leave the Corporation to Become an Entrepreneur Harper and Row New York

36 Nielsen RP Peters MP and Hisrich RD (1985) lsquoIntrapreneurship strategy for internal markets ndash corporate non-profit and government institution casesrsquo Strategic Management Journal Vol 6 pp181ndash189

37 Carrier C (1994) lsquoIntrapreneurship in large firms and SMEs a comparative studyrsquo International Small Business Journal Vol 12 No 3 pp54ndash61

38 Carrier C (1996) lsquoIntrapreneurship in small businesses an exploratory studyrsquo Entrepreneurship Theory and Practice Vol 21 No 1 pp5ndash20

39 Antoncic B and Hisrich RD (1999) lsquoIntrapreneurship construct refinement and cross-cultural validationrsquo Journal of Business Venturing Vol 16 pp495ndash527

40 Chinho L Hojung T and Chienming W (2003) lsquoFuzzy fitness model of intrapreneurship activities or Taiwanese high-tech firmsrsquo International Journal of Management and Enterprise Development Vol 1 No 1 pp45ndash54

41 Hitt MA Ireland RD Camp SM and Sexton DL (2001) lsquolsquoGuest editorsrsquo introduction to the special issue strategic entrepreneurship entrepreneurial strategies for wealth creationrsquo Strategic Management Journal Vol 22 pp479ndash491

42 Ireland RD Hitt MA Camp SM and Sexton DL (2001) lsquoIntegrating entrepreneurship actions and strategic management actions to create firm wealthrsquo Academy of Management Executive Vol 15 No 1 pp49ndash63

43 Shane S and Venkataraman S (2000) lsquoNote the promise of entrepreneurship as a field of researchrsquo Academy of Management Review Vol 25 No 1 pp217ndash226

44 Chang J (1998) lsquoModel of corporate entrepreneurship intrapreneurship and exopreneurshiprsquo Borneo Review Vol 9 No 2 pp187ndash213

314 KS Christensen

45 Sharma P and Chrisman JJ (1999) lsquoToward a reconciliation of the definitional issues in the field of corporate entreprenrushiprsquo Entrepreneurship Theory and Practice Vol 22 pp43ndash68

46 Zahra SA (1991) lsquoPredictors and financial outcomes of corporate entrepreneurship an exploratory studyrsquo Journal of Business Venturing Vol 6 pp259ndash285

47 Sathe V (1989) lsquoFostering entrepreneurship in a large diversified firmrsquo Organisational Dyn Vol 18 pp20ndash32

48 Thornberry N (2001) lsquoCorporate entrepreneurship antidote or oxymoronrsquo European Management Journal Vol 19 No 5 pp526ndash533

49 Chesbrough HW (2000) lsquoDesigning corporate ventures in the shadow of private venture capitalrsquo California Management Review Vol 42 No 3 pp31ndash49

50 Penrose ET (1959) The Theory of the Growth of the Firm Wiley New York 51 Barney JB (1991) lsquoFirm resources and sustained competitive advantagersquo Journal of

Management Vol 17 pp99ndash120 52 Brush CG Greene PG and Hart MM (2001) lsquoFrom initial idea to unique advantage the

entrepreneurial challenge of constructing a resource basersquo Academy of Management Executive Vol 15 No 1 pp64ndash80

53 Zahra SA and Garvis DM (2000) lsquoInternational corporate entrepreneurship and firm performance the moderating effect of international environment hostilityrsquo Journal of Business Venturing Vol 15 pp469ndash492

54 Hitt MA and Ireland RD (2000) lsquoThe intersection of entrepreneurship and strategic management researchrsquo in Sexton DL and Landstroumlm HA (Eds) Handbook of Entrepreneurship Blackwell Oxford 45ndash63

55 Lu JW and Beamish PW (2001) lsquoThe internationalisation and performance of SMEsrsquo Strategic Management Journal Vol 22 pp565ndash586

56 Hitt MA Ireland RD and Lee H (2000) lsquoTechnological learning knowledge management firm growth and performancersquo Journal of Engineering and Technology Management Vol 17 pp231ndash246

57 West III GP and Meyer GD (1998) lsquoTo agree or not to agree Consensus and performance in new venturesrsquo Journal of Business Venturing Vol 13 pp395ndash422

58 Beekun RI Stedham Y and Young GJ (1998) lsquoBoard characteristics managerial controls and corporate strategy a study of US hospitalsrsquo Journal of Management Vol 24 pp3ndash19

59 Hitt MA Hoskisson RE Johnson RA and Moesel DD (1996) lsquoThe market for corporate control and firm innovationrsquo Academy of Management Journal Vol 39 pp1084ndash1119

60 Covin JG and Slevin P (2002) lsquoThe entrepreneurial imperatives of strategic leadershiprsquo in Hitt MA Ireland RD Camp SM and Sexton DL (Eds) Strategic Entrepreneurship Creating a New Mindset Blackwell Publisher Oxford

61 Davidsson P Delmar F and Wiklund J (2002) lsquoEntrepreneurship as growth growth as entrepreneurshiprsquo in Hitt MA Ireland RD Camp SM and Sexton DL (Eds) Strategic Entrepreneurship Creating a New Mindset Blackwell Publishers Oxford

62 Hitt MA Ireland RD Camp SM and Sexton DL (Eds) (2002) Strategic Entrepreneurship Creating a New Mindset Blackwell Publisher Oxford

63 Tidd J Bessant J and Pavitt K (1997) Managing Innovation Integrating Technological Market and Organisational Change West Sussex England John Wiley and Sons

64 Freeman C (1982) The Economics of Industrial Innovation (2nd Edition) Frances Pinter London

65 Drucker PF (1985) Innovatoin and Entrepreneurship Practice and Principles Harper and Row New York

66 Porter M (1990) The Competitive Advantage of Nations Macmillan London


67 Hamel G (2000) Leading the Revolution Harvard Business School Press Boston 68 Gee RE (1994) lsquoFinding and commercialising new businessesrsquo Research Technology

Management Vol 37 No 1 pp49ndash57 69 Mason H and Rohner T (2002) The Venture Imperative ndash A New Model for Corporate

Innovation Harward Business School Press Boston 70 Prahalad G and Hamel G (1990) lsquoThe core competence of the corporationrsquo Harvard

Business Review Vol 68 No 3 pp79ndash91 71 Drucker PF (1993) Post-capitalist society Butterworth-Heinemann Oxford p7 72 Ireland RD and Hitt MA (1999) lsquoAchieving and maintaining strategic competitiveness in

the 21st century the role of strategic leadershiprsquo Academy of Management Executive Vol 13 No 1 pp43ndash57

73 Zahra SA Ireland RD and Hitt MA (2000) lsquoInternational expansion by new venture firms international diversity mode of market entry technological learning and performancersquo Academy of Management Journal Vol 43 No 5 pp925ndash950

74 Zahra SA and George G (2002) lsquoInternational entrepreneurship the current status of the field and future research agendarsquo in Hitt MA Ireland RD Camp SM and Sexton DL (Eds) Strategic Entrepreneurship Creating a New Mindset Blackwell Publisher Oxford

75 Hitt MA Hoskisson RE and Kim H (1997) lsquoInternational diversification effects on innovation and firm performance in product-diversified firmsrsquo Academy of Management Journal Vol 40 No 4 pp767ndash798

76 Stuart TE Hoang H and Hybels RC (1999) lsquoInterorganisatinal endorsements and the performance of entrepreneurial venturesrsquo Administrative Science Quarterly Vol 44 pp315ndash349

77 Dubini P and Aldrich H (1991) lsquoPersonal and extended networks are central to the entreprenerushial processrsquo Journal of Business Venturing Vol 6 pp305ndash313

78 Gulati R (1998) lsquoAlliances and networksrsquo Strategic Management Journal Vol 19 pp293ndash317

79 Lee L and Gongming Q (2003) lsquoInternalisation or externalisation the option for small and medium-sezed technology-based enterprises in overseas marketsrsquo International Journal of Management and Enterprise Development Vol 1 No 1 pp55ndash70

80 Chesbrough H and Rosenbloom RS (2002) lsquoThe role of the business model in capturing value from innovations evidence from Xerox Corporationrsquos technology spin-off companiesrsquo Industrial and Corporate Change Vol 11 No 3 pp529ndash555

81 Spender JC (1996) lsquoMaking knowledge the basis of a dynamic theory of the firmrsquo Strategic Management Journal Vol 17 Winter Special Issue pp45ndash62

82 Grant RM (1996) lsquoTowards a knowledge-based theory of the firmrsquo Strategic Management Journal Vol 17 Winter Special Issue pp109ndash122

74

75

CHAPTER 5

Postscript to article 1

The article in Chapter 4 of the dissertation was published in International Journal of

Management and Enterprise Development The paper was later translated into

Danish revised and substantially improved in several areas Finally the article was

published in the Danish Journal Ledelse amp Erhvervsoslashkonomi (Christensen 2005a)

The main differences between the two articles are to be found in the introduction the

paragraph ldquoTowards a framework for corporate entrepreneurshiprdquo and the

concluding remarks which have been considerably improved In addition the Danish

article has adopted a Danish perspective of the Danish labour market situation the

writing has been improved and the figures have been revised to make the basic

message clearer

Corporate venturing Initiatives which lead to the establishment of a new organisation within the boundaries of an existing one

Internal resources Primarily concerns the internal knowledge resources (human resources processes technologies etc) of the parent company within national and cultural boundaries

Internationalisation Focuses on the resources available to the company from establishing departments abroad and in other cultures

External networks Relates to access to resources the company needs and which the company does not necessarily develop or possess itself

Table A Four ways to organise corporate entrepreneurship

76

Thus based on the Danish version of the article this postscript presents a more

detailed and well-developed discussion of the framework for corporate

entrepreneurship and the implications thereof in a Danish context Table A which is

translated from the Danish article provides an overview of the four perspectives on

corporate entrepreneurship presented in the article

51 TOWARDS A FRAMEWORK FOR CORPORATE ENTREPRENEURSHIP

Figure 43 (figure 3 in the original article submitted as part of this dissertation)

summarises the theoretical framework for corporate entrepreneurship The four

organisational perspectives on corporate entrepreneurship corporate venturing

internal resources internationalisation and networks are placed in the central part of

the figure to show that corporate entrepreneurship can be conceptualised from each

perspective

The lower middle part of figure 43 shows the possible results of the various

initiatives arising from corporate entrepreneurship activities While some initiatives

hardly affect the organisation at all or only imply minor changes others will change

the company through organisational or strategic renewal and may transform it into

something lsquonewrsquo or significantly different from what it was before Finally as shown

in the lowest part of figure 43 the results can transcend the boundaries of the

company and influence the competitive rules of the market

The model illustrates the organisational opportunities a company has to encourage

both innovation and entrepreneurship eg collaboration with other companies

(exopreneurship) or exploiting resources it already possesses There is no general

blueprint for the best way of organising It depends on the specific company its

strategy culture organisation etc and the type of innovation it finds most

appropriate

77

Both the original article and the revised version (Christensen 2005a) have presented

various perspectives from which these questions can be addressed However it is

important to note that the perspectives complement each other ie experiences

acquired from different approaches and from different traditions in the research

literature can shed light on how to manage the tensions between different ways of

organising innovativeness

While the perspectives in figure 43 lead to different ways of organising

innovativeness anything the company or management can do to enable corporate

entrepreneurship is important There is therefore a need for organisational initiatives

to enable corporate entrepreneurship which either build on specific perspectives or

span them in an integrated way

In a review of the literature Jeffrey Hornsby and Donald Kuratko and various co-

authors have suggested a number of factors which enable corporate entrepreneurship

In particular they point to five factors which have been discussed in the literature

since the end of the 1980s rewards management commitment access to resources

appropriate organisational structures and attitudes to risk (Hornsby et al 1993

Hornsby et al 2002 and Kuratko et al 1990) Empirically however they found

only management commitment organisational structure resources and rewards

significant (Kuratko et al 1990)

Based on an empirical study of innovative processes at Danfoss Drives regarding

factors that enable intrapreneurship (Christensen 2005b article 3 of this

dissertation) it was concluded that in relation to this specific case risk did not play a

major role in corporate entrepreneurship although communication culture and

processes were important factors If employees find the companyrsquos initiatives in these

areas insufficient then factors which are supposed to enable corporate

entrepreneurship become barriers to innovativeness and intrapreneurship instead

78

There is a need both as regards research and managerial implications to focus more

on which factors enable and hinder corporate entrepreneurship respectively and how

entrepreneurial activities are best organised This also has potential implications for

industrial policy If Danish companies cannot compete against companies operating

in low-wage countries then where possible they should opt for so-called knowledge-

intensive production instead

A typical characteristic of knowledge-intensive production is that companies should

focus not only on product and technological development but also be better at

developing new interpersonal ways of working (exopreneurship) This could include

better adoption of usersrsquo needs through user-driven innovation (see for example

Rosted 2005) Another aspect of the move towards more knowledge-intensive

production is a new way of managing (intrapreneurship) which makes companies

better able to implement new technologies faster and exploit them more effectively

52 CONCLUDING REMARKS

There has been an increasing shortage of labour in Denmark in recent years This has

changed the previous focus on the creation of more jobs to a new emphasis on the

creation of the right jobs in companies with a high potential for growth and value

creation This is often (see for example Hoffman et al 2007) associated with the

marketing of new products in new markets which makes far greater demands on

knowledge and managerial resources than merely starting up a new company

According to Hoffmann et al (2007) while Denmark has been good at helping

entrepreneurs on generic issues such as VAT business plans accounting marketing

etc entrepreneurial policy has had less success in nurturing innovative growth

Furthermore the conventional wisdom is that smaller companies have to lead the way

79

in creating new jobs ndash not only by entrepreneurs starting up new companies but also

by smaller companies supporting the start-up of new firms

Based on this assumption a study by Evald (2003) estimated that over a period of

five years 153 smaller so-called parent companies have spun off 459 new companies

resulting in 5508 new jobs This corresponds to on average of about 7 jobs a year

over the period ndash or 2-3 jobs per company In other words while the number of firms

has increased greatly the size and with it potential of newly established companies

has not grown substantially

Another investigation of the strategic development of smaller companies (Drejer et

al 1999) showed however that the total effect of the jobs created is more or less

zero since almost as many jobs are lost as created While there is undoubtedly a

potential for job creation in both small and large companies these studies alone say

nothing about which occupational structure best guarantees growth and job creation

in Denmark

However any initiative whether the result of government policy or companies

setting up new ventures needs to take a starting point in the existing business

structure which consists of both small and large companies Article 1 presented a

broader framework for corporate entrepreneurship in order to provide a starting point

for assessing which activities companies can best implement ndash and probably also

which initiatives can be enabled via political decision-making Although most Danish

firms are small and medium-sized Denmark also has a number of larger companies

with considerable potential supporting innovative entrepreneurs It is therefore

appropriate to focus on corporate entrepreneurship as a unifying concept for these

companiesrsquo innovative initiatives

When concepts like corporate entrepreneurship become popularised are written

about in the business press and are incorporated in policy proposals there is always a

80

risk of the basic ideas losing their grounding in well-documented evidence and

becoming mere managerial fads So is corporate entrepreneurship just another

managerial fad Or do we need to rethink how innovativeness is organised in more

loosely coupled structures than is possible in the traditional functionally organised

company where research is mainly done in the RampD department customer contact is

the province of the sales and marketing functions etc

A common assumption of innovation management is that even though firms might

originally be the result of a radical innovation when they mature they mostly rely on

incremental innovations based on existing resources The implication is that radical

innovations are often left to smaller companies although new business ideas will still

emerge in larger companies However the entire organisational structure including

the various layers of management can have difficulty in handling the entrepreneurial

needs of innovation This means that management will sometimes be faced by the

possibility for new strategies and related dilemmas ndash particularly if the new ventures

are far from the parent companyrsquos core competencies and market opportunities

This means that corporate entrepreneurship is not only a question of setting up the

appropriate structures outside the organisation but also as argued in article 1 an

issue for the organisation as a whole Since different organisational structures support

different organisational needs this is a good starting point for ensuring the ability of

larger companies to innovate

In other words larger companies should experiment with organisational structures

and forms which create innovation These include various types of network

organisations loosely coupled organisations and project organisations as a

supplement to the classical hierarchy In addition to organisational forms

management style must also change since renewal and innovation cannot be planned

81

and managed in the same way as operational activities (see for example

Christensen 2005b 2006)

53 REFERENCES

Christensen KS 2005a Corporate Entreprenoslashrskab Begreber og Perspektiver

Ledelse amp Erhvervsoslashkonomi Vol 61 No 1 13-26

Christsensen KS 2005b Enabling intrapreneurship the case of a knowledge-

intensive industrial company European Journal of Innovation Management Vol 8

No 3 pp 305-322

Christensen KS 2006 Losing Innovativeness The Challenge of being acquired

Management Decision Vol 44 No 9 pp 1161-1182

Drejer A LB Henriksen amp JB Christensen 1999 Smaring virksomheders strategiske

udviking Aalborg Oslashst Nordjysk Informatik og Virksomhedsudvikling

Evald MR 2003 Corporate Venturing i Danmark En undersoslashgelse af mindre

virksomheders knopskudsaktiviteter Center for Smaringvirksomhedsforskning Syddansk

Universitet

Hoffmann A NM Nielsen amp J Nyholm 2007 Fremtidens erhvervsservice og

ivaeligrksaeligtterpolitik ndash en guide til flere vaeligkstvirksomheder Marts 2007



Journal of Business Venturing Vol 17 No 3 pp 253-373

Hornsby JS DW Naffziger DF Kuratko amp RV Montagno 1993 An interactive

model of the corporate entrepreneurship process Entrepreneurship Theory amp


82

Kuratko DF RV Montagno amp JS Hornsby 1990 Developing an intrapreneurial

assessment instrument for an effective corporate entrepreneurial environment

Strategic Management Journal Vol 11 No 1 pp 49-58

Rosted J 2005 Brugerdreven innovation Resultater og anbefalinger Oslashkonomi- og


Koslashbenhavn FORA

83

PART II

Intrapreneurship from an Internal Resources Perspective

The internal resource perspective takes a starting point in established organisational

structures Based on this perspective the aim of intrapreneurship is to identify hidden

or suppressed organisational resources and bring them together in (new) ways to

facilitate innovation and generate new competitive advantages In some cases these

resources may be tangible but in most cases today they are intangible eg

knowledge resources which means that they will often be closely related to the

organisational members

The second part of the dissertation consists of two articles which in different ways

present issues related to intrapreneurship The articles show that getting the most out

of a firm or organisation requires new ways of working and thinking Managers ndash or

coaches as they may prefer to be called ndash in knowledge-intensive organisations face

new challenges since their employees have other needs and wants than employees in

traditional industrial companies

While acquisitions are an increasingly popular way for mature organisations to gain

access to new resources and skills it does not necessarily mean that they can

successfully integrate a new entrepreneurial subsidiary (eg as a CV) and its

innovativeness and creative ways of working The first article in Part II Losing

innovativeness the case of being acquired focuses on the personal mechanisms that

84

are affected when a small entrepreneurial company is taken over by a large

multinational company

The article discusses the practice of intrapreneurship and investigates

intrapreneurship in its natural setting It focuses on what happens to the

entrepreneurial spirit in a company when it is taken over by another (much larger)

company which has grown mainly through acquisition rather than internal

development The discussion centres on a study of the intrapreneurial spirit and

practices of Ericsson Telebit a Danish IT firm Its acquisition by a large mature

company is found to have a profound influence on the firmrsquos intrapreneurial spirit In

particular innovation creativity and the innovative process have been analysed in

relation to the entrepreneurial spirit The article concludes that the larger a company

becomes the more difficult it is to maintain a managerial commitment to innovation

since innovative initiatives and activities may be subdued by formal control systems

which almost by definition are necessary when an organisation becomes larger and

the range of operations more diversified The aim is therefore to identify those factors

that managers need to focus on and actively use in order to enable intrapreneurship

and give intrapreneurs room to grow within corporate boundaries

The second article Enabling intrapreneurship the case of a knowledge-intensive

industrial company discusses factors that management can influence to enable or

hinder intrapreneurship In order to provide a framework for evaluation a short

overview of the main factors from the literature is provided It should be noted

however that these are primarily based on studies of traditional industrial

companies

Based on a case study of Danfoss Drives the usability of the factors is analysed in a

specific knowledge-intensive setting The conclusion from the findings is that the

framework for industrial companies cannot be used for a knowledge-intensive

85

company and a more complete framework with three additional factors is therefore

developed The article shows that whereas in traditional industrial companies the

important enablers were more direct or extrinsic in knowledge-intensive companies

they are more indirect or intrinsic

86

87

CHAPTER 6

Losing innovativeness the challenge of being acquired


Christensen Karina Skovvang 2006 Losing Innovativeness the challenge of being

acquired Management Decision Vol 44 No 9 pp 1161-1182

88

Losing innovativenessthe challenge of being acquired

Karina Skovvang ChristensenDepartment of Management The Aarhus School of Business

Aarhus Denmark

Abstract

Purpose ndash The aim of the paper is to explore how innovativeness and creativity in a smalltechnology company changes after the company is acquired by a larger company

Designmethodologyapproach ndash The empirical part of the article is based on interview andquestionnaire data with a focus on employeesrsquo perception of innovativeness and creativity includingtheir own innovativeness in relation to the possibilities offered within the organisational structure

Findings ndash The results indicate that entrepreneurial spirit innovativeness and creativity in the casecompany were related to the lack of boundaries to and contact with customers These driving forcescould not be sustained when the organisation matured and was acquired by a larger company

Research limitationsimplications ndash More research regarding the integration phase ofacquisitions and how it affects employees and innovativeness is needed Case-based researchshould examine differences between companies that are repeatedly successful in integrating smalltechnology companies into their organisational structure and those that are not Employeesrsquomotivation as a key factor to innovativeness should be in focus and the research should also includeemployees that leave the acquired company as well as employees with the acquiring company

Practical implications ndash An acquisition strategy as a way for mature organisations to gain accessto innovativeness and new resources and skills can easily fail Even though the resources and skills ofthe two companies are complementary and the competencies of the acquired organisation are intactefforts are needed to make the energies of the two organisations act in tandem Thus the pre- andpost-integration phases of an acquisition seem to be of paramount importance

Originalityvalue ndash Very few papers have studied how employees in an acquired company perceiveincorporation into a large mature company This article adds to research by examining how employeesin a small entrepreneurial company perceive innovation creativity and the innovative process threeyears after being acquired by a large mature company

Keywords Acquisitions and mergers Entrepreneurialism Innovation

Paper type Case study

IntroductionOver the years entrepreneurs have shown that new ideas can form the basis for newcompanies and that these companies can sometimes grow rapidly and be highlyprofitable While some companies have been successful in maintaining innovativenesscreativity and an entrepreneurial spirit many organisations have great difficulty inmaintaining their initial recklessness to which established companies are oftenvulnerable The ability to continuously innovate also for well-established companies

The current issue and full text archive of this journal is available at

wwwemeraldinsightcom0025-1747htm

The author gratefully acknowledges the helpful comments made by Per Nikolaj BukhAnders Drejer and John Parm Ulhoslashi as well as two anonymous referees on an earlier version ofthis paper Special thanks goes to Telebitrsquos former HR manager Poul Joslashrgen Dybdal managerErik Reinholdt and all the other employees at Ericsson Telebit

Losinginnovativeness

1161

Received November 2005Revised July 2006

Accepted July 2006

Management DecisionVol 44 No 9 2006

pp 1161-1182q Emerald Group Publishing Limited

0025-1747DOI 10110800251740610707668

is thus becoming increasingly important not only for companiesrsquo competitiveadvantage but also for their survival

As an organisation grows and matures management concerns increasingly turnfrom exploration to exploitation (March 1991) of resources Often the managerialsystems and values of mature companies are better at exploiting areas aligned withexisting resources and skills than exploring areas far outside them This concern withalignment could explain why it is often difficult for mature organisations to exploreentirely new areas of resources However too much emphasis on the exploitation ofexisting resources can become a barrier to innovation and thus long-term performance(Leonard-Barton 1992 March 1991) since access to new resources is usually essentialto maintaining creativity and innovativeness

Over the last couple of decades acquisitions have been an increasingly popular wayfor mature organisations to gain access to new resources and skills Howeveracquiring resources through acquisition does not necessarily mean that the matureorganisation is able to handle a new entrepreneurial subsidiary and its innovativenessand creative ways of working Often the acquired company will slowly adapt to themature organisationrsquos existing and often stifling management systems This in turnwill lead to increasing inertia and with it frustration decreasing both employeesrsquomotivation and their liking for recklessness Being incorporated into a large maturecompany is certainly not easy for a small innovative and creative company

Little research has been carried out on how employees in an acquired companyactually perceive incorporation into a large mature company (eg Brockner et al 1993Hambrick and Cannella 1993 Reilly et al 1993) This article adds to research byexamining how employees in a small entrepreneurial company perceive innovationcreativity and the innovative process three years after being acquired by a largemature company Based on a case study of the Danish company Ericsson Telebit thearticle shows what happens to this specific organisational unit which while apparentlyenjoying success and an increase in the number of employees following its acquisitionby a large multi-national company only two years later experienced layoffs and radicalrestructurings for three consecutive years as a consequence of a change in strategy ofthe acquiring company

The article is organised as follows section 2 briefly presents the case for innovationthrough acquisitions and outlines the entrepreneurial challenge faced by the acquiredorganisation Section 3 describes the methodology used Section 4 presents the casecompany Ericsson Telebit and the interview results while section 5 presents ananalysis of the questionnaire results Finally section 6 concludes the article

Innovation through acquisition the entrepreneurial challengeMergers and acquisitions (MampA) are often motivated by a belief that the combinationof two or more companiesrsquo resources and skills can create more value than is possibleby the two companies separately or by engaging in other ways of co-operating egthrough alliances These synergistic benefits from resource combinations it has beenargued are more likely to be uniquely valuable when based on complementaritiesrather than similarities (Harrision et al 1991 2001) Thus acquisitions of companiespossessing complementary technological capabilities and entrepreneurial abilities maybe seen as a way for large more bureaucratic companies to increase theirinnovativeness

MD449

1162

However in a review of the literature Man and Duysters (2005) find that companiesengaging in MampA activities generally face a decline in innovation While muchresearch focuses on the innovative performance of the company especially on theoutput of innovations eg number of patents or input measures such as RampD expenses(see Man and Duysters 2005) after a merger or an acquisition only limited researchhas been carried out on how MampA affect creativity and the innovative performance ofthe individuals employed in the acquiring or acquired company

Exceptions include Kapoor and Lim (2005) who found that the number of patentsper inventor per year fell in US semiconductor companies that were acquired between1991 and 1998 and Ernst and Vitt (2000) who demonstrated similar results in ananalysis of 43 acquisitions Ernst and Vitt also showed further that to a large extentkey inventors leave their company after the acquisition Of course how employeesreact in an MampA situation can be influenced by a large number of factors butknowledge of what can happen when a small innovative company is acquired by alarger company and how this is perceived by employees can provide insight into whatfactors enable innovation and how these factors are affected by acquisitions

With respect to the overall performance of the acquiring company much researchhas documented that mergers and acquisitions often fail to deliver their intendedbenefits and actually destroy economic value in the process However in this area toothere has been much less focus on exploring the specific factors that influence thesuccess of the integrative process Thus King et al (2004 p 196) conclude from acomprehensive meta-analysis of the literature on post-acquisition performance thatldquoexisting empirical research has not clearly and repeatedly identified those variablesthat impact an acquiring companyrsquos performancerdquo

The case for innovation through acquisitionsIn principle companies can develop and grow either by exploiting or exploring theirresources (March 1991) The former focuses on increasing efficiency sales etc whilethe latter can be achieved through MampA or by internally-driven innovations (see alsoBurgelman 1986 Hitt et al 1990) Chaudhuri and Tabrizi (1999) argue thatdetermining the right mix of externally and internally generated innovation is aquestion of whether or not innovation can be done quickly enough internally whileaccording to Ghoshal (1987) the acquisition process may be necessary in order toobtain advantages of scale and scope in the global economy

Most organisations however are limited in their choice of innovative mode byresource constraints Consequently say Hitt et al (1990 p 29) ldquothe acquisition processand the resulting conditions after the acquisition is consummated affects managerialcommitment to innovationrdquo However committing significant financial resources toacquisitions leaves less for innovation which means that managers may give a lowerpriority to internal innovation (Hitt et al 1991) Thus since investments in acquisitionsand investments in other areas eg innovation may be perceived as trade-offs mostorganisations prioritise managerial commitment either to mergers and acquisitions orinternally to innovation

Acquisition is often suggested as a solution to stifling management systemsespecially as regards technology development (Warner 2003) and a growing body ofliterature has evolved to help organisations understand the value of technology andinnovation through acquisitions (eg Hitt et al 1990 Hitt et al 1996 James et al 1998)


1163

For example Karim and Mitchell (2000) find that acquisitions are a key to resourcereconfiguration either through deepening existing resources or extending the resourcemix This leads them to believe that companies that grow through acquisitions aremore robust and more likely to survive than those that do not Similarly Ahuja andKatila (2001) find that large companies can increase their innovativeness when theyacquire smaller companies and based on a study of MampA in Greece Papadakis (2005)suggests that the larger the acquirer compared with the acquired company the moresuccessful the acquisition

However other studies find that the performance of acquisitions is often belowexpectations (eg Chaudhuri and Tabrizi 1999 Hargedoorn and Duysters 2002) andin their review of the effect of mergers acquisitions and alliances Man and Duysters(2005) conclude that alliances should be favoured to mergers and acquisitions for thepurpose of innovative renewal

Collier (1983) argued that organisations often mature when they grow larger andthat this may be why larger organisations have increasingly pursued growth throughMampA compensating for their stifled systems and often ldquolackingrdquo innovation byacquiring entrepreneurial organisations However absorbing and integrating anentrepreneurial organisation into a larger one is a complex process that challengesmany of the pre-existing structures and processes in both organisations One of themajor challenges is to maintain creativity and innovativeness ndash at least in the acquiredorganisation ndash within the newly established corporate boundaries

Managing the post-acquisition processIt is often less clear from the available empirical literature how the post-acquisitionprocess influences the innovative performance of the acquired company Bresman et al(1999) suggest that it may be difficult to maintain innovativeness in the immediatepost-acquisition period because knowledge transfer becomes a one-way process fromthe acquirer to the acquired which can make employees in the acquired organisationfeel stressed angry disoriented frustrated confused and even frightened (Buono1997) leading to tension and uncertainty This potentially dampens employeesrsquocreativity and innovativess (Zhuang 1995)

Further information and knowledge are increasingly seen as key resources in theso-called knowledge-intensive companies However as emphasised by Von Krogh et al2000 knowledge is often related to processes which are basically not manageable in thetraditional sense or which lose their efficiency and impact if management is too tightKnowledge-sharing therefore presumes a motivation which does not comeautomatically

A knowledge-sharing culture involves the exchange of experiences together withthe ability to identify and cooperate with persons in the organisation withcomplementary competencies etc Thus companies need to develop aknowledge-sharing culture and a common identity since this helps to identify whatthe organisation must know and what capabilities should be developed (Bukh et al2005) Furthermore in acquired technology-based companies the most talentedindividuals embody the acquired companyrsquos institutional knowledge and these peopleare also the ones who have the best employment opportunities outside the company (cfBuono 1997)

MD449

1164

Changes in the organisation including MampA are likely to induce changes in theculture and thus also in the organisationrsquos ability to adopt and explore knowledgeThis is especially the case when new knowledge related to customers and otherinternal and external stakeholders must be integrated in the organisationOrganisational learning and organisational knowledge is not simply the sum ofemployeesrsquo learning and knowledge but is influenced by the social processes in thecompany as has been emphasised in the concept of the learning organisation and theknowledge-based company

MethodThis article addresses three fundamental issues ndash creativity innovation and theinnovative process ndash based on employeesrsquo perception of themselves and the innovativeactivities in the case company Ericsson Telebit The data collection was carried out inthe period August-October 2002 and was based on a combination of semi-structuredinterviews on-site observations and a questionnaire distributed to employees at thecompany The initial purpose of the interviews was to get an overview of relevantthemes regarding the role of innovation and creativity in order to develop thequestionnaire however the insights obtained also enabled a more thoroughinterpretation of the results The purpose of the questionnaire was to address abroader understanding of the concepts throughout the organisation while theobservations were used to validate and expand the interview statements

The two main data collection methods interviews and questionnaires were used ina mixed method research design in order to gain both insight into the development ofthe case company and the post-merger experiences of the employees (the interviews)and specifically examine the role and nature of creativity and innovation in thecompany (the questionnaire) Even though the methods are combined in a study of thesame phenomenon as is broadly done in triangulation (Denzin 1989 Jick 1979) wecannot claim the same kind of validity as when the same dimension of a researchproblem is examined using multiple methods However both the on-site observationsand the interviews add to the interpretation of the questionnaire results Below theinterviews and especially the questionnaire are described in more detail

The interviewsIn August 2002 three in-depth interviews were conducted at Ericsson Telebit one withan employee who had been with the company from the start one with a functionalmanager and one with an employee from the research department The author alsohad an informal introductory conversation with the HR manager as well as informalinterviews with several other employees The in-depth interviews were concentratedaround five themes background information incorporation into LM Ericssonchanging organisational structures motivation and customers They weretape-recorded and transcribed for subsequent coding and analysis

The questionnaireBased on prior knowledge interviews and written documents a questionnaire wasdeveloped to probe into employeesrsquo perception of the working environment how theconcept of innovation was interpreted and what is needed for employees to beinnovative The questionnaire adopts and extends Zhuangrsquos (1995) so-called attitude


1165

survey questionnaire which was originally designed to gain insight into the dynamicsof innovation with creativity as an input to the development of new ideas Thisquestionnaire adopts Heaprsquos (1989) notion of creativity as ldquothe synthesis of new ideasand concepts by the radical restructuring and re-association of existing onesrdquo thuscapturing the human factor as an input to the companyrsquos innovativeness

Some of Zhuangrsquos original questions were asked in reverse to control whetherrespondents paid attention to the questions The questionnaire used in this paperconsists of 35 questions (compared with Zhuangrsquos 28 questions) divided into threesections each preceded by a statement indicating the focus of the section At the end ofeach section respondents were given the opportunity to make comments andsuggestions

