Gard, Baltes, Katzy - 2013 - IAMOT - Managing autonomy of teams in Corporate Entrepreneurship – Evidence from small and medium firms

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Managing autonomy of teams in
Corporate Entrepreneurship –
Evidence from small and medium firms
Jérôme Gard1, Guido Baltes 1, Bernhard Katzy2
1HTWG Konstanz, Brauneggerstr. 55, D-78405 Konstanz, jerome.gard@htwg-konstanz.de,
gbaltes@htwg-konstanz.de
2CeTIM @UniBw München, Werner Heisenbergweg 39, 88559, Neubiberg, Germany,
bernhard.katzy@cetim.org
ABSTRACT
This research in progress paper investigates new business development in small and medium sized (SME) German
enterprises. Germany is known for its “hidden champions”, little publicly known global market leaders in niches. We
find that they successfully mandate business development teams that engage in close market interaction and develop
the business based on so gathered experience; to which we refer as pivoting. Successful teams are found to enjoy
high levels of autonomy combined with coaching and top management interaction. The paper reports case studies
illustrating four autonomy dimensions that determine new business development (functional autonomy, decision
autonomy, strategic autonomy, and structural autonomy) and each is aligned with specific balancing activities. The
paper contributes to corporate entrepreneurship literature by providing a new conceptual framework of autonomy,
which is a first step for quantifying the effects of autonomy on the performance of business development teams.
Characteristics of the four autonomy dimensions are derived from the cases and their influence on the ability of
teams to develop a new business is revealed. The paper concludes with recommendations for future research and
managerial implications.
Keywords:
Autonomy, New business development teams, Corporate entrepreneurship, SME, Grounded theory, Case study
Introduction
Technology based firms competing in volatile markets face the challenge of continuously
adapting their way for creating value according to the life cycles of technologies and markets.
One way of coping with this challenge is to develop the organizational ability to explore new
business opportunities in order to explore new markets or technologies. Developing this ability is
however a challenge for many firms. A prominent example is Nokia, currently fighting for its
survival in the mobile phone industry. The company struggles to adapt its hardware-based
differentiation of mobile phones (80 models in 2009) to the software-based smartphone
paradigm (4 models in 2012) (Gartner Dataquest, IDC). Small and medium sized enterprises
(SMEs) are facing the same challenge with access to significantly fewer resources.
Developing new businesses within the context of established SMEs is discussed in corporate
entrepreneurship literature (Kuratko, 2010). In this paper, corporate entrepreneurship is defined
by a team that establishes new customer contacts, develops distribution channels and marketing
concepts, business plans, strategies and so on in order to develop a new business. The activities
of the so called business development team focus on the exploration of business opportunities
which distinguish from the parent organization’s business in terms of market, product or
technology (Kanter, 1985; Kuratko, 2010; Shane & Venkataraman, 2000).
The ways in which firms implement corporate entrepreneurship differ between large firms (e.g.
multinational corporations) (Birkinshaw, 1997; Hanan, 1976; Hill & Hlavacek, 1972) and SMEs
(Borch, 1999; Schafer, 1990; Simsek & Heavey, 2011). Large firms provide the team with all
responsibilities (e.g. marketing, controlling or sales) and resources (e.g. financial assets or
experts) required for developing the new business in a rather autonomous organization (e.g.
subsidiary) (Edwards, Ahmad, & Moss, 2002; Garnier, 1982; Hill & Hlavacek, 1972). In
contrast, new business development teams in SMEs are at least partly embedded in their parent
organization. For example, they share responsibilities (e.g. Marketing), resources and knowledge
of the parent organization (Antoncic & Hisrich, 2003) and compete with other units in the
general battle of resource allocation.

The guiding question of this paper is how such business development teams can be managed as
they have distinct needs from the rest of the organization because their targets and thus their
means of success are difficult to plan (Gard, Baltes, & Katzy, 2012). Particularly at an early stage
of business development, these teams may have a vision where to go but may have only a rough
idea how to get there. They develop the new business through market interaction and pivot
(switch) activities for developing the business while remaining bounded to the vision of the new
business. This ‘pivoting’ approach is regarded as a successful way for managing new business
development (Eden & Ackermann, 1998; Kuratko, 2010; Lindbolm, 1959; Sarasvathy &
Venkataraman, 2011) but is sometimes seen as uncontrollable thus as an indicator for
organizational inefficiency or ‘muddling through’ (Ansoff, 1967).
Business development teams require autonomy in order to successfully develop a new business
through pivoting (Kanter, 1985; Lumpkin, Cogliser, & Schneider, 2009; Sathe, 1985; Simon &
Houghton, 1999; Sprigg, Jackson, & Parker, 2000) which is a matter of balance as too much as
well as too little autonomy increases the rate of failure (Shimizu, 2012). Thus, the major
challenge for higher level management is to establish an adequate level of autonomy that enables
pivoting without losing control over business development activities. The first aim of this
research in progress paper is to provide a sensitizing study revealing the influence of autonomy
on the ability of teams to develop a new business within SMEs and describe why some managers
successfully manage the level of autonomy whereas others fail.
Our research contributes further to theory as it has been recently criticized that autonomy is often
“too simplified” in corporate entrepreneurship meaning that research focuses on single autonomy
dimensions despite autonomy is a multidimensional phenomenon (Lumpkin et al., 2009). A
deeper understanding of the multiple dimensions is required in order to understand how
managers balance autonomy. Thus, the second aim of this research in progress paper is to
identify and characterize the dimensions of autonomy determining new business development.
We therefore conduct an inductive study presenting two representative case studies which
provide an in-depth exploration of the autonomy dimensions and their influence on the ability of
teams to develop a new business partly embedded in a parent organization (high-tech SMEs).
Following the approach of grounded theory, we analyze the data and discuss these characteristics
and the influence of observed dimensions. These findings are concluded in a four-dimensional
conceptual framework of autonomy for new business development teams before we derive
recommendations for future research and practitioners.
Theoretical Discussion – Autonomy in Corporate Entrepreneurship
Successful development of new businesses within established firms requires entrepreneurial
behavior of individuals enabled by autonomy which can be described as “freeing organizational
members (both individuals and teams) to operate outside of an organization’s existing norms and
constraints where they can think and act more independently” (Lumpkin et al., 2009) to enable
activities outside the “current concept of corporate strategy” (Burgelman, 1983). Based on the
autonomy delegation argued in organizational life-cycle theory (Greiner, 1997), it is well
accepted in corporate entrepreneurship literature that lower level managers (e.g. the leader of a
business development team) require sufficient autonomy for experimenting in market interaction
(e.g. customers, competitors or technology) in order to develop the new business (Kuratko &
Michael, 2004).
Autonomy is a major motivation for people to engage in entrepreneurial initiatives, e.g. in
developing a new business (Gelderen & Jansen, 2006; Oosterbeek, van Praag, & Ijsselstein,
2010). Autonomy promotes job satisfaction and lowers absenteeism (Turner & Lawrence, 1965),
facilitates creation, transfer and application of knowledge (Janz & Prasarnphanich, 2005), it also
positively influences future performance of entrepreneurial initiatives (Hill & Hellriegel, 1994)
and enhances the competitiveness of the firm (Nielsen & Pedersen, 2003).
These studies are however hardly comparable as they use different definitions of autonomy. Thus
their results refer to different dimensions of autonomy such as autonomous decision making,
functional autonomy or the freedom to act without consensus seeking. This indicates that the
concept of autonomy incorporates more dimensions than, for example, providing organizational

