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report is about the investigation of two case studies based on leadership and its relation with entrepreneurship. One of these case studies is of Compaq Computers Corporation and the other one is of Doka Corporation. Through comparative and comprehensive reading, the evaluation of both case studies and their data will ensure the outcomes of the corporations with effective leadership to be successful.
The aims of the report are to critically evaluate two case studies and indicate the successful role of leadership on their entrepreneurial strategies, to identify the weaknesses that give points of failure of leadership under the circumstances, and to evaluate the relationship between leadership and entrepreneurship. The objectives of the report are to give the significance of entrepreneurial ideas, to evaluate the case studies to show instances where leadership paved a way to success and the otherwise.
Leadership contributes to the regional development through its implementation with having direct impact on entrepreneurial capabilities. The performance of employees and their behavior show development of leadership typologies (Marmor 1987). According to Stimson, the effective leadership is maintained through changes and adjustments proactively. The success of various businesses gives the core competence and competitive advantage to be effective leadership (Stimson, Stough et al. 2005).
Entrepreneurship, on the other hand, deals with innovations created in new ventures coming along in business market. Like other businesses, it also gets influenced by the leadership of lead entrepreneur and their creativity (Chen 2007). These businesses measure their innovation and protects them through patents. The new ventures involve high level of risk and invite aggressive competition (Vecchio 2003). Some new businesses float new ideas for the upcoming innovators besides, calling for combined efforts and injecting more creativity. Such innovation capability needs to be managed and lead effectively and efficiently (Chen, Chang et al. 2007).
The success of outcomes influenced by leadership in entrepreneur businesses are investigated through the following case studies.
Case studies Overview & Identification of Issues:
The strong or weak leadership determines the institutions and starter businesses to be effective or ineffective. The market fits and resources endowment may be characterized as either good or poor. The competitive behaviors can affect the outcomes (Feser 2001). In order to check the optimistic results along with the weaknesses of the case scenarios, both the case studies prove to be guidelines. Lets just start off with filtering of issues in them.
Compaq computer corporation, faced intense competitive forces in global market. The marketing leaders of various countries in Europe were enjoying healthy manufacturing operations. The saturation in domestic market served as reason of shrunk profitability. The stockholders were sued shockingly. The company faced first losses and prices had to be discounted. The issues faced by Compaq were identified slowly during the case study. The first issue was that the leaders were unable to keep track of competitors strategy to attack the strategies of Compaq. In addition to that, the costs per computer were rising leading to increased expenses (Reich and Benbasat 1996). The competitors prevailed and the prices had to be reduced. All during this time the consistent factor was the good supply of computers within Europe. The leaders were unable to keep a keen eye on their short comings and to fix them globally without having to compromise on their profit shares.
The second case study is based on a Russian Corporation named Doka. The company had a deep impact of the economical and political conditions customary. One of the significant drawback Russian companies faced is that their business laws are not quite established. It became a reason to economic ties in new ventures and the joint ventures. Doka company was founded in 1987 and came to the business arena as a first high tech company of the country. Soon after setting foot in the global market, the first achievement was the manufacturing of first satellite of the world named ââ‚¬Å“Sputnikââ‚¬. The economic ties came side by side with the break down of Soviet Union. The company started with the new guidelines setting a role model for the other companies. Innovation served as the core competence. The company figured in time that it requires to establish new relations with the appropriate businesses. By 1995 the sales increased. Excelling in all directions as marketing, management, research and development and manufacturing of telecommunication products, with telecommunication sector as the major sector, the company was able to invest in other businesses. After telecom, the company was excelling brilliantly in software as well. Everything was going fine until the partnerships established and the lack of development of sales network in global market shook the revenues. The international marketing of the company started making the other countries to see Russian companies as the ones affect with Country Cold war. The copyrights were offered by some European companies because they did not exist at the first place. One of the biggest challenges faced by the company was the finance issues when the expansion of network occurred and out stretched to all continents of the world.
Critique and Comparative Analysis:
The corporations make decisions time to time. Some of these turn out to be strengthening the company where as some turn out to be disaster to the companies.
The manufacturing of Compaq Computers bloomed when it entered the market. Soon it had to fight with the rapidly soaring competition with its competitors. The corporate had to compromise on its profits and the lawsuits of competitors was spiraling down the corporate to the bottom. The revolution needed severely to bring the corporate back from ventilators. Along happened the miracle when Eckhard Pfeifer came around as the new leader. His point of focus was the global supply chain, employees performance, cost effectiveness, systems division, quality and reliability, customer service and penetrating market prices of Compaq products. The leadership hit the nail right in the head of innovation in all of these aspects.
