The Creation of an Entrepreneurial Organisation - Assignment Example

 The Creation of an Entrepreneurial Organisation Introduction The means by which an entrepreneurial organisation developes is different depending on the types of products or services provided. Some organisations have a stronger focus on improving internal and external communications, whilst other organisations maintain a strict focus on quality or improving customer service. The development of an entrepreneurial organisation involves key factors for the business founder who plays an integral role in structuring or designing the organisational environment. This paper describes what helps in developing an entrepreneurial organisation. Concepts and philosophies Casson (1982) identifies that in most businesses, there is a need to cope with a great deal of uncertainty and complexity. These uncertainties come from the external market, in terms of changing consumer behaviour, or even internally as the business tries to grow and develop new systems to support growth. In order to remain competitive, based on service or product offerings, there is a need for innovation. Innovation is often considered to be related to the product, such as changing features or improving product benefits, however innovation in the entrepreneurial organisation involves a new way of doing things that give competitive advantage over other companies, both large and small. The development of an entrepreneurial organisation begins with having the entrepreneur being actively involved in the conceptual stages (Fiore & Lussier, 2009). The business founder considers the external environment, such as buyer intensity, and then begins developing departments or specific job functions that can support business goals. Generally, the entrepreneur is responsible for coordinating resources, such as developing a human resources philosophy or in areas of procurement in the supply chain. In the early stages of organisational development, the entrepreneur is very active and visible in areas of management planning, employee control, and setting an appropriate business mission or vision. The entrepreneur asks himself, where do I want to be in x amount of years and how should the business get there. This makes an entrepreneurial organisation one where business strategy, strategic intention, is always on the mind of the developer. As the company experiences growth, new layers of management or job roles are added. This creates a need to develop a human resources campaign that promotes teamwork, respect and trust. Happy Computers, a small entrepreneurial organisation in Britain, decided that the best way to promote teamwork was to build trust and respect. “Trust people to do a good job and respect their abilities, their needs and their preferences. The result is increased turnover and better staff retention” (Doring, Jeantet, Kumpfmuller, Pedziwiatr & Sanchez, 2006, p.4). In order to make this happen, the entrepreneur uses their visionary approach to building a cooperative environment, such as developing small-scale training programmes or using different cultural models to assist employees in working in a diverse business environment. Using a variety of psychological theories, such as motivational theory, the entrepreneurial organisation is developed with a people focus in mind. The key for a team-focused organisation is to ensure that people are content with their job roles and status within the business and then working to create a unified organisational culture that remains focused on achieving the vision. However, before this team can be secured and considered to be efficient, they must understand what the company is working towards. Entrepreneurial organisations require first the vision and a leader with the ability to conduct environmental analyses to find strategic fit in their unique marketplace (Majumdar, 2008). During the developmental phases of the entrepreneurial organisation, finding what specific strengths are present within the business, including owner capabilities and staff competency, must be considered to be competitive. It is the responsibility of the entrepreneur to fully understand what drives their market and then position the company to provide excellence in product or service delivery. It is only then that team concepts can be successful and each person will then be able to find their own identity related to their role in the organisation. The development of teams, once the company is properly positioned, means establishing a set of shared meanings (Darling & Beebe, 2007). This is the foundation of developing an organisational culture, whereby employees and leaders all share the same focus and tend to have the same attitude related to customer service, interpersonal relationships, and in terms of generic business policy. Organisational culture development is very important for success in the entrepreneurial organisation, as it acts as the foundation for how an employee should behave in their job roles. If the vision is to excel in customer service, the organisational culture should be developed with this theme in mind, in areas of human resources, leadership and training. For example, the entrepreneur sets the vision for service improvements and then begins a process of communicating this goal to all members of staff. The entrepreneur, in their early role as planner and conceptual leader, might begin considering strategic options that can support customer service enhancement. He or she might determine that new email systems are needed to improve inter-office communications or develop an intranet where employees can post their concerns, ideas, or research findings about