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Summary of what you learn
Write a summary of what you learned, liked or disliked from the Chapter 2 reading, Answer questions assignment, and the article review you are doing for me.
Chapter 2
Behavioral Aspects of Corporate Entrepreneurship
What are the key components in the creative process? What is the difference between innovation and creativity? How can an organization overcome barriers to innovation and creativity? What behaviors promote corporate entrepreneurship activity within an organization?
 
Scenario: Ericsson
Ericsson has been a recognized leader in the telecommunications industry since 1876. The company is a leading worldwide provider of telecommunications equipment and related services to mobile and fixed network operators globally. It was one of the first companies to establish overseas business operations. Even in the early stages, the founder, Lars Magnus Ericsson, decided to open a production facility in Russia. Technology is the forefront of Ericsson, and today it continues to expand and innovate to be on the cutting edge and make telecom services affordable and available to all. As innovation is most important to Ericsson and is a driver, the company adopts a market-driven innovation strategy focusing on improving available technology with local customization and adaptation to meet consumer specific needs, wants, and expectations.
In 1900, Ericsson employed 1,000 people globally and produced 50,000 telephones; in 1923, the first automatic 500-point switches were put into service; in 1950, LM Ericsson telephone exchange supported the world’s first international call; in 1968, the first digital telephone exchange (AXE) was installed; in 1991, AXE lines exceeded 105 million in 11 countries serving 34 million subscribers; in 2000, the company became the world’s leading supplier of 3G mobile systems; in 2005, Ericsson won the biggest contracts to date to manage Operator 3’s networks in Italy and the United Kingdom; in 2008, a research center was established in Silicon Valley; and in 2009, Verizon and Ericsson collaborated to carry out the first data call on a 4G network. Ericsson has a long history of innovation and the pioneering of next generation technologies for more efficient and higher-quality telecommunications. In 1878, Ericsson introduced telephones with a single trumpet; in 1968, the first digital telephone exchange (AXE) was installed; in 1981, the first mobile system, Nordic Mobile Telephone (NMT), was inaugurated in Saudi Arabia; in 1991, the first GSM (Global System for Mobile Communications) phones were in operation; in 1999, Ericsson pushed for 3G and mobile Internet; in 2003, high-speed broadband (Wideband Code Division Multiple Access, or WCDMA) rollout started globally; in 2007, full-service broadband, with fixed and wireless network converge, was introduced; in 2008, Ericsson pushed for 4G (Long Term Evolution, or LTE), the standard the company helped to form; and in 2009, Ericsson won the IEC InfoVision Award for fiber and backhaul solutions.
Over 1,000 networks in more than 175 countries utilize Ericsson’s network equipment, and 40 percent of all mobile calls are made through its systems. Ericsson is the world’s principal supplier of mobile networks. In 2010, it employed 88,060 people worldwide. The networks supported over 2 billion subscribers and served over 700 million subscribers, with the United States and China being the company’s biggest markets. Ericsson has over 25,000 patents, one of the industry’s strongest portfolios. Ericsson is now driving the standardization of the next generation step LTE and Multimedia Telephony (MMTel), which further enhances consumer communication and entertainment experience. Ericsson recognizes the importance of communication in changing the lives of people and the way they work. Innovation is an important component of its culture. It uses innovation to empower people, business, and society. It provides communication networks, telecom services, and multimedia solutions, making it easier to communicate in a dynamic, global environment. This is supported by its global team of researchers that is constantly working on creating breakthrough innovations that will shape the future. Ericsson is a financially strong global innovation leader, investing approximately $5 billion annually in research and development. The research areas of Ericsson include wireless access networks; broadband technologies; multimedia technologies, services, and software; radio access technologies; packet technologies; global services research; and sustainability and electromagnetic frequency.
In October 2001, Sony Ericsson was established through a 5050 joint venture with Sony Corporation and Telefonaktiebolaget LM Ericsson. For Ericsson, this joint venture provided a vital link to the consumer. The joint venture combines the mobile communications expertise of Ericsson with the consumer electronics and content expertise of Sony Corporation. Sony Ericsson provides a range of mobile devices, including those supporting multimedia applications and other personal communication services.
In 2008, ST-Ericsson was created through a 50-50 joint venture by bringing together ST-NXP Wireless and Ericsson Mobile Platforms, two of the world’s leading semiconductor and platform companies. ST-Ericsson is an industry leader in design, development, and creation of cutting-edge mobile platforms and semiconductors across the broad spectrum of wireless technologies.
In July 2010, Ericsson acquired a stake in Nortel and broke into the South Korean market with LG-Ericsson. By combining LG’s and Ericsson’s research and development competencies, it has strengthened its position and become a unique player in the industry. This has been achieved through wireless, optical, and wire line products. As a result of the combination of innovative ideas and network convergence technologies, LG-Ericsson provides the connectivity that eliminates barriers in the exchange of information, enabling customers to recognize users’ potential.
Ericsson has been the leader in driving technology forward from telegraph to telephone all the way to the rollout of 4G. It has contributed significantly to form the industry’s standards from NMT and GSM to LTE. It is advancing its vision of being “the prime driver in an all-communicating world” through innovation, technology, and sustainable business solutions. Recognizing that innovation is rapidly changing, its Innovation Centers are focused to create mobile applications that are directly relevant and value adding to the consumer and the society as a whole. It has created a vivid culture of innovation, rapidly transferring from innovation to commercialization.
www.ericsson.com
Introduction
Among all the necessary attributes required for successful entrepreneurship, corporate entrepreneurship, renewal, innovation, and proactivity, the individual entrepreneur or corporate entrepreneur is the most critical. Corporate entrepreneurship and the behavior associated with it are initiated in established organizations for such reasons as profitability, growth, development, venturing, renewal, and innovation. In other words, these organizations support the corporate entrepreneur in order to identify and develop revenue-generating opportunities, expand and grow internationally, and eff

ectively configure resources as a source of competitive advantage.
