Over the past years businessmen have observed changes in the structure and framework of businesses. Entrepreneurship became more popular for the past decades and the number of resources in search for opportunities is made accessible and greater. Moreover, financial capital is now available to most people. Aside from the material and financial resources, the human capital and public capital like infrastructures are important aspects for an entrepreneur. According to Welch (2003) over the last two decades forty countries were evaluated regarding their history and culture and its impact on entrepreneurship and the following hypotheses emerge:
- Entrepreneurship thrives in communities wherein the resources are moveable.
- Entrepreneurship is bigger when successful individuals in the community reinvest their extra capital in programs of other members of the community.
- Entrepreneurship thrives in communities wherein the achievement of other members of the community is acknowledged rather than ridiculed.
- Entrepreneurship is greater and more successful in communities that see change and transformation as positive rather than negative.
Major changes in the society have occurred in this world. Transformation in the financial and labour markets have made businesses more accessible to people. The most significant change is the emergence of globalisation wherein the flow of capital and labour across the borders in the world have helped products, ideas, and money disseminate throughout the international market, circulating in places wherein opportunity awaits.
This paper examines entrepreneurial culture and applies it in a large organisation. In addition, a discussion on the cases of Sir Ralph Halpern and the Burton Group plc and Jack Welch will be given.
Sir Ralph Halpern and the Burton Group plc
Burton Group plc is one of the oldest companies in Great Britain that specialises in clothing. It was established in the year 1904 by David Osinsky, and during pre-war and World War II the retail outlets of the company have increased to 595. However, when the Sir Montague Burton died in the year 1952, the company encountered a number of problems which contributed to its poor performance in the market. When the chief executive officer resigned, Sir Ralph Halpern took over; his main objective is to remove loss-making businesses. He introduced a unique organisational structure. During Halpern’s term as the chief executive officer of Burton Group plc the sales of the products grew up to £300 million, approximately £39 million pre-tax profits and a return capital employment of 16 per cent. After revitalising the organisation, Sir Ralph Halpern resigned. However, the organisation has again encountered problems and it entered a period of consolidation that involves downsizing employees and demerging of Debenhams.
In traditional economic literature entrepreneurship is viewed as a process wherein it must begin at the bottom and the people behind the business must work its way up. That is true in a number of companies such as the Burton Group plc wherein it started as a small retail store prior to World War II and become one of the biggest enterprising organisations. But despite of the success of the organisation it encountered problems after World War II.
And upon obtaining the position of the chief executive officer of Burton Group plc Burton vowed to revitalise the company. The theory of intrapreneurship is the entrepreneurial process within the organisation wherein it basically perceives itself differently from the usual idea of entrepreneurship wherein innovation is done within the setting of an existing firm (Umana, 2002). In the case of Halpern and Burton plc, Sir Ralph Halpern utilised the theory effectively because he was able to transform the culture of the company, in addition, Halpern welcomed the idea of change in which it could lead to innovation within the organisation.
Aside from the theory of intrapreneurship, enterprise culture was also extensively utilised by Sir Ralph Halpern. He was able to challenge the existing system and process within the organisation and come up with new solutions and ideas to problems in which it became beneficial to the whole organisation.
On the basis of the case, the theories of intrapreneurship and enterprise culture should not be modified since it provides a significant view regarding change within an organisation wherein it is considered one of the keys to successful entrepreneurship.
Burtons became a successful organisation upon utilisation of the two theories. However, it will become more successful if Burton’s was able to diversify its company and entered into new markets apart from clothing, since the theories talks about change and innovation. It will be a welcome change for the organisation if they are able to enter new products and services, as well as, markets.
Entrepreneurial culture is developed by large organisations in order to bring loyalty among employees, as well as, sustaining the competitive advantage of the company. Entrepreneurial culture was established in Burton group plc but despite of that, the company have shown cracks after Halpern resigned as CEO. There are a number of reasons why cracks appeared, one is that the changes that the new CEO implemented within the company were ineffective, the senior managers have mismanaged the organisation and economic and political situation of the nation may also have an effect. If Halpern did not resign, there will be a big difference since he is the man behind the changes and innovation of the organisation; if problems and issues will emerge he knows how to manage it.
Jack Welch: an activist CEO
Jack Welch is one of the most admired and respected CEOss in the world today. He retired last September 7, 2001 as the chief executive officer of General Electric. Under the chairmanship of Welch, General Electric became the largest and most successful companies in the world with total assets of 5 billion, and considered the World’s Most Respected Company during the years 1998, 1999, and 2000 by the Financial Times. In addition, General Electric has received the Fortune nomination as America’s most admired company during the years 1998-2001. Jack Welch was able to do that during his time as CEO of GE because he made the company informal through breaking the chain of command, communicating across the various departments of the company, and by treating its employees as if they worked for a challenging and high profile entrepreneur. Jack Welch has great belief on people and in order to tap the potential of the employees he would challenge the teams and set demanding targets and performances in order to sustain the organisation’s top ranking. He utilises rewards as a driving force for employees to perform well in their job.