Section one of the questionnaire (see Appendix for the full questionnaire)containing seven questions was designed to collect personal data eg sex age etc Sixof these questions corresponded to Zhuangrsquos questions while the seventh is added toenable analysis of the data across the different departments at Ericsson Telebit

Section two containing 14 questions was designed to evaluate respondentsrsquocreativity (13 questions corresponded to 12 of Zhuangrsquos one of his questions rdquoDo youmistrust your own or other peoplersquos intuitionrdquo being divided into two) Zhuangexplains that he condensed Terry Farnsworthrsquos (1987) original creativity scale from 40to 12 questions by removing those explicitly aimed at managers The 13 questions aretherefore scored individually and the sum used as an indicator of creativity forcross-tabulation As in section one there was an additional question on whether thecompany created a context for improvements both personal and professional

The remaining 12 questions (nine of which corresponded to Zhuangrsquos) in sectionthree were designed to collect data on how the respondents perceive innovation Onequestion asked respondents to indicate factors of importance for realising their owninnovation potential while another asked them to identify the factors most emphasisedby the organisation The last ten questions in this section asked respondents to rankstatements about the companyrsquos present innovation strengths

At the end of October 2002 the questionnaire was accessible on Ericsson Telebitrsquosintranet for fourteen days The response rate was only 30 percent even though thequestionnaire was placed on the front page together with a reminder at the end of theperiod One of the managers suggested that the length of the questionnaire might haveput off some potential respondents The overall response is shown in Table I

Innovativeness of Ericsson Telebit from spin-off to integrationEricsson Telebit has its roots in the very first Danish IT company Regnecentralenwhich was founded in 1955 In 1989 after a number of years under different ownership50 per cent of the shares in Regnecentralen were acquired by Britainrsquos ICL(International Computers Ltd) the rest being acquired a few years later ndash after ICL

Number of employees 120Questionnaires received 37Overall response rate () 3083Usable number of responses 33Net response rate () 2750

Table IAnalysis of overallresponse

MD449

1166

had been bought by the Japanese company Fujitsu Ltd As part of the restructuring itwas decided to close down the part of Regnecentralen that developed and producednetwork routers and accessories These changes in ownership together with areorganisation and refocusing of business areas led to the establishing of Telebit ASin 1992

Together with 12 other people mostly from RegnecentralenICL the projectmanager of the routers and accessories department decided to start Telebit on the basisof a contract with their main customer a Dutch company Between 1992 and 1999Telebit increased its number of employees from 13 to 38 and in 1995 it became the firstcompany in the world to introduce a commercial router based on IPv6 (InternetProtocol version 6) technology[1] With the competencies and insights into internettechnologies that this generated within the organisation including the breakthrough ofIPv6 technology Telebit positioned itself as an innovative company possessingcompetencies at the cutting edge of new IP-related technologies

At the time therefore the companyrsquos innovativeness was mostly driven bytechnological insight and both internally and among its customers technology wasregarded as one of the main drivers of Telebitrsquos competitive advantage ConsequentlyTelebit focused its development efforts on IP technology its aim being to makeprototypes of new routers to demonstrate the possibilities of the technology rather thana specific product with a clear market position

Incorporation into LM EricssonTelebitrsquos acquisition by LM Ericsson (Ericsson) in 1999 led to major changes Thenumber of employees at the newly-named company Ericsson Telebit (TED theinternal Ericsson abbreviation) increased rapidly doubling within 12 months fromapproximately 70 to 140 This in turn influenced the way of working eg how newemployees were trained since mentoring was not possible to the same extent as beforeIncorporation into Ericsson also resulted in several organisational changes As a relicof the Telebit days TED started as a single development department where employeeswere allocated to projects for shorter or longer periods Soon after however TED wasreorganised into an ldquoad hoc matrix structurerdquo where employees were organised indepartments on the basis of work areas and competencies As one of the managersexplained the aim of this new structure was to bring management into focus

Before the development manager did all kinds of stuff and the employees were veryautonomous Experienced hands They did not need project management or hardly anymanagement at all

Like many other entrepreneurial companies (cf Churchill and Lewis 1983) the oldTelebit organisation had a very flexible and loosely-defined organisational structurewith informal and minimal management systems and activities appeared almostchaotic and disjointed (Kazanjian and Drazin 1990 Stevenson and Harmeling 1990)Furthermore Telebit could be said to be characterised by intuitive decision-makingbased on the foundersrsquo values goals and skills (eg Bird 1992)

After being taken over by Ericsson the number of small projects was reduced andthe focus directed towards few but large long-term projects This together withincreased collaboration with other Ericsson units in Sweden created the need forfull-time project managers at TED The company had to improve project management


1167

skills since single projects were now of greater importance At the same time ongoingprojects were given more emphasis in the organisational structure in order to increaseemployeesrsquo commitment to project-specific goals rather than the department

Ericsson Telebitrsquos productsWith the new focus on large projects TEDrsquos product portfolio consists basically of twoprojects that were also its ldquoproductsrdquo SoftWare for Internet Protocol for Ericsson(SWIPE ) and Terminal Internet Protocol (TIP) Product management was now placedat two different locations in Stockholm SWIPE represents the development of softwarefor the mobile internet while TIP focuses on the development of an IP stack for mobile(terminals) which together makes it possible to merge ldquothe internet worldrdquo with ldquothemobile worldrdquo

During the first years of Ericsson ownership TED had its own researchdepartment providing courses for the Ericsson University in Stockholm andfunctioning as a third business area together with the two large projects At thebeginning of 2002 however this research department was closed down as part of aworldwide cut-back in Ericssonrsquos activities and TED had to find new ways to keeptechnologically up to date The solution was to launch smaller research projects incooperation with the University of Aarhus and the University of Aalborg (two Danishuniversities) As one employee put it

the opportunity to aim at entirely new initiatives is gone unless the management believesthat the only way is to establish a group of people ndash corresponding to 10 out of 150 people ndashwith unlimited possibilities not total anarchy but a group with possibilities and today wedo not have that

This means that TED mostly focuses on the improvement of existing products orprocess improvement

The marketFor employees the takeover by Ericsson not only limited their opportunities forcreativity access to the market and possibilities for innovation at TED but thesituation in the mobile market also changed After having experienced a period of rapidgrowth the market began to stagnate mainly because many mobile telephoneoperators were unwilling to establish the new network for third-generationtechnologies (3G or UMTS) since as one employee explained ldquothere is no money initrdquo Given the poor shape of the world economy in general operators were unwilling tomake any further investments in 3G having already spent huge sums on Europeanauctions for UMTS licences a transitional technology between GSM and true 3G

The stagnation of the mobile phone market influenced TED via Ericsson The scopeof development projects was changed several times concurrently with the operatorsrsquopostponement of investments in UMTS networks Some parts of TEDrsquos projects wereclosed down a few just weeks before they were due to be finished Nevertheless thegeneral belief at Ericsson in 2002 was that future products should still be based on theInternet Protocol technology which meant that TED represented a key competence forEricsson

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1168

From customers to sponsorsAs a result of its incorporation into Ericsson TED moved several steps down the valuechain since they no longer produced and marketed their own products to externalcustomers but only had internal customers at Ericsson called ldquosponsorsrdquo From beingan independent company supplying the market with leading-edge technology TEDwas now a local design centre within Ericsson Employees regarded this as a having amajor influence on their work They felt that they had lost the feeling for customersrsquoneeds because now they only got specifications from other parts of Ericsson One ofthe employees put it as follows

The products TED provides are based on a chain of demanded specifications [from otherparts of Ericsson] Because of this chain you are easily alienated towards the customers Andthis has also happened for TED We do not have direct contact with our customers which isboth good and bad but the understanding of the customers needs is an ability we do notpossess any more and that is a problem

The employees feel that the lack of feedback from customers or end users means thatthe quality of daily decisions and their commitment to product quality has sufferedNotwithstanding some of the original Telebit employees have maintained theircontacts with customers based on the hardware Telebit sold at the time Thisknowledge of customersrsquo needs is highly valued at TED and these employees are usedas a feedback group

TEDrsquos management is certainly not happy about the change in orientation awayfrom customers One of the managers explained

if we do not continue to have contacts then we lose the real contact with the end userstheir needs and how they use our products and then it will only be development in relation towritten requirements from the sponsors in Stockholm

Organisational structureInternationally Ericsson is divided into six business units each of which has directcontact with customers worldwide and responsibility for identifying customer needsand demands The business unit that includes TED is organised into three core unitscore network radio access network and application and services The core units focuson technological developments and are supported by so-called local design centreswhere actual technological development takes place

The financing of local design centre support follows the chain-of-command impliedby the organisational structure This means that funds flow from the business units viacore units to the local design centres The practical implication is that the core unitsfunction as coordinators managing the internal architecture including how thecomponents within the area are related One of the employees at TED explains this inthe following way ldquofor example when the purpose is to put IP technology on a routerit is the core unitrsquos responsibility to lsquosponsorrsquo a local design centrerdquo and sponsoringhere literally means supporting the local design centre with financial resources

While the clear separation of RampD departments from business units with customercontact has the advantage of directing research activities towards the commercialapplication of technologies it also has disadvantages since the organisationalstructure has a tendency to discourage more basic RampD activities and more long-termactivities without a specific market potential Without independent financing the local


1169

design centres are unable to follow new ideas that emerge during the projectsHowever they are allowed or even expected to be innovative within the project scopesas specified by Ericssonrsquos core units though since the sponsors are part of the board ofdirectors in the local design centres it limits the centresrsquo ability to act independently

EmployeesEven though sponsors have the formal powers to pass on assignments to the localdesign centre some TED employees feel that they sometimes have insufficienttechnological insight to choose the right projects While the sponsor organisations areclose to the end market and thus often have superior knowledge about customersrsquo andend usersrsquo immediate needs via the business units their knowledge of technologycomes from the design centres which means that they sometimes lack anunderstanding of its possibilities

Like many other RampD-oriented organisations TED regards knowledge as its mostimportant resource This also makes demands on employees since the companyrequires them to be able to work autonomously creatively take initiatives and askother people for help if needed Therefore TED primarily employs people with anappropriate educational background eg those with a university degree in computerscience engineers etc Notwithstanding some employees have obtained their maineducational qualifications from ongoing training not having had a formal degree insoftware engineering or other related areas before joining TED

Some employees have been with TED since it was established as an independentcompany in 1992 while others joined the company later Some had several yearsrsquoexperience from other companies while others were newly qualified One employeedescribed things as

We are 20 or 25 old guys while the rest are young They need more experience before theyrealise that teamwork is more important than putting oneself at the front line

This is also why TED makes an effort to attract and retain experienced employeesAnother employee said

We talk a lot and help each other There is a very good helping spirit and it is very naturalthat we help each other

This is also the impression gained from observations when visiting the organisationEmployees talk in the hallways in the offices and so on Most offices are shared bytwo or three persons and the offices of the project groups are located close together sothat distance is not a barrier to communication However it was also pointed out that adoor can be a small barrier to some employees even though management encouragesthem to talk to each other and seek help

Discussion of Ericsson Telebitrsquos innovativenessThis section draws on the questionnaire results in order to provide another angle onhow the acquisition and organisational turbulence has affected Telebitrsquos innovationand the perception of innovation among employees In addition when possible theresults are compared with findings from Zhuangrsquos (1995) study several questionsbeing similar (all results presented are based on average scores)

MD449

1170

Based on Heaprsquos (1989) definition Zhuang defined creativity as a ldquosynthesis of newideas and concepts by the radical restructuring and reassociation of existing onesrdquo(Zhuang 1995 p 14) While Zhuang measured innovation on an organisation-by-organisation basis this study is based on only one company Furthermore innovation ismeasured based on employeesrsquo perceptions rather than as a predefined concept Inaddition to creativity and innovation a third element the innovative process concernshow creativity is turned into improved corporate performance

CreativityAs discussed in section 2 creativity was measured on a scale from 1 to 13 The averagescore of different groups of employees is shown in Table II As can be seen employeesrsquoperception of their creativity is very similar across age and position moreover thedispersion of responses (not reported here) is low with the highest score being 13 andthe lowest 8 Four employees all male scored 13 while only one scored 8 The biggestdifference in creativity albeit not significant was found between the sexes Howeverthis could be explained by their job function in the company Of the seven femaleemployees five were in services or administration and two were in operations whereasamong the twenty-six male employees one was in administration nineteen were inoperations and six were managers (either department or project managers) Thisdifference between the sexes is as shown in Table II in agreement with Zhuangrsquosfindings in the companies alpha and beta

At first glance it seems surprising that employees aged 50 thorn scored slightly higher(albeit not significantly) on creativity than the other age groups younger people beingcommonly believed to be more creative and innovative which is in line with Zhuangrsquos(1995) study Some research (eg Hambrick and Mason 1984) shows that oldermanagers generally dislike deviating from the status quo and show greater adherenceto the norms of the organisation unlike younger and less experienced managers whoare more likely to pursuer creative strategies Other studies (eg Mostafa 2005) find nodifference in creativity and the perception of creativity between age groups

TED Alpha Beta

Overall average 1033 794 834

By ageUnder 20 000 900 70021-30 1014 844 87531-40 1025 814 82641-50 1025 700 890Over 50 1080 760 820

By positionManagerial 1033 868 917Non-managerial 1033 747 796

By sexMale 1058 819 859Female 943 747 700

Table IIAnalysis of scores on

creativity scale


1171

Without giving too much weight to the results since the difference is insignificant oneexplanation could be that the organisational emphasis on creativity and innovationfrom the early days of Telebit has fostered a climate conducive to creativity As statedby Shearring (1992) the human brain stays plastic throughout life and givenopportunity and motivation adults can master new subjects acquire new skills andlearn to behave more creatively at any age Another explanation for the high creativityscore among the over-50s may be that most of them are the entrepreneurs who havebeen with TED since the beginning in 1992 They were originally employed because oftheir ability to apply their knowledge to problem-solving and product development

Even when the thirteen questions on creativity in the questionnaire were condensedto 12 and the reverse questions were corrected the overall average of 942 wasremarkably higher than the 794 in Alpha and 834 in Beta[2] In TED the averagescore on creativity was the same for both managerial and non-managerial employeeswhereas it was significantly higher for managerial than non-managerial employees inboth Alpha and Beta Managers are often found to be more creative thatnon-managerial employees (eg Mostafa 2005) but in a technology-based companylike TED it is probably not surprising that creativity is a widely dispersedcharacteristic

InnovationAs shown in Table III in addition to Zhuangrsquos ten statements regarding employeesrsquoperception of innovation the questionnaire also included three further statementsrelated to the transformation of ideas to ldquoproductsrdquo and meeting customersrsquo andsuppliersrsquo requirements respectively Based on a five-point Likert scale from 1(strongly disagree) to 5 (strongly agree) Table III shows how employees at TEDperceive innovation

The most significant statements which employees either agree or strongly agreewith are about generating new ideas and seeing something from a differentperspective One of the interviewees at TED explained the latter as follows

innovation is not necessarily to develop something entirely new it might as well apply tothe usability and application of an existing technology A good example is the IP technologywhich actually is an old technology and there are plenty of people in this world who knowmore about it than we do But we have focused on the IP technology in relation toimplementation and the small thing it is to put an IP stack on a mobile phone opens for a lotof new application and service opportunities and to me this is an example of creativity

Judging from the distribution of the innovation scores TED employees do not seem tohave a shared perception of what innovation is This is in agreement with for exampleRoos and von Krogh (1995) who argue that the perception of a concept depends onprior knowledge which means that it differs from person to person From thispoint-of-view the high score of the statement ldquoseeing something from a differentperspectiverdquo is thus a very interesting result and is in line with TED employeesrsquoassertion that innovation can be initiated throughout the organisation and from outsideit as showed in Table IV According to employees new ideas are often generated atnatural meeting places like canteens coffee machines mail rooms etc whichencourage and enable informal conversations (Christensen and Bang 2003Christensen 2005) Another perspective on innovation is customer-driveninnovation Customers can be involved in the innovative process in different ways

MD449

1172

Per

cen

tag

ed

istr

ibu

tion

ofth

ein

nov

atio

nsc

ores

atT

ED

Iny

our

opin

ion

in

nov

atio

nis

abou

tS

tron

gly

dis

agre

eD

isag

ree

Not

sure

Ag

ree

Str

ong

lyag

ree

TE

DA

lph

aB

eta

Inv

enti

ng

som

eth

ing

enti

rely

new

00

273

91

424

212

358

235

252

Gen

erat

ing

new

idea

s0

00

00

048

551

54

523

083

28Im

pro

vin

gso

met

hin

gth

atal

read

yex

ists

30

61

152

515

242

388

227

198

Fol

low

ing

the

mar

ket

lead

er27

351

512

19

10

02

033

533

98A

ttra

ctin

gin

nov

ativ

ep

eop

le6

115

212

133

333

33

732

592

98P

erfo

rmin

gan

exis

tin

gta

skin

an

eww

ay0

06

112

175

86

13

822

222

04S

pre

adin

gn

ewid

eas

61

00

212

515

212

382

222

217

Ad

opti

ng

som

eth

ing

that

has

bee

nsu

cces

sfu

lly

trie

del

sew

her

e3

033

327

327

39

13

063

162

76S

eein

gso

met

hin

gfr

oma

dif

fere

nt

per

spec

tiv

e0

00

06

163

630

34

242

411

91In

trod

uci

ng

chan

ges

00

182

212

485

121

355

224

230

Tra

nsf

orm

ing

idea

sto

ldquopro

du

ctsrdquo

30

91

152

485

242

382

NA

NA

Mee

tin

gcu

stom

ers

121

182

394

212

91

297

NA

NA

Mee

tin

gsu

pp

lier

s12

121

242

421

23

02

82N

AN

A

Notes

Th

en

um

ber

sin

this

tab

lear

eav

erag

esc

ores

ona

fiv

e-p

oin

tL

iker

tsc

ale

onin

nov

atio

nA

lph

aan

dB

eta

are

from

Zh

uan

grsquos

(199

5)st

ud

yan

dar

ein

clu

ded

inor

der

toco

mp

are

the

Tel

ebit

scor

esw

ith

two

oth

erco

mp

anie

s

Table IIIWhat is innovation about

(percentage distributionand average)


1173

eg work groups or ldquocamping outrdquo at customers (Christensen 2005) A third andrelated perspective on innovation is networks with research institutions which may beestablished to get access to basic research (Christensen 2005) or to new ideas viastudentsrsquo projects There are an infinite number of approaches to innovation the onlylimitation is within the individuals

It should also be noted that the more general perception of innovation at TED issignificantly different from that in the Alpha and Beta companies For instance asshowed in Table III TED employees think that going beyond traditional ways ofthinking namely ldquoseeing something from at different perspectiverdquo is very important toinnovation whereas in the more traditional industrial companies Alpha and Betaemployees think it more important for innovation to ldquofollow the market leaderrdquo Thedifference between the two very different statements partly reflects the fact that Alphaand Beta are traditional industrial companies whereas TED is knowledge intensiveand competes on innovativeness

Employees were also asked to give their opinion on nine statements regardingvaluation of innovation in their organisation As shown in Table V the strongestcommon belief was how significantly an innovation improves the organisationrsquosprofitability (score 415) How new technology is applied (394) and whether it iscomplementary to existing products (373) were also perceived to be importantCommon to these three statements is that none of the employees strongly disagreedalthough the lower the score the more uncertain people were

The innovation processWith a score of 424 against 366 for marketing and production employees engineersor operational employees appear to play the most important role in initiating theinnovative process Employees expressed mixed opinions about whether or not theboard of directors or sponsors were well placed to initiate an innovation As Table IVshows the distribution of employeesrsquo perception is scattered giving an average scoreof 312 This disagreement also clearly emerged from the interviews becauseemployees perceive the sponsors in different ways Those who think sponsors are wellplaced to initiate an innovation based their answer on the sponsorsrsquo power to controlthe supply of resources (financial support) whereas the main reason given for

Percentage distribution of the position toinitiate innovation scores at TED

Who do you think is in a favourableposition to initiate a product innovation

Stronglydisagree Disagree

Notsure Agree

Stronglyagree

TEDaverage

The board of directors 1 13 5 9 5 312Marketing people 1 3 5 20 3 366Production people 1 4 5 17 5 366Engineersoperational 0 1 1 20 11 424Accountants 2 16 7 8 0 264Purchasing people 1 9 12 10 0 297Nobody 23 5 5 0 0 145External experts (consultants) 1 4 12 14 2 336Receptionists 5 11 10 7 0 258

Table IVWho is in a position toinitiate a productinnovation

MD449

1174

disagreeing with this statement is that the sponsors only provide TED with resourcesndash and not with ldquodriverdquo

Summing up creativity innovation and the innovative processes all played acritical role in entrepreneurship though there is still a need for someone to takeresponsibility for and drive the entrepreneurial process This person can either be anindependent entrepreneur or an entrepreneur working in an existing organisation(intrapreneur) but they may be motivated by different reasons

Concluding discussionAs one of the first contributions to understanding the implications of mergers andacquisitions for companiesrsquo innovativeness Hitt et al (1990) argued that managerialcommitment to innovation is based on organisational conditions More specificallythis means that up to a certain company size managerial commitment to innovationincreases but any subsequent increase in size tends to overburden both managementand employees with formal control systems creating difficulties in relation toinnovative activities in large mature companies

The changes in organisational boundaries as regards access to customers andrelated relevant information as well as the increase in control and reporting systemsexperienced by employees at TED are probably very typical for acquiredorganisations Almost by definition organisations pursuing acquisitions becomelarger and the range of their operations more diversified which affects the types ofcontrol systems needed following an acquisition (Hitt et al 1990)

Williamson (1975) has argued that large multinational companies are often not asefficient as smaller companies at developing innovations rather they are efficient inmanufacturing and distribution while smaller entrepreneurial organisations are moreefficient at developing innovations due to their greater flexibility This is illustrated byTED where innovation became difficult when the small entrepreneurial company wasincorporated into a large and complex multi-national company and it is also inaccordance with Damanpourrsquos (1992) conclusion that size matters to innovation

Percentage distribution of the valuation ofinnovation scores at TED

How is the value of an innovationjudged in an organisation like yours


Notsure Agree

Stronglyagree TED

How novel it is 0 3 13 15 2 348How many people it involves 1 13 13 3 3 282How long it takes 1 9 9 9 5 324How much it costs 2 7 5 14 5 339How significantly it improves theorganisationrsquos profitability 0 0 4 20 9 415Whether new technology is applied 0 1 6 20 6 394The extent of change it entails 1 2 17 12 1 330Whether it involves a new business area 1 4 13 10 5 342Whether it is complementary to existingproducts 0 0 11 20 2 373

Table VValuation of innovation


1175

In relation to employeesrsquo perception of creativity and innovation and to their ownability to be creative and innovative most employees at TED emphasised their ownand colleaguesrsquo creativity and innovativeness However it was also realised thatcreativity itself was not enough for new ideas to materialise in actions in largeorganisations One of the TED employees expressed this very clearly

It is an illusion to believe that you can take a small creative and innovative company andintegrate it into a larger one ndash it is downhill most of the time

Implications for practiceThe working practices and processes that were developed when Telebit was a separatecompany gradually disappeared or were simply lost when the company wasincorporated into Ericsson even though most of the employees were still the same Theimportant lesson here is that although creativity and innovativeness have a stronghuman dimension innovation requires an organisational context that enablesknowledge creation (Von Krogh et al 2000) In the case of Telebit the former workingroutines and practices as well as contact to customers formed part of the tacitorganisational knowledge and as is well known from the literature on knowledgecreation (Von Krogh et al 2000) this is not easily transferable

This indicates that to maintain the opportunities and competencies of the acquiredorganisation some efforts are needed to make the energies of the two organisations acttogether in tandem Telebit probably lost its original innovativeness because thereorganisation of the company distorted the entrepreneurial drive created by directcustomer contact However it is impossible to say what might have happened ifEricsson had focused more on the integration process and on facilitating the transfer ofcapabilities to the consolidated company This is the strategy recommended by forexample Buono (1997) who studied a similar type of acquisition and demonstratedthat a process that incorporates work with organisational members on pre-acquisitionanxieties is beneficial

Papadakis (2005) found that the existence of a communication program was aparticularly significant factor explaining the success of MampA Similarly a survey byBert et al (2003) found under-communication to be the most important problemFurthermore Bert et al (2003) also emphasised that post-merger problems are to agreat extent due to a clash of cultures and different management styles very similar towhat was experienced by the employees at TED

One company well known for its ability to successfully acquire new technologythrough acquisitions is Cisco Systems which more than any other high-tech companyhas built up a dominant market position through acquisitions (Mayer and Kenney2004) Although comparing the acquisition of Telebit by Ericsson with the generalimpression of Ciscorsquos acquisition practice from the literature has its limitations a closerlook into this can still provide some key points for understanding what ndash or what not ndashhappened when Telebit was acquired

According to Pfeffer and Sutton (2006) Ciscorsquos success stems from the companyrsquossystematic examination of evidence about what went right and wrong in othercompaniesrsquo mergers as well as a merger integration process that ensures the peoplestay with the company feel at home and can use their knowledge to makecontributions to the new company We did not explicitly ask the employees at TED

MD449

1176

about the kind of post-integration procedures used at Ericsson or how Ericsson hadlearnt from this experience ndash however specific corporate-wide procedures forintegration or learning were not mentioned in the interviews either In their study ofCiscorsquos strategy Mayer and Kenney (2004 p 300) show that ldquoif employees leave ortheir practice is significantly disrupted then the acquisition is almost certain to failrdquoThus not only retention but also preserving the way of working seems to be of theutmost importance since it is both emphasised in the case of Cisco and apparent fromthis study

Implications for researchWhile MampA seem to be a recurring part of corporate life there is no substantialevidence about what really matters in the integration phase The case study reported inthe article pointed to specific factors that were important for the innovativenesscreativity and entrepreneurial spirit of the acquired company These elements mostimportantly the informality of the organisation and close contact to customers werenot preserved after the acquisition More generally a comparison with Cisco couldpoint to the importance of how the integration phase is managed

As regards creativity and innovativeness in general the literature identifies severalways in which management can influence a companyrsquos practices and processes Giventhe importance of the pre- and post-integration phases both qualitative andquantitative cross-company studies could shed more light on which factors areimportant and how the presence or absence of these factors influence the success of anacquisition

One way of strengthening the conclusions with respect to how creativity andinnovativeness can be maintained in acquired technology companies could be toexamine similar acquisitions not only at Ericsson and Cisco but also at othercompanies competing in the same business areas The focus here should be both on theactual experiences in the acquired companies the specific conditions related to theacquisitions and on the management of the post- and pre-integration phase Onelimitation of the present study is that it only focuses on employees who have stayedwith the acquired company Given the importance of the integration phase newinsights could be gained from following an acquisition more closely regardingattitudes both among those who stay and those who leave as well as among employeesat the acquiring company Furthermore it should be possible to conduct survey-basedstudies across a larger number of companies including in other sectors to examinehow management of the integration phase influences the motivation and creativity ofemployees in the acquired companies

Notes

1 The accelerating growth of the internet and its migration into new areas such as embeddeddevices together with the widespread use of IP in wireless consumer devices severely testedInternet Protocol version 4 (IPv4) which was designed in the early 1980s The new standardIPv6 was developed to extend the current IP infrastructure and improve scalability andsecurity of IP networks and also provides mechanisms for easier configuration of networksand attached devices

2 Not testable as Zhuangrsquos (1995) variance is not accessible


1177

References

Ahuja G and Katila R (2001) ldquoTechnological acquisitions and the innovation performance ofthe acquiring firms a longitudinal studyrdquo Strategic Management Journal Vol 22 No 3pp 197-220

Bert A MacDonals T and Herd T (2003) ldquoTwo merger integration imperatives urgency andexecutionrdquo Strategy amp Leadership Vol 31 No 3 pp 42-9

Bird B (1992) ldquoThe operation of intentions in timerdquo Entrepreneurship Theory and PracticeVol 17 No 1 pp 11-20

Bresman H Birkenshaw J and Nobel R (1999) ldquoKnowledge transfer in internationalacquisitionrdquo Journal of International Business Vol 30 No 3 pp 439-62

Brockner J Grover S OrsquoMalley MN Reed TF and Glynn MA (1993) ldquoThreads of futurelayoff self-esteem and survivorsrsquo reactions evidence from the laboratory and the fieldrdquoStrategic Management Journal Summer pp 153-66

Bukh PN Christensen KS and Mouritsen J (2005) Knowledge Management and IntellectualCapital Establishing a Field of Practice Palgrave Macmillan Houndsmill

Buono AF (1997) ldquoTechnology transfer through acquisitionrdquo Management Decision Vol 35No 3 pp 194-204

Burgelman RA (1986) ldquoManaging corporate entrepreneurship new structures forimplementing technological innovationrdquo in Horwith M (Ed) Technology in the ModernCorporation Pergamon Press New York NY pp 1-13

Chaudhuri S and Tabrizi B (1999) ldquoCapturing the real value in high-tech acquisitionsrdquoHarvard Business Review Vol 75 No 5 pp 123-30

Christensen KS (2005) ldquoEnabling intrapreneurship the case of a knowledge-intensiveindustrial companyrdquo European Journal of Innovation Management Vol 8 No 3pp 305-22

Christensen KS and Bang HK (2003) ldquoKnowledge management in a project orientedorganisation three perspectivesrdquo Journal of Knowledge Management Vol 7 No 3pp 116-28

Churchill N and Lewis V (1983) ldquoThe five states of business growthrdquo Harvard BusinessReview Vol 61 pp 44-51

Collier DW (1983) ldquoTechnology in diversified decentralised companiesrdquo Journal of BusinessStrategy Vol 3 pp 91-3

Damanpour F (1992) ldquoOrganisational size and innovationrdquo Organisation Studies Vol 13 No 3pp 375-402

Denzin NK (1989) The Research Act A Theoretical Introduction to Sociological Methods 3rd edPrentice-Hall Englewood Cliffs NJ

Ernst H and Vitt J (2000) ldquoThe influence of corporate acquisitions on the behaviour of keyinventorsrdquo RampD Management Vol 30 No 2 pp 105-19

Farnsworth T (1987) Test Your Executive Skills Ebury Press London

Ghoshal S (1987) ldquoGlobal strategy an organising frameworkrdquo Strategic Management JournalVol 8 No 5 pp 425-40

Hambrick DC and Cannella AA (1993) ldquoRelative standing a framework for understandingdepartures of acquired executivesrdquo Academy of Management Journal Vol 36 No 4pp 733-62

Hambrick D and Mason P (1984) ldquoUpper echelons the organisation as a reflection of its topmanagementrdquo Academy of Management Review Vol 9 No 2 pp 193-206

MD449

1178

Hargedoorn J and Duysters G (2002) ldquoThe effect of mergers and acquisitions on thetechnological performance of companies in a high-tech environmentrdquo Technology Analysisamp Strategic Management Vol 14 No 1 pp 67-85

Harrison JS Hitt MA Hoskinsson RE and Ireland RD (1991) ldquoSynergies andpost-acquisition performance differences versus similarities in resource allocationsrdquoJournal of Management Vol 17 pp 173-90

Harrison JS Hitt MA Hoskinsson RE and Ireland RD (2001) ldquoResource complementarityin business combinations extending the logic to organisational alliancesrdquo Journal ofManagement Vol 27 pp 679-90

Heap J (1989) The Management of Innovation and Design Cassell Educations Ltd London

Hitt MA Hoskisson RE and Ireland RD (1990) ldquoMergers and acquisitions and managerialcommitment to innovation in M-form companiesrdquo Strategic Management Journal Vol 11No 10 pp 29-47

Hitt MA Hoskisson RE Ireland RD and Harrison JS (1991) ldquoEffects of acquisitions onRampD inputs and outputsrdquo Academy of Management Journal Vol 34 No 3 pp 693-706

Hitt MA Hoskisson RE Johnson RA and Moesel DD (1996) ldquoThe market for corporatecontrol and firm innovationrdquo Academy of Management Journal Vol 39 No 5 pp 1084-119

James AD Georghiou L and Metcalfe JS (1998) ldquoIntegrating technology into merger andacquisition decision makingrdquo Technovation Vol 18 Nos 89 pp 563-73

Jick TD (1979) ldquoMixing qualitative and quantitative methods triangulation in actionrdquoAdministrative Science Quarterly Vol 24 No 4 pp 602-11

Kapoor R and Lim K (2005) ldquoThe impact of acquisitions on the innovation performance ofinventors at semiconductor companiesrdquo Academy of Management Best Conference Papers2005

Karim S and Mitchell W (2000) ldquoPath-dependent and path-breaking change reconfiguringbusiness resources following acquisitions in the US medical sector 1978-1995rdquo StrategicManagement Journal Vol 21 No 11 pp 1061-81

Kazanjian RK and Drazin R (1990) ldquoA stage contingent model of size and growth fortechnologically based venturesrdquo Journal of Business Venturing Vol 5 No 3 pp 137-50

King DR Dalton DR Daily CM and Covin JG (2004) ldquoMeta-analysis of post acquisitionperformance indicators of unidentified moderatorsrdquo Strategic Management JournalVol 25 No 2 pp 187-200

Leonard-Barton D (1992) ldquoCore capabilities and core rigidities a paradox in managing newproduct developmentrdquo Strategic Management Journal Vol 13 pp 111-25

Man AP and Duysters F (2005) ldquoCollaboration and innovation a review of the effect ofmergers acquisitions and alliances on innovationrdquo Technovation Vol 25 pp 1377-87

March JG (1991) ldquoExploration and exploitation in organisational learningrdquo OrganisationScience Vol 2 No 1 pp 71-87

Mayer D and Kenney M (2004) ldquoEconomic action does not take place in a vacuumunderstanding Ciscorsquos acquisition and development strategyrdquo Industry and InnovationVol 11 No 4 pp 299-326

Mostafa M (2005) ldquoFactors affecting organisational creativity and innovativeness in Egyptianbusiness organisations an empirical investigationrdquo The Journal of ManagementDevelopment Vol 24 No 1 pp 7-33

Papadakis VM (2005) ldquoThe role of broader context and the communication program in mergerand acquisition implementation successrdquo Management Decision Vol 43 No 2 pp 236-55


1179

Pfeffer J and Sutton RS (2006) Hard Facts Dangerous Half-Truths and Total NonsenseProfiting from Evidence-Based Management Harvard Business School Press Boston MA

