Entrepreneurial Organisation - Assignment Example

Entrepreneurial Organisation. Introduction: Entrepreneurship is the ability to create or innovate something that can add value to one’s ambition driven by a high need for achievement, sheer hard work, good leadership and management, and immense courage to take calculated risks and face failures. Importance of entrepreneurship in creation of economic wealth at individual and national levels has been advocated in entire literature and practice. At corporate level, entrepreneurial trend is necessary to enable sustained innovativeness and competitiveness. Similarly, entrepreneurship can be for- social activities, like one ventured by Florence Nightingale on nursing science; wealth creation or any other reason that embeds an ambition to do something different that adds value to self, to society, to the nation and/or to environment as a whole. Therefore, entrepreneurship is about doing and making, it has to be lived through deliberate innovation. Peter Drucker (2007) describes that the vision of an entrepreneurial society is where individuals will increasingly have to take responsibility for their own learning and re-learning, for their own self-development and for their careers. An entrepreneur is characterized by personality traits and motivational styles of any ambitious person. Carsrud and Brannback (2007) critiqued the myths that entrepreneurs are made, have specific cognitive style, or are extreme risk takers and asserted that some entrepreneurial skills can be taught and some characteristics are attitudes that can be influenced through education, but some are inherent, like art. In addition, they state that any intelligent person with an ambition and determination can become and entrepreneur. Theoretical Foundations: Kruger’s (2004) study identified two basic trends in evolution of entrepreneurship: first, Turgot and Say (1803) identified that people who wanted to create and develop new businesses emerged as entrepreneurs; and second from Cantillon and Schumpeter’s studies underpinning innovation as the reason for entrepreneurship. Thirdly, Kirzner‘s view of entrepreneur is who possesses unique knowledge, which enables him/her to extract economic rent from ignorance (Carsrud & Brannback, 2007). Drucker refers to entrepreneurship as the attitude to change, to which he proposes: ‘the entrepreneur always searches for change, responds to it and exploits it as an opportunity’ (2007; p.xiv). However, management researchers like Carlock (1994) and Grant and Perren (2002) and others have asserted that there no single accepted definition of entrepreneur in literature (Kruger, 2004). Based on different views, Carsrud and Brannback (2007; p.10) have defined entrepreneurship as ‘the process by which individuals-either on their own or inside organisations-pursue opportunities without regard to the resources they currently control.’ Characteristics of an Entrepreneur: Al Shapero described entrepreneurial behaviour as the kind of behaviour that includes: taking initiative; organising or reorganising of social and economic mechanisms to turn resources and situations to practical account; and the acceptance of risk and failure (Carsrud & Brannback, 2007). Entrepreneurial persons are innovative and creative, but not necessarily inventors. They have a sense of excellence and highly self motivated which drives performance and achievement. Entrepreneurs work effectively in an impendent setting, and can flourish in an altruistic setting. Carsrud and Brannback (2007; p.15) have outlined eight different characteristics commonly found in entrepreneurs: cooperativeness and a strong team player; strong desire to work hard; strong desire to learn new and different things; ability to listen to others and network; non competitive but visionary and goal setting; strong self efficacy; coach or trainer; and not any more risk-prone than other professionals. For entrepreneurs to be successful, they have to be willing to learn and combine a variety of inputs from perception and experiences of others such as mentors, networks of advisors, advisory boards etc. Keen observation and learning can help entrepreneurs to enhance their knowledge. Good communication skills are extremely important to influence others including employees, shareholders and business partners; make impactful business plans and deals; and market their ideas/plans. Passion keeps entrepreneurs sustain and grow their businesses and people. This passion helps them take risks and also continue even after failures. Positive attitude towards officials helps in overcoming the official bottlenecks and getting things done in one’s favour. Positive attitude towards employees helps in improving commitment of workers to their work. Carsrud and Brannback (2007) have identified four types of entrepreneurs: achievement entrepreneurs who are driven by the need to achieve, exemplified by David Bruce of Flounder and Firkin of chain of pubs in London; salesman entrepreneur who relies on people skills and are driven by their feelings for people’s needs and wants, like Schulz of Starbucks Coffee; technology entrepreneur or the idea developer, or the innovator/inventor of new processes for existing products, like Bill Gates of Microsoft; and lastly, the manager who manages by taking charge with authority and cognition, like Jack Welch of General Electric (Examples from Bolton & Thompson, 2004). Creation of entrepreneurial organisation and teams: Slaughter (1996; p.100) had identified a seven-step approach to create entrepreneurial organisation, through studies based on Marion Laboratories Inc in 1950. The steps include: hire self-motivated people; help others be successful; create clarity in organisational purpose, direction, structure and measurement; determine and