Doka corporation initiated the business in a less established business cultural environment. The human resource was very competent and the innovations pitched in the business market. The strategic fit was excellent till the focus on core competence was concerned. Looking at Exhibit one, it shows how successful the financial operations were. As compared to financial operations the telecommunication and information technology brought the revenues of 39% which was maximum. The company was developing new machines for agriculture, telecommunications and information technology industry. The research and development
Significance of Entrepreneurial Ideas:
The significance of entrepreneurial ideas revolves around introducing more creativity and bringing more efficient solutions for the customers. The overall impact of good entrepreneur practice is on enhanced economic growth (Stroll 2006). The goods it brings to the economy are the influential solutions that give away the new ways of thinking, establishing new ideas and propagating more innovation. In case of crises the revolutionary solutions save the economies more credit crunch. The leaders play a role in keeping the spirit of innovativeness alive among the manufacturers (OECD 2010).
The entrepreneurial ideas of Eckhard Pfeifer as the leadership in Compaq Computers Corporation changed the impression of Compaq not only on the employees but also on the global market. The first change that was brought about by Eckhard was to change the way the company was marketing. The services were renewed and polished like never before. The customers expectations were to acquire the less space taking computers at work place as well as at the business market. The new designs of computers were focusing on just the same. Then the supply chain innovations brought back the old clients. The sales and distribution methods were significantly improved. The best benefit was of the low cost on all of these efforts. The leadership made the best use of the entrepreneurial ideas.
Doka corporation took up the challenge of producing the top notch machines in fields of biotechnology, microelectronics, machinery and special equipment, telecommunications and information technology. The new and latest versions of the machines produced stamped the regional markets with highest level reliability and error free operations. The work was getting faster and easier. The new ideas were especially significant to the bank economy growth in Russia. The economic boost gave the annual turnover of 247 million rubles. The new relations in the international market were growing along with the research and development at various places in international market.
Level of effectiveness of leadership:
The influential leader Eckhard of Compaq reduced the sized of computers and lured the business world to cut their expenses by offering warranty services and toll free direct sales. The basic idea behind the strategy was to improve the services and focus on new versions of computers that initiate the demand in the global market. The effectiveness soared when IBM computers sales declined with stirring sales of low cost, reliable, high quality computers of Compaq corporation. The new systems had the features that served as the core competence of the corporation. Soon the stock prices raised to the new trade level of 11$ in 1983. Within a year the Eckhard planned to step into the global market and things changed drastically. The effectives of hard work of Mr. Pfeifer gave the corporation the sales growth of the continuous third year.
The leaders of Doka corporation were focusing on their investment plans in cooperation with the streamlined development plans of corporations trading, technology manufacturing and economic growth. The management of corporation needed to be highly cooperative and flexible. The top managers carefully assessed priorities and established benchmarking priorities. The result was the autonomy of the corporation. The primary classification of the manufacturing and investment was broken down into various business lines. These lines were telecommunication, software, biotechnology, lighting and culture. The leadership had to focus on how interactive and cooperative these departments were to each other.
Case Study 1:
Contribution of Leadership in Success of the scenario:
The new strategy implemented by Eckhard Pfeifer welcomed the current employees to adopt a new strategy that focused big times on new strategy to eliminate the losses and price discounts. The supply chain focus regained market shares in United States, Japan and entire Europe market. The new costs computers with improved reliability stole back the market shares from the competitors. The new services for customers with enhanced customer care gave direct sales through toll free numbers and gave customers the chance to utilize their warranty.
One success factor that Pfeifer made the best use of was to change the thinking of business world for the competitors of Compaq. The best package of high quality products in less prices was the catch offer to the commercial and domestic users of computers. The policies of the company hit hard the recession in 1987 by less spending thus compounding competition increasingly among competitors in global market. The consistent growth in stock rates in European market gave the 15% growth rate in the entire continent. In 1990, the sales reached to $3.6 Billion with the income of $455 Billion. It was 58% of the revenues that were gathered from international market. In 1991 the share rates reached the new height of $74 per share.
Relation of leadership with successful entrepreneurship:
The research and development of marketing, and manufacturing sector improved their performance when the new leader of the corporate established new goals for every department to achieve. With the achievement of revolutionary entrepreneur practices, the Compaq niche was back in business with the company with direct sale methods. The new operations and ways of selling was backed by the qualified and competent leaders set in charge by Eckhard. The company came back around with the discounted prices and the niche market sellers faced a hard time to compete with Compaq this time.
Instances that lack a relation with entrepreneurship:
The focus of Compaq shifted towards, the international market. The clones of Compaq were unable to reduce their prices. This is exactly when the relation with entrepreneurship diminished in the case study. The case study took the direction of international market and how the strategies were developing to combat the aggressive completion among the clones. Soon after Compaq was honored with the label of Compaq portable computers, the market share (as shown in figure C6-1) showed the development of Compaq.
