Description
Abstract about emerging issues in corporate entrepreneurship.
Journal of Management 2003 29(3) 351–378
Emerging Issues in Corporate Entrepreneurship
Gregory G. Dess
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School of Management, University of Texas at Dallas, Richardson, TX 75083-0688, USA
R. Duane Ireland
Department of Management Systems, Robins School of Business, University of Richmond,
Richmond, VA 23173, USA
Shaker A. Zahra
Entrepreneurship Division, Babson College, Babson Park, MA 02157-0310, USA
Steven W. Floyd
School of Business Administration, The University of Connecticut,
368 Fair?eld Road, Storrs, CT 06269, USA
Jay J. Janney
Department of Management and Marketing, School of Business Administration,
University of Dayton, 300 College Park, Dayton, OH 95469-2271, USA
Peter J. Lane
Department of Management, College of Business, Arizona State University,
P.O. Box 874006, Tempe, AZ 85287-4006, USA
Research on corporate entrepreneurship (CE) has grown rapidly over the past decade. In
this article, we identify four major issues scholars can pursue to further our understanding
about CE. The issues we explore include various forms of CE (e.g., sustained regeneration,
domain rede?nition) and their implications for organizational learning; the role of leadership
and social exchange in the CE process; and, key research opportunities relevant to CE in
an international context. To address the latter issue, we propose a typology that separates
content from process-related studies and new ventures vs. established companies. We close
with a reassessment of the outcomes in CE research, which becomes particularly salient with
the increasing importance of social, human, and intellectual capital in creating competitive
advantages and wealth in today’s knowledge economy. Throughout the article, we use the
organizational learning theory as a means of integrating our discussion and highlighting the
potential contributions of CE to knowledge creation and effective exploitation.
© 2003 Elsevier Science Inc. All rights reserved.
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Corresponding author. Tel.: +1-972-883-2703; fax: +1-972-883-2799.
E-mail addresses: [email protected] (G.G. Dess), [email protected] (R.D. Ireland),
[email protected] (S.A. Zahra), [email protected] (S.W. Floyd), [email protected]
(J.J. Janney), [email protected] (P.J. Lane).
0149-2063/03/$ – see front matter © 2003 Elsevier Science Inc. All rights reserved.
doi:10.1016/S0149-2063(03)00015-1
352 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Both scholars and practitioners remain interested in studying and better understanding
corporate entrepreneurship (CE) (Ireland, Kuratko & Covin, 2002). CE has been viewed
as the driver of new businesses within on-going enterprises as achieved through inter-
nal innovation, joint ventures or acquisitions; strategic renewal (Guth & Ginsberg, 1990;
Hitt, Nixon, Hoskisson &Kockhar, 1999); product, process, and administrative innovations
(Covin & Miles, 1999); diversi?cation (Burgelman, 1991); and processes through which
individuals’ ideas are transformed into collective actions through the management of un-
certainties (Chung & Gibbons, 1997). Sharma and Chrisman de?ne CE as “. . . the process
whereby an individual or a group of individuals, in association with an existing organiza-
tion, create a new organization, or instigate renewal or innovation within that organization”
(1999: 18).
Given its importance to corporate vitality and wealth generation in today’s global econ-
omy, CE has generated considerable attention in research. This paper identi?es emerging
issues in CE and suggests research questions for future research. Our analysis highlights
the role of CE in inducing and cultivating organizational learning, which is a key source
of new knowledge that could be used to develop organizational capabilities. Learning is at
the heart of the strategic renewal process that enables the ?rm to adapt and respond to chal-
lenges in their newmarkets (Zahra, Nielsen &Bogner, 1999). Given the various types of CE
(Covin & Miles, 1999), our discussion applies learning theory to show how CE in domestic
and international operations creates new knowledge. This discussion also gives attention to
the role of leadership in stimulating organizational learning within CE and harvesting new
knowledge. Finally, recognizing the vital importance of learning for strategic renewal, we
propose that future researchers should incorporate learning among the key outcomes of CE
activities.
The organizational learning theory suggests that when companies are exposed to new
and diverse stimuli, the stage is set for questioning existing assumptions and beliefs. This
process also induces experimentation, which fosters learning by doing. Learning means the
acquisition of information and knowledge that is new for a ?rm. This learning is impor-
tant for the creation and exploitation of the knowledge necessary for product, process and
organizational innovation. Therefore, throughout this article we highlight the importance
of CE activities for promoting organizational learning and developing new knowledge that
generates advantages.
Our analysis of CEcovers four major issues. The ?rst is howknowledge is created through
four types of CE—sustained regeneration, organizational rejuvenation, strategic renewal,
and domain rede?nition. Mediated by two forms of organizational learning, these CE types
lead to three forms of new knowledge that are then used differently within the ?rm.
Next, we identify the critical roles and social exchanges that comprise the CE process.
This analysis shows how entrepreneurial roles and information exchanges across multiple
levels of management promote the kinds of organizational learning required by the four
types of CE. Based on this perspective, we de?ne entrepreneurial leadership as establishing
the conditions conducive to role performance and social exchange. These conditions include
organization trust, consensus on dominant logic, and appropriate organizational controls.
Third, we address the dynamic interplay between CE and internationalization. We use
a typology that separates content from CE process-related studies in new ventures vs.
established companies. In addition to reviewing and synthesizing studies conducted in each
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 353
cell, we highlight major ?ndings fromearlier researchineacharea, identifygaps, andsuggest
promising avenues for future CE research. The discussion draws attention to knowledge
creation and exploitation as important objectives within CE.
Fourth, we address the outcome variables in CE research. We provide examples of how
performance indicators must re?ect the temporal nature of CE. In addition, we draw on
such literatures as knowledge management, options theory, and entrepreneurial failure to
discuss how the increasing importance of social, human, and intellectual capital necessi-
tates new conceptualizations of performance. This discussion concludes by highlighting
the importance of learning and knowledge creation as dependent variables in future CE
research.
CE, Organizational Learning, and Knowledge
Deliberate and intentional in nature, CEis concerned with various forms of newness (e.g.,
organizational renewal, innovation, and establishing newventures) and has its consequences
for organizational survival, growth, and performance (Kazanjian, Drazin & Glynn, 2001).
Increasingly, CEis foundtoaffect ?rmperformance (Zahra &Covin, 1995; Zahra &Nielsen,
2002). From a resource-based perspective, CE is a key means of accumulating, converting,
and leveraging resources for competitive purposes (Floyd & Wooldridge, 1999) such as
developing and using product, process, and administrative innovations to rejuvenate and
rede?ne the ?rm and its markets or industries (Covin & Miles, 1999).
An intangible resource vital to 21st century organizations (Hitt &Ireland, 2002; Ireland &
Hitt, 1999), knowledge can be created through effective CE (Kuratko, Ireland
& Hornsby, 2001). In fact, Zahra et al. (1999: 169) argue that, “. . . formal and informal CE
activities can enrich a company’s performance by creating new knowledge that becomes a
foundation for building newcompetencies or revitalizing existing ones.” Embedded primar-
ily within the ?rm’s human capital (Lepak & Snell, 1999), knowledge is information that
is laden with experience, judgment, intuition, and value (Nonaka & Takeuchi, 1995). Both
explicit and tacit in nature, knowledge is mutable and can be thought of as true justi?ed
belief (von Grogh, Ichijo & Nonaka, 2000).
Given its centrality to forming competitive advantages that often are the path the ?rm
travels to outperformits rivals (Coff, 2002; Grant, 1996), today’s ?rms bene?t by facilitating
the development and management of knowledge stocks and ?ows between people and
organizational units (Ireland, Hitt, Camp & Sexton, 2001). We argue that through effective
CE, ?rms develop knowledge and use it as a continuous source of innovations to outperform
competitors (Kazanjian et al., 2001). In this context, CE is a knowledge enabler as it forms
and subsequently uses or applies knowledge (von Grogh et al., 2000)—knowledge that at
its best, is valuable, new, unique, and competitively relevant (Zahra et al., 1999).
According to Zahra et al. (1999: 177), “CE activities can lead to three different types
of new knowledge.” CE’s multidimensionality (Covin & Miles, 1999) complicates these
relationships. Moreover, we believe that organizational learning mediates the relationships
between different CE types and different kinds of knowledge. In turn, the different types of
knowledge (i.e., technical, integrative, and exploitative) should be used differently for the
organization to gain maximum competitive bene?t from them.
354 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Figure 1. Relationships among CE strategy, organizational learning, knowledge and implementation.
We explore these issues through a series of proposed relationships (see Figure 1) that are
drawn primarily from the entrepreneurship and strategic management literatures’ theory
and empirical results. As stated above, the general expectation of relationships among
Figure 1’s variables is established (Covin & Miles, 1999; Zahra et al., 1999). However, the
relationships we propose between different types of CE and new knowledge, as moderated
by two types of organizational learning, have not been speci?ed. As such, the expectations
depicted in Figure 1 are untested and represent fertile ground for entrepreneurship and
strategic management researchers.
Forms of Corporate Entrepreneurship
Covin and Miles (1999) conceptualize four types of CE, with each one oriented to either
rejuvenating or intentionally rede?ning the organization or establishing innovation. Struc-
turally complex ?rms such as those engaging in product and/or market diversi?cation may
simultaneously use one of more or even all four CE forms in different parts of the company.
Concerned primarily with continuous innovations, sustained regeneration is the most
frequently recognized CE form. Here, the ?rm develops cultures, processes, and structures
to support and encourage a continuous stream of new product introductions in its current
markets as well as entries with existing products into new markets (Covin & Miles, 1999).
Firms are aware of product life cycles and often frame product strategies around the compet-
itive expectations associated with them. Commonly viewed as competitors who understand
an industry’s accepted rules of engagement (Porter, 1980), ?rms involved with CE commit
to the importance of learning and adapting while actively competing against rivals. Demon-
strating an ability to introduce new products and enter new markets, Arm and Hammer
uses sustained regeneration as it creatively works with baking soda, its core product. Ac-
cording to Covin and Miles (1999: 51): “. . . through the development and introduction of
baking soda-based toothpaste and deodorizing products, Armand Hammer has been able to
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 355
capitalize on emerging product-market opportunities unseen or underappreciated by com-
petitors in its core industry segment.”
The ?rm’s internal processes, structures, and capabilities are the targets of oganizational
rejuvenation. Concerned primarily with improving the ?rm’s ability to execute strategies,
organizational rejuvenation often entails changes to value chain activities. Demonstrating
process and administrative innovations rather than product innovations, organizational reju-
venation shows that ?rms can become more entrepreneurial through processes and structures
as well as by introducing newproduct and/or entering newmarkets with existing products. In
recent years, GE rejuvenated itself by developing and using what others sometimes viewed
as radical administrative routines and operating policies to support them. For the most part,
CEefforts oriented to organizational rejuvenation are framed around support activities (e.g.,
procurement and human resource management) rather than primary (e.g., inbound logistics
and operations) activities (Porter, 1980). The most successful organizational rejuvenation
efforts renew one or more major aspects of the ?rm’s operations.
Strategic renewal ?nds the ?rm seeking to change how it competes. Thus, the nature of
rivalry with competitors is altered as the ?rm concentrates on renewing the strategies it uses
to successfully align itself with its external environment. With organizational rejuvenation,
the organization itself is the focus of CEefforts. This is in stark contrast to strategic renewal’s
intention of positively mediating the “organization-environment interface” (Covin &Miles,
1999: 52). At its best, CE as strategic renewal allows the ?rm to more pro?tably exploit
product-market opportunities. Often, this outcome is achieved when the ?rm repositions
itself in ways that allow simultaneous exploitation of current competitive advantages and
explorationfor advantages that will leadtofuture success (Ireland, Hitt &Vaidyanath, 2002).
Harley-Davidson’s turnaround demonstrates the use of this CEform. Cisco Systems’ current
attempt to renewitself through internal growth rather than acquisitions highlights this ?rm’s
effort toat least partiallyalter howit competes, givenchanges inits competitive environment.
Through domain rede?nition, the ?rm proactively seeks to create a new product market
position that competitors haven’t recognized or have underserved (Covin & Miles, 1999).
The focus here is exploring for what is possible rather than exploiting what is currently
available. The commitment to reenergize the ?rmby rede?ning its domain is also intended to
establish ?rst mover advantages. As the ?rst ?rmto sell an offering in a newproduct category
(Golder & Tellis, 1993), the company rede?ning its domain is proactive and demonstrates
a strong entrepreneurial orientation (Lumpkin & Dess, 1996). Sony’s introduction of the
innovative Walkman illustrates ?rst mover actions that created a new product arena.
Types of Organizational Learning
Organizational learning is a capability allowing ?rms to create knowledge as the source
of improved performance (Hitt & Ireland, 2000). Thus, organizational learning mediates or
facilitates the relationships between CE and the development of new types of knowledge.
Organizational learning occurs through several avenues including action (called learning
bydoing) (Lieberman, 1984) andmemory (the constant repetitionof anorganization’s activi-
ties) (Nelson&Winter, 1982). Twomajor types of learning—acquisitive andexperimental—
occur as organizations using one or more types of CE learn by doing and through memory,
among other avenues (Zahra et al., 1999) (see Figure 1).
356 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Acquisitive learning takes place when the ?rm gains access to and subsequently in-
ternalizes preexisting knowledge from its external environment. Acquisition knowledge
is grounded in public knowledge—that is, knowledge that resides in the public domain
(Matusik, 2002). Because of this, acquisitive knowledge is rarely the source of uniqueness
?rms require to form sustainable competitive advantages (Leonard-Barton, 1995). But, the
absence of access to publicly available knowledge and learning places the ?rm at a com-
petitive disadvantage relative to rivals (Zahra et al., 1999) and reduces its ability to use CE
as the path to creating a new organization or to engage in strategic renewal or successful
innovation.
Experimental learning occurs inside the ?rm and generates knowledge that is distinctive
to it. Private knowledge, which includes items such as the ?rm’s unique routines, processes,
trade secrets, and documentation (Matusik, 2002), is the basis of experimental learning. Be-
cause it is the product of ?rm-speci?c knowledge that may be valuable, rare, and imperfectly
imitable, competitive advantages evolving from experimental learning tend to be more sus-
tainable than are those that are products of acquisitive learning. Thus, acquisitive learning
represents a necessary but insuf?cient condition for competitive success as measured by
the ?rm’s ability to develop new knowledge. Moreover, the emphasis on innovation as a
source of successful competition in the global economy, in turn, leads to a premium on
experimental learning relative to acquisitive learning for ?rms engaging in CE (Zahra &
Garvis, 2000).
As shown in Figure 1, we argue that the different CE types have different relationships
with the two types of organizational learning. In turn, three types of new knowledge are
products of the interactions among CE forms and the two organizational learning types.
New Knowledge and its Implementation
Traveling through the organization’s ability to learn, CE leads to three types of new
knowledge. Technical knowledge, concerned with insights about the properties of speci?c
activities, is vital to sustained regeneration and results primarily from acquisitive learning.
Specialized in nature, technical knowledge helps the ?rmre?ne current products and extend
product lines, often through process innovations. From an ef?ciency perspective, technical
knowledge is vital to the ?rm’s efforts to create more value by how it completes primary
and support activities in its value chain(s). However, this type of knowledge is rarely the
foundation for sustainable competitive advantages.
Organizational learning also leads to integrative knowledge. Firm-speci?c and predom-
inately tacit in nature, it is a product of how the ?rm has learned to creatively and uniquely
combine its idiosyncratic resources and capabilities to create value. Grounded in memory,
history, and organizational routines, employees creating integrative knowledge do so by
recombining and extending the ?rm’s resources and capabilities in manners that demon-
strate Schumpeter’s (1934) classic conceptualization of an entrepreneur (Zahra et al., 1999).
