Technological Entrepreneurship A Balanced Scorecard Perspective Commerce Essay

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The paper aims to present the most important features of technological entrepreneurship, both in industrial and non-industrial organisations, and its important role in organisational development. The conceptual model used to describe our approach is The Balanced Scorecard, with a focus on learning and growth perspective. Within this view, a set of specific indicators is proposed in order to assess the performance of technological entrepreneurship and intrapreneurship. The result will reflect entrepreneur's perspective, internal innovative processes, innovation and growth of an organization.

Introduction

The development of global economy led to the increasing of modern business practices. The entrepreneurial skills have contributed to improve the business environment, through expanding the entrepreneur's horizons and by assuming a substantially higher risk in decision making.

The evolution of entrepreneurship led to its diversification depending on the industry, social and economic context, entrepnreneurs'skills and objectives, and other factors. In the study of these forms a special attention was given to technological, social and green entrepreneurship.

This research is aiming to define technological entrepreneurship as one form of entrepreneurship, currently in full development. According to Byers (2008) "technology entrepreneurship is a style of business leadership based on the process of identifying high-potential, technology-intensive business opportunities, gathering resources such as talent and cash, and managing rapid growth using principled, real-time decision-making skills." [2]

The conceptual model which can provide a new point of view about technological entrepreneurship is Balanced Scorecard (BSC). According to Kaplan and Norton in 1992, BSC was designed as a management tool for performance measurements. It took several years for the authors to redefine Balanced Scorecard. At the end, the authors defined BSC as a tool for translating organizational strategy into specific actions through the development of performance objectives and measures [10].

The Balanced Scorecard has emerged as a proven tool in meeting the many challenges faced by the modern organization [14]. In Gupta's work since 2004 it has been shown that BSC is important from a point of view that enables connections between organizational objectives in terms of four perspectives: financial, customer, internal processes and learning and growth [8].

The current research develops a new definition of technological entrepreneurship, using the Balanced Scorecard conceptual model as a core method for defining this concept.

Although multiple measures of entrepreneurship exist, the use of key performance indicators (KPIs), common for industrial and nonindustrial companies, can highlight the Learning and Growth (L&G) principles from the innovation point of view.

The main goal of the current research is to distinguish technological entrepreneurship from the other types of entrepreneurship using internationally comparable indicators used for learning and growth perspective of an organisation.

The main characteristics OF Technological ENTREPRENEURSHIP

Technological entrepreneurship is defined as an important modality to commercialize technical inventions [23], as a bridge between technological evolution and commercial exploitation, which includes all activities linked to the identification of potential entrepreneurial opportunities, arising from technological development, and, likewise, linked to the exploitation of these opportunities through the success of innovative products.

Technological entrepreneurship was interpreted in different ways and at different levels of analysis, as a system [1], as a policy [20], as a strategy [7], as a process [16] or as an individual attitude [5].

Within the context of technological changes, the interest for the ecological domain and social dimension is important to describe several types of entrepreneurship. As mentioned before, within this framework, there were selected to describe three types of entrepreneurship: technological, green and social. This comparison can provide a better understanding of the main characteristics of entrepreneurship domain and it is presented in table 1.

Balanced Scorecard Perspectives

A new form of Balanced Scorecard was developed in 1996 by Kaplan and Norton [10]. The new model, realized for translating the strategy into specific actions, engaged 4 interrelated perspectives: financial, customer, internal processes and learning and growth. In fact, these 4 perspectives represent a balance between long and short term organizational objectives, between lag and lead performance measures [15].

Differences and similarities between the three types of entrepreneurship

Type of

Entrepreneurship

Differences

Similarities

Social

Specific to social organizations

Involve social objectives for each activity [19]

The emphasis is more on individual than on collective models [5]

Innovation

Private business sector

Business orientation on specific domains

Learn & Growth

Long term investments

Green

Has the environment as central objective

Environmental innovations [11]

Promotes corporate social responsibility and sustainability

Technologic

Emphasise technological changes

Learning and growth in technological innovation field

Financial perspective

According to Kaplan and Norton's conceptual model, this perspective offers an overview of financial performance measures. In time, this perspective evolved and was materialized through specific performance measurements. It is important to measure organizational success and financial evolution of an organization, also this perspective offers a new point of view on organizational financial objectives [12]. This perspective aims to provide information about financial and non-financial performance indicators and necessary data for analysing process of organizational success [6].