Reilly AH Brett JM and Stroh LK (1993) ldquoThe impact of corporate turbulence on managersrsquoattitudesrdquo Strategic Management Journal Vol 14 pp 167-79

Roos J and von Krogh G (1995) ldquoWhat you see depends on who you are think aboutepistemologyrdquo IMD Perspectives for Managers No 7 pp 1-4

Shearring HA (1992) ldquoCreativity and older adultsrdquo Leadership amp Organization DevelopmentJournal Vol 13 No 2

Stevenson HH and Harmeling S (1990) ldquoEntrepreneurial managementrsquos need for a morelsquochaoticrsquo theoryrdquo Journal of Business Venturing Vol 5 No 1 pp 2-14

Von Krogh G Ichijo K and Nonaka I (2000) Enabling Knowledge Creation How to Unlock theMystery of Tacit Knowledge and Release the Power of Innovation Oxford University PressOxford

Warner AG (2003) ldquoBuying versus building competence acquisition patterns in theinformation and telecommunications industry 1995-2000rdquo International Journal ofInnovation Management Vol 7 No 4 pp 395-415

Williamson OE (1975) Markets and Hierarchies Analysis and Antitrust Implications FreePress New York NY

Zhuang L (1995) ldquoBridging the gap between technology and business strategy a pilot study onthe innovation processrdquo Management Decision Vol 33 No 8 pp 13-21

Appendix QuestionnaireThe first questions are about your background

(1) Sex male or female

(2) Your age

(3) Education (a) High school College (b) Bachelor degree (c) Engineer (d) MSc or MA (e)PhD (f) none and (g) Other please specify

(4) How many years have you been with the company

(5) In which department are you employed

(6) Which of the following categories best describe your current position (a) CEO and unitmanager (b) Department manager (c) Operational employees (d) Clericaladministration (e) Trainee (f) Services and (g) Other please specify

(7) How many years have you been in your current position

The next questions are about yourself in relation to your work environment

(8) Do you get bored when doing things the same way every time

(9) Are you afraid of making mistakes

(10) Are you satisfied when making improvements

(11) Does the company create a context in which you can make improvements (a) Personalandor (b) Professional

MD449

1180

(12) Are you discouraged from acting because of lack of resources

(13) Do you like solving problems in unconventional ways

(14) Do you feel that it is your job to be critical of established practices

(15) Do you trust your own intuition

(16) Do you trust other peoplersquos intuition

(17) Are you afraid of having your ideas ridiculed

(18) Do you find it hard to accept disorder and confusion

(19) Can you quickly point out why an idea will not work

(20) Do you welcome other peoplersquos ideas

(21) Do you prefer a quiet life to challenging one

The following questions are about the interpretation of different concepts (Questions 22-28 arebased on a five-point Likert scale)

(22) In your opinion innovation is about (a) inventing something entirely new (b)generating new ideas (c) improving something that already exists (d) following themarket leader (e) attracting innovative people (f) performing an existing task in a newway (g) spreading new ideas (h) adopting something that has been successfully triedelsewhere (i) seeing something from a different perspective (j) introducing changes (k)transforming ideas into ldquoproductsrdquo and (l) meetings with customers

(23) In your opinion an innovation can be (a) a product (b) a service (c) a technology (d) aproduction process (e) a management system (f) an administration procedure and (g)an organisational innovation

(24) How is the value of an innovation judged in an organisation like yours (a) How novelit is (b) how many people it involves (c) how long it takes (d) how much it costs (e)how significantly it improves the organisationrsquos profitability (f) whether newtechnology is applied (g) the extent of change it entails (h) whether it involves a newbusiness area and (i) whether it is complementary to existing products

(25) Who do you think is in a favourable position to initiate a product innovation (a) Theboard of directors (b) marketing people (c) production people (d) engineers (e)accountants (f) purchasing people (g) nobody (h) external experts (consultants) and(i) receptionists

(26) Why do companies embark on innovative activities (a) They want to increase profitmargin (b) their competitors (c) they want to do better than their competitors (d)pressure from customers (e) they have creative employees (f) in an attempt to cutdown their operational costs (g) they have the financial resources and (h) they try toavoid straight price competition

(27) The key to onersquos ability to innovate is to (a) be born with the right talent (b) be able tothink creatively (c) complete a higher education (d) have at least ten years of workexperience (e) possess good interpersonal skills (f) be good at putting theory into


1181

practice (g) realise the necessity (h) ask ldquostupidrdquo questions and (i) other pleasespecify

(28) Which of the following organisational factors are important to realising onersquosinnovation potential (a) Regular employee performance appraisals (b) freedom towork within areas of greatest interest (c) criticism from superiors or colleagues (d)recognition and appreciation (e) contact to stimulating colleagues (f) creativitytraining programmes (g) encouragement to take risks (h) monetary rewards (i)tolerance of non-conformity and (j) opportunity to work alone rather than in a team

(29) Which of the factors in question 28 do you feel get most emphasis in your company

On a scale from 1(creativity within specific scopes) to 5 (pursue ones ideas) and 10 (gives financialsupport to individuals or groups of employees who wish to start their own company on the basis ofan idea

(30) To which extent does the company make room for creativity and innovation

On a scale from 1(most important) to 10 (less important)

(31) Please rank the following statements in order of importance to the companyrsquos presentstrength of innovation (a) informal and relaxed management style (b) decentralisedmanagement structure (c) regular employee performance appraisal (d) generousbudget for research and development (e) strong emphasis on team effort (f) effectiveemployee suggestion scheme (g) encourage employees to work on their own initiative(h) prompt public recognition and appreciation (i) attractive monetary reward and (j)promotion

(32) Is there any point you wish to make concerning any aspect of your companyrsquosinnovation activities

(33) Other (comments and suggestions)

About the authorKarina Skovvang Christensen MSc (Econ) is a PhD student at the Department of ManagementAarhus School of Business Her primary research interests include management of innovationknowledge and strategy and her PhD project deals with management of intrapreneurship inknowledge-intensive organisations She has previously worked with intellectual capitalstatements and has published articles and books on knowledge management corporateentrepreneurship innovation and management accounting Karina Skovvang Christensen canbe contacted at KaSCasbdk

MD449

1182

To purchase reprints of this article please e-mail reprintsemeraldinsightcomOr visit our web site for further details wwwemeraldinsightcomreprints

111

CHAPTER 7

Enabling Intrapreneurship The Case of a Knowledge-Intensive Industrial Company

Originally Published in

Christensen Karina Skovvang 2005 Enabling Intrapreneurship The Case of a

Knowledge-Intensive Industrial Company European Journal of Innovation

Management Vol 8 No 3 pp 305-322

112

Enabling intrapreneurshipthe case of a knowledge-intensive

industrial companyKarina Skovvang Christensen

Department of Organisation and ManagementThe Aarhus School of Business Aarhus Denmark

Abstract

Purpose ndash The aim of the paper is to provide an understanding of the various factors that enableintrapreneurship in established firms The paper reports on a case study of intrapreneurship in a largeknowledge-intensive industrial firm

Designmethodologyapproach ndash Based on the existing literature it is suggested that the use ofdifferent factors can either enable or inhibit intrapreneurship and five enabling factors that areidentified Based on interviews on-site observations and documents and reports the five factors with apotential influence on intrapreneurship are examined and alternative factors considered

Findings ndash The five enabling factors that are identified in the literature are not sufficient to enableintrapreneurship in knowledge-intensive companies and it is concluded that three additional factorsenabling intrapreneurship in established firms should also be taken into account

Practical implications ndash The knowledge of what makes factors either enablers or inhibitors areincomplete and to enhance the intrapreneurial ability of an organisation managers must learn whichfactors to use in different situations

Originalityvalue ndash Only very few papers have studied intrapreneurship in specific organisationsThis paper contributes with a synthesis of the literature in the area and with a suggestion of a modelthat is used in the empirical analysis and augmented based on that The paper furthermore contributesto the body of literature on the factors enabling intrapreneurship in general

Keywords Communication Entrepreneurialism Culture


1 IntroductionJob creation has become a hot topic in most old industrialised countries whereproduction is increasingly moving to the newly industrialised countries Typically inmany European countries the underlying assumption in the public debate is that newjobs should mainly be created in small- and medium-sized firms (SMEs) Howeverstudies have shown that job creation in SMEs has almost come to a standstill and thatoverall these firms lose almost as many jobs as they create (see for example Hisrich1990 Sathe 2003)

Other authors eg Pinchot (1985) and Morris and Kuratko (2002) have suggestedthat there is a potential for job creation in both large and small companies though theysay little about the kind of industrial structure best suited to achieving this or about thebest way to ensure job creation and growth In any event we have to take a startingpoint in the existing structure with both large and small companies Much research has

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

wwwemeraldinsightcomresearchregister wwwemeraldinsightcom1460-1060htm

The author gratefully acknowledges the helpful comments made by Per Nikolaj Bukh AndersDrejer and John Parm Ulhoslashi on an earlier version of this paper

Enablingintrapreneurship

305

European Journal of InnovationManagement

Vol 8 No 3 2005pp 305-322

q Emerald Group Publishing Limited1460-1060

DOI 10110814601060510610171

been done within the field of entrepreneurship focusing on the entrepreneurrsquoscharacteristics and the process of starting up a new independent company (Gartner1988) although it is also necessary to improve innovation in large companies But iscorporate entrepreneurship the solution or is it just another passing fad

Corporate venturing has often been mentioned in relation to corporateentrepreneurship (eg Sathe 2003) and it has both good and bad points Sometimesmanagement faces new strategic dilemmas ndash especially if the new ventures are notclosely related to the mother companyrsquos core competencies and markets But as notedby Guth and Ginsberg (1990) and Sharma and Chrisman (1999) among otherscorporate entrepreneurship is more than corporate venturing and to be moreintrapreneurial companies therefore need to take the whole organisation into accountAs has often been pointed out in the literature on organisational design differentcorporate structures support different organisational needs (eg Hisrich 1990)Corporate structure is thus a good starting point as regards enabling intrapreneurship

In other words well-established and mature companies need to experiment withnew ways of organising and organisational structures that are known to enableinnovation to take place eg networks loosely coupled organisations and projectorganisations as a supplement to the classic hierarchy Notwithstanding managersalso need to recognise that innovation and renewal cannot be planned and managed inthe same way as operational activities

Another reason why innovation in large well-established companies is important isthat such companies possess more resources (both human financial and structural) thansmall companies and are therefore faced by less overall uncertainty Often they onlyexpose themselves to one kind of uncertainty at a time while entrepreneurs typicallyhave to cope with several simultaneously eg technology markets financial capital andbranding The transition to the knowledge society may thus be very difficult to achievethrough small companies alone which makes the focus on innovation in large companieseven more important This in turn implies directing more attention towards the keyfactors that enable and improve innovation within companies

In this paper I examine how companies can encourage intrapreneurship by meansof five different enablers derived from the literature rewards management supportresources organisational structure and risk Based on a case study of a largeknowledge-intensive industrial firm it is concluded that the factors are not of equalimportance and that in this specific organisation other important factors also enableintrapreneurship This leads to a proposed model consisting of eight enablers

This paper is organised as follows Section 2 which draws on the literature in thefield suggests a classification of corporate entrepreneurship based on fourorganisational perspectives each with different motivations for engaging inentrepreneurial activities Section 3 presents the methodology and discusses theadvantages and disadvantages of a single case study Section 4 briefly describes thecase company while section 5 presents a detailed analysis of the factors from a singlecase Section 6 discusses the findings and suggests how intrapreneurship can beenabled while section 7 presents the conclusion and implications

2 Corporate entrepreneurshipThe ideas behind corporate entrepreneurship can be traced back to the mid-1970s (egPeterson and Berger 1972 Hanan 1976) but it was not until Pinchotrsquos (1985) book on

EJIM83

306

intrapreneuring in the mid-1980s that it became a separate research topic However itstill seems to be a concept in search of a clear definition Various broader or narrowerdefinitions have been proposed by different authors some as observed by Sharma andChrisman (1999) using the same definition for different phenomena and others usingdifferent definitions for the same phenomenon A sufficiently broad definition ofcorporate entrepreneurship is thus crucial in order to avoid prematurely excludingimportant issues

One approach to the field is to regard corporate entrepreneurship as the overallconcept covering everything to do with entrepreneurship in a company (Christensen2004) such as intrapreneurship (Pinchot 1985) exopreneurship (Chang 1998) andcorporate venturing (Burgelman 1983) Common to these topics is that corporateentrepreneurship refers to ldquoa multidimensional process with many forces acting inconcert that lead to the implementation of an innovative ideardquo (Hornsby et al 1993p 30)

Jeffrey Hornsby and Donald Kuratko together with different co-authors havereviewed the literature from the late-1980s onward and have found five internalenablers of corporate entrepreneurship consistent with the main literature rewardsmanagement support resources (including time) organisational structure andrisk-taking (Kuratko et al 1990 Hornsby et al 2002) However based on an empiricalanalysis Kuratko et al (1990) only find management support organisational structureresources and rewards significant

In Hornsby et al (1993) the authors further develop their work from 1990 resultingin the following enablers management support autonomywork discretionrewardsreinforcement time availability and organisational boundaries However intheir paper from 2002 they return to the five enablers from 1990 but test those from1993 Hornsby et al (1993) also point out that individual characteristics such asrisk-taking propensity desire for autonomy need for achievement goal orientationand internal locus of control have a significant influence on corporateentrepreneurship

Other researchers have explored different enablers eg from the externalenvironment According to Antoncic and Hisrich (2004) both organisational factorssuch as organisational support formal controls and numbers of alliances andenvironmental conditions such as dynamism technological opportunities industrygrowth and demand for new products are important in relation to corporateentrepreneurship In an earlier study Zahra (1991) suggested that in addition tointernal organisational factors the intensity of corporate entrepreneurship is alsoinfluenced by corporate strategy and factors from the external environment such asdynamism hostility and heterogeneity

Covin and Slevin (1991) developed an integrative model including both externalfactors such as technological sophistication dynamism hostility and industry lifecycle stage together with such strategic variables as mission strategy and internalenablers such as top management values and philosophies organisational resourcesand competencies organisational culture and organisational structure Zahra (1993)further developed Covin and Slevinrsquos (1991) integrative model eliminatingtechnological sophistication on the ground that it is part of environmentaldynamism and adding munificence by which is meant the abundance ofopportunities for innovation in an industry Zahra also questions the inclusion of


307

industry life cycle stage because it relates to another level than dynamism hostilityand munificence Zahra (1993) also argues for a narrower classification of the internalenablers claiming that the suggested changes would make the model more complete

Although corporate entrepreneurship is influenced by a number of both internal andexternal factors this paper will focus only on those internal factors that the companyhas a possibility to influence directly

3 MethodologyA division of Danfoss a major Danish industrial company was chosen as a case studyto help determine which factors enable intrapreneurship Being one of Denmarkrsquoslargest industrial companies Danfoss might well have suffered from a lack ofintrapreneurship but despite its industrial roots the company is generally regarded asboth very knowledge-intensive and innovative Furthermore the companyrsquos CEO iswell-known in the public debate in Denmark for his promotion of entrepreneurship as apolicy agenda and innovativeness in Danish firms This managerial focus onintrapreneurship thus made Danfoss ideal for studying the enablers ofintrapreneurship at least in this particular firm

A major problem of large firmsrsquo innovative activities is how they can be fitted intoday-to-day routines without compromising efficiency As a starting point interviewswere carried out with employees on this issue The method chosen was the so-calledembedded case study design (see also Yin 2003 p 43) involving three levels ofanalysis

(1) The firm (its strategy and performance)

(2) Employees (their interaction)

(3) The use of factors (tracing different enablers)

It is generally argued that embedded case design provides richness and multipleperspectives in explaining behaviour

The intrapreneurial enablers ndash rewards top management support resourcesorganisational structures and risk ndash which were derived from the literature in advancehad already been found consistently throughout the literature by others The empiricalmaterial includes four interviews the aim of which was to identify the enablers(respondents were selected from three different organisational positions in order toobtain a broader perspective on the same issues a project manager two functionalmanagers and an engineer) two days of on-site observations (including two meetings)where various employees were informally questioned about their research themes anda wide range of documents and reports

Each interview was conducted in tandem (two researchers) one researcher beingprimarily responsible for the interview and the other for taking notes and filling ingaps in the questioning The interviewees were asked to tell the story of the companyhow they perceive innovation why the firm needs to be innovative where in theorganisation the innovations are created how they are organised and how and whichdifferent enablers encourage and support them to be innovative The interviews whichlasted for an average of about one-and-a-half hours they were recorded andtranscribed for later use At the end of each day field notes were written by eachresearcher individually reflected on and afterwards discussed by both researchers

EJIM83

308

The interviewees were chosen from different positions in order to get a broaderperspective on the same themes and the formal interviews were supported andvalidated or categorised as a single opinion by small-talking to a number of otheremployees and through observations General statements will be presented asldquoDanfoss Drives saysrdquo The interviewees provided several insights and a variety andbreadth of data which allowed the exploration of different settings and breakdowninto categories that were grounded more empirically in a knowledge-intensivecompany than would have been possible from solely using the five factors from theliterature

The analytical process was mainly concerned with coding the interviews andclassifying the text into categories for content analysis (see for example Weber 1985)based on predetermined categories which is the main difference from grounded theory(Glaser and Straus 1967) Several researchers (eg Glaser 1978 Miles and Huberman1994) have suggested that coding provides a basis for the interpretation of data Thecoded data from the interviews were triangulated with observations and writtendocuments

4 Danfoss DrivesDanfoss Group is an international engineering company with approximately 17000employees and a total turnover of almost DKK 15 billion of which the Motion ControlUnit share is approximately 3400 employees and almost DKK 35 billion respectivelywith customers all over the world Danfoss Drives is the largest division in the MotionControl Unit The Motion Control Unit was established ultimo 2000 and apart fromDanfoss Drives also includes three other divisions Gear motors Marine Systems andFlow The activities in Danfoss Drives can be dated back to 1968 which saw theintroduction of the first mass-produced frequency converter for speed control ofmotors The heating ventilation and air-condition applications (HVAC) wereintroduced in 1990 and since the acquisition of Bauer a gear motor producer in1999 Motion Controls has been marketed as a one-stop shop for the industry

Through acquisitions in the US and the founding of a company in GermanyDanfoss Drives now has two production sites in addition to its headquarter inGraasten Denmark and via Danfoss sales companies is able to serve a wide range ofcustomers in different industries throughout the world including chemicals andconsumer goods metals and mining pulp and paper and the refrigeration andautomotive industries

41 Strategy and the organisationDanfoss Drives pursues a dual strategy the aim of which is both to maintain itsleading global position in the food beverage HVAC and water industries throughvolume and growth and to retain its position as a component supplier providingready-to-install solutions for (niche) customers

The continuous introduction of new and improved products means that DanfossDrives attaches a lot of importance to technological innovation and its efforts to gain acompetitive advantage owe a lot to close cooperation with customers In 1998 thedevelopment process in Danfoss Drives was organised into a matrix structureinvolving technology centres serving the different projects project leaders andprojects organised into a ldquocore teamrdquo and a number of ldquosub-teamsrdquo The product leader


309

who is responsible for the development of new products and managing thedevelopment process is assisted by a ldquocore teamrdquo which consists of members fromeach key area marketing production finance and IT

Danfoss Drivesrsquo management acknowledges that the companyrsquos commercialsuccess depends on employeesrsquo competencies and that employees are therefore itsmost important resource Here we describe how Danfoss Drives enablesintrapreneurship by means of many different forces acting together

5 Corporate entrepreneurship at Danfoss DrivesWithout having any distinct corporate entrepreneurship strategy Danfoss Drives hasactively used the organisational structure to enable intrapreneurship in the form ofcorporate ventures internationalisation and formal networks and the internalorganisation has been organised to encourage innovation knowledge creation anddissemination But using the organisational structure is not the only way DanfossDrives encourages intrapreneurship This section describes how various means areapplied and perceived by the employees at Danfoss Drives

This paper examines how the above-mentioned five enablers in Kuratko et al (1990)influence intrapreneurship at Danfoss Drives

51 RewardsSome authors (eg Fry 1987 Morris and Kuratko 2002 Sathe 2003) stress thatentrepreneurial behaviour can be encouraged by effective reward systems that mustconsider clear goals feedback individual influence and rewards based on results(Kuratko et al 1990 Hornsby et al 1993 2002) or it could be related to theperformance of the team (Hisrich and Peters 1986) Designing a reward system thatreflects the behaviour the company wishes to encourage is therefore crucial Accordingto Sathe (2003) people are motivated by different things Entrepreneurs may seekrewards such as the pride that comes from starting their own business and theprospect of financial gains whereas intrapreneurs value other incentives which are notalways clear (Sathe 2003) Morris and Kuratko (2002 p 245) note that intrapreneursare motivated by controllable rewards such as ldquoregular pay bonuses profit shareequity or shares in the company expense accounts job security promotions expandedjob responsibilities autonomy public or private recognition free time to work on petprojects money for research or trips to conferencesrdquo Morris and Kuratko (2002) alsoargue that intrapreneurs should share some of the downside risk but this financial riskand incentive is exactly what Sathe (2003) identifies as the difference betweenentrepreneurs and intrapreneurs

In practice it can be more difficult to differentiate between entrepreneurial andintrapreneurial incentives as not all entrepreneurs or intrapreneurs are motivated inthe same way At Danfoss Drives the reward structure reflects the fact that they are aninternational player and incentives change across cultures and countries financialrewards (bonus) are highly motivating in the USA whereas ldquoin Denmark financialrewards are generally less appreciated than promotion prestige and recognition fromcolleagues as the Danish Internal Revenue Service (IRS) destroys all possibilities forfinancial rewardsrdquo It is not uncommon (Sathe 2003) and very Danish that if someemployees get a financial reward then it influences other employees negativelyFlexibility in relation to an assignment and working hours is highly appreciated by

EJIM83

310

Danes and this together with recognition from colleagues is the most commonreward Prestige related to the completion of an assignment is also valued

52 Management supportThe second factor is management support that in the literature is often synonymouswith top management support and governance (Hitt et al 2002 Hornsby et al 1993Kuratko et al 1990) It is crucial for management to support intrapreneurial activities(Hisrich and Peters 1986 Stevenson and Jarillo 1990) even if they do not fullyunderstand them (Hornsby et al 2002 Kuratko et al 1990) As pointed out by Kuratkoet al (1990) and Hornsby et al (1993) the basic idea of management support is toencourage employees to believe that innovation is embedded in the role of allemployees And this is precisely the case at Danfoss Drives everyone is encouraged tobe innovative and consequently innovation happens everywhere

Employees view a supportive management as one that does not work against newinitiatives from employees and acts as a sponsor for intrapreneurs which basicallymeans giving them access to resources This agrees with Fry (1987) One of theemployees put it as follows

What my manager does is provide me with resources that make it possible to explore newopportunities

Otherwise employees agree that support from other colleagues is more importantThey not only use each other to discuss and test new ideas but groups of employeescooperate to develop new products and new ideas Other employees eg clerks andtechnical assistants can also support a project group by from an engineerrsquospoint-of-view doing more mundane things such as office work getting the rightcomputer programs for the job etc As one of the managers said ldquoit is easy to getpeople together in workshops on new themes and problems even though they arebusyrdquo which indicates that generally support among employees is high Butsupporting (top) managers are important as ldquosponsorsrdquo

53 ResourcesIn addition to the support of top management projects also need financial resources toget off the ground (see for example Hisrich and Peters 1986 Hornsby et al 2002Sathe 2003 Stevenson and Jarillo 1990 Stopford and Baden-Fuller 1994) On the otherhand the speed and success of a project is not proportional with fundingencouragement inspiration and perspiration are also necessary (Fry 1987) Gettingaccess to the companyrsquos facilities and resources is not always sufficient ndash it isimportant to make employees feel confident and encouraged to experiment (Burgelmanand Sayles 1986) The well-known 3M case illustrates that this kind of support andfreedom automatically generates another important resource (time) Employees at 3Mare encouraged to spend 15 per cent of their time on their own projects Howeveraccording to Fry (1987) this 15 per cent is often spent after hours or at weekends Somescholars (eg Drucker 1993 Nonaka and Takeuchi 1995 Bukh et al 2005) haveargued that the most important resource in the knowledge society is knowledge itselfand knowledge is not just the fundamental driver of innovation but also an importantpart of the companyrsquos competitive advantage


311

The most important intrapreneurial resource at Danfoss Drives is human resourcesie the knowledge and skills of the employees However other resources are importanttoo especially time and financial support which to some extent the company sees as aprerequisite for employees to act in an intrapreneurial way Although as DanfossDrives says

time and money have to be earned which means you have to finish your assigned projectbefore you can playrdquo

And continues

we would explore different directions that are not directly related to the core of ourproduct simply to broaden the horizon and knowledge about what is going on Probablythere is something out there which in combination with other things could be veryinnovative eg in relation to regulation techniques something interesting could befound in relation to how the body regulates the absorption of medicine However theresources are limited and therefore we have to focus on the most important adjacentareas

The use of resources is a matter of priority and long-term innovation is vulnerablecompared with short-term business pressure (Hisrich 1990) Lack of resources andtime is thus also a barrier to long-term innovation at Danfoss Drives As the companypoints out even though daily or weekly slack time for innovation would be preferableemployees are ldquo in periods very tied up with projects and in other periods webreathe and have time to run innovative projects to broaden the horizon andknowledge of the employees and to motivate themrdquo

Being part of a large company also brings bureaucratic obstacles eg the engineersare employed on flextime terms which is highly popular but current thinking atDanfoss Group headquarters is whether all employees should be on ldquojob salaryrdquoinstead to which one of the employees retorts

that will be rubbish then I will only focus on my assigned projects and nothing more

On the other hand being part of a large company can also mean greater flexibility andmore choices As one of the managers says

10 per cent of 1 billion creates more financial flexibility than 10 per cent of 1 million andexploring ideas costs money

The availability of financial resources thus plays an important role in intrapreneurshipor the utilisation and implementation of ideas One of the employees explains that ldquoI tryto look at the companyrsquos purse as if it was my ownrdquo and if some employees believe sostrongly in an idea that they are willing to pay for its implementation themselves thenthe company always considers it again

54 Organisational structureOrganisational structure has been found very important for innovative activities inseveral ways (see for example Burgelman 1983 Guth and Ginsberg 1990Hornsby et al 1993 Sathe 2003) According to Davis and Lawrence (1991) externalpressure for dual focus pressures for high information-processing capacity andpressures for shared resources require a matrix organisation Sathe (2003) on theother hand argues that matrix and functional or ldquosilordquo organisations can inhibit

EJIM83

312

corporate entrepreneurship with respect to new business creation Instead herecommends collaboration and the pooling of competencies in cross-functionalbusiness units so that competencies in technology product developmentmarketing sales and other functions will be available for new business This isprecisely how Danfoss Drives pools different knowledge resources in each projectwithin a matrix structure

The reorganisation in 1998 into a matrix structure focused on a projectorganisation with strong project leaders was positively received by employees since itclarified the chain of command As one of the employees put it

Before you were more like a specialist and you could easily work on four different projectsand that was not always easy Because who did you refer to Who pushed you the most Andwhich project did you better like yourself

Basically the new organisational structure made it possible for employees to focuson the project and their jobs The importance of the project groups wasemphasised by a physical reorganisation where all project members are nowlocated together Previously employees were located with ldquosimilarrdquo people egmarketing people sat together with other marketing people in a marketingdepartment Both ways have advantages and disadvantages but at Danfoss Drivesgathering together employees with different backgrounds has become the preferredway of doing things

If Danfoss Drives believes strongly in new ideas a group of employees may get thechance to turn them into a new business unit One of the managers says that

Instead of imposing it [the new ideas] into the existing organisation we have started a smallgroup a small project outside the traditional rules of the established organisation

This is in essence what corporate ventures are all about (see for example Biggadike1979 Guth and Ginsberg 1990) Another manager reflected that

Our ventures have been started based on a specific idea or idea area and then it has beenisolated and nurtured This basically means that they [the ventures] have got some peace andresources to work on a new area

What this means in practice is that the ventures do not have to strictly follow standardoperating procedures which gives them a flexibility and agility that the existingorganisation does not possess (Ellis and Taylor 1987)

Internationalisation is the third strategy Danfoss Drives employs to encourageintrapreneurship (Lu and Beamish 2001) The company sees a clear distinctionbetween networks and internationalisation because

when we speak about internationalisation it is within the legal boundaries of theorganisation which means that you have colleagues all around the world with whom youhave to communicate They are an integrated part of the company and thereforeinformation can flow freely whereas within a network there are some restrictions on theinformation you can pass on

Furthermore Danfoss Drives thinks it is necessary to be present ie represented byplants sales offices ventures etc (see for example Hitt and Ireland 2000) in theirmain markets to ensure strong relations with customers and with it to learn from themand get access to their knowledge and sets of values


313

If intrapreneurship is expanded to corporate entrepreneurship there is a fourthway to enable entrepreneurial activities which is to deliberately make use of formalnetworks ie universities customers suppliers and ERFA groups (experienceexchanging groups) ndash by comparison the use of informal networks is difficult toplan and control Danfoss Drives creates networks to get access to knowledgeresources that the organisation needs but does not itself possess (see also Hitt et al2000) saying

The network to the universities is primarily to get access to basic research whereasrelationships to other companies or ERFA groups may be because they do somethingdifferent from which we can learn

Danfoss Drives also participates in ERFA groups to test new ideas on people who havenot yet adapted to the Danfoss way of thinking This says the company will ensurethat ldquotwo developers with the same background gradually become uniformrdquo Anotherway to test ideas is on customers Danfoss Drives not only visits their customers theyldquocamp outrdquo at particular customers for a month at a time because they believe in closecooperation and as they say

we follow them in everything they are doing which provides us with insight intoproblems that would be hard to get in other ways

55 RiskThe fifth and last factor that Kuratko et al (1990) found consistently throughout theliterature is risk Morris and Kuratko (2002) described how both too little risk and toomuch risk can be fatal for a company While too little risk becomes dangerous when acompany ignores changing market conditions by making little or no innovation atthe other extreme attempting to come up with a breakthrough innovation is highlyrisky Therefore focusing on lower-risk markets ie new varieties of productsservices etc makes risk management easier and creates more success Fry (1987)notes that making intrapreneurs experiment without penalising them when an ideafails will encourage an intrapreneurial spirit and the more experiments they carryout the better they will be at determining what works and what does not work(Morris and Kuratko 2002)

Danfoss Drives address risk management from a Darwinistic approach which asone of the managers said means ldquosurvival of the fittestrdquo The projects are veryautonomous so that if an idea is related to an ongoing project it is up to the projectleader and the core team to decide whether it will be implemented or not If the idearelates to a new product the employee has to make strong enough arguments toconvince the product planning group that it is worth implementing These interactionprocesses mean that employees feel relaxed about trying to implement new ideas Asone said

you have to keep your word and be honest then you can be flighty and take risks butyou have to be honest and acknowledge if you have overextended yourself acknowledge thatyou have to go back one step Then you can make a flop and no one complains because theyknow you did your best and in most cases you are likely to succeed

EJIM83

314

At Danfoss Drives most ideas are related to the planned projects since they areplanned four years ahead The aim of such a long planning horizon is both to giveemployees an opportunity to deconstruct the project and come up with ideas and togive them time to think differently and innovatively before the project starts One ofthe employees said

If the company did not give me this information then I would probably not be able to comeup with all these ideas

And when employees have time to think about coming projects says Danfoss Drivesthe risk is lower compared to short-time planning

6 Towards a more complete modelThe Danfoss Drives case is in line with Kuratko et alrsquos (1990) findings as regards thefactors that can help an organisation to enable intrapreneurship However the Danfosscase also makes it clear that a knowledge-intensive company is more complex thantraditional industrial companies The five factors identified by Kuratko et al (1990) arethus not sufficient in themselves to understand intrapreneurial behaviour in suchcompanies

The Danfoss case showed that basic factors such as (top) management support andfinancial resources are not sufficient for intrapreneurship to happen while risk onlyseems to matter to the extent that it is perceived by employees

The possibilities within the five factors can be divided into basic andintrapreneurial factors as showed in Table I By basic factors is meant thosewhich must be present for intrapreneurship to occur eg regular payment to theintrapreneur access to financial resources and other materials a management thatldquosponsorsrdquo the project (not rejecting an idea before development gets started) a basicorganisational structure and tolerance for risk (at least lower-risk projects)Intrapreneurial factors denote efforts that can encourage and enrich intrapreneurialactivities such as expanded job responsibility autonomy and recognition real (top)management commitment ndash not just assignment of resources different knowledgeresources different organisational structures that promote different aspects than thetraditional organisation and no penalisation of employees who try to developsomething new

The interviews small talk and observations at Danfoss Drives revealed that otherfactors at the company also enable intrapreneurship Common to all interviewees isthat they talked about the importance of communication company culture and

Factor Basic factors Intrapreneurial factors

Rewards Regular pay job security Promotion expanded job responsibilityautonomy recognition free time to work onpet projects bonuses

(Top) management support Sponsors CommitmentResources Finance and materials Knowledge resourcesOrganisational structure Hierarchy Corporate venturing cross-functional teams

internationalisation external networksRisk Tolerance of lower risks No penalisation

Table IFactors influencing

intrapreneurship


315

processes to help finish a project The following paragraphs will take a closer look atthese three factors which will be analysed based on the empirical data from DanfossDrives supported where relevant by the literature

61 CommunicationSince it creates a common framework of understanding language can be consideredthe most prominent communicative tool available to man (Christensen and Bang 2003)At Danfoss Drives communication is closely related to culture and geographicallocation One of the interviewees expressed this very clearly

Via your language you can articulate the country in which you have been raised its cultureand its values The whole set of values are embedded in your language that is whyEnglish and American Danish and Norwegian are different even though they are verysimilar

Language culture and geography are very closely related and together they articulateprecision and when you try to express yourself in another language then you lose theprecision

Language is thus a very central part of communication The official language at DanfossDrives is English and this therefore causes some difficulties All employees are expectedto use English at the level they master but employees find it very frustrating to have tospeak English to German customers (to whom they used to speak German) since it canbe a barrier to really understanding the details Danfoss Drives says

If we continued speaking German with the German customers then they would communicatein their native language and there would be only one translation Now all of us have to putsubstantial effort in expressing the right things and furthermore we may not understandwhat is said with the intention of the sender