members with time outside their regular job (Fry, 1987). These dimensions to date, however,
remain ambiguous in the corporate entrepreneurship literature (Lumpkin et al., 2009). Thus, the
aim of this review is to shed light on the dimensions of autonomy relevant for the context of
business development in established firms.
Functional Autonomy
In corporate entrepreneurship literature, autonomy is traditionally discussed for corporate
ventures that are rather autonomous from the parent organization in terms of responsibilities and
resources required for developing the business (e.g. with its own experts in R&D, sales,
marketing or controlling) (Edwards et al., 2002; Garnier, 1982; Hill & Hlavacek, 1972). These
rather autonomous venture teams have been identified in large multinational corporations (Hill &
Hlavacek, 1972). Here, research focuses often on the question which functions to develop within
the team and which functions to locate in the parent organization (Gifford, 1998). Some positive
relation between functional autonomy and initiative performance (e.g. achieved goals) was found
which is even stronger in the early phases of business development (Hill & Hellriegel, 1994).
There is however no consensus on the question of establishing functional autonomy (Newburry
& Zeira, 1999). It is rather argued that functional autonomy depends on the context in which the
business is developed. For example, teams involved in activities of internationalization are
expected to establish functional autonomy in key functional areas (Robins, Tallman, & Fladmoe-
Lindquist, 2002). Others argue, that (full) functional autonomy should only be formed within the
team if the innovation is radical (Martinez & Jarillo, 1991). Similarly, it is argued that functional
autonomy depends on the degree of alignment between the new business and the core business
of the parent organization. Here, a higher degree of alignment is argued to enable resource
sharing (e.g. the parent's established marketing channels, brand assets or partner networks)
(Block, 1989; Dougherty, 1995; MacMillan, Block, & Narasimha, 1986) inhering a lower level
of autonomy. The reduction of autonomy is argued to be over-compensated by the benefits that
shared resources (parent organization) provide, as they provide business related knowledge and
experience (Kanter, 1985; Sathe, 1985; Sykes, 1986).
Decision Autonomy
A different lens is provided by the argument that the team needs autonomy to experiment with
market stimuli (e.g. performance and potential of technology or customer needs) in order to
gather experience with unfamiliar conditions (e.g. acting on a new market) (Kanter, 1985;
Sarasvathy & Venkataraman, 2011). Here, it is argued that team members should enjoy
autonomy to make decisions in their environment without consensus seeking (Hornsby,
Naffziger, Kuratko, & Montagno, 1993) to increase the flexibility of adapting to volatile market
parameters (Block, 1989; Dougherty, 1995). Furthermore, autonomy is argued to compensate for
information asymmetry on market parameters between higher and lower level managers as
decision autonomy enables lower level managers to leverage their war front knowledge for
decision making (Floyd & Wooldridge, 1994; Kuratko & Michael, 2004). Thus, decision
autonomy is closely related to the concept of decentralization (dispersed decision making
authority) (Hage & Aiken, 1967; Pugh, Hickson, Hinings, & Turner, 1968) and helps business
development teams to thrive (Hornsby, Kuratko, & Zahra, 2002; Kanter, 1989; Kuratko, Ireland,
Covin, & Hornsby, 2005; Lumpkin et al., 2009; Lumpkin & Dess, 1996). Decentralization refers
to the authority of lower level managers to make decisions without approval (Burns & Stalker,
1961) and thus “the locus of decision making authority in an organization” (Brock, 2003).
The locus of decision autonomy influences the innovativeness and performance of a firm
(Andersen & Segars, 2001; Floyd & Lane, 2000; Gebert, Boerner, & Lanwehr, 2003; Hill,
Martin, & Harris, 2000; Young & Tavares, 2004). Similarly, decision autonomy enables the
leader of a new business development team to make decisions without consensus seeking (e.g.
with higher level managers) thus increases his/her ability to react quickly and flexibly to volatile
developments (Hanan, 1976). Teams enjoying high levels of decision autonomy experience high

variance (number and diversity of ideas) and show increased learning effectiveness (due to
learning the lessons of failure) (McGrath, 2001).
Decision autonomy enables a large number and variety of sub-coalitions that tend to support
innovation (Jennings & Lumpkin, 1989). Providing high levels of decision autonomy may
however as well inhere increased risk of failure (Gebert et al., 2003). Too much decision
autonomy increases the failure rate of business development initiatives in a similar way as too
little decision autonomy (Block & MacMillan, 1993; Simon & Houghton, 1999). In parts, this is
attributed to decision autonomy inhering the risk of opportunistic behavior (Eisenhardt, 1989;
Fama & Jensen, 1983) materializing in modification of the business vision towards individual or
group interests (Guth & Macmillan, 1986) which may lead to inconsistency with corporate
strategy (Feldman, 1989).
These risks may be reduced by continuous reviews of the business development team by higher
level management (Quinn, 1985; Sathe, 1985, 1989; Sykes, 1986; Sykes & Block, 1989) which
reduces information asymmetry and enables tracing the business development team’s track
(Sathe, 1989). Here, the character of reviewed performance indicators is critical as single focus
on financial targets for example, is criticized for being inadequate for evaluating new business
development (March, 2006). Targets are still essential, but should rather be defined in the form of
milestones (e.g. established projects or acquired customers) (Garvin & Levesque, 2006). These
should be implemented at a strategic rather than operational level because negative impacts are
expected when higher level managers do not provide autonomy on operational decisions in the
business development team (Quinn, 1985).
Recent research confirms that high levels of decision autonomy combined with strategic control
reviews leads to best results in terms of successful business development (Goodale, Kuratko,
Hornsby, & Covin, 2011). This particularly applies when control is established in critical areas
(only) (Thornhill & Amit, 2000). In contrast, very high as well as very low intensity control
negatively influences business development performance (Amabile & Kramer, 2012; Amabile,
Schatzel, Moneta, & Kramer, 2004; Oldham & Cummings, 1996). In contrast, some empirical
results indicate no impact on performance at all (Sorrentino & Williams, 1995).
Strategic Autonomy
Some authors argue that new businesses emerge from managerial grassroots (Bower, 1986;
Burgelman & Grove, 1996; Mintzberg, 1973, 1978, 1994; Mintzberg & Waters, 1985) which
itself needs to emerge unhindered from the current concept of strategy (Burgelman, 1983) and
the constraints of the parent organization (Bouchard, 2002). This corresponds to the argument
that the business development team should have control over the ends of the new business (e.g.
setting strategic targets) (Bouchard, 2002; Lumpkin et al., 2009). Strategic autonomy is enabled
by defining goals for new and unfamiliar situations rather on the basis of a vision which provides
strategic freedom (Ahmed, 1998). Accordingly, business development teams should be guided by
the parent organization rather through ‘broad vision statements’ to give room for defining
business ends (Hill & Hlavacek, 1972). This allows teams to gather experience and knowledge
based on experimentation in market interaction (Sarasvathy & Venkataraman, 2011). This is
(positively) termed “pivoting” in entrepreneurship research but (negatively) “muddling through”
in strategic management (Eden & Ackermann, 1998; Lindbolm, 1959).
Higher levels of decision autonomy encourage individuals or/and teams to identify and develop
the business by experimentation and risk-taking (Hart, 1991; Hart, 1992; Lumpkin & Dess,
1996; Miller, 1983). Accordingly, strategic decision making is experience-based as a result of
experiments rather than planning-based (Garvin & Levesque, 2006). Consequently, successful
initiatives have a tendency to emerge (Dess & Lumpkin, 2005), which in turn increases a firm’s
performance in volatile environment due to openness and awareness for market-based
opportunities (Andersen & Knudsen, 2006; Kuratko et al., 2005). Further, firms respond faster
when lower-level managers can make strategic decisions without time-consuming hierarchical
approval processes (Andersen & Segars, 2001; Huber, 1990)
Thus, strategic autonomy has a positive impact on financial performance in dynamic
environments as strategic decision making by lower level managers without excessive consensus

