part v – growth and development of entrepreneurial ventures chapter 15 – strategic planning for...
TRANSCRIPT
Part V – Growth and Development Part V – Growth and Development of Entrepreneurial Ventures of Entrepreneurial Ventures
Chapter 15 – Strategic Planning forChapter 15 – Strategic Planning for Emerging Ventures Emerging Ventures
Chapter 16 – Managing Chapter 16 – Managing Entrepreneurial Growth Entrepreneurial Growth
Chapter 17 – Global OpportunitiesChapter 17 – Global Opportunities for Entrepreneurs for Entrepreneurs
Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 16 – ManagingChapter 16 – Managing Entrepreneurial Entrepreneurial Growth Growth
A Venture’s Typical Life CycleA Venture’s Typical Life Cycle
Venture Development StagesVenture Development Stages
New-VentureNew-VentureDevelopmentDevelopment
Start-upStart-upActivitiesActivities
VentureVentureGrowthGrowth
BusinessBusinessStabilizationStabilization
InnovationInnovationor Declineor Decline
Profit, Productivity,Profit, Productivity,RevenuesRevenues
The Entrepreneurial The Entrepreneurial Company in the Twenty-Company in the Twenty-
First CenturyFirst Century
The Entrepreneurial MindsetThe Entrepreneurial MindsetFuture GoalsFuture Goals
ChangeChange Status QuoStatus Quo
Per
ceiv
ed C
apab
ilit
yP
erce
ived
Cap
abil
ity
Blo
cked
Blo
cked
Po
ssib
leP
oss
ible
EntrepreneurEntrepreneurSatisfiedSatisfiedManagerManager
FrustratedFrustratedManagerManager
ClassicClassicBureaucratBureaucrat
Building the Adaptive FirmBuilding the Adaptive Firm
• Share the Entrepreneur’s VisionShare the Entrepreneur’s Vision
• Increase the Perception of OpportunityIncrease the Perception of Opportunity
• Institutionalize Change as the Venture’s GoalInstitutionalize Change as the Venture’s Goal
• Instill the Desire to Be InnovativeInstill the Desire to Be Innovative– A reward systemA reward system– An environment that allows for failureAn environment that allows for failure– Flexible operationsFlexible operations– The development of venture teamsThe development of venture teams
The Transition from an The Transition from an Entrepreneurial Style to a Entrepreneurial Style to a Managerial ApproachManagerial Approach
• Balancing the Focus Balancing the Focus (Entrepreneur and Manager)(Entrepreneur and Manager)
The Entrepreneurial Culture Versus The Entrepreneurial Culture Versus the Administrative Culturethe Administrative Culture
Entrepreneurial FocusEntrepreneurial FocusCharacteristicsCharacteristics
Administrative FocusAdministrative FocusCharacteristicsCharacteristics
StrategicStrategicOrientationOrientation
Driven by perceptionDriven by perceptionof opportunityof opportunity
Driven by controlledDriven by controlledresourcesresources
Revolutionary, withRevolutionary, withshort durationshort duration
Evolutionary, withEvolutionary, withlong durationlong duration
Commitment toCommitment toSeize OpportunitiesSeize Opportunities
Commitment ofCommitment ofResourcesResources
Many stages, withMany stages, withminimal exposure atminimal exposure at
each stageeach stage
A single stage, withA single stage, withcomplete commitmentcomplete commitment
out of decisionout of decision
The Entrepreneurial Culture Versus The Entrepreneurial Culture Versus the Administrative Culturethe Administrative Culture
Entrepreneurial FocusEntrepreneurial FocusCharacteristicsCharacteristics
Administrative FocusAdministrative FocusCharacteristicsCharacteristics
Control of Control of ResourcesResources
Episodic use or rentEpisodic use or rentof required resourcesof required resources
Ownership orOwnership oremployment ofemployment of
required resourcesrequired resources
Flat, with multipleFlat, with multipleinformal networksinformal networks
HierarchyHierarchyManagementManagementStructureStructure
Understanding the Understanding the Growth StageGrowth Stage
Key Factors During the Growth StageKey Factors During the Growth Stage
• ControlControl
• ResponsibilityResponsibility
• Tolerance of failureTolerance of failure
• ChangeChange
Managing Paradox and ContradictionManaging Paradox and Contradiction
• Bureaucratization versus Bureaucratization versus DecentralizationDecentralization
• Environment versus StrategyEnvironment versus Strategy
• Strategic Emphases: Quality Strategic Emphases: Quality versus Cost versus Innovationversus Cost versus Innovation
Confronting the Growth WallConfronting the Growth WallSuccessful growth-oriented firms have exhibited a few Successful growth-oriented firms have exhibited a few
consistent themes:consistent themes:• The entrepreneur is able to envision and anticipate The entrepreneur is able to envision and anticipate
the firm as a larger entity.the firm as a larger entity.• The team needed for tomorrow is hired and The team needed for tomorrow is hired and
developed today.developed today.• The original core vision of the firm is constantly and The original core vision of the firm is constantly and
zealously reinforced.zealously reinforced.• New “big-company” processes are introduced New “big-company” processes are introduced
gradually as supplements to, rather than gradually as supplements to, rather than replacements for, existing approaches.replacements for, existing approaches.
• Hierarchy is minimized.Hierarchy is minimized.• Employees hold a financial stake in the firm.Employees hold a financial stake in the firm.
Confronting the Growth WallConfronting the Growth WallA six-step program was recommended as a A six-step program was recommended as a
process for breaking through the inability to process for breaking through the inability to handle environmental change or trends:handle environmental change or trends:
1.1. Get the factsGet the facts
2.2. Create a growth task forceCreate a growth task force
3.3. Plan for growthPlan for growth
4.4. Staff for growthStaff for growth
5.5. Maintain a growth cultureMaintain a growth culture
6.6. Use an advisory boardUse an advisory board
Growth and Decision Growth and Decision MakingMaking
Effective DelegationEffective Delegation
Effective delegation:Effective delegation:
1.1. Assigning specific dutiesAssigning specific duties
2.2. Granting authority to carry out these dutiesGranting authority to carry out these duties
3.3. Creating the obligation of responsibilityCreating the obligation of responsibility
Achieving Entrepreneurial Achieving Entrepreneurial Leadership in the New MillenniumLeadership in the New Millennium
Entrepreneurial leadership arises Entrepreneurial leadership arises when an entrepreneur attempts to when an entrepreneur attempts to
manage the fast-paced, growth manage the fast-paced, growth oriented company.oriented company.
Components of Entrepreneurial LeadershipComponents of Entrepreneurial Leadership
1.1. Determining the firm’s purpose or vision.Determining the firm’s purpose or vision.2.2. Exploiting and maintaining the core Exploiting and maintaining the core
competencies.competencies.3.3. Developing human capital.Developing human capital.4.4. Sustaining an effective organizational Sustaining an effective organizational
culture.culture.5.5. Emphasizing ethical practices.Emphasizing ethical practices.6.6. Establishing balanced organizational Establishing balanced organizational
controls.controls.