Corporate entrepreneurship in network organizations:: How subsidiary initiative drives internal market efficiency

Abstract

Julian Birkinshaw believes that corporate entrepreneurship can play an important strategic rôle in the business development of large, multinational firms, and he particularly identifies internal initiatives by subsidiary companies. The growth of network organizations is relevant here, and he puts forward a framework for an `internal market' to understand how they work. The internal market model is used to examine the various roles that corporate entrepreneurs can play in the large firm, with the aim of achieving network optimization. The author assesses the costs and benefits of internal initiatives, and points out the importance of arriving at an appropriate level of subsidiary entrepreneurship, agreed by head office and subsidiary, rather than applying blanket prescriptions.