Innovation and Entrepreneurship in the Modern Business World
Business Perspective: What’s in Your Future?
In his book The New Rules: How to Succeed in Today’s Post-Corporate World, Harvard professor John P. Kotter surveyed 115 Harvard business graduates about their career paths. Some results were surprising. Many graduates left large corporations to join smaller companies. Several of those who started in large companies also transitioned to smaller firms. They believed that large companies were not open to creative ideas for change or receptive to radical changes.
Small business entrepreneurs often have more opportunities for advancement, are more open to ambiguous situations, and provide an environment for influence.
Innovation and Entrepreneurship
Hearing of innovation and entrepreneurship, we immediately think of success stories like Steve Jobs of Apple Computer and Bill Gates of Microsoft. Entrepreneurs have creative ideas and use their skills and administrative resources to meet identifiable market needs.
What is the Entrepreneurial Spirit?
It suggests dissatisfaction with the status quo and the perception of a need to do things differently. Innovation occurs because of situations like:
- An unexpected occurrence, failure, or success.
- A mismatch between expectations and reality.
- A process or task that needs improvement.
- Changes in market structure or industry.
- Changes in demographics.
- Changes in meaning or perception.
- Newly acquired knowledge.
3M Chile
True to its tradition of innovation, 3M has instituted a contest that promotes the creative initiative of students and professionals in Chile since 2002.
Reengineering the Organization
Reengineering involves rethinking and radically redesigning business processes to achieve significant improvements in critical performance measures such as cost, quality, service, and speed.
Key Aspects of Reengineering
Let’s briefly consider these key features. First, hardly anyone would disagree with the need to rethink the fundamental idea of what the organization does and why. While working as a systems analyst, one of the authors found that systems and procedures were often obsolete, ineffective, and completely unnecessary.
Structuring and Organizing the Process
First, the structure should reflect the objectives and plans for activities arising from them.
Second, it should reflect the authority available to company management. Authority in a given organization is a socially determined right to exercise discretion and, as such, is subject to change.
Third, the structure of an organization, like any plan, should reflect the surrounding environment.
Fourth, because the organization is staffed, the clustering of activities and authority relations of an organizational structure must take into account human constraints and customs.
The Logic of Organizing
- Establish company objectives.
- Formulate supporting objectives, policies, and plans.
- Identify, analyze, and classify the activities needed to achieve these objectives.
- Group activities in light of available human and material resources and how best to use them, depending on circumstances.
- Delegate to the head of each group the necessary authority to perform the activities.
- Join groups horizontally and vertically through authority relationships and information flows.
Some Misconceptions
Organizing does not involve extreme occupational specialization, which often makes work uninteresting, tedious, and too restrictive.
Basic Questions for an Effective Organization
- What determines the scope of management and, therefore, levels of organization?
- What determines the basic framework for departmentalization, and what are the strengths and weaknesses of the basic forms?
- What types of authority relations exist in organizations?
- How should authority be dispersed throughout the organizational structure, and how is the degree of dispersion determined?
- How should the manager apply management theory in practice?
The Answers to These Questions
The answers to these questions form the basis for a theory of organization. When considered together with similar analyses of planning, staffing, direction, and control, they constitute an operational approach to management.
Summary
The term ‘organization’ is often used loosely. The formal organization is the intentional structure of roles. The informal organization is a network of personal and social relationships that are not established or required by formal authority but arise spontaneously.
The scope of management refers to the number of people a manager can effectively supervise. A broad administrative area has few organizational levels, while a narrow range has many levels.