customers or other external market factors. This new communications system continues to promote teamwork and consistently sends the message that the organisational culture is one built on service. “The more attuned you are to abilities and personality traits, the better you will be at identifying the tasks you and others can best perform in team situations” (Carter, Bishop & Kravits, 2007, p.52). This is where the entrepreneur is vital in the development of the organisation, as they must act as the cultural champion and human resources manager to identify skills improvement or identify employee weaknesses that need development. The entrepreneur, especially in the early stages of organisational development, should conduct an internal analysis on the skills available currently and then identify any key traits that can best meet the business vision. For example, the entrepreneur may have recruited an individual with a background in public relations, but was hired to handle a management role instead. The entrepreneur should use this human resource to improve competitive position, perhaps by allowing this new manager to use their PR skills to help develop press releases when new innovations have been created. An entrepreneurial organisation understands the skill-sets available in the entire organisational population and then works to exploit or further develop these talents to make the business more competitive. “Innovation is driven by the ability to see connections, to spot opportunities, and to take advantage of them” (Bessant & Tidd, 2007, p.6). In this case, innovation as a competitive tool involves using employees as resources and becoming very active in trying to use these employee competencies to improve business position in their market. There are always going to be certain negative consequences in the entrepreneurial organisation, part of the uncertainty or risk process. For example, employees may be resistant to certain change programmes that have been developed by the entrepreneur, creating the need to become a change champion to curb this resistance. At the social or cultural level, employees in teams may not be effective when working with one another and reject certain cultural characteristics of others in their team. One employee may hail from a background that values group consensus whilst another in the group believes that individual self-expression is more important. The entrepreneurial organisation develops contingency plans in the event of cultural differences between team members and promotes diversity as a means to combat this type of resistance. There is a very large element of social networking that occurs within the entrepreneurial organisation, as it is a flatter hierarchy that is more decentralized, therefore the needs or cultural backgrounds of employees should be recognised, identified, and planned for. This might involve developing a one-day training programme that describes the different cultures present within the entrepreneurial organisation. No matter what the decision made, it is very important during the initial development stage to come up with a plan for battling different employee resistances and improve social relationships. Being part of an entrepreneurial organisation means being more aware of employee needs and trying to satisfy them whilst also ensuring a strong market position in relation to the product or service being offered by the business. There is a great deal of emphasis on human resources in this type of organisation, making it more transformational in design than larger or more corporate-minded organisations that often have high levels of employee controls. Instead, the entrepreneurial organisation is team-focused as a top priority and works to create internal policies that are closely linked to vision and entrepreneurial attitude about areas of growth or market improvements. Conclusion The development of an entrepreneurial organisation involves assessing employee skills, recruiting employees with the best resources for long-term growth or sustainability, and then letting employees expand their competencies as active and vital business contributors. It is an organisation where human relations, motivational theories, and cultural needs are taken into consideration and then blended with mission or vision to improve team philosophy and diversity. It seeks to maximise resources, both human and tangible, and then structures the organisation for efficiency in whatever goal has been set to make the organisation competitive. References Bessant, J. & Tidd, J. (2007). Innovation and Entrepreneurship, Chichester: John Wiley & Sons, p.6. Carter, C., Bishop, J. & Kravits, S. (2007). Keys to college studying: Becoming an active thinker, 2nd ed. Pearson Prentice Hall. Casson, M. (1982). The Entrepreneur: An Economic Theory, Oxford: Martin Robertson and Co. Darling, J. & Beebe, S. (2007). Effective entrepreneurial communication in organisation development: Achieving excellence based on leadership strategies and values, Organization Development Journal, Chesterland. 25(1), pp.76-89. Doring, A., Jeantet, V., Kumpfmuller, P, Pedziwiatr, E. & Sanchez, B. (2006). Organisation Theory and Entrepreneurship. http://www.happycomputers.co.uk/resources/Organisation%20Theory%20and%20Entrepreneurship.doc (accessed April 24, 2010). Fiore, R. & Lussier, R. (2009). Measuring wealth generation in early-stage entrepreneurial organizations: An alternative to the capital asset pricing model, Journal of Small Business Strategy, 19(2), pp.51-67. Majumdar, S. (2008). Modelling growth strategy in small entrepreneurial business organisations, The Journal of Entrepreneurship, 17(2), p.157. Read More