Models of Innovation: Startups and Mature Corporations

  • Freeman J
  • Engel J
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The article compares innovation at entrepreneurial start-up companies with established, mature corporations. Although larger corporations have competitive advantages due to size and capital, start-ups in high technology can exploit changes in technology that produce market disruptions. Creativity is enhanced in organizations that work in teams with shifting job responsibilities versus the bureaucratic structure of large corporations. However, established companies have more of the discipline required to execute a strategy and bring a product to market. This paradox between creativity and discipline can be solved if corporations build organizational units protected from the structures used to generate discipline. Start-ups can solve a lack of capital though venture capitalists.

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  • John Freeman

  • Jerome S. Engel

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