The Use Of An Entrepreneurial Culture Commerce Essay


It has often been argued, whilst comparing the relative strengths of large and small organisations, that whilst strengths of large organisations flow from their many resources, smaller firms possess favourable behavioural characteristics (Vossen, 2010). Being better at pioneering does not depend upon the larger or smaller size of a firm, even as the roles of small and large firms in enabling of technological progress are likely to be complementary, in terms of the differences in their forms of innovation (Vossen, 2010). The key to success for the managements of both large and small firms lies in their ability to achieve confluence; on the ability of the large firm to merge its wherewithal with some of the advantages of the small firm, or on the ability of a small firm to bring to the table the strengths of larger firms, in terms of development of networks, or in R&D collaboration and support (Vossen, 2010).

2. Analysis

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Chesbrough (2000) argues that corporate ventures have numerous advantages, in comparison with private ventures, in terms of longer time-frames, bigger capital investments, widespread creation and synchronisation of internal synergies, and preservation of learning from failures (Cohen and Levin, 1989). Shane and Venkataraman, (2000), add that research in industrial firms reveals that entrepreneurship is less probable in a de-novo start-up because capital market limitations make it difficult for independent entrepreneurs to finance new and path breaking projects (Cohen and Levin, 1989). Levinthal and March (1993) further state that organisational arrangements by and large appear to be more effectual in elimination of disadvantages than in the provision of exceptional compensations for great successes (Sathe, 2003).

Entrepreneurship is more probable when the quest for entrepreneurial prospects leads to the endeavours of individuals, who are discouraged from engaging in such actions in large companies; this is more likely to occur when existing employers do not possess first mover benefits, economies of scale or the learning curve advantages, (Cohen and Levin, 1989) as well as in industries that have low entry barriers (Acs & Audretch, 1987) (Sathe, 2003).

The strategies of market leaders or first-to-market organisations aim to achieve that their products reaches the market before their competitors and provide their organisations with the advantage of transitory monopoly in development and utilisation of new technology before its adoption by market competitors (Oden, 1997). However, in circumstances where profit margins diminish because of products reaching the end of their life cycles, organisations dispose off or discard such products and shift their attention to new products; Intel, for example, follows such a strategy exceedingly well (Oden, 1997).

The venture team approach in large organisations throws up many advantages. The major advantage of this form stems from the fact that it empowers firms to undertake potentially radical ventures e.g. break through products, whose commercial introduction can become complicated and difficult in existing organisational environments (Oden, 1997). The focused 24*7 involvement of all key executives in such ventures results in distinct improvement in the timeliness and quality of the developmental effort (Oden, 1997). It also becomes possible to synergistically combine the superior talents of the pioneering group of people and forge a truly ingenious interdisciplinary assembly of people. Such a venture team provides a novel business approach that can stimulate enthusiasm and dedication and increase chances of product and commercial success (Oden, 1997).

Smaller "entrepreneurial" firms on the other hand boast of several inherent advantages over their bigger competitors in the development and launching of new and innovative products; new products in such firms not only progress through the expansion process more speedily than in large organisations but also consume much lesser expenses (Oden, 1997). Smaller firms are also able to compete much more effectively than their larger counterparts in terms of time-frames for product development (Oden, 1997).

The vigorous role of the CEO in smaller venture firms predisposes all team members in staying stimulated and focused and helps in overcoming numerous obstacles and roadblocks that are prevalent in the majority of large organisations (Oden, 1997). Most of the core participants in venture firms are so involved in developmental activities that they cannot get burdened by the political wrangling that is so often responsible for slowing down and even occasional derailing of new expansion processes in larger organisations (Oden, 1997).

Schrage (2000) describes how large organisations model, simulate, and prototype to innovate repeatedly, until they get the right product; Thomke (2001: 68) supports the paybacks of such a system of researching, since most large development companies have systems in place that enable the short-listing of ideas to be followed by their filtration for the emergence of viable products (Sathe, 2003). The most significant stage of such development is the period when such concepts or ideas converted into working prototypes, which are then taken through the complex process of product tests, trials, discussions, customer feedback, and necessary product modifications; Thomke (2001) states that Toyota Motors endeavours to resolve over four fifths of all design related issues even prior to production of initial prototypes (Sathe, 2003).

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Innovation processes in modern day corporations commence with the development of a modernisation vision that is in alignment with Strategic Business Unit (SBU) strategy. A prime example of this is provided by the manufacture of HP inkjet printers at Hewlett Packard (Koen, 2010). HP dot matrix printers were experiencing torrid times in the mid-1980s, when (a) their market share was being hammered down by the higher priced and better quality laser printers and (b) their profit margins were being eroded by the emergence of lower priced dot-matrix printers at the lower end of the profitability scale (Koen, 2010). HP responded sharply to this development through intense in-house research, developing, by September 1985, a vision for the SBU, to match the quality of laser printers and the competitive prices of low-end dot-matrix printers (Koen, 2010).

The Sony Corporation is another example of the creation of sustainable innovations that bring about paradigm shifts in consumer behaviour; their development, in 1952, of the Walkman which embodied the vision of a "pocketable" radio, when radios were being used only for military applications (Koen, 2010). Yet another exemplary model of an innovative vision is the expansion of the product line of Kodak by developing a single use disposable camera, for which the film could be rolled in an economically priced plastic case to be returned straight to the photofinisher for development (Koen, 2010). This innovation furthered the development of Kodak's hugely successful Fun Saver camera. Successful innovation visions spawned by large firms promote not only current growth but also sustain their corporate vision for further sweeping breakthroughs (Koen, 2010).

Research into the three important innovators of current times, namely Apple, Nintendo, and Nokia, and their open innovation concept, reveals that such innovations basically necessitate complementing of internal competencies, and core strengths of R&D, management and commercialisation, with external resources (Pontiskoski and Asakawa, 2009). The case of Apple is fascinating because of the cognitive manner in which true needs and desires of customers have been met, without the benefit of market research, on the iPod; it is the legendary Steve Job's future strategic vision that has enabled the unlocking of the capabilities of organisational people in ensuring that the correct mix of resources create such cherished products (Pontiskoski and Asakawa, 2009).

3. Conclusion

Rothwell and Dodgson (1994) state that the capability of firms, of all shapes and sizes, to sustain mutually harmonising relationships is expected to be a progressively significant criterion for achievement of innovative success; this is particularly relevant for smaller organisations whose potential is restricted by their lack of scale and availability of synergistic technological and related resources (Vossen, 2010).

All firms have diverse capabilities, resources and strategies. The permutations and combinations of such criteria drive innovation and its strategic implementation in swiftly changing business and economic environments (Pontiskoski and Asakawa, 2009).