Edited by Shaker A. Zahra, Donald O. Neubaum and James C. Hayton
Chapter 5: Institutionalizing corporate entrepreneurship as the firm’s innovation function: reflections from a longitudinal research program
O’Connor discusses the consequences when companies fail to adapt, transform and renew themselves on the path to innovation. She explores the important question of how incumbents can develop an organizational capability for transformational renewal by building a sustained competency for CE. O’Connor notes the divergent views in a firm’s inability or even unwillingness to engage in path-breaking or transformational change even when the need is evident. She notes that some researchers overlook the role of managers in promoting transformational change. The author also notes that the dynamic capability perspective gives prominence to this role. One pitfall of this perspective, however, is accepting notions of path dependency, where past practices shape future action. Instead, O’Connor argues that entrepreneurial activities can move organizations toward new opportunities and create new paths for breakthrough innovation, setting the stage for transformation. Some of these entrepreneurial activities are indigenously driven. The firm, therefore, needs to work hard to capture the learning that happens within these activities to promote breakthrough innovations. Her field work and surveys of managers provide rich data to identify serious barriers in this regard. These include lack of clarity about the strategic intent; inconsistent action with that intent; not managing resource constraints and organizational challenges; and treating breakthrough innovations as rare events. O’Connor observes that managerial mindsets and inaction may delay or even prevent the development of a sustained capability to engage in breakthrough innovations, a key foundation for the formulation and development of new capabilities.
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