In addition to the official language there are at least two other languages at DanfossDrives a company-specific and a technical language The language used internally inthe company is very specific with many abbreviations and terms and it can be veryconfusing As Danfoss Drives says

It takes new employees about a year to fully understand what is being said

And as Pinchot (1985) argued the innovation process is inhibited or distorted whenpeople do not speak a common language communication is slowed down

The technical language used by engineers is highly precise since all terms withinelectronics and software are the same in English American English and AustralianEnglish and Danish educational courses are based on English textbooks But not allemployees at Danfoss Drives are engineers and as one of the engineers said ldquowe [theengineers and the rest of the organisation] do not speak a common language however the tone is free and hard ndash but friendlyrdquo and they are not afraid to ask if thereis something they do not understand

General communication within Danfoss Drives is very informal which encouragesemployees to talk to everyone However employees at Danfoss Drives are scatteredaround Graasten which is a barrier to daily communication As Danfoss Drives explains

We have colleagues 200m from here and it feels like they are placed in Aarhus [almost200 km from Graasten] If you think you could gain from speaking with them then you haveto walk over there and then you are very likely to wait until tomorrow

EJIM83

316

However one of the managers says

Generally the information and communication within and between the departments supplychain core processes etc flow well ndash maybe too well as there are hardly any conflicts oftenwe are too polite it takes too much time to make a decision because we seek consensus andtoo many people are involved

The involvement of so many people is due to the complexity of the products andmakes it very hard to get an overview because a lot of important information has to betaken into account Conversely the consensus-seeking and meetings shortencommunication and make employees feel they have influence (Fry 1987) Tosupport communication Danfoss Drives is developing a common informationstructure for meetings reports etc which should make it easier for employees to findthe right information

Face-to-face communication is the preferred form of communication at DanfossDrives This can be illustrated by the mechanics group which meets physically every14 days to keep the amount of written information to a minimum The team leader ofthe mechanics group said

We can write a report but if people are going to read it some will read it in one way otherswill read it in another way and some will not read it at all In this way [by meeting every 14days] we get a resume and if something is not clear we can ask I have chosen thisinformation strategy in the group because everyone will be informed and afterwards you cango home and if you are interested you can easily ask for more information

Together with direct and open communication (see for example Leonard and Swap2002 Pinchot 1985) face-to-face communication physical proximity naturalldquowatering holesrdquo such as coffee pots and mail rooms meetings special placesroomsfor special occasions team building social events cross-level and cross-functionallocations (see for example Christensen and Bang 2003 Leonard and Swap 2002) allencourage improved communication at Danfoss Drives Decision reports and otherkinds of documentation are still written down in the mechanics group including a finalreport but all the unnecessary ldquosemirdquo reports are skipped Danfoss Drives shares ideasand knowledge in both formal and informal ways which for example Fry (1987) andChristensen and Bang (2003) have described to be preferable

However being a worldwide company face-to-face meetings are not always possibleor convenient because of distance so a lot of information is often sent by e-mail Thisoften leads to misunderstandings in their daily work however Danfoss Drives says

you try to make sure that you have expressed exactly what you want but when you get ane-mail back with 20 questions then there is nothing else to do than call or even better meetface-to-face otherwise the e-mails will continue going back and forth because a large partof the context disappears when you write down information

This is one of the reasons why employees at Danfoss Drives spend so much time inmeetings to inform and coordinate and as the company explains this need forcommunication may reflect Danish culture

62 CultureSince innovation is not restricted to the research and development department itldquopervadesrdquo the companyrsquos culture This is supported by small talk and observations


317

and it is clear that new ideas are generated across the whole company and incooperation with customers and suppliers and then further developed in an interplaybetween salesmarketing and customers production and supplies research anddevelopment and engineers Danfoss Drives believes that in this way they ensure ahigher degree of intrapreneurship ndash both in relation to product process and strategicinnovation ndash than if innovation were only carried out by the research and developmentdepartment which typically consists of techniciansengineers Thus ldquo theinnovation will be technology driven rather than market drivenrdquo according toDanfoss Drives

Company culture also plays a role in relation to for example decision-making Thedecision-making process at Danfoss Drives in Denmark has changed radically duringthe last decade because of changing product characteristics A decade ago the companyhad employees with a broad range of knowledge resources which meant that theycould make decisions about almost everything Today the industry has become muchmore complex more technologically oriented which makes it impossible to be ageneralist and all employees have now become specialists within a relatively smallarea Among other things this is one of the reasons why Danes at Danfoss Drives arevery consensus-seeking and many different types of employees are asked for advicebefore a decision is made Although it slows down the intrapreneurial process and istime- and resource-consuming Danfoss Drives thinks it enables them to make betterdecisions By involving many employees in the overall decisions managers try todecentralise as many lower-level decisions as possible Danfoss Drives believes that

because of the complexity there is no right answer What may be a good solution for onemay seem wrong to another even though the result may be the same What is mostimportant is that the employee who has to carry out the task feels that it is the right way to doit

Decentralised decisions create a very high degree of commitment and ensure thatemployees really make an effort to succeed This is contrary to Danish culture but asone of the managers explains

Especially in Germany the process of decision-making is different They do not have somany meetings The manager decides he takes the responsibility and he takes theconsequences and the employees implement in the United States it is also the managerwho makes the decisions but they [like the Danes] also have a lot of meetings before thedecision is made

Danfoss Drives believes that the delegation of decision-making creates more flexibilitywhich is one thing that Danes because of their very relaxed culture are better at thanforeign companies

The general experience at Danfoss Drives is that culture also plays a major role inrelation to the perception of time especially working hours In Denmark mostemployees are employed on flextime terms which means that they decide themselveswhen they come and leave thus controlling their own working hours In Germany onthe other hand employees have fixed working hours while in the US employeesusually come before the manager arrives and leave after he has left In these countriestherefore the manager decides working hours At its plants abroad Danfoss Drivesadapts to the norms of the country concerned

EJIM83

318

63 ProcessSince Danfoss Drives is ISO9000-certified it has to follow and document a number ofprocedures and processes In general the company believes that their processes arevery robust but they are continuously trying to improve organisational processesfurther One of the most visible process innovations concerns the development of anin-line printing house together with Xerox Basically this means that the manual isprinted in a specific language and number related to a specific order and every timethere is a change in the manual it is made online The main advantage of this is that itensures that the manual is always up to date and it saves the company resources inrelation to a printed manual ndash both paper and storage Danfoss Drives has alsoimproved inventory control by implementing an electronic kaizen system (Imai 1986)However when striving after effectiveness and efficiency environmental awarenessand high-quality products are also essential

All projects are managed in relation to a ldquokey-point planrdquo like Cooperrsquos (2001) stagegate model Although they can change the level of documentation in each project theyacknowledge that it is very difficult for them to run small projects One of themanagers also explains that managing ldquothe next generation of a product to a knownmarket developing a new product to an unknown market or developing a specificproduct to a specific market or a brand-labelling project with a supplier are verydifferent projectsrdquo and they think it is a weakness to use the same project model for allprojects

Danfoss Drives is aware of their strengths and weaknesses and small projects aredefinitely one of their weaknesses since the whole system is geared to large-scaleproduction Small companies are now bringing innovations to the market which issomething that Danfoss Drives used to do By recognising that Danfoss Drivestemporarily ldquochanged the focus from innovation and idea-creation to a focus on theprocess of production planning and technology planningrdquo as one of the managersexplains The focus not only changed from product to process innovation but also toknowledge-intensive production by means of relationship management and otherways of managing However the emphasis is now back on innovation again

7 Conclusion and implicationsActivities that benefit the strategic and financial position of a company are those mostlikely to be developed and implemented Given this the exploration and exploitation ofdifferent intrapreneurial enablers seems the logical choice since it can result insignificant corporate gains The research challenge is to understand whyintrapreneurial enablers have not attracted companiesrsquo attention to a greater extent

The Danfoss Drives case indicates that rewards top management supportresources organisational structure and tolerance of risk are not sufficient to encourageintrapreneurship in a knowledge-intensive company Not all factors directly encourageintrapreneurship although some are necessary in order to create an intrapreneurialclimate Fry (1987 p 5) argued that

[i]f managers arenrsquot innovative if they donrsquot provide the climate for creativity if they canrsquotset aside their carefully laid plans to take advantage of a new opportunity then intrapreneurshave little encouragement


319

This basically means that managers can be the biggest obstacle to intrapreneursinasmuch as a single decision can kill a project before it gets started

The Danfoss Drives case has shown that enabling intrapreneurship is easier whenthe (top) management communicates a clear vision and plan to employees for a longertime horizon (Sathe 2003) Consequently the framework should consist of eightintrapreneurial enablers instead of five communication culture process rewards (top)management support resources organisational structure and risk

Morris and Kuratko (2002 p 257) note that ldquoculture underlies all other componentsof a workplacerdquo ie all other factors This means that all factors are interrelated andinfluence each other in some way ndash at least with culture as a common denominatorWhile the Danfoss case shows that culture in itself is not sufficient to describe howmanagers can enable intrapreneurship the eight factors described above all contributein one way or another and are therefore too important to leave out Hisrich (1990)defines an intrapreneurial culture as follows ldquo[d]evelop visions goals and actionplans take action and be rewarded suggest try and experiment create and developregardless of the area and take responsibility and ownership This environment ofcourse supports individuals in their effort to create somethingrdquo Danfoss Drives comesclose to an intrapreneurial culture on several points but there is still room formanagerial improvements

Clearly there is a need for further research into factors that enable and encourageintrapreneurship in knowledge-intensive companies Studies related to the enablers areimportant Are there more than eight and which How are they related And how canmanagers exploit the synergies involved Up to now we only know that the eightenablers influence intrapreneurship not if and how they can be used to turn theintrapreneurial level up and down Breakthrough innovations that change the rules ofcompetition in a market are very rare and as Morris and Kuratko (2002) also arguefrequent experiments make intrapreneurs better able to determine what works andwhat does not work

References

Antoncic B and Hisrich RD (2004) ldquoCorporate entrepreneurship contingencies andorganizational wealth creationrdquo Journal of Management Development Vol 23 No 6pp 518-50

Biggadike R (1979) ldquoThe risky business of diversificationrdquo Harvard Business Review Vol 57No 3 pp 103-11

Bukh PN Christensen KS and Mouritsen J (2005) Knowledge Management and IntellectualCapital Establishing a Field of Practice Palgrave Macmillan Basingstoke

Burgelman RA (1983) ldquoA process model of internal corporate venturing in the diversified majorfirmrdquo Administrative Science Quarterly Vol 28 No 2 pp 39-55

Burgelman RA and Sayles LR (1986) Inside Corporate Innovation Strategy Structure andManagerial Skills Free Press New York NY

Chang J (1998) ldquoModel of corporate entrepreneurship intrapreneurship and exopreneurshiprdquoBorneo Review Vol 9 No 2 pp 187-213

Christensen KS (2004) ldquoA classification of the corporate entrepreneurship umbrella labels andperspectivesrdquo International Journal of Management and Enterprise Development Vol 1No 4 pp 301-15

EJIM83

320

Christensen KS and Bang HK (2003) ldquoKnowledge management in a project-orientedorganization three perspectivesrdquo Journal of Knowledge Management Vol 7 No 3pp 116-28

Cooper RG (2001) Winning at New Products Perseus Cambridge MA

Davis SM and Lawrence PR (1991) ldquoThe matrix organization ndash who needs itrdquo in Shafritz JMand Ott JS (Eds) Classics of Organization Theory 3rd ed Wadsworth PublishingCompany Belmont CA pp 234-54

Drucker PF (1993) Post-capitalist Society Butterworth-Heinemann Oxford

Ellis RJ and Taylor NT (1987) ldquoSpecifying entrepreneurshiprdquo in Chruchill NCHornaday JA Kirchhoff BA Krasner OJ and Vesper KH (Eds) Frontiers ofEntrepreneurship Research Babson College Wellesley MA pp 527-41

Fry A (1987) ldquoThe Post-It Note an intrapreneurial successrdquo SAM Advanced ManagementJournal Vol 52 No 3 pp 4-9

Gartner WB (1988) ldquoWho is an entrepreneur Is the wrong questionrdquo American Journal ofSmall Buiness Vol 10 pp 696-706

Glaser B (1978) Theoretical Sensitivity Advances in the Methodology of Grounded TheorySociology Press Mill Valley CA

Glaser BG and Straus AL (1967) The Discovery of Grounded Theory Strategies forQualitative Research Aldine Chicago IL

Guth WD and Ginsberg A (1990) ldquoGuest editorsrsquo introduction corporate entrepreneurshiprdquoStrategic Management Journal Vol 11 pp 5-15

Hanan M (1976) ldquoVenturing corporations think small to stay strongrdquo Harvard Business ReviewVol 54 pp 139-48

Hisrich RD (1990) ldquoEntrepreneurshipintrapreneurshiprdquo American Psychologist Vol 45 No 2pp 209-22

Hisrich RD and Peters MP (1986) ldquoEstablishing a new business venture unit within a firmrdquoJournal of Business Venturing Vol 1 pp 307-22

Hitt MA and Ireland RD (2000) ldquoThe intersection of entrepreneurship and strategicmanagement researchrdquo in Sexton DL and Landstrom HA (Eds) Handbook ofEntrepreneurship Blackwell Oxford pp 45-63

Hitt MA Ireland RD and Lee H (2000) ldquoTechnological learning knowledge managementfirm growth and performancerdquo Journal of engineering and Technology ManagmementVol 17 pp 231-46

Hitt MA Ireland RD Camp SM and Sexton DL (2002) Strategic EntrepreneurshipCreating a New Mindset Blackwell Oxford

Hornsby JS Kuratko DF and Zahra SA (2002) ldquoMiddle managers perception of the internalenvironment for corporate entrepreneurship assessing a measurement scalerdquo Journal ofBusiness Venturing Vol 17 No 3 pp 253-73

Hornsby JS Naffziger DW Kuratko DF and Montagno RV (1993) ldquoAn interactive model ofthe corporate entrepreneurship processrdquo Entrepreneurship Theory amp Practice Vol 17No 2 pp 29-37

Imai M (1986) Kaizen Random House New York NY

Kuratko DF Montagno RV and Hornsby JS (1990) ldquoDeveloping an intrapreneurialassessment instrument for an effective corporate entrepreneurial environmentrdquo StrategicManagement Journal Vol 11 No 1 pp 49-58


321

Leonard D and Swap W (2002) ldquoHow managers can spark creativityrdquo in Hesselbein F andJohnston R (Eds) On Creativity Innovation and Renewal A Leader to Leader GuideJossey-Bass San Francisco CA pp 55-65

Lu JW and Beamish PW (2001) ldquoThe internationalization and performance of SMEsrdquoStrategic Management Journal Vol 22 pp 565-86

Miles MB and Huberman AM (1994) Qualitative Data Analysis Sage Thousand Oaks CA

Morris MH and Kuratko DF (2002) Corporate Entrepreneurship Harcourt College PublishersOrlando FL

Nonaka I and Takeuchi H (1995) The Knowledge-Creating Company Oxford University PressOxford

Peterson R and Berger D (1972) ldquoEntrepreneurship in organizations evidence from the popularmusic industryrdquo Administrative Science Quarterly Vol 16 pp 97-106

Pinchot G (1985) Intrapreneuring Why You Donrsquot Have to Leave the Corporation to Become anEntrepreneur Harper amp Row New York NY

Sathe V (2003) Corporate Entrepreneurship Top Managers and New Business CreationCambridge University Press Cambridge

Sharma P and Chrisman JJ (1999) ldquoToward a reconciliation of the definitional issues in thefield of corporate entreprenrushiprdquo Entrepreneurship Theory amp Practice Vol 22 pp 43-68

Stevenson HH and Jarillo JC (1990) ldquoA paradigm of entrepreneurship entrepreneurialmanagementrdquo Strategic Management Journal Vol 11 pp 17-27 Special issue

Stopford J and Baden-Fuller CF (1994) ldquoCreating corporate entrepreneurshiprdquo StrategicManagement Journal Vol 15 No 7 pp 521-36

Weber PR (1985) Basic Content Analysis Sage Beverly Hills CA

Yin RK (2003) Case Study Research Design and Methods Sage London

EJIM83

322

131

PART III

Managing Internal Knowledge Resources

The third part of the dissertation consists of two articles which in different ways deal

with internal knowledge resources and how these can be managed in order to

encourage intrapreneurship Thus from addressing intrapreneurship from an lsquointernal

resourcersquo perspective (cf Chapter 4) we now move on to discuss knowledge

management and management in knowledge-intensive companies

As mentioned in Chapter 2 the PhD project is part of a larger research project

KNORI the aim of which was on the one hand to examine how knowledge-

intensive companies can be innovative and enable change in the face of changing

market conditions and on the other to explore and identify the challenges and

possibilities for companies and industrial policy Since knowledge and knowledge

intensiveness were key factors in the selection of case companies for the project the

internal resource perspective was found particularly appropriate since as described

in article 1 this is mainly based on companies exploiting intangible knowledge-

based resources

Intrapreneurs in knowledge-intensive organisations innovate on the basis of

knowledge Thus knowledge-based resources are not only a basic driver of

innovation but they are also an important part of the companyrsquos competitive

advantage The case companies that form the empirical basis for this dissertation are

132

all knowledgendashintensive companies It is therefore crucial to understand the

relationship between the main drivers of intrapreneurship in such companies

innovation management knowledge and knowledge management

THE KNOWLEDGE-MANAGEMENT PERSPECTIVE

In recent years there has been an overwhelming interest in the concepts of

knowledge and knowledge-based resources in the management literature This is not

only reflected in the importance of knowledge-intensive companies as discussed

above but also in an interest in how knowledge-based resources interact in the

creation of value and how knowledge can be managed This has influenced

management practice and research in many ways eg in terms of the characteristics

of knowledge the difference between information and knowledge and the

categorisation of knowledge (cf Baxter amp Chua 1999) However the literature

comprises many different research traditions and points of view

Some authors see knowledge as a resource that can be used as a basis for strategy

formulation (Sveiby 1997) whereas according to others it is integrated in a broader

strategy framework such as the balanced scorecard approach (Kaplan amp Norton

2004) Others again (eg Bukh et al 2001) perceive knowledge and intellectual

capital as two closely related terms For example Lennon amp Wollin (2001 p 411)

focus on knowledge in a learning perspective and Sher amp Lee (2003) relate it to

information technology Other strands of research could be identified all of which

have their own merits

Philosophical interest in the concept of knowledge and obtaining knowledge goes

back a long time However as emphasised by von Krogh amp Roos (1995) knowledge

was not directly included in management theories until the mid-1950s around the

time when some of the early thoughts on cybernetics and systems theory were being

133

presented (see for example Simon 1945 1960 Minsky 1956) The starting point

for these authors was often human intelligence as opposed to knowledge

incorporated in rule-based computer systems (cf Varela et al 1992)

Managers often discuss knowledge from different perspectives the differences

consisting in the way knowledge is perceived In other words the basic

epistemological perspectives differ Article five makes a distinction between two

different perspectives the first of which is the ldquoartefact-orientedrdquo perspective The

focus here is on information technology and the ways in which technology is be used

to codify knowledge for management decision-making It is assumed that everything

can be described and the more data a company collects the more knowledge it

possesses

The artefact-oriented perspective often relies on systems theory and information-

processing theories In practical applications it draws on information technology

Many authors have indicated that this has become insufficient for dealing with

management challenges created by the complexity of the knowledge society The

problem is not lack of documents data or access to information but rather the

quality content and organisation of the material

This has given rise to the second perspective which we term the process-oriented

perspective and is most clearly exemplified by Ikujiro Nonaka who regards

knowledge as a ldquodynamic human process of justifying personal beliefs as a part of an

aspiration for the lsquotruthrsquordquo (Nonaka 1994 p 15 cf Nonaka amp Takeuchi 1995)

Crucially the focus here is on the actual process by which knowledge is created not

on the document or rules which are based on the process This implies that

continuous and dynamic adaptation to lsquoreal lifersquo takes place Thus knowledge is a

continuous process which changes gradually as the individual framework of

understanding is developed

134

IMPORTANCE OF THE PERCEPTION OF KNOWLEDGE

Knowledge is a complex term which is often not easy to define precisely For

example Roos amp von Kroghrsquos (1995 p 1) statement ldquo[w]hat you see depends on

who you arerdquo implies that knowledge should be regarded as a subjective term From

this point of view knowledge can be expressed in many different ways since not

only knowledge but also knowledge about knowledge depends on the context It is

therefore essential to clarify the background for the various perceptions of

knowledge knowledge-management concepts etc

An understanding of the term knowledge or at least what it means to the individual

or organisation is important because it affects the importance which management

attaches to the term According to von Krogh amp Roos (1996 cf von Krog et al

1994) this implies that successful knowledge management requires that you relate to

lsquothe nature of knowledgersquo (von Krogh amp Roos 1996 p 224) Therefore knowledge

management also becomes a question of epistemological understanding

The more importance attached to epistemological views the greater the demands

made on the manager It is no longer sufficient lsquoonlyrsquo to act and make decisions

because reflection on onersquos own actions becomes part of the decision process which

must now also take account of other possible solutions The reflective manager must

therefore be familiar with different epistemologies because this gives a much larger

scope for action and it ensures a better understanding of the limitations of various

actions (see Venzin et al 1998 p 36)

More effective knowledge management may also result from adapting management

tools to the prevailing perception of knowledge This agrees with Marr et al (2003)

who suggest that knowledge management practices will be perceived as more

effective if they match personal epistemologies However knowledge management is

multi-faceted and our understanding of current practice has already been determined

135

by our choice of epistemology This illustrates the fact that the more an organisation

focuses on knowledge the more important it becomes to understand the

epistemological implications

An epistemology cannot be forced on individuals or an organisation Becoming

familiar with the way in which colleagues collaborators and others understand

lsquorealityrsquo will result in more possibilities and improved co-operation An

understanding of the alternative perspectives means that you can make an active

choice Since knowledge depends on both the starting point of the individual

employee and the organisational context (Lave amp Wenger 1991) ldquo[t]he conscious

choice of an epistemological mode is a critical success factor for research and

managementrdquo (Venzin et al 1998 p 37)

THE TWO ARTICLES IN THE SECTION

The first article in this section Understanding intrapreneurship by means of state-of-

the-art knowledge management and organisational learning theory presents a

theoretical perspective of innovation and knowledge and combines these in a

framework for knowledge-based intrapreneurship The framework consists of three

situations for innovation management exploitation sustainable change and

disruptive change and two tasks of intrapreneurship exploitation and exploration

The aim of the framework is to describe the content of intrapreneurship in six sub-

tasks based on the complexity of knowledge ndash tacitness demarcation and social

elements ndash that the intrapreneur needs to manipulate in each case together with the

corresponding type of learning involved The framework underlines the fact that the

complexity of knowledge has important implications for the way we think about

intrapreneurship and innovation

136

The second article Knowledge Management in Perspectives An Analysis of Project

Management in Two Companies touches on the challenges faced by knowledge-

intensive companies from another angle This article discusses the knowledge

resource and how to manage it in greater depth although the main focus is on an

understanding of the nature of knowledge-management activities ie how the

company can influence knowledge resources The article concludes that there are

different ways of managing knowledge resources and that not all of them encourage

intrapreneurship

The article presents two different ways of understanding knowledge ndash an artefact-

oriented perspective and a process-oriented perspective ndash and how knowledge

resources should be managed It is concluded that managerial awareness of the two

perspectives results partly in greater degrees of freedom and partly in enhanced

mutual understanding in the organisation Furthermore the article shows that the

perspectives are complementary and that the company needs to supplement the one

with the other A company that wants to create and maintain an intrapreneurial spirit

needs to supplement process-oriented initiatives with artefact-oriented initiatives A

company wanting to produce existing products more efficiently on the other hand

should supplement artefact-oriented initiatives with process-oriented initiatives

REFERENCES

Baxter J amp FW Chua 1999 Australian Accounting Review Vol 9 No 3 pp 3-14

Bukh PN J Mouritsen MR Johansen amp HT Larsen 2001 Videnregnskaber

Rapportering og styring af virksomhedens videnressourcer Copenhagen Boslashrsens

Forlag

Kaplan RS amp D P Norton 2004 Stratety maps converting intangible assets into

tangible outcomes Boston Harvard Business School Press

137

Lave J amp E Wenger 1991 Situated Learning Legitimate Peripheral Participation

Cambridge University Press

Lennon A amp A Wollin 2001 Learning organisations empirically investigating

metaphors Journal of Intellectual Capital Vol 2 No 4 pp 410-422

Marr B O Gupta S Pike amp G Ross 2003 Intellectual capital and Knowledge

management effectiveness Management Decision Vol 41 No 8 pp 711-781

Minsky M 1956 Some Universal elements for finite automat In Automata Studies

CE Shannon amp J McCarthy (eds) Princeton NJ Princeton University Press

Nonaka I 1994 A Dynamic Theory of Organizational Knowledge Creation

Organization Science Vol 5 No 1 pp 14-37

Nonaka I amp H Takeuchi 1995 The Knowledge-creating Company Oxford Oxford

University Press

Roos J amp G von Krogh 1995 What you see depends on who you are Think about

epistemology IMD Perspectives for Managers Vol 7 pp 1-4

Sher P J amp V C Lee 2003 Information technology as a facilitator for enhancing

dynamic capabilities through knowledge management Information amp Management

Vol 41 No 8 pp 933-945

Simon HA 1945 Administrative Behavior New York Free Press

Simon HA 1960 The New Science of Management Decisions New York Harper amp

Row Publisher

Sveiby KE 1997 The New Organizational Wealth Managing amp Measuring

Knowledge-based Assets San Francisco Berrett-Koehler Publishers

138

Varela FJ 1992 Whence Perceptual Meaning A Cartography of Current Ideas In

Understanding Origins Contemporary Views on the Origin of Life Mind and

Society F J Varela amp J P Dupuy (eds) Dordrecht Kluwer Academic Publisher

Venzin M G von Krogh amp J Roos 1998 Future Research into Knowledge

Management Knowing in firms Understanding Managing amp Measuring Knowledge

G von Krogh J Roos amp D Kleine (eds) London Sage

Von Krogh G G Roos amp K Slocum 1994 An essay on corporate epistemology


Von Krogh G amp J Roos 1995 Organizational epistemology Houndsmill

Macmillan

Von Krogh G amp J Roos 1996 Editorial and overview The Epistemological

Challenge Managing Knowledge and Intellectual Capital European Management


139

CHAPTER 8

Understanding Intrapreneurship by means of state-of-the-art knowledge management

and Organisational learning


Drejer Anders Karina Skovvang Christensen amp John Parm Ulhoslashi 2004


and Organisational learning Theory International Journal of Management and

Enterprise Development Vol 1 No 2 pp 102-119

140

102 Int J Management and Enterprise Development Vol 1 No 2 2004


Understanding intrapreneurship by means of state-of-the-art knowledge management and organisational learning theory

Anders Drejer Karina S Christensen and John P Ulhoslashi Department of Organisation and Management Aarhus Business School Haslegaringrdsvej 10 DK-8210 Aarhus V Denmark E-mail adrasbdk

Abstract Ever since Peter Drucker stated that there are only two constant factors in business ndash innovation and marketing ndash the need for continuously reinventing and changing business organisations according to the present and future needs of the market place has been in existence in the management literature No less today external turbulence and dynamic market conditions have come to stay for good However the challenges are quite different today The emergence of knowledgendashbased organisations and increased importance of knowledge as the key to competitive advantage poses new and interesting challenges for managers and researchers alike In this paper we will attempt to enlighten theories of intrapreneurship and innovation by applying state-of-the-art knowledge management theory and organisational learning theory to them

Keywords intrapreneurship innovation management knowledge organisational learning

Reference to this paper should be made as follows Drejer A Christensen KS and Ulhoslashi JP (2004) lsquoUnderstanding intrapreneurship by means of state-of-the-art knowledge management and organisational learning theoryrsquo Int J Management and Enterprise Development Vol 1 No 2 pp102ndash119

Biographical notes Dr Anders Drejer is a Professor in Strategic Management and Business Development at Aarhus Business School and head of its group devoted to strategy

Karina S Christensen is a PhD student at Aarhus Business School specialising in knowledge management and intrapreneurship

Dr John Parm Ulhoi is Professor in Technology and Innovation Management at Aarhus Business School head of its group on innovation management and the supervisor of Karina S Christensen

1 On the developing need for intrapreneurship

We are slowly beginning to understand that innovation and learning are not the prerogative of start-ups and entrepreneurs any more Rather in the age of technological turbulence and hyper-competition even mature firms need to be innovative and agile This is why we are beginning to see a new strand of literature on intrapreneurship ie

Understanding intrapreneurship by means of state-of-the-art 103

innovators in mature organisations However as early as 1958 Peter Drucker remarked on management that

ldquohellipmanagement is first and foremost about the continuing development of the organisation and its employees The demands and needs of the environment is constantly evolving and management is about adjusting the company according to the needs and demands of the environmenthelliprdquo [1]

As a starting-point this paper rests on the following basic assumptions

bull the importance of innovation is increasing and will continue to grow in the years to come

bull external market-related turbulence for business organisations is not a passing phenomenon

bull the same observation goes for technological turbulence which further enhances the need for innovation and intrapreneurship

Space consideration does not allow us to go into any kind of detail regarding these assumptions Rather we will argue that environmental turbulence and knowledge in fusion should be regarded as an opportunity for innovative firms although recognise that market-related dynamics and technological turbulence can also pose serious risks for stagnant and complacent firms

But what are the implications of the more frequent technological changes increased market segmentation and global competition for organisations According to Kumpe and Bolwijn [2] the necessary organisational forms have undergone profound changes through the last decades This has increased the importance of innovation and underlined the need for renewal and extension of existing product portfolio For understanding this development Kumpe and Bolwijn [2] have produced a model which is shown in Figure 1

The external environment of business organisations has undergone radical changes since 1960s and successful companies have had to adjust to these changes in order to survive In the 1960s successful companies focused on effectiveness They were based on rationality and hierarchical structures that were bureaucratic Management was primarily focused on the efficiency of various important processes within organisation In the last decade the importance of product development and innovation however has increased considerably [34] Technological updates and design renewal are important today in order to sustain market share and remain competitive The challenge of the development function in organisations eg the RampD department has therefore increased considerably with limited resources and time changing the nature of development work The market place it can be said has short-term demands that often require long-term technology research and development which in turn pose great difficulties in prioritisation and management [5]

Therefore an important implication of the development discussed above is that innovative activities can no longer be assumed to be the domain of start-ups and entrepreneurs Now all firms need to pay attention to differentiating themselves by means of innovation and development [4] while at the same time maintaining operational effectiveness [6] In other words firms are caught between exploration and exploitation to use the firms of James March [7] and Leonard-Barton [8] This is a fourth assumption of the paper that we believe is justified by the above discussion ndash but what does it mean It means that firms and managers need to start paying attention to the creation of innovation by intrapreneurs and intrapreneurial activities

104 A Drejer KS Christensen and JP Ulhoslashi

Figure 1 The evolution of market demands and (required) competencies of firms

Source Adapted from [2]


The outlined developments have taken place in parallel with another important development ndash the shift from the industrial society to the knowledge society Today many organisations are becoming knowledge intensive organisations staffed with knowledge workers that will dominate the influence of global value creation [910] This has made a lot of people talk about knowledge management as a new managerial discipline for exactly the same reasons that others do talk about innovation management

Thus intrapreneurs in modern organisations manipulate knowledge instead of physical product and technologies in order to create the necessary innovations and technologies In that light it is paramount that we begin to understand the relationships between knowledge knowledge management and innovation management and intra-preneurship To provide a framework for such an understanding is the very purpose of this paper In order to propose a framework for knowledge and innovation management and intrapreneuship we will start by investigating intrapreneurship and its context ndash innovation management ndash before discussing what we today know about knowledge and knowledge management in firms Finally we will try to integrate the two managerial issues in a framework that outlines the task of intrapreneurship in modern organisations

2 Innovation management and intrapreneurship

Innovation and innovativeness are very much in the centre of the debate of how the business environment of firms has evolved over the years Even though a lot of incongruent definitions can be found in the literature (see the discussion by Carcia and Calantone [11] there seems to be general agreement that innovation (the process) is an iterative process initiated by the perception of a new market andor service opportunity for a technology-based invention which leads to development production and marketing tasks in order to bring about a commercial success of the invention (eg [41213]) On the other hand innovativeness (the quality of the outcome) is used as a measure of the lsquonewnessrsquo of an innovation where highly innovative products etc are seen as new to the world the industry or at least the firm [13]

Despite the necessity for innovation in many firms discussed in the introduction it is clear that no two firms should necessarily be innovative in the same manner Innovation can to be directed at products markets production competencies [1113] as well as administrative competencies as defined by Lowe [14] and Gaynor [15] This corresponds to the thinking behind Miles and Snowrsquos seminal strategy model [16] where strategic management is seen as a process of solving three independent problems the entrepreneurial problem (choices within the product-market domain) the engineering problem (choices related to operations) and the administrative problem (choices related to administration)

Miles and Snowrsquos model [16] of lsquoorganisational adaptationrsquo focuses on the integration between technology and organisation The model is also referred to as a model for lsquostrategic adaptationrsquo (eg [17]) The purpose of the model is to describe and diagnose existing organisational behaviors The model is based on the following three basic ideas

bull οrganisations can act to create (or choose) their environment

bull managementrsquos strategic choices shape the organisationrsquos structure and processes

bull on the other hand once chosen structure and process constrain strategy


These basic ideas are in line with the work of authors such as Galbraith [18] and Mintzberg [19] The ideas describe a change in attitude towards strategy from the traditional perception of planning under stable external conditions to strategic management as a process of constantly developing and being innovative in order to keep up with turbulent and dynamic business conditions

21 Innovation management the context of intrapreneurship

The real issue however is how to create a constant stream of innovations in any kind of organisation It was Drucker [20] who first pointed out that innovation is not just an outcome innovation is a process In order to avoid confusion we will propose to call the set of managerial activities that together attempt to control the process of innovation for lsquoInnovation Managementrsquo We can therefore safely say that lsquoinnovationrsquo itself is reserved for the results of the process hopefully amply managed by innovation management A further note on innovations many have noted that innovation is more than just invention (eg [1213]) thereby emphasising that ideas need to be put into practice and inventions need to be commercialised in order to speak of innovation [21] In our fairly broad perception of innovation to cover more than just product innovation it is probably necessary to say that ideainventions need to be implemented in the products production or administrative competencies of the firm

