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Management Topic 9 Notes.docx

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Rutgers University
Xi Wang

Management Topic 9 Notes Ashley Brown 11/17/13 Managing Growth and New Enterprises a) Robert Mondavi - We serve his shit at Margarita’s - Started out buying best grapes and making premium taste and premium price wines - This established his name but would not allow him to expand - Started working with local growers in Napa Valley, CAto improve grape quality b) Causes for interest in corporate entrepreneurship - Increase in wanting to “do your own thing” - Corporate entrepreneurship is entrepreneurial action within an established organization - Entrepreneurial endeavors consist of the following: new business venturing (creation of new business within an existing organization), innovativeness ( new product and service innovation), self-renewal (transformation of an organization through the renewal of the key ideas on which it is built), and proactiveness (intiative and risk taking, competitive aggressiveness and boldness) c) Managerial vs Entrepreneurial Decision Making - Distinction lies in 8 dimensions 1) Strategic orientation - Refers to those factors that are inputs into the formulation of the firm’s strategy - Strategy of entrepreneurs is driven by the presence or generation of opportunities for new entry and is less concerned about the resources that may be required to pursue such opportunities - Resources do not constrain, whereas managerial firms have a strategy that involves using resources efficiently 2) commitment to opportunity - have a commitment to taking action on potential opportunities and pursing opportunities rapidly - In contrast, traditionally managed firms place more emphasis on information and data collection 3) Commitment of resources - Afocus on how to minimize the resources that would be required in the pursuit of a particular opportunity - In contrast when traditionally managed firms decide to commit resources to an opportunity, they do so on a large scale 4) Control of resources - Entrepreneurially managed firms are less concerned about owning resources and more concerned about having access to others’resources, including financial capital, intellectual capital, skills, and competencies 5) Management structure - Is organic - Has few layers of bureaucracy between top mgmt. and the customer and typically has multiple informal networks - Can capture and communicate more information from the external environment and are sufficiently fluid to be able to take quick action based on that information 6) Reward philosophy - Compensates employees based on their contribution toward the discovery/generation and exploitation of opportunity - Traditionally managed firm rewards mgmt. and employees based on their responsibilities 7) Growth orientation - Great desire to expand the size of the firm at a rapid pace - Traditionally managed firms: growth at slow and steady pace 8) Entrepreneurial culture - Encourages employees to generate ideas, experiment, and engage in other tasks that might produce creative output - Traditionally managed firm begins with assessment of resources that it controls, and is mostly interested in ideas that revolve around currently controlled resources *** most firms are a combination of traditional and entrepreneurial; there is a scale that measures this, the higher the score = more entrepreneurial d) Establishing a culture for corporate entrepreneurship - Must operate on frontiers of technology - Experimentation – trial and error – is encouraged - Make sure there are no initial organizational obstacles that inhibit creativity in new product development - Resources of the firm need to be available and easily accessible - Amultidisciplined team approach needs to be encouraged - Must establish a long time horizon for evaluating the success of the overall program as well as the success of each individual venture - The spirit of corporate entrepreneurship cannot be forced on individuals - Has a reward system based on attainment of established performance goals - Needs sponsors and champions who not only support the creative activity but also have the planning flexibility to establish new objectives and directions as needed - Entrepreneurial activity must be wholeheartedly supported and embraced by top mgmt. e) Leadership characteristics of corporate entrepreneurs - Understands the environment - Is visionary and flexible - Creates mgmt. options - Encourages teamwork - Encourages open discussion - Builds a coalition of supporters - Persists f) Establishing corporate entrepreneurship in the organization - First step in process is to secure a commitment to corporate entrepreneurship by top, upper, and middle mgmt. levels - Second, ideas and general areas that top management is interested in supporting should be identified, along with the amount of risk money that is available to develop the concept further; should specify time frame, volume, and profitability requirements for the new venture - Third, a company needs to use technology to make itself more flexible - Fourth, the organization should be a group of interested managers who will train employees as well as share their experiences - Fifth, the organization needs to develop ways to get closer to its customers - Sixth, an organization that wants to become more entrepreneurial must learn to be more productive with fewer resources - Seventh, the organization needs to establish a strong support structure for corporate entrepreneurship - Eighth, support must involve tying the rewards to the performance of the entrepreneurial unit - Finally, the organization needs to implement an evaluation syste
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