Thus, integrative knowledge results primarily from the combined, relatively indirect effects
of acquisitive and experimental learning (Figure 1’s dotted lines showthe proposed indirect
effects).
Exploitative knowledge accumulates as the ?rm learns how to exploit its resources.
Thus, exploitative knowledge expands as the ?rm learns how to creatively ?nd unique,
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 357
value-creating ways to exploit its technical and integrative knowledge sets. This learning
type is oriented to ?nding new ways of commercializing the ?rm’s goods or services that
evolved from effective applications of its technical and integrative knowledge.
As shown in Figure 1, we believe that a different emphasis is required for the ?rm to
gain maximum bene?t from the new knowledge components resulting from its use of CE as
mediated by organizational learning. When using technical knowledge, the implementation
focus is on leveraging knowledge. In contrast, recombining and extending knowledge is
the outcome sought when the ?rm applies its new integrative knowledge. Lastly, the ?rm
concentrates on importing new technical and integrative knowledge into value-creating
primary and support activities when trying to effectively use its newexploitative knowledge.
Research Questions
We believe that relationships shown in Figure 1 should be tested empirically. Testing
these relationships would require different speci?cations among the variables, given the
proposed direct and indirect effects.
Our viewis that indirect relationships between variables are not as strong as are the direct
relationships. For example, sustained regeneration’s relationship with acquisitive learning
is stronger than is its relationship with experimental learning.
Recall that this type of CE ?nds the ?rm trying to learn how to apply its valuable
innovation-producing capabilities in ways that will result in new products being intro-
duced into current markets or existing products being introduced into new markets. In both
instances, externally-based acquisitive knowledge can be used to help improve the orga-
nization as it learns how to continue applying existing advantages in value-creating ways.
However, we also argue that sustained regeneration has an indirect relationship with ex-
perimental learning in that new products are unlikely to be produced without effort being
devoted to developing and then using valuable, idiosyncratic organizational knowledge.
Space limitations preclude discussion of all the relationships are proposed in Figure 1.
We encourage scholars to consider the theoretical validity of what we’ve proposed. If
deemedtheoreticallysound, empirical testingof those relationships couldanswer interesting
research questions as well as contribute to the entrepreneurship and strategic management
literatures.
Entrepreneurial Leadership in Corporations: The Roles
of Controls, Consensus and Trust
Corporate entrepreneurship often fails because large organizations present hostile envi-
ronments for creative ideas (Burgelman, 1983a; Sharma & Chrisman, 1999). Innovative
proposals are frequently defeated by ?nancial control systems and other formalities that
are typical of large bureaucracies (Kanter, 1983). Creating collateral organizations, such as
new venture divisions can isolate entrepreneurial processes from the parent organization
(Burgelman, 1983b). However, the isolation also makes it less likely that their initiatives
will harmonize with the needs of the core business, which, in turn, reduces the likelihood
that new ventures receive the support and acceptance, necessary to become commercially
358 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
viable (Sharma, 1999). Even when the CE process is established within the core of a ?rm,
virtually all entrepreneurial initiatives face some degree of survival risk induced either by
the structural or strategic context (Burgelman, 1983b). The ?rm needs to explore how its
innovative and competitive capabilities can be rede?ned, renewed, or replaced while en-
suring that the resulting changes in policies, priorities, and procedures will be accepted
throughout the organization. Managers’ acceptance of the new initiatives is of particular
concern because they are the ones responsible for managing the shift from one set of op-
erating routines to another. Indeed, the lack of such acceptance threatens the success of
any organizational change effort (Kotter, 1995). Thus, a fundamental challenge in CE is
managing the con?ict between the new and the old and overcoming the inevitable tensions
that such con?ict produces for management.
Despite the potential importance of such con?ict, prior research on CE leadership has
paid little if any attention to the issue. One way to begin to focus on it is to build upon
recent work on managers’ strategic roles. Floyd and Lane (2000) suggest that strategic
change involves a system of social exchanges between managerial roles. These roles form
three sub-processes (competence deployment, competence modi?cation, and competence
de?nition). We believe that these processes drive the four types of CE identi?ed above
(Covin & Miles, 1999). (See the top rows of Table 1.)
Speci?cally, in sustained regeneration ?rms seek to create a steady streamof newproduct
introductions and the entry of existing products into new markets. This requires a combina-
tion of competence deployment and competence modi?cation. Organizational rejuvenation
aims at improving the effectiveness of existing strategy by adjusting value chain activities,
especially support activities. This requires deploying the ?rm’s existing competence while
modifying the organizational processes that enable such deployment. Strategic renewal goes
beyond adjusting processes to fundamentally rethinking how the ?rm competes. This is the
essence of competence de?nition. Finally, domain rede?nition focuses on exploring possi-
ble newmarkets and products to create ?rst-mover advantages. This is the most challenging
of Covin and Miles (1999) types, as it typically requires both de?ning and deploying new
competences.
Viewing CEas a systemof roles and social exchanges provides a theoretical basis for con-
nectingentrepreneurial activityto the organization’s on-goingagenda. Therefore, it suggests
a way to examine how CE leadership may resolve con?icts between old and new priorities.
More speci?cally, this perspective portrays the challenges of CE leadership as managing a
social learning process involving roles and relationships among managers at the top, middle
and operating levels of the organization. Thus, CE leadership depends not only on the skills
and abilities of individuals but also on the quality of interactions within the management
hierarchy—in particular, we will argue that it depends on the extent of shared understand-
ing and the level of interpersonal trust in the organization. Researching the contingencies
surrounding these attributes requires understanding the nature of the social exchanges in
CE, the con?icts that disrupt them, and the resolution mechanisms at a leader’s disposal.
CE Leadership as a System of Social Exchanges
The motivation for viewing CE as social exchange is the set of strategic roles shown in
Table 1. The literature suggests that these roles are central to both CE and strategic renewal
G
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Table 1
Social exchanges, managerial roles, and controls in corporate entrepreneurship
Type of corporate entrepreneurship
Sustained regeneration Organizational rejuvenation Strategic renewal Domain rede?nition
Effects on ?rm’s
competence
Deploy existing Modify
existing
Deploy existing Modify
existing
Deploy existing De?ne new De?ne new Deploy new
Top management
roles
Directing Recognizing Directing Recognizing Directing Ratifying Ratifying Directing
Middle
management
roles
Implementing Synthesizing
and facilitating
Implementing Synthesizing
and facilitating
Implementing Championing Championing Implementing
Operating
management
roles
Conforming Adjusting Conforming Adjusting Conforming Experimenting Experimenting Conforming
Organizational
controls needed
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and market
controls
A mix of
bureaucratic
and market
controls
A mix of
market and
clan controls
A mix of
market and
clan controls
360 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
(Bartlett & Ghoshal, 1994; Hart, 1992; Nonaka, 1994). Performing in these roles involves
processing information and taking action that facilitates organizational change, and it is the
need for information to performin these roles that gives rise to our focus on social exchange
as a central feature of CE.
In contrast to bounded rationality or political views, a social exchange perspective of
CE (MacNeil, 1974; Rousseau, 1990) highlights its on-going, dynamic quality. Individual
actions anddecisions are thus seenina relational context where “nosegment of which—past,
present, future—can sensibly be viewed independently from other segments” (MacNeil,
1974: 695). As organization members interact and exchange information, roles and role
expectations develop which are embedded in relationships speci?c to the organizational
context. These roles enable the organization to engage in many activities including CE.
CE’s dependence on relational exchanges among managers has several implications for
CE leadership. Leadership should be focused on the social context—both in terms of
in-role performance and in architecting broader organizational arrangements. Taking on
roles means depending on others to provide information and perform in complementary
roles. The role of middle managers as champions, for example, depends on gaining infor-
mation fromexperimentation at the operating level and rati?cation at the top. CE leadership
means more than performing in one of the roles, however. It means shaping the internal
organizational context in ways that foster effective exchanges between all the roles. This
requires articulating a vision, gaining acceptance of the vision within the organization, and
creating congruence between the vision and followers’ self-interests (Pawar & Eastman,
1997).
Strategic Role Con?ict and Exchange Opportunism in CE
Management entails a wide variety of behaviors, including but not limited to the en-
trepreneurial roles identi?ed in Table 1. This variety of formal and informal behaviors
and differences in the expectations of the people with whom a manager interacts—the role
senders (Nandram&Klandermans, 1993)—is likely to result in con?icts about which role is
appropriate at a given point in time. Adding to the potential for role con?icts are differences
in managers’ beliefs about the need for organizational change. Differences in managers’ be-
lief structures are due to educational background, experience, primary functional area, and
position within the corporate hierarchy (Floyd & Lane, 2000; Weick, 1995). The plethora
of managerial roles and differing managerial beliefs leads to dissensus over which roles to
enact, and as a result, inconsistent role-sending behavior. For example, top management
may see a need to fundamentally rethink how the ?rm competes (the need for strategic
renewal) and thus expect operating-level managers to adopt the experimenting role. But if
middle managers do not perceive the same need for fundamental change, if they believe, for
example, that incremental improvements are of primary importance (the need for sustained
regeneration), they will expect operating-level managers to adopt the conforming role. The
con?ict in the expectations of the two role senders would create tension and uncertainty at
the operating level. This tension over which entrepreneurial role a manger should enact is
termed strategic role con?ict (Floyd & Lane, 2000).
Managers caught in role con?ict are unlikely to enact entrepreneurial roles successfully,
and this will disrupt the information exchanges needed for CE. Managers caught in role
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 361
con?ict may also experience considerable stress that can lead to organizationally dysfunc-
tional coping behaviors such as avoidance, lying, or exit (Grover, 1993; Hirschman, 1970).
These coping behaviors deprive the organization of timely access to needed information
and therefore have the potential to disrupt CE even further.
Role dissensus also undermines predictability in relational exchanges and weakens in-
terpersonal trust. Lower levels of trust, in turn, increase the risk of opportunism among
managers—in the form of dishonesty, in?delity or shirking (Griesenger, 1990). Note that
opportunism need not be real to be disruptive. Just the risk of opportunism can be enough
to reduce the amount of information shared (Lane, Lyles & Salk, 1998). Well-intended but
unexpected behavior may be misinterpreted as opportunistic (Ghoshal & Moran, 1996).
When members of a relational exchange system begin to perceive that others are acting
opportunistically, trust breaks down even further, and the cycle of misinformation therefore
tends to become negatively self-reinforcing.
Differences in strategic role expectations can create uncertainty in all management situ-
ations. However, Jones and Butler (1992) suggest that such uncertainty is especially likely
in CE. An additional source of uncertainty in CE is that the ?rm is by de?nition venturing
into new areas for which managers have not yet developed a shared understanding (Weick,
1995). Jones and Butler suggest that this not only creates uncertainty in how opportunities
are recognized but also in howthe ?rmshould develop structures and transactions to capital-
ize on them. The differences in managerial perceptions discussed earlier and the uncertainty
in CE further elevate the risk of real or perceived managerial opportunism.
Developing CE Consensus and Trust through Organizational Controls
For effective exchanges to occur, an individual must be willing to “buy” what another
party wishes to sell. For CE this means that there should be some overlap in managerial
beliefs about the substance of strategic priorities and the need for strategic change—what
we describe as consensus on the dominant logic. Lacking it, champions are likely to be-
come frustrated by top managers who consistently reject their proposals, for example.
Implementers are likely to be confused by directions that are out of sync with their own
perceptions of strategy. In addition to the substance of entrepreneurial initiatives, consensus
on the dominant logic includes shared understanding on the need for change, i.e., which
types of exchanges (regeneration, rejuvenation, renewal, or rede?nition) are needed. Lack-
ing this, managers are likely to be working at cross-purposes—operating level managers
experimenting when middle managers expect them to conform, for example. In short, con-
sensus on the dominant logic increases the likelihood that managers will share a common
set of expectations for role performance and that they will seek and receive the information
necessary to perform in role.
Abroad consensus on dominant logic also will have indirect bene?ts. Because consensus
reduces uncertainty about expected managerial roles, it reduces both the opportunities for
managers to act opportunistically and the chance that well-intended actions will be miscon-
strued. This sets in another self-reinforcing spiral, an increasingly positive one. The less
that members of a relational exchange system perceive that others are acting opportunis-
tically, the more that trust builds up between them, and the less concerned they are about
opportunism in the future.
362 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
What is needed, therefore, is a mechanism by which leaders can help their organizations
develop the consensus and trust needed to support CE. Jones and Butler (1992: 742–746)
suggest the problems created by uncertainty in CE can be addressed by providing “an eq-
uitable distribution of rewards.” However, they caution that effective reward systems may
be dif?cult to develop for CE. They conclude that the ultimate solution may lay in the
development of organizational controls that can help address the problems of uncertainty,
but provide no insights into what the ideal set of controls might be (1992: 746–747). Floyd
and Lane’s (2000) prescriptions for minimizing strategic role con?ict offer a more detailed
answer. They suggest that aligning a ?rm’s organizational controls with the type of envi-
ronmental change that it faces can minimize strategic role con?ict. The alignment creates
consistency in behavioral expectations by signaling what cues are important, which behav-
iors are appropriate and what kind of result is valuable. This, in turn, reduces uncertainty
about each role’s importance and the kind of information that is valued by the ?rm.
Approaches to organizational control can be described as a choice between market de-
vices, bureaucratic mechanisms and clan controls (Ouchi, 1980). These controls vary in
the types of uncertainty that they can address, but they are not mutually exclusive and can
be used in combination to nurture strategic consensus in a variety of contexts (Floyd &
Lane, 2000). Market control uses passively observable data to evaluate opportunities and
outcomes within the ?rm (Daft & Weick, 1984). They help address the potential for role
con?ict in competence de?nition by clarifying the objective criteria for evaluating newideas
and opportunities. Bureaucratic control entails the use of standardized behavior and per-
formance assessments. Under bureaucracy managers methodically probe to determine how
to resolve well-de?ned problems (Daft & Weick, 1984). These controls are appropriate for
competence deployment. Clan control conveys information through traditions and assumes
that members’ commitment is driven by organizational identi?cation and common culture.
Rather than analyzing data or methodically searching for the one right answer, clans reduce
uncertainty by creating a communality that reduces opportunismdue to similarity of norms,
beliefs, and priorities between members. The trust that develops through clan control may
be essential if there is uncertainty about whether and howto modify an existing competence,
what to keep, what to change, and how.
Combining these insights on organization controls and consensus with the earlier discus-
sion of the relationship between types of CE and change in the ?rm’s competences suggests
the alignment of controls and types of CE presented in the bottom rows of Table 1. Here,
we propose that by correctly aligning controls with the type of CE, managers can reduce
role dissensus and increase dominant logic consensus. If the controls and CE type are mis-
aligned, either the existing strategy will be insuf?ciently reinforced or needed deviations
from the existing strategy will be sti?ed.
Opportunities for Researching CE Leadership
We offer this model of CE leadership because we believe that it focuses on an important
but under researched topic—managing con?icts in the CE process. The social exchange
approach we take offers rich opportunities for future research because it acknowledges that
managers at multiple levels play a role in CE and because it places interactions between
managers at the heart of the CE process. The social exchange perspective also suggests
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 363
that two new constructs, dominant logic consensus and strategic role con?ict, should be
examined by future CE leadership studies. Other streams of management research can
provide guidance on operationalizing both constructs (see Dess & Priem, 1995; Shenkar &
Zeira, 1992). Finally, the model implies that the ef?ciency of social exchanges may be an
indicator of CE leadership effectiveness. This could be operationalized using measures of
organizational trust (Rousseau, Sitkin, Burt & Camerer, 1998) or identi?cation-based trust
(Lewicki & Bunker, 1995).