Finally there is the issue of how new an innovation should be According to the strictest of definitions innovations should be new to the world (eg [22]) However this ignores the idea of parallel development of technologies in different industries ndash ie precursor to technology development [4] ndash not to mention the difficulties experienced by any firm struggling to implement something new to the firm itself (eg [23]) A suitable compromise between views seems to be to say that an innovation should be new to the firm and its industry

So what are the activities that constitute innovation management Notwithstanding the enormous differences between individual firms several authors have identified five important activities that together define innovation management in its proper context (eg [4]) The first three activities define innovation management per se whereas the last two define the context of innovation management The activities are

bull Technological integration This refers to the integration between technologies and the product-markets of the firm [24]) and emphasises the importance of satisfying the customer with the innovations of any firm In other words technology development (production and administration) needs to be integrated with product development [4] also at the strategic level

bull The process of innovation By this is meant the cross-functional (business) process of activities that create innovations across the departments of the firm Obviously no one department is responsible for innovation and it is thus necessary to see how departments together create innovations see Cooper [25] for one of the seminal accounts of this subject

bull Strategic technology planning This refers to the planning of technology andor competence projects with the aim of maintaining a balanced portfolio of technologies andor competencies see [26] or [27]


bull Organisational change Innovation is closely related to organisational change No matter how small or large the innovation it will effect the organisation with needs for new knowledge new markets new employees and so on Thus it is difficult to speak of innovation without considering organisational change

bull Business Development Of course innovation should be seen as a means for creating new and improved business for the company That is innovation can both drive and be driven by business development as the second very critical element of innovation management

In a systemic interplay we believe that these activities together constitute what we have defined as innovation management But innovation management is surely not the same phenomenon in all organisations

22 Contingent situations for innovation management

The recent emergence of quite complex products consisting of perhaps mechanical components electronics components and software not to mention interfaces to other IT products as well as a strong image part (of an expanded product concept) has given rise to many questions regarding the traditional idea of using the technological S-curve as a key to contingent use of the theory of innovation management

First of all many of the new products such as computers cellular phones and so on are in effect complex systems of many technologies each with individual life cycles And how are many individual life cycles added in to one life cycle for the entire product per se It seems as if the individual technologies and the complex products of which the technologies are a part need not develop according to the same logic But then what drives development of such complex products This is indeed very hard to say In the case of cellular phones it certainly seems as if it is not the end-users that drive development of new generations of cellular phones (eg [4]) But this does not have to mean that development is driven by technology push In conclusion we can say that it seems necessary to develop richer models for contingency of Innovation Management theory

Based on a firm empirical basis Christensen [28] discusses this in great detail He concludes that there must be two kinds of technology changes from one life cycle to the next (1) disruptive changes that create conditions like envisioned by Schumpeter as creative destruction and (2) sustainable changes that continue to support established firms and knowledge patterns in the industry [28] Whereas sustainable changes can be found to support established firms disruptive changes lead to the demise of established firms in favor of newcomer firms Christensen explains the difference between the two kinds of technological changes in terms of the S-curve Sustainable changes continue along the same basic pattern as measured by the same performance measure whereas disruptive changes start an entirely new S-curve (compared to earlier curves) that needs to be measured by another performance parameter

For instance disc drives for computers has changed dramatically on several occasions For instance in 1980 a new kind of technology was part of enabling the personal computer [28] However it was difficult for established firms to foresee that as their perception was driven by the old standard of performance (in that case capacity rather than size) Thus new firms became leading in the new market for personal computers The typical example of the computer-industry would be that of IBM versus


Apple Computer Because Apple was driven by a value system that was about creating small computers for home use its managers could see the value of a disc drive that was smaller than the generation before albeit not performing quite as well On the other hand IBM was driven by a value system that favored making large computer for central computer departments in large firms and saw hence no value in a smaller disc drive Unfortunately ndash for IBM that is ndash the market favored the former option and an entirely new product was created Interestingly Christensen demonstrates that exactly the same forces are at play in an entirely different kind of industry ie that of machinery for the building industry Thus the phenomenon does not need to be new at all and certainly not limited to IT-based industries

We suggest that there must be at least three situations for innovation management We have the well-known situation of technology exploitation ie after the dominant design has been established This situation can of course be divided into a number of situations This has been amply demonstrated by the equally well-known AD Little approach to technology investment (eg [26]) that distinguishes between monitoringearly adoption selectively investingfollower developing key technology maintaining mature technology and divesting of obsolete technology as the life cycle nears another technology shift [26] Furthermore we argue that changes of technology between life cycles can be either sustaining or disruptive rather than the traditional idea of a discontinuous technological change leading to creative destruction

Based on the above discussions we can go beyond the popular distinction between creative destruction and technology exploitation and define three situations for innovation management

bull exploitation of existing technologies

bull stable technological change

bull disruptive technological change

Because these three situations are the key to a contingent framework for intrapreneurship related to knowledge and innovation they are important to understand in detail In order to do so it is necessary with research designed to yield this kind of detailed understanding A logical place to start would be to conduct case studies or action research in companies in order to present examples of the three situations and how they change over time Even though this article does not have space for a sufficient presentation of such case studies the authors will describe and illustrate the three situations in this Section This is based on a number of longitudinal case studies undertaken by one of the authors and presented in a recent book [4]

Exploitation of existing technologies This situation corresponds to the stable situation of the smooth part of the S-curve The task of Management of Technology (MoT) is to secure that the firm develops technologies faster than its competitors (or as a follower if that is desired) and exploit technologies in processes and secondarily products This is truly a race for technological development and a lead may not last forever This kind of competition can be compared with the metaphor of say 100 meter running Because of specialisation among athletes one will find that the same athletes compete (almost) every time Furthermore race tracks rules equipment etc will be the same every time ndash and the athletes probably train in similar fashion Thus it seems very difficult to maintain a leadership position in a competition of this kind ndash unless one is very competent in getting everything together The most obvious examples of such firms will be traditional industrial firms in many industries Car-manufacturing is a little atypical because of the


strong emphasis on the products still However research has shown that emphasis has changed from products to processes many years ago [29] and we also know it is a very difficult place to break in as a newcomer

Stable technological change Other firms go through a series of sustainable technological changes ndash usually at pretty high speed This is of course quite complex but we must remember that the technological changes happen within the boundaries of the same design concept and thus value system for the firm Therefore the task here is to configure ndash and sometimes develop ndash a set of technologies constituting a product within the time available Technological performance is often of less importance as long as the new product is on market in time We may compare this metaphorically with a group of athletes that agree to go from one distance to another sequentially from 100 meter to 200 meter to 400 and so on Every time the group changes there will be a change of advantages ndash albeit a small one However over time leadership may well change as the group moves from 100 to 800 meters for instance We see that there will be many similarities between each pair of distances and that the value system of athletes will only need to change slowly ndash relatively An obvious example of such firms can be found in mobile communications where a group of firms have followed each other through several generations of cellular phones The lead has changed over time and there has even been a few entries into the industry However many firms have followed along for very long time

Disruptive technological change Finally there are firms that have lived through creative destruction Here both market and technology change at the same time ie a new design concept as well as new components need to be designed ndash usually along with establishing a new firm to do so This means that everything must be designed simultaneously ndash product (concept and detailed construction) market processes administration and so on This by the way corresponds to inventing an entirely new game of sports ndash the rules equipment etc must be invented at the same time Examples of firms here rarely include established firms reinventing themselves ndash that is almost impossible because it requires changing the culture and value system of an established firm ndash and thus usually one-offs Apple Computer is a much researched example of a firm that invents an entire new industry by breaking the established rules and beliefs

23 Intrapreneurs who makes the innovations

Considering the past two decades the responses of the companies in the 1980s and to some extent the 1990s to the challenges outlined above have been characterised by reductions of work force downsizing rightsizing budget cuts and depressed morale in their workforce [30] The centre of attention has been a focus on short-term costs of production but no company can afford to rely on such an approach forever The real challenge of a company to remain a going concern is to establish a competitive advantage and the only way to accomplish that is continuous innovation and creation of new ideas According to Morris and Kuratko [30] the answer is adaptability flexibility speed aggressiveness and innovativeness which can be boiled down to one word ndash intrapreneurship (for going concern firms) and entrepreneurship (for start-ups)

In parallel with the downsizing wave (eg [31]) researcherrsquos interest in intra entrepreneurship seriously took off In particular interest in topics as entrepreneurial management corporate entrepreneurship and intrapreneurship in the last couple of years is remarkable This may in part be due to lsquore-labellingrsquo [3233] of existing concepts but it


has paved the way to the emergence of new practices and theories From 1983 the interest for the topic has been on the increase which can be seen in relation to Pinchotrsquos introduction of the concept of intrapreneurship in 1983 and his book Intrapreneuring in 1985

New fads or concepts are often seen or claimed to be driven by practice [34] and the more popular part of the management literature which in the case of knowledge management was represented by Drucker [9] and Stewart [35] But as Abrahamson [36] has argued the researchers have often been aware of and interested in the new phenomenon for some time but the explosion seldom takes off before it has gained the interest from practitioners That is exactly what is happening at the moment for the overall concept of corporate entrepreneurship and the many different labels illustrate that even though the interest on the overall topic is growing there still is a lack of the consensus on what it really means andor should mean

It is again the purpose of this paper to help fill that void ndash what does intrapreneurship really mean

3 Knowledge in an innovation perspective

An important aspect about knowledge and knowledge management is that it is only within the last few years that the concepts of knowledge and knowledge management have risen to the top of the agenda of researchers and managers Even though we have discussed knowledge and learning in the educational realm for many years only recently have we begun to explore its ramifications in firms and for managers Therefore we will assert that there is a major contribution coming from discussing what is state-of-the-art about knowledge from an innovation perspective and try to integrate that into a framework for the task of the intrapreneur in modern organisations This is simply because this has not been done before and intrapreneurs in modern organisations ndash we have come to realise ndash manipulate knowledge rather than physical artifacts

31 Knowledge management in a knowledge society

Peter Drucker takes the development of the knowledge society [9] back to the Second World War and already in the 1960s he talks about lsquoknowledge workrsquo and lsquoknowledge workerrsquo However Thomas Stewartrsquos articles in Fortune magazine about lsquoBrainpowerrsquo [37] and lsquointellectual capitalrsquo [38] indicates the entry to the knowledge society for most scholars and practitioners which eg Nonaka and Takeuchi [39] and Baxter and Chua [34] have pointed out in different ways One of the clearest statements is Druckerrsquos [9] own prediction about lsquo[t]he basic economic resourcehellip is and will be knowledgersquo and the uniqueness about the knowledge society is that knowledge has become the resource rather than a resource [9 p 41] italics added by the authors)

Even though knowledge is introduced as the new crucial factor for the success of the organisations it is worth to remember that it may not be so new in the first place It is well known that old management concepts and techniques are re-launched under new labels to mobilise new interest and action [40] An example is knowledge in the sense of actor theory [32] where knowledge is related to linguistic and organisational actors and actants in the same way as Catasuacutes [33] did with environment and environmental management Whether this is due to a re-labelling or new practices and new theories


lsquonewrsquo concepts such as knowledge management knowledge worker and knowledge management strategy have gained a lot of attention recently As described by Bukh et al [40] the alertness of these concepts is among other things indicated by the centrality of the label lsquoknowledge managementrsquo in both organisations by consultants and scholars

A tendency to see knowledge and knowledge management from a wider ndash and often strategic ndash perspective rather than an exclusive artifact-oriented perspective [41] where the primary idea is to capture code and store data and information to make them available for an entire organisation has been promoted by many researchers [394142] Knowledge management however can be seen as an ongoing innovative process based on knowledge creation knowledge sharing and knowledge dissemination This process-oriented perspective [41] is rooted in Ikujiro Nonakarsquos article The Knowledge-Creating Company from 1991 which was the first summarised presentation of this perspective

Among others von Krogh et al [42] and Christensen and Bukh [41] argue that knowledge sharing is a combinantion between people and technology which means both social interaction and technological transactions This is supported by the fact that lsquogeneration of synthesisrsquo is important for knowledge creation The interplay between dichotomies such as tacit and explicit knowledge body and mind individual and organisation top-down and bottom-up bureaucracy and task force and relay and rugby [39] are core elements in the knowledge creation process The interaction between all these dichotomies is expressed in the knowledge spiral [39] A managerial purpose is to keep this spiral running to create dynamic knowledge which is crucial for the innovative activities in an organisation

32 Different types of knowledge

Typically knowledge is defined as lsquothat which is knownrsquo This is however only one way of looking at knowledge Another important way to look at knowledge is to look at lsquothe state of knowingrsquo The state of knowledge can be discussed along several dimensions most notably

bull The level of articulation ie to what extent is it possible to represent knowledge formally and explicitly and thereby share knowledge within the organisation Knowledge can be characterised on a continuum from tacit to explicit

bull Depth of knowledge ie how deep is the organisationrsquos understanding regarding a certain area of knowledge This can range from no knowledge (and inability to utilise that knowledge) to complete understanding and ability to utilise knowledge

bull Location of knowledge ie is the knowledge internal or external to the firm

bull Diffusion of knowledge ie to what extent is knowledge the possession of everybody in the organisation (so everyone can use the knowledge)

bull Complexity of knowledge ie a summary of the other factors of knowledge

Below we will discuss the level of articulation and complexity of knowledge only as these are the most important dimensions of knowledge within this context

321 Level of articulation tacit to explicit

Inspired by Michael Polyani it has only recently become accepted that not all knowledge in an organisation can be fully articulated [43] perhaps a recognition of the fact that not


all knowledge of value is easily accessible via books the internet etc This is not surprising to us but merely another manifestation of the very thinking behind competence development and an internal focus in management of firms Typically a distinction is made between tacit and explicit knowledge (eg [394143]) Tacit knowledge is the kind of knowledge that cannot be articulated and codified whereas explicit knowledge is easy to codify Evidently different strategies for handling knowledge and for learning are needed for tacit and explicit knowledge respectively The two possible states of knowledge are to us merely end-points on a scale ndash in reality knowledge will be something in between It is thus important to note that tacitness of knowledge should not be seen as a form of mystification Tacit knowledge can be learned ndash just consider the craftsman education in Denmark ndash and it is a natural and important part of all domains of knowledge [44]

A number of factors can be said to contribute to the tacitness of knowledge Based on the references in this Section we have identified a number of continuums that expresse most importantly a factor contributing to tacitness of knowledge

bull Embodied or disembodied knowledge Examples of embodied knowledge are written procedures manuals or mechanical components that all seem to be physically part of the organisation Examples of disembodied knowledge are heuristics organisational values or culture [8]

bull Observable or non-observable in use Tacit knowledge will typically be difficult to observe in use Examples of non-observable knowledge therefore include knowledge related to craftmanship andor knowledge related to a large element of experience

bull Independent or part of a system Some kinds of knowledge are part of a larger system of knowledge and experience ndash eg craftmanship ndash whereas other kinds are independent It will be far more difficult to articulate knowledge of the former kind than of the latter kind

In summary tacit knowledge is disembodied non-observable in use and part of a system of knowledge whereas explicit knowledge is embodied observable in use and independent of other kinds of knowledge Many kinds of knowledge in a firm will be towards the tacit kind and hence more difficult to manage through formal systems and traditional forms of learning

322 Depth of knowledge Dreyfuss and Dreyfuss

An important point regarding knowledge relates to its lsquodepthrsquo by which we understand an expression of the organisationrsquos ability to utilise that knowledge Thus the greater the depth of knowledge the greater the ability to utilise that knowledge This assumption can be discussed ndash obviously some persons can understand quite a lot about an area and be unable to apply that knowledge However we assume that in relation to firms and this project this will not be the case However there is not necessarily any correlation between the depth of knowledge and its level of articulation ndash understanding and utilisation can be high even with tacit knowledge

There have been several contributions to this dimension of the state of knowing For instance Machlup [45] has identified 13 different lsquoelements of knowingrsquo and describes a number of levels in the development of knowledge For Machlup the central issue in his


lsquoelements of knowingrsquo is how well an individual or an organisation is able to perform utilising this knowledge He defines a number of stages ranging from lsquobeing acquainted withrsquo to lsquobeing able to performrsquo This corresponds to a continuum from having knowledge that exists (but being unable to do anything with it) to having thorough knowledge and being able to utilise that knowledge A somewhat similar typology has been proposed [46] with an eight-level typology of knowledge in relation to the description of processes

The most important contribution however is also the oldest one Dreyfuss and Dreyfuss [47] have proposed a model for the depth of knowledge that clearly can be said to contain the other newer contributions to the area The model describes the knowledge of a person as he becomes more and more competent in five levels ndash from novice to expert ndash and describes how true experts are highly dependent on tacit knowledge whereas others are dependent on explicit knowledge

323 Location of knowledge

Knowledge can reside in many different organisational contexts ranging from the individual person to networks of employees ndash and most notably in relation to modern organisations In networks consistent of internal and external persons to the firm the network of organisations being the ultimate form of that In this context two issues stand out as particularly important (1) the transfer of knowledge from one person to the entire organisation and (2) the transfer of knowledge external to the organisation to the inside of the organisation

In modern organisations knowledge will often be found in the tacit form and hence reside in the knowledge and experience of one person or just a few persons In order to enable the firm to utilise that knowledge to the largest possible extent ndash that is make more people capable of mastering the knowledge ndash the process of diffusing knowledge from one person to the entire organisation is critical There are several ways to do that It seems evident that the mechanism of codification making knowledge more explicit is vital to the process

In many firms other knowledge will often be found outside the organisation This is only natural for a relatively small firm with minor resources For instance suppliers often have knowledge critical for the customer firm on say processes customised process technology etc Therefore many firms engage in networking activities of different kinds for instance shared marketing RampD efforts etc with many different partners Thus the second important issue relating to location of knowledge is whether or not knowledge is internal to the organisation Learning processes for internalising knowledge are absolutely vital to modern organisations

324 Diffusion of knowledge undiffused to diffused

It is through the diffusion process that an organisation becomes capable of deriving value from the knowledge it has developed by eg RampD activities internalising networking etc [39] Evidently the diffusion of knowledge is very critical In order to be able utilise knowledge better more people need to have access to the knowledge and master the knowledge Thus the extent of diffusion in general is closely related to the dimension of depth of knowledge However not every part of the organisation will reach the same


depth of knowledge at the same time ndash or be able to do so ndash so diffusion is a critical issue in its own right

Normally diffusion of knowledge is described along a continuum from undiffused (located with one person) to fully diffused (residing with every body) The latter end of the continuum suggests that diffusion of knowledge has a lot to do with the concept of corporate values and corporate culture As soon as something is fully diffused one can say that it has become part of the corporate culture Therefore learning processes need to be both formal and informal in order to diffuse knowledge

Of course diffusion is a relative construct in the sense that it should be measured on a lsquoneed to knowrsquo basis There is no point in diffusing knowledge to parts of the organisation where that knowledge is irrelevant Having noted that we would like to add that very often the need to know is greatly underestimated in organisations

325 Complexity of knowledge

The dimension of complexity of knowledge is seen as very important in relation to learningtransfer of knowledge [48] Complexity of knowledge is a function of

bull The tacitness of knowledge and thereby the way knowledge is being embedded and represented within the organisation Complex knowledge must be expected to have significant tacit elements [43]

bull The extent to which the knowledge can be demarcated from other areas of knowledge in the organisation Complex knowledge will typically be intertwined with other types of knowledge in the organisation and therefore be difficult to demarcate clearly [49]

bull The extent to which knowledge has social elements ie a large number of actors needed for the knowledge to exist [32] eg network knowledge Typically complex knowledge will be dependent on a number of actors and their ability to function together in a group or network

In other words the more complex the knowledge the more one or more of the three dimensions mentioned above will be present The more complex knowledge the more difficult will it be to model that knowledge and to acquire the same by formalised means

4 Understanding intrapreneurship better

Increasingly the need for innovation management is changing Innovation management these days is the domain of all modern organisations ndash not just start-ups Therefore it is crucial to consider the work of intrapreneurs in theory about innovation management Furthermore such modern intrapreneurs manipulate knowledge rather than physical artifacts Investigating state-of-the-art theory about knowledge we have concluded that complexity of knowledge is a construct that has large implications for the way we think about intrapreneurship and innovation In this Section we will link together complexity of knowledge and the work of the intrepreneur in a common framework In order to do that however we need to establish the context for the work of the intrapreneur We will do this by discussing the purpose of the intrapreneurrsquos work and its content


41 The purpose exploitation and exploration

Regarding the purpose of intrapreneurship we will assert that the intrapreneur is to fulfill the organisationrsquos need for renewal in light of its need for stability James March has formulated the idea that management is a balance between two forms of learning activities ndash exploration and exploitation ndash the finding of new resources and the use of existing ones [7] This is probably based on some of Marchrsquos early thinking on management since March from early on saw management as two fundamentally different activities that needed to be conducted quite differently (eg [50]) One has been labeled lsquothe technology of foolishnessrsquo [50] as a serious attempt to create a supplement to the analytical planning-oriented style of management that we know from operations management

The ideas of March have been inspiring for many others such as Dorothy Leonard-Barton [8] who has worked on experiments versus exploiting the knowledge assets and hence competencies of the company Leonard-Barton [8] too acknowledges that we are talking about two mentally different activities but does not discuss the managerial challenges of doing two fundamentally different mental activities Within the field of strategic management Hamel and Prahalad [51] have written a paper on lsquostrategy as stretch and leveragersquo in Harvard Business Review in almost similar terms while Michael Porter recently has written a thought-provoking article lsquoWhat is a strategyrsquo [6] in which he claims that strategy is about differentiation in the market place combined with operational effectiveness The latter to Porter is not even strategic in nature ndash but that is another point

42 The content learning leading to innovation

Regarding the content of intrapreneurship we will see this as learning Learning occurs under two conditions When there is a match or a mismatch between intentions and outcomes of intended actions in organisations If there is a mismatch the actions are corrected until there is a match between actions and intended outcomes [52] However several authors have discussed different levels of learning in organisations ie a radical change of behavior may not be the result of the same kind of learning as a minor adjustment of current behavior Argyris illustrates this with his model of single and double loop learning

Figure 2 Model of single- and double-loop learning



Single-loop learning can be compared to a thermostat A thermostat is programmed to detect if the surrounding temperature exceeds or is below the reference temperature and responds by simply turning the heat on or off If the thermostat asked itself why it was programmed as it was then it would be a double-loop learner since it was able to reconsider its own situation and thereby perhaps alter this situation In other words double-loop learning is mainly a matter of being able to question onersquos governing values ie self-assessment Single-loop learning is appropriate for routine and repetitive issues while double-loop learning seems more relevant for complex and non-programmable tasks [52]

Double-loop learning is not simple at all it often requires evaluation of your existing values and ways of doing things and how you influence your surroundings in both negative and positive ways Even if you are able to see and evaluate your own faults there is still a long way to go before an actual change occurs ndash if any occurs at all Double-loop learning means the unfreezing of paradigms prejudices and habits in order to be open-minded towards new and alternative ways of action [52] This furthermore involves a number of other psychological mechanisms that will not be discussed further within this context It is easy to relate to the problems dealing with double-loop learning Just think of the advice that you give other people but never use yourself Sometimes you even say to your self or to others lsquoYou shouldnrsquot be doing it the way I do but insteadrsquo You are often well aware of your own deficiencies but accept them as a solid implemented and non-changeable part of you If these lsquovaluesrsquo are changed it is often in connection with a major crisis or event that really shakes you out of balance

We will compare a personrsquos double-loop learning as a serious reconsideration of that personrsquos current situation often leading to radical changes with organisations and the way they learn when innovating In comparison with industrial organisations it is seen that double-loop learning and perhaps radical change often emerges as a result of a near fatal crisis ie major turn-around efforts crisis management and so on However if double-loop learning could be integrated into the formal and informal systems of organisations the organisations would have more time to reconsider their basic situation and prevailing values and from there develop serious alternative solutions Maybe organisations would even be able to develop entirely new ways of doing things ndash without the existence of a crisis

43 A framework for intrapreneurship in light of knowledge

The elements of a framework for intrapreneurship and innovation in light of a knowledge perspective are now in place The elements are

bull situations for innovation management ndash exploitation sustainable change and disruptive change

bull task of intrapreneurship ndash exploitation and exploration

bull complexity of knowledge bull tacitness bull demarcation bull social elements

bull type of learning involved

Combining these elements yields the following framework


The framework defines the task of intrapreneurship as a combination of the three situations for innovation management and the learning-related concepts of exploitation and exploration ndash the latter being closely related to single and double loop learning Furthermore the framework provides an attempt to describe the content of intrapreneurship in the six subtasks resulting from outlining the framework This is done by defining the complexity of the knowledge that the intrapreneur needs to manipulate in each instance and the corresponding type of learning involved In all this yields the framework proposed in Table 1

Table 1 Framework for intrapreneurship

Exploitation-task Exploration-task

Exploitation of the same technology

Priority 90 Purpose Reuse and add to

existing market and technology knowledge primarily internal

located

Complexity Low Explicit knowledge Clearly demarked

Few social elements

Learning Single loop learning

Priority 10 Purpose Experiment with

new technologies in order to test the basic assumptions of

the firm

Complexity High Tacit assumptions

Not demarked Totally social

Learning

Double loop learning

Sustainable technological change

Priority 50 Purpose Develop existing

knowledge on current markets or technologies

Complexity Medium

Explicit knowledge Often external and not demarked

Few social elements


Priority 50 Purpose Develop new

knowledge on new markets or technologies

Complexity Medium

Tacit knowledge Often outside of firm and

not demarked Few social elements (mostly

technology)

Learning Both forms of learning

Disruptive technological change

Priority 10 Purpose develop explicit knowledge organisational

procedures

Complexity High Tacit (should be explicit) Internal but not demarked

May social elements External located knowledge

Learning

Single loop learning

Priority 90 Purpose develop new and tacit knowledge on market

and technologies

Complexity High Tacit and new Not demarked

Many social elements



Obviously this framework is merely a first step The framework needs to be researched in greater detail both empirically and theoretically The boundaries of time and space prevent us from doing so in this paper but we look forward to contributing to the effort

References

1 Drucker PF (1958) The Practice of Management Harper and Row

2 Kumpe T and Bolwijn PT (1994) lsquoTowards the innovative firm ndash a challenge for RampD managementrsquo Reseach-Technology Management JanndashFeb Issue pp38ndash44

3 Tidd J Bessant J and Pavitt K (1997) Managing Innovation Wiley

4 Drejer A (2001) The Innovative Firm (In Danish) Boslashrsens Forlag

5 Rosenkopf L and Tushman ML (1994) lsquoThe co-evolution of technology and organisationrsquo in Joel et al (Eds) Evolutionary Dynamics of Organisations Oxford University Press pp403ndash424

6 Porter ME (1996) lsquoWhat is strategyrsquo Harvard Business Review Vol 17 NovemberndashDecember pp33ndash47

7 March J (1991) lsquoExploration and exploitation in organizational learningrsquo Organization Science Vol 2 No 1

8 Leonard-Barton D (1995) Wellsprings of Knowledge Harvard Business School Press

9 Drucker PF (1993) Post-capitalist Society Oxford Butterworth-Heinemann

10 Drucker PF (1994) lsquoThe theory of the businessrsquo Harvard Business Review SeptemberndashOctober

11 Drejer A (2002) Strategic Management and Core Competencies Quorum Books

12 Roberts EK (1981) Generating Effective Corporate Innovation The Free Press

13 Afuah A (1998) Innovation Management The Free Press

14 Lowe P (1995) The Management of Technology Prentice Hall

15 Gaynor GH (1991) Achieving the Competitive Edge Through Integrated Technology Management McGraw-Hill

16 Miles RE and Snow CC (1978) Organizational Strategy Structure and Process McGraw-Hill

17 Stacy R (1993) Strategic Management and Organizational Dynamics Prentice Hall

18 Galbraith J (1979) Organization Design The Free Press

19 Mintzberg H (1983) Structure In Five ndash Designing Effective Organizations Prentice-Hall

20 Drucker PF (1985) Innovation and Entrepreneurship Harper amp Row

21 Tushman L and Rosenkopf L (1986) lsquoOrganizational determinants of technological changersquo in Staw B and Cummings L (Eds) Research in Organizational Behaviour Vol 14 pp311ndash347

22 Tushman ML and Anderson P (1990) lsquoTechnological discontinuities and organisational environmentsrsquo Administrative Science Quarterly Vol 35 pp1ndash8

23 Voss CA (1988) lsquoImplementation a key issue in manufacturing technology the need for a field of studyrsquo Research Policy

24 Iansiti M (1998) Technology Integration ndash Making Critical Choices in a Dynamic World Harvard Business School Press

25 Cooper (1995) New Product Development The Free Press

26 Bhalla SK (1987) The Effective Management of Technology Batelle Press

27 Drejer A and Riis JO (2000) Competence-based Strategy (In Danish) Boslashrsens Forlag


28 Christensen JC (1998) Innovatorrsquos Dillema Harvard Business School Press

29 Abernathy WJ and Clark KB (1985) lsquoInnovation ndash mapping the winds of creative destructionrsquo Research Policy Vol 14 pp3ndash22

30 Eisenhardt H and Martin JE (2000) lsquoDynamic capabilities what are theyrsquo Strategic Management Journal Vol 21 pp1105ndash1121

31 Edvinsson L and Malone T (1997) Intellectual Capital HarperCollins

32 Latour B (1999) Pandorarsquos Hope Essays on the Reality of Science Studies Cambridge MA Harvard University Press

33 Catasuacutes B (2001) Borders of Management Five Studies of Accounting Organizing and the Environment Doctoral dissertation School of Business Stockholm University

34 Baxter J and Chua FW (1999) lsquoKnowledge management now and the futurersquo Australian Accounting Review Vol 9 No 3 pp3ndash14

35 Lei D Hitt MA and Bettis R (1996) lsquoDynamic core competences through meta-learning and strategic contextrsquo Journal of Management Vol 22 No 4 pp549ndash569

36 Spender JC (1996b) lsquoOrganizational knowledge learning and memoryrsquo Journal of Organizational Change Management No 9 pp63ndash79

37 Stewart TA (1991) lsquoBrainpower how intellectual capital is becoming Americarsquos most valuable assetrsquo Fortune June 3rd pp44ndash60

38 Stewart TA (1994) lsquoYour companyrsquos most valuable asset intellectual capitalrsquo Fortune October 3rd pp68ndash74

39 Nonaka I and Takeuchi H (1995) The Knowledge-creating Company Oxford Oxford University Press

40 Nonaka I (1991) lsquoThe Knowledge-Creating Companyrsquo Harvard Business Review NovemberndashDecember pp96ndash104

41 Christensen KS and Bukh PN (2003) lsquoVidenledelse ndash to perspektiver (trans knowledge management ndash two perspectives)rsquo in Bukh PN Christensen KS and Mouritsen J (Eds) Videnledelse ndash Et praksisfelt under Etablering (trans knowledge Management ndash Establishing a Field of practice) Koslashbenhavn DJOslashF pp65ndash85

42 Von Krogh G Roos J and Kleine D (1998) Knowing in Firms Understanding Managing and Measuring Knowledge London Sage

43 Winter S (1987) lsquoKnowledge and competence as strategic assetsrsquo in Teece DJ (Ed) The Competitive Challenge Ballinger pp159ndash184

44 Spender JC (1996) lsquoMaking knowledge the basis of a dynamic theory of the firmrsquo Strategic Management Journal Vol 17 Winter Issue pp45ndash62

45 Nevis EC DiBella AJ and Gould JM (1995) lsquoUnderstanding organizations as learning systemsrsquo Sloan Management Review Winter Issue pp73ndash85

46 Bukh PN Christensen KS and Mouritsen J (2003) Videnledelse ndash Et praksisfelt under Etablering (trans Knowledge Management ndash Establishing a Field of practice) Koslashbenhavn DJOslashF

47 Dreyfus H and Dreyfus S (1986) Mind over Machine The Power of Human Intuition and Expertise in the Era of the Computer Free Press

48 Duncan Rand Weiss A lsquoOrganisational learning implications for organisation designrsquo in Barry M Staw (Ed) Research in Organisational Behaviour JAI Press

49 Kolb D (1984) Experimental Learning Prentice Hall

50 March J (1994) Management in a Complex World Samfundsvidenskaberne

51 Von Krogh G and J Roos (1996) Managing Knowledge Perspectives on Cooperation and Competition London Sage

52 Argyris C and Schon DA (1998) Organisational Learning II Addison-Wesley

159

CHAPTER 9

Knowledge Management in Perspective(s) An Analysis of Project Management in Two

Companies

Christensen Karina Skovvang Per Nikolaj Bukh amp Heine Kaasgaard Bang 2007

Knowledge Management in Perspective(s) An Analysis of Project Management in

Danish Companies

160

161

August 2007

Knowledge Management in Perspectives An Analysis of Project Management in Two Companies

Assistant professor Karina Skovvang Christensen University of Aarhus Professor Per Nikolaj Bukh Aalborg University

Partner Heine Kaasgaard Bang Conmoto

Abstract

This article analyses project management activities in two companies from a knowledge management perspective It is shown how human competences it-systems and project management systems are integrated and how these knowledge resources reflect strategies for knowledge management The Knowledge Management activities are analysed from two perspectives an artefact oriented and a process oriented perspective From the first perspective project management seems to consist of similar components in the two firms whereas the process oriented perspective identify context dependent differences It is concluded how awareness of different perspectives opens up for more managerial options and better understanding in practice

Keywords Knowledge Management Strategy Project Management Case study Knowledge Management Practice Corresponding author Assistant professor Karina Skovvang Christensen University of Aarhus School of Economics and Management Building 1322 DK-8000 Aarhus C email kschristenseneconaudk The authors are grateful to Allan Krogh Erlandsen BampO and Hanne Buje Jensen FKI Logistex Crisplant for access to the companies and for comments to a previous version of the article

