The purpose of this study is to provide the knowledge to understand and the skills to manage innovation at the operational and strategic levels. It integrates the management of market, technological and organizational change to improve the competitiveness of firms and effectiveness of other organizations. The analysis suggests that it is no longer sufficient to focus on a single dimension of innovation, as technological, market, and organizational change interact. Instead of following the ‘one best way' school of management, this study identifies the links between the structures and processes that support innovation. One way of developing technologies, products, and processes by firms involves venturing outside their existing core competencies. Firms establish internal corporate ventures (ICVs) in order to exploit underutilized resources in new ways; to introduce competitive pressure on to internal suppliers; to divest non-core activities; to satisfy managers' ambitions; to spread the risk and cost of producst development; to combat cyclical demands of mainstream activities; and to diversify the business. However, firms may also establish ICVs in order to grow new businesses based on new technologies, products, or markets. A new corporate venture requires a clear business plan and an intrapreneur who must raise the finance, as well as manage the development and the growth of the businees. Such an intrapreneur should resemble a traditional entrepreneur in a high level of motivation and need for autonomy. However, unlike their counterparts, intrapreneurs also need to have good political and social skills in order to deal with internal politics and bureaucracy. Firms that are consistently successful at corporate venturing are characterized by four factors: (1) in assessing failed ventures, they draw a distinction between bad decisions and bad luck; (2) they measure progress of ventures against agreed milestones, and change the direction if necessary; (3) if a venture is not successful, they terminate it, rather than making further investments; and (4) they perceive venturing as a learning process, and learn from both failures and successes. The present study examines the nature of innovative small firms and the issues particular to their creation, management, and growth. Focuses on a subset of small and medium-sized enterprises (SMEs) which are based on new technologies, and differ from other SMEs because they are usually established by highly qualified personnel, require large amounts of capital, and face greater technical and market risk. While new independent ventures and corporate ventures have similar requirements concerning management and organization, certain differences exist. While corporate entrepreneurs have the advantage of the financial, technical, and marketing resources of the parent firm, they must seek high levels of affiliation and need great social skills in order to deal with internal politics and bureaucracy. Their independent counterparts, on the other hand, must raise finance and develop functional expertise, but have the advantage of independence and managerial and technical autonomy. (AT)