Customer perspective

It is based more on organizational and market actors. Michalska J. in 2005 [13] presented this perspective, through the organizational effectiveness, as an overview of all available sources of financial success, such as market position and customer satisfaction. In fact, this perspective should respond to the question: "How should be a firm perceived in eyes of customers?" When Kaplan and Norton (1992) first time introduced the Balanced Scorecard, this perspective was evaluated just from the customer's point of view.

Internal Processes

This perspective reflects manager's point of view on its own business processes. The main question of this perspective is: what management process a company should adopt to be more efficient? In fact it will use client's demands to produce new products and obtain better outcome [3].

Learning and growth perspective

Kaplan and Norton in 1996 defined this perspective through three main dimensions: people, systems and organizational procedures. As researchers went further, this perspective became an important part of performance analysis. In fact, this perspective is about the ability of each company to adapt to the market's condition, to new challenges, to change [13] or to be in the same line with new technology.

Also this perspective aims to provide the analysis of the most important objectives, according to main idea of technological change and development of human resources of each company.

Indicators and research method DESIGN

In order to provide a better understanding of performance measurements for technological entrepreneurship, we made a

compilation of performance indicators for each dimensions from Balanced Scorecard's perspective of Learning and Growth (Table 2).

According to the main idea of this study, it aims to provide not only a new definition of technological entrepreneurship, but also to provide a new flexible method to adapt this concept for each company depending of performance indicators. The method was structured in four steps.

First step - defining selection criteria

Establish the main criteria for selecting the performance indicators which can be used for assessing the dimensions of the Learn and Growth perspective of BSC. In this case, the criterion used was the structure in three dimensions, given as "sources" of this perspective by Kaplan and Norton in 1996.

Step two - selecting the indicators

Establish reliable sample of KPIs for companies / organizations from different types of industries, or different types of activities (table 2).

The KPIs were chosen from a large available list which aims to provide information's about innovation. To know which KPI's are important and appropriate for learning and growth perspective, it was agreed to rate them using a scale from 1 to 10 (1 - the less important, 10 - the most important). These notes will reflect the minor or major interest of entrepreneur for innovation part of Balanced Scorecard's Perspective of Learn and Growth (table 3).

The notation which will be used is:

P1-6 - KPIs for the first dimension: People

S1-6 - indicators for the second dimension: System

OP1-6 - indicators for the third dimension: organizational procedures.

Step three - defining the structure of the performance indicators system

Translate the organisation approach of the Learning and Growth perspective into relations between performance indicators from each of the three dimensions: people, systems and organisational procedures. The main objective is to realize the best combination of indicators. An example is shown in Figure 1.

KPIs specific for three sources of Learning and Growth perspective from Balanced Scorecard

(source: www.indicatorideperformanta.ro)

Learn and growth perspective

People

Systems

Organizational procedures

Education, training, counselling programs for employees

New technology involvement

Investment agreements process

Cross training of work quality

Low yield of equipment

Stakeholder involvement

Management skills and life-long learning

Equipment availability

Investments of exploration of new markets

Employees implicated in innovation processes

Performance systems

Dedicated resources for innovations

Research and development employees

Internal platforms for knowledge exchanges

Optimized procedures

Customer satisfaction

Regression tests

Innovation Pipeline Strength

Notation of indicators

People

Systems

Organizational procedures

P1

3

S1

10

OP1

4

P2

5

S2

7

OP2

5

P3

3

S3

7

OP3

8

P4

10

S4

7

OP4

10

P5

9

S5

10

OP5

9

P6

7

S6

8

OP6

9

Employees implicated in innovation processes

Research and development employees

Internal platforms for knowledge exchanges

Optimized procedures

Dedicated resources for innovations

Example of grouping indicators from different categories

In this case, the best combination was established based on marks 9 and 10.

This combination was chosen because we aim to define firstly innovation and describe it through performance indicators. So, we chose from our list (Table 2) the KPIs for innovation, based on the best marks that are shown in Table 3.

Step four - defining the organisation' customized approach of technological entrepreneurship

Formulate definition of technological entrepreneurship according to indicators which were used and which match the activity of organization. To better understand this step and to perform scenarios analysis, we proposed 4 new indicators that are calculated by formulas:

= , (1)

= , (2)

= , (3)

where GP, GS and GOP are related grades for each dimension.

where x, y and z represents grade's weight from each dimension: people, systems and organisational procedures, calculated by formula 4.