Jack Welch considered that the management of General Electric is similar with that of the grocery store. And just like Pritchard, Welch regarded the view of the customers important, if the customer is not satisfied with the product, if the products and services are not good the company will most likely loose its customers. Pritchard and Welch managed their companies vividly and determine the small details of the company that could affect the whole organisation.
Jack Welch and Sir Ralph Halpern also possess similar characteristics as Chief Executive Officer. One of those similarities is both CEOs are not afraid of change. They even view change as an important aspect in the success of an organisation. And because of that these two CEOs were able to revitalise the companies and make it one of the most successful organisations not just in their respective countries but throughout the whole world.
Most of the time, the word culture is associated in the world of business, particularly among the entrepreneurial and corporate companies. Every organisation wants to establish a corporate culture in order to attract and retain employees that would contribute to the success of the company. Corporate culture is a very complex act because in order to have it an organisation must be able to balance a number of elements at every level within the company, particularly entrepreneurial companies, in which the management is developing its business at the same time its organisational culture. Corporate culture must be guided, cultivated and constantly checked and adapted to ensure that the culture you wanted to cultivate within the company will not go astray with your intentions.
Coca-Cola Corporation
Initially, Coca-Cola was invented as a drug to cure for diseases such as headache, morphine, addiction, and impotence (Coca-Cola, 2007). It was invented by Dr, John Stith Pemberton on May 8, 1886 in Atlanta, Georgia. In the year 1887, Asa Griggs Candler acquired a stake in Pemberton’s company and incorporated it as the Coca-Cola Company. Candler assertively advertise and market Coca-Cola product and during its 50th Anniversary Coca-Coal attained national status icon for the United States of America. During the World War II, it became a patriotic symbol because Coca-Cola provided the soldiers of the United States free drinks, added to the fact that it is the only company that was allowed to enter the front lines as technical officers. As the United States and its allies win in the World War II so did the Coca-Cols company. The company benefited from this advancement because they were able to set-up franchise in various countries. In the year 1985, due to the aggressive campaign of its rival Pepsi, the Coca-Cola Company reformulated the popular carbonated drinks to suit the preference of the consumers which is sweeter soda. However, the New Coke became a commercial failure which leads to the adverse reaction of the public. Protests from different sectors of the society emerged. Due to these events the company return the original formula and named it Coca-Cola Classic. Despite returning the original formula, the company still received accusations from different groups.
With increase competition from various companies in the United States and the whole world and changing trends in beverages Coca-Cola is faced with a number of challenges. And because of that changes must be made in order to accommodate the evolving trends in the market. Transforming the organisation into an entrepreneurial one and change management are two things a new CEO must do in order to overcome the obstacles.
Coca-Cola is still one of the leading beverage companies in the United States and in the whole world, however with the trend of globalisation and emergence of new competitors in the market, the company is losing its competitive advantage. Changes in management and culture must be made in order to keep up with the trends.
And in order to do that, companies must leave the mechanistic perception of the organisation and start the process of changing the mental disposition into a holistic one that welcomes entrepreneurial activities throughout the company. According to Naisbitt (1994) the bigger the economy of the world, the smaller players become more powerful. It clearly indicates that the entrepreneur plays an important role in the global business environment nowadays. This trend has huge impacts not only in small players but also for large organisations such as Coca-Cola which is still stuck in the existing frameworks.
As the new chief executive officer of Coca-Cola, the organisation must be employee friendly. The company must be able to provide a comfortable and safe working environment that will unleash the full potential of an individual, as well as, enable him or her to grow and learn in the workplace. Employees must be treated as assets of the company and must be trusted and respected. The workers, particularly in marketing and research and development must do their assigned task and utilise the right skills in order to finish it. And in order to do that teamwork approach must be done because it is an efficient method of developing strong commitment and communication among managers and employees.
In order to achieve the desired changes within the organisation, change management must be done. Change, according to Davidson (2001) “change is the significant difference in what was before.” In business it means accomplishing tasks in a new format, following new directions, acquiring new technologies, new management procedures, acquisitions and merging and other important events in corporations. Change is an important aspect in the business world especially in technology and innovation, because nowadays technologies and products are coming together to achieve a common conclusion or objective.
