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The entrepreneurial organization - Essay Example

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Large-scale organizations are most commonly characterized as bureaucracies. However, bureaucratic organization structure is rapidly becoming dysfunctional, and new structures are evolving right within a number of large-scale organizations, as well as within many other small and medium scale enterprises.
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The entrepreneurial organization

Download file to see previous pages... They can only thrive in an environment of relative freedom.
Under industrialization, bureaucracy was the dominant form of organization. The factory was designed to produce standardized products; the bureaucracy was designed to produce standardized decisions. Many major corporations of today developed in an industrial society, based on a bureaucratic model of machine-like division of function, routine activity, regularity, seeming permanence, and a long vertical hierarchy. It was a world of mass markets uniform goods and services, and long production lines.
During the 1990's, however, the top-down authoritarian management style began yielding to a networking style of management. Horizontal communication in a networked environment is freer and more fluid, with few bureaucratic barriers. In the new style of management, people learn from one another peer to peer, everyone is a resource for everyone else, and each person gets support and assistance from many different directions. In any bureaucratic structure, people tend to feel they cannot change their environment and thus may never seek the information that might change it. In sharp contrast, the new emerging form of organizations supports change, innovation, and individual initiative to an optimal degree.
Intrapreneurship simply represents an organizational culture that allows employees flexibility and authority in pursuing and developing new ideas. Intrapreneurship is nothing but entrepreneurship practiced within the context of a large established organization. An intrapreneur is involved in the "venturing" process, that is, in developing a new business inside a corporation from its initial idea until it becomes a viable business. Often an intrapreneur must lead a project with an entrepreneurial vision , willingness of using power , leadership, motivation and ability to overcome resistance and barriers (Johansen, 2002).

Joseph Schumpeter (1883-1950) was a pioneering researcher in the field of entrepreneurship, he studied the role of the entrepreneur as an innovator, i.e., the person who develops a new product, a new market, or new means of production. Schumpeter distinguished between dependent and independent entrepreneurs, the former being those who are connected to an existing company, and the latter being those who start their own companies. Although coined and popularized by Gifford Pinchot in 1985, the term 'intrapreneur' (short for intra-corporate entrepreneur) essentially means what Schumpeter called a dependent entrepreneur.

Several factors in organizations can have an influence on intrapreneurship/entrepreneurship. Usually, there are any number of barriers to innovation that can occur in organizations. Among all these factors and barriers, the degree of bureaucratic-style management within an organization can have the most adverse impact on the levels of individual initiative.

2. The Paradigm Shift

Bureaucratic-style management is fading from the scene, albeit gradually. Mega corporations may be thriving, nonetheless their internal structures are becoming more geared towards innovation. Once considered a contradiction in terms, corporate intrapreneurship has become widely accepted in successful companies, such as 3M, Intel, and Coca-Cola.Also, in the fiercely competitive world of high ...Download file to see next pagesRead More
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