PART 2

LEADING AND MANAGING

THE ENTREPRENEURIAL
ORGANISATION

CHAPTER 9
Managing the Entrepreneurial
Organization

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Influences on Organisational Architecture

Environment

Culture
Architecture Strategy
Leadership

Structure
and size

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Influences on Organisational Architecture

Environment

Culture
Architecture Strategy
Management

Structure
and size

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Barriers to Corporate Entrepreneurship

• Focusing on efficiency or return on investment

• Planning for the long-term and then control
against plan
• Enforcing standard procedures, rules and
regulations
• Avoiding risk
• Making decisions based on past experience
• Managing functionally
• Promoting individuals who conform

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Barriers to Corporate Entrepreneurship

• Systems
• Structures
• Strategic direction
• Policies and procedures
• People
• Culture
Morris 1998

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Barriers: Solutions

• Ignore them You can use all

• Work round them three for different
• Remove them types of barriers

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Change and Effectiveness
STAGE 1 STAGE 2 STAGE 3

High Getting used Relearning Becoming

to the new effective
circumstances

Denial Putting it
Effectiveness

together
Immobilisation
Depression Testing new
reality

Low Letting go
Short Long
CHANGE Time
EVENT
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
 Preparing for Change

• Provide a compelling reason for change

• Make aims and tangible results of change
clear
• Make information on changes freely available
• Get commitment from management
• Do as much as possible, as quickly as
possible – don’t change piecemeal
• Address cultural components of change
• Consult staff on process of change

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 ‘Political and organisational’ actions
for Change
1. Decide who are the blockers and do something
about them
2. Put change agents in key positions
3. Build political support for changes with
stakeholders
4. Use task forces to push through implementation
5. Make dramatic, symbolic changes early on
6. Begin on a small scale and demonstrate success
quickly
7. Remember to change relevant parts of structure
8. Monitor process and ensure change is embedded
Yukl (2002)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 ‘People orientated’ actions for Change

1. Create sense of urgency

2. Brief people on effect of changes
3. Help people deal with change
4. Keep people informed about changes as
they progress
5. Break changes down into small parts
6. Empower staff top make changes
themselves
7. Demonstrate commitment to change from
the top until project is complete
Yukl (2002)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 The Change Cube

Strategy Organisation
Conceptual
Vision Culture

Positions Structure

Programmes Systems

Products People Formal

Concrete

Informal

Mintzberg (1998)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Freedom v Control
SPACE

Too much
CHAOS CHAOS
BOUNDARIES

DIRECTION
BALANCE BALANCE
Too Too
CONSTRAINT
few little
BALANCE BALANCE

CHAOS CHAOS
Too little
SUPPORT Adapted from Birkinshaw (2003)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Open Book Management

1. Free access to financial information

2. Continuously presenting information to
employees
3. Train them to understand information
4. Make them understand their job is improve
financial results in whatever way they can
5. Empower them to make decisions that do
this
6. Give them a stack in success or failure
Case (1997)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Organization structure & management
Organic structure
style Mechanistic structure

Open free-flowing communication Highly structure & restricted

communication
Allows different operating styles Stresses uniform operating styles

Authority based on expertise Authority based on role & position

Free to adapt to change Reluctance to change

Emphasises getting things done
Loose and informal control
Behaviour shaped by situation &
personality
Participative decision-making
Emphasises compliance with
processes & procedures
Tight control
Behaviour constrained by job
description
Hierarchical decision-making

Entrepreneurial management style Bureaucratic management style

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Structure, Style and Cycling
Organisation structure
Mechanistic Organic

Pseudo- Effective
Entrepreneurial

entrepreneurial firm entrepreneurial firm

Management style

Bureaucratic

Effective Unstructured
bureaucratic firm unadventurous firm

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

 Risk Classification

Greatest risk
Great risk

High
More Great
risk risk
Impact on Great risk
the
organisation
Least More Low
risk risk
Low Controllability
High
Low High
Likelihood
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
 Risk Classification
Greatest risk
=
Great risk High Impact
+
High Likelihood
+
High
Low Controllability
More Great
risk risk
Impact on Great risk
the
organisation
Least More Low
risk risk
Low Controllability
High
Low High
Likelihood
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
 Reactions to Risk

1. Attempt to eliminate risk

2. Attempt to reduce risk by increasing
controls
3. Transfer the risk
4. Accept the risk and monitor key risk
indicators

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns