Innovation, Change and Entrepreneurial Management

Lori Rosenkopf
The Wharton School of the University of Pennsylvania

Today's world is one of rapid change -- technological, social, economic and political. Organizations, large or small, must respond to these changes in order to survive. The most successful organizations, however, are those which exploit and even create change.

This mini-course will expose you to a mix of approaches and techniques that promote innovative thinking and entrepreneurial behavior in organizations. The first half of the course examines how patterns of change in technologies and industries create both opportunities and threats for existing firms and entrepreneurs. Theoretical models and actual examples emphasize how technological and organizational systems are key components of an "entrepreneurial mindset". The second half of the course focuses on tactics and strategies that encourage innovation and entrepreneurship within (and between) organizations. Cases and articles highlight critical success factors for both new and established firms, and also how interorganizational activities shape markets and opportunities. Additionally, two of the sessions are structured to promote interaction with practicing managers.

MATERIALS:

Bulkpacks containing the assigned readings as well as copies of overhead transparencies to facilitate note-taking are available through Wharton Reprographics. Please bring these materials with you to class as they will not be distributed during class sessions. You can generate extra copies of the syllabus, assignments, and most class notes from a home page (address and password to be supplied). If additional materials are distributed in class, you may find a nominal charge on your bursar bill at the end of the semester.

COURSE EVALUATION:

Class participation 25%
Project 35%
Exam 40%

Class participation is an integral component of your learning experience as well as your grade. Your class participation score will be based on my assessment of the quality of your comments in class and the consistency of your attendance. To help me learn your name and background, please give me a class card and also use a tent card in class. Since class discussion will revolve around the readings and cases, preparation is essential. Specific questions that will guide your reading and help your preparation for each session are included in the syllabus.

The project deliverable is a five-page paper. You may choose whether you wish to work individually and analyze how several concepts discussed in class relate to your previous work experience (Option A), or whether you wish to work in a group (no larger than four) to analyze how these same concepts apply to an assigned case (Option B). Papers are due in my office on April 24 by 4:30 p.m. Late work will not be accepted.

The exam will consist of several discussion questions that will require you to apply your learning from class. Books and notes are allowed, as you will be expected to integrate the case work and readings in your answers.

SYLLABUS

INNOVATION, CHANGE AND ENTREPRENEURIAL MANAGEMENT

1) March 17-18. Innovation? Change? Entrepreneurial Management?

  • New York Times, "One Key or 2 for the Car? Innovation is Unwanted" (Handout)
  • Wall Street Journal, "Crossword-Puzzle Editor Eschews Esnes and Anoas, which Vexes Traditionalists" (Handout)

  • 2) March 19-20. The Challenge of Innovation

  • Nadler and Tushman, "A Model for Diagnosing Organizational Behavior" (#1)
  • Case: Bidwell Manufacturing Company (#2)
  • * If your last name starts with A-G, consider Acton's perspective. If your last name starts with H-P, consider Horton's perspective. If your last name starts with Q-Z, consider Hirsch's perspective. What does your character think should be done about the MTC? Be prepared to take your character's role in class.
    * Now consider Flint's perspective. How does he feel about the MTC? What might he recommend to Horton?

    3) March 24-25. Opportunity or Threat?

  • Cooper and Smith, "How Established Firms Respond to Threatening Technologies" (#3)
  • Smith, "The Bell-Western Union Patent Agreement of 1879: A Study in Corporate Imagination" (#4)
  • Business Week, "Contact-Lens Sellers Just Don't See Eye-to-Eye" (#5)
  • * How did telephone technology and its market opportunities evolve in the late 1800s?
    * Would you consider the telephone a "competence-enhancing" or "competence-destroying" technology for Western Union at this time?
    * How can Western Union's telephone strategy be classified along the four dimensions suggested by Cooper and Smith?
    * What types of contact lens innovation are occurring, and who is affected by them?

    4) March 26-27. Patterns of Change in Technologies and Industries

  • Abernathy and Utterback, "Patterns of Industrial Innovation" (#6)
  • Foster, "Timing Technological Transitions" (#7)
  • Case: "Hattori-Seiko and the World Watch Industry" (#8)
  • * A "dominant design" can be defined as a particular set of product characteristics that capture the majority of a market over an extended period of time, such as the Model T, the IBM-compatible PC, and the QWERTY keyboard. How does the concept of a dominant design relate to the articles by Abernathy and Foster? To the Seiko case?
    * Why did the Swiss succeed in being global leaders? How did they sustain their position so long (Swiss share 80% in the late 1940s!)?
    * What capabilities did Timex and Bulova develop to become world volume and revenue leaders? What kept the Swiss from developing these capabilities?
    * Likewise, why did Hattori-Seiko succeed Timex and Bulova as industry leader?