While we feel that examining CE leadership though this lens has much promise, it is
clearly not the only approach that can be taken to studying this topic. Indeed, our con-
cept of CE leadership resonates with other leadership theories focused on transforming the
intraorganizational social context to facilitate change. Pettigrew (1987), for example, de-
scribes leadership as a process wherein the leader delegitimates alternative views and seeks
to legitimate desired views. Sashkin (1992) describes leadership as a process of instilling
new values and organizational culture. Nadler and Tushman (1989) see it as envisioning,
energizing, and empowering organizational members. Our view of CE leadership as special
context for transformational leadership is perhaps most in line with Kotter’s (2001) distinc-
tion between managers and leaders. Managers organize people to solve problems. Leaders
prepare organizations for change and help them to cope with it.
Corporate Entrepreneurship and Internationalization
A growing body of research seeks to empirically document CE activities as ?rms in-
ternationalize their operations (Zahra & Garvis, 2000). Given that internationalization is
a complex, challenging and costly process, the success of CE efforts can signi?cantly in-
?uence ?rm performance. Companies can no longer simply export their domestic business
practices to foreign markets and expect to reap the full bene?ts of internationalization.
Success in global markets requires companies to be entrepreneurial in deciding when, how,
and where to expand internationally. Internationalization, therefore, provides an important
opportunity to study CE activities and their links to performance among new ventures and
established companies alike.
As Figure 2 indicates, one way to organize this literature is to separate content from
process-related studies in new ventures vs. established companies. Content studies usually
focus on the types of strategies and their dimensions that ?rms use as they internationalize
their operations. Process studies examine howa ?rm’s internationalization strategies emerge
and change over time. These studies usually assume that the process of internationalization
in?uences a ?rm’s success as well as the types of entrepreneurial activities it pursues. Below,
we review key studies that have been conducted to date on each of the four cells in Figure 2.
New Venture Internationalization and Entrepreneurship
Recently, some researchers have begun to examine the different factors that spur success-
ful internationalization by new ventures (i.e., companies eight years or younger). Research
indicates that environmental, organizational and strategic factors combine to in?uence the
extent, direction, speed and process of new ventures’ internationalization (for a review, see
364 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Figure 2. A 2 ×2 typology of corporate entrepreneurship research.
Zahra & George, 2002). This research also suggests that new ventures gain access to re-
sources and knowledge, especially about technology, by internationalizing their operations
(Zahra, Ireland & Hitt, 2000). New ventures also can improve their competitive and ?nan-
cial performance as they enter international markets. The organizational learning theory
suggests that new ventures can gain new knowledge from its diverse internationalization
efforts. This knowledge, in turn, can promote the development of new organizational skills
and capabilities.
Entrepreneurial activities, especially those embodied in CE, pervade newventures and es-
tablished companies alike. Some newventures are more willing to take risks, introduce more
newproducts, and exhibit greater proactiveness than their rivals. Yet, some researchers tend
to equate the creation of a new global business with entrepreneurship. While this practice
is consistent with some research (Gartner, 1985), it does not capture those entrepreneurial
activities that occur within a new ?rm after its creation. Thus, this research ignores the
variety of post-internationalization entrepreneurial activities and their implications for or-
ganizational learning.
Cell 1 (content). This stream of research examines the content of new ventures’ in-
ternational activities and their potential effect on future performance. Research by Ovi-
att and McDougall is most representative of this stream of research (for a review, see
Oviatt & McDougall, 1999). These researchers have cataloged the entrepreneurial ac-
tivities that managers undertake to develop and grow global start-ups (Dana, Etemad &
Wright, 1999) The results of this research have provided a foundation for the proposition
that entrepreneurial activities that precede internationalization signi?cantly in?uence the
short-termsuccess of global start-ups. These studies have also examined the survival, growth
and pro?tability of international new ventures, even though these studies remain relatively
few in number.
Despite the growing research interest in understanding the factors that in?uence the
success of global start-ups, we could not locate any studies that have examined the en-
trepreneurial activities that start-ups undertake once they go international. Differences
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 365
across different types of global start-ups in their CE activities are also ignored. It is also
unclear if such differences, if they exist, vary across the stages of the ?rm’s international-
ization process. Thus, these studies have not captured the effect and type of organizational
learning (Zahra et al., 1999), as discussed earlier, on future CE activities among global
start-ups. Finally, studies that fall within Cell 1 have yet to link post-internationalization
entrepreneurial activities to the survival of global start-ups. One probable reason for this
gap is that the use of case studies and mail surveys has dominated this body of research,
making it dif?cult to document entrepreneurial activities or learning from these efforts and
link them directly to new venture performance.
Cell 2 (process). To date, only a few studies have tracked the evolution of the strategies
global start-up ?rms use or the entrepreneurial activities they undertake over time. Most of
these studies have investigated the process by which entrepreneurs assembled resources and
put their organizations together in their bid to internationalize their operations. Collectively,
these studies highlight the importance of the founder’s vision, connections (as commonly
manifested by social capital), and access to international networks.
However, researchers have not systematically examined the types of entrepreneurial ac-
tivities and their intensity as the ?rm globalizes its operations. Further, the effect of the
sequence of a ?rm’s strategic actions to internationalize its operations has not been linked
to entrepreneurial activities, learning or ?nancial performance. Changes in the modes of
entry and use of coordinative mechanisms to synchronize global strategies have not been
connected to the ?rm’s entrepreneurial activities, even though certain modes (e.g., acquisi-
tions) might be conducive to particular CE efforts (Schollhammer, 1982). Thus, it is unclear
how entrepreneurial activities in?uence the evolution, growth, or ?nancial performance of
global newventures. Also, howcompanies learn and develop newknowledge through inter-
nationalization remains unknown. Finally, researchers have not examined how the process
of internationalization varies across the four types of CE presented earlier (Covin & Miles,
1999).
Established Companies’ Internationalization and Entrepreneurship
More research has been published on the entrepreneurial activities within established
global companies than within newventures. The bulk of this research is descriptive in focus
and static in research design, as discussed next.
Cell 3 (content). Content-related studies have explored the types of CE activities in
MNCs. Ghoshal and Bartlett (1988) conducted one of the earliest studies, examining the
range and content of entrepreneurial activities that occur in MNCs. These researchers pro-
posed that such entrepreneurial activities are crucial for MNCs’ successful performance, a
factor that has encouraged other researchers to document the conditions under which CE
in?uences company performance. For example, Zahra and Garvis (2000) theorized and em-
pirically found that CE moderates the relationship between a ?rm’s internationalization and
its ?nancial performance. Speci?cally, their ?ndings show that established companies with
higher levels of CEwere able to achieve higher performance through international expansion
than those ?rms with lower CE scores. The results also indicated that established companies
366 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
that vigorously pursued CE were better positioned to leverage their international venturing
activities in ways that improved their ?nancial performance, thereby creating wealth for
their owners. Similarly, a recent study found that international venturing by medium-sized
US companies was positively related to a company’s future performance (Zahra, Neubaum
& Huse, 2000).
Despite the insights gained from recent studies examining content-related issues linking
CE and internationalization, they remain few in number and limited in focus. These studies
also lack clarity as to how ?rms actually leverage their skills in their international expan-
sion to achieve higher ?nancial performance. These studies have also failed to determine
the length and duration of the period where higher CE was conducive to a stronger relation-
ship between a ?rm’s internationalization and its ?nancial performance. Understanding the
length of the period where CEimproves a ?rm’s ?nancial performance can be useful in guid-
ing strategy-making processes, especially in investing in different CE ventures. Finally, the
learning implications of internationalization have not been analyzed in a systematic fashion.
Cell 4 (process). A related body of empirical research has explored the processes as-
sociated with CE in MNCs or established companies that are expanding internationally.
Three themes dominate this body of research. The ?rst centers on the role managers play in
stimulating and fostering CE in the MNC’s operations. Ghoshal and Bartlett (1994) aptly
described the nature of these roles and the factors that shape their substance and content,
proposingthat these roles varybymanagers’ organizational level withinthe formal structure.
While each role can enhance an MNC’s overall entrepreneurial activities, serious con?icts
might arise as different managers champion and support different initiatives at different
levels within the MNC. Therefore, coordination is essential in order to gain the full bene?ts
from these diverse managerial roles. The intuitive appeal of Ghoshal and Bartlett’s (1994)
conceptual scheme notwithstanding, there exists little empirical validation of their theoret-
ically derived role descriptions and how to ensure effective coordination among these roles
within an MNC. The implications of this coordination for CEand subsequent organizational
learning are also not well understood in this stream of research.
A second theme in past CE research is how MNCs leverage their international operations
in order to build and exploit a set of enduring competitive advantages. Some researchers
have examined and evaluated the contributions of MNCs’ subsidiaries to the creation and
later diffusion of innovations within their parent organizations (Bartlett & Ghoshal, 1989;
Birkinshaw, 1999; Birkinshaw & Hood, 1998; D’Cruz, 1986). Findings from this research
have improved our understanding of the antecedents and effects of subsidiary entrepreneur-
ship. Less is known, however, about the process by which CE activities actually unfold in
subsidiaries or how they are connected later to the MNCs’ competitive strategy or formal
business de?nition. This gap in the literature is puzzling especially because early empirical
work on CE has focused on these issues (e.g., Burgelman, 1983a, 1983b).
A third theme in prior research has investigated the potential effects of national cultures
in shaping CE in established companies. While this research does not examine CE in MNCs
per se, it has sought to clarify if and how national cultural variables in?uence CE efforts
within established companies. Research by Morris, Davis and Allen (1994) is illustrative
of this theme. It shows that certain organizational cultural variables (e.g., individualism)
can signi?cantly and positively in?uence CE in one country but can have the opposite (or
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 367
no) effect in other countries. The results highlight the contingent nature of the relationship
between organizational cultural variables and CE; this relationship depends on national
culture. These ?ndings are informative of the vital roles national cultural variables play in
in?uencing CE activities and determining a ?rm’s gains from them. Findings from this re-
search streamcan also guide managerial decision-making in different countries, determining
the nature, direction, and pace of CE and its implications for entrepreneurial activities.
Despite the important insights gained from process-related research on CE and inter-
nationalization (Cell 4), the bulk of this research has been descriptive and lacks a strong
theoretical foundation. The dominance of case studies is another source of concern because
these analyses that have not yielded original theoretical insights. Finally, reviewing the em-
pirical studies that have been published to date, it is hard to con?dently distinguish them
from mainstream international business research. Researchers who have pursued this re-
search stream have emphasized the internationalization process rather than entrepreneurial
issues.
Synthesis and Future Research Agenda
Clearly, the link between CE and internationalization is an emerging subject of great
interest to entrepreneurship, international business, and strategy scholars. Opportunities for
productive future research in this young but fast growing area are abundant. For scholars
interested in content-related issues (Cells 1 and 3 in Figure 2), an important challenge is to
examine and document the types of entrepreneurial activities in established companies, be
it MNCs or otherwise. Researchers would bene?t also from applying and re?ning existing
classi?cations or typologies of CE activities (Morris, 1998; Schollhammer, 1982). They
would bene?t also from examining a ?rm’s entrepreneurial orientation (Lumpkin & Dess,
1996) as well as its actual behavior. Using longitudinal research designs, future researchers
can also provide a strong basis to identify different CE activities as they unfold over time.
This research can also help ?ll several gaps in the literature on the effect of national and
corporate cultures in promoting different types of CE and how they in?uence a ?rm’s gains
from pursuing different CE activities.
Focusing on process-related issues (Cells 2 and 4), we believe future research can also
be informative in showing how ?rms develop effective structures and systems that spur CE
in their international operations. Understanding these structures and systems is essential to
tracking the processes by which CE activities come into existence within international oper-
ations in new ventures and established companies alike. These systems and structures also
in?uence organizational learning. The various strategies CE champions employ to promote
their initiatives within their companies’ international operations is another issue worthy of
future study. Research is necessary also to document how ?rms institutionalize their dif-
ferent CE efforts. Toward this end, future researchers need to examine how the processes
used to institutionalize CE in a ?rm’s international operations might contribute to organiza-
tional learning and acquiring new knowledge. CE institutionalization demands sensitivity
to several organizational, political, and strategic issues. It also requires capturing, sharing
and integrating the knowledge the ?rm might have gained in its international CE activities.
The process by which the ?rmcaptures this knowledge can be useful in crystallizing and in-
tegrating the ?rm’s learning. Following the learning theory, knowledge integration ensures
368 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
that internationalization enhances the ?rm’s learning (Zahra et al., 2000) and subsequent
?nancial performance.
Future research should establish whether ?rms with different CE types (Miles & Snow,
1999) pursue different internationalization strategies that link these differences to organi-
zational performance. Also, researchers should document the effect of CE types on orga-
nizational learning as a consequent of internationalization. To do so, researchers need to
consider the various types of learning discussed earlier (Zahra et al., 1999), and study the
effect of the intensity of CE activities and their types on the content, speed and depth of
organizational learning (Zahra, Ireland & Hitt, 2000). Finally, given the potential dynamic
interplay between CE and organizational learning, future empirical research should explore
the effect of prior learning on changes in CE types and how these changes unfold over time.
Examining the issues above can signi?cantly improve our understanding of potential
relationships among CE, internationalization, and performance. In an environment where
globalization is the norm, executives and scholars alike can gain rich insights into the
dynamic interplay between the internationalization process and CE as a way of creating
newcompetencies that enable ?rms toenhance ?rmperformance. At the core of this dynamic
interplay lies the ?rm’s ability to create and gain new knowledge that can be combined or
deployed to renew existing skills while creating and honing new ones (Zahra et al., 1999).
The development and acquisition of skills promotes strategic renewal, a process that usually
demands creativity. This dynamic renewal process is at the heart of entrepreneurship in both
young and established companies.
Conclusion
The dynamic interplay between a ?rm’s CE and internationalization represents an im-
portant research opportunity. Managers and researchers should give attention to the ?rm’s
entrepreneurial activities that shape these ?rms’ product portfolios and differentiate them
from the competition. While we are encouraged by the growing interest in these issues, this
review shows that scholarship has not kept up with managerial practice, thereby missing
a major opportunity to inform future theory building on the changing foundations of com-
petitive advantages in global markets. The research issues outlined herein offer a roadmap
for fruitful inquiry into the potentially rich contributions entrepreneurship can make to
a company’s successful internationalization and vice versa and the implications of these
variables for organizational learning.
Corporate Entrepreneurship and Performance:
Reassessing the Dependent Variable
CE in today’s global and information economy has important implications for the de-
velopment of both descriptive and normative theory. As such, the inclusion of outcome
constructs and measures that are both reliable and valid is essential for building a coher-
ent body of research that has relevance for both academics and practitioners. Developing
normative theory of CE and the development of auxiliary measurement theory cannot be
divorced from one another. As noted by Blalock (1982), if a poor ?t is observed (in, for
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 369
example, CE constructs and performance), we are unable to ascertain if the fault lies with
the substantive theory, the auxiliary measurement theory, or both. Thus, in addition to the
need for reliable and valid measures of CE constructs, the same rigorous criteria must be
applied to performance indicators.
