ch9 managing the entrepreneurial organization
TRANSCRIPT
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
CHAPTER 9
Managing the Entrepreneurial
Organization
PART 2
LEADING AND MANAGING
THE ENTREPRENEURIAL
ORGANISATION
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Influences on Organisational Architecture
Architecture Strategy
Leadership
Environment
Culture
Structure
and size
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Influences on Organisational Architecture
Architecture Strategy
Management
Environment
Culture
Structure
and size
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Barriers to Corporate Entrepreneurship
• Focusing on efficiency or return on investment
• Planning for the long-term and then control
against plan
• Enforcing standard procedures, rules and
regulations
• Avoiding risk
• Making decisions based on past experience
• Managing functionally
• Promoting individuals who conform
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Barriers to Corporate Entrepreneurship
• Systems
• Structures
• Strategic direction
• Policies and procedures
• People
• Culture
Morris 1998
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Barriers: Solutions
• Ignore them
• Work round them
• Remove them
You can use all
three for different
types of barriers
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Eff
ec
tive
ne
ss
High
Low
ShortTime
Long
STAGE 1 STAGE 2 STAGE 3
Getting used
to the new
circumstances
Immobilisation
Change and Effectiveness
Relearning Becoming
effective
Denial
Depression
Letting go
Testing new
reality
Putting it
together
CHANGE
EVENT
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Preparing for Change
• Provide a compelling reason for change
• Make aims and tangible results of change
clear
• Make information on changes freely available
• Get commitment from management
• Do as much as possible, as quickly as
possible – don’t change piecemeal
• Address cultural components of change
• Consult staff on process of change
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
‘Political and organisational’ actions
for Change
1. Decide who are the blockers and do something about them
2. Put change agents in key positions
3. Build political support for changes with stakeholders
4. Use task forces to push through implementation
5. Make dramatic, symbolic changes early on
6. Begin on a small scale and demonstrate success quickly
7. Remember to change relevant parts of structure
8. Monitor process and ensure change is embedded
Yukl (2002)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
‘People orientated’ actions for Change
1. Create sense of urgency
2. Brief people on effect of changes
3. Help people deal with change
4. Keep people informed about changes as they progress
5. Break changes down into small parts
6. Empower staff top make changes themselves
7. Demonstrate commitment to change from the top until project is complete
Yukl (2002)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
The Change Cube
Strategy Organisation
Vision
Positions
Programmes
Products
Culture
Structure
Systems
People Formal
Informal
Conceptual
Concrete
Mintzberg (1998)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Freedom v Control
SPACE
SUPPORT
Too much
Too little
BO
UN
DA
RIE
S DIR
EC
TIO
N
Too
few
Too
littleCONSTRAINT
CHAOS
CHAOS CHAOS
CHAOS
BALANCE BALANCE
BALANCEBALANCE
Adapted from Birkinshaw (2003)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Open Book Management
1. Free access to financial information
2. Continuously presenting information to
employees
3. Train them to understand information
4. Make them understand their job is improve
financial results in whatever way they can
5. Empower them to make decisions that do
this
6. Give them a stack in success or failure
Case (1997)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Organization structure & management
styleOrganic structure Mechanistic structure
Entrepreneurial management style Bureaucratic management style
Open free-flowing communication
Emphasises getting things done
Loose and informal control
Behaviour shaped by situation &
personality
Participative decision-making
Authority based on expertise
Free to adapt to change
Allows different operating styles Stresses uniform operating styles
Highly structure & restricted
communication
Authority based on role & position
Emphasises compliance with
processes & procedures
Tight control
Behaviour constrained by job
description
Hierarchical decision-making
Reluctance to change
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Structure, Style and Cycling
Effective
entrepreneurial firm
Effective
bureaucratic firm
Pseudo-
entrepreneurial firm
Unstructured
unadventurous firm
En
trep
ren
eu
ria
lB
ure
au
cra
tic
Ma
na
ge
me
nt
sty
le
Organisation structure
Mechanistic Organic
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Risk Classification
Great
risk
Greatest risk
Likelihood
Low
High
Impact on
the
organisation
Low
High
HighLow
Controllability
Least
risk
More
risk
More
risk
Great risk
Great risk
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Risk Classification
Great
risk
Likelihood
Low
High
Impact on
the
organisation
Low
High
HighLow
Controllability
Least
risk
More
risk
More
risk
Great risk
Great risk
Greatest risk
=
High Impact
+
High Likelihood
+
Low Controllability
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Reactions to Risk
1. Attempt to eliminate risk
2. Attempt to reduce risk by increasing
controls
3. Transfer the risk
4. Accept the risk and monitor key risk
indicators