Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

CHAPTER 6

Entrepreneurial

Leadership

PART 2

LEADING AND MANAGING

THE ENTREPRENEURIAL

ORGANISATION

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Influences on Organisational Architecture

Structure

and size

Architecture Strategy

Leadership

Environment

Culture

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The best way I know to establish and maintain a

healthy, competitive culture is to partner with people –

through shared objectives and common strategies

Michael Dell

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Constructing Culture

CULTURE

Cognitive

processes

• Ethics, values, beliefs

attitudes, etc.

• Norms & rules of

conduct

Organisational

processes

• Leadership styles

• Structures

• Empowerment

• Controls & rewards

• Routines, rituals etc.

• Stories, symbols &

myths

Values

Behaviours

• How things are actually done

• Vocabulary

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Constructing Culture

CULTURE

Cognitive

processes

• Ethics, values, beliefs

attitudes, etc.

• Norms & rules of

conduct

Behaviours

• How things are actually done

• Vocabulary

Organisational

processes

• Leadership styles

• Structures

• Empowerment

• Controls & rewards

• Routines, rituals etc.

• Stories, symbols &

myths

Values

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Constructing Culture

CULTURE

Cognitive

processes

• Ethics, values, beliefs

attitudes, etc.

• Norms & rules of

conduct

Behaviours

• How things are actually done

• Vocabulary

Organisational

processes

• Leadership styles

• Structures

• Empowerment

• Controls & rewards

• Routines, rituals etc.

• Stories, symbols &

myths

Values

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Constructing Culture

CULTURE

Cognitive

processes

• Ethics, values, beliefs

attitudes, etc.

• Norms & rules of

conduct

Behaviours

• How things are actually done

• Vocabulary

Organisational

processes

• Leadership styles

• Structures

• Empowerment

• Controls & rewards

• Routines, rituals etc.

• Stories, symbols &

myths

Values

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Hofstede’s Dimensions of Culture

• Individualism v collectivism – the degree to

which people prefer to act as individuals

rather than as groups

• Power distance – the degree of inequality

accepted by the community

• Uncertainty avoidance – the degree to which

people avoid ambiguity/uncertainty & prefer

structure

• Masculine v feminine – quality of life issues

like achievement & assertiveness v

relationships & concern for others

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Hofstede’s Dimensions of Culture

UNCERTAINTY AVOIDANCEHong Kong,

UK, USA,

Singapore

Greece, France,

Portugal,

Uruguay

INDIVIDUALISMSouth America,

Pakistan

LowHigh

USA, Australia,

Canada, France

POWER DISTANCE

USA, Germany,

Scandinavia,

UK

South America,

Malaysia, France

MASCULINITY North EuropeUSA, Austria, UK,

Japan, Germany

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Implications for culture

Creative,

innovative

Opportunistic

Achievement

‘Can-do’

‘Work is fun’

Sharing information

and knowledge

Change is normal

Celebrate

success

Measured

risk taking

Belonging,

ownership

Continual

learning

Self-confident

but realistic

Close relationships

with suppliers

Close relationships

with customers

Close relationships

with staff

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The DNA in Hofstede’s dimensions

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The DNA in Hofstede’s dimensions

Creative,

innovative

Opportunistic

Achievement

‘Can-do’

‘Work is fun’

Sharing information

and knowledge

Change is normalCelebrate

success

Measured

risk takingBelonging,

ownership

Continual

learning

Self-confident

but realistic

Close relationships

with suppliers

Close relationships

with customers

Close relationships

with staff

‘Can-do’

Celebrate

success

Close relationships

with customersClose relationships

with customers

Close relationships

with suppliersClose relationships

with suppliers

Close relationships

with staffClose relationships

with staff

‘Can-do’

Belonging,

ownership

Achievement

Celebrate

success

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Hofstede’s dimensions of culture

The growing entrepreneurial firm should :

Move from high ‘individualism’ to high ‘collectivism’- encouraging ‘ingroup’ feeling with strong sense of identity that encourages cooperation, building of relationships & networks

Have low ‘power distance’- egalitarian, informal and open relationships, information flows and flat organisational structures

Have low ‘uncertainty avoidance’- a tolerance of risk & ambiguity, preference for flexibility & personal choice & decision making

Achieve a balance between ‘masculine v feminine’

- between ‘outgroup achievement orientation & ‘ingroup’ relationship and network building

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Hofstede’s Dimensions of Culture

UNCERTAINTY AVOIDANCEHong Kong,

UK, USA,

Singapore

Greece, France,

Portugal,

Uruguay

INDIVIDUALISMSouth America,

Pakistan

LowHigh

USA, Australia,

Canada, France

POWER DISTANCE

USA, Germany,

Scandinavia,

UK

South America,

Malaysia, France

MASCULINITY North EuropeUSA, Austria, UK,

Japan, Germany

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Entrepreneurial v administrative

cultures

Entrepreneurial

• Results

• Job

• Parochial

• Open

• Loose

• Pragmatic

Administrative

• Process orientation

• Employee orientation

• Professional interest

• Closed system

• Tight control

• Normative orientation

Hofsted (1990)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Other elements of an entrepreneurial

culture

• People & empowerment

• Focus

• Commitment & personal responsibility

• ‘Doing the right thing’

• Value creation through innovation & change

• Hands-on management

• Freedom to grow & to fail

• Attention to basics

• Emphasis on future & sense of urgency

Morris & Kuratko (2002)

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Cultures that enhance v cultures

that inhibit learning

Enhances learning

Balances interests of

stakeholders

Inhibits learning

Tasks more important than

people

Focuses on people

Empowers people & makes them believe

Has approachable leaders

Makes time for learning

Takes holistic approach to problem solving

Encourages open communication

Believes in teamwork

Focus on systems

Allows change only when necessary

Preoccupied with short term

Compartmentalises problem solving

Restricts information & communication

Believes in individual competition

Has controlling leaders

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Close

supplier

relationships

Close

relationships

with staff

EgalitarianBelief in

teamwork

Commitment

Entrepreneurial culture

Sharing

information &

knowledgeOpportunistic

Achievement

orientation

Charge is

normal‘Work is fun’

Self-

confident but

realistic

Celebrate

success

Belonging,

ownership

Close

customer

relationships

Shared

visions

Acquiring

information &

knowledge

Building

networks

People are

important

Time for

learning and

innovation

Open communication

Emphasis on

future

Personal

responsibility

Attention to

basics

Doing the

‘right thing’

Hands-on

management

Strong

relationshipsContinual

learning

Creative,

innovate

Measured

risk-taking

Empowered

can-do staff

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Culture & leadership style

• Theory X - assumes employees dislike work

• Theory Y - assumes employees can like work

& motivated and then trusted to exercise

discretion within framework of rules

• Theory Z – assumes consensus and trust

can be established through participative,

team-based decision-making