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 simple culture is that it captures the personality of the company and what it stands for. what Entrepreneurship is not only Entrepreneurship affected by the culture in a company, it is also a core element of the culture. of E The Nature of Culture in Organizations Culture can be defined as “an organization’s Culture 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” its A culture reflects the unique history of a group culture 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. external The Nature of Culture in Organizations
Finally, cultures are fuzzy. They include Finally, E elements that may seem contradictory or paradoxical. paradoxical. Cultures tend to differ along some key Cultures dimensions: 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. Cultures substance forms.
Substance refers to shared systems of values, beliefs, and norms. values, Forms are the concrete ways in which the substance is manifested in the organization. organization. E • Artifacts and Creations Visible but often Artifacts and Artifacts -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 Assumptions preconscious - Nature of human relationships E The Pieces and Parts of Culture “Organizational cultures can enhance Organizational 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.” management.” Core Ideology and the Envisioned Future
Core ideology includes core values, or what the Core core or company stands for, as well as core purpose, core or the reason the company exists. or
Sony Corp.’s core values include being a Sony E pioneer, doing the impossible, and encouraging individual ability and creativity. encouraging At Disney, creativity, dreams, and At imagination form some of the core values. imagination 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. the Goals motivate people and evoke Goals passion and conviction. passion E E Generic Culture Types Four prototypes: The Process Culture The Tough-Guy/Macho Culture The Work Hard/Play Hard The Culture 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 improvement E
Core Cultural Values (fig. 10.2)
see following diagrams… E Multipurpose Comfort/ Satisfaction Unity of Unity Interest 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 Cintas provider of corporate identity uniforms, with annual sales exceeding $1.9 billion with The company has grown for 31 consecutive The years, with sales increasing at a compound rate of 25% and profits at a rate of 33% rate An investment of $1,000 in Cintas stock An when it went public in 1983 would be worth over $50,000 today. over 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. those Collective orientation – the subordination of personal interests to the goals of the larger work group. the Merits of Individualism vs. Collectivism (Table 10.3) E Positive Aspects Negative Aspects E Exploring a Key Value: Individualism The ability to achieve sustained The 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. ownership 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 There develop “zero error cultures” as companies strive to meet ever-higher performance standards in a hypercompetitive marketplace standards
This results in innovation incompetence, This where bold initiatives are avoided and initiatives are pursued only when there is an apparent guarantee of outcomes apparent E A Different View of Failure The culture in the entrepreneurial firm The celebrates failure. celebrates Fear of failure is a certain recipe for Fear mediocrity. mediocrity. Failure is perceived – employees attach certain Failure perceived costs to it costs Is it job loss, a smaller pay raise, a missed Is promotion, a blemished record, loss of autonomy, personal embarrassment, loss of stature, or something else? stature, E A Different View of Failure Johnson & Johnson – “Failure is our most Johnson important product”. important 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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This note was uploaded on 10/02/2010 for the course ENTR ENTR 3312 taught by Professor A.lish during the Spring '10 term at University of Houston-Victoria.
- Spring '10