162

1 Introduction

Many different researchers have introduced the concept of knowledge in academic

discussions within varying fields Mouritsen et al (2001) focuses for instance on the

management of intellectual capital whereas Prahalad amp Hamel (1990) describe the

companyrsquos strategic work based on core competencies In other parts of the

management literature both Leonard (1995) and Nonaka (1994) are concerned with

knowledge in relation to innovation whereas Huber (1991) and Lyles amp Schwenk

(1992) focus on organising of information so that it can be collected stored and reused

in other connections A common characteristic of these theories is that knowledge is an

important factor which is structured in ways that ensure the applicability of knowledge

in accordance with the strategies of the company

In relation to projects and project organisations the attention to knowledge management

as well as the role that social processes practises and patterns have in effectively

managing project knowledge is relatively new as Bresnen et al (2003) have pointed out

Knowledge is however a vital resource in project based industries and well working

knowledge management is in project organisations for instance essential for improving

the utilisation of core capabilities and technological platforms and reduce development

time in project (Oshri et al 2005)

The purpose of this paper is to pay attention to how different perspectives on a subject ndash

in this case project management and knowledge management ndash can broaden ones view

and

This article is based on a study of knowledge management in two Danish project based

organisations The article presents knowledge management as a perspective of

management where knowledge and knowledge resources are brought into focus The

empirical part of the article is based on an analysis of knowledge management

initiatives in relation to project management in the development division of the Danish

company Bang amp Olufsen and in the Danish company FKI Logistex Crisplant It is in

the article demonstrated how different perspectives on knowledge and knowledge

management expressed through two different epistemologies the artefact-oriented and

163

the process-oriented epistemology implies different understandings of the nature and

the role of knowledge management

The remainder of the article is structured in the following way Section 2 discusses

briefly the meaning of knowledge management and the two perspectives are introduced

In the following section 3 a short introduction to the method applied as well as a short

description of the two companies are given In section 4 the companiesrsquo different

initiatives in relation to knowledge management will be presented and it is illustrated

how knowledge management may be an integrated part of project management In

section 5 knowledge management is analyzed from the two different perspectives and

finally section 6 discussed how the perspectives may help to show a more balanced

picture of knowledge management by focusing on different parts of knowledge

management

2 Knowledge management in practice

In recent years there has in the management literature been an overwhelming interest in

the concept of knowledge and knowledge based resources This is not only reflected in

the importance of knowledge-intensive companies but also in an interest in how

knowledge based resources interact in the creation of value in companies and how

knowledge can be managed

When managers discuss knowledge different perspectives are often taken The

difference consists in the way in which knowledge is perceived In other words the

basic epistemological perspectives differ In this article a distinction is made between

two different perspectives which will be outlined in more details below

21 The two perspective on knowledge management

The first perspective on knowledge and knowledge management will be termed the

artefact oriented perspective Focus is often on information technology and the ways in

which technology may be applied for the codification of knowledge It is more or less

explicitly assumed that everything can be described and the more data a company

164

collects the more knowledge it possesses Knowledge management is therefore mostly

based on collecting storing and distributing knowledge in the form of eg documents

and specific information (eg Huber 1991 Lyles amp Schwenk 1992) From the artefact-

oriented perspective knowledge management focus for instance on project memory (cf

Kaumlrreman et al 2004) and manuals for organisational processes (Malone et al 1993)

Many authors (eg Blackler 1995 Tsoukas 1996) have indicated that the artefact

oriented perspective has become insufficient when handling management challenges in

relation to the complexity of the knowledge society and has hence criticised the

restricted view of knowledge expressed by the artefact oriented perspective emphasising

instead that knowledge is situated in social and organisational practises as well as

relationships (Tsoukas amp Vladimirou 2001) The problem is not lack of documents

data or access to information The limitation can rather be found in the quality content

and organisation of the material This has given rise to the second perspective which

we term the process oriented perspective

The process oriented perspective is most clearly exemplified by Ikujiro Nonakarsquos

research where knowledge is perceived as a ldquodynamic human process of justifying

personal beliefs as a part of an aspiration for the lsquotruthrsquordquo (Nonaka 1994 p 15 Nonaka

amp Takeuchi 1995) An essential point is that focus is on the process in which knowledge

is created and not on the documents or the rules which are based on the process This

implies that continuous and dynamic adaptation to lsquoreal lifersquo takes place

From the process-oriented epistemology knowledge creation and sharing is considered

as a continuous process where knowledge is transformed between tacit and explicit

knowledge and between people and technology The point of departure is here the so-

called SECI-model (Nonaka amp Takeuchi 1995) which consists of four types of

processes which Nonaka amp Takeuchi (1995) identify as central in relation to

knowledge management Socialization Externalization Combination and

Internalization According to Nonaka amp Takeuchi (1995 pp 70-71) the development of

organizational knowledge are a continuous and dynamic interaction between tacit and

explicit knowledge

165

22 Knowledge Management and the perception of Knowledge

Knowledge is a complex term as it is often not easy to agree on an exact definition The

view of knowledge that pervades much research especially from the artefact oriented

perspective ndash but not limited to that ndash is positivist ie the Platonic view that knowledge

is lsquojustified true beliefrsquo However the more recent knowledge management researchers

eg Nonaka amp Takeuchi (1995) von Krogh amp Roos (1995) Mourisen et al (2001) and

others have initiated a move away from seeing the subject at standing in a static

cognitive relationship of certainty to propositions stating facts about the empirical world

(se also Jackson amp Klobas 2007)

Following this recent tradition we adopt an approach where knowledge neither as an

object to be managed nor as a research object is strictly defined on beforehand Rather

we as the basic idea of simultaneously working with different perspectives on

knowledge as presented above let the nature of knowledge be based on the individuals

set of beliefs or mental models used to interpret actions and events in the world This

opens up for different perceptions of knowledge and knowledge management in an

organisation much like Roos amp von Kroghrsquos (1995 p 1) reflect in their statement that

ldquo[w]hat you see depends on who you arerdquo which implies that knowledge should be

regarded as a subjective term Following this notion it is quite possible that knowledge

can be expressed in many different ways since not only knowledge but also knowledge

about knowledge depends on the context This implies that it is essential to clarify the

background for the various perceptions of knowledge knowledge management concepts

etc

The understanding of the term knowledge or at least what it means to the individual or

the organisation is important because it affects how knowledge enters the managerial

processes According to von Krogh amp Roos (1996) this implies that successful

knowledge management requires that you relate to lsquothe nature of knowledgersquo (von

Krogh amp Roos 1996 p 224) Therefore knowledge management also becomes a

question of epistemological understanding


tools that fit the prevailing perception of knowledge This observation is in accordance

with Marr et al (2003) who suggest that knowledge management practises will be

166

perceived as more effective if they match the personal epistemology In relation to an

in-depth study of knowledge management in a project case study in an Australian

industrial engineering organisation Sense (2007 p 17-18) document similarly that the

project members favour knowledge sharing techniques that align with their cognitive

style type and further that they acknowledge the personal bias towards specific modes

of sharing knowledge

23 Strategies for knowledge management

Hansen et al (1999) have associated the understanding of knowledge management that

we have termed the artefact oriented perspective with a so-called codification strategy

which govern companies intend to collect existing knowledge and make it accessible to

the rest of the organization This form of strategy should be seen as an alternative or

more precisely a supplement to the personification strategy which focuses on the

aspects that are difficult to express in a way based on codification Thus the

personification strategy in more in line with the process oriented perspective on

knowledge management outlined above

While the codification strategy is a cornerstone in the bureaucratic organisation the

personification strategy has seen its strength in the knowledge intensive organisations

that rely on the competence of the individuals The two strategies seem according to

Hansen et al (1999) to dominate practice in general which among other things may be

due to the fact that they supplement each other instead of being mutually exclusive

Hansen et al (1999) point out that often one of the strategies normally will have a more

prevailing position in the organizationrsquos consciousness However knowledge

management is multi-faceted and our understanding of current practise has already been

set by our epistemology This illustrates that the more an organisation focuses on

knowledge the more important it becomes to understand the epistemological

implications

167

3 The Two Companies and the methodology

This article is anchored in a case study of how knowledge management takes place in

practice in two organisations The distinct strength of case studies is the ability to deal

with a variety of evidence documents questionnaires interviews and observations in a

flexible manner In particular when exploring the two companiesrsquo practises that are not

on beforehand perceived as knowledge management initiatives in the companies a case

study approach seems appropriate A case study approach offers in this context an

opportunity for observing and describing a complicated research phenomenon in a way

that allows analytical generalisations (Eisenhardt 1989 Tsoukas 1989) of the

observations

The empirical data includes 5 semi-structured interviews in each of the two companies

where the respondents were asked to tell about the companyrsquos history how knowledge

management affects their daily work how knowledge is created and shared as well as

how they work with different tools (eg project models and IT-systems) The interviews

took approx 1frac12 hour on average and they were taped and transcribed for later use The

interviews at BampO were carried through in the period 28-29 August 2003 whereas the

interviews at Crisplant were collected almost two years earlier ie in the period 29

October to 12 December 2001 Moreover data in the form of documents reports and

observations were collected General attitudes are expressed by the company name

whereas the respondentrsquos function is emphasized where it is of importance in

connection with a statement

Bang amp Olufsen (BampO) is known for its distinguished design and quality products

within audio and video which are the companyrsquos core business areas Development of

new products is a decisive competitive parameter to BampO and is ascribed much

attention Development costs thus represent more than 9 per cent of the companyrsquos

turnover This article only addresses knowledge management in the product

development division of BampO

FKI Logistex Crisplant AS (Crisplant) develops produces and installs solutions within

the so-called automatic high-speed transport and sorting systems (ATS) area which

forms a substantial part of operations at airports postal centres libraries mail order

168

businesses distribution centres etc all over the world These systems are developed and

implemented in a close cooperation not only with the customer but with a number of

other companies which supply other parts of the installation of which the sorting system

must be an integrated part

4 Knowledge Management in the two companies

The two organisations were chosen because they represent two different types of project

based organisations both focussing on product development BampO has organised

product development in a department separated from production with products being

manufactured at assembly plants and sold to customers all over the world Crisplant

develops customer specific solutions in projects more like a construction company with

development and installation at the customer site being separate phases of the same

project

Product development as it is undertaken in both companies is often generically

described a knowledge intensive activity (Meyer amp Utterback 1993) where managers

engineers and technicians apply the knowledge they have developed through formal

training and over time form experience while at the same time enhancing their skills and

capabilities through the project Such knowledge-intensive companies are dependent on

their employee based knowledge resources However neither BampO nor Crisplant have a

separate strategy for knowledge management Instead the analysis stresses the

importance of knowledge management being an integrated part of the companiesrsquo

processes and management activities trying to create an organizational culture which

encourages development sharing and anchoring of knowledge to support the main

strategic goal they each have

41 Knowledge management in Bang amp Olufsen

Knowledge management in BampO focus on interactions where employees meet across

departments and enter into a dialogue where creative ideas are being conceived new

knowledge generated and existing knowledge disseminated in the organization BampO is

169

dependent on tacit knowledge or unique competencies such as employees that have ldquoa

pair of good earsrdquo as it was expressed by a project manager which are able to hear

precisely when a loudspeaker or an amplifier sounds correct Such knowledge is very

difficult to transfer as explicit knowledge Instead BampO is committed to the fact that

knowledge transfer takes place through close cooperation where competences are

disseminated in the organization

The development processes are built around key personsrsquo unique knowledge resources

in a way that makes it difficult for competitors to imitate BampOrsquos products To

disseminate the specialist knowledge it is in the interviews stressed that it is important

that it is communicated to the organization that these lsquoknowledge keepersrsquo are available

It must be known who possess specific types of knowledge so that instead of being a

hidden resource the individual key persons become an available resource to be relied on

all over the organization A manager at BampO explains

hellip we have a culture in the development division where everybody walks around and talks to everybody about the problems they encounter hellip when an employee is designing something the person knows that he needs to go and talk to a specific colleague because the colleague knows something special about this And then he does so and they have a chat about it So we sense that in most cases there is free and open access to all the knowledge available via you could say personal contact

In this situation the sharing of knowledge is enabled by the autonomy that employees

are granted by management similarly to what Oshri et al (2005 p 16) found in a case

study of knowledge transfer in a multiple-project environment Further key employeesrsquo

expert knowledge is made available to the organisation by holding a large number of

internal courses at BampO where the employees teach each other

However explicit knowledge is also decisive to BampO because aside from the tacit

knowledge which is being applied in the development processes explicit and codifiable

knowledge is also applied to a great extent in all development projects It may both be

knowledge which is unique to BampO and at the same time it may be knowledge which

in principle is available on the world market To capture knowledge BampO uses the

TOP-model an adopted version of Cooperrsquos (2001) stage gate model in all

170

development projects In practice it means that when the first phases of a development

project (physical proximity and face-to-face contact) is completed only a few people

the quality people are responsible for making sure that knowledge is shared both in the

individual project and across projects

In addition to this BampO has strict documentation requirements during the development

projects due to the companyrsquos ISO-certification the internal strategies for knowledge

sharing and to make it possible to reuse earlier developed elements in future products

similar to what Tsai (2001) demonstrated in a study where transferring knowledge from

one base project to other projects enhances organisational innovation and performance

BampO thus appear to be very conscious about the importance of documentation and it is

attempted to extend the documentation activities further so that the company may reuse

more knowledge and thus reuse more solutions by building up modular products

42 Knowledge Management in Crisplant

All project activities in Crisplant are from development over production to

implementation project-organized and are run according to Crisplantrsquos project

management tool Crisplant Project Management Model (CPMM) which is an adopted

version of a state gate model (cf Cooper 2001) Due to the nature of the customer

specific solutions the context is somewhat similar to the construction industry where

eg Bresnan et al (2003) emphasise that organisations face substantial obstacles to be

overcome in ldquocapturing knowledge and in re-cycling of project based learning that

steam form the relatively self-contained idiosyncratic and finite nature of project tasksrdquo

(ibid p 158)

Crisplant develops solutions with a high degree of customization the individual projects

are very different and the composition of project teams takes place more on the basis of

employeesrsquo competencies than on the basis of specific technical components which

must be included in the project Thus knowledge management has to focus specifically

on employees and as a consequence the development sharing and anchoring of the

accumulated knowledge is an integrated part of the companyrsquos way of working

171

Crisplant says ldquoIt is natural for us to live by having knowledge and trying to give our

customers value through a continuous development and creative use of our knowledgerdquo

Thereby knowledge management becomes an integrated part of the management

activities influencing the organizational culture and supporting the overall main

strategic goals A manager at Crisplant furthermore says ldquoKnowledge management is

about presenting favourable conditions for the creative process of the individual in

cooperation with others and hence set the knowledge resources of the company at playrdquo

But Crisplant also uses a range of IT-tools for supporting the creation and transfer of

knowledge Like many other companies Crisplant has an extensive intranet which may

potentially play a role in codifying explicit knowledge and in lsquostoring and distributingrsquo

knowledge But the intranet is mainly used for the distribution of news creating a

possibility for the employees to be updated with the companyrsquos activities and as such it

does not constitute an essential part of Crisplantrsquos knowledge management

Standardized and codified knowledge is however of importance in relation to

documenting the experience from the separate development phases By codifying and

collecting knowledge in progress reports drawn up by the project leaders each month

Crisplant is however of the opinion that it is the employeesrsquo tacit knowledge which is

essential for the companyrsquos progress and growth Accordingly the Managing Director

explains that the work with eg the companyrsquos intranet is more expressing a wish for a

general IT-competence development among the staff to be able to respond to future

technological requirements from co-operators than it is due to a direct knowledge

management strategy

Crisplant is convinced that the informal knowledge sharing taking place daily as ldquoface-

to-facerdquo contact is by far of greatest strategic importance Crisplantrsquos management thus

attempts to make the frames for knowledge sharing and knowledge creation available by

focusing on teamwork in the project organization and by integrating a dialogue-based

company culture that cultivates trust norms and shared values where projects take the

character of communities of practice (Brown amp Duguid 1991 2001)

The manager responsible for organisational development explains that the day-to-day

knowledge sharing and knowledge creation to a wide extent is expressed through the

work with CPMM as well as a continuous focus on creativity in all processes To

172

improve creativity Crisplant works intensely with a model named internally as the

lsquoCreative Working Modelrsquo (CWM) This model facilitates the process at all levels from

structuring a project over the way a certain meeting is structured to how the individual

employees structure their working day

The CWM consists of five phases A seeing phase which focus on dialogue about

expectations with regard to the final goal and thus which objectives must be obtained to

reach the overall goals for the task or project Following this comes the idea phase

where it is established how the objectives and goal should be obtained The third phase

is the planning phase which is carried through in interaction with Crisplantrsquos Project

Management Model When the planning is done the project participants begin carrying

out the things as the fourth phase and subsequently the project group goes into a seeing

again phase where the course of events is evaluated and the project team learns from its

experiences

43 Knowledge Management as Project Management

BampOrsquos product development division as well as Crisplant are organized as project

organizations Competent efficient and reliable projects implementation is decisive for

business success in BampO as well as Crisplant For several years both companies have

applied a project management model inspired by Cooperrsquos so-called lsquostage gate modelrsquo

(Cooper 2001) The adoption of the model is denoted the Crisplant Project Management

Model and the TOP-model at BampO

At Crisplant the purpose of working with the Stage-Gate model is to establish ldquoa

common set of rules for project control management and execution internally as well as

in cooperation with customers suppliers and other partnersrdquo (Crisplant 1999 p 4) In

the product development division at BampO the Stage-Gate model has a more direct role

as knowledge management tool as it is continuously adjusted according to the

experiences from different product development projects At BampO the Stage-Gate

model thus functions as a dynamic model where knowledge is accumulated and later

disseminated through the application in the individual projects

173

Each phase of the Stage-Gate models ends with a lsquogatersquo In this connection the project

managers of both companies prepare a gate report on the status of the project both with

regard to progress and budget At the same time often major replacement among

employees takes place in between the individual phases and therefore a gate also

represents a critical point in relation to knowledge management as knowledge needs to

be transferred from one team to another

With respect to knowledge creation Crisplant focuses on how knowledge is collected

stored and passed on in each phase of the project through extensive documentation

requirements BampO works with similarly high documentation requirements in its

projects At the same time at BampO the awareness of the value of face-to-face

knowledge transfer along the way are very present the method manager in BampO

expresses it in the following way

hellip it is not such an lsquoover the wallrsquo-transfer taking place at each individual gate It is not the documentation that ensures knowledge transfer in the projects hellip it is only because people talk together and that we agree on how things should look that it works hellip it is not due to our documentation

Furthermore Crisplant emphasizes the metaphorical importance of a gate symbolizing a

door which closes at the completion of a phase while a new one opens to the next phase

and the future However like BampO Crisplant is aware of that not all types of

knowledge can be passed on in written-down documentation

Both companies apply pre-determined checklists which the project manager goes

through and on that basis he prepares a phase report after each individual phase of the

Stage-Gate model These phase reports are saved and used eg when the project

management tool is being updated At the end of a project a project evaluation meeting

is held at both Crisplant and BampO where the projectrsquos experiences good as well as bad

are collected in a final report

174

5 Knowledge Management in Perspective(s)

In the following two subsections project management of the two companies are

analyzed according to the two epistemological perspectives on knowledge management

the artefact oriented and the process oriented Hereby it is illustrated how the

presentation and the perception of knowledge management depend on the

epistemological starting point

51 Artefact-Oriented Epistemology

As a part of BampOrsquos codification strategy artefacts in the form of process

documentation product specifications development documentation etc are pointed out

as an essential element of the knowledge management activities At Crisplant such

documents also form an important part of the knowledge collecting process which the

then Managing Director expressed in this way

hellipAs we work out a concept proposal and a solution to our customer we document the thoughts and ideas we have concerning the solution to a specific project Thus the knowledge stays in the company so to say ndash because it has been taken down in writing

From this perspective knowledge is in both companies about writing and documenting

in order that the company may be capable of leaning on previous project descriptions

etc when new quotations are given and on the whole when working on the projects

Thus the project management systems function as a repository for routine solutions

where explicit knowledge can be reused (cf Markus 2001 p59)

If knowledge management is illustrated based on an artefact-oriented epistemology the

essential elements of the knowledge of both companies would be all the documents and

reports written down concerning the companyrsquos procedures and processes the project

management models and quality control systems in both companies IT-tools used in the

company such as intranet budget control systems databases administrative systems

etc support the collection storage and distribution of the formalized knowledge which

is the focal point of the artefact-oriented epistemology

175

Within the artefact-oriented epistemology knowledge management is thus focused on

the types of knowledge which may be explicated formalized and ultimately codified

Project management in the two companies appear to consist of more or less the same

components From a pure artefact oriented perspective knowledge management is

ensured by having these suitable systems The artefact oriented knowledge management

is about consistent documentation of development activities via Stage-Gate-models

quality management and data collection at both BampO and Crisplant In the artefact

oriented perspective there is much less focus on the context in which the knowledge

was created as the underlying assumption is that the knowledge can be re-used even

though the context in which it was created is less explicit

52 Process Oriented Epistemology

Knowledge management seen through a process-oriented epistemology (with emphasis

on the SECI model) is apparent in both BampO and Crisplant It may be illustrated by the

fact that the companies besides anchoring knowledge through process reports Stage-

Gate models and quality control systems are focusing on the personal relations

Crisplant uses the CWM to support the transfer of knowledge between project phases in

the stage gate model and BampO works with mentor arrangements and works hard on

creating a dialogue-based culture By sharing knowledge across the organizations the

companies attempt to internalize knowledge into more persons

At Crisplant the process-oriented epistemology is predominant in the work with the

CWM which structures the processes and becomes instrumental for creating sharing

and internalizing knowledge At both BampO and Crisplant the socialization phase is also

stressed by attaching importance to project teams meeting physically because this is the

way to share opinions values and knowledge and to obtain a common framework of

understanding

The externalization phase should be understood as the process where the employees

express their ideas Here Nonaka et al (2000) stresses that the use of images

metaphors analogies etc may help the employees to express a point without really

being able to explain it This is what happens in the idea phase of the CWM at

176

Crisplant When all thoughts and ideas have been aired and placed on the boards it is

important that they are combined and reduced in order to make a realistic plan for the

development of the project Therefore the ideas from Crisplantrsquos idea phase and BampOrsquos

development department are both incorporated in the companiesrsquo Stage-Gate models

which structure the development of the projects This is the equivalent of what takes

place in Nonakarsquos combination phase in the SECI-model

The internalization phase is the last phase of the SECI-model where the objective is to

embody common guidelines goals and objectives corresponding to Crisplantrsquos

executing phase in their CWM and the phases in the companiesrsquo Stage-Gate models

where the products are actually developed and installed at the customers site At this

stage experiences are gained from the project in hand and as far as possible these

experiences will also be incorporated in the stage gate model in order to be available for

later project

As knowledge sharing in Crisplant builds mainly on the Creative Working Model the

personification strategy is predominant in Crisplantrsquos knowledge management activities

Although documentation was emphasised by the managing director because knowledge

stays in the organisation when it is written down (see above) this from a process

oriented perspective does not mean that it is the capacity to document and codify that is

the essential feature Rather the project management systems in combination with the

CWM facility interaction

BampOrsquos knowledge management strategy is not as clear as it involves more elements

from both the codification strategy and the personification strategy In the same way as

Crisplant BampO acknowledges the importance of face-to-face communication but in

BampO it is more a question of making the structures and frameworks available to the

organisation thus leaving it to the initiatives of the employees to communicate when

needed Thus the experiences from BampO is in line with Keegan amp Turner (2001) who

in an study of learning across project found that the informal networks within

companies are the most important conduit for transferring knowledge between projects

(cf Sense 2007)

Damodaran amp Olphert (2000) as well as Edwards et al (2005) have argued that in

general a push-strategy ie when information and knowledge are lsquopushedrsquo through to

177

the potential users is less effective than a pull-strategy which is based on creating a

basic organizational culture and context which encourage organizational learning ndash and

where the employees have access to knowledge when needed From this point of view

Crisplant uses a form of push-strategy while similarly BampO uses a pull-strategy to

implement knowledge sharing through physical meetings However it is another form

for push than in Damodaran amp Olphertsrsquo terms when a process oriented epistemology is

adopted as it is the organizational structures and frames that are lsquopushedrsquo to the

employees

The ideal context of knowledge creation and sharing depends on the type of knowledge

For instance both BampO and Crisplant find it important that a project team meets

physically in the initial phases where the objective is to express thoughts and ideas

concerning the project At BampO the product development begins in Idea Land where a

group of designers are seated closely together Later in the construction phases physical

proximity is not imperative to the same degree

Following the process oriented epistemology both tacit and explicit knowledge and not

least the interplay between the two knowledge types are in focus From a process

oriented perspective it is the first two phases of the SECI model (Socialization and

Externalization) which differs the most between the two companies whereas the last

two phases (Combination and Internationalization) are more similar in the two

companies In the Combination phase knowledge management is primarily centred on

working with the Stage-Gate models and in the Internalization phase the specific

development work is conducted Contrary to BampO Crisplant still give priority to

physical proximity in the last phase as Crisplant focuses on a common internalization

phase for the group in preference to the individual

6 Concluding Remarks

Authors like Roos and von Krogh (1995 p1) have argued that the way we understand

knowledge depends on the existing knowledge and the basic assumptions we bring

along This means that whether we are researchers observing knowledge management in

action or practitioners involved in the management of knowledge our understanding of

178

knowledge and knowledge management will be in subjective term This understanding

or at least what knowledge management means to the individual the group or

organization is important because it as argued be von Krogh and Roos (1996) implies

that successful knowledge management requires that you relate to lsquothe nature of

knowledgersquo (von Krogh amp Roos 1996 p 234)

Therefore knowledge management becomes a question of epistemological

understanding By giving a multi-faceted view of knowledge management based on the

two different epistemologies this article illustrates how different epistemological points

of departure are essential to the way we lsquoseersquo and thereby think and act Generally it is

a way of illustrating how we are all more or less limited by our own existing

knowledge We are subconsciously controlled by our framework of reference and

understanding but the more conscious we become of this and the more we acknowledge

it the more we will be able to overcome these limitations and thus achieve a more

nuanced view of existing management activities

The analysis illustrated how the content of knowledge management differs depending

on the underlying epistemology It makes demands on the manager as conscious

reflection in relation to initiatives as the possibility that another departure implies

another decision becomes part of the decision process However in practice an

understanding of different perspectives will give a company a more nuanced picture of

the organization knowledge and management thereby expanding the optics which is

used for identification of potentials or any problems in relation to the management of

knowledge

In the analysis of the knowledge management activities in Crisplant the process oriented

epistemology was clearest The sharing of knowledge is encouraged by initiatives

where the employees physically are seated in relation to the projects to enable lsquoroomrsquo

for communication In addition to this other knowledge management initiatives become

visible eg in relation to collection of data and experiences from the projects when the

departure is the artefact oriented epistemology All this support the personification

strategy (cf Hansen et al 1999) where tacit and human interaction plays a crucial role

Knowledge management in BampOrsquos is also most obvious if departing in the process

oriented epistemology but the concrete initiatives are mainly based on methods which

179

are best understood from the artefact oriented epistemology For instance this is

expressed by the higher priority continuous documenting and updating of the models

are given in BampO compared to Crisplant In practice both tacit and explicit knowledge

are of more or less equal significance in BampO which mean that the company tries to

combine the personification and codification strategy

BampO finds the tacit knowledge which exists in the organization of great strategic

importance and therefore they try to distribute it in the organization through eg

mentoring close relations across departments and dialogue-based culture At the same

time codifiable knowledge is paid considerable attention at BampO which is best

expressed through the work on currently updating the dynamic stage-gate model

It can not generally be stated when a given strategy should be used as it is very

company specific When a companyrsquos competitive advantage are mainly to be found in

reuse of existing solutions which for example are put together in a new way or the

possibility for lsquomass productionrsquo of a new product The more standardized solutions a

company offers the more it points in the direction of the codification strategy and

thereby a knowledge management strategy departuring in the artefact oriented

epistemology or the process oriented epistemology supported by the artefact oriented

Otherwise when a company provides more customized solutions it points in the

direction of the process oriented epistemology and primarily knowledge management

initiatives based on this epistemology and thereby the personification strategy An

important thing is to notice that the epistemologies are supportive and not exclusive

If significant importance is attached to epistemological assumptions heavier demands

are to a certain extent placed on the manager It is no longer sufficient lsquoonlyrsquo to act and

make decisions because conscious reflection in relation to own acts and the opportunity

to take another point of departure involving another decision becomes part of the

decision process The reflective manager must be familiar with different epistemologies

as mentioned by Venzin et al (1998 p 36) as it provides a much larger managing

scope and ensures a better understanding of the limitations to the various sets of

actions More effective knowledge management may result from adapting management

tools that fit the prevailing perception of knowledge The more the organization focuses

180

on knowledge the more important it becomes to understand the epistemological

implications

7 References

Blackler F (1995) Knowledge knowledge work and organizations An overview and

interpretation Organisation Studies 16(6) 1021-1041

Bresnen M Edelman L Newell S Scarbrough H and Swan J (2003) Social practices

and the management of knowledge in project environments International Journal of

Project Management 21(3) 157-166

Brown JS and Duguid P (1991) Organizational learning and communities-of-practice

Towards a unified view of working learning and innovation Organization Science

2(1) 40-55

Brown JS and Duguid P (2001) Knowledge and organisation a social practice

perspective Organization Science 12 198-213

Cooper RG (2001) Winning at new products Perseus Cambridge MA

Crisplant (1999) Crisplant Project Management Model (In Danish Faseplan for

projektgennemfoslashrelse paring Crisplant)

Damodaran L and Olphert W (2000) Barriers and facilitators to the use of knowledge

management systems Behaviour and Information Technology 19(6) 405-413

Edwards JS Shaw D and Collier PM (2005) Knowledge management systems finding

a way with technology Journal of Knowledge Management 9(1) 113-125

Eisenhardt K (1989) Building theories from case study research Academy of

Management Review 14(4) 532-550

Hansen MT Nohria N and Tierney T (1999) Whatrsquos your strategy for managing

knowledge Harvard Business Review 77(2) 106-116

Huber G (1991) Organizational learning the contributing process and the literature

Organization Science 2(1) 88-116

181

Jackon P and Klobas J (2007) Building knowledge in projects A practical application

of social constructivism to information systems development International Journal of

Project Management (fortcoming)

Keegan A and Turner JR (2001) Quantity versus quality in project based learning

practises Management Learning 32(1) 77-98

Kaumlrreman D Alvesson M and M Blom (2004) Knowledge Management and

raquoOrganisational Memorylaquo ndash Remembrance and Recollection In a Management

Consultancy Company In Knowledge management establishing a field of practice

(Bukh PN Christensen KS and Mouritsen J eds) pp 124-148 Palgrave Macmillan

Houndsmill

Leonard D (1995) Wellsprings of Knowledge Building amp Sustaining the Sources of

Innovation Harvard Business School Press Boston MA

Lyles M and Schwenk C (1992) Top management strategy and organizational

knowledge structures Journal of Management Studies 29(2) 155-74

Malone TW Crowston K Lee J and Pentland B (1993) Tools for inventing

organizations toward a handbook of organizational processes In Proceedings of the

2nd IEEE Workshop on Enabling Technologies Infrastructure for Collaborative

Enterprises Morgantown WV

Markus L M 2001 Towards a theory of knowledge reuse Types of knowledge reuse

and factors n reuse success Journal of Management Information Systems Vol 18

No 1 pp 57-93

Marr B Gupta O Pike S and Ross G (2003) Intellectual capital and Knowledge

management effectiveness Management Decision 41(8) 711-781

Meyer MH and Utterback JM (1993) The product family and the dynamic of core

capabilities Sloan Management Review 34(3) 29-38

Mouritsen J Larsen HT and Bukh PN (2001) Intellectual Capital and the Capable

Firm Narrating Visualising and Numbering for Managing Knowledge Accounting

Organisations and Society 26(7) 735-762

Nonaka I (1994) A Dynamic Theory of Organizational Knowledge Creation


182

Nonaka I and Takeuchi H (1995) The Knowledge-creating Company Oxford University

Press Oxford

Nonaka I Toyama R and Konno N (2000) SECI Ba and Leadership a Unified Model

of Dynamic Knowledge Creation Long Range Planning 33 5-34

Oshri I Pan SL and Newell S (2005) Trade-offs between knowledge exploitation and

exploration activities Knowledge Management Research amp Practice 3 10-23

Prahalad CK and Hamel G (1990) The Core Competence of the Corporation Harvard

Business Review 68(3) 79-88

Roos J and von Krogh G (1995) What you see depends on who you are Think about

epistemology IMD Perspectives for Managers 7 1-4

Sense AJ (2007) Stimulating situated learning within projects personalizing the flow of

knowledge Knowledge Management Research amp Practice 5 13-21

Tsai W (2001) Knowledge transfer in intraorganizational networks Effects of network

position and absorptive capacity on business unit innovation and performance

Academy of Management Journal 44(5) 996-1004

Tsoukas H (1989) The validity of idiographic research explanations Academy of


Tsoukas H (1996) The firm as a distributed knowledge system A constructionist

approach Strategic Management Journal 17 11-25

Tsoukas H and Vladimirou E (2001) What is organizational knowledge Journal of

Management Studies 38 973-993

Venzin M von Krogh G and Roos J (1998) Future research into knowledge

management In Knowing in Firms Understanding managing and measuring

knowledge (von Krogh G Roos J and Klein D eds) Sage London

Von Krogh G and Roos J (1995) Organizational Epistemology Macmillan London

Von Krogh G and Roos J (1996) Managing Knowledge Perspectives on Cooperation

and Competition Sage London

183

PART IV

184

185

CHAPTER 10

Findings and Perspectives

It has been argued in both the media and various reports that intrapreneurship might

be the key to making established organisations more innovative The emphasis on

intrapreneurs and particularly intrapreneurship is a challenge because on the one

hand intrapreneurship is a liberating force that allows individuals to master their

ideas and on the other it is part of a lsquoproduction functionrsquo in corporate life where

individuals are subordinated to the requirements of organisational interests The

practice of intrapreneurship is therefore somewhat paradoxical because in a sense it

requires individuals to subordinate themselves to organisational concerns that they

will have to master reflexively

As this dissertation has shown the concept and tools of intrapreneurship can be used

under a variety of circumstances in the area of management Intrapreneurship can be

applied to the organisation with a focus on corporate ventures internal resources and

internationalisation (Chapter 4) In relation to mergers or acquisitions the conversion

of entrepreneurship to intrapreneurship can be of central concern (Chapter 6)

Intrapreneurship can also be approached from a managerial perspective relating to

how various intrapreneurial mechanisms can be screwed up and down (Chapter 7)

