Chapter 11

8/9/2016
Chapter 11 Learning Objectives
• To understand the importance of venture team in the success
Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Venture Team Building and of a venture.
Organizational Plan • To understand the meaning and implication of effective team

management.
• To know about the precautions that need to be taken for

team building for venture and how to take care of those
factors.
• To learn about the factors that result in lack of understanding

amongst the co-founders of a venture.
Contd…
Entrepreneurship: Creating and Leading an Entrepreneurial Organization Author: Arya Kumar Entrepreneurship: Creating and Leading an Entrepreneurial Organization Author: Arya Kumar
Learning Objectives Importance of Effective Team for

Venture Success
• To learn about common attributes of an effective venture • More than an idea what matters, is the effective, harmonious

team. trustworthy, competent team that leads to success in an
entrepreneurial venture.
• To understand the process of developing a venture team.
• Entrepreneurial team with an entrepreneurial leader and
• To learn about importance of managing people to build quality of the team is a key ingredient in the higher potential
effective teams. venture.
• Founding members of a venture need to have a clear goal
• To learn about different types of organizational structures and worthwhile idea.
and their relevance to different types of ventures during • Although each team member has a unique role and
different stages of growth. To learn about importance of contribution but it needs to be synergized with the role of
organizational structure, and systems and procedures for the others.
managing a venture. Contd…
Importance of Effective Team for Effective Management Team—Key to

Venture Success Venture Success
• Building a professionally backed-up winning team goes a long Board of

way in achieving dynamism and success. Directors

Chief High
Growth
Executive
• Building high potential ventures without the backing of a Officer
Successful
Ventures
strong and cohesive team is not possible.
Effective
• Team building process starts with objective and honest Management
assessment of the strengths and weaknesses of team Team
members to identify the gaps to be filled in by inducting new
people in the team as employees or co-founders.
Banks, Seed Funders, Venture Capitalists,
• Core team should consist of complementary competencies Financial Institutions
and knowledge.
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Business Plan Success Depend Upon Reasons for Business Failures

Committed Team

Lack of Understanding Amongst Co-founders arises on
Account of Lack or No Documentation
Having
Genuinely Diversified
Business Plan
Committed Competencies,
Skills and Other Success
Team Members
Resources Role and Process to
Goals/ Responsib- Sharing Loss/
Participation Deal with
Objectives Gain
ilities Differences
• It is important to realize that business of business is

business and therefore any money, time and effort put into
it has to be viewed on business lines rather than charity.
Common Attributes of Effective Teams Venture Team Development
Clear
Expectation
and Context

Cultural Commitment to
Purpose and Need for Partners
Change Values
Control Attributes of • Where to find partners?

Effective Competence
Teams
• How to choose the best one(s)?
Consequences Communication,
Sharing Coordination
and • How to convince them to become a part of the core
Collaboration
team?
Creative
Innovation
“Teams outperform individuals, especially when performance

requires multiple skills, judgments, and experiences.” Issues to be Resolved for Inducting Partners
—Jon R Katzenbach
People Management—Key to Venture Tips for Employees Management

Success
Employees are fulcrum of business • Guru Guide to Entrepreneurship by Boyett and Boyett based
Hire people with adaptability and on the advice from leading entrepreneurs has proposed three
attitude ways to treat employees as equals:
Inspire, motivate and enable them to
deliver excellence Get rid of executive limos and executive parking spaces.
Principles of
Eliminate executive dining rooms, executive bathrooms,
Managing Be transparent and open with your
People employees and exclusive executive offices.
Don’t employ receptionists, executive secretaries, personal
Respect and treat employees as equals assistants, or other support staff.
Encourage employees to take initiative
Remove employees, as and when

becomes necessary
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Organizational Structure Nature of Organizational Structure
People

Small Simple, Lean, Flexible
Business Organizational Structure
Business
Organization
Environment
Systems and Formal, Large and

Structure Large
Complex Organizational
Processes Companies
Structure
Growth Plans of the Company
Flat Organizations—Advantages Designing Organizational Structure
• Open communication between employees Reporting


