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Unformatted text preview: Chapter 10 Developing an Entrepreneurial Culture Copyright (c) 2007 by Donald F. Kuratko All rights reserved. E Introduction A simple way to think about culture is that it captures the personality of the company and what it stands for. Entrepreneurship is not only affected by the culture in a company, it is also a core element of the culture. E The Nature of Culture in Organizations Culture can be defined as "an organization's basic beliefs and assumptions about what the company is about, how its members should behave, and how it defines itself in relation to its external environment" A culture reflects the unique history of a group of people interacting over time, but it also is subject to continuous change as people come and go, and is based on developments in the external environment. The Nature of Culture in Organizations
Finally, cultures are fuzzy. They include E elements that may seem contradictory or paradoxical. Cultures tend to differ along some key dimensions: Positive vs. negative Strong or weak Homogeneous or heterogeneous Consistent or inconsistent E The Pieces and Parts of Culture Six elements Values Rules of conduct Vocabulary Methodology Rituals Myths and stories E The Pieces and Parts of Culture Cultures consist of substance and forms.
Substance refers to shared systems of values, beliefs, and norms. Forms are the concrete ways in which the substance is manifested in the organization. E Artifacts and Creations Visible but often Artifacts and -Technology not decipherable Creations -Art -Visible and audible behavior Values patterns -Testable in the physical Greater level of environment Values awareness -Testable only by social consensus Basic Assumptions -Relationship to environment -Nature of reality, time, space Taken for granted, Basic of human nature -Nature invisible, -Nature of human activity Assumptions preconscious - Nature of human relationships E The Pieces and Parts of Culture "Organizational cultures can enhance and inspire us. They can remove us from the boxes and traps in which we exist, making our lives richer and giving meaning to our daily tasks. [This] is the goal of cultural management." Core Ideology and the Envisioned Future
Core ideology includes core values, or what the company stands for, as well as core purpose, or the reason the company exists.
Sony Corp.'s core values include being a E pioneer, doing the impossible, and encouraging individual ability and creativity. At Disney, creativity, dreams, and imagination form some of the core values. Core Ideology and the Envisioned Future Envisioned future about setting clear and compelling goals that the company commits to achieve over the next 10 or 20 years. Goals motivate people and evoke passion and conviction. E E Generic Culture Types Four prototypes: The Process Culture The Tough-Guy/Macho Culture The Work Hard/Play Hard Culture The Bet-the-Company Culture E Organizational Culture Examples Ouchi, 1981 Types A, J, and Z Deal and Kennedy, 2000 Process Tough-guy/macho Work hard/play hard Bet the company E Organizational Culture Examples Mitroff and Kilmann, 1975 Sensation-thinking Intuition-feeling Intuition-thinking Sensation-feeling Sethia and Von Glinow, 1985 Apathetic Exacting Caring Integrative E
Organizational Culture Examples Kets DeVries and Miller, 1984 Paranoid Avoidant Charismatic Bureaucratic Schizoid Elements of an Entrepreneurial Culture
People and empowerment focused Value creation through innovation and change Attention to the basics Hands-on management Doing the right thing Freedom to grow and to fail Commitment and personal responsibility Emphasis on the future and a sense of urgency E Elements of an Entrepreneurial Culture E Healthy discontent describes an emphasis on constant improvement E
Core Cultural Values (fig. 10.2)
see following diagrams... E Multipurpose Comfort/ Satisfaction Unity of Interest Personal purpose Unipurpose Excellence Class interest Organizational purpose
Consensus decision-making Command decision-making E Empirical decision-making Qualitative decision-making Expediency Performancebased rewards Career Disposable labor Integrity Power/tenurebased rewards Jobs Intimate concerns E Entrepreneurial Leadership Through
Culture: An Example
Cintas Corporation is the world's leading provider of corporate identity uniforms, with annual sales exceeding $1.9 billion The company has grown for 31 consecutive years, with sales increasing at a compound rate of 25% and profits at a rate of 33% An investment of $1,000 in Cintas stock when it went public in 1983 would be worth over $50,000 today. E Exploring a Key Value: Individualism
Individualism a self-orientation, an emphasis on self-sufficiency and control, the pursuit of individual goals that may or may not be consistent with those of the employee's colleagues. Collective orientation the subordination of personal interests to the goals of the larger work group. Merits of Individualism vs. Collectivism (Table 10.3) E Positive Aspects Negative Aspects E Exploring a Key Value: Individualism The ability to achieve sustained entrepreneurship in a company is dependent upon a balance between the need for individual initiative and the spirit of cooperation and group ownership of innovation. E High Entrepreneurial Intensity Low
Strong individual Strong group or orientation collective org. Ideal balance E A Different View of Failure Managers struggle with the concept of failure There is a tendency within companies to develop "zero error cultures" as companies strive to meet ever-higher performance standards in a hypercompetitive marketplace
This results in innovation incompetence, where bold initiatives are avoided and initiatives are pursued only when there is an apparent guarantee of outcomes E A Different View of Failure The culture in the entrepreneurial firm celebrates failure. Fear of failure is a certain recipe for mediocrity. Failure is perceived employees attach certain costs to it Is it job loss, a smaller pay raise, a missed promotion, a blemished record, loss of autonomy, personal embarrassment, loss of stature, or something else? E A Different View of Failure Johnson & Johnson "Failure is our most important product". Different types of failure Moral failure Personal failure Uncontrollable failure E A Different View of Failure
Failure 10 Success 10 Failure 10 Success Developing an Environment to Support Entrepreneurship
"To be able to innovate, the enterprise needs to put every three years or so every single product, process, technology, market, distributive channel, and internal staff activity on trial for life." - Peter F. Drucker ...
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- Spring '08