Entrepreneurial Management in Business - Essay Example

Entrepreneurial management refers to the use of entrepreneurial skills in the management of business and its practices, as well as in all its aspects (Price). This management method is used to increase efficiency and effectiveness in the running of business using shift in the priorities of an organization (Hortovanyi 11). As such, the allocation of resources receives significant attention from the leader or manager while focusing on other equally important aspects of increasing and capitalizing on the effectiveness of the organization. Such factors include time and money allocation, expertise, talent and services that can be delivered effectively, rather than through conventional, traditional management, skills and capabilities found in leaders. In the use of entrepreneurship skills in management, maximization on the available resources is usually the highest priority to increase the level of output in a firm, without incurring additional costs both financially and through labor. As per the definition of entrepreneurial management, an entrepreneur is a good manager who assumes all the risks of a business by taking control of the company, as well as its goals and direction. The entrepreneurship model of management is made up of six different styles that are generated from a combination of one or more styles, but all aim at the earlier mentioned goals of effectiveness and independence. The first style is the classic and is more of a traditional entrepreneurial management style based on monitoring and supervision (Roslan et al 91). With this in mind, all hired personnel are monitored and supervised on a personal level, where personal refers to the manager taking the role of supervisor. This style also focuses on lack of delegation of responsibilities in the firm all thanks to the personal nature or attachment of the manager to the firm in taking the lead to oversee everything personally. The down side to this style lies in the failure to delegate duties and responsibilities due to the neurotic urge to do everything by oneself, which is more of a negative way to run a firm. The style is reformed by defining that which can be delegated and that which cannot, in order to create a convention on that which is right and wrong in running of the firm in relation to effectiveness. However, due to the common belief that this style uses team management, businesses often become too complicated to be run by the entrepreneur using this style; thus the inclusion of managers from outside to run the business. Still, due to the lack of trust in the delegation of responsibilities to subordinates and other members of staff, there is usually conflict in the running of the firm, as the leader needs to be in control. This is concerning running and supervising everything personally, which leads to over regulation what the managers are supposed t do for the development of the firm. As a result, it disillusions the subordinates and the firm is left without members of staff since they cannot handle the occurrence of such events on a regular basis as it appears disrespectful to the members of staff by subjecting them to some of the responsibilities that one cannot handle on his or her own. To correct the situation of the classic style of leadership with its down sides, to is crucial to identify the role of one’s leadership in relation to one’s ability to delegate. Therefore, when one cannot delegate effectively, it is crucial to keep the complexity of the business to a minimum in order to eliminate the need for managers and disillusionment of subordinates. The second style is the coordinator, which is an alternative to the classic method in that it takes the recommendations of reforming the classic to mind. A firm can be easily run with a very limited number of employees together with the leader, where the role of the leader revolves around organization. In this case, entrepreneurial management involves the leader verifying that everything is done in the form and that the firm is in order. As the name suggest, the leader may have to delegate the duties and responsibilities in the firm to get all matters of business handled. However, the leader does engage in some of the tasks in person, as it only requires a small number of staff to get the firm running. This style is the most popular due to its upsides in that with a very small number of employees, the turnover can be very massive, and the firm can go rapidly. This shows the effectiveness of the style in bringing down the cost of management and of productivity while maximizing on the few resources available. This is especially with the human resources, where a business can grow exponentially even with just a single employee. The downside to this style is that it bears a fallacy on the economies of labor, where it is assumed that labor is cheaper when produced from within the house that is, from the entrepreneur’s side. It is also based on the conservatism of most of the leaders on the above fallacy. Still on the styles of entrepreneurial leadership, craftsman style falls under the leaders who attempt to capitalize control over their businesses by handling everything they can, in person (Merril and Sedgwick). It is a form of derivative from the classic style of leadership mentioned earlier. The style focuses