In this section, we begin by discussing the need to include multiple measures of the eco-
nomic and ?nancial outcomes of CE initiatives. Then, we address the value of incorporating
a stakeholder perspective, i.e., moving beyond the narrow use of economic and ?nancial
indicators. Drawing on Kaplan and Norton’s (1992) concept of the “balanced scorecard,”
we propose that the use of stakeholder analysis need not implicitly involve tradeoffs among
the various stakeholders, but rather that symbiotic relationships may exist and that stake-
holder groups can be satis?ed in an interdependent manner. In the closing section, we
focus on the need to emphasize additional forms of capital—human, social, intellectual—
in assessing the outcomes of CE endeavors. We posit that concepts such as real options
and learning platforms can provide useful insights on the potential bene?ts of CE initia-
tives that may not be evident in the short-term. One of the most important consequences
of CE is learning that enables the ?rm to develop new knowledge that renews its skills
and capabilities. Consequently, we believe that learning should be considered an outcome
of CE.
Economic and Financial Measures
CE research must include multiple measures of economic outcomes such as pro?tability
and sales growth to capture the inherent tradeoffs between ef?ciency and effectiveness,
respectively (Hofer &Schendel, 1978). Furthermore, the desired outcomes of CE initiatives
such as investment in R&D, new product development, or re-tooling a production facility
with expensive (and risky) new technology may not be realized for several accounting
periods. For example, in the biotechnology industry, it can take approximately seven years
to go from the initial new drug application to bringing a new product to market—typically
at costs in excess of US$ 100 million (Folta, Amburgey & Janney, 1997). Zahra and Covin
(1995) and others have argued that the economic bene?ts of CE efforts may not be readily
apparent in the short run, but take several years to come to fruition. In conducting research
on the relationship between CE initiatives and performance (especially activities involving
the expenditures of signi?cant ?nancial and non?nancial resources), researchers must make
judicial use of lag effects to incorporate the temporal nature of their subject of inquiry.
CE research can also bene?t from the inclusion of more sophisticated measures of ?nan-
cial performance. Economic value added (EVA) and market value added (MVA) provide
additional insights because they recognize the cost of capital and the inherent riskiness of
a ?rm’s operations (Lehn & Makhija, 1996). MVA, for example, provides an indicator of
the stock market’s estimate of the net present value of a ?rm’s past and future investment
projects; it would likely provide a measure of future returns for CE endeavors. Such indica-
tors are not, of course, without controversy. Gary Hamel criticized EVA as a performance
indicator because it onlymeasures returns inexcess of a ?rm’s cost of capital. Instead, Hamel
suggests a measure that he believes better captures the dynamics of corporate performance,
i.e., “a company’s current share of total market capitalization of its relevant competitive
domain with its share a decade ago” (Hamel, 1997: 75). This perspective suggests that
370 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
on-going CE activities aimed at keeping the organization on the cutting edge in terms
of proactively seeking new opportunities may make a more lasting contribution to value
creation than an occasional attempt to innovate, introduce or adopt entrepreneurial ideas.
Clearly, research can bene?t from the inclusion of both accounting and market measures of
?nancial performance.
Incorporating Stakeholder Perspectives
Conceptualizing and operationalizing the performance of the “effectiveness” construct
is, of course, a highly problematic issue in many research domains. However, it presents
particular challenges in the domain of CE. When ?rms undertake CE initiatives, how can
one tell if it augmented (or detracted from) the organization’s effectiveness? As Atkinson,
Waterhouse and Wells (1997), Freeman and McVea (2001) and others have noted, the mod-
ern organization is a complex nexus of contracts, both explicit and implicit, that speci?es
relationships and involves bargaining among multiple stakeholder groups. Atkinson et al.
(1997) identi?ed two groups of stakeholders: environmental stakeholders who de?ne the
?rm’s external environment (customers, owners, and the community-at-large) and process
stakeholders (employees and suppliers) who work “within the environment de?ned by the
external stakeholders to plan, design, implement, and operate the processes that make and
deliver the company’s products to its customers” (1997: 27). Recognizing the inherent
con?icts among an organization’s external and internal stakeholders, Hall (1987) has pro-
posed a “contradiction model” of organization effectiveness in which ?rms face con?icts
among multiple and con?icting environmental constraints, multiple and con?icting goals,
and multiple and con?icting time frames.
To provide integration of the many diverse issues that ?rms face in assessing their ef-
fectiveness, Kaplan and Norton (1992) have developed the “balanced scorecard” concept.
It includes a set of measures that provide managers with a quick but comprehensive view
of their business. It complements the ?nancial indicators that re?ect the results of actions
already taken with indicators of operational measures of customer satisfaction, internal
processes, and the organization’s innovation and improvement activities. The latter are
considered operational measures that can drive future performance.
Such a concept has important implications for assessing the outcomes of CE initiatives.
Although CE often revolves around innovation and new venture creation, the balanced
scorecard approach provides a reminder that these activities must satisfy several criteria
that are weighted differently by different stakeholders.
An underlying tenet of the balanced scorecard approach is the salience of multiple forms
of capital to an organization. Clearly, managers should be concerned about enhancing their
?rm’s stock of ?nancial resources. However, in today’s knowledge economy, human, so-
cial, and customer capital take on an increasing importance. For example, both scholars
(e.g., Coff, 1997; Nahapiet & Ghoshal, 1998) as well as writers in the popular press (e.g.,
Edvinsson & Malone, 1997; Munk, 1998; Stewart, 1997) have argued that human capital is
the critical, scarce resource and the key to value creation in the information age. Further-
more, Porter (1985) has articulated the need for organizations to view their ?rm as part of
an expanded value chain consisting of themselves, suppliers, customers, and alliance part-
ners. Such a perspective reinforces the importance of the role of social capital both within
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 371
organizations as well as between a focal organization and external stakeholders (Dyer &
Singh, 1998). A shortcoming of the balanced scorecard is ignoring the learning outcomes
of the various CE types, discussed earlier in this paper. This learning requires multiple types
of capital, as discussed next.
Recognizing the Increasing Role of Multiple Forms of Capital in Today’s Economy
We argue that many of the performance constructs developed in the strategic management
literature were originally created within the context of existing ?rms as well as at a time
when physical, ?nancial, and labor resources were a ?rm’s key resources for attaining
advantages. And, although many of the measures originally used in the CE literature may
remainviable for newventures, suchmeasures maybecome less applicable for ?rms that rely
primarily on human, social, and intellectual capital to create advantages. Therefore, future
CE researchers should give greater attention to knowledge-based resources and learning
outcomes.
Human capital focuses primarily on capabilities, knowledge, skills, and experience, all
of which are embodied in and inseparable from the individual. Intellectual capital refers
“to the knowledge and knowing capabilities of a social collectivity, such as an organization,
intellectual community, or professional practice” (Nahapiet & Ghoshal, 1998: 245). Social
capital is “broadly de?ned as an asset that inheres in social relations and networks” (Leana
& Van Buren, 1998: 538). We believe that as the level of human, social, and intellectual
capital inherent in a new venture increases, different perspectives on the outcomes of CE
become more important. Such intangible resources or “invisible assets” (Itami & Roehl,
1987) are especially salient in newer ?rms in emerging industries. Assembling, deploying
and leveraging these diverse types of capital create opportunities for knowledge creation
and exploitation within CE activities.
In addition to the increasing importance of human, intellectual, and social capital in
our discussion of CE, we draw upon the real options literature (Bowman & Hurry, 1993;
McDonald & Siegel, 1986; Myers, 1977). A real option is an investment in which the
purchaser obtains the right, but not the obligation, to acquire (or divest) an investment
at a later date, at contracted terms (McGrath, 1999). The literature suggests that ?rms
can derive an economic value by investing incrementally and delaying a full investment
commitment until more information about the decision is known (Dixit &Pindyck, 1994). If
the investment decisionfares poorly, losses are cappedat the amount of the initial investment;
at the same time the ?rm retains the full “upside potential” of the investment decision. This
insight encourages ?rms to place many “small bets” on promising opportunities, pouring
funds then into the most promising opportunities. Real options create ?exibility for ?rms;
freed from having to extricate themselves from much larger commitments, ?rms can shift
funds from a given opportunity to a more promising one. Using this logic, companies also
see far downside risks associated with CE activities. Consequently, they are more willing
to experiment, learn and develop new knowledge.
We suggest that real options theory can shed some new light on the outcomes of CE
initiatives. For example, as ?rms make platform investments in order to establish a new
technology or early foothold in new markets, they maintain the ability to expand rapidly if
conditions warrant. These investments also can enhance the learning consequences of CE.
372 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
At the same time, ?rms embedded in wider networks tend to use the informal relations to fa-
cilitate innovation (Starr &MacMillan, 1990), while they enjoy a more accurate assessment
of environmental conditions. Therefore, they are able to proactively pursue opportunities
more quickly than ?rms outside of their network. Future CE research should enhance our
understanding of how ?rms employ such intangible forms of capital to create and exploit
new opportunities. Additionally, platforms for learning (Grenadier & Weiss, 1997) can
moderate the relationship between CE initiatives and company performance. For example,
endeavors at innovative product market development—even if unsuccessful at one point in
time—may provide substantial economic bene?ts at a later time if it enables the ?rm to
recombine resources effectively (Kogut & Zander, 1992). Following learning theory, this
process can improve learning and knowledge creation within CE activities. Clearly, future
CE research could bene?t from using longitudinal time lagged variables.
The operationalization of performance constructs in CE research could be revised to
recognize the emergence of the importance of intangible assets in the economy. The in-
clusion of indicators to re?ect a new venture’s level of intellectual capital should require
much more ?ne-grained measures than those proposed by Edvinsson and Malone (1997) in
their path-breaking book, Intellectual Capital. Rather than rely on measures such as “new
channel development investment,” “education unique to noncompany-based employees,”
and “employee competence and development investment” (1997: 245), we would propose
including indicators of “the knowledge and knowing capabilities” (Nahapiet & Ghoshal,
1998) that enable an organization to exploit emerging opportunities. This knowledge should
be assessed within a ?rm’s competitive context as a means of providing sustainable com-
petitive advantages, a proposition that is consistent with learning theory. This would require
the perspective of both an organization’s present product-market-technology and its antic-
ipated endeavors. The question could be posed: How do such intangible resources provide
leverage for future entrepreneurial endeavors? The ?rm’s social capital—a viable outcome
as well as antecedent to CE endeavors—could be assessed, broadly speaking, by its network
of relationships that have the potential for providing it with valuable tangible and intangible
resources (Adler & Kwon, 2002).
CE research could build on prior network research that has investigated such substan-
tive issues as alliance networks, executive friendship ties, and corporate director interlocks
(e.g., Geletkanycz & Hambrick, 1997; Gulati, 1995; Westphal & Zajac, 1997). Such net-
work ties—both strong and weak—would serve to mitigate the extent of risk taking that
is inherent in CE initiatives. For example, ?rms in deeply embedded networks may better
bene?t from their strategic initiatives via superior access to ?nancial and knowledge re-
sources. This enables ?rms to combine resources in a more effective and ef?cient manner
as well as enhance their potential for developing superior learning platforms to exploit future
product-market opportunities. Thus, not only would the potential downside or risk taking
associated with CE efforts be mitigated, but also the positive economic bene?ts of proactive
and innovative behaviors would be released. Following the learning theory, such outcomes
might include rapid, deep and broad learning of new technologies and skills. Such research
would bene?t from the application of “?ne-grained” methodologies (Harrigan, 1983) that
would enable one to identify unfolding, emergent processes. This research would help to
further improve our understanding of the role of organizational learning as a consequence
of the various CE types ?rms might pursue.
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 373
Conclusion
In this paper, we have identi?ed four promising research avenues in CE. While other
issues are worthy of analysis, we believe the four issues we examined have important
implications for organizational learning and the creation of new knowledge. Collectively,
these issues help us open the “black box” that pervades the literature on the relationship
between CE and performance. These issues also help us to recognize the importance of CE
for knowledge creation and exploitation as well as learning. We welcome dialogue, debate,
and critique with the goal of enhancing research in an area that holds such promise for rich
descriptive and normative theory.
Acknowledgments
The ideas in this paper were initially developed for a panel that was presented at the
2000 Strategic Management Society Meetings in Vancouver, British Columbia, Canada.
We thank the reviewers and editors of the Journal of Management as well as Tom Lumpkin,
Doug Lyon, and Bruce Skaggs for their helpful comments.
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Gregory G. Dess is the Andrew Cecil Endowed Chair in Management at the Univer-
sity of Texas at Dallas. He has published numerous articles in leading academic and
practitioner-oriented journals in strategic management, organization theory, knowledge
management, and related topics. He currently serves on the editorial board of Strategic
Management Journal, Journal of Business Venturing, Journal of Business Research, and
Organizational Dynamics. Gregwas one of the charter members of the Academyof Manage-
ment Journals’ Hall of Fame and he received his Ph.D. from the University of Washington.
R. Duane Ireland holds the W. David Robbins Chair in Strategic Management in the
Robins School of Business, University of Richmond. His research is concerned with strate-
gic alliances, strategic entrepreneurship, and corporate entrepreneurship. In addition to the
Journal of Management, Duane’s articles have appeared in the Academy of Management
Journal, Academy of Management Review, Academy of Management Executive, Strategic
Management Journal, Administrative Science Quarterly, Decision Sciences, Human Rela-
tions, Journal of Management Studies, and British Journal of Management, among others.
He has written several textbooks and edited scholarly books. His work has received awards
for best papers from the Academy of Management Journal (2000) and Academy of Man-
agement Executive (1999). Duane has received awards for excellence in terms of teaching
and service.
Shaker A. Zahra is Paul T. Babson Distinguished Professor in Entrepreneurship in Bab-
son College. His research covers corporate, international, and technological entrepreneur-
ship. Shaker’s articles have appeared in the Academy of Management Journal, Academy of
Management Review, Academy of Management Executive, Strategic Management Journal,
Journal of Management, Journal of Business Venturing, Journal of Management Studies,
Entrepreneurship: Theory and Practice, Decision Sciences, Information Systems Research,
amongothers. His researchhas receivedseveral awards includingbest papers inthe Academy
of Management Journal, Journal of Management, and Entrepreneurship: Theory and Prac-
tice. His teaching and service have also received awards of excellence.
378 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Steven W. Floyd is the Cizik Chair in Strategic Management, Technology and Manufac-
turing, and an Associate Professor in Strategic Management at the School of Business,
University of Connecticut. His recent research focuses on the role of social context in the
development of strategic initiatives, the contributions of middle-level management to corpo-
rate entrepreneurship and strategy-making and the organizational processes associated with
strategic renewal. Articles on these and other topics have been published in the Academy
of Management Review, Academy of Management Journal, Strategic Management Journal,
Journal of Management, Entrepreneurship: Theory and Practice, and Journal of Manage-
ment Studies.
Jay J. Janney is an Assistant Professor of Management at the University of Dayton. His
research interests include the integration of strategic management and entrepreneurship,
real options, and the resource-based view of the ?rm. His work has appeared in Business
Horizons, Journal of Business Ethics, and Journal of Business Venturing (in press), among
others. Jay earned his Ph.D. from the University of Kentucky, and previously served on the
faculty of Purdue University.
Peter J. Lane is an Associate Professor of Management at Arizona State University’s
College of Business. His research on corporate strategy, strategic processes, and inter?rm
collaboration has been published in the Academy of Management Review, Academy of
Management Executive, Strategic Management Journal, and Human Relations. His current
research focuses on socio-cognitive in?uence on strategy innovation both within and across
organizations.
doc_465762470.pdf
Abstract about emerging issues in corporate entrepreneurship.
Journal of Management 2003 29(3) 351–378
Emerging Issues in Corporate Entrepreneurship
Gregory G. Dess
?