{ x, y, z } = , (4)

where G represents grades for each type of dimension;

S - maximum grade of the used scale and

Ni is number of indicators from each dimension.

= , (5)

IP, IS and IOP represents weighted mean of grades from each type of dimensions: people, system and organisational procedures.

ILG is a composite indicator, which represents Learning and Growth Perspective, calculated as arithmetic average of weighted means of each type of dimension.

SCENARIOS FOR IMPLEMENTING THE RESEARCH METHOD

At this point, there will be listed all possible resulting combinations of indicators, based on marking process.

Case 1:

This case it is an ideal one. It means that this case describe the technological entrepreneurship through all performance indicators with 9 and 10 marks.

P4

P5

S1

S5

OP4

OP5

OP6

Figure 2. First case structure

Basically it is presented data flow among the entire organization. From this point of view, the technological entrepreneurship could be defined as a data flow through and among the organization, between employees and systems in friendly environment, which describe technological changes and innovation processes in the organization.

Case 2:

P4

S1

S5

OP4

Figure 3. Second case indicator combination

In this case, of major interests, are the indicators with 10 marks. Like in the previous case, there are bilateral relations between indicators. The difference is that we cannot speak about data flow, but we bring in front organizational sources.

Case 3:

P5

OP5

OP6

Figure 4. Third case indicator combination

It involves the question: "how people can influence or be influenced by organizational procedures?". It means that future innovation projects depend on R&D employees and good and optimized organizational processes.

Case 4:

This case presents a situation in which all indicators, from KPI's database, are used. It means that there is no limitation about importance grades.

In order to perform scenarios analysis, there were calculated: weight and specific indicators (table 4 and table 5). According to the results from table 5, the most valuable scenario for implementing the proposed method is case 2, which is based totally on Learning and Growth Perspective (100%). Although case 1 provides significant result (96,2%), we can notice that the influence of organisational procedures decreases. The result from case 3 indicates that the absence of a dimension causes an inappropriate approach of Learning and Growth Perspective.

The last scenario indicates that Learning and Growth Perspective is influenced by systems and organisational procedures indicators more than people's KPIs.

Table 4: Calculating weights

People

Grade

Weight

System

Grade

Weight

Organisational Procedures

Grade

Weight

P1

3

5

S1

10

16.67

OP1

4

6.67

P2

5

8.33

S2

7

11.67

OP2

5

8.33

P3

3

5

S3

7

11.67

OP3

8

13.33

P4

10

16.67

S4

7

11.67

OP4

10

16.67

P5

9

15

S5

10

16.67

OP5

9

15

P6

7

11.67

S6

8

13.33

OP6

9

15

Table 5: Calculating specific indicators

IP

IS

IOP

ILG

Case 1

9.52

10

9.35

9.62

Case 2

10

10

10

10

Case 3

9

0

9

6

Case 4

7.37

8.38

8.15

7.97

Conclusions

Although it was already defined, the technological entrepreneurship, this conceptual method provides a new type of definition, based on concrete indicators.

If in the beginning of this study, technological entrepreneurship was defined as a strategy, a process, a system or attitude, than according to proposed method, it is more about data collection, employee involvement, knowledge database and organizational sources.

Basically Learning and Growth perspective from Balanced Scorecard provide for this study information about employees involvement, information and informational systems between organizational departments and organizational environment.

Based on case structures, the important features of technological entrepreneurship are:

a) Reflects entrepreneur's perspective

b) Employees involvement in innovation processes

c) Provide knowledge "database" for managers

d) Establishing bilateral relations between performance indicators

e) Applying the designed method for those three perspectives of BSC: people, systems and organisational procedures

The advantage of this proposed method is that technological entrepreneurship gets to be defined from different point of view (researchers, managers, etc.). It seems to become more specific and it could be illustrated in several directions.

The primary KPI database can be also defined by the company, and after that it can be structured according to the proposed method.

The designed method can be applied for different types of organisations from different industries, including educational institutions, public administration and NGOs also.

The limitation is that by using this method it could not be known if the performance indicators are chosen correctly or if selection criteria are matching the intentions of those who want to define this concept

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