Ch7 building the entrepreneurial structure

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

CHAPTER 7

Building the

Entrepreneurial Structure

PART 2

LEADING AND MANAGING

THE ENTREPRENEURIAL

ORGANISATION

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Influences on Organisational Architecture

Architecture Strategy

Leadership

Environment

Culture

Structure

and size

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Structure

‘Corporations have to dismantle bureaucracies

to survive. Economies of scale are giving way

to economies of scope, finding the right size for

synergy, market flexibility and, above all,

speed….To survive, big companies today are all

deconstructing themselves and creating new

structures, many as autonomous units.’

John Naisbitt (1994)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Size and structure

• Size matter – small is beautiful

• Structure matters – but relates to other factors (eg task complexity or environmental turbulence)

….but relationships are the important thing

….and all this influences and is influenced by the management/leadership style

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Experiments with different structures

• Decentralisation

• Delayering

• Outsourcing

• Downscoping

• Using project forms of organising

• Developing strategic alliances

• Communicating horizontally as well as vertically

• Investing in information technology

• Practising new HRM techniquesPettigrew & Fenton (2000)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Hierarchical structure

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Matrix structure

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

It doesn’t make sense to stay true to a structure that makes it more

difficult for people to succeed. Your organisation structure must be

flexible enough to evolve along with your people, rather than work

against them. This is one of the biggest and most challenging

cultural issues we face as a fast growing company.

Michael Dell

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The entrepreneurial spider’s web

Entrepreneur

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Structure, task complexity and

environment

TASK

Complex

ChangingStable

Simple

ENVIRONMENT

Heirarchical with

matrix sub-

organisations

adhering to

established

protocols

Machine

bureaucracy

Organic

structures

Heirarchical with

matrix sub-

organisations with

considerable

discretion

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Organic structure

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Structure, task complexity and

environment

TASK

Complex

ChangingStable

Simple

ENVIRONMENT

Heirarchical with

matrix sub-

organisations

adhering to

established

protocols

Machine

bureaucracy

Organic

structures

Heirarchical with

matrix sub-

organisations with

considerable

discretion

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

New Organisation Structures

• Networks and the socially embedded

firm

• The knowledge firm in the knowledge

economy

• The globalising firm and its changing

boundaries

Fenton and Pettigrew

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Strategic Alliances

Relatively enduring interfirm cooperative arrangements, involving flows and linkages

that use resources and/or governance structures from autonomous organisations, for the joint accomplishment of individual

goals linked to the corporate mission of each sponsoring firm

Parkhe (1993)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Strategic alliances

Awareness

& partner

selection

Exploration Expansion

Commitment

to the

relationship

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Michael Dell

Hyper-growth companies are

quintessentially learn-by-doing

organisations. They survival

depends on swift adaptation.

The key is to have enough

structure in place that growth is

not out of control but not so

much that the structure

impedes your ability to adapt

quickly.