on the quality of the output, which is why it is most useful in crafts rather than in other businesses. The benefits of this style are that everything can be done in the right manner, as the leader is there to set an example for the rest of the employees. As a result, the style eases the costs and expenses that would be incurred from doing the same task until perfection is achieved. /however, despite the benefits, there are negative aspects to it in that it limits the size of the business the same way that the classic style does. It also forces the leader to handle most of the tasks, whether he or she likes them. To correct these styles, common advice is delegating all the jobs that one does not like handling in order to avoid the limitation of handling every job in person. Small partnership is another form of leadership style in entrepreneurial management, where leaders have less control and autonomy in the businesses as they are forced to share in some tasks (Merril and Sedgwick). This is especially in the tactical decisions with other partners in order to meet the needs and wants of the partners one of the benefits of this style is that the leader enjoys substantial support from other partners who have stakes in the business; thus are motivated to drive business to success. The success of the business affects all partners and stakeholder; thus, there is increased cooperation between employees and the leader to see that the business expands and attains high turnovers. To get this style to work, it is done through sharing responsibilities between the partners, where aspects of the business are shared amongst, or between the partners to increase effectiveness and efficiency within the business. On the other hand, this style does not ensure attainment of the full potential of a business in that business finally reach a point where they cannot grow any further, reaching their limit. This style only allows getting to their limit where they cannot get any further in terms of growth, but does not limit their potential to improve. Other styles include the big team venture, which involves the leader spending plenty of resources on management in order for the business to grow. The down side to it is that one must have a fully capable team of subordinates as with this style; it holds a great risk of losing one’s investment, just as it is with making profits. The final style of leadership in the entrepreneurial management is the entrepreneur-employee team, which gives the entrepreneur the largest amount of control in the business (Merril and Sedgwick). Authority in the business is vested in a number of responsible employees who understand that the entrepreneur gives the final word and makes all the decisions in the business. However, it requires a large amount of capital in order to maintain the employees who are delegated with authority. In addition to the merits and demerits of this style of leadership, another merit is that of the use of social networking in order to innovate and instill a competitive edge over other businesses. In light of the above, the method of management allows creation of opportunities, resolution of problems, pursuance of goals, and progression of businesses. This creates an advantage over other methods of leadership due to its self-driven nature. A good example of the management method is in the privatization of public institutions that have seen a significant drop in costs of service delivery and efficient in productivity. As such, schools, prisons, toll roads, wastewater management plants, utilities and others have enjoyed the beauty of entrepreneurship in management through immense growth and efficiency (Johnston 441). In these institutions, entrepreneurial management ends anarchy and creates competitive pluralism for improved service delivery and inculcation of professional ethics (Kuratko 1). In conclusion, entrepreneurial management in business involves the application of entrepreneurship in business and comes with both benefits and risks. It is, therefore, crucial to understand what method best suits a business prior to its application. Works cited Hortovanyi, Lilla. Entrepreneurial Management in Hungarian SMEs. Corvinus University of Budapest. 2010. Web. 29 Nov. 2012. < http://phd.lib.uni-corvinus.hu/459/4/hortovanyi_lilla_eng.pdf> Roslan, Raja et al. Effectiveness of Entrepreneurial Leadership Styles in Improving SMIs Manufacturing Bumiputera Technopreneurs Performance in Melaka. Journal of Human Capital Development. 2009. 29 Nov. 2012. < http://jhcd.utem.edu.my/index2.php?option=com_docman&task=doc_view&gid=18&Itemid=80> Johnston, Van R. "The Entrepreneurial Management Transformation: From Privatization, Reinventing, and Reengineering, to Franchising, Efficiency, and Entrepreneurial Ethics." Policy Studies Journal 24.3 (1996): 439. Price, Robert. What is entrepreneurial management? 2011. Web. 29 Nov. 2012. < http://blog.gcase.org/2011/10/24/what-is-entrepreneurial-managment/> Merril, Ronald and Sedgwick, Henry. The Six styles of Entrepreneurial Leadership. 1995. Web. 29 Nov. 2012. < http://www.turnaround.org/Publications/Articles.aspx?objectID=2676> Kuratko, Donald. Entrepreneurial Leadership in the 21st Century. Journal of Leadership and Organizational Studies, 2007. Web. 29 Nov. 2012. < http://www.pogc.ir/Portals/0/maghalat/890724-5.pdf> Read More