School of Management, University of Texas at Dallas, Richardson, TX 75083-0688, USA
R. Duane Ireland
Department of Management Systems, Robins School of Business, University of Richmond,
Richmond, VA 23173, USA
Shaker A. Zahra
Entrepreneurship Division, Babson College, Babson Park, MA 02157-0310, USA
Steven W. Floyd
School of Business Administration, The University of Connecticut,
368 Fair?eld Road, Storrs, CT 06269, USA
Jay J. Janney
Department of Management and Marketing, School of Business Administration,
University of Dayton, 300 College Park, Dayton, OH 95469-2271, USA
Peter J. Lane
Department of Management, College of Business, Arizona State University,
P.O. Box 874006, Tempe, AZ 85287-4006, USA
Research on corporate entrepreneurship (CE) has grown rapidly over the past decade. In
this article, we identify four major issues scholars can pursue to further our understanding
about CE. The issues we explore include various forms of CE (e.g., sustained regeneration,
domain rede?nition) and their implications for organizational learning; the role of leadership
and social exchange in the CE process; and, key research opportunities relevant to CE in
an international context. To address the latter issue, we propose a typology that separates
content from process-related studies and new ventures vs. established companies. We close
with a reassessment of the outcomes in CE research, which becomes particularly salient with
the increasing importance of social, human, and intellectual capital in creating competitive
advantages and wealth in today’s knowledge economy. Throughout the article, we use the
organizational learning theory as a means of integrating our discussion and highlighting the
potential contributions of CE to knowledge creation and effective exploitation.
© 2003 Elsevier Science Inc. All rights reserved.
?
Corresponding author. Tel.: +1-972-883-2703; fax: +1-972-883-2799.
E-mail addresses: [email protected] (G.G. Dess), [email protected] (R.D. Ireland),
[email protected] (S.A. Zahra), [email protected] (S.W. Floyd), [email protected]
(J.J. Janney), [email protected] (P.J. Lane).
0149-2063/03/$ – see front matter © 2003 Elsevier Science Inc. All rights reserved.
doi:10.1016/S0149-2063(03)00015-1
352 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Both scholars and practitioners remain interested in studying and better understanding
corporate entrepreneurship (CE) (Ireland, Kuratko & Covin, 2002). CE has been viewed
as the driver of new businesses within on-going enterprises as achieved through inter-
nal innovation, joint ventures or acquisitions; strategic renewal (Guth & Ginsberg, 1990;
Hitt, Nixon, Hoskisson &Kockhar, 1999); product, process, and administrative innovations
(Covin & Miles, 1999); diversi?cation (Burgelman, 1991); and processes through which
individuals’ ideas are transformed into collective actions through the management of un-
certainties (Chung & Gibbons, 1997). Sharma and Chrisman de?ne CE as “. . . the process
whereby an individual or a group of individuals, in association with an existing organiza-
tion, create a new organization, or instigate renewal or innovation within that organization”
(1999: 18).
Given its importance to corporate vitality and wealth generation in today’s global econ-
omy, CE has generated considerable attention in research. This paper identi?es emerging
issues in CE and suggests research questions for future research. Our analysis highlights
the role of CE in inducing and cultivating organizational learning, which is a key source
of new knowledge that could be used to develop organizational capabilities. Learning is at
the heart of the strategic renewal process that enables the ?rm to adapt and respond to chal-
lenges in their newmarkets (Zahra, Nielsen &Bogner, 1999). Given the various types of CE
(Covin & Miles, 1999), our discussion applies learning theory to show how CE in domestic
and international operations creates new knowledge. This discussion also gives attention to
the role of leadership in stimulating organizational learning within CE and harvesting new
knowledge. Finally, recognizing the vital importance of learning for strategic renewal, we
propose that future researchers should incorporate learning among the key outcomes of CE
activities.
The organizational learning theory suggests that when companies are exposed to new
and diverse stimuli, the stage is set for questioning existing assumptions and beliefs. This
process also induces experimentation, which fosters learning by doing. Learning means the
acquisition of information and knowledge that is new for a ?rm. This learning is impor-
tant for the creation and exploitation of the knowledge necessary for product, process and
organizational innovation. Therefore, throughout this article we highlight the importance
of CE activities for promoting organizational learning and developing new knowledge that
generates advantages.
Our analysis of CEcovers four major issues. The ?rst is howknowledge is created through
four types of CE—sustained regeneration, organizational rejuvenation, strategic renewal,
and domain rede?nition. Mediated by two forms of organizational learning, these CE types
lead to three forms of new knowledge that are then used differently within the ?rm.
Next, we identify the critical roles and social exchanges that comprise the CE process.
This analysis shows how entrepreneurial roles and information exchanges across multiple
levels of management promote the kinds of organizational learning required by the four
types of CE. Based on this perspective, we de?ne entrepreneurial leadership as establishing
the conditions conducive to role performance and social exchange. These conditions include
organization trust, consensus on dominant logic, and appropriate organizational controls.
Third, we address the dynamic interplay between CE and internationalization. We use
a typology that separates content from CE process-related studies in new ventures vs.
established companies. In addition to reviewing and synthesizing studies conducted in each
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 353
cell, we highlight major ?ndings fromearlier researchineacharea, identifygaps, andsuggest
promising avenues for future CE research. The discussion draws attention to knowledge
creation and exploitation as important objectives within CE.
Fourth, we address the outcome variables in CE research. We provide examples of how
performance indicators must re?ect the temporal nature of CE. In addition, we draw on
such literatures as knowledge management, options theory, and entrepreneurial failure to
discuss how the increasing importance of social, human, and intellectual capital necessi-
tates new conceptualizations of performance. This discussion concludes by highlighting
the importance of learning and knowledge creation as dependent variables in future CE
research.
CE, Organizational Learning, and Knowledge
Deliberate and intentional in nature, CEis concerned with various forms of newness (e.g.,
organizational renewal, innovation, and establishing newventures) and has its consequences
for organizational survival, growth, and performance (Kazanjian, Drazin & Glynn, 2001).
Increasingly, CEis foundtoaffect ?rmperformance (Zahra &Covin, 1995; Zahra &Nielsen,
2002). From a resource-based perspective, CE is a key means of accumulating, converting,
and leveraging resources for competitive purposes (Floyd & Wooldridge, 1999) such as
developing and using product, process, and administrative innovations to rejuvenate and
rede?ne the ?rm and its markets or industries (Covin & Miles, 1999).
An intangible resource vital to 21st century organizations (Hitt &Ireland, 2002; Ireland &
Hitt, 1999), knowledge can be created through effective CE (Kuratko, Ireland
& Hornsby, 2001). In fact, Zahra et al. (1999: 169) argue that, “. . . formal and informal CE
activities can enrich a company’s performance by creating new knowledge that becomes a
foundation for building newcompetencies or revitalizing existing ones.” Embedded primar-
ily within the ?rm’s human capital (Lepak & Snell, 1999), knowledge is information that
is laden with experience, judgment, intuition, and value (Nonaka & Takeuchi, 1995). Both
explicit and tacit in nature, knowledge is mutable and can be thought of as true justi?ed
belief (von Grogh, Ichijo & Nonaka, 2000).
Given its centrality to forming competitive advantages that often are the path the ?rm
travels to outperformits rivals (Coff, 2002; Grant, 1996), today’s ?rms bene?t by facilitating
the development and management of knowledge stocks and ?ows between people and
organizational units (Ireland, Hitt, Camp & Sexton, 2001). We argue that through effective
CE, ?rms develop knowledge and use it as a continuous source of innovations to outperform
competitors (Kazanjian et al., 2001). In this context, CE is a knowledge enabler as it forms
and subsequently uses or applies knowledge (von Grogh et al., 2000)—knowledge that at
its best, is valuable, new, unique, and competitively relevant (Zahra et al., 1999).
According to Zahra et al. (1999: 177), “CE activities can lead to three different types
of new knowledge.” CE’s multidimensionality (Covin & Miles, 1999) complicates these
relationships. Moreover, we believe that organizational learning mediates the relationships
between different CE types and different kinds of knowledge. In turn, the different types of
knowledge (i.e., technical, integrative, and exploitative) should be used differently for the
organization to gain maximum competitive bene?t from them.
354 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Figure 1. Relationships among CE strategy, organizational learning, knowledge and implementation.
We explore these issues through a series of proposed relationships (see Figure 1) that are
drawn primarily from the entrepreneurship and strategic management literatures’ theory
and empirical results. As stated above, the general expectation of relationships among
Figure 1’s variables is established (Covin & Miles, 1999; Zahra et al., 1999). However, the
relationships we propose between different types of CE and new knowledge, as moderated
by two types of organizational learning, have not been speci?ed. As such, the expectations
depicted in Figure 1 are untested and represent fertile ground for entrepreneurship and
strategic management researchers.
Forms of Corporate Entrepreneurship
Covin and Miles (1999) conceptualize four types of CE, with each one oriented to either
rejuvenating or intentionally rede?ning the organization or establishing innovation. Struc-
turally complex ?rms such as those engaging in product and/or market diversi?cation may
simultaneously use one of more or even all four CE forms in different parts of the company.
Concerned primarily with continuous innovations, sustained regeneration is the most
frequently recognized CE form. Here, the ?rm develops cultures, processes, and structures
to support and encourage a continuous stream of new product introductions in its current
markets as well as entries with existing products into new markets (Covin & Miles, 1999).
Firms are aware of product life cycles and often frame product strategies around the compet-
itive expectations associated with them. Commonly viewed as competitors who understand
an industry’s accepted rules of engagement (Porter, 1980), ?rms involved with CE commit
to the importance of learning and adapting while actively competing against rivals. Demon-
strating an ability to introduce new products and enter new markets, Arm and Hammer
uses sustained regeneration as it creatively works with baking soda, its core product. Ac-
cording to Covin and Miles (1999: 51): “. . . through the development and introduction of
baking soda-based toothpaste and deodorizing products, Armand Hammer has been able to
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 355
capitalize on emerging product-market opportunities unseen or underappreciated by com-
petitors in its core industry segment.”
The ?rm’s internal processes, structures, and capabilities are the targets of oganizational
rejuvenation. Concerned primarily with improving the ?rm’s ability to execute strategies,
organizational rejuvenation often entails changes to value chain activities. Demonstrating
process and administrative innovations rather than product innovations, organizational reju-
venation shows that ?rms can become more entrepreneurial through processes and structures
as well as by introducing newproduct and/or entering newmarkets with existing products. In
recent years, GE rejuvenated itself by developing and using what others sometimes viewed
as radical administrative routines and operating policies to support them. For the most part,
CEefforts oriented to organizational rejuvenation are framed around support activities (e.g.,
procurement and human resource management) rather than primary (e.g., inbound logistics
and operations) activities (Porter, 1980). The most successful organizational rejuvenation
efforts renew one or more major aspects of the ?rm’s operations.
Strategic renewal ?nds the ?rm seeking to change how it competes. Thus, the nature of
rivalry with competitors is altered as the ?rm concentrates on renewing the strategies it uses
to successfully align itself with its external environment. With organizational rejuvenation,
the organization itself is the focus of CEefforts. This is in stark contrast to strategic renewal’s
intention of positively mediating the “organization-environment interface” (Covin &Miles,
1999: 52). At its best, CE as strategic renewal allows the ?rm to more pro?tably exploit
product-market opportunities. Often, this outcome is achieved when the ?rm repositions
itself in ways that allow simultaneous exploitation of current competitive advantages and
explorationfor advantages that will leadtofuture success (Ireland, Hitt &Vaidyanath, 2002).
Harley-Davidson’s turnaround demonstrates the use of this CEform. Cisco Systems’ current
attempt to renewitself through internal growth rather than acquisitions highlights this ?rm’s
effort toat least partiallyalter howit competes, givenchanges inits competitive environment.
Through domain rede?nition, the ?rm proactively seeks to create a new product market
position that competitors haven’t recognized or have underserved (Covin & Miles, 1999).
The focus here is exploring for what is possible rather than exploiting what is currently
available. The commitment to reenergize the ?rmby rede?ning its domain is also intended to
establish ?rst mover advantages. As the ?rst ?rmto sell an offering in a newproduct category
(Golder & Tellis, 1993), the company rede?ning its domain is proactive and demonstrates
a strong entrepreneurial orientation (Lumpkin & Dess, 1996). Sony’s introduction of the
innovative Walkman illustrates ?rst mover actions that created a new product arena.
Types of Organizational Learning
Organizational learning is a capability allowing ?rms to create knowledge as the source
of improved performance (Hitt & Ireland, 2000). Thus, organizational learning mediates or
facilitates the relationships between CE and the development of new types of knowledge.
Organizational learning occurs through several avenues including action (called learning
bydoing) (Lieberman, 1984) andmemory (the constant repetitionof anorganization’s activi-
ties) (Nelson&Winter, 1982). Twomajor types of learning—acquisitive andexperimental—
occur as organizations using one or more types of CE learn by doing and through memory,
among other avenues (Zahra et al., 1999) (see Figure 1).
356 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Acquisitive learning takes place when the ?rm gains access to and subsequently in-
ternalizes preexisting knowledge from its external environment. Acquisition knowledge
is grounded in public knowledge—that is, knowledge that resides in the public domain
(Matusik, 2002). Because of this, acquisitive knowledge is rarely the source of uniqueness
?rms require to form sustainable competitive advantages (Leonard-Barton, 1995). But, the
absence of access to publicly available knowledge and learning places the ?rm at a com-
petitive disadvantage relative to rivals (Zahra et al., 1999) and reduces its ability to use CE
as the path to creating a new organization or to engage in strategic renewal or successful
innovation.
Experimental learning occurs inside the ?rm and generates knowledge that is distinctive
to it. Private knowledge, which includes items such as the ?rm’s unique routines, processes,
trade secrets, and documentation (Matusik, 2002), is the basis of experimental learning. Be-
cause it is the product of ?rm-speci?c knowledge that may be valuable, rare, and imperfectly
imitable, competitive advantages evolving from experimental learning tend to be more sus-
tainable than are those that are products of acquisitive learning. Thus, acquisitive learning
represents a necessary but insuf?cient condition for competitive success as measured by
the ?rm’s ability to develop new knowledge. Moreover, the emphasis on innovation as a
source of successful competition in the global economy, in turn, leads to a premium on
experimental learning relative to acquisitive learning for ?rms engaging in CE (Zahra &
Garvis, 2000).
As shown in Figure 1, we argue that the different CE types have different relationships
with the two types of organizational learning. In turn, three types of new knowledge are
products of the interactions among CE forms and the two organizational learning types.
New Knowledge and its Implementation
Traveling through the organization’s ability to learn, CE leads to three types of new
knowledge. Technical knowledge, concerned with insights about the properties of speci?c
activities, is vital to sustained regeneration and results primarily from acquisitive learning.
Specialized in nature, technical knowledge helps the ?rmre?ne current products and extend
product lines, often through process innovations. From an ef?ciency perspective, technical
knowledge is vital to the ?rm’s efforts to create more value by how it completes primary
and support activities in its value chain(s). However, this type of knowledge is rarely the
foundation for sustainable competitive advantages.
Organizational learning also leads to integrative knowledge. Firm-speci?c and predom-
inately tacit in nature, it is a product of how the ?rm has learned to creatively and uniquely
combine its idiosyncratic resources and capabilities to create value. Grounded in memory,
history, and organizational routines, employees creating integrative knowledge do so by
recombining and extending the ?rm’s resources and capabilities in manners that demon-
strate Schumpeter’s (1934) classic conceptualization of an entrepreneur (Zahra et al., 1999).