But in changing the management and culture of the organisation a number of obstacles or barriers must be faced. One of the challenges is that some of the employees are not natural team players and their approach to their job is individualistic. Although, a number of employees are already familiar with teamwork, utilising it within the company is still new to them. Some of the employees resist the idea of changing the culture of the organisation to a more entrepreneurial one. And in order to overcome those obstacles the following must be done according to Lawton (2001):
Treat people with respect- it is a common and simple law that human beings follow. It may sound simple but the underlying meaning of these words is very complicated because once trust or respect is broken issues within the company may arise. Employees must trust and respect their managers and likewise. Respect and trust is the fundamental basis for a competitive and sustainable entrepreneurial culture. Employees that resist changes must be respected by the management but not tolerated, they must explain to them the reasons why the company will undertake that measure in a civilised and respectful manner.
Help Employees Stay Healthy- offering health insurance and health benefits will ensure the workers that the company is concerned regarding their health. Having sick leaves must also be given to them. Health compensations are just one of the benefits employees look in a company and if the organisation is providing good health packages employees will most likely accept changes within the organisation.
Open Doors to Communication- develop an environment wherein the workers could interact and talk to each other. Managers must talk to employees regarding their concerns in the company. Aside from issues and concerns talking to employees makes it easier for the management to identify the individuals that are working hard and has the potential to rise to the top. If the employees and managers have an open communication it will be easier for the new chief executive officer to address the changes that he or she will make within the company.
Build camaraderie- allow the employees as well as the managers to get to know each other through team building and meetings on a regular basis. Through these activities the employees and the managers could discuss openly the path of the company as well as new ideas for the company. An organisation that has a good camaraderie makes it easier for the employees to talk to.
It is very important for the new chief executive officer to instil in the mind of its subordinates the idea that resistance to changes will yield bigger losses and wider exposure to risks.
In nurturing and creating entrepreneurial culture among large organisations Luczkiw (2007) utilised Entreplexity Discipline as a tool. The Entreplexity Discipline according to Lucskiw integrates both theory and practice into a body of knowledge that determines entrepreneurial start-ups or on the edge of existing structures. The discipline has five pillars and these are:
Structure- it refers to the parts of the system and their functions in association with one another. Through understanding the crucial elements of the parts it could be easily understood by the management the impact of actions and interactions within the organisation to the external environment. Through changing into an entrepreneurial culture, the organisation could exploit new opportunities in the external environments and create patterns that were not developed before. Entrepreneurial culture lets employees think out of the box and generate opportunities. Once the search for these opportunities is finished, the employees of the organisation could start to formulate ideas, it is through interaction with the external environment that an organisation could determine their markets wherein they could exploit it.
Systems- business is composed of organisational structure such as economic, social and political that interacts with one another in the national and international context. The systems in businesses are complex. And according to Waldorp (1992) the following are the properties related to complex systems.
-it is composed of a network of numerous agents that act in parallel.
-the agents in the various levels of organisation revise and rearrange themselves through rivalry and mutual accommodation.
-these people anticipate and foretell the future through utilising internal models that are based on personal experiences.
-they exploit special demands of products and services and develop new opportunities partners or competitors.
In the stage of developing and entrepreneurial culture within the company wherein the start up is dependent on the chaotic events or innovation surrounding the shift by the entrepreneur followed by an emphasis on order or management.
People- the people are the ones that have the capability to transform existing structures and integrate systems within the company to help create a vision of the company for the future. An organisation that has entrepreneurial culture have self-determined people, this type of individuals are driven by the activities of the company rather than the rewards. According to Shaver (1991) an organisation that wants to have an entrepreneurial culture must believe in innovation and must be motivated enough to persist until the job is finished.
The Process: Action and Interaction- through incorporating the first three pillars which are the structures, systems and persons an organisation is now ready to develop a vision for the future. According to Collin and Porras (as cited by Lucskiw) the vision has three major components and these are:
Core beliefs and values- these are the basic principles that motivates employees and managers of an organisation it is the extension of an individual’s values and belief.
Purpose- it is something that companies strive to achieve.
Mission- it is the major goal that every individual in the company wants to attain.
Strategy: Differentiation and Integration- through differentiation and integration each member of the organisation contributes to the success of the firm. In a business environment wherein companies deal with open systems traditional planning does not work. Differentiation and integration are more efficient in synthesizing learning and managers and leaders that utilised it emerged with renewed enthusiasm towards work and the challenges that it offers.
The global business environment is constantly changing and becomes more complex and chaotic as globalisation occurs. Having an entrepreneurial culture within the organisation develops people that have the ability to create and develop structures that will reflect their views. They will become agents of change wherein they will develop systems that have never been built before.
Credit:ivythesis.typepad.com
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