Lecture 5: Entrepreneurial school Flashcards
What is an entrepreneur?
One who organizes, manages and assumes the risks of a firm (managing owner)
What is the key of the entrepreneurial school?
Vison -> entrepreneurs mental representation of strategy.
The organizational success is personalized leadership, based on the vision
What is the visonary process?
Imaginary of what the future should look like and what the environment should look like and how the organization should respond to that
What are the origins of the entrepreneurial school?
Economics - decisions on what quantities to produce and at what prices to sell
What are axamples of different views on entrepreneurship?
- Karl Marx -> entrepreneurs are agents of economic and technologicl change (at expense of society)
- Schumpeter -> Power of entrepreneurs is that they carried out new combinations (they have business idea and make this idea powerful and profitable)
- Knight -> entrepreneurs handle risk and uncertainty
- Drucker -> entrepreneurship is management itself
An entrpreneur can be …
- the founder of an organization
- the manager of a self-owned business
- the innovative leader of an organization, owned by others
What are the 4 characteristics of an entrepreneur (Mintzberg)?
- Strategy making is dominated by the search for new opportunities
- Power is centralized
- Environment is uncertain and dynamic
- Growth is the dominant goal
What are the characteristics of the entrepreneurial school?
- Strategy exists in the mind of the leader (entrepreneur) as perspective, long-term direction and vision of the (firms) future
- Entrepreneur is key; make strategy and oversee implementation of strategy
- Strategy is deliberate and emergent (overall vision is deliberate and the details of the vision emerge)
- Entrepreneurial strategy tends to take the form of a niche; market positions protected from outright competition
- Organizational structure is malleable and simple
- Process is semi-consious at best, rooted in the experience and intuition of the leader
What is the strategy process in the entrepreneurial school?
Opportunities -> Leader’s vision -> Emerging strategy -> organizational structure
In a circular form
What is Lewin’s 3 stage model of change?
- Unfreezing ->Understanding how status quo is hindering organization
- Changing -> a shift in mindset before new strategic vision can be conceived
- Refreezing -> the changes made are accepted and refreezed to the new status quo
What are opportunities of this school?
- Entrepreneurial school helps explain the rise of new market
- creating demand or fulfilling needs
- innovating business model
What is entrepreurial leadership?
Ability to influence others to use resources in a manner that seeks and identifies opportunities and advantages
What are 3 different ways of leadership within entrepreneurial school?
- People-oriented
- Purpose-oriented
- Learning-oriented
What are the limitations of this school?
- strategy formation remains a blackbox
- Contradictory conclusions on entrepreneurial behaviour and personality (strong bias to success stories)
- is centralization always positive?
- vision overshadows operations
- organizations are vulnerable when main strategists leaves
- are visionary leaders always affective
- School can be seen as risky, cause there is onlu one strategists
What kind of strategies are common in the entrepreneurial school?
simple and unique strategies