Thus, integrative knowledge results primarily from the combined, relatively indirect effects
of acquisitive and experimental learning (Figure 1’s dotted lines showthe proposed indirect
effects).
Exploitative knowledge accumulates as the ?rm learns how to exploit its resources.
Thus, exploitative knowledge expands as the ?rm learns how to creatively ?nd unique,
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 357
value-creating ways to exploit its technical and integrative knowledge sets. This learning
type is oriented to ?nding new ways of commercializing the ?rm’s goods or services that
evolved from effective applications of its technical and integrative knowledge.
As shown in Figure 1, we believe that a different emphasis is required for the ?rm to
gain maximum bene?t from the new knowledge components resulting from its use of CE as
mediated by organizational learning. When using technical knowledge, the implementation
focus is on leveraging knowledge. In contrast, recombining and extending knowledge is
the outcome sought when the ?rm applies its new integrative knowledge. Lastly, the ?rm
concentrates on importing new technical and integrative knowledge into value-creating
primary and support activities when trying to effectively use its newexploitative knowledge.
Research Questions
We believe that relationships shown in Figure 1 should be tested empirically. Testing
these relationships would require different speci?cations among the variables, given the
proposed direct and indirect effects.
Our viewis that indirect relationships between variables are not as strong as are the direct
relationships. For example, sustained regeneration’s relationship with acquisitive learning
is stronger than is its relationship with experimental learning.
Recall that this type of CE ?nds the ?rm trying to learn how to apply its valuable
innovation-producing capabilities in ways that will result in new products being intro-
duced into current markets or existing products being introduced into new markets. In both
instances, externally-based acquisitive knowledge can be used to help improve the orga-
nization as it learns how to continue applying existing advantages in value-creating ways.
However, we also argue that sustained regeneration has an indirect relationship with ex-
perimental learning in that new products are unlikely to be produced without effort being
devoted to developing and then using valuable, idiosyncratic organizational knowledge.
Space limitations preclude discussion of all the relationships are proposed in Figure 1.
We encourage scholars to consider the theoretical validity of what we’ve proposed. If
deemedtheoreticallysound, empirical testingof those relationships couldanswer interesting
research questions as well as contribute to the entrepreneurship and strategic management
literatures.
Entrepreneurial Leadership in Corporations: The Roles
of Controls, Consensus and Trust
Corporate entrepreneurship often fails because large organizations present hostile envi-
ronments for creative ideas (Burgelman, 1983a; Sharma & Chrisman, 1999). Innovative
proposals are frequently defeated by ?nancial control systems and other formalities that
are typical of large bureaucracies (Kanter, 1983). Creating collateral organizations, such as
new venture divisions can isolate entrepreneurial processes from the parent organization
(Burgelman, 1983b). However, the isolation also makes it less likely that their initiatives
will harmonize with the needs of the core business, which, in turn, reduces the likelihood
that new ventures receive the support and acceptance, necessary to become commercially
358 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
viable (Sharma, 1999). Even when the CE process is established within the core of a ?rm,
virtually all entrepreneurial initiatives face some degree of survival risk induced either by
the structural or strategic context (Burgelman, 1983b). The ?rm needs to explore how its
innovative and competitive capabilities can be rede?ned, renewed, or replaced while en-
suring that the resulting changes in policies, priorities, and procedures will be accepted
throughout the organization. Managers’ acceptance of the new initiatives is of particular
concern because they are the ones responsible for managing the shift from one set of op-
erating routines to another. Indeed, the lack of such acceptance threatens the success of
any organizational change effort (Kotter, 1995). Thus, a fundamental challenge in CE is
managing the con?ict between the new and the old and overcoming the inevitable tensions
that such con?ict produces for management.
Despite the potential importance of such con?ict, prior research on CE leadership has
paid little if any attention to the issue. One way to begin to focus on it is to build upon
recent work on managers’ strategic roles. Floyd and Lane (2000) suggest that strategic
change involves a system of social exchanges between managerial roles. These roles form
three sub-processes (competence deployment, competence modi?cation, and competence
de?nition). We believe that these processes drive the four types of CE identi?ed above
(Covin & Miles, 1999). (See the top rows of Table 1.)
Speci?cally, in sustained regeneration ?rms seek to create a steady streamof newproduct
introductions and the entry of existing products into new markets. This requires a combina-
tion of competence deployment and competence modi?cation. Organizational rejuvenation
aims at improving the effectiveness of existing strategy by adjusting value chain activities,
especially support activities. This requires deploying the ?rm’s existing competence while
modifying the organizational processes that enable such deployment. Strategic renewal goes
beyond adjusting processes to fundamentally rethinking how the ?rm competes. This is the
essence of competence de?nition. Finally, domain rede?nition focuses on exploring possi-
ble newmarkets and products to create ?rst-mover advantages. This is the most challenging
of Covin and Miles (1999) types, as it typically requires both de?ning and deploying new
competences.
Viewing CEas a systemof roles and social exchanges provides a theoretical basis for con-
nectingentrepreneurial activityto the organization’s on-goingagenda. Therefore, it suggests
a way to examine how CE leadership may resolve con?icts between old and new priorities.
More speci?cally, this perspective portrays the challenges of CE leadership as managing a
social learning process involving roles and relationships among managers at the top, middle
and operating levels of the organization. Thus, CE leadership depends not only on the skills
and abilities of individuals but also on the quality of interactions within the management
hierarchy—in particular, we will argue that it depends on the extent of shared understand-
ing and the level of interpersonal trust in the organization. Researching the contingencies
surrounding these attributes requires understanding the nature of the social exchanges in
CE, the con?icts that disrupt them, and the resolution mechanisms at a leader’s disposal.
CE Leadership as a System of Social Exchanges
The motivation for viewing CE as social exchange is the set of strategic roles shown in
Table 1. The literature suggests that these roles are central to both CE and strategic renewal
G
.
G
.
D
e
s
s
e
t
a
l
.
/
J
o
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r
n
a
l
o
f
M
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g
e
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e
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2
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9
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3
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7
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5
9
Table 1
Social exchanges, managerial roles, and controls in corporate entrepreneurship
Type of corporate entrepreneurship
Sustained regeneration Organizational rejuvenation Strategic renewal Domain rede?nition
Effects on ?rm’s
competence
Deploy existing Modify
existing
Deploy existing Modify
existing
Deploy existing De?ne new De?ne new Deploy new
Top management
roles
Directing Recognizing Directing Recognizing Directing Ratifying Ratifying Directing
Middle
management
roles
Implementing Synthesizing
and facilitating
Implementing Synthesizing
and facilitating
Implementing Championing Championing Implementing
Operating
management
roles
Conforming Adjusting Conforming Adjusting Conforming Experimenting Experimenting Conforming
Organizational
controls needed
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and clan
controls
A mix of
bureaucratic
and market
controls
A mix of
bureaucratic
and market
controls
A mix of
market and
clan controls
A mix of
market and
clan controls
360 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
(Bartlett & Ghoshal, 1994; Hart, 1992; Nonaka, 1994). Performing in these roles involves
processing information and taking action that facilitates organizational change, and it is the
need for information to performin these roles that gives rise to our focus on social exchange
as a central feature of CE.
In contrast to bounded rationality or political views, a social exchange perspective of
CE (MacNeil, 1974; Rousseau, 1990) highlights its on-going, dynamic quality. Individual
actions anddecisions are thus seenina relational context where “nosegment of which—past,
present, future—can sensibly be viewed independently from other segments” (MacNeil,
1974: 695). As organization members interact and exchange information, roles and role
expectations develop which are embedded in relationships speci?c to the organizational
context. These roles enable the organization to engage in many activities including CE.
CE’s dependence on relational exchanges among managers has several implications for
CE leadership. Leadership should be focused on the social context—both in terms of
in-role performance and in architecting broader organizational arrangements. Taking on
roles means depending on others to provide information and perform in complementary
roles. The role of middle managers as champions, for example, depends on gaining infor-
mation fromexperimentation at the operating level and rati?cation at the top. CE leadership
means more than performing in one of the roles, however. It means shaping the internal
organizational context in ways that foster effective exchanges between all the roles. This
requires articulating a vision, gaining acceptance of the vision within the organization, and
creating congruence between the vision and followers’ self-interests (Pawar & Eastman,
1997).
Strategic Role Con?ict and Exchange Opportunism in CE
Management entails a wide variety of behaviors, including but not limited to the en-
trepreneurial roles identi?ed in Table 1. This variety of formal and informal behaviors
and differences in the expectations of the people with whom a manager interacts—the role
senders (Nandram&Klandermans, 1993)—is likely to result in con?icts about which role is
appropriate at a given point in time. Adding to the potential for role con?icts are differences
in managers’ beliefs about the need for organizational change. Differences in managers’ be-
lief structures are due to educational background, experience, primary functional area, and
position within the corporate hierarchy (Floyd & Lane, 2000; Weick, 1995). The plethora
of managerial roles and differing managerial beliefs leads to dissensus over which roles to
enact, and as a result, inconsistent role-sending behavior. For example, top management
may see a need to fundamentally rethink how the ?rm competes (the need for strategic
renewal) and thus expect operating-level managers to adopt the experimenting role. But if
middle managers do not perceive the same need for fundamental change, if they believe, for
example, that incremental improvements are of primary importance (the need for sustained
regeneration), they will expect operating-level managers to adopt the conforming role. The
con?ict in the expectations of the two role senders would create tension and uncertainty at
the operating level. This tension over which entrepreneurial role a manger should enact is
termed strategic role con?ict (Floyd & Lane, 2000).
Managers caught in role con?ict are unlikely to enact entrepreneurial roles successfully,
and this will disrupt the information exchanges needed for CE. Managers caught in role
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 361
con?ict may also experience considerable stress that can lead to organizationally dysfunc-
tional coping behaviors such as avoidance, lying, or exit (Grover, 1993; Hirschman, 1970).
These coping behaviors deprive the organization of timely access to needed information
and therefore have the potential to disrupt CE even further.
Role dissensus also undermines predictability in relational exchanges and weakens in-
terpersonal trust. Lower levels of trust, in turn, increase the risk of opportunism among
managers—in the form of dishonesty, in?delity or shirking (Griesenger, 1990). Note that
opportunism need not be real to be disruptive. Just the risk of opportunism can be enough
to reduce the amount of information shared (Lane, Lyles & Salk, 1998). Well-intended but
unexpected behavior may be misinterpreted as opportunistic (Ghoshal & Moran, 1996).
When members of a relational exchange system begin to perceive that others are acting
opportunistically, trust breaks down even further, and the cycle of misinformation therefore
tends to become negatively self-reinforcing.
Differences in strategic role expectations can create uncertainty in all management situ-
ations. However, Jones and Butler (1992) suggest that such uncertainty is especially likely
in CE. An additional source of uncertainty in CE is that the ?rm is by de?nition venturing
into new areas for which managers have not yet developed a shared understanding (Weick,
1995). Jones and Butler suggest that this not only creates uncertainty in how opportunities
are recognized but also in howthe ?rmshould develop structures and transactions to capital-
ize on them. The differences in managerial perceptions discussed earlier and the uncertainty
in CE further elevate the risk of real or perceived managerial opportunism.
Developing CE Consensus and Trust through Organizational Controls
For effective exchanges to occur, an individual must be willing to “buy” what another
party wishes to sell. For CE this means that there should be some overlap in managerial
beliefs about the substance of strategic priorities and the need for strategic change—what
we describe as consensus on the dominant logic. Lacking it, champions are likely to be-
come frustrated by top managers who consistently reject their proposals, for example.
Implementers are likely to be confused by directions that are out of sync with their own
perceptions of strategy. In addition to the substance of entrepreneurial initiatives, consensus
on the dominant logic includes shared understanding on the need for change, i.e., which
types of exchanges (regeneration, rejuvenation, renewal, or rede?nition) are needed. Lack-
ing this, managers are likely to be working at cross-purposes—operating level managers
experimenting when middle managers expect them to conform, for example. In short, con-
sensus on the dominant logic increases the likelihood that managers will share a common
set of expectations for role performance and that they will seek and receive the information
necessary to perform in role.
Abroad consensus on dominant logic also will have indirect bene?ts. Because consensus
reduces uncertainty about expected managerial roles, it reduces both the opportunities for
managers to act opportunistically and the chance that well-intended actions will be miscon-
strued. This sets in another self-reinforcing spiral, an increasingly positive one. The less
that members of a relational exchange system perceive that others are acting opportunis-
tically, the more that trust builds up between them, and the less concerned they are about
opportunism in the future.
362 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
What is needed, therefore, is a mechanism by which leaders can help their organizations
develop the consensus and trust needed to support CE. Jones and Butler (1992: 742–746)
suggest the problems created by uncertainty in CE can be addressed by providing “an eq-
uitable distribution of rewards.” However, they caution that effective reward systems may
be dif?cult to develop for CE. They conclude that the ultimate solution may lay in the
development of organizational controls that can help address the problems of uncertainty,
but provide no insights into what the ideal set of controls might be (1992: 746–747). Floyd
and Lane’s (2000) prescriptions for minimizing strategic role con?ict offer a more detailed
answer. They suggest that aligning a ?rm’s organizational controls with the type of envi-
ronmental change that it faces can minimize strategic role con?ict. The alignment creates
consistency in behavioral expectations by signaling what cues are important, which behav-
iors are appropriate and what kind of result is valuable. This, in turn, reduces uncertainty
about each role’s importance and the kind of information that is valued by the ?rm.
Approaches to organizational control can be described as a choice between market de-
vices, bureaucratic mechanisms and clan controls (Ouchi, 1980). These controls vary in
the types of uncertainty that they can address, but they are not mutually exclusive and can
be used in combination to nurture strategic consensus in a variety of contexts (Floyd &
Lane, 2000). Market control uses passively observable data to evaluate opportunities and
outcomes within the ?rm (Daft & Weick, 1984). They help address the potential for role
con?ict in competence de?nition by clarifying the objective criteria for evaluating newideas
and opportunities. Bureaucratic control entails the use of standardized behavior and per-
formance assessments. Under bureaucracy managers methodically probe to determine how
to resolve well-de?ned problems (Daft & Weick, 1984). These controls are appropriate for
competence deployment. Clan control conveys information through traditions and assumes
that members’ commitment is driven by organizational identi?cation and common culture.
Rather than analyzing data or methodically searching for the one right answer, clans reduce
uncertainty by creating a communality that reduces opportunismdue to similarity of norms,
beliefs, and priorities between members. The trust that develops through clan control may
be essential if there is uncertainty about whether and howto modify an existing competence,
what to keep, what to change, and how.
Combining these insights on organization controls and consensus with the earlier discus-
sion of the relationship between types of CE and change in the ?rm’s competences suggests
the alignment of controls and types of CE presented in the bottom rows of Table 1. Here,
we propose that by correctly aligning controls with the type of CE, managers can reduce
role dissensus and increase dominant logic consensus. If the controls and CE type are mis-
aligned, either the existing strategy will be insuf?ciently reinforced or needed deviations
from the existing strategy will be sti?ed.
Opportunities for Researching CE Leadership
We offer this model of CE leadership because we believe that it focuses on an important
but under researched topic—managing con?icts in the CE process. The social exchange
approach we take offers rich opportunities for future research because it acknowledges that
managers at multiple levels play a role in CE and because it places interactions between
managers at the heart of the CE process. The social exchange perspective also suggests
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 363
that two new constructs, dominant logic consensus and strategic role con?ict, should be
examined by future CE leadership studies. Other streams of management research can
provide guidance on operationalizing both constructs (see Dess & Priem, 1995; Shenkar &
Zeira, 1992). Finally, the model implies that the ef?ciency of social exchanges may be an
indicator of CE leadership effectiveness. This could be operationalized using measures of
organizational trust (Rousseau, Sitkin, Burt & Camerer, 1998) or identi?cation-based trust
(Lewicki & Bunker, 1995).
