Management concepts and orientation for corporate management
The orientation of a business in these five dimensions determines how new or existing markets with new or existing products (or services) are developed. As stated by Lumpkin and Dess, entrepreneurial behaviour of an organisation requires a high orientation in all five dimensions. The company must select and shape various degrees of entrepreneurial orientation independently of the characteristics of the external business environment and the organisational context. The development of processes, practices and decision-making to enable entry into markets can be defined as a fundamental entrepreneurial task. With this, Lumpkin and Dess also emphasise the connection between entrepreneurial activities and strategic management. The business environment, the company strategy and organisational architecture influence how entrepreneurial orientation should be shaped in order to achieve the best possible company performance (see figure 18).
Entrepreneurial orientation is thus considered to be in harmony with traditional microeconomics, explicitly on the level of the organisation and thus the entrepreneurial behaviour of the organisation is examined as a whole and related to company performance. Thus, entrepreneurial organisations with an organic (decentralised, informal) structure (in place of a mechanistic structure with strong centralisation and formalisation) have a higher performance in dynamic environments. This is particularly illustrated by the fact that an organic structure promotes innovation and autonomy (Burns and Stalker 2001). An entrepreneurial orientation can then be seen as a source of competitive advantages and strategic renewal.
Oden (1997:8-10) asserts that the fundamental role of intrapreneurship is the development of new products. Intrapreneurship can then only be successful if there is an appropriate company culture. He puts the shaping of the internal business environment at the forefront. As well as an aggressive strategy and an entrepreneurial culture, the developments of optimisation and innovation processes are central to the achievement of the global competitiveness required. In realising entrepreneurial product innovation processes, he distinguishes three fundamental phases: concept development (with brainstorming and concept evaluation), technical development (with the draft design, the setting up and testing of prototypes, as well as the final design and pilot production) and the launching onto the market of the new product. Through this process, ideas that can be marketed can be specified and transferred into a business plan. This is then implemented by an entrepreneurial team working together with the functional unit of the organisation. Because the required entrepreneurial culture often does not exist, entrepreneurs would have to overcome certain obstacles.
Concepts on entrepreneurial process, culture and structural leadership
According to Block and MacMillan (1995:3-12,20-32), if organisations in global competition are to survive, they must continuously generate new and successful entrepreneurial activities within the existing organisation. In order to achieve this, organisations cannot simply copy proven recipes but must tread an individual path in order to develop the organisation culture for their long-term effectiveness. As well as a vision that is adequately communicated and a target oriented strategy, Block and MacMillan require the competent management of individual entrepreneurial activities in the spheres of products, markets, technology as well as the entrepreneurial orientation of the whole organisation. Management acquire their entrepreneurial orientation by experience and training and not as biological characteristics. Entrepreneurial management are said to be risk managers but not risk seekers. The entrepreneurial process must be understood as a part of the organisation and attain collective dimensions. The organisation structure has a basic effect on the entrepreneurial orientation of the organisation members. Entrepreneurial opportunities must be pursued with a view to an optimal use of the available resources.
Block and MacMillan (1995:5-12) also define an intrepreneurship process model for the development and realisation of new activities76; the model has six systematic steps based on a division of labour. In the first step, a framework for the generation of ideas and a process for the management of entrepreneurial activities is developed. As a second step, entrepreneurial opportunities and the implementation team is identified. Subsequently, in the third step, the planning of entrepreneurial activities is to be concluded and implementation begins. In the implementation stage (fourth step), individual entrepreneurial activities must be monitored and an evaluation takes place which keeps in mind the fundamental entrepreneurial implementation process. In the fifth step, entrepreneurial activity reaches the level of an established business.
As a sixth step, experiences are evaluated for future entrepreneurial activities and the entire process model, enabling the entrepreneurial organisation to learn from success and failure. All six phases require different competencies to manage the individual entrepreneurial activities from start-up through to established business. Implementation must take place with the respective opportunity and total entrepreneurial organisation in mind. The integration is done by the organisation’s management team. The frame of reference77 for the management team78 of the individual entrepreneurial activity is set using direct entrepreneurial decisions and structural leadership. In the process, it is said to be important that the entrepreneurial organisation sees the realisation of many entrepreneurial activities as an integral part of the strategy for strengthening long-term viability79 and that they promote an entrepreneurial culture. The starting point for entrepreneurial activities should be the present competency base. Evolutionary strategies for the use of existing knowledge for new products and dealing with new markets could be complemented by revolutionary strategies based on the company’s own technological developments80.
Levels of analysis for the global business environment
The entrepreneurial organisation has to analyse the business environment on various geographical levels. In a global economy and in terms of securing longterm viability, it is important for an organisation to follow the development of the global economy if it is to be able to evaluate opportunities and risks and the effects of its entrepreneurial decisions. Graf (2005:330-332) also believes that information about supranational economic regions (see for example Melnikas 2008) is necessary in order to make strategic decisions. Bearing in mind the achievement of short-term viability and individual entrepreneurial activities, it is particularly important to examine markets, industries and national economies (see figure 70).
Graf suggests an inside-out perspective as a starting point for adapting the organisation to changed framework conditions and its positioning in the environment; this has to be supplemented with an outside-in perspective that bears in mind future developments in the business environment, enabling specific entrepreneurial activities to be planned. With this, it becomes clear that systems thinking and systematic consideration of the interplay between various system levels are of great significance when analysing the environment. In this way, relevant analyses appropriate to existing entrepreneurial questions and/or problems can be carried out on a global level, on the level of economic regions, on country levels and also on a regional level.
1. Introduction and the issue at stake
1.1 Outline of problem and terminology
1.2 Background and framework for the chapters to come
1.3 Chapter sequence and research road map of the study
2. Research strategy
2.1 Research objective and process of study
2.2 Research design and methodology of study
3. Intrapreneurship and the global business environment
3.1 The role of intrapreneurship
3.2 Business environment: Characterisation, segments, analysis
3.3 Organisation, environment and systems thinking
3.4 Conclusion: The three central tasks of an entrepreneurial organisation
4. Analyses of the three central tasks of an entrepreneurial organisation
4.1 Entrepreneurial information gathering
4.2 Entrepreneurial shaping of the future
4.3 Entrepreneurial shaping of the organisation
5. Design concept for holistic intrapreneurship
5.1 Role model of the entrepreneurial organisation
5.2 Conceptual framework to describe and analyse the global business environment
5.3 Networking and interaction between the entrepreneurial organisation and the global business environment
5.4 Conclusion: Building blocks for the vital entrepreneurial learning organisation
6. Studies on the role of intrapreneurship and on the role model
6.1 Study on the role of intrapreneurship in technology companies
6.2 Intrapreneurship in an innovative technology company
6.3 Survey of experts on implementation of the role model in practice
6.4 Conclusion: Elements for development and strengthening entrepreneurial orientation
7. Closing remarks and outlook
7.1 Summary and contributions of the study
7.2 Implications and some directions for further research