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Various researchers also indicated entrepreneurship (ENTR) as the fundamental act supporting innovation (Amit et al., 1993). In this regard, corporations should improve their innovation capability (Kelley et al., 2009) through CE (Lee & Pati, 2017). History has proved that businesses should be capable of rapid change, transformation, and innovation to fulfil the fast-changing marketplace's expectations (Schoemaker et al., 2018). The Schumpeterian opportunity recognition process and CD have been examined for engineering firms. This study has revived a classical debate over opportunity recognition by incorporating external factors to propose the CE model. Engineering firms need to identify gaps in the market through naturally occurring obsolescence of products and services (CD) to create TO with appropriate MO. Opportunity recognition in engineering firms is distinguished and bounded by MO and technical viability. CD intensifies the impact of MO on TO significantly. MO is the reason for the emergence of TO, which corporate entrepreneurs in engineering firms exploit. Results reveal that MO and TO exerts a positive influence on CE. Structural Equation Modelling (SEM) using Partial Least Square (PLS) approach has been used to analyse the data. A survey was conducted using a structured questionnaire with 132 managers of engineering firms in Pakistan. This paper investigates the CD concept in engineering firms by explaining how technical opportunity (TO) transforms into corporate entrepreneurship (CE) actions once opportunities have a market orientation (MO). Schumpeter's idea of creative destruction (CD) explains innovation functions in organisations.