The Likelihood of Corporate Entrepreneurship in Large Corporations

Abstract

Entrepreneurship becomes more important nowadays in the strategic management process, in particular, in the company’s ability to increase profitability over time. From the view of entrepreneurship, entrepreneurs notice opportunities from where they act and create new hierarchies or ventures to organize transactions. If the entrepreneur happens to be the firm’s manager and when the management function is distinguished from the entrepreneurial function, agency problems arise in the new hierarchy. The firm’s manager could act against corporate entrepreneurship if he decides to explore the innovation concept for his own benefits to setup his own business. This paper sought to explore the feasibility of corporate entrepreneurship in large corporations under the consideration of conflict of interest, the characteristics of the manager, and the moral consideration of the manager. This is an explanatory research which used three case studies through semi-structured interviews. The results of the three case studies and the cross cases analysis support the existence of the conflict of interest in determining whether to explore the innovation concept for the corporation or his own benefits. It also confirms the importance of the characteristics of the manager and the moral consideration of the manager in the decision-making process on how to explore the innovation concept. All the cases confirmed that the likelihood of corporate entrepreneurship in large corporations is low as the manager is likely to explore the innovation concept for his own benefits.