Management at all levels is crucial to the successful efforts of corporate entrepreneurship. Managerial and employee behavior as well as organizational structure and culture are necessary ingredients for corporate entrepreneurship activity. The corporate entrepreneurship activity requires that creativity and innovative risk taking occur in an organization that enables the organization to renew itself and enhance performance through effective resource utilization. Strong management support and leadership is essential for this to occur.
To effectively facilitate the development of entrepreneurship, organizations need to focus on such key factors as top management support, longer time horizons, resources, rewards, more flexible organizational structures, and a culture that is conducive to corporate entrepreneurship activity. The willingness of top management to facilitate, promote, and support entrepreneurial activity in the organization can take many forms, such as championing innovative ideas, providing necessary resources or expertise, or institutionalizing the corporate entrepreneurship activity within the organization’s systems and processes.
The company culture influences behavior within organizations that affects daily operations. The concept of culture describes a range of activities and features that are associated with organizational life. New employees must be effectively integrated into the organization if they are to become useful members of the team. Existing employees must be able to adjust and adapt to structural and cultural changes necessary for growing in a dynamic environment.
Culture also influences a number of aspects of organizational activity including how people interact. From a management perspective, culture occurs organically, naturally, and informally. The bureaucratic structure and rigidity that all too often emerge within organizations may not be appropriate for the achievement of company objectives in a dynamic environment. In some organizations, the dominant culture is hostile to management’s intentions. The movement toward a more participative, less hostile culture will fail if it is not supported by appropriate training, encouragement, and tolerance of mistakes. The maintenance of a culture is also challenging as culture does not remain static but evolves over time.
This chapter examines the ways the organization can facilitate corporate entrepreneurial behavior through structural support and cultural change. Innovation and creativity are discussed to provide an understanding of the process, the barriers, and methods for addressing those barriers. Then the key aspects of corporate entrepreneurship are presented along with the individual personality characteristics and differences of corporate entrepreneurs. Following a presentation of the ways in which an organization can develop an entrepreneurial culture, the chapter concludes with a discussion of the transformation needed that will lead to sustainable corporate entrepreneurial behavior and activity.
Innovation and Creativity
Innovation and creativity are vital elements of corporate entrepreneurship. Creativity is the basis for the development of innovative business concepts. It is the application of an individual’s ability to discover and develop new ideas, processes, or concepts in novel ways. The resulting innovation indicates the presence or absence of entrepreneurship in an organization. Innovation is a key ingredient in the entrepreneurial process, putting into practice new ideas, a central characteristic of the entrepreneurial endeavor. Innovation harnesses the creative energy and develops those ideas into realistic products, processes, or services. The corporate entrepreneur must be highly creative in moving a concept from idea generation to fruition, overcoming the obstacles in the process.
Innovation in fast-changing environments has been identified as the essence of entrepreneurial behavior. Innovation can take many forms, such as developing new products and services, developing new methods of production, identifying new markets, identifying new sources of supply, and developing new organizational strategies. While breakthrough innovations are great, most innovations make incremental improvements to existing product lines rather than risk bringing something radically new to market. Breakthrough innovations are rare and include the steam engine, penicillin, the computer, the automobile, and the Internet. Rarely do companies successfully navigate a process that results in breakthrough thinking.
Technological innovations occur more frequently than breakthrough innovations and are, in general, at a lower level of scientific discovery and advancement. Technological innovations offer advancements in the product-market area and should be protected by firms to the extent possible. The personal computer, voice and text messaging, and the jet airplane are examples of technological innovations.
Ordinary innovation is the form of innovation that occurs most frequently. It usually extends a technological innovation into a better product or service with a different and usually greater market appeal. American Express is always looking to extend, modify, and enhance its services. Companies have different strategies of innovation. 3M encourages breakthrough innovation, while Dell, Microsoft, and Starbucks have different strategies. Innovation is clearly evident in Microsoft. Microsoft Office and Windows have become standard for most consumers, with almost 300 million computers sold each year. Yet Microsoft recognizes that business does not stand still and strategically enters new markets to ensure that it does not lose market share and that it continually improves its current products. Companies like General Electric, 3M, and Nokia have been able to continuously innovate and transform themselves to serve new and growing markets by developing innovative products and delivering them effectively. Hewlett-Packard and IBM are committed to corporate entrepreneurship and have taken steps to ensure that they will be leaders in innovation. The link between corporate entrepreneurship, innovation, and creativity occurs through three stages. Stage 1 comprises creativity through idea, activity, ability, and skill; Stage 2 comprises invention through working model and prototype; and Stage 3 comprises innovation through successful commercial introduction of the invention.
The Creative Process
Creativity is originality that is realistic, viable, and marketable. Three key aspects of organizational creativity are knowledge, drive, and ability. Knowledge of the course of action is required for opportunity identification, problem solving, and decision making. Drive refers to the passion, desire, and motivation to do something new and novel with the courage to proceed as a first mover. This individual has an internal focus of control and is driven by a sense of achievement and self-fulfillment. Ability refers to the ways in which an individual seeks to identify a solution to a problem by adopting diverse and creative techniques in order to accurately assess and evaluate the situation and identify the best course of action.
The following five components are the essential aspects of the creative process: