Does entrepreneurship help in implementing strategies?

Contd from last week...

He activates and implements an invention and contributes towards the innovation. An entrepreneur may hire a creative individual (manager, technician, accountant) to ensure the change to take place under his or her entrepreneurship.

Entrepreneurship and organisational structure

The traditional view is that entrepreneurship is found at the top of the organisation. In a proprietorship the owner is top management. Alford (1997) and Foxall and Minkes (1996) argue that entrepreneurship is diffused throughout the organisation.

Schumpeter explains that an entrepreneur may not necessarily be the same as the financial risk taker i.e. the owner. Risk taking entrepreneurs do start businesses. On the other hand, the financial risk takers or, in other words, owners of the business can hire entrepreneurs to run the business. In some literature they are called entrepreneurs. Entrepreneurship has been described by some researchers as an entrepreneurial behaviour of managers throughout the organisation. This clearly indicates that entrepreneurs are not necessarily placed only at the top levels of the organisational structure.

It is now clear that entrepreneurship is the process of anticipating future opportunities in the uncertain environment and making a judgment while tolerating ambiguity of objectives, in decision making under novel and complex situations.

Entrepreneurship and implementing strategies

Strategy implementation is basically the managing of administrative tasks needed to put strategy into practice (Stoner et al.,2002). The process of converting insights into actionable business propositions consists of several steps. It ranges from implementing strategies to monitoring implementation.

(1) Simplify the proposition into a small meaningful statement, clearly indicating the expected change

(2) Defining the long-term and short-term goals clearly and precisely

(3) Identifying risk involved and absorbing uncertainty, encapsulating the key issues of risk and crisis management

(4) Obtaining commitment and getting a strong sense of resolve from others in the organisation

(5) Managing resistance, managing change

(6) Monitoring implementation

The above stages run though the management process, starting from planning through to controlling through organising and leading of tasks and related resources in implementing strategies. The process talks about the environment, values and resources of an organisation. A key premise in the creation and early development of organisations is the importance of the role played by individuals, structured process and environments (Williams & Tse, 1995). The individual is viewed as being responsible for influencing the organisation’s direction, particularly through infancy to the growth stage. Strategic planning in a small, entrepreneurial company is usually done by the individual entrepreneur. Bhide (1994; cited in Thompson, 1999) argues that entrepreneurship deals with risk in strategy creation or formation with a quick initial screening using a careful, but limited, analysis to evaluate the quality of an idea, but then it stays flexible throughout the process of implementation.

Therefore, the level of support the entrepreneurship provides in carrying out the administrative tasks in terms of structure, systems, style, staff, skills, strategy and superordinate goals needed to put strategy into practice is important to achieve an effective and efficient strategy implementation. Superordinate goals refer to guiding concepts, values and aspirations that unite an organisation in some common purpose (Stoner et al.,2002).

The concept of entrepreneurship has contributed vastly in theory on implementing strategies. Various studies have found that the personality and the management style of the entrepreneur and his or her perceptions of the opportunities and threats in the external environment all significantly affect strategic decision-making (Williams & Tse, 1995). Small organisations can be influenced dramatically by the type of individual in determining strategies and structure.

There are various typologies that deal independently with each environment, structure or strategy, each of which has been shown to influence the nature of entrepreneurship.

The success of a business is dependent upon the ability to find a valuable strategic position, whereby the company’s resources, competencies and capabilities are deployed and managed to meet and satisfy the demands and expectations of key stakeholders. Sustained success requires that positioning is strengthened constantly in a dynamic and competitive environment, and changed, perhaps dramatically, from time to time.

This represents continuous improvement on one hand, and discontinuous change to a new competitive paradigm on the other hand (Thompson, 1999). In implementing strategies, entrepreneurship supports to clarify which strategic competencies from a long list of generic competencies can make a real difference (Thompson & Richardson, 1995; cited in Thompson, 1999).

Miller (1983) as cited in Zhao (2005) argues that entrepreneurship represents organisational behaviour. The key elements of entrepreneurship include risk taking, proactivity and innovation.

However, Slevin and Covin (1990; cited in Zhao, 2005) have argued that the three elements are not sufficient to ensure organisational success.