seeking increases adaptability to environmental changes (Andersen, 2004; Perrow, 1967).
However, this is costly due to high levels of informal communication to coordinate mutual
adjustments (Perrow, 1967). Thus, only volatile environments justify the effort where benefits of
adaptability outweigh the cost of enhanced coordination and communication (Thompson, 1966).
The experience-based strategic decision making in addition allows lower level managers to
combine a strategic vision with hands on information (Floyd & Wooldridge, 1992; Nonaka,
1988) which increases impact in terms that the implementation of strategy is facilitated (Dess,
1987). As lower level managers iteratively interact in small cycles with the market environment,
they are likely to be first in recognizing emerging threads and opportunities (Mintzberg &
Waters, 1985; Pascale, 1984).
Structural Autonomy
Structural autonomy is described as the authority of action (coordinating) that a person holds in a
job (Hackman & Oldham, 1975; Hackman, 1990). This understanding builds on the definition
that structural autonomy is the legitimation of a team or its leader to choose the work methods,
define the scheduling of the work and select the work criteria autonomously from higher level
managers (Breaugh, 1985; Gulowsen, 1972 ). It is the independence of individuals or teams to
coordinate resources free from restrictions and independently (Lumpkin & Dess, 1996) which is
positively related to business development team success (Lassen, Gertsen, & Riis, 2006;
Srivastava & Agrawal, 2010). Structural autonomy thus refers to the extent to which the leader of
a team is able to coordinate activities in order to adapt the team configuration in response to
changes in the market or gathered experiences without higher level managers approval (Gard et
al., 2012). For example, a team leader may commit experts or define key performance indicators
without consensus seeking with higher level managers.
This shapes the competences of the team which influences future strategic options (Eisenhardt &
Brown, 1998). Competences refer to the ability of individuals to respond adequately to uncertain
situations (Hanft & Müskens, 2003; Pawlowsky, Menzel, & Wikens, 2005) which inheres self-
determined thinking and acting (Knispel, 2004). This enables individuals to learn from their own
experience and qualify themselves for solving complex problems which are typically aligned
with business development activities (Heyse, 2004). The team’ portfolio of competences needs to
fit the business/market needs. (Re-)configuration i.e. coordination of the interplay of these
competences allows for adaptation to changing market conditions (Teece & Pisano, 1994). This
(re-)configuration is substantially driven by lower level managers and is often unintended or
occurs without the awareness of higher level managers (Andersen, 2000).
The structural autonomy to do that enables managers to absorb slack resources which has a
positive impact on business development success (Chandler, 1962). Slack resources can be
defined as "that cushion of actual or potential resources which allows an organization to adapt
successfully to … external pressures for change … as well as to initiate changes in strategy with
respect to the external environment" (Bourgeois, 1981). This enables latitude concerning the
timing and the way to perform a job in an uncertain environment (Klein, 1991). Furthermore, the
ability to absorb such excessive resources encourages a firm’s experimentation and risk-taking
behavior which is essential for corporate entrepreneurship (Burgelman & Sayles, 1986). In such
situations where market parameters are uncertain slack resources are particularly important
because the demand for resources or the requirements on competences is hard to predict (Voss,
Sirdeshmukh, & Voss, 2008). They enable to experiment with a broader range of competences
which increases flexibility and subsequently the firm’s ability to survive. This overweighs the
cost aligned with organizational inefficiencies (Desouza et al., 2009; Staehle, 1991). In sum,
slack resources increase the ability of an organization to solve complex problems through the
adaptation of competences which determines future strategic options (Bourgeois, 1981; Cyert &
March, 1963; Ruiz-Moreno, García-Morales, & Llorens-Montes, 2008). Most researchers agree
that the availability of slack resources is beneficial for exploration initiatives such as new
business development as they increase the flexibility to adapt to a dynamic or uncertain
environment (Su, Xie, & Li, 2009).