While we feel that examining CE leadership though this lens has much promise, it is
clearly not the only approach that can be taken to studying this topic. Indeed, our con-
cept of CE leadership resonates with other leadership theories focused on transforming the
intraorganizational social context to facilitate change. Pettigrew (1987), for example, de-
scribes leadership as a process wherein the leader delegitimates alternative views and seeks
to legitimate desired views. Sashkin (1992) describes leadership as a process of instilling
new values and organizational culture. Nadler and Tushman (1989) see it as envisioning,
energizing, and empowering organizational members. Our view of CE leadership as special
context for transformational leadership is perhaps most in line with Kotter’s (2001) distinc-
tion between managers and leaders. Managers organize people to solve problems. Leaders
prepare organizations for change and help them to cope with it.
Corporate Entrepreneurship and Internationalization
A growing body of research seeks to empirically document CE activities as ?rms in-
ternationalize their operations (Zahra & Garvis, 2000). Given that internationalization is
a complex, challenging and costly process, the success of CE efforts can signi?cantly in-
?uence ?rm performance. Companies can no longer simply export their domestic business
practices to foreign markets and expect to reap the full bene?ts of internationalization.
Success in global markets requires companies to be entrepreneurial in deciding when, how,
and where to expand internationally. Internationalization, therefore, provides an important
opportunity to study CE activities and their links to performance among new ventures and
established companies alike.
As Figure 2 indicates, one way to organize this literature is to separate content from
process-related studies in new ventures vs. established companies. Content studies usually
focus on the types of strategies and their dimensions that ?rms use as they internationalize
their operations. Process studies examine howa ?rm’s internationalization strategies emerge
and change over time. These studies usually assume that the process of internationalization
in?uences a ?rm’s success as well as the types of entrepreneurial activities it pursues. Below,
we review key studies that have been conducted to date on each of the four cells in Figure 2.
New Venture Internationalization and Entrepreneurship
Recently, some researchers have begun to examine the different factors that spur success-
ful internationalization by new ventures (i.e., companies eight years or younger). Research
indicates that environmental, organizational and strategic factors combine to in?uence the
extent, direction, speed and process of new ventures’ internationalization (for a review, see
364 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Figure 2. A 2 ×2 typology of corporate entrepreneurship research.
Zahra & George, 2002). This research also suggests that new ventures gain access to re-
sources and knowledge, especially about technology, by internationalizing their operations
(Zahra, Ireland & Hitt, 2000). New ventures also can improve their competitive and ?nan-
cial performance as they enter international markets. The organizational learning theory
suggests that new ventures can gain new knowledge from its diverse internationalization
efforts. This knowledge, in turn, can promote the development of new organizational skills
and capabilities.
Entrepreneurial activities, especially those embodied in CE, pervade newventures and es-
tablished companies alike. Some newventures are more willing to take risks, introduce more
newproducts, and exhibit greater proactiveness than their rivals. Yet, some researchers tend
to equate the creation of a new global business with entrepreneurship. While this practice
is consistent with some research (Gartner, 1985), it does not capture those entrepreneurial
activities that occur within a new ?rm after its creation. Thus, this research ignores the
variety of post-internationalization entrepreneurial activities and their implications for or-
ganizational learning.
Cell 1 (content). This stream of research examines the content of new ventures’ in-
ternational activities and their potential effect on future performance. Research by Ovi-
att and McDougall is most representative of this stream of research (for a review, see
Oviatt & McDougall, 1999). These researchers have cataloged the entrepreneurial ac-
tivities that managers undertake to develop and grow global start-ups (Dana, Etemad &
Wright, 1999) The results of this research have provided a foundation for the proposition
that entrepreneurial activities that precede internationalization signi?cantly in?uence the
short-termsuccess of global start-ups. These studies have also examined the survival, growth
and pro?tability of international new ventures, even though these studies remain relatively
few in number.
Despite the growing research interest in understanding the factors that in?uence the
success of global start-ups, we could not locate any studies that have examined the en-
trepreneurial activities that start-ups undertake once they go international. Differences
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 365
across different types of global start-ups in their CE activities are also ignored. It is also
unclear if such differences, if they exist, vary across the stages of the ?rm’s international-
ization process. Thus, these studies have not captured the effect and type of organizational
learning (Zahra et al., 1999), as discussed earlier, on future CE activities among global
start-ups. Finally, studies that fall within Cell 1 have yet to link post-internationalization
entrepreneurial activities to the survival of global start-ups. One probable reason for this
gap is that the use of case studies and mail surveys has dominated this body of research,
making it dif?cult to document entrepreneurial activities or learning from these efforts and
link them directly to new venture performance.
Cell 2 (process). To date, only a few studies have tracked the evolution of the strategies
global start-up ?rms use or the entrepreneurial activities they undertake over time. Most of
these studies have investigated the process by which entrepreneurs assembled resources and
put their organizations together in their bid to internationalize their operations. Collectively,
these studies highlight the importance of the founder’s vision, connections (as commonly
manifested by social capital), and access to international networks.
However, researchers have not systematically examined the types of entrepreneurial ac-
tivities and their intensity as the ?rm globalizes its operations. Further, the effect of the
sequence of a ?rm’s strategic actions to internationalize its operations has not been linked
to entrepreneurial activities, learning or ?nancial performance. Changes in the modes of
entry and use of coordinative mechanisms to synchronize global strategies have not been
connected to the ?rm’s entrepreneurial activities, even though certain modes (e.g., acquisi-
tions) might be conducive to particular CE efforts (Schollhammer, 1982). Thus, it is unclear
how entrepreneurial activities in?uence the evolution, growth, or ?nancial performance of
global newventures. Also, howcompanies learn and develop newknowledge through inter-
nationalization remains unknown. Finally, researchers have not examined how the process
of internationalization varies across the four types of CE presented earlier (Covin & Miles,
1999).
Established Companies’ Internationalization and Entrepreneurship
More research has been published on the entrepreneurial activities within established
global companies than within newventures. The bulk of this research is descriptive in focus
and static in research design, as discussed next.
Cell 3 (content). Content-related studies have explored the types of CE activities in
MNCs. Ghoshal and Bartlett (1988) conducted one of the earliest studies, examining the
range and content of entrepreneurial activities that occur in MNCs. These researchers pro-
posed that such entrepreneurial activities are crucial for MNCs’ successful performance, a
factor that has encouraged other researchers to document the conditions under which CE
in?uences company performance. For example, Zahra and Garvis (2000) theorized and em-
pirically found that CE moderates the relationship between a ?rm’s internationalization and
its ?nancial performance. Speci?cally, their ?ndings show that established companies with
higher levels of CEwere able to achieve higher performance through international expansion
than those ?rms with lower CE scores. The results also indicated that established companies
366 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
that vigorously pursued CE were better positioned to leverage their international venturing
activities in ways that improved their ?nancial performance, thereby creating wealth for
their owners. Similarly, a recent study found that international venturing by medium-sized
US companies was positively related to a company’s future performance (Zahra, Neubaum
& Huse, 2000).
Despite the insights gained from recent studies examining content-related issues linking
CE and internationalization, they remain few in number and limited in focus. These studies
also lack clarity as to how ?rms actually leverage their skills in their international expan-
sion to achieve higher ?nancial performance. These studies have also failed to determine
the length and duration of the period where higher CE was conducive to a stronger relation-
ship between a ?rm’s internationalization and its ?nancial performance. Understanding the
length of the period where CEimproves a ?rm’s ?nancial performance can be useful in guid-
ing strategy-making processes, especially in investing in different CE ventures. Finally, the
learning implications of internationalization have not been analyzed in a systematic fashion.
Cell 4 (process). A related body of empirical research has explored the processes as-
sociated with CE in MNCs or established companies that are expanding internationally.
Three themes dominate this body of research. The ?rst centers on the role managers play in
stimulating and fostering CE in the MNC’s operations. Ghoshal and Bartlett (1994) aptly
described the nature of these roles and the factors that shape their substance and content,
proposingthat these roles varybymanagers’ organizational level withinthe formal structure.
While each role can enhance an MNC’s overall entrepreneurial activities, serious con?icts
might arise as different managers champion and support different initiatives at different
levels within the MNC. Therefore, coordination is essential in order to gain the full bene?ts
from these diverse managerial roles. The intuitive appeal of Ghoshal and Bartlett’s (1994)
conceptual scheme notwithstanding, there exists little empirical validation of their theoret-
ically derived role descriptions and how to ensure effective coordination among these roles
within an MNC. The implications of this coordination for CEand subsequent organizational
learning are also not well understood in this stream of research.
A second theme in past CE research is how MNCs leverage their international operations
in order to build and exploit a set of enduring competitive advantages. Some researchers
have examined and evaluated the contributions of MNCs’ subsidiaries to the creation and
later diffusion of innovations within their parent organizations (Bartlett & Ghoshal, 1989;
Birkinshaw, 1999; Birkinshaw & Hood, 1998; D’Cruz, 1986). Findings from this research
have improved our understanding of the antecedents and effects of subsidiary entrepreneur-
ship. Less is known, however, about the process by which CE activities actually unfold in
subsidiaries or how they are connected later to the MNCs’ competitive strategy or formal
business de?nition. This gap in the literature is puzzling especially because early empirical
work on CE has focused on these issues (e.g., Burgelman, 1983a, 1983b).
A third theme in prior research has investigated the potential effects of national cultures
in shaping CE in established companies. While this research does not examine CE in MNCs
per se, it has sought to clarify if and how national cultural variables in?uence CE efforts
within established companies. Research by Morris, Davis and Allen (1994) is illustrative
of this theme. It shows that certain organizational cultural variables (e.g., individualism)
can signi?cantly and positively in?uence CE in one country but can have the opposite (or
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 367
no) effect in other countries. The results highlight the contingent nature of the relationship
between organizational cultural variables and CE; this relationship depends on national
culture. These ?ndings are informative of the vital roles national cultural variables play in
in?uencing CE activities and determining a ?rm’s gains from them. Findings from this re-
search streamcan also guide managerial decision-making in different countries, determining
the nature, direction, and pace of CE and its implications for entrepreneurial activities.
Despite the important insights gained from process-related research on CE and inter-
nationalization (Cell 4), the bulk of this research has been descriptive and lacks a strong
theoretical foundation. The dominance of case studies is another source of concern because
these analyses that have not yielded original theoretical insights. Finally, reviewing the em-
pirical studies that have been published to date, it is hard to con?dently distinguish them
from mainstream international business research. Researchers who have pursued this re-
search stream have emphasized the internationalization process rather than entrepreneurial
issues.
Synthesis and Future Research Agenda
Clearly, the link between CE and internationalization is an emerging subject of great
interest to entrepreneurship, international business, and strategy scholars. Opportunities for
productive future research in this young but fast growing area are abundant. For scholars
interested in content-related issues (Cells 1 and 3 in Figure 2), an important challenge is to
examine and document the types of entrepreneurial activities in established companies, be
it MNCs or otherwise. Researchers would bene?t also from applying and re?ning existing
classi?cations or typologies of CE activities (Morris, 1998; Schollhammer, 1982). They
would bene?t also from examining a ?rm’s entrepreneurial orientation (Lumpkin & Dess,
1996) as well as its actual behavior. Using longitudinal research designs, future researchers
can also provide a strong basis to identify different CE activities as they unfold over time.
This research can also help ?ll several gaps in the literature on the effect of national and
corporate cultures in promoting different types of CE and how they in?uence a ?rm’s gains
from pursuing different CE activities.
Focusing on process-related issues (Cells 2 and 4), we believe future research can also
be informative in showing how ?rms develop effective structures and systems that spur CE
in their international operations. Understanding these structures and systems is essential to
tracking the processes by which CE activities come into existence within international oper-
ations in new ventures and established companies alike. These systems and structures also
in?uence organizational learning. The various strategies CE champions employ to promote
their initiatives within their companies’ international operations is another issue worthy of
future study. Research is necessary also to document how ?rms institutionalize their dif-
ferent CE efforts. Toward this end, future researchers need to examine how the processes
used to institutionalize CE in a ?rm’s international operations might contribute to organiza-
tional learning and acquiring new knowledge. CE institutionalization demands sensitivity
to several organizational, political, and strategic issues. It also requires capturing, sharing
and integrating the knowledge the ?rm might have gained in its international CE activities.
The process by which the ?rmcaptures this knowledge can be useful in crystallizing and in-
tegrating the ?rm’s learning. Following the learning theory, knowledge integration ensures
368 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
that internationalization enhances the ?rm’s learning (Zahra et al., 2000) and subsequent
?nancial performance.
Future research should establish whether ?rms with different CE types (Miles & Snow,
1999) pursue different internationalization strategies that link these differences to organi-
zational performance. Also, researchers should document the effect of CE types on orga-
nizational learning as a consequent of internationalization. To do so, researchers need to
consider the various types of learning discussed earlier (Zahra et al., 1999), and study the
effect of the intensity of CE activities and their types on the content, speed and depth of
organizational learning (Zahra, Ireland & Hitt, 2000). Finally, given the potential dynamic
interplay between CE and organizational learning, future empirical research should explore
the effect of prior learning on changes in CE types and how these changes unfold over time.
Examining the issues above can signi?cantly improve our understanding of potential
relationships among CE, internationalization, and performance. In an environment where
globalization is the norm, executives and scholars alike can gain rich insights into the
dynamic interplay between the internationalization process and CE as a way of creating
newcompetencies that enable ?rms toenhance ?rmperformance. At the core of this dynamic
interplay lies the ?rm’s ability to create and gain new knowledge that can be combined or
deployed to renew existing skills while creating and honing new ones (Zahra et al., 1999).
The development and acquisition of skills promotes strategic renewal, a process that usually
demands creativity. This dynamic renewal process is at the heart of entrepreneurship in both
young and established companies.
Conclusion
The dynamic interplay between a ?rm’s CE and internationalization represents an im-
portant research opportunity. Managers and researchers should give attention to the ?rm’s
entrepreneurial activities that shape these ?rms’ product portfolios and differentiate them
from the competition. While we are encouraged by the growing interest in these issues, this
review shows that scholarship has not kept up with managerial practice, thereby missing
a major opportunity to inform future theory building on the changing foundations of com-
petitive advantages in global markets. The research issues outlined herein offer a roadmap
for fruitful inquiry into the potentially rich contributions entrepreneurship can make to
a company’s successful internationalization and vice versa and the implications of these
variables for organizational learning.
Corporate Entrepreneurship and Performance:
Reassessing the Dependent Variable
CE in today’s global and information economy has important implications for the de-
velopment of both descriptive and normative theory. As such, the inclusion of outcome
constructs and measures that are both reliable and valid is essential for building a coher-
ent body of research that has relevance for both academics and practitioners. Developing
normative theory of CE and the development of auxiliary measurement theory cannot be
divorced from one another. As noted by Blalock (1982), if a poor ?t is observed (in, for
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 369
example, CE constructs and performance), we are unable to ascertain if the fault lies with
the substantive theory, the auxiliary measurement theory, or both. Thus, in addition to the
need for reliable and valid measures of CE constructs, the same rigorous criteria must be
applied to performance indicators.
