Initially an entrepreneur is engaged in assessing the potential for the entrepreneurial venture and then dealing with start-up issues. In exploring the entrepreneurial context, entrepreneurs are gathering information, identifying potential opportunities, and pinpointing possible competitive advantage(s). Then, armed with this information, the entrepreneur begins researching the venture’s feasibility uncovering business ideas, looking at competitors and exploring financing options. After looking at the potential of the proposed venture and assessing the likelihood of pursuing it successfully, the entrepreneur proceeds to planning the venture, which includes activities such as developing a viable organizational mission exploring organizational culture issues, and creating a well thought out business plan. Once these planning issues have been resolved, the entrepreneur must look at organizing the venture, which involves choosing a legal form of business organization, addressing other legal issues such as patent or copyright searches, and coming with an appropriate organizational design for structuring how work is gong to be done. After these startup activities have been completed, the entrepreneur is ready to actually launch the venture. This step involves setting goals and strategies and establishing the technology operations methods, marketing plans, information systems, financial accounting systems and cash flow management systems.
Once the entrepreneurial venture is functioning, the entrepreneur’s attention switches to managing it. What’s involved with actually managing the entrepreneurial venture? An important activity is managing the various processes that are part if every business :making decisions, establishing action plans, analyzing external and internal environments, measuring and evaluating performance and making needed changes. Also, the entrepreneur must perform activities associated with managing people including selecting ad hiring, appraising and training, motivating, managing conflict, delegating tasks, and being an effective leader. Finally, the entrepreneur must manage the venture ‘s growth which includes such activities as developing and designing and designing growth strategies, dealing with crises, exploring various avenues for financing growth, placing a value on the venture, and perhaps eventually exiting the business.
Can large organizations have Entrepreneurs?
The entrepreneurial spirit doesn’t have to be limited solely to smaller, start up businesses. Some large companies, such as General Electric are attempting to model the activities of the entrepreneur. Why? In general, entrepreneurs are better able to respond to a changing environment than are managers in a traditional hierarchical organization. The owner manager is involved in the day to day operations and is usually close to the customer. Furthermore the owner manager is the main decision maker, and all employees report to him or her. The result is a flatter organization with few layers of hierarchy.
Intrapreneurs: Persons within an organization who demonstrates entrepreneurial characteristics.
In large organizations people who demonstrate entrepreneurial characteristics are often called intrapreneurs. Do entrepreneurs exist in every large established organization? The answer depends on one’s definition of the term. The noted management guru Peter Drucker argues that they can exist in larger organizations. He describes an entrepreneurial manager as someone who is confident in his or her abilities, who seizes opportunities for change, and who not only expects surprises but also capitalizes on them. He contrasts this person with the traditional manager, who feels threatened by change, is bothered by uncertainty, prefers predictability and is inclined to maintain the status quo. Drucker’s use of the term entrepreneurial, however is misleading. By almost any definition of good management, his entrepreneurial type would be preferred over the traditional type. Yet intrapreneurship can capture the autonomy and riskiness inherent in true entrepreneurship, because intartreneuership takes place within a larger organization. All financial risks are carried by the parent company. Rules, policies and other constraints are imposed by the parent company; intrapreneurs report to bosses and the payoff for success is typically career advancement rather than financial independence.
However, it remains true that certain companies do believe in institutionalizing entrepreneurial behavior. Take, for instance, Shiv Nadar of HCL Technologies, a company valuated at 10,000 crores today. Nadar regularly receives business plans from his own executives who want to turn entrepreneurs. He funds the best of these in his attempt to make HCL a breeding ground for intrapreneurs, HCL hires people who are aggressive risk takers, and gives them enough responsibility and independence to think and function like entrepreneurs early in their careers. The creation of an entrepreneurial culture at HCL has not only helped the company to benefit from its employees’ dynamism ad entrepreneurial mindset, but has also led o the creation of many successful companies like NIIT, Headstrong, STG Group, Techspan, and numerous others.