Title: Informal corporate entrepreneurship: implications from the failure of the Concorde alloy foundry and the success of the Toshiba laptop

Authors: Pier A. Abetti

Addresses: Lally School of Management and Technology, Rensselaer Polytechnic Institute, 110 8th Street, Troy, NY 12180-3590, USA

Abstract: The results to date of formal corporate entrepreneurship, as exemplified by Internal New Venture Divisions and Corporate Venture Capital have been mixed. In contrast, frustrated internal entrepreneurs have tried informal approaches to circumvent the company bureaucracy and obtained exceptional results. In this study, we discuss two cases: the Concorde alloy foundry; and the Toshiba laptop computer, which were both initially successful. The Concorde alloy project was approved and strongly supported by the company President, but was discontinued after 26 years. Instead, the Toshiba laptop project was vetoed twice by the headquarters and driven underground. After it surfaced by chance in Europe, the laptop became almost overnight a spectacular success, which resulted into a multi-billion dollar business and worldwide leadership of Toshiba in subnotebooks. By comparing the histories of the two projects, we analyse the key success factors for informal corporate entrepreneurship and explain why the first approved and supported project failed and why the second unapproved and ostracised project succeeded. We conclude with lessons learned and implications for R&D project managers and corporate entrepreneurs, the roles of champions for protecting the informal innovators, and how to recognise informal corporate entrepreneurs with high potential for success.

Keywords: Merlin–Gerin; Toshiba; laptop computer; Concorde alloy foundry; corporate entrepreneurship; internal new ventures; corporate venture capital; internal entrepreneurs; key success factors; informal innovation.

DOI: 10.1504/IJEIM.2004.005846

International Journal of Entrepreneurship and Innovation Management, 2004 Vol.4 No.6, pp.529 - 545

Available online: 16 Dec 2004 *

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