These enablers have been shown to be differ between traditional industrial companies

and knowledge-intensive companies so understanding intrapreneurship from a

knowledge (management) perspective is crucial since it is the knowledge resource

that has been lsquomanipulatedrsquo in modern companies not physical products (Chapter 8)

186

If we look at the activities covered by intrapreneurship in more detail (eg as outlined

in Chapter 4) we can see that intrapreneurship not only provides a set of new

management tools and techniques but also the application of well-known

management techniques in new combinations often facilitated by the use of

innovation management and knowledge-management tools (as illustrated in Chapter

8 and 9)

The focus of this dissertation has been on the entrepreneurial aspects of the

organisation as well as activities processes and projects within organisations rather

than on the individual entrepreneur starting a new firm In this respect the

dissertation has followed Gartnerrsquos (1988 1989) suggestion of a change in focus

from the intrapreneur as a person to intrapreneurship as a process When

intrapreneurship is seen as a process it does not require the implementation or

exploitation of one particular technology or technical instrument Rather it

encourages more elements to work in concert But if intrapreneurship is a process

located within and between people processes and technologies how does

management know that lsquosomethingrsquo is worth exploring and how can it intervene to

enable and support intrapreneurship

However while may be of vital concern to many companies this dissertation has not

tried to answer the question of how management knows when lsquosomethingrsquo is worth

exploring The strategic entrepreneurship literature has touched on this by integrating

company initiatives that research shows to be relevant to the creation of wealth Thus

according to Hitt et al (2002 p 13) ldquostrategic entrepreneurship facilitates firmsrsquo

efforts to identify the best opportunities (matched to their resources and with the

highest potential returns) and to exploit them with the discipline of a strategic

business planrdquo This is definitely an area for further research

187

101 ELEMENTS OF THIS DISSERTATION

The chapters of this dissertation contribute to the mosaic of intrapreneurship as a

developing field The study has explored intrapreneurship from an internal resources

perspective (see Chapter 4) From this point of view the aim of intrapreneurship is to

identify previously undiscovered resources in the organisation or combine existing

resources in new ways that make them valuable innovations and thereby create new

organisational wealth (see for example Ireland et al 2001 Alvarez amp Barney

2002)

The aim of this section is to discuss the results of the five articles in relation to the

research question and their contribution to the intrapreneurial debate The overall

research question is the exploration and exploitation of internal resources with

respect to intrapreneurship while the overall aim of the dissertation is to study the

intrapreneurial potential in its natural settings

The five articles in this dissertation are related in the sense that they study

intrapreneurship intrapreneurial enablers and intrapreneurial management Figure

101 illustrates how the five articles are related to the intrapreneurial framework

developed in the first article (chapter 4)

188

Figure 101 Relation of the articles to intrapreneurship

In the first article intrapreneurship was placed within the wider scope of corporate

entrepreneurship Based on this intrapreneurship has been defined and a framework

for discussing intrapreneurship has been developed The second part of the

dissertation which took a starting point in the internal resource perspective

attempted to identify the mechanisms behind intrapreneurial opportunities in a

company based on its existing resources

The study of intrapreneurship in terms of innovation and enabling factors has been

based on case studies The second article discussed the change from entrepreneurship

to intrapreneurship and how this has influenced innovativeness and related issues in

a specific company The third article examined various factors which can enable


Intrapreneurship ExopreneurshipEntrepreneurship

CorporateVenture

InternalResources

Internationa-lization

Enablers

1

2

3

Innovation

4

5

Knowledgeresources

189

intrapreneurship across the different organisational perspectives Article four and five

focused on one specific resource the knowledge resource and how it can be

managed with respect to intrapreneurship

102 MAIN POINTS AND CONTRIBUTIONS

This section will discuss the findings and contributions of the dissertation The aim of

the dissertation has been to contribute to the field of intrapreneurship and provide

managers in knowledge-intensive companies with managerial tools to influence the

level of intrapreneurship

The first contribution was the framework for discussing corporate entrepreneurship

presented in article 1 This shows how organisations utilizing corporate

entrepreneurship have to choose between different organisational opportunities

Based on the framework in article 1 the second contribution is that a clear distinction

between corporate entrepreneurship and intrapreneurship has been made These

concepts have been used interchangeably in the literature and still are Although the

basic ideas underlying the two concepts are similar both focusing on innovativeness

in established companies intrapreneurship takes place within the boundaries of the

firm whereas corporate entrepreneurship also takes place across organisational

boundaries This demonstrates the importance of the boundaries of the firm

The third contribution of the dissertation is that it demonstrates how an acquisition

strategy as a way for mature organisations to gain access to innovativeness and new

knowledge resources can easily fail Article 2 shows that the success of an acquisition

not only depends on retaining key employees Even though the competencies of the

acquired organisation are formally intact efforts are also needed to make the energies

of the two organisations act together and create a new intrapreneurial part of the

company Unless managers actively take part in facilitating an intrapreneurial spirit

190

then the acquired entrepreneurial part of the organisation will slowly stifle The

fourth contribution as demonstrated in articles 2 and 3 is that access to end

customers is an important driving force both in relation to innovativeness and to

preserving the entrepreneurial spirit

The fifth contribution in article 3 is an increase in the number of factors ndash from five

to eight ndash that need to be taken into account when enabling intrapreneurship The five

factors most often mentioned in the literature ndash rewards top management support

resources organisational structure and tolerance of risk ndash are not always sufficient to

encourage intrapreneurship in a knowledge-intensive company Employees in

traditional industrial companies and knowledge-intensive companies are likely to be

motivated in different ways This means that the enabling factors are different and

what may be an enabling factor in a traditional industrial company may only be

perceived as a basic or sustaining factor in a knowledge-intensive company

Thus article 3 has argued that communication ie the creation of a common

language culture in a broad sense and processes that support innovativeness should

be added to the original five factors enabling intrapreneurship With respect to

enabling factors a sixth contribution of the dissertation is a distinction between basic

and influencing factors since not all factors directly encourage intrapreneurship

although some are necessary in order to create an intrapreneurial climate

The seventh contribution is the framework for intrapreneurship presented in article 4

The framework defines the task of intrapreneurship as a combination of three

situations involving innovation management ndash exploitation sustainable change and

disruptive change ndash and the learning-related concepts of exploitation and exploration

Six sub-tasks the solution to which are based on the complexity of knowledge and

learning are derived from the framework

191

The eighth contribution of the dissertation appears in article 5 where an analysis of

knowledge management in two companies from the point of view of

intrapreneurship shows different aspects of how activities are practiced It is shown

how the different epistemological starting points of departure are essential to the way

we lsquoseersquo and thereby also how we think and act By applying these perspectives it is

emphasized how intrapreneurship can be enabled from a knowledge-management

perspective The ninth contribution of the dissertation is the indication that a

company should also take epistemological aspects into consideration when designing

organisational structures aimed at enabling intrapreneurship If the aim is to facilitate

intrapreneurship and an intrapreneurial spirit the company should base its activities

on process-oriented initiatives while these should be supplemented by artefact-

oriented initiatives if the aim is to streamline production and explore existing

resources

103 SYNTHESISING THE CONTRIBUTIONS

The dissertation presents two frameworks An overall framework for exploring and

discussing intrapreneurship (article 1) and a framework for exploring

intrapreneurship and innovation in light of knowledge and learning (article 4) Based

on the classification in the overall framework it was decided that the rest of the

dissertation would take a starting point in the internal resource perspective This

section attempts to provide a synthesis of the articles and their contributions to the

literature as described in the previous section This synthesis takes a starting point

especially in the framework developed in article 4

As the case studies showed the classification outlined in the framework was not only

theoretical but was also applicable in practice For instance Danfoss Drives had

actively used the organisational structure to enable intrapreneurship in the form of

corporate ventures internationalisation and formal networks (article 3) Other case

192

companies eg Bang amp Olufsen and Ericsson Telebit also had a similar

organisational structure albeit not as explicit Article 3 also found that the internal

organisation in Danfoss Drives had been organised to encourage innovation and the

creation and dissemination of knowledge which is characteristic of the internal

resource perspective as described in article 1 and which was the focus of article 4

and 5

The classification is applicable in both traditional industrial companies and

knowledge-intensive companies although this dissertation has focused on the latter

As described in chapter 4 the main difference between intrapreneurs in the two types

of companies is that in knowledge organisations they manipulate knowledge rather

than physical products and technologies

These two types of employees are different in nature which means that their

motivation might stem from different factors Managers in knowledge-intensive

companies therefore need other mechanisms to fine-tune the level of intrapreneurship

compared with managers in traditional companies Article 3 examined various

enabling factors with a potential to influence the level of intrapreneurship and found

that although not all factors directly encourage intrapreneurship some are necessary

in order to create an intrapreneurial climate The five enablers ndash rewards top-

management support resources organisational structures and risk ndash which seem to

be significant in traditional industrial companies (Hornsby et al 1993 Kuratko et

al 1990) are found insufficient to fine-tune the level of intrapreneurship in

knowledge-intensive companies

Metaphorically speaking the basic factors can be seen as a thermostat (see article 4)

which is programmed to detect whether the surrounding temperature is above or

below the reference temperature and which responds by simply turning the heat up

or down This means for example that if wages are below minimumaverage wages

193

they can be regulated accordingly Or if insufficient resources are assigned to a

project more resources can be allocated The basic factors can thus be related to

single-loop learning (Argyris and Schoumln 1996) inasmuch as this is mainly a question

of detecting a mismatch and regulating the factors involved until the intrapreneurial

activities are back on track

The intrapreneurial factors found in article 3 are more complex since they require an

active effort and to some extent challenge existing values with regard to innovation

Following the thermostat metaphor and the requirements for entering into a double-

loop learning mode as was also discussed in article 4 the three intrapreneurial

factors take on a new significance For example communication can be seen as an

intrapreneurial factor which encourages the questioning of existing values

Communication can lead to innovation-stimulating discussions and the sharing of

ideas and knowledge resources and can potentially result in a challenge to the

existing values of the organisation which may otherwise be an obstacle to

innovation

Following Argyris and Schoumln (1996) it was further argued in article 4 that single-

loop learning is appropriate for routine and repetitive issues while double-loop

learning seems more relevant for complex and non-programmable tasks This

supports the findings from article 3 that there is a need for other enabling factors in

knowledge-intensive companies than those in industrial companies It also indicates

that basic enablers are easier for managers to use because they can influence them

directly Conversely intrapreneurial enablers can only be influenced indirectly

An insight into these intrapreneurship-enabling factors might be of help to the

managers of an acquiring company eg the acquisition example examined in article

2 While it is often argued that top management should be actively involved in

acquisition processes the factors identified in article 3 show more specifically what it

194

takes to avoid stifling the entrepreneurial spirit in the acquired company One of the

employees from the case company Ericsson Telebit expressed this clearly with

respect to the acquisition of innovativeness ldquoIt is an illusion to believe that you can

take a small creative and innovative company and integrate it into a larger one ndash it is

uphill most of the timerdquo (article 2) It was also shown in article 2 that managers can

be the biggest obstacle to intrapreneurs since a single wrong decision can kill a

project before it gets started Furthermore the interviews reported in article 2 also

indicated that managers can be the worst enemy of ongoing projects too

New ideas and innovative activities will at some point normally acquire the nature

of a project Thus the management of projects and the sharing of knowledge through

the various phases of a project is just as crucial to intrapreneurship as it is to project

management Projects thus often serve as a ldquoframerdquo for innovative activities which

makes project management an important issue in intrapreneurship Article 5 showed

how knowledge management can be a significant managerial tool in project

management It also showed how the use of additional perspectives can enable

knowledge management to advance mutual understanding in the organisation and

make it easier to create and share knowledge Article 5 thus also shows how

intrapreneurship is best enabled in the specific situation

However in the light of the framework in article 4 it also depends on the complexity

of knowledge that intrapreneurs need to manipulate Again this is supported by the

findings in article 3 which showed that enabling factors in industrial companies are

insufficient to encourage intrapreneurship in a knowledge-intensive company

Finally returning to the research questions outlined in section 232 as explained

above article 1 addressed the first research question by clarifying the difference

between corporate entrepreneurship and intrapreneurship and by defining

intrapreneurship as entrepreneurship within the boundaries of the firm The

195

classification offers three organisational perspectives through which intrapreneurship

can be explored starting up a corporate venture using existing internal resources

and internationalisation This theoretical classification is supported by the

organisational structure in Danfoss Drives which is outlined in Chapter 7

The second research question is concerned with how intrapreneurship is influenced

by various factors and crucially if and how it can be influenced by management and

the rest of the organisation Question 2a was discussed in article 2 which showed that

acquiring innovativeness requires the active effort of management both to maintain

innovativeness and to overcome organisational inertia which are often characteristic

of mature organisations The active use of both extrinsic and intrinsic factors is

needed if an entrepreneurial spirit is to be converted into an intrapreneurial spirit

Research question 2b which was addressed in article 3 deals with factors that are

likely to influence intrapreneurship It was suggested that factors known to be

influential in traditional industrial companies ie rewards management support

resources organisational structure and risk are perceived as basic factors only in

knowledge-intensive companies whereas communication culture and processes are

perceived as intrapreneurial factors In general therefore in knowledge-intensive

companies extrinsic factors can be said to be basic factors while intrinsic factors are

more intrapreneurial Article 2 and 3 have offered two different views of how internal

resources can be influence by different extrinsic and intrinsic factors

The third research question is concerned with the relation between intrapreneurship

and the knowledge resources (article 4) Question 3a looked at how intrapreneurship

can be understood in light of knowledge management and article 4 developed a

framework for understanding the relation between intrapreneurship and knowledge

and the knowledge issues that should be taken into account ndash level of articulation and

the depth location and diffusion of knowledge ndash which together define the

complexity of knowledge Question 3b deals with the way in which the knowledge

196

resource can be managed with respect to intrapreneurship Article 5 demonstrated

how intrapreneurship can be enabled by taking a starting point in the process-oriented

knowledge-management perspective Together article 4 and 5 have showed that the

knowledge resource is of importance for intrapreneurship in knowledge-intensive

companies and that it should be addressed and managed based on its complexity

104 LIMITATIONS OF THE STUDY

The overall aim of the five articles has been to provide some answers to both the

overall research question ie exploration and exploitation of internal resources with

respect to intrapreneurship and how this has been influenced by the specific

organisation management managerial initiatives and employees of the organisation

the sub- questions in the three parts of the dissertation and the main question in each

article However due to the methodological choices made and the specific focus of

each article a number of limitations have to be taken into account if the synthesis

presented in the previous section is to be regarded as an overall conclusion

The obvious question is whether it is at all possible to say anything in general about

organisations management managerial initiatives and employees based on

literature reviews and a few case studies The immediate answer is probably not

However intrapreneurship is still a relatively young and unexplored field and the

purpose of this dissertation is just as much to identify areas that need further research

Of course the literature review only includes literature published before the article

was published in 2004 The body of knowledge is rapidly increasing with many new

studies being carried out and more articles and books being published This material

has not been taken into consideration when developing the framework in article 1

Furthermore the case-based articles are of course limited in the sense that they only

consider some of the relevant actors Only a few employees and managers have been

197

interviewed the interviews have not been carried out at multiple sites within the

organisation and the studies are snapshots in time Nor have customers or other

stakeholders been interviewed Doing so might have altered the conclusions in ways

that would not have been possible to control for in these articles and would have

necessitated another research setup

Specifically article 2 is subject to the limitation that it only focuses on employees

who have stayed with the acquired company Given the importance of the integration

phase new insights could be gained from following an acquisition more closely

regarding the attitudes both of those who stay and those who leave as well as of

employees at the acquiring company

Similarly article 3 only investigates one division of Danfoss The significance of the

factors that enable intrapreneurship could therefore gain from extending the study ndash

both to the whole company and to more companies both within the same industry

and in other industries In addition an expansion of the study in article 5 would

definitely increase generalisability

Besides these specific limitations of the articles a more general limitation is that it

was realised early in the research process that there were limited possibilities for

studying cross-sectional longitudinal phenomena since the companies included in

the KNORI project were so different and because changes within the companies also

meant changes in the research opportunities In retrospect more interviews over a

longer period might have given a more balanced view since it would have given

more room for longitudinal aspects of the research themes However it can only be

speculated what such interviews might have added In principle more comprehensive

data could have strengthened the conclusions by improving reliability On the other

hand more factors could be changing over time thus weakening the conclusions

198

With respect to possible generalisations the results would still be based on the same

number of observations represented by the companies in the KNORI project Thus I

have tried to make the most of the available possibilities given the context of the

project and my own absence due to two stays abroad and two maternal leaves I have

therefore framed the research issues in the specific articles without any attempt at

overall generalisation

105 REFERENCES

Alvarez SA amp JB Barney 2002 Resource-Based Theory and the Entrepreneurial

Firm In MA Hitt RD Ireland SM Camp and DL Sexton (eds) Strategic

Entrepreneurship Creating a New Mindset Oxford Blackwell Publishings pp 89-

105

Argyris C amp DA Schoumln 1996 Organisational Learning II Theory Method and

Practice Addison-Wesley Publishing Company

Gartner WB (1988) Who is an entrepreneur Is the wrong question American


Gartner WB (1989) Some suggestions for research on entrepreneurial traits and




Perspectives In MA Hitt RD Ireland SM Camp and DL Sexton (eds)

Strategic Entrepreneurship Creating a New Mindset Oxford Blackwell

Publishings pp 1-16

199




Ireland DR MA Hitt CM Camp amp DL Sexton 2001 Integrating

entrepreneurship and strategic management thinking to create firm wealth Academy

of Management Executive Vol 15 No 1 pp 49-63




200

201

APPENDIX I

Case companies

In this appendix the case companies are described as they appeared at the time of

data collection ie in 2003 Since then some of the companies have gone through

major changes including reorganisations and different ownership and key employees

have left etc The companies would therefore look somewhat different today and

from a practical point of view access to them would also be different now In view of

this it was decided that a 2007-description of the companies would not be relevant to

this study

Below each of the companies is given a brief historic and financial description

followed by a short presentation of the different business models used One of the

main selection criteria for the study was to include a number of heterogeneous

companies Thus the first company is a subsidiary of a major electronics firm which

specialises in specific development projects while the second is a division of a large

industrial corporation The third company develops produces and sells electronic

goods while the fourth is a producer of large-scale sorting solutions for airports

postal services and industry The fifth is a network intermediator which specialises in

wireless solutions for the Internet Before going on to describe companies

individually a framework characterising five cases will be briefly presented

The cases for the study were selected on the basis of figure 31 (page 40) according

to which the companies obtain and improve knowledge internally and where renewal

was predicted to occur as described in the figure Another way used to categorise the

202

companies was Greinerrsquos (1972) life cycle model which was chosen for its wide

application especially in studies of company structures and strategies in a non-static

world A simplification of the model is shown in figure A1

Size of organi-zation

Large

Small

Age of organization

PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5

Evolution stages

Revolution stages

1 Crisis of LEADERSHIP

5 Crisis of

2 Crisis of AUTONOMY

3 Crisis of CONTROL

4 Crisis of RED TAPE

1 Growth through CREATIVITY

2 Growth through DIRECTION

3 Growth through DELEGATION

4 Growth through COORDINATION

5 Growth through COLLABORATION

Young Mature

Figure A1 The five phases of growth (Greiner 1972 p 41)

Greinerrsquos life cycle characteristics were used as an overall framework to help

understand the different organisational challenges facing the companies in the study

This follows the hypothesis that age and history have a number of implications for

the innovation process The big difference in age and history ndash the youngest firm

having existed for only three years and the oldest for 88 years ndash was thus an

important factor in the study of innovation activities in the five companies

Since a company can be characterised by the products it makes theories about product

life cycles formed another important part of understanding a companyrsquos innovative

activities Tushman amp Nadler (1996) argue that the product life cycle has implications

for the type of innovation activities that dominates in certain periods This is illustrated

in figure A2

203

Emergence

Dominant Design

Growth

Mature

Major product Minor process

Major process Minor product

Minor product Minor process


Low High

Dominant Innovation Types

High HighLearning Requirement

ProductProcess Substitution

Figure A2 Types of innovation over product life cycle

(Tushman amp Nadler 1996 p 139)

Based on the position of their products in the life cycle therefore an analysis of the

companiesrsquo innovative activities was able to conclude whether they focused on product

or process innovation (Abernathy amp Utterback 1978) Grant (2002) argues that the

type of innovation can also be seen as an indicator of the rate of innovation as

illustrated in figure A3

Based on figure A3 product innovation is characterised by the highest rate of

innovation and process innovation the lowest Grant (2002 p 373) introduces a third

type of innovation strategic innovation which involves new combinations of markets

and products According to Grant this type of innovation can be seen as a medium

rate of innovation Figure A3 illustrates the importance of evolution over time where

strategic innovations form an important part of future innovations because of market

saturation and the lack of possible product innovations

204

Figure A3 Innovation over the life cycle from technological to strategic innovation

(Grant 2002 p 373)

A1 ERICSSON TELEBIT

Telebit was established in 1992 and employed 13 people In 1999 the firm merged

with the Swedish corporation LM Ericsson (Ericsson) when it acquired its current

name Ericsson Telebit (TED is the internal abbreviation for Ericsson Telebit) In the

process the number of employees grew from approximately 70 to 140 within twelve

months In 2003 TED was a local design centre mainly concentrating on software

development for Ericssonrsquos mobile and fixed Internet products

In 1995 TED became the first company to introduce a commercial router for Internet

Protocol version 6 (IPv6) and was a leading provider of software based on IPv6

technology working continuously to improve the application and development of this

IP-platform After joining Ericsson the company became a separate design centre for

long-term projects for different product units in the Ericsson organisation whereas

Rat

e o

f in

no

vati

on

Time

Productinnovation

Processinnovation

Strategicinnovation

205

previously it had developed customer products directly Since the company only had

one overall customer Ericsson the various product units became known as sponsors

The longer duration of projects and the move down the value chain had a number of

implications for organisational structure and put a strain on the companyrsquos

entrepreneurial culture Work was structured around two major projects instead of a

large number of smaller projects of short duration One project called SoftWare for

Internet Protocol for Ericsson (SWIPE) focused on software development for

routers while the other focused on IP solutions for mobile terminals and was named

Terminal Internet Protocol (TIP) Ericsson Telebit is represented by the middle arrow

in figure 31 which shows that an organisation based on a number of large projects

often acquires new knowledge through these projects even though the end product is

produced in another (production) process

The age and size of the organisation together with the focus on building an

appropriate structure for the running of the two large projects led to the conclusion

that Ericsson Telebit had reached the Coordination phase Since its owner was its

only customer Ericsson Telebit was forced to run an efficient and cost-minimising

organisation as well as nurturing creativity and opportunity The crisis which

followed the need to control costs in a creative environment had led to a new

structure where employees were more closely connected with specific projects

replacing the more organic structure there before the company joined Ericsson

Since all products were to be used in the mobile terminals and Internet of tomorrow

the rate of innovation was as high as it could be in the twenty-first century This is

illustrated by the fact that all the applications developed by Ericsson Telebit up to

now had not yet reached the market

206

A2 DANFOSS DRIVES

Danfoss Drives is the largest division of the Motion Control segment of Danfoss

Group one of Denmarkrsquos largest industrial corporations The Motion Controls

segment was established ultimo 2000 and apart from Danfoss Drives it also

includes two other divisions Gearmotors and Marine Systems In 2001 the turnover

of the Motion Control Segment was almost DKK 3 billion with customers all over

the world

Activities at Danfoss Drives can be dated back to 1968 with the introduction of the

first mass-produced frequency converter Heating Ventilation and Air-Condition

applications (HVAC) were introduced in 1990 and after the acquisition of Bauer a

gear motor manufacturer in 1999 the Motion Controls Segment was marketed as a

one-stop shop for the industry Apart from its headquarters in Graasten Denmark

Danfoss Drives had three production sites established via acquisitions in America

and the founding of a company in Germany In 2003 the company served a wide

range of customers across different industries eg chemicals and consumer goods

metals and mining pulp and paper refrigeration and the automotive industry

With its emphasis on the continuous introduction of new and improved products

Danfoss Drives has attached a lot of importance to technological innovation The

development of new products for the Drives division was the responsibility of a

Product Development manager has responsibility for The development process was

organised in a matrix structure with technology centres serving the different projects

which again were organised in a ldquocore teamrdquo and a number of ldquosub-teamsrdquo In

managing the development process the Product Development manager was assisted

by the Strategic Product Development Unit The Danfoss Group had a number of

cross-unit project groups which were set up to co-ordinate and assist in different areas

such as sales amp marketing production and ITfinance As with Ericsson Telebit

207

Danfoss Drives is represented by the middle arrow in figure 31 Although the general

organisational structure of Danfoss Drives was very different from Ericsson Telebit

the two companies were similar with regard to the organisation of the development

projects where projects were the main source of innovation and adoption of new

knowledge

With nearly 40 yearsrsquo experience of developing high-tech products for a broad range

of industries Danfoss Drives remains committed to continuous innovation Given its

size and number of markets and it was argued based on its actions and

organisational structure they had reached the collaboration stage The company had

formed a matrix structure to enable it to combine technological inventions with

market demands and the use of headquarter staff also followed the characteristics of

the collaboration stage inasmuch as they worked in interdisciplinary teams which

consult with rather than manage field units

It is difficult to precisely describe Danfoss Driversquos rate of innovation since they

focus on both product and strategic innovations And this was made even more

complicated by the fact that the companyrsquos products also provided process

innovations to its customers However based on the companyrsquos historical product

development the first mass-produced frequency converter developed in 1968 and the

HVAC technology developed in 1990 represent the main radical innovations All

subsequent innovations were incremental Danfoss Drivesrsquo future rate of innovation

was thus characterised as medium-high implying that they would continue to be at

the cutting edge of their technological platforms

A3 BANG amp OLUFSEN

Bang amp Olufsen (BampO) the best-known Danish company in the niche market for

electronic consumer goods was established in 1925 as a producer of radios By 2003

208

it had become a globally recognised niche producer of audio television and telephone

products at the high end of the market with a turnover in the financial year

20012002 of DKK 42 billion and after-tax profits of DKK 147 million The

company employs 2800 people and its main activities are located in Struer

Product development costs of DKK 333 million reflect the fact that innovation

through new product launches are an important part of the companyrsquos strategy as a

high-end producer BampO has divided its activities in two main groups branded and

non-branded businesses The branded businesses include activities in the audiovisual

and telephone markets while the non-branded businesses covered a number of

diversified activities

Branded businesses are by far the largest part of BampO accounting for more than 90

percent of turnover BampO Telecom is operated as a separate division and sells its

products through both BampO shops and telecom companies As a leading producer of

high-end audio products BampO is forced to continuously introduce new products

which in 2003 led to the presentation of ldquoa major acoustic productrdquo The telecom

division was established in 1986 in collaboration with the former Jysk Telefon Its

main product in 2003 was wireless telephones which account for more than 75

percent of turnover

BampO Medical AS is the largest of the non-branded businesses with an annual

turnover of DKK 250-300 million and 290 employees Products are developed in

collaboration with leading companies in the medical industry including Novo

Nordisk Another example was the partnership with 3M which led to the

development of the worldrsquos first digital stethoscope

BampO ICEpower AS was established by BampO and the inventor of a new technology

for digital amplifiers While initially experiencing significant growth in turnover

recent major investments in technology and product development had led to a loss of

209

more than 50 percent of turnover BampO has high hopes for the future potential of the

technology since it can be implemented in a large number of products

Under the name New Businesses 35 employees were involved in testing the potential

of developing and launching new products in new or existing markets Up to now the

company had identified opportunities in the market for car audio systems including

the further development of loudspeakers to be sold through existing distribution

channels

Apart from the divisions set up to develop and sell products BampO had also

established BampO Operations a division focusing on process-optimising the

production of products developed in the other divisions As part of this optimisation

BampO Operations had decided to outsource part of the production of telephones

BampOrsquos innovative activities were concentrated in a separate department with around

300 employees Apart from the joint activities with the medical industry in BampO

Medical all product innovation was carried out in this department BampO is thus an

example of a company that tries to benefit from ideas and knowledge generated in the

RampD department This was represented by the right-hand side of figure 31

As a more than 75-year-old company employing 2800 people in a complex

organisational structure BampO had reached the red-tape crisis because of the need to

move from the Coordination phase to the Collaboration stage To address this the

company began a process of reconfiguring those business activities where there was a

need for a more spontaneous way of working The lsquonewrsquo structure of the RampD

department can be seen in this perspective In 2003 BampO started on a restructuring

of the organisation from being ldquoproduct-project-orientedrdquo to combining all activities

in one central RampD department Prior to this BampO had RampD departments in all

product lines (except medical)

210

Even though innovation activities in the branded businesses were focused on product

development the rate of innovation was low because it involved a minor degree of

traditional product innovation This conclusion was based on the fact that from a

generic point of view all the products were late in their life cycle and the innovations

were mostly focused on design attributes and the addition of some new

functionalities BampO Medical and the New businessesrsquo focus on strategic innovation

was based on identifying new markets for launching products made using BampOrsquos

core competencies which is the main reason for the conclusion that BampOrsquos

innovation activities mainly involved a low rate of innovation

A4 CRISPLANT

Crisplant founded in 1951 by a Danish entrepreneur had had a number of different

owners since the beginning of the 1970rsquos In 2003 after a short period as an

independent company on the Danish stock exchange Crisplant AS became part of

the British engineering company FKI Group which had more than 17000 employees

and a total turnover of euro 2790 million Organisationally Crisplant AS was part of

FKI Logistex a division specialising in automated material flow solutions and

employed more than 900 employees with an annual turnover of approximately euro 160

million

As a project-oriented company Crisplant AS made customised sorting systems for

airport baggage-handling parcel carriers retailers mail-order companies internet

trading and manufacturersrsquo distribution In 2003 Crisplant had built more than 600

sorting systems around the world and was continuously looking for new markets

Software development was crucial to Crisplantrsquos product innovation and in 2001 it

therefore acquired Dator one of its main suppliers of operating systems at the same

time changing its name to Dator-Crisplant One of the reasons for acquiring Dator

was that the companyrsquos financial problems made its future uncertain Since this could

211

have interrupted Crisplantsrsquo supply of operating systems it seemed strategically

sound to secure the existence of one of its main suppliers by buying it In 2003 all

software development was carried out in Dator-Crisplant and this resulted in a

number of competitive advantages since Crisplant could now offer its customers a

more integrated software solution One example of this was the fully automated mini

post office Parcel Matetrade which enabled easy access to postal services either as a

single product or as an integrated solution

Project management was a cornerstone of Crisplantrsquos business model and the

company had therefore developed its own project management model based on the

identification of eight phases each characterised by a set of specific targets Before

moving to the next phase a ldquogaterdquo needed to be crossed which included a number of

evaluations and the preparation of plans and budgets for the next phase The use of a

common project model ensured that agreements time schedules and budgets were

kept and also made it easier to accumulate experience and knowledge for future

projects The model is illustrated in figure A4

Figure A4 Crisplantrsquos project management model

Although Crisplant was mainly structured around its three main business units the

company also had an RampD department which carried out basic research in relation to

Automatic High-Speed Transport and Sorting Systems which formed a substantial

part of operations In Crisplant therefore innovative activities were basically

represented by the lsquoright arrowrsquo in figure 31 similar to BampO ndash at least as regards the

more radical innovations The customer-oriented projects which had the character of

212

production processes also needed to be innovative although the innovations which

took place here were more incremental in nature All in all therefore major parts of

the companyrsquos knowledge generation took place in the projects as reflected by the

middle part of figure 31

A5 END2END

End2End was founded in 1999 by a group of executives from mobile network

operators with venture capital from Deutsche Bank Capital Venture Partners

Hewlett-Packard and Cisco Systems After the latest round of financing in August

2002 the total amount of invested capital including debt and equity was euro 654

million The company which was situated in both Denmark and the United Kingdom

had about 40 employees with the Headquarters and Network Operating Centre

(NOP) in Aalborg and the so-called Data Centre in Copenhagen

All management of the data centre was controlled electronically from Aalborg and

the company had no official address in Copenhagen As the first international Point-

of-Presence (POP) the company had a sales office in Bracknell UK and depending

on demand planned to open POPs in a number of locations around the world (See

figure A5)

213

Figure A5 Diagram of End2Endrsquos operations

The company was a managed service provider and contentapplication aggregator for

mobile data services and was a leader in its field in Europe End2End offered its

customers lower up-front investments and increased data speed enabling mobile

operators to take up opportunities as they arose End2End provided these benefits to

customers in the form of turnkey services via its infrastructure in Denmark and the

UK The actual software solutions were delivered in a partnership with third-party

software developers the solutions being based on open standards that complement

mobile operatorsrsquo existing offerings and capabilities End2End service delivery

infrastructure manages the complex network between end customer mobile operator

and software developer Apart from managing mobile data services End2End consults

its customers on opportunities tests and evaluations of profitable mobile data

services

Customers include mobile operators Internet portals providers of mobile service

applications network providers and brand owners looking for a quick flexible and

low-cost access to mobile infrastructure

214

With a management team of seven End2End mobile had reached the delegation

phase where all major areas had their own manager Tage Rasmussen who was CEO

in 2003 was responsible for the transition of the company from a technically led

company to a more commercially focused organisation while founder and president

Peter Langkilde was responsible for funding and overall business development

Apart from these two executives who also served on the board of directors End2End

had appointed five managers responsible for Sales Marketing Network Operations

Customer Operations and Finance With only 40 employees the company was not

expected to have reached the crisis of co-ordination but management seemed to be

concerned about the transition to a more commercially and effective organisation that

was focused on developing products and services to meet real market needs

The role of intermediator involved strategic innovation since End2End was creating

new combinations of services in the value chain which again created process

innovations for its customers Advising and consulting customers in the building and

outsourcing of digital infrastructures was part of its offerings and this clearly

underlined the importance of strategic considerations Because of the relatively new

and undeveloped market for the outsourcing of IT infrastructures the rate of

innovation was considered to be high This is based on the impact of strategic

innovations on the value chains of the future and in this respect the fact that

End2Endrsquos products and services created process innovation for its customers could

be seen as a valuable by-product

Based on the framework in figure 31 End2End can be seen as an example of a

company where innovation takes place in the production processes (software

development) Thus production was the main way of acquiring new knowledge and

ideas which is represented by the left-hand side of figure 31

215

A6 REFERENCES

Grant RM 2002 Contemporary Strategy Analysis Concepts Techniques

Applications Oxford Blackwell Publishing

Greiner LE 1972 Evolution and revolution as organizations grow Harvard

Business Rerview July-August pp 37-46

Tushman M amp D Nadler 1996 Organizing for innovation In Ken Starkey (ed)

