Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Foreword
- Preface
- List of abbreviations
- 1 Introduction
- 2 Why a consistent emphasis and approach for new business creation is beneficial but difficult to achieve
- I The business environment
- II The management culture
- III The corporate executives
- 7 The bigger-is-better corporate philosophy
- 8 The small-is-beautiful corporate philosophy
- 9 New business creation challenges for corporate executives
- 10 Guidance and coaching by the DGM's boss and support and challenge by the controllers
- IV The division general manager
- V The division and its top management team
- VI Putting it all together
- Notes
- Bibliography
- Index
8 - The small-is-beautiful corporate philosophy
Published online by Cambridge University Press: 22 September 2009
- Frontmatter
- Contents
- List of figures
- List of tables
- Foreword
- Preface
- List of abbreviations
- 1 Introduction
- 2 Why a consistent emphasis and approach for new business creation is beneficial but difficult to achieve
- I The business environment
- II The management culture
- III The corporate executives
- 7 The bigger-is-better corporate philosophy
- 8 The small-is-beautiful corporate philosophy
- 9 New business creation challenges for corporate executives
- 10 Guidance and coaching by the DGM's boss and support and challenge by the controllers
- IV The division general manager
- V The division and its top management team
- VI Putting it all together
- Notes
- Bibliography
- Index
Summary
This chapter examines how the small-is-beautiful corporate philosophy influences new business creation (Table 8.1).
The attraction of the small-is-beautiful corporate philosophy
The small-is-beautiful corporate philosophy encourages the pursuit of many small opportunities because it assumes that the division, not corporate headquarters, is the primary center for corporate entrepreneurship. It is assumed that every business is a growth business, and that innovation and entrepreneurship can create repeated waves of growth in so-called mature businesses. Corporate executives exit an existing business only when there is considerable evidence that the business cannot be profitably grown over the long term, as DGM Buddy March at 3M said when this study began:
Don't use the word “mature” in this company. We have grown huge profitable businesses from product lines that others called mature, by vigorously developing new products and new markets. We do divest businesses occasionally, but it is as difficult to convince corporate executives to divest as it is to persuade them to acquire.
The small-is-beautiful corporate philosophy also limits the financial risk to the corporation by requiring each division to self-finance its new initiatives. As Ray Thorngate, DGM of 3M Engineering Products, pointed out, “The tradition in 3M is that each division funds its own growth. Corporate is not going to give you any money.”
- Type
- Chapter
- Information
- Corporate EntrepreneurshipTop Managers and New Business Creation, pp. 106 - 116Publisher: Cambridge University PressPrint publication year: 2003