Method
Interviews were conducted with the aim of describing how small and medium size high-tech
firms develop new businesses and for revealing the cause-effect relation of autonomy and its
inherent dimensions. Interviews were conducted in six small and medium size firms in high-tech
industries (Solar, IT, Automotive-Supplier). Data was collected from May 2011 until May 2012
through a series of open interviews (thirteen) with a time frame between 1 to 2,5 hours. The
interviews were conducted with the CEOs as well as the leaders of business development teams
which provided first hand data from experiencing business development in the context of
established firms. The interviewees were personally involved in new business development
either as acting business developer or responsible higher level manager. Apart from one, the
interviewees had worked for the companies for more than five years and some even since the
company’s beginning.
Following grounded theory, each interview was transcribed and coded in interactive sessions
among the three authors. At an early stage (around May to August 2011) coding focused around
the question of ‘how small and medium size enterprises develop strategy’. Discussions among
the researchers (the three authors) were conducted through weekly Skype conferences based on
this early and open minded coding. Discussions materialized in rough case descriptions which
summarized the observations. These revealed that the real world problem of the interviewees was
not related to efficient strategy making in established businesses. Instead, their challenge was
rather to adapt activities of new business development to changes in their volatile environment.
In tackling that challenge, some of the firms performed successfully whereas others failed. This
was further evaluated by presenting and discussing these findings with the interview partners.
Subsequently, a second session of interviews was conducted with the same (six) companies and
one further company. These interviews were transcribed and coded in the same manner. Coding
now focused on the question ‘how SMEs develop new businesses through teams and why some
firms fail and others succeed’. Iterative discussions based on coding continued and data was
recoded numerous times. In the end, the three researchers grounded the core hypothesis that the
level of autonomy which the leader of the business development team enjoys influences the
success and failure of initiatives. The evidence for this hypothesis was reflected in the literature
whilst at the same time revealing a gap in research. It was criticized that the dimension
describing autonomy remain ambiguous in the corporate entrepreneurship literature (Lumpkin et
al., 2009). To address that research gap, cross-case analysis was conducted by coding the
interviews to identify the dimensions of autonomy observable in all the cases.
This use of coded real world cases as a means of data analysis and interpretation is frequently
applied in grounded theory research and an accepted approach in management research (Glaser
& Strauss, 1967; Turner, 1983). Case studies are chosen as a means of analysis and data
description because the phenomenon of autonomy remains ambiguous in corporate
entrepreneurship literature (Lumpkin et al., 2009). Qualitative methods such as case study
research enable the description of such an ambiguous phenomenon from a holistic perspective
and in real-life settings (Yin, 2009). Case studies enable researchers to generate in-depth
understanding by focusing on people’s perceptions (Patton, 2002; Ticehurst & Veal, 2000).
High-tech companies were chosen for data collection because it was expected that these firms
compete in highly dynamic environments in which volatility of market parameters is common.
Thus, the challenge of developing new businesses is more frequent. Data collection was limited
to seven firms because the cases showed high repetition of observed dimensions of autonomy
and patterns of new business development. Furthermore, in-depth discussions with additional
experts (CEOs and business developers) of other firms indicated no further insights. Accordingly,
data collection was closed. Two cases where chosen from the data for this paper to illustrate a
full and comprehensive description of the autonomy dimensions in the context of corporate
entrepreneurship. These cases are representative of the other cases because they enable the
description of all four dimensions of autonomy identified in the cross-case analysis and provide
contrasting cause-relation effects in terms of high (Company A) and low levels of autonomy
(Company B). Generalizability of our findings might however be limited through the perception
of the interviewees.

Case Studies
Solar-Company (Company A)
The case study refers to a medium-sized high-tech company in the photovoltaic industry (PV-
Industry) with around 130 employees and a turnover of about 25 Million Euro. The company’s
solutions focus on the improvement of productions process for PV wafers, cells and modules.
The company provides quality measurement equipment, chemical additives for production and
consultancy for quality management. Despite the consolidation and fierce price competition in
the PV-Industry, the company was able to generate continues growth by continuously developing
new businesses. Several new businesses have been developed since the company was found in
1999. The following is an in-depth description of one successful business development.
Founded in 1999 as a university spin-off, Company A had high knowledge related to production
processes for PV cells and modules resulting from university research. At this early stage, the
business was based on production process consultancy. In a next step, consultancy was combined
with hardware sales of quality measurement equipment. Therefore, a partner was identified who
had developed quality measurement equipment; e.g. for production processes in technology-wise
related industry (e.g. semiconductor industry). Cooperation between the two firms was started
with the aim of combining the process knowledge of Company A with the hardware knowledge
of the partner. The outcome yielded quality measurement equipment for laboratories and in-line
production processes in the PV-industry. Company A acted as a representative and received a
sales commission, whereas the partner signed the contracts and provided the equipment.
Involved in sales activities, the interviewee (physicist), still working part-time at the university,
became more and more involved in business development activities. Based on his interaction
with customers when conducting sales activities, he recognized that the customer’s knowledge
related to PV quality management was low. This was not only the case for the equipment that
Company A provided but also for third-party equipment (e.g. scales or microscopes). He
perceived this lack of knowledge as a business opportunity and developed the business idea to
combine Company A’s process know-how with market available quality measurement equipment
in order to offer a turnkey package to the customers. This package included the equipment,
service and operational training related to the equipment.
Driven by this idea, he initiated and coordinated several activities for developing this new
business. First, a marketing concept was developed. Based on the different customer needs (e.g.
high quality vs. high quantity production), differentiated standard packages were developed and
productized as hybrid products (e.g. brochures, flyers, sales presentations and the web-page were
(re)designed). Second, the interviewee initiated business partnerships and signed cooperation
contracts with the different manufacturers of equipment (e.g. Carl Zeiss AG). Third, a training
concept was developed in order to support the end-customer in implementing the equipment into
their production processes. Fourth, a team was built to train end-customers and provide field
service. These activities were supervised and coordinated by the interviewee and conducted by a
cross-functional team (e.g. team members from marketing, sales or service).
The new established business was unique in the PV-industry: Company A offered a productized
hybrid bundle or a comprehensive set of quality measurement equipment, implementation
service, field service and training. As the partner only provided part of the range of this bundle,
the interviewee was in good position for re-negotiating contractual conditions. Based on the
argument that the customer requires turnkey offing which only Company A could offer, the
authority for signing the contracts was transferred to Company A. Thereby Company A was put
in the position to establish relationships with customers based on intensified interaction (e.g.
conducted training and provided service). That provided deeper customer understanding which
was important for further developing the market solution which subsequently improved
Company A’s market position.
This growth paved the way free for reaching a new customer group – PV turnkey manufacturers
(companies providing ready for operating production facilities for solar cells and modules). The
new business enabled Company A to establish a temporary monopoly in this market segment,
leading to contracts with each single turnkey manufacturer in Germany. Before building the new

