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EFFECTUAL CELLS: FOSTERING INNOVATION-BASED CORPORATE ENTREPRENEURSHIP THROUGH CONDITIONS FOR EFFECTUAL PROCESSES (INTERACTIVE PAPER)

2010

Alvaro Filipe da Costa

Corporate Entrepreneurship (CE) features many of the same uncertainties as classical entrepreneurship, e.g. the dependency on innovation outcomes which are difficult to predict (Phan et al., 2009). Moreover, both types of entrepreneurship often involve the possibility of constructing an environment rather than only positioning oneself in a given environment, thus calling for approaches to control and shape rather than merely adapt and predict (Wiltbank et al., 2006). The effectuation approach (Sarasvathy, 2001) thereby seems suited to describe CE situations. We focus on innovation-based CE (ICE), as innovation is the preeminent mechanism for creating business that generates new revenue streams and creates value for shareholders (Kelley, Peters & O’Connor 2009; Narayanan, Yang & Zahra, 2009), and analyze the influence of newness in respect to market and technology as an indicator of innovativeness (Hill and Rothaermel, 2003) . This study examines the performance of corporate innovation projects, the characteristics of their respective processes and the antecedents of these processes. We establish that highly innovative CE benefits from effectual processes (as opposed to causative processes) and develop hypotheses regarding antecedents of such processes in established companies. More specifically, we seek to concretize the concept of “effectual cells” (Wiltbank et al., 2008).

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