Case Study 2:
Contribution of Leadership in Success of the scenario:
Doka Corporation set foot in international market and accepted to work with many international partners. Before doing so, the international strategy had to be developed with which all operations of all departments needed to be streamlined. Based on their harmony, the leaders developed the international strategy. The group of all department heads agreed on the international dealer network. The result was the initiation of business from many wholesalers. The enlarged network included the qualified and experienced mounting, installing and service outlets. No area was left unattended. In 1994, the growth of network within Russia and the CIS republics strengthened as given in exhibit 3. The exhibit 4 gives the network extension chart to the rest of the world. Doka entered in all continents of the world except Antarctica.
The partners of Doka corporation started project in joint ventures with the corporation and introduced the changing and new mode of technology in their own countries. These partner countries are Germany, Finland, Poland, Sweden, France, Belgium, Denmark, Switzerland, Italy, Spain, Slovenia, United Kingdom, Canada, United States, Israel, Hong Kong, Saudi Arabia, South Africa, Australia, Taiwan, Singapore and Japan. Slowly, the countries started to make relations with Doka corporation. The innovations of the corporate prevailed in every country and every culture. The network management was intensive focus point of the company leaders. This is how the multi national contacts multiplied and the company started participating in international meetings and fairs.
Relation of leadership with successful entrepreneurship:
In this case study, the center of focus is hard to point out at one thing. The company started and reached to the heights gradually and perpetually. This did not happen unplanned. The starters of the corporation had no experience of international market and hardly any business policies established. The leadership took the wiser step forward one by one. In the beginning, the corporation focused on manufacturing of new machines for all types of business and industry. The leaders planned the next steps wisely to enlarge their networks and then focused on their domestic market and their needs. After some experience with dynamics of domestic market, the contacts increased with international markets. This did not happen on its own. The basic reason for continuous development was the sustained focus on company operations, growth, expansion and development. The entrepreneurs had to be following the expectations of the past and keep increasing their progress in order to promote the technology world wide. The product of the company was the machines and the leaders grabbed every golden opportunity to increase their brand recognition.
The issue of lack of developed market of Russia was still there while the operations were progressing. The starting point was to bring a revolution to the economy of Russia by Doka taking up the challenge to start work in the under developed business market and extend the business to global market. The strategic planning in directions of business environmental research and devising a strategy that gives a win win situation to the company and the neighbor companies was developed by the leaders (Grace 2010). The involving of other businesses had to be done which was focused through the network maintenance. The supply chain was managed effectively and this promoted the speed of growth of Doka Corporation in Russian zone, CIS regions and slowly moving forward to other continents.
The turnover of the company grew, when the leaders figured out in time that the financial issues need to be fixed in time by making connections with other qualified clients and customers. The Exhibit 5 gives the growth rate of the company over the years. From 1990 to 1995 the market estimate gives fives times more growth rate in 1995 as compared to 1990.
Instances that lack a relation with entrepreneurship:
The sales of the Doka corporation was the part that was always ignored all through the case study. The sales network was not well developed. The corporate trust was always built with the reliable partners both nationally and internationally. The political hazards were out of the control of marketer of Doka and other leaders. The copyright and patents were developed when the company had to bring their products to the international market.
Comparison of the case studies:
The strengths of Compaq were to develop new computers according to the expectation of customers, focusing on their niche market, innovative services of sales and supply chain, and the best part was to keep the quality high and the prices low. This truly penetrated the Compaq soon became famous for Compaq portable computers.
The Doka strengths were in the form of good and highly qualified and competent staff in every department. The innovation in ever kind of machine soon distributed the products of Doka not only in every city of Russia and but also in major cities of every continent. The focus on network enlargement soon brought the company to the global market and the network became waster every day.
The weaknesses of Compaq were good hold of leader, but leaders partial focus on entrepreneurship. The more focus was on services but the rate of quality and growth of new computers was not up to the mark.
The weaknesses faced by Doka were less educate about the business terms market, and under developed networks and poor economy. The company owner never lost his focus on any department and thus through availing the up coming opportunities the weaknesses were overcome shortly.
Conclusion & Recommendations:
Comparing the two case studies, the Compaq corporation met a brilliant leader who focused on their services tremendously and development the market for Compaq back again. But as compared to Compaq, Doka corporation had less developed business market, no clear evidence of if there was a one good leader or many at the functional level but the focus never broke on any sector of business. Whether it is global or domestic market the market shares are growing in every sector and service. Eckhard came to Compaq and gave a 180 degree spin to the market shares and growth rate of the company but the leadership focus was more on services and their innovation.
The relation between leadership and entrepreneurship is unbreakable because without this relation the business growth rate will hamper. In case of Compaq, the company needs to focus much on the development of newer versions of computers with blooming technology. The Doka corporation needs to focus on its environmental factors in order to know how their strategies will give a bigger boost to the country economy as the same time as the market shares are growing.