How Organizations Learn A Critical Reader pp 135-155

216

217

APPENDIX II

English Summary

Intrapreneurship is a developing field which it is the purpose of this dissertation to

contribute to The study is primarily concerned with intrapreneurship from an internal

resources perspective The aim of intrapreneurship from this perspective is to identify

previously undiscovered organisational resources with respect to innovation or

combine existing resources in ways that enable these to become valuable innovations

The dissertation is comprised of five articles all of which are related to the overall

research theme exploration and exploitation of internal resources with respect to

intrapreneurship The overall agenda of the dissertation is to study the intrapreneurial

potential in its natural settings Based on data from the five case companies it was

decided to let the articles develop from the most interesting data and observations

This means that the articles are not part of a step-by-step research strategy leading to

a final conclusion but are discussions of different subtopics within the overall topic

drawing on different theories and different methodologies

The first article introduces the concept of corporate entrepreneurship This has been

used to explain various organisational phenomena ranging from strategy through

management in general to innovation and the abundant use of labels and

perspectives has consequently led to a lack of clarity Based on a literature review a

framework for corporate entrepreneurship has developed including intrapreneurship

exopreneurship and four organisational perspectives corporate venturing internal

resources internationalisation and external networks

218

The aim of the second article is to explore how innovativeness and creativity in a

small high-tech company changes after the company is acquired by a larger company

The empirical part of the article is based on interview and questionnaire data with a

focus on employeesrsquo perception of innovativeness and creativity including their own

innovativeness in relation to the possibilities offered within the organisational

structure The results indicate that entrepreneurial spirit innovativeness and

creativity in the case company were related to the lack of boundaries to and contact

with customers These driving forces could not be sustained when the organisation

matured and was acquired by a larger company

The aim of the third article is to provide an understanding of the various factors that

enable intrapreneurship in established companies The article reports on a case study

of intrapreneurship in a large knowledge-intensive industrial company Based on the

existing literature it is suggested that the use of different factors can either enable or

inhibit intrapreneurship and five enabling factors are identified Based on interviews

on-site observations and documents and reports the five factors are examined and

alternative factors considered The five enabling factors that are identified in the

literature are not sufficient to enable intrapreneurship in knowledge-intensive

companies and it is concluded that three additional factors ndash communication culture

and processes ndash should also be taken into account

The emergence of knowledge-based organisations and the increased importance of

knowledge as the key to competitive advantage poses new challenges for managers

and researchers alike The fourth article attempts to enlighten theories of

intrapreneurship and innovation by means of state-of-the-art knowledge management

theory and organisational learning theory

The fifth article analyses project management activities in two companies from a

knowledge management perspective It is shown how human competencies it-

219

systems and project management systems are analysed from two perspectives an

artefact-oriented and a process-oriented perspective From the first perspective

project management seems to consist of similar components in the two companies

whereas the process-oriented perspective identifies context-dependent differences It

is concluded that awareness of different perspectives opens up the possibilities for

more managerial options and better understanding in practice

220

221

APPENDIX III

Dansk resume

Intraprenoslashrskab er et felt under udvikling hvor mange brikker mangler at falde paring

plads for at opnaring en forstaringelse for hvorledes fornyelse og skabelse af nye

virksomheder kan ske inden for rammerne af etablerede virksomheder Formaringlet med

afhandlingen er at bidrage til dette puslespil Afhandling omhandler primaeligrt

intraprenoslashrskab fra et internt ressource perspektiv hvilket betyder at intraprenoslashrskab

belyses ved at fokusere paring udnyttelsen af interne organisatoriske ressourcer eller ved

at kombinere virksomhedens eksisterende ressourcer paring nye maringder som kan goslashre

dem vaeligrdifulde med henblik paring innovation

Afhandlingen bestaringr af fem artikler som alle er relateret til det overordnede emne

udvikling og udnyttelse af interne ressourcer med henblik paring intraprenoslashrskab

Afhandlingen studerer det intraprenante potentiale i dets naturlige omgivelser og

artiklerne er baseret paring de mest interessante data og observationer fra de fem case

virksomheder der har medvirket i projektet Det betyder at artiklerne ikke foslashlger en

skridtvis forskningsstrategi frem mod eacuten samlet konklusion men fremstaringr som

forskellige artikler der indenfor den overordnede problemstilling traeligkker paring

forskellige teorier og baseres paring forskellige metoder

Den foslashrste artikel introducerer begrebet corporate entreprenoslashrskab som er blevet

anvendt til at forklare forskellige organisatoriske faelignomener Fra strategi over ledelse

i al almindelighed til innovation Dette har medfoslashrt en mangfoldighed af begreber og

perspektiver som har skabt stor uklarhed omkring corporate entreprenoslashrskab Med

222

henblik paring at etablere et fundamentet for de foslashlgende artikler redegoslashres der i den

foslashrste artikel for corporate entreprenoslashrskabsbegrebet ud fra forskellige perspektiver

Der praeligsenteres i artiklen endvidere et overblik ved hjaeliglp af en model der

indeholder intraprenoslashrskab og exoprenoslashrskab samt fire organisatoriske perspektiver

corporate venturing interne ressourcer internationalisering og eksterne netvaeligrk

Den anden artikel belyser hvordan innovation og kreativitet i en lille virksomhed

aeligndrer sig naringr virksomheden opkoslashbes af en stoslashrre virksomhed Den empiriske del af

artiklen er baseret paring interviews og sposlashrgeskemadata med fokus paring medarbejdernes

opfattelse af innovation og kreativitet inklusiv deres egen innovationsevne i relation

til de muligheder der findes inden for organisationen Resultaterne indikerer at den

entreprenante aringnd innovationsevne og kreativitet i case-virksomheden isaeligr var

relateret til den uformelle organisationsstruktur og taeligtte kundekontakt Disse

drivkraeligfter kunne ikke fastholdes da organisationen blev opkoslashbt af en stoslashrre og mere

etableret virksomhed

Den tredje artikel har til formaringl at skabe en forstaringelse for de forskellige faktorer der

kan fremme intraprenoslashrskab i etablerede virksomheder Med udgangspunkt i et

litteraturstudie identificeres fem faktorer der enten kan fremme eller haeligmme

intraprenoslashrskab Betydningen af de fem faktorer undersoslashges i et casestudie i en stor

videnintensiv industrivirksomhed De fem faktorer findes ikke tilstraeligkkelige til at

fremme intraprenoslashrskab og alternative faktorer foreslarings Det resulterer i at yderligere

tre faktorer ndash kommunikation kultur og processer ndash foreslarings som intraprenante

faktorer i videnintensive virksomheder

Den oslashgede forskningsmaeligssige og erhvervspolitiske interesse for videnintensive

virksomheder og stigende betydning af viden som noslashglen til konkurrencemaeligssige

fordele stiller ledere og forskere overfor nye udfordringer Derfor belyser den fjerde

artikel intraprenoslashrskabs- og innovationsteori ved hjaeliglp af videnledelsesteori og

223

organisatorisk laeligringsteori Paring baggrund af et litteraturstudie udvikles en model der

belyser intraprenoslashrskab ud fra tre forskellige situationer for innovationsledelse Den

teknologiudnyttende situation den stabilt forandrende situation og den omvaeligltende

forandringssituation og to laeligringsrelaterede koncepter udnyttelse og udvikling

Modellen beskriver hvorledes intraprenoslashrskab vil fremstaring i hver af de seks

undergrupper

Den femte artikel analyserer projektledelsesaktiviteter i to virksomheder fra et

videnledelsesperspektiv Det vises hvordan menneskelige kompetencer it-systemer

og projektledelsessystemer kan analyseres ud fra to perspektiver et artefaktorienteret

og et procesorienteret perspektiv Med udgangspunkt i det foslashrste perspektiv fremstaringr

projektledelsen i de to virksomheder nogenlunde ens mens det procesorienterede

perspektiv identificerer kontekstafhaeligngige forskelle Det konkluderes at bevidsthed

om forskellige perspektiver giver flere ledelsesmaeligssige muligheder og en bedre

forstaringelse i praksis og af praksis

Det konkluderes at denne afhandling primaeligrt har bidraget med brikker til den del af

intraprenoslashrskabspuslespillet som vedroslashrer virksomheders eksisterende

organisatoriske ressourcer Den foslashrste artikel viste hvordan intraprenoslashrskab kan

gribes an fra forskellige perspektiver Mens artikel to og tre praeligsenterede to

forskellige syn paring hvordan interne ressourcer kan paringvirkes af forskellige indre og

ydre faktorer Artikel fire og fem pegede paring at videnressourcer er af afgoslashrende

betydning for intraprenoslashrskab i videnintensive virksomheder og at de derfor boslashr

adresseres og ledelses med udgangspunkt i deres kompleksitet

i

Preface

Changes in the driving forces of the global economy affect the competitive

environment of companies and require new management methods and

tools as well as new ways of organising activities By now it has become

quite clear that companiesrsquo innovativeness development of new

knowledge and exploitation of existing ideas are a top priority for both

politicians and managers

This in turn has driven research into such topics as entrepreneurship

innovation management intrapreneurship knowledge management and

corporate venturing Building on existing knowledge in various fields the

aim of this research is to contribute insights into how new ideas can not

only be fostered within large companies but also be commercialised by

means of the entrepreneurial forces within their formal structures

Corporate entrepreneurship corporate venturing and intrapreneurship are

some of the general terms for organising innovative activities in a way that

combines the advantages of established companies with the creativity and

recklessness of the individual entrepreneur Since these terms also cover

new techniques principles methods and organisational forms ndash and

sometimes well-known management ideas applied in new ways and often

in new combinations ndash they can be difficult to define precisely One

starting point of this research project has therefore been to disentangle the

concepts as they are used in the research literature

ii



























iii





















corporate venture





iv























v


The PhD process


Personal

Publications










2007



May 29th 2007



November 2007


April 5th 2004



September 2007

vi



























vii




Aarhus University

December 2007

viii

ix

Contents

Preface i

Contentsix

PART I 1

Introduction 1

CHAPTER 1 3



13 References11

CHAPTER 2 13








24 References27

CHAPTER 3 31

Methodology 31



x










38 References50

CHAPTER 4 57


41 Introduction59










46 Conclusion 68

47 References70

CHAPTER 5 75



53 References81

xi

PART II 83


CHAPTER 6 87


61 Introduction89




63 Method93






643 The Market 96



646 Employees 98


651 Creativity99

652 Innovation100





67 References106

CHAPTER 7 111


71 Introduction113


73 Methodology116



xii


751 Rewards118


753 Resources 119


755 Risk 122



762 Culture125

763 Process127


78 References128

PART III 131


CHAPTER 8 139




















85 References157

xiii

CHAPTER 9 159


159

91 Introduction162














97 References180

PART IV 183

CHAPTER 10 185






105 References198

APPENDIX I 201

Case companies201




A4 Crisplant210

xiv

A5 End2End212

A6 References215

APPENDIX II 217

English Summary 217

APPENDIX III 221

Dansk resume221

1

PART I

Introduction



















2











additional insights








REFERENCE




3

CHAPTER 1

The Background














intrapreneurship







4
























5


























6














important













7










1999)
















8


















2002)





9

219

201

175

161154

172

150

35

52

118

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

DK

K b

n














10

















challenges







Aarhus University

11










13 REFERENCES













12


FORA Koslashbenhavn





FORA Koslashbenhavn



13

CHAPTER 2






















14
























entrepreneurship

15
















paper Boslashrsen5





16

05

101520253035404550

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total
















17

0

5

10

15

20

25

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total
















18



























19












dissertation














20




















based







21

























22















questions








perspective



23


























24




















basic factors







25










26


PART I Introduction




























27

24 REFERENCES


21(1)254-285


Vol 57 No 3 pp 103-111



MA Ballinger



244












28
























Vol 17 No 3 pp 253-372

29





Chicago Press





pp 135-172












Press Cambridge MA

30



22 pp 43-68





79

31

CHAPTER 3

Methodology


















research issues

32


























33
























34

32 UNIT OF ANALYSIS



















to be analysed






35












1992 Tsai 2001)













operation

36
























individuals

37






study approach




















38
















Productionprocesses

Developmentproject



processes


projects




39



























40
























41

























study

42


holistic


embedded


CONTEXT

Case

CONTEXT

CaseEmbedded

Unit of analysis 1


CONTEXT

Case

CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case

CONTEXT

Case

CONTEXT

Case

















43


























research

44



























45


























46


























47

























48































bull Other things

49

























50














38 REFERENCES




Amsterdam Elsevier



Vol 28 No1 pp 13-33



pp 1154-1184

51


Jossey-Bass













No 5 pp 994-1003



No 3 pp 217-234





52



pp 191-207




Oaks CA Sage






No 3 pp 613-619



Sage





393-405



53



CA Sage 105-117


California Sage


45 No 2 pp 209-222



No 5 pp 1084-1119









Elsevier



Vol 9 pp 241-264



54











34 No 2 pp 221-239













55




University Press











22 pp 43-68




No 1 pp 7-23




56





University Press










SAGE Publications








57

CHAPTER 4


Perspectives
















1 Introduction


302 KS Christensen













304 KS Christensen













306 KS Christensen













308 KS Christensen
















310 KS Christensen






6 Conclusion








Acknowledgements


312 KS Christensen















































314 KS Christensen







































74

75

CHAPTER 5











message clearer






76












perspective













appropriate

77



























78

























79














in Denmark













80


























81



53 REFERENCES





No 3 pp 305-322







Universitet









82






Koslashbenhavn FORA

83

PART II




















84























companies




85





86

87

CHAPTER 6





88



Aarhus Denmark

Abstract














1161


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307











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309







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311



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312














313








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314













intrapreneurship


315













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316












317








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318








319





References








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320






















321














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322

131

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132


























133











possesses
















134



























135

























136








intrapreneurship











REFERENCES




Forlag



137












University Press





Vol 41 No 8 pp 933-945



Row Publisher



138










Macmillan




139

CHAPTER 8








140























































































































































located


Few social elements




the firm



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Complexity Medium


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technology)




procedures



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and technologies






References






















































159

CHAPTER 9


Companies



Danish Companies

160

161

August 2007




Abstract



162

1 Introduction




















and









163












management
















164





























explicit knowledge

165






















etc










166


























implications

167










observations





















168












project
















169


























170






















(ibid p 158)







171






















management strategy










172













experiences
















173
























174


























175

























understanding





176













later project
















(cf Sense 2007)



177








employees






















178






















knowledge










179































180


implications

7 References








2(1) 40-55
















181










Houndsmill











No 1 pp 57-93










182


Press Oxford


























183

PART IV

184

185

CHAPTER 10






















186






8 and 9)




















187








2002)










188














CorporateVenture

InternalResources


Enablers

1

2

3

Innovation

4

5

Knowledgeresources

189


























190


























191













resources














192






and 5





















193















innovation












194



























195




























196


























197


























198







105 REFERENCES




105











Publishings pp 1-16

199










200

201

APPENDIX I

Case companies







this study














202





Large

Small

Age of organization


Evolution stages

Revolution stages


5 Crisis of


3 Crisis of CONTROL







Young Mature












in figure A2

203

Emergence

Dominant Design

Growth

Mature





Low High


















204


(Grant 2002 p 373)

A1 ERICSSON TELEBIT












Rat

e o

f in

no

vati

on

Time

Productinnovation

Processinnovation

Strategicinnovation

205

























206

A2 DANFOSS DRIVES






the world




















207





knowledge


















A3 BANG amp OLUFSEN



208


















percent of turnover









209







channels



















210










A4 CRISPLANT








million









211























212





A5 END2END












figure A5)

213













services




214


























215

A6 REFERENCES







216

217

APPENDIX II

English Summary





















218



























219







220

221

APPENDIX III

Dansk resume





















222



























223






undergrupper

















ii



























iii





















corporate venture





iv























v


The PhD process


Personal

Publications










2007



May 29th 2007



November 2007


April 5th 2004



September 2007

vi



























vii




Aarhus University

December 2007

viii

ix

Contents

Preface i

Contentsix

PART I 1

Introduction 1

CHAPTER 1 3



13 References11

CHAPTER 2 13








24 References27

CHAPTER 3 31

Methodology 31



x










38 References50

CHAPTER 4 57


41 Introduction59










46 Conclusion 68

47 References70

CHAPTER 5 75



53 References81

xi

PART II 83


CHAPTER 6 87


61 Introduction89




63 Method93






643 The Market 96



646 Employees 98


651 Creativity99

652 Innovation100





67 References106

CHAPTER 7 111


71 Introduction113


73 Methodology116



xii


751 Rewards118


753 Resources 119


755 Risk 122



762 Culture125

763 Process127


78 References128

PART III 131


CHAPTER 8 139




















85 References157

xiii

CHAPTER 9 159


159

91 Introduction162














97 References180

PART IV 183

CHAPTER 10 185






105 References198

APPENDIX I 201

Case companies201




A4 Crisplant210

xiv

A5 End2End212

A6 References215

APPENDIX II 217

English Summary 217

APPENDIX III 221

Dansk resume221

1

PART I

Introduction



















2











additional insights








REFERENCE




3

CHAPTER 1

The Background














intrapreneurship







4
























5


























6














important













7










1999)
















8


















2002)





9

219

201

175

161154

172

150

35

52

118

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

DK

K b

n














10

















challenges







Aarhus University

11










13 REFERENCES













12


FORA Koslashbenhavn





FORA Koslashbenhavn



13

CHAPTER 2






















14
























entrepreneurship

15
















paper Boslashrsen5





16

05

101520253035404550

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total
















17

0

5

10

15

20

25

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total
















18



























19












dissertation














20




















based







21

























22















questions








perspective



23


























24




















basic factors







25










26


PART I Introduction




























27

24 REFERENCES


21(1)254-285


Vol 57 No 3 pp 103-111



MA Ballinger



244












28
























Vol 17 No 3 pp 253-372

29





Chicago Press





pp 135-172












Press Cambridge MA

30



22 pp 43-68





79

31

CHAPTER 3

Methodology


















research issues

32


























33
























34

32 UNIT OF ANALYSIS



















to be analysed






35












1992 Tsai 2001)













operation

36
























individuals

37






study approach




















38
















Productionprocesses

Developmentproject



processes


projects




39



























40
























41

























study

42


holistic


embedded


CONTEXT

Case

CONTEXT

CaseEmbedded

Unit of analysis 1


CONTEXT

Case

CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case

CONTEXT

Case

CONTEXT

Case

















43


























research

44



























45


























46


























47

























48































bull Other things

49

























50














38 REFERENCES




Amsterdam Elsevier



Vol 28 No1 pp 13-33



pp 1154-1184

51


Jossey-Bass













No 5 pp 994-1003



No 3 pp 217-234





52



pp 191-207




Oaks CA Sage






No 3 pp 613-619



Sage





393-405



53



CA Sage 105-117


California Sage


45 No 2 pp 209-222



No 5 pp 1084-1119









Elsevier



Vol 9 pp 241-264



54











34 No 2 pp 221-239













55




University Press











22 pp 43-68




No 1 pp 7-23




56





University Press










SAGE Publications








57

CHAPTER 4


Perspectives
















1 Introduction


302 KS Christensen













304 KS Christensen













306 KS Christensen













308 KS Christensen
















310 KS Christensen






6 Conclusion








Acknowledgements


312 KS Christensen















































314 KS Christensen







































74

75

CHAPTER 5











message clearer






76












perspective













appropriate

77



























78

























79














in Denmark













80


























81



53 REFERENCES





No 3 pp 305-322







Universitet









82






Koslashbenhavn FORA

83

PART II




















84























companies




85





86

87

CHAPTER 6





88



Aarhus Denmark

Abstract














1161


Accepted July 2006



0025-1747DOI 10110800251740610707668







MD449

1162








1163







MD449

1164







1165










MD449

1166









1167








MD449

1168










1169










MD449

1170




TED Alpha Beta


By ageUnder 20 000 900 70021-30 1014 844 87531-40 1025 814 82641-50 1025 700 890Over 50 1080 760 820




creativity scale


1171







MD449

1172

Per

cen

tag

ed

istr

ibu

tion

ofth

ein

nov

atio

nsc

ores

atT

ED

Iny

our

opin

ion

in

nov

atio

nis

abou

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tron

gly

dis

agre

eD

isag

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Not

sure

Ag

ree

Str

ong

lyag

ree

TE

DA

lph

aB

eta

Inv

enti

ng

som

eth

ing

enti

rely

new

00

273

91

424

212

358

235

252

Gen

erat

ing

new

idea

s0

00

00

048

551

54

523

083

28Im

pro

vin

gso

met

hin

gth

atal

read

yex

ists

30

61

152

515

242

388

227

198

Fol

low

ing

the

mar

ket

lead

er27

351

512

19

10

02

033

533

98A

ttra

ctin

gin

nov

ativ

ep

eop

le6

115

212

133

333

33

732

592

98P

erfo

rmin

gan

exis

tin

gta

skin

an

eww

ay0

06

112

175

86

13

822

222

04S

pre

adin

gn

ewid

eas

61

00

212

515

212

382

222

217

Ad

opti

ng

som

eth

ing

that

has

bee

nsu

cces

sfu

lly

trie

del

sew

her

e3

033

327

327

39

13

063

162

76S

eein

gso

met

hin

gfr

oma

dif

fere

nt

per

spec

tiv

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06

163

630

34

242

411

91In

trod

uci

ng

chan

ges

00

182

212

485

121

355

224

230

Tra

nsf

orm

ing

idea

sto

ldquopro

du

ctsrdquo

30

91

152

485

242

382

NA

NA

Mee

tin

gcu

stom

ers

121

182

394

212

91

297

NA

NA

Mee

tin

gsu

pp

lier

s12

121

242

421

23

02

82N

AN

A

Notes

Th

en

um

ber

sin

this

tab

lear

eav

erag

esc

ores

ona

fiv

e-p

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tsc

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onin

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from

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uan

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(199

5)st

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the

Tel

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scor

esw

ith

two

oth

erco

mp

anie

s




1173








Notsure Agree

Stronglyagree

TEDaverage



MD449

1174









Notsure Agree

Stronglyagree TED




1175








MD449

1176





Notes




1177

References





















MD449

1178





















1179












(2) Your age











MD449

1180



















1181











MD449

1182


111

CHAPTER 7






112




Abstract














305


Vol 8 No 3 2005pp 305-322


DOI 10110814601060510610171








EJIM83

306








307











EJIM83

308








309







EJIM83

310








311



And continues









EJIM83

312














313








EJIM83

314













intrapreneurship


315













EJIM83

316












317








EJIM83

318








319





References








EJIM83

320






















321














EJIM83

322

131

PART III















based resources





132


























133











possesses
















134



























135

























136








intrapreneurship











REFERENCES




Forlag



137












University Press





Vol 41 No 8 pp 933-945



Row Publisher



138










Macmillan




139

CHAPTER 8








140























































































































































located


Few social elements




the firm



Learning





Complexity Medium


Few social elements




Complexity Medium



technology)




procedures



Learning



and technologies






References






















































159

CHAPTER 9


Companies



Danish Companies

160

161

August 2007




Abstract



162

1 Introduction




















and









163












management
















164





























explicit knowledge

165






















etc










166


























implications

167










observations





















168












project
















169


























170






















(ibid p 158)







171






















management strategy










172













experiences
















173
























174


























175

























understanding





176













later project
















(cf Sense 2007)



177








employees






















178






















knowledge










179































180


implications

7 References








2(1) 40-55
















181










Houndsmill











No 1 pp 57-93










182


Press Oxford


























183

PART IV

184

185

CHAPTER 10






















186






8 and 9)




















187








2002)










188














CorporateVenture

InternalResources


Enablers

1

2

3

Innovation

4

5

Knowledgeresources

189


























190


























191













resources














192






and 5





















193















innovation












194



























195




























196


























197


























198







105 REFERENCES




105











Publishings pp 1-16

199










200

201

APPENDIX I

Case companies







this study














202





Large

Small

Age of organization


Evolution stages

Revolution stages


5 Crisis of


3 Crisis of CONTROL







Young Mature












in figure A2

203

Emergence

Dominant Design

Growth

Mature





Low High


















204


(Grant 2002 p 373)

A1 ERICSSON TELEBIT












Rat

e o

f in

no

vati

on

Time

Productinnovation

Processinnovation

Strategicinnovation

205

























206

A2 DANFOSS DRIVES






the world




















207





knowledge


















A3 BANG amp OLUFSEN



208


















percent of turnover









209







channels



















210










A4 CRISPLANT








million









211























212





A5 END2END












figure A5)

213













services




214


























215

A6 REFERENCES







216

217

APPENDIX II

English Summary





















218



























219







220

221

APPENDIX III

Dansk resume





















222



























223






undergrupper

















iii





















corporate venture





iv























v


The PhD process


Personal

Publications










2007



May 29th 2007



November 2007


April 5th 2004



September 2007

vi



























vii




Aarhus University

December 2007

viii

ix

Contents

Preface i

Contentsix

PART I 1

Introduction 1

CHAPTER 1 3



13 References11

CHAPTER 2 13








24 References27

CHAPTER 3 31

Methodology 31



x










38 References50

CHAPTER 4 57


41 Introduction59










46 Conclusion 68

47 References70

CHAPTER 5 75



53 References81

xi

PART II 83


CHAPTER 6 87


61 Introduction89




63 Method93






643 The Market 96



646 Employees 98


651 Creativity99

652 Innovation100





67 References106

CHAPTER 7 111


71 Introduction113


73 Methodology116



xii


751 Rewards118


753 Resources 119


755 Risk 122



762 Culture125

763 Process127


78 References128

PART III 131


CHAPTER 8 139




















85 References157

xiii

CHAPTER 9 159


159

91 Introduction162














97 References180

PART IV 183

CHAPTER 10 185






105 References198

APPENDIX I 201

Case companies201




A4 Crisplant210

xiv

A5 End2End212

A6 References215

APPENDIX II 217

English Summary 217

APPENDIX III 221

Dansk resume221

1

PART I

Introduction



















2











additional insights








REFERENCE




3

CHAPTER 1

The Background














intrapreneurship







4
























5


























6














important













7










1999)
















8


















2002)





9

219

201

175

161154

172

150

35

52

118

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

DK

K b

n














10

















challenges







Aarhus University

11










13 REFERENCES













12


FORA Koslashbenhavn





FORA Koslashbenhavn



13

CHAPTER 2






















14
























entrepreneurship

15
















paper Boslashrsen5





16

05

101520253035404550

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total
















17

0

5

10

15

20

25

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year

Nu

mb

er o

f ar

ticl

es

Intrapreneurship



Total
















18



























19












dissertation














20




















based







21

























22















questions








perspective



23


























24




















basic factors







25










26


PART I Introduction




























27

24 REFERENCES


21(1)254-285


Vol 57 No 3 pp 103-111



MA Ballinger



244












28
























Vol 17 No 3 pp 253-372

29





Chicago Press





pp 135-172












Press Cambridge MA

30



22 pp 43-68





79

31

CHAPTER 3

Methodology


















research issues

32


























33
























34

32 UNIT OF ANALYSIS



















to be analysed






35












1992 Tsai 2001)













operation

36
























individuals

37






study approach




















38
















Productionprocesses

Developmentproject



processes


projects




39



























40
























41

























study

42


holistic


embedded


CONTEXT

Case

CONTEXT

CaseEmbedded

Unit of analysis 1


CONTEXT

Case

CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case



CONTEXT

Case

CONTEXT

Case

CONTEXT

Case

















43


























research

44



























45


























46


























47

























48































bull Other things

49

























50














38 REFERENCES




Amsterdam Elsevier



Vol 28 No1 pp 13-33



pp 1154-1184

51


Jossey-Bass













No 5 pp 994-1003



No 3 pp 217-234





52



pp 191-207




Oaks CA Sage






No 3 pp 613-619



Sage





393-405



53



CA Sage 105-117


California Sage


45 No 2 pp 209-222



No 5 pp 1084-1119









Elsevier



Vol 9 pp 241-264



54











34 No 2 pp 221-239













55




University Press











22 pp 43-68




No 1 pp 7-23




56





University Press










SAGE Publications








57

CHAPTER 4


Perspectives
















1 Introduction


302 KS Christensen













304 KS Christensen













306 KS Christensen













308 KS Christensen
















310 KS Christensen






6 Conclusion








Acknowledgements


312 KS Christensen















































314 KS Christensen







































74

75

CHAPTER 5











message clearer






76












perspective













appropriate

77



























78

























79














in Denmark













80


























81



53 REFERENCES





No 3 pp 305-322







Universitet









82






Koslashbenhavn FORA

83

PART II




















84























companies




85





86

87

CHAPTER 6





88



Aarhus Denmark

Abstract














1161


Accepted July 2006



0025-1747DOI 10110800251740610707668







MD449

1162








1163







MD449

1164







1165










MD449

1166









1167








MD449

1168










1169










MD449

1170




TED Alpha Beta


By ageUnder 20 000 900 70021-30 1014 844 87531-40 1025 814 82641-50 1025 700 890Over 50 1080 760 820




creativity scale


1171







MD449

1172

Per

cen

tag

ed

istr

ibu

tion

ofth

ein

nov

atio

nsc

ores

atT

ED

Iny

our

opin

ion

in

nov

atio

nis

abou

tS

tron

gly

dis

agre

eD

isag

ree

Not

sure

Ag

ree

Str

ong

lyag

ree

TE

DA

lph

aB

eta

Inv

enti

ng

som

eth

ing

enti

rely

new

00

273

91

424

212

358

235

252

Gen

erat

ing

new

idea

s0

00

00

048

551

54

523

083

28Im

pro

vin

gso

met

hin

gth

atal

read

yex

ists

30

61

152

515

242

388

227

198

Fol

low

ing

the

mar

ket

lead

er27

351

512

19

10

02

033

533

98A

ttra

ctin

gin

nov

ativ

ep

eop

le6

115

212

133

333

33

732

592

98P

erfo

rmin

gan

exis

tin

gta

skin

an

eww

ay0

06

112

175

86

13

822

222

04S

pre

adin

gn

ewid

eas

61

00

212

515

212

382

222

217

Ad

opti

ng

som

eth

ing

that

has

bee

nsu

cces

sfu

lly

trie

del

sew

her

e3

033

327

327

39

13

063

162

76S

eein

gso

met

hin

gfr

oma

dif

fere

nt

per

spec

tiv

e0

00

06

163

630

34

242

411

91In

trod

uci

ng

chan

ges

00

182

212

485

121

355

224

230

Tra

nsf

orm

ing

idea

sto

ldquopro

du

ctsrdquo

30

91

152

485

242

382

NA

NA

Mee

tin

gcu

stom

ers

121

182

394

212

91

297

NA

NA

Mee

tin

gsu

pp

lier

s12

121

242

421

23

02

82N

AN

A

Notes

Th

en

um

ber

sin

this

tab

lear

eav

erag

esc

ores

ona

fiv

e-p

oin

tL

iker

tsc

ale

onin

nov

atio

nA

lph

aan

dB

eta

are

from

Zh

uan

grsquos

(199

5)st

ud

yan

dar

ein

clu

ded

inor

der

toco

mp

are

the

Tel

ebit

scor

esw

ith

two

oth

erco

mp

anie

s




1173








Notsure Agree

Stronglyagree

TEDaverage



MD449

1174









Notsure Agree

Stronglyagree TED




1175








MD449

1176





Notes




1177

References





















MD449

1178





















1179












(2) Your age











MD449

1180



















1181











MD449

1182


111

CHAPTER 7






112




Abstract














305


Vol 8 No 3 2005pp 305-322


DOI 10110814601060510610171








EJIM83

306








307











EJIM83

308








309







EJIM83

310








311



And continues









EJIM83

312














313








EJIM83

314













intrapreneurship


315













EJIM83

316












317








EJIM83

318








319





References








EJIM83

320






















321














EJIM83

322

131

PART III















based resources





132


























133











possesses
















134



























135

























136








intrapreneurship











REFERENCES




Forlag



137












University Press





Vol 41 No 8 pp 933-945



Row Publisher



138










Macmillan




139

CHAPTER 8








140























































































































































located


Few social elements




the firm



Learning





Complexity Medium


Few social elements




Complexity Medium



technology)




procedures



Learning



and technologies






References






















































159

CHAPTER 9


Companies



Danish Companies

160

161

August 2007




Abstract



162

1 Introduction




















and









163












management
















164





























explicit knowledge

165






















etc










166


























implications

167










observations





















168












project
















169


























170






















(ibid p 158)







171






















management strategy










172













experiences
















173
























174


























175

























understanding





176













later project
















(cf Sense 2007)



177








employees






















178






















knowledge










179































180


implications

7 References








2(1) 40-55
















181










Houndsmill











No 1 pp 57-93










182


Press Oxford


























183

PART IV

184

185

CHAPTER 10






















186






8 and 9)




















187








2002)










188














CorporateVenture

InternalResources


Enablers

1

2

3

Innovation

4

5

Knowledgeresources

189


























190


























191













resources














192






and 5





















193















innovation












194



























195




























196


























197


























198







105 REFERENCES




105











Publishings pp 1-16

199










200

201

APPENDIX I

Case companies







this study














202





Large

Small

Age of organization


Evolution stages

Revolution stages


5 Crisis of


3 Crisis of CONTROL







Young Mature












in figure A2

203

Emergence

Dominant Design

Growth

Mature





Low High


















204


(Grant 2002 p 373)

A1 ERICSSON TELEBIT












Rat

e o

f in

no

vati

on

Time

Productinnovation

Processinnovation

Strategicinnovation

205

























206

A2 DANFOSS DRIVES






the world




















207





knowledge


















A3 BANG amp OLUFSEN



208


















percent of turnover









209







channels



















210










A4 CRISPLANT








million









211























212





A5 END2END












figure A5)

213













services




214


























215

A6 REFERENCES







216

217

APPENDIX II

English Summary





















218



























219







220

221

APPENDIX III

Dansk resume





















222



























223






undergrupper

















Intrapreneurship: Exploration and Exploitation of Internal ...

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Transcript of Intrapreneurship: Exploration and Exploitation of Internal ...