business in 2005, Company A was still small (with less than 20 employees), many projects were
conducted with external consultants and production capacity did not expand beyond prototype
level. This business was fundamentally changed through the new business. Sales as well as sales
margins increased significantly. Similarly, the number of customer relations as well as the
number of employees increased.
In 2006 the demand for turnkey solutions began to decrease in Europe and to simultaneously
increase in Asia. Consequently, the turnkey manufacturers entered the Asian markets. The
interviewee recognized this development due to his intensive interactions with these customers.
He again perceived this as a business opportunity to enter the Asian market. Based on this idea,
he initiated a deal with turnkey manufacturers that Company A would provide a comprehensive
quality measurement bundle (e.g. providing the equipment, consultancy, training and service) in
the turnkey projects. As the agreement was settled, the first projects (three at the same time) were
conducted in Taiwan. To deliver that contract volume, the interviewee set up a small team of
experts, most of them worked for Company A as external consultants beforehand (now hired
fulltime). The team started with the three parallel projects and initiated further sales and service
activities. “This team was the nucleus for the sales and service organization that was built later
on”.
These projects opened access to the Asian markets. The interviewee engaged in further sales
activities and was able to sign contracts for follow-up projects as well as projects with new
customers without the support of the turnkey manufacturers. Ultimately, the interviewee
established a stand-alone position (with an own market presence) in the Asian market which was
the basis for further growth. Retrospectively, the interviewee stated "we would have never
managed to enter the Asian markets without the turnkey partners. We had not even been present
at a single trade fair".
Subsequently, sales increased significantly in 2006 and the interviewee hired local employees
(Asia) and invested in their qualification in order to be able to manage the increasing number of
projects. While the initial team members were sent to Asia with German employment contracts
in a freelancer’s scheme, international employment and business law became more relevant with
the international employees. Since 2006, Company A spent tens of thousands of Euros on
consultancy in order to clarify these legal aspects. In this context the interviewee stated “if we
had done everything strictly following international employment and business law, we would
never have afforded to enter the Asian markets. Today, we have of course solved these legal
issues but the required consultants were very expensive”.
In order to scale sales and service, the team in Asia was expanded into a new organization. The
interviewee had the choice to build their own sales and service organization or to outsource sales
and service to one of the local organizations specialized on these issues. When first projects were
conducted, the interviewee immediately recognized that it was of significant importance to
guarantee reliable service because only this ensured production stability for the customers. He
further realized that “there is nothing better than a reliable service if you want to sell again and
again to the same customer”. He therefore decided to build an own sales and service organization
based on the existing team. More than that, engaged in sales in Asia, the interviewee realized that
their customers utilized the trademark “Made in Germany” of their quality measurement
equipment as a marketing aspect. He decided that a unique products design, highlighting the
German brand, would be helpful. To achieve that, the interviewee initiated the redesign of the
hardware, the web-page, brochures, sales presentations and so forth.
In line with that, the CEO and the interviewee decided that it was time to no longer rely on the
equipment of the partner company but develop their own equipment. “Thus, with a forerun of 1-
2 years, we invested several millions in product development”. Software development was the
core activity of the hired engineers whereas the production of hardware was outsourced. In 2010,
the development department comprised more than 20 engineers. In product development, it was
decided to develop equipment for high quality production processes instead of high quantity
production processes. The interviewee stated “the customers asked to have the equipment at a
lower price, but customers always have a tendency to get things cheaper in order to increase their
margins”. It was expected that production process optimization towards high-end products would

become the key success factor for manufacturers (wavers, modules and cells). Years later, this
anticipation of market demand turned out to be true as was seen in 2011 when high-end modules
achieved at least a 50% higher price than average modules and manufacturers of high-end
products seemed to be secure whereas others went bust (e.g. German producers such as Q-Cells
or Sunways collapsed).
When the PV-crisis hit Europe around 2008-2009, the international run of solar cell and module
manufacturers on the Asian market started. This crisis was based on the fact that the Chinese
government subsidized Chinese PV-manufacturers with billions of US-dollars. Thus, Chinese
manufacturers were able to provide solar cells and modules for one third of the price than their
competitors in Europe (some offers even below factor costs). Company A took advantage from
this crisis situation because they were able to provide mature quality measurement equipment
solutions (sets of equipment, training, service etc.) to these companies. Well in time, market-
ready equipment was just produced when sales increased. High sales rates in combination with
significantly increased sales margins determined the company’s growth. In 2011, the interviewee
stated that entering the Asian market was essential for survival. Most companies with a similar
business model were squeezed out of the market at this time. In contrast, Company A grew from
around 20 employees in 2005 to 130 employees in 2010 and the company’s major revenue was
generated in Asia.
One might argue that the described development of the business was unique and based rather on
luck than sound judgment. However, the interviewee reported at least five other cases where new
businesses were developed following the same pattern of inventing and (re)adapting to changing
market environments (e.g. the deceasing demand for turnkey solutions on Europe followed by
the internationalization of turnkey manufacturers to Asia). One of these businesses is an
established and profitable business unit in Company A today. Another one was successfully
developed through Company A generating around 10 Million Euro turnover itself when it was
carved-out of Company A in 2008. The reason for this carve-out was that this business had
enormous growth potential which required a level of investment that Company A was unable to
provide. Thus, this business was integrated in the parent company of Company A as a distinct
business division. This business division generated a turnover of more than 300 Million Euro in
2010.
IT-Company (Company B)
This case refers to a small information technology and consulting company with around 30
employees and a turnover of around 2-10 Million Euro. The company provides solutions for
visualization in management control systems, product-life-cycle management (PLM) or
collaboration. Turnover was primarily generated through the PLM business focused on
individualized solutions for the automotive industry. Due to the industry trend towards
standardized solutions in combination with decreasing payment rates for specialized
programmers, the business became in a cash-out position in the company’s portfolio today.
Therefore, the company (here called Company B) engaged in the development of new
businesses. In particular, the case describes the evolution of the PLM business and the ways
which Company B tried in order to develop a new business.
Company B was founded in 1989 by five founders. This large number of stakeholders became
increasingly problematic over the years because the roles of shareholders and executive directors
were unspecified and their targets rather diverse. The CEO of today’s business argued that he
was not able to develop the business with the given setup. He found an external investor who
provided him capital to pay the shareholders out. After that, the company started being profitable.
Around 1996 the CEO had the vision that web-based technologies would change the way people
work. “Everybody laughed at me these days but I went my way”. He developed a solution for
integrating product-lifecycle relevant applications in firm specific portals. The value proposition
for the customer was, for example, that the integration of different engineering applications
enabled internationally distributed engineers to operate as a team. This solution was so
innovative that Company B won competitions with global players like HP or IBM for projects
with the major OEMs within the automotive industry. Highly individual projects with a