In this section, we begin by discussing the need to include multiple measures of the eco-
nomic and ?nancial outcomes of CE initiatives. Then, we address the value of incorporating
a stakeholder perspective, i.e., moving beyond the narrow use of economic and ?nancial
indicators. Drawing on Kaplan and Norton’s (1992) concept of the “balanced scorecard,”
we propose that the use of stakeholder analysis need not implicitly involve tradeoffs among
the various stakeholders, but rather that symbiotic relationships may exist and that stake-
holder groups can be satis?ed in an interdependent manner. In the closing section, we
focus on the need to emphasize additional forms of capital—human, social, intellectual—
in assessing the outcomes of CE endeavors. We posit that concepts such as real options
and learning platforms can provide useful insights on the potential bene?ts of CE initia-
tives that may not be evident in the short-term. One of the most important consequences
of CE is learning that enables the ?rm to develop new knowledge that renews its skills
and capabilities. Consequently, we believe that learning should be considered an outcome
of CE.
Economic and Financial Measures
CE research must include multiple measures of economic outcomes such as pro?tability
and sales growth to capture the inherent tradeoffs between ef?ciency and effectiveness,
respectively (Hofer &Schendel, 1978). Furthermore, the desired outcomes of CE initiatives
such as investment in R&D, new product development, or re-tooling a production facility
with expensive (and risky) new technology may not be realized for several accounting
periods. For example, in the biotechnology industry, it can take approximately seven years
to go from the initial new drug application to bringing a new product to market—typically
at costs in excess of US$ 100 million (Folta, Amburgey & Janney, 1997). Zahra and Covin
(1995) and others have argued that the economic bene?ts of CE efforts may not be readily
apparent in the short run, but take several years to come to fruition. In conducting research
on the relationship between CE initiatives and performance (especially activities involving
the expenditures of signi?cant ?nancial and non?nancial resources), researchers must make
judicial use of lag effects to incorporate the temporal nature of their subject of inquiry.
CE research can also bene?t from the inclusion of more sophisticated measures of ?nan-
cial performance. Economic value added (EVA) and market value added (MVA) provide
additional insights because they recognize the cost of capital and the inherent riskiness of
a ?rm’s operations (Lehn & Makhija, 1996). MVA, for example, provides an indicator of
the stock market’s estimate of the net present value of a ?rm’s past and future investment
projects; it would likely provide a measure of future returns for CE endeavors. Such indica-
tors are not, of course, without controversy. Gary Hamel criticized EVA as a performance
indicator because it onlymeasures returns inexcess of a ?rm’s cost of capital. Instead, Hamel
suggests a measure that he believes better captures the dynamics of corporate performance,
i.e., “a company’s current share of total market capitalization of its relevant competitive
domain with its share a decade ago” (Hamel, 1997: 75). This perspective suggests that
370 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
on-going CE activities aimed at keeping the organization on the cutting edge in terms
of proactively seeking new opportunities may make a more lasting contribution to value
creation than an occasional attempt to innovate, introduce or adopt entrepreneurial ideas.
Clearly, research can bene?t from the inclusion of both accounting and market measures of
?nancial performance.
Incorporating Stakeholder Perspectives
Conceptualizing and operationalizing the performance of the “effectiveness” construct
is, of course, a highly problematic issue in many research domains. However, it presents
particular challenges in the domain of CE. When ?rms undertake CE initiatives, how can
one tell if it augmented (or detracted from) the organization’s effectiveness? As Atkinson,
Waterhouse and Wells (1997), Freeman and McVea (2001) and others have noted, the mod-
ern organization is a complex nexus of contracts, both explicit and implicit, that speci?es
relationships and involves bargaining among multiple stakeholder groups. Atkinson et al.
(1997) identi?ed two groups of stakeholders: environmental stakeholders who de?ne the
?rm’s external environment (customers, owners, and the community-at-large) and process
stakeholders (employees and suppliers) who work “within the environment de?ned by the
external stakeholders to plan, design, implement, and operate the processes that make and
deliver the company’s products to its customers” (1997: 27). Recognizing the inherent
con?icts among an organization’s external and internal stakeholders, Hall (1987) has pro-
posed a “contradiction model” of organization effectiveness in which ?rms face con?icts
among multiple and con?icting environmental constraints, multiple and con?icting goals,
and multiple and con?icting time frames.
To provide integration of the many diverse issues that ?rms face in assessing their ef-
fectiveness, Kaplan and Norton (1992) have developed the “balanced scorecard” concept.
It includes a set of measures that provide managers with a quick but comprehensive view
of their business. It complements the ?nancial indicators that re?ect the results of actions
already taken with indicators of operational measures of customer satisfaction, internal
processes, and the organization’s innovation and improvement activities. The latter are
considered operational measures that can drive future performance.
Such a concept has important implications for assessing the outcomes of CE initiatives.
Although CE often revolves around innovation and new venture creation, the balanced
scorecard approach provides a reminder that these activities must satisfy several criteria
that are weighted differently by different stakeholders.
An underlying tenet of the balanced scorecard approach is the salience of multiple forms
of capital to an organization. Clearly, managers should be concerned about enhancing their
?rm’s stock of ?nancial resources. However, in today’s knowledge economy, human, so-
cial, and customer capital take on an increasing importance. For example, both scholars
(e.g., Coff, 1997; Nahapiet & Ghoshal, 1998) as well as writers in the popular press (e.g.,
Edvinsson & Malone, 1997; Munk, 1998; Stewart, 1997) have argued that human capital is
the critical, scarce resource and the key to value creation in the information age. Further-
more, Porter (1985) has articulated the need for organizations to view their ?rm as part of
an expanded value chain consisting of themselves, suppliers, customers, and alliance part-
ners. Such a perspective reinforces the importance of the role of social capital both within
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 371
organizations as well as between a focal organization and external stakeholders (Dyer &
Singh, 1998). A shortcoming of the balanced scorecard is ignoring the learning outcomes
of the various CE types, discussed earlier in this paper. This learning requires multiple types
of capital, as discussed next.
Recognizing the Increasing Role of Multiple Forms of Capital in Today’s Economy
We argue that many of the performance constructs developed in the strategic management
literature were originally created within the context of existing ?rms as well as at a time
when physical, ?nancial, and labor resources were a ?rm’s key resources for attaining
advantages. And, although many of the measures originally used in the CE literature may
remainviable for newventures, suchmeasures maybecome less applicable for ?rms that rely
primarily on human, social, and intellectual capital to create advantages. Therefore, future
CE researchers should give greater attention to knowledge-based resources and learning
outcomes.
Human capital focuses primarily on capabilities, knowledge, skills, and experience, all
of which are embodied in and inseparable from the individual. Intellectual capital refers
“to the knowledge and knowing capabilities of a social collectivity, such as an organization,
intellectual community, or professional practice” (Nahapiet & Ghoshal, 1998: 245). Social
capital is “broadly de?ned as an asset that inheres in social relations and networks” (Leana
& Van Buren, 1998: 538). We believe that as the level of human, social, and intellectual
capital inherent in a new venture increases, different perspectives on the outcomes of CE
become more important. Such intangible resources or “invisible assets” (Itami & Roehl,
1987) are especially salient in newer ?rms in emerging industries. Assembling, deploying
and leveraging these diverse types of capital create opportunities for knowledge creation
and exploitation within CE activities.
In addition to the increasing importance of human, intellectual, and social capital in
our discussion of CE, we draw upon the real options literature (Bowman & Hurry, 1993;
McDonald & Siegel, 1986; Myers, 1977). A real option is an investment in which the
purchaser obtains the right, but not the obligation, to acquire (or divest) an investment
at a later date, at contracted terms (McGrath, 1999). The literature suggests that ?rms
can derive an economic value by investing incrementally and delaying a full investment
commitment until more information about the decision is known (Dixit &Pindyck, 1994). If
the investment decisionfares poorly, losses are cappedat the amount of the initial investment;
at the same time the ?rm retains the full “upside potential” of the investment decision. This
insight encourages ?rms to place many “small bets” on promising opportunities, pouring
funds then into the most promising opportunities. Real options create ?exibility for ?rms;
freed from having to extricate themselves from much larger commitments, ?rms can shift
funds from a given opportunity to a more promising one. Using this logic, companies also
see far downside risks associated with CE activities. Consequently, they are more willing
to experiment, learn and develop new knowledge.
We suggest that real options theory can shed some new light on the outcomes of CE
initiatives. For example, as ?rms make platform investments in order to establish a new
technology or early foothold in new markets, they maintain the ability to expand rapidly if
conditions warrant. These investments also can enhance the learning consequences of CE.
372 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
At the same time, ?rms embedded in wider networks tend to use the informal relations to fa-
cilitate innovation (Starr &MacMillan, 1990), while they enjoy a more accurate assessment
of environmental conditions. Therefore, they are able to proactively pursue opportunities
more quickly than ?rms outside of their network. Future CE research should enhance our
understanding of how ?rms employ such intangible forms of capital to create and exploit
new opportunities. Additionally, platforms for learning (Grenadier & Weiss, 1997) can
moderate the relationship between CE initiatives and company performance. For example,
endeavors at innovative product market development—even if unsuccessful at one point in
time—may provide substantial economic bene?ts at a later time if it enables the ?rm to
recombine resources effectively (Kogut & Zander, 1992). Following learning theory, this
process can improve learning and knowledge creation within CE activities. Clearly, future
CE research could bene?t from using longitudinal time lagged variables.
The operationalization of performance constructs in CE research could be revised to
recognize the emergence of the importance of intangible assets in the economy. The in-
clusion of indicators to re?ect a new venture’s level of intellectual capital should require
much more ?ne-grained measures than those proposed by Edvinsson and Malone (1997) in
their path-breaking book, Intellectual Capital. Rather than rely on measures such as “new
channel development investment,” “education unique to noncompany-based employees,”
and “employee competence and development investment” (1997: 245), we would propose
including indicators of “the knowledge and knowing capabilities” (Nahapiet & Ghoshal,
1998) that enable an organization to exploit emerging opportunities. This knowledge should
be assessed within a ?rm’s competitive context as a means of providing sustainable com-
petitive advantages, a proposition that is consistent with learning theory. This would require
the perspective of both an organization’s present product-market-technology and its antic-
ipated endeavors. The question could be posed: How do such intangible resources provide
leverage for future entrepreneurial endeavors? The ?rm’s social capital—a viable outcome
as well as antecedent to CE endeavors—could be assessed, broadly speaking, by its network
of relationships that have the potential for providing it with valuable tangible and intangible
resources (Adler & Kwon, 2002).
CE research could build on prior network research that has investigated such substan-
tive issues as alliance networks, executive friendship ties, and corporate director interlocks
(e.g., Geletkanycz & Hambrick, 1997; Gulati, 1995; Westphal & Zajac, 1997). Such net-
work ties—both strong and weak—would serve to mitigate the extent of risk taking that
is inherent in CE initiatives. For example, ?rms in deeply embedded networks may better
bene?t from their strategic initiatives via superior access to ?nancial and knowledge re-
sources. This enables ?rms to combine resources in a more effective and ef?cient manner
as well as enhance their potential for developing superior learning platforms to exploit future
product-market opportunities. Thus, not only would the potential downside or risk taking
associated with CE efforts be mitigated, but also the positive economic bene?ts of proactive
and innovative behaviors would be released. Following the learning theory, such outcomes
might include rapid, deep and broad learning of new technologies and skills. Such research
would bene?t from the application of “?ne-grained” methodologies (Harrigan, 1983) that
would enable one to identify unfolding, emergent processes. This research would help to
further improve our understanding of the role of organizational learning as a consequence
of the various CE types ?rms might pursue.
G.G. Dess et al. / Journal of Management 2003 29(3) 351–378 373
Conclusion
In this paper, we have identi?ed four promising research avenues in CE. While other
issues are worthy of analysis, we believe the four issues we examined have important
implications for organizational learning and the creation of new knowledge. Collectively,
these issues help us open the “black box” that pervades the literature on the relationship
between CE and performance. These issues also help us to recognize the importance of CE
for knowledge creation and exploitation as well as learning. We welcome dialogue, debate,
and critique with the goal of enhancing research in an area that holds such promise for rich
descriptive and normative theory.
Acknowledgments
The ideas in this paper were initially developed for a panel that was presented at the
2000 Strategic Management Society Meetings in Vancouver, British Columbia, Canada.
We thank the reviewers and editors of the Journal of Management as well as Tom Lumpkin,
Doug Lyon, and Bruce Skaggs for their helpful comments.
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Gregory G. Dess is the Andrew Cecil Endowed Chair in Management at the Univer-
sity of Texas at Dallas. He has published numerous articles in leading academic and
practitioner-oriented journals in strategic management, organization theory, knowledge
management, and related topics. He currently serves on the editorial board of Strategic
Management Journal, Journal of Business Venturing, Journal of Business Research, and
Organizational Dynamics. Gregwas one of the charter members of the Academyof Manage-
ment Journals’ Hall of Fame and he received his Ph.D. from the University of Washington.
R. Duane Ireland holds the W. David Robbins Chair in Strategic Management in the
Robins School of Business, University of Richmond. His research is concerned with strate-
gic alliances, strategic entrepreneurship, and corporate entrepreneurship. In addition to the
Journal of Management, Duane’s articles have appeared in the Academy of Management
Journal, Academy of Management Review, Academy of Management Executive, Strategic
Management Journal, Administrative Science Quarterly, Decision Sciences, Human Rela-
tions, Journal of Management Studies, and British Journal of Management, among others.
He has written several textbooks and edited scholarly books. His work has received awards
for best papers from the Academy of Management Journal (2000) and Academy of Man-
agement Executive (1999). Duane has received awards for excellence in terms of teaching
and service.
Shaker A. Zahra is Paul T. Babson Distinguished Professor in Entrepreneurship in Bab-
son College. His research covers corporate, international, and technological entrepreneur-
ship. Shaker’s articles have appeared in the Academy of Management Journal, Academy of
Management Review, Academy of Management Executive, Strategic Management Journal,
Journal of Management, Journal of Business Venturing, Journal of Management Studies,
Entrepreneurship: Theory and Practice, Decision Sciences, Information Systems Research,
amongothers. His researchhas receivedseveral awards includingbest papers inthe Academy
of Management Journal, Journal of Management, and Entrepreneurship: Theory and Prac-
tice. His teaching and service have also received awards of excellence.
378 G.G. Dess et al. / Journal of Management 2003 29(3) 351–378
Steven W. Floyd is the Cizik Chair in Strategic Management, Technology and Manufac-
turing, and an Associate Professor in Strategic Management at the School of Business,
University of Connecticut. His recent research focuses on the role of social context in the
development of strategic initiatives, the contributions of middle-level management to corpo-
rate entrepreneurship and strategy-making and the organizational processes associated with
strategic renewal. Articles on these and other topics have been published in the Academy
of Management Review, Academy of Management Journal, Strategic Management Journal,
Journal of Management, Entrepreneurship: Theory and Practice, and Journal of Manage-
ment Studies.
Jay J. Janney is an Assistant Professor of Management at the University of Dayton. His
research interests include the integration of strategic management and entrepreneurship,
real options, and the resource-based view of the ?rm. His work has appeared in Business
Horizons, Journal of Business Ethics, and Journal of Business Venturing (in press), among
others. Jay earned his Ph.D. from the University of Kentucky, and previously served on the
faculty of Purdue University.
Peter J. Lane is an Associate Professor of Management at Arizona State University’s
College of Business. His research on corporate strategy, strategic processes, and inter?rm
collaboration has been published in the Academy of Management Review, Academy of
Management Executive, Strategic Management Journal, and Human Relations. His current
research focuses on socio-cognitive in?uence on strategy innovation both within and across
organizations.
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