communicate your own values and philosophies; provide appropriate reward systems; create an experimental learning attitude; and celebrate your victories. The entrepreneur teams have the ability to hasten the establishment of entrepreneurial organisation. Kamm et al. (1990) have defined entrepreneurial teams as, ‘two or more individuals who jointly establish a firm in which they have a financial interest’ (cited by Ensley, 1999; p.8). Cooperation and collaboration have to be fostered in entrepreneurial teams in order to provide mutually beneficial control mechanism over resources. These help in working together with different skills, cognition, expertise, and differences of opinion. Impact of entrepreneurial team behaviours on business level strategies can bring varying outcomes to new venture performance and strategy formation and implementation. Many researchers have concluded with differing outcomes, and hence cannot be generalized (Ensley, 1999). Members of entrepreneurial team should have a sense of ownership, contribution and achievement. Factors for entrepreneurship: Entrepreneurship is triggered by factors such as opportunity recognition and entrepreneurial intentions. Recognition of opportunity may happen either by an active and systematic search of the external environment; discovery of opportunity by chance; or by creation of the entrepreneur. Opportunity recognition can be stated as the first step towards entrepreneurship; it can either be market-driven or product and technology driven. Secondly, sociocultural settings also play a role in this sphere because different people perceive a specific opportunity in different ways, shaped by their sociocultural beliefs and educational background. Carsrud and Brannback (2007; p.12) quote the example of a scientific researcher in an urban context may view opportunities for research or its related work differently from people living on a farm in rural areas. Thirdly, if the opportunity is viewed as difficult or requires long-term investment of efforts and resources, it may not be perceived as feasible or desirable. Carsrud and Brannback (2007) have associated entrepreneurship with characteristics like growth, innovation and flexibility. Entrepreneurship does not mean something big or unique; it can be found both in big and small firms, at all levels of management. Kirzner asserted that sources of entrepreneurship are to be found in information or knowledge asymmetry (Carsrud & Brannback, 2007). This means, entrepreneurship seeks new combinations of resources that other people possess in the form of knowledge, talent, and skills. This is what Drucker had referred to as building knowledge economy through continuous learning in order to sustain. Drucker (2007) attributed the making of entrepreneurial society of America to the ‘management’ science, scope ranging to societies of education, healthcare, government, and politics. The fundamental requirement for creation of entrepreneurial society is application of technology to management of new problems and new opportunities. Hence, the time now demands development of principles, practice and discipline in field of entrepreneurship and innovation. Personal networks and relationships can be rich sources for entrepreneurial opportunities for individuals and organisations. Conclusions and Learning: In conclusion, entrepreneurship is a quality that, either inherently possessed or learned by acquiring skills, helps one undertake or innovate to build something that he/she values based on perceived and/or invented opportunities. For this, the individual who aims to be an entrepreneur possesses qualities such as ambition, haste, determination, and courage. When two or more of such people come together to achieve a goal, they form the entrepreneurial team. An entrepreneurial team’s success lies in its cooperation and collaboration of activities meant to achieve the common goal using distinct skills, experiences and competencies. Characteristics for entrepreneurship such as positive and philanthropic attitude, selflessness, continuous learning, people management and communication skills can be acquired. However, one can be successful only with appropriate opportunity recognition and willingness. Learning from Drucker’s vision mentioned at the beginning, and by applying all the described aspects of entrepreneurship to myself, I have been able identify my entrepreneurial skills as ambition and positive attitude, confidence to face risks and failures, willingness to work hard; and areas of development such as enhancing communication skills; continually look for innovative ideas that can add value to the business; enhance knowledge of markets and customer preferences with respect to the product; people management skills; and performing risk analysis in field of venture. References Bolton, B.K and Thompson, J. 2004. Entrepreneurs in action. In Entrepreneurs: talent, temperament, technique. 2nd ed. Oxford: Butterworth-Heinemann. (Ch.2, pp:115-231) Carsrud, A.L and Brannback, M.E. 2007. Entrepreneurship. U.S.A: Greenwood Publishing Group. Drucker, P.F. 2007. Innovation and entrepreneurship: practice and principles. Oxford: Elsevier. Ensley, M.D. 1999. Entrepreneurial teams as determinants of new venture performance. U.S.A: Taylor & Francis. Kruger, M.E. 2004. Entrepreneurship Theory and Creativity. In Creativity in the entrepreneurship domain. London: University of Pretoria. (Ch.2; pp:11-37) Lal, S.K. 2003. Entrepreneurial Performance in Role Perspective. India: Abhinav Publications. Slaughter, M.P. 1996. Seven Keys to Shaping the Entrepreneurial Organisation. In Smilor, R.W and Sexton, D.L’s Leadership and entrepreneurship: personal and organisational development in entrepreneurial ventures. CT, U.S.A: Greenwood Publishing Group. (Ch.8; pp:99-112). Read More