timeframe sometimes between 10 and 15 years were successfully conducted. These projects
materialized in solutions that were perfectly tailored to the customer’s requirements which
resulted in high customer satisfaction.
In consequence, the company grew to a level of complexity (e.g. number of projects, employees)
where the CEO alone was not able to manage the company by himself. Consequently, he
developed managers responsible for business units. These managers became strategic assets for
the company. Based on their experience, they developed their own vision for the respective
business unit.
In order to develop their respective businesses accordingly, they required a level of autonomy the
CEO was not willing/able to provide. “There where demands expressed, a demand for autonomy
which I was not able to fulfill … I had debts which I needed to pay back to the investor … there
was a large list of prohibitions … my people required a level of autonomy that I didn’t even have
myself”. In fact, the CEO was unable to provide his managers with the requested level of
autonomy as the investor enforced harsh contractual conditions in order to avoid any
uncontrolled activities (such as investments in other firms or inter-firm cooperation).
Due to the limited autonomy, the managers were unable to develop their business according to
their vision and perceived the parent company as being an obstacle rather than a support. As a
consequence, the managers left and founded their own company (Company Y) in 2000. This
drain of managerial competence was not constrained by binding instruments such as contractual
clauses (e.g. non-competition clause was not included in employment contracts).
In order to build their business, the managers recruited some of the best people from Company B
as well as specialists that at the time were in the job application procedure at Company B. The
CEO stated “I have invested a lot in qualifying managers with the effect that I generated my own
competition. I qualified every chief executive manager including some executive managers of
Company Y.” Company Y has successfully grown to more than 100 employees in a good market
position.
In consequence, the CEO decided to cut the competences of his employees in order to avoid such
events in the future. For example, employees where only qualified in competences which were at
the core of their job (such as sales). Another incident was an employee of Company B working
secretly for Company Y. This employee had full access to Company B’s intranet which was a
repository for business relevant knowledge. Subsequently, some of the stored information was
used by the employees of Company Y (for example sales presentations). The CEO of Company
B immediately limited his employees’ access to the intranet to a minimum when he recognized
the knowledge leaking.
The cutting short of competences as well as the limiting of access to business relevant
knowledge however caused new problems after a while. The CEO stated “I seriously cut the
competences of my employees. It seemed to work. However, the company lost its ability to
generate further growth … this was simply too extreme”. He created a rather “mechanistic”
organization in which employees followed documented guidelines, working procedures,
regulations and business processes in order to do their job.
This was sufficient for managing existing projects efficiently. But as the CEO claimed later, the
company lost its ability to generate innovative solutions for customers and to generate new
business. This was particularly true for the PLM business where the company gradually
transformed from a tier-1 supplier to a tier-2 supplier. A long-term customer in the automotive
industry even refused follow-up projects with the argument that the degree of innovation on offer
was too low.
The economic outcome displayed its full effect when the economic crisis hit the automotive
industry in 2008. The PLM business that had provided steady growth for the past 10-15 years
started to stagnate. The CEO was not surprised as he had noticed standardized solutions
dominating the market whereas prices for specialized programmers (Java) had been dropping
continuously (Company B focuses on individualized solutions). At a point before the financial
crisis in 2008, he decided that it was time to cash-out the old and create a new business.

He forced his employees to work on developing new business ideas. But as he stated “I failed. I
seriously tried everything but the company was neither moving forward nor backwards. I would
never have believed this if I hadn’t seen it with my own eyes... Everybody was used coming to
work and to having work … The Company needed that shock if you ask me today.” The shock
was that no new business was developed. Instead employees stuck with ‘business-as-usual’. In
consequence, around 25 specialized programmers had no project when some of the long-term
projects ended. Subsequently the CEO downsized the business over a two year period from
around 75 to 30 employees without generating losses. The result was, however, surprising
because the company generated exactly the same profit (absolute) with 30 employees as it had
before with 75 employees. After that, the CEO managed the remaining projects himself.
He recognized that new businesses ideas (for example new fields for application) would not
emerge from the mechanistic type of organization that had evolved over the years. He argued that
his executive managers needed more autonomy and decided for radical organizational change.
Two of his executive managers were given the opportunity to establish their own businesses in a
new environment. For that, subsidiaries were established in Ingolstadt and Stuttgart with the
executive managers in charge. Each executive manager was provided with one major customer
(automotive industry) and a small team of programmers and consultants. The aim of both
initiatives was to maintain existing customers and gain new customers with no limitation to
specific industries. In fact, the teams were allowed to conduct projects with existing customers,
engage in further sales efforts (70% of the executive manager’s work time) and human resource
development activities for building their own team. Every other function (e.g. R&D, marketing,
controlling) was provided by Company B and the executive managers were controlled by the
CEO.
In the interviews it became clear that basic decisions such as brochures and other marketing
material should be utilized, when and where to make an offer, which customer to contract and so
on were basically made by the CEO. Similarly, the influence of the executive managers on the
current concept of strategy was rather low. The CEO stated that he discussed strategic issues with
three employees (chief of development, chief of product management, chief of finance). The
executive managers were however not part of this group.
Not surprisingly, new business did not emerge and one of the subsidiaries was closed. It was
argued that the executive manager did not have the ability to acquire new customers and the
nearly 10 year old project with the main customer ended without a follow-up project. At the
beginning, things went wrong in the second subsidiary as well. The executive manager had
trouble managing the programmers in his team. He was a consultant, and thus struggled to
provide constructive feedback on the technical side and to guide programming activities. The
executive manager agreed with the CEO that it would be best to abandon programming activities
for his business. Accordingly, the business was adapted with the focus on process consultancy.
The business started running when after a while the team acquired a new OEM in the automotive
industry and several smaller customers. Strategically however, the CEO saw the initiative still in
a cash-out position for cross-financing the development of new businesses.
Over the years, the CEO recognized that business process integration in a “collaboration
platform” is not only a topic for large companies but also for small and medium size enterprises
(SMEs). He knew however, that individual solutions (which his company developed in the
product life-cycle field) were not marketable because they were simply not affordable for SMEs.
Technology in this field advanced however and standard solutions (such as Microsoft
Sharepoint) emerged on the market. Thus, business process integration became suddenly
affordable for SME – a new business idea was born. The value proposition was to generate
individualized collaboration platforms (based on the standard software) that integrated
information and applications from different systems (e.g. ERP or PLM) in a short time and at
low cost.
However, the CEO argued that the mechanistic part of his company would not be able to develop
such a new business. He stated that this team was good for administrating and conducting
projects but unable to think outside the box and not willing to enter unknown terrain. It was
further argued that the guidelines, regulations, procedures and processes helpful for the

