Entrepreneurial strategy
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by R. Duane Ireland |
For researchers and business practitioners alike, strategy and entrepreneurship share a common objective — high performance. Given the increasing complexity associated with the global economy, learning what can be done to achieve high performance is clearly something in which new and established organizations have a strong interest.
Strategy research examines the set of actions a firm takes that allow it to outperform competitors while entrepreneurship research principally deals with newness — new products in the form of either goods or services, new processes used to produce new products, and creating new businesses (or ventures). Thus, strategy research contributes to our knowledge about how to best use the advantages a firm has today, while entrepreneurship research is framed largely around identifying opportunities to create some type of new advantages in the form of innovations.
A strategic approach is required to exploit the innovation and realize the advantage over competitors. I am working with colleagues, including Professor Michael Hitt and PhD candidate Justin Webb, in recent research that shows older, established firms often are not entrepreneurial enough and lose their advantages as a result. Alternatively, newer businesses are innovative but frequently are not strategic and thus are unable to realize advantages from their innovations.
When strategy and entrepreneurship are more carefully integrated, the likelihood a firm can improve its performance greatly increases. This interesting and novel work is framed around a new concept. Called strategic entrepreneurship, this concept describes the actions a firm takes today to exploit its current competitive advantages while simultaneously using some of its resources to explore for the innovations that will provide the foundation for the competitive advantages it will need to succeed in the future.
Thus, strategic entrepreneurship refers to and describes the actions a firm takes to form a proper balance between opportunity (exploration) and advantage-seeking (exploitation) behaviors. Although preliminary in nature, recent work suggests that firms that master strategic entrepreneurship likely will outperform those unable to develop this capability.
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