Relationships
• Close relationships with each other
• Less bureaucratic
Arrangements
• Quick decision making of Jobs or
Group of Jobs
• Better to build teams
• Less cost on account of higher productivity up to a particular Functional
Relationships Operational
point of production Relationships
• Highly innovative
Achievement of Organizational Goals in

Most Effective and Efficient Manner
Requirements of Effective Factors to be Considered by Small

Organizational Structure Business Owners for Organizational
Structure
• Identifying specific vital tasks/functions. • Relative strengths and weaknesses of various organizational
• Identifying right people to perform those functions. forms.

• Explaining it to each and every employee, what his role will
• Legal advantages and disadvantages of organizational
be. structure options.
• Organization should develop objective criteria to measure the
performance of its employees without being biased or unfair • Advantages and drawbacks of departmentalization options.
to any employee. • Likely growth patterns of the company.

• No concentration of power in the hands of a few executives,
as this may lead to grouping and reduced quality output. • Reporting relationships that are currently in place.
• To have optimum number of employees in each department. Contd…
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Factors to be Considered by Small Types of Organizational Structure

Business Owners for Organizational
Structure
• Reporting and authority relationships that you hope will be • Informal structure has lot of flexibility and openness, and

implemented in the future. is most suitable for startup ventures having few people who
are highly committed and self directed to the organization.
• Optimum ratios of supervisors/managers to subordinates. • Functional organizational structure is suitable when the
organization is small in terms of number of employees as well
• Suitable level of autonomy/empowerment to be granted to as operations, geographically centralized, and provides few
employees at various levels of the organization (while still goods and services.
recognizing individual capacities for independent work). • Divisional structure helps in overcoming problems
associated with relatively large size of employees and
• Structures that will produce greatest worker satisfaction. operations, geographically dispersed activity, and company
starts delivering wide range of goods/services to the
• Structures that will produce optimum operational efficiency. customers.
• Matrix structure helps in grouping employees by both
function and product. It attempts to derive the advantage of
both separate structures.
Advantages of Systems and Procedures

Systems and Procedures—Advantages
Compliance to
Undertakes
Optimum Accounting,
Various Tasks
Resource Legal and
with
Utilization Other
Consistency
Stipulations
Backed-up by Appropriate Manuals and Forms
Entrepreneurship: Creating and Leading an Entrepreneurial Organization Author: Arya Kumar

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8/9/2016

Chapter 11 Learning Objectives

• To understand the importance of venture team in the success

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Organizational Plan • To understand the meaning and implication of effective team

• To know about the precautions that need to be taken for

• To learn about the factors that result in lack of understanding

Learning Objectives Importance of Effective Team for

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Importance of Effective Team for Effective Management Team—Key to

• Building a professionally backed-up winning team goes a long Board of

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

way in achieving dynamism and success. Directors

Business Plan Success Depend Upon Reasons for Business Failures

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• It is important to realize that business of business is

Common Attributes of Effective Teams Venture Team Development

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Control Attributes of • Where to find partners?

“Teams outperform individuals, especially when performance

People Management—Key to Venture Tips for Employees Management

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Encourage employees to take initiative

Remove employees, as and when

Organizational Structure Nature of Organizational Structure

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Systems and Formal, Large and

Growth Plans of the Company

Flat Organizations—Advantages Designing Organizational Structure

• Open communication between employees Reporting

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Achievement of Organizational Goals in

Requirements of Effective Factors to be Considered by Small

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

• Identifying right people to perform those functions. forms.

to any employee. • Likely growth patterns of the company.

Factors to be Considered by Small Types of Organizational Structure

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Copyright © 2012 Dorling Kindersley (India) Pvt. Ltd.

Advantages of Systems and Procedures

Systems and Procedures—Advantages

Backed-up by Appropriate Manuals and Forms

Entrepreneurship: Creating and Leading an Entrepreneurial Organization Author: Arya Kumar

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