mechanistic team hindered innovative people to create something new. The CEO stated “I want
to create a team that is completely detached from the rest of the organization, so they can create
their own culture, their own spirit. And I don’t want to be their leader in terms that I pull them
like I have done in the past … honestly, I am tiered … they can get every support they require
but they need to generate growth themselves. This is now something new, a trail … but I believe
that it will work”.
With this basic idea in mind, the CEO established a small team of around four full-time
employees with the aim of developing the new business. In the first stage, the team members
developed the conceptual design of the new business. While this business solution matured, the
team increasingly engaged in sales activities and human resource development. Questions such
as what activities to pursue and how to develop the business were primarily made by the team
members. Even strategic issues (e.g. where to focus research and development activities, which
solutions should be developed or issues of qualification) where decided by the team. The CEO
stated “I don’t want to tell them what to develop or give them other directions for the content of
their business as long as the business is moving forward… The only guideline they have is the
vision to generate collaborative solutions for SMEs and their budget”.
The new business was however in an early stage causing trouble with the key performance
indicators and controlling procedures derived from those in the established businesses. Targets
(e.g. budgets or turnover) were planned but did not reflect real word conditions. Milestones such
as number of customer acquisitions or cost coverage seemed to be more valid and were
implemented. After a period of excessive customer acquisition, first bigger projects were
initiated and turnover started to increase around two years after first investments were made. The
business was still in an early stage when interviews were ended (first projects just started and
break-even was not yet achieved). Nevertheless, the CEO stated that the new business was on the
right track and he saw enormous potential.
Discussion
Case A describes that the new business successfully emerged and thrived through the business
development team. This was determined by the autonomy of the business developer to pivot
(shift) business develop activities based on experience that was gathered through
experimentation in market interaction. Pivoting is indicated through the fact that the business
(distributor business) was adapted various times (e.g. turnkey business, internationalization or
positioning in Asia). For example, the business developer recognized the opportunity to develop
the ‘turnkey business’ through experience gained when he engaged in close interaction with
customers. Business development activities which evolved from this experience where rather
experimentation-based as these activities were not discussed, not analytically determined, and
rather unplanned, based on the intuition of the business developer that activities would work.
Similarly, business development activities evolved when first projects were initiated in Asia or
the company changed its market position by establishing an own sales and service organization
in Asia.
Pivoting was facilitated as the business developer had the ability to adapt business development
activities rather autonomous (free from limitations and direction of the CEO) based on his
experience. The CEO was a rather visionary type of a leader providing the business developer
with high levels of autonomy. This is indicated through the fact that the strategic direction of the
new business was mainly driven by the business developer and decisions related to business
development activities were often made without consensus seeking with the CEO. Furthermore,
the business developer had latency-free access to functional experts and was able to coordinate
them autonomously from the CEO. Direction was (only) given through a broad vision statement
and control (only) established through revisions of rough budget and business plans. On the other
hand, clear budgets and the availability of functional experts that the CEO was able/willing to
provide limited the level of autonomy.
In contrast, the negative impact of too low levels of autonomy on new business development is
highlighted in Case B. Here, autonomy was significantly reduced when the two business unit
managers left the company. For example, projects that where before managed rather

autonomously by these managers where managed by the CEO after this event. Furthermore,
employees were treated as functional specialists with restricted qualification and strict job
descriptions rather than independent decision makers. Access to the intranet was limited to a
minimum and directive leadership enforced. These aspects are described as indicators for too low
levels of autonomy causing an organizational crisis that a company has to overcome in order to
achieve growth (Greiner, 1997).
The consequence was that a rather mechanistic kind of organization manifested itself over the
years. This organization was able to successfully (efficiently) conduct projects but unable to
generate innovative solutions or develop a new business, even when the CEO pushed hard.
Consensus exists that the limitation of individuals in terms of qualification and job diversity,
directive leadership and centralization (all described in Case B), or in other words too low
autonomy decreases the organizational ability to generate innovation (Burns & Stalker, 1961;
Lawrence & Lorsch, 1967). The CEO learned that the organizational ability to generate a new
business requires higher levels of autonomy. He therefore established two business development
teams in Stuttgart and Ingolstadt in order to enable them to act more independently. In fact
however, sales targets were set by the CEO in combination with tight budgets, basic decisions
(e.g. which commercials to provide or where to place an offer) were made by the CEO and the
operational business influenced through close project plan reviews and other controlling
instruments.
The level of autonomy of these teams was higher than the autonomy established in the
mechanistic part of the organization. However, new businesses did not emerge and the CEO
decided for more radical change when he established a new business development team
(collaboration business). Here, the level of autonomy was similar to that described in Case A.
Still, business development was at an early stage when interviews ended but the CEO perceived
this as the most promising approach compared to the earlier trails.
Hence the cases highlight that new businesses can successfully emerge and thrive through new
business development teams but therefore the business developer requires an adequate level of
autonomy to adapt business development activities in response to experience gathered through
close market interaction (pivoting). In a nutshell, the cases show that autonomy determines
successful business development which reinforces recent argumentation in corporate
entrepreneurship (Dess & Lumpkin, 2005). Despite this relevance of autonomy in corporate
entrepreneurship, it is recently criticized that the dimensions of autonomy remain ambiguous
(Lumpkin et al., 2009). In the following, we further contribute to this discussion and characterize
the dimensions of autonomy observed in the cases.
Characterization of Functional Autonomy
Functional autonomy in Case A is defined through a rather high share of resources in functional
areas between the parent organization and the business development team, whereas the share of
resources was rather low in Case B. In Case B only one functional expert in sales was
temporarily provided by the parent organization. Similar to Case B, the business opportunities
‘turnkey business’ or ‘internationalization’ were operationalized through a cross functional team
(e.g. experts in marketing, sales, training or service). In contrast however, many of these
functional experts actually worked for the parent organization (e.g. concerning sales, training or
marketing) and were only involved in some business development activities.
We argue that functional autonomy is characterized though the share of resources and the level of
autonomy can be high in some functional areas and low in others. It is therefore argued that
functional autonomy depends on the functional area (Crockett, Payne, & McGee, 2007; Hill &
Hellriegel, 1994). Case A shows further that functional autonomy was established in areas
required for direct customer interaction. For example, sales, training and service expertise was
available in the team when the ‘turnkey business’ was developed and first projects in Asia were
operationalized by functional experts (e.g. sales, service, project management) that were fulltime
members of the business development team. On the other hand, autonomy in functional areas
such as accounting or finance was not reported. Based on these observations, we argue that the
nature of the functional area matters in the sense that the team requires autonomy in functional

