Corporate Entrepreneurship and Resource Recombination: A Dynamic Capabilities Approach to Innovation

Abstract

This paper delineates the firm resources and firm capabilities as the two major driving forces of competitiveness. Capabilities are probably a more salient factor in maintaining and generating firms' novel competencies. Firm resources can be recombined in an entrepreneurial way to inspire innovation, which leads to positional advantages and superior performance. Corporate entrepreneurship is theorized as both organizational climate and culture, which can effectively and efficiently promote resource recombination. Top management's role is central. It should provide the mid-level managers with an entrepreneurial atmosphere: including autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness. Corporate entrepreneurship can be conceived in two ways: intrapreneurship and interpreneurship. Corporate intrapreneurship includes internal venture, cross-functional integration, and subsidiary initiatives. Corporate interpreneurship involves, among other things, collaborative entrepreneurial alliances and networks, vertically or horizontally. Entrepreneurial resource recombination can recombine and reorient a firm's financial, human, and relational resources so as to improve its innovation capacity, thus result in the firms' positional advantage and superior performances.