Part V – Growth and Development of Entrepreneurial Ventures Chapter 15 – Strategic Planning for Emerging Ventures Chapter 16 – Managing Entrepreneurial.

Part V – Growth and Development Part V – Growth and Development of Entrepreneurial Ventures of Entrepreneurial Ventures

Chapter 15 – Strategic Planning forChapter 15 – Strategic Planning for Emerging Ventures Emerging Ventures

Chapter 16 – Managing Chapter 16 – Managing Entrepreneurial Growth Entrepreneurial Growth

Chapter 17 – Global OpportunitiesChapter 17 – Global Opportunities for Entrepreneurs for Entrepreneurs

Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 16 – ManagingChapter 16 – Managing Entrepreneurial Entrepreneurial Growth Growth

A Venture’s Typical Life CycleA Venture’s Typical Life Cycle

Venture Development StagesVenture Development Stages

New-VentureNew-VentureDevelopmentDevelopment

Start-upStart-upActivitiesActivities

VentureVentureGrowthGrowth

BusinessBusinessStabilizationStabilization

InnovationInnovationor Declineor Decline

Profit, Productivity,Profit, Productivity,RevenuesRevenues

The Entrepreneurial The Entrepreneurial Company in the Twenty-Company in the Twenty-

First CenturyFirst Century

The Entrepreneurial MindsetThe Entrepreneurial MindsetFuture GoalsFuture Goals

ChangeChange Status QuoStatus Quo

Per

ceiv

ed C

apab

ilit

yP

erce

ived

Cap

abil

ity

Blo

cked

Blo

cked

Po

ssib

leP

oss

ible

EntrepreneurEntrepreneurSatisfiedSatisfiedManagerManager

FrustratedFrustratedManagerManager

ClassicClassicBureaucratBureaucrat

Building the Adaptive FirmBuilding the Adaptive Firm

• Share the Entrepreneur’s VisionShare the Entrepreneur’s Vision

• Increase the Perception of OpportunityIncrease the Perception of Opportunity

• Institutionalize Change as the Venture’s GoalInstitutionalize Change as the Venture’s Goal

• Instill the Desire to Be InnovativeInstill the Desire to Be Innovative– A reward systemA reward system– An environment that allows for failureAn environment that allows for failure– Flexible operationsFlexible operations– The development of venture teamsThe development of venture teams

The Transition from an The Transition from an Entrepreneurial Style to a Entrepreneurial Style to a Managerial ApproachManagerial Approach

• Balancing the Focus Balancing the Focus (Entrepreneur and Manager)(Entrepreneur and Manager)

The Entrepreneurial Culture Versus The Entrepreneurial Culture Versus the Administrative Culturethe Administrative Culture

Entrepreneurial FocusEntrepreneurial FocusCharacteristicsCharacteristics

Administrative FocusAdministrative FocusCharacteristicsCharacteristics

StrategicStrategicOrientationOrientation

Driven by perceptionDriven by perceptionof opportunityof opportunity

Driven by controlledDriven by controlledresourcesresources

Revolutionary, withRevolutionary, withshort durationshort duration

Evolutionary, withEvolutionary, withlong durationlong duration

Commitment toCommitment toSeize OpportunitiesSeize Opportunities

Commitment ofCommitment ofResourcesResources

Many stages, withMany stages, withminimal exposure atminimal exposure at

each stageeach stage

A single stage, withA single stage, withcomplete commitmentcomplete commitment

out of decisionout of decision

The Entrepreneurial Culture Versus The Entrepreneurial Culture Versus the Administrative Culturethe Administrative Culture

Entrepreneurial FocusEntrepreneurial FocusCharacteristicsCharacteristics

Administrative FocusAdministrative FocusCharacteristicsCharacteristics

Control of Control of ResourcesResources

Episodic use or rentEpisodic use or rentof required resourcesof required resources

Ownership orOwnership oremployment ofemployment of

required resourcesrequired resources

Flat, with multipleFlat, with multipleinformal networksinformal networks

HierarchyHierarchyManagementManagementStructureStructure

Understanding the Understanding the Growth StageGrowth Stage

Key Factors During the Growth StageKey Factors During the Growth Stage

• ControlControl

• ResponsibilityResponsibility

• Tolerance of failureTolerance of failure

• ChangeChange

Managing Paradox and ContradictionManaging Paradox and Contradiction

• Bureaucratization versus Bureaucratization versus DecentralizationDecentralization

• Environment versus StrategyEnvironment versus Strategy

• Strategic Emphases: Quality Strategic Emphases: Quality versus Cost versus Innovationversus Cost versus Innovation

Confronting the Growth WallConfronting the Growth WallSuccessful growth-oriented firms have exhibited a few Successful growth-oriented firms have exhibited a few

consistent themes:consistent themes:• The entrepreneur is able to envision and anticipate The entrepreneur is able to envision and anticipate

the firm as a larger entity.the firm as a larger entity.• The team needed for tomorrow is hired and The team needed for tomorrow is hired and

developed today.developed today.• The original core vision of the firm is constantly and The original core vision of the firm is constantly and

zealously reinforced.zealously reinforced.• New “big-company” processes are introduced New “big-company” processes are introduced

gradually as supplements to, rather than gradually as supplements to, rather than replacements for, existing approaches.replacements for, existing approaches.

• Hierarchy is minimized.Hierarchy is minimized.• Employees hold a financial stake in the firm.Employees hold a financial stake in the firm.

Confronting the Growth WallConfronting the Growth WallA six-step program was recommended as a A six-step program was recommended as a

process for breaking through the inability to process for breaking through the inability to handle environmental change or trends:handle environmental change or trends:

1.1. Get the factsGet the facts

2.2. Create a growth task forceCreate a growth task force

3.3. Plan for growthPlan for growth

4.4. Staff for growthStaff for growth

5.5. Maintain a growth cultureMaintain a growth culture

6.6. Use an advisory boardUse an advisory board

Growth and Decision Growth and Decision MakingMaking

Effective DelegationEffective Delegation

Effective delegation:Effective delegation:

1.1. Assigning specific dutiesAssigning specific duties

2.2. Granting authority to carry out these dutiesGranting authority to carry out these duties

3.3. Creating the obligation of responsibilityCreating the obligation of responsibility

Achieving Entrepreneurial Achieving Entrepreneurial Leadership in the New MillenniumLeadership in the New Millennium

Entrepreneurial leadership arises Entrepreneurial leadership arises when an entrepreneur attempts to when an entrepreneur attempts to

manage the fast-paced, growth manage the fast-paced, growth oriented company.oriented company.

Components of Entrepreneurial LeadershipComponents of Entrepreneurial Leadership

1.1. Determining the firm’s purpose or vision.Determining the firm’s purpose or vision.2.2. Exploiting and maintaining the core Exploiting and maintaining the core

competencies.competencies.3.3. Developing human capital.Developing human capital.4.4. Sustaining an effective organizational Sustaining an effective organizational

culture.culture.5.5. Emphasizing ethical practices.Emphasizing ethical practices.6.6. Establishing balanced organizational Establishing balanced organizational

controls.controls.