areas that enable close market interaction and adaptation of business development activities in
response to changing environmental conditions (e.g. changing customer requirements).
Characterization of Decision Autonomy
Decision autonomy that the business developers at the teams in Stuttgart and Ingolstadt (Case B)
inhered was rather low as only some decisions referring to project management and human
resource development could be made without the approval of the CEO. In contrast, high decision
autonomy in almost every functional area enabled the business developer in Case A to act with
greater flexibility when developing the new business. For example, the business developer
recognized the ‘turnkey business’ opportunity and responsively made several decisions in order
to adapt the business. He decided which third party equipment manufactures to collaborate with,
to develop marketing and training concepts or to establish training and service teams. These
decisions were basically made by the business developer without time-consuming approval
meetings with higher level managers. Thus, decisions related to business development activities
were made flexible and free from direction and limitation of higher level management.
In corporate entrepreneurship, decision autonomy is often characterized through the latitude of
lower level managers to make decisions without the approval of higher level management
(Hornsby, Kuratko, & Montagno, 1999). The decisions made for developing the ‘turnkey
business’ are however further characterized through the functional areas where they are made.
Research in corporate entrepreneurship often overlooks that decision autonomy may be high in
some functional areas and lower in others (Dess & Lumpkin, 2005; Hornsby et al., 1999;
Hornsby et al., 1993; Kuratko, 2010; Zahra, Jennings, & Kuratko, 1999) which has distinctive
implications for business development success(Crockett et al., 2007).
We argue that an in-depth understanding of decision autonomy with respect to functional areas
contribute to the ongoing discussion for balancing decision autonomy. Such results would
indicate criteria for balancing decision autonomy among functional areas. Research concerning
multinational corporations provides indication that these criteria exist. For example, some
authors argue that decision autonomy should be high in operational functional areas (Hedlund,
1979) whereas others argue that autonomy should be established in market related functional
areas (Garnier, 1982). However, little is known about these criteria for the context of SMEs
which provides space for future research.
Characterization of Strategic Autonomy
The business developers in Case B (Stuttgart and Ingolstadt) had a rather low influence on the
strategic direction of their businesses. They were not part of the group in which strategic issues
were discussed and the case describes that the strategic direction was mainly given by the CEO.
In Case A however, high levels of strategic autonomy enabled the strategic direction to emerge
from the managerial grassroots. The strategy to enter the Asian market and subsequently to
achieve a competitive position was not intended when the business developer adapted the
business towards the ‘turnkey business’. Rather, the business developer recognized the tendency
of turnkey manufacturers to enter the Asian market through close interaction with these
customers. Perceiving this as an opportunity, he made the strategic decision to enter the Asian
market in cooperation with these customers. Similarly, the strategic decision (‘positioning’) to
establish an own sales and service organization in Asia emerged when the business developer
recognized (when engaged in first sales activities) that service reliability was one major value
proposition for Asian customers. Another strategic decision referred to the general direction of
R&D activities. Here it was decided to focus on quality measurement equipment for high quality
instead of high quantity production processes (based on experience made on trade fares and the
like).
Strategic autonomy is typically not seen as an autonomy dimension in corporate
entrepreneurship. Case A shows however, that strategic autonomy determines the development of
the new business as it enables the business developer to guide the future direction of the new
business based on experience. It is argued that lower level managers are a better knowledge
source than higher level managers as they have first-hand experience (Wooldridge & Floyd,
1990). Only recently, it is argued in corporate entrepreneurship that strategic autonomy should be

considered when investigating autonomy (Bouchard, 2002; Lumpkin et al., 2009). In-depth
characterization of strategic autonomy is however not provided yet.
Basically, strategic decisions are defined in terms of their long-term orientation and their strong
impact on organizational activities in order to be truly strategic in their nature (Miles & Snow,
1978; Miller, 1987). The three strategic decisions (above) fit this definition but need to be
distinguished when addressing the way decisions are made. The R&D-decision was made by the
business developer without the approval of higher level managers. In contrast, the
internationalization and positioning decisions were discussed with the CEO. Thus, the level of
strategic autonomy is defined through the extent to which the business developer makes strategic
decisions autonomously from higher level managers and the extent to which the business
developer influences strategic decision through participation in strategic discussions (formal or
informal). This characterization is established in strategic management but is new to corporate
entrepreneurship (Andersen, 2004).
Characterization of Structural Autonomy
The level of structural autonomy in Case B (teams in Stuttgart and Ingolstadt) was moderate
compared to Case A. The CEO in Case B influenced the (re)configuration of resources in the
operational business of both teams (Stuttgart and Ingolstadt). For example, he directly
coordinated programmers (Stuttgart) and sales experts (Ingolstadt) when things went wrong in
the teams. In contrast, the case of Company A shows that the business developer was the only
driver for the (re)configuration of resources. When it was decided to adapt the business model
towards the turnkey business, he for example coordinated marketing experts, composed a
training team, mobilized experts that worked for the company beforehand and coordinated these
experts when conducting first projects in Asia. Similarly, (re)configuration of resources was
conducted by the business developer when the sales and service organization was established in
Asia. These (re)configurations were basically coordinated autonomously from higher level
managers.
Structural autonomy enables the business developer to commit individuals to problems fitting
their competences. For example, specific external experts were chosen for conducting first
projects in Asia because the business developer knew their individual competences due to
previous projects and had the intuition that they are able to conduct these projects in the new
business environment. The (re)configuration of these resources inheres the authority of the
business developer to coordinate the team’s activities in terms of ‘What to do’, ‘How to do it’
and ‘When to do what’. The extent to which the business developer has the authority to influence
these issues without the approval of high level managers characterizes the level of structural
autonomy.
Structural autonomy enables the business developer to autonomously coordinate individuals to
engage in specific business development activities. Thereby, the business developer strongly
influences the development of the competences of his team which has an influence on future
strategic options (Eisenhardt & Brown, 1998). Thus, structural autonomy indicates to what
extend strategic options emerge from the business developer. This phenomenon is verified in
strategic management literature but is not yet considered in corporate entrepreneurship.
Conclusion
The paper shows that new businesses in SMEs successfully emerge and thrive through business
development teams. Therefore, the team requires the autonomy to adapt business development
activities based on experience gathered through experimentation in market interaction. However,
high levels of autonomy inhere the risk that business development teams fail due to missing
direction and control. The main challenge for higher level management is thus to establish an
adequate level of autonomy that enables the team to develop the new business through pivoting
without losing control over business development activities.
Our results show that the level of autonomy is defined through four dimensions: functional
autonomy, decision autonomy, strategic autonomy, and structural autonomy. Decision autonomy
enables the business developer to adapt business development activities flexibly in response to

his experiences made through close interaction with market stimuli. Strategic and structural
autonomy enables strategy to emerge from the managerial grassroots. Strategic autonomy
enables the business developer to iteratively readjust the strategic direction in response to
changing environmental conditions and structural autonomy enables the business developer to
drive future strategic options through the development of the team’s competence portfolio.
Functional autonomy determines business development through the level of shared resources
between the parent organization and the business development team, which determines the
team’s ability to solve problems aligned with business development activities.
The adequate level of autonomy can, however, not be extracted from few cases only. Drawing
such conclusions is not the purpose of the paper. Rather, this research in progress paper has the
aim to sensitize for the multidimensional phenomenon of autonomy in corporate
entrepreneurship and provide a first conceptual framework for investigating autonomy in the
context of business development teams that are embedded in SMEs. Research conceptualizing
autonomy as a multidimensional phenomenon with a focus on SMEs does not yet exist in
corporate entrepreneurship. We argue therefore, that our results provide a first contribution to
theory. In a further step, we will conduct a literature review on the four dimensions of autonomy
with the aim to operationalize empirically testable hypotheses within an integrating theoretical
model.
Moreover, the paper provides implications for management. We assume that the insights
managers draw from the paper and the cases increases efficiency when they engage in their first
cycle(s) when learning how to manage new business development teams. Particularly, managers
learn that business development teams are most successful when they are able to develop the
new business through pivoting and this requires rather high levels of autonomy. The highlighted
dimensions of autonomy are comprehensive and enable managers further to define what the
boundaries of the playing field for business development teams are and make it easier to derive
criteria for adjusting the level of autonomy.
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