    5) March 31, 4:30 p.m., 350 SH-DH. Recognizing and Capitalizing on Opportunity

    ** GUEST SPEAKERS -- SPECIAL SESSION REPLACES REGULAR SESSIONS **
    ** ALL FOUR SESSIONS MEET JOINTLY AT THIS SPECIAL TIME AND PLACE **

    Mr. David Reim (WG '90), President, SimStar, Skillman, NJ
    Mr. Edward Battle (WG '90), Vice President, SimStar, Scottsdale, AR

  • Fortune, "Profiting from a Changing America" (#9)
  • Fortune, "Where the Next Fortunes will be Made" (#10)

  • 6) April 2-3. Entrepreneurial Vision

  • Collins and Porras, "Building Your Company's Vision" (#11)
  • Case: "The Body Shop International" (#12)
  • Fortune, "Can The Body Shop Shape Up?"(#13)
  • * Identify the resources and competencies that led to the Body Shop's growth.
    * What are the Roddicks' "Big Hairy Audacious Goals"?

    7) April 7-8. Jump-Starting Entrepreneurial Behavior in Established Firms

  • Norling, "Network or Not Work: Harnessing Technology Networks at Dupont" (#14)
  • Case: "Texas Instruments, Inc. -- Educational Products" (#15)
  • "How Goliaths Can Act like Davids" (#16)
  • New York Times, "Consumer-Product Giants Relying on Intrapreneurs" (#17)
  • * How do TI's structures and practices spur entrepreneurial activity? Or stymie it?
    * How are Dupont's structures similar or different to TI's?

    8) April 10, 4:30 p.m., 351 SH-DH. Managing Innovation and Entrepreneurship in Established Firms

    ** GUEST SPEAKERS -- SPECIAL SESSION REPLACES REGULAR SESSIONS **
    ** ALL FOUR SESSIONS MEET JOINTLY AT THIS SPECIAL TIME AND PLACE **

    Mr. John Haigh, Executive Consultant of Strategy, AT&T, Basking Ridge, NJ
    Ms. Michelle Ehrenreich, Principal, Mercer Management Consulting, NY, NY

  • Kotter, "Leading Change: Why Transformation Efforts Fail" (#18)

  • 9) April 14-15. Roles and Networks in the Innovation Process

  • Morison, "Gunfire at Sea: A Case Study of Innovation" (#19)
  • Roberts and Fusfeld, "Staffing the Innovative Technology-Based Organization" (#20)
  • * What made Sims champion the use of continuous-aim firing? How did his motivation differ from Scott's?
    * Why did the Navy resist Sims' efforts?
    * What other factors influenced the transition to continuous aim firing?

    10) April 16-17. Organizational Renewal

  • Tushman, Newman and Romanelli, "Convergence and Upheaval: Managing the Unsteady Pace of Organizational Evolution" (#21) -- SKIM
  • Nonaka, "Creating Organizational Order Out of Chaos: Self-Renewal in Japanese Firms" (#22) -- SKIM
  • Quinn, "Managing Strategic Change" (#23) -- SKIM
  • Fortune, "Is he too Cautious to Save IBM?" (#24)
  • Business Week, "How IBM Became a Growth Company Again" (#25)
  • * What do you see as the major challenges for IBM now?
    * How do you evaluate Gerstner's leadership thus far? How does his approach compare to those recommended by Tushman et al., Nonaka, and Quinn?

    11) April 21-22. Organization Learning: Looking Beyond the Firm

  • Chesbrough & Teece, "When is Virtual Virtuous? Organizing for Innovation" (#26)
  • "Turning Rivals into Teammates" (#27)
  • Case: "Bill Gates and the Management of Microsoft" (#28)
  • Fortune, "Software Hardball" (#29)
  • * What are Microsoft's principal strengths?
    * How has Bill Gates fostered innovation at Microsoft?
    * With what issues will Gates and Microsoft have to contend as they move forward? What should they do to deal with these issues effectively?

    12) April 23-24. Recap: Technological and Organizational Systems ** PROJECTS DUE **

  • Business Week, "Electric Cars: Will they Work? And Who will Buy Them?" (#30)
  • * How would you predict that electric car technologies and markets will evolve over the next ten years, and why?
    * What do you consider the most critical factors that will determine the long-term success of electric cars?
    * What strategic and organizational moves would you recommend that incumbent auto manufacturers take to manage this situation?

    FINAL EXAM. Date and location to be determined.