Part V – Growth and Development of Entrepreneurial Ventures Chapter 15 – Strategic Planning for Emerging Ventures Chapter 16 – Managing Entrepreneurial Growth Chapter 17 – Global Opportunities for Entrepreneurs Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 16 – Managing Entrepreneurial Growth

A Venture’s Typical Life Cycle Profit, Productivity, Revenues New-Venture Development Start-up Activities Venture Growth Business Stabilization Innovation or Decline Venture Development Stages

The Entrepreneurial Company in the Twenty-First Century

The Entrepreneurial Mindset Future Goals Change Status Quo Satisfied Manager Entrepreneur Possible Perceived Capability Classic Bureaucrat Frustrated Manager Blocked

Building the Adaptive Firm Share the Entrepreneur’s Vision Increase the Perception of Opportunity Institutionalize Change as the Venture’s Goal Instill the Desire to Be Innovative A reward system An environment that allows for failure Flexible operations The development of venture teams

The Transition from an Entrepreneurial Style to a Managerial Approach Balancing the Focus (Entrepreneur and Manager)

The Entrepreneurial Culture Versus the Administrative Culture Entrepreneurial Focus Characteristics Administrative Focus Characteristics Strategic Orientation Driven by perception of opportunity Driven by controlled resources Commitment to Seize Opportunities Revolutionary, with short duration Evolutionary, with long duration Many stages, with minimal exposure at each stage A single stage, with complete commitment out of decision Commitment of Resources

The Entrepreneurial Culture Versus the Administrative Culture Entrepreneurial Focus Characteristics Administrative Focus Characteristics Ownership or employment of required resources Control of Resources Episodic use or rent of required resources Management Structure Flat, with multiple informal networks Hierarchy

Understanding the Growth Stage

Key Factors During the Growth Stage Control Responsibility Tolerance of failure Change

Managing Paradox and Contradiction Bureaucratization versus Decentralization Environment versus Strategy Strategic Emphases: Quality versus Cost versus Innovation

Confronting the Growth Wall Successful growth-oriented firms have exhibited a few consistent themes: The entrepreneur is able to envision and anticipate the firm as a larger entity. The team needed for tomorrow is hired and developed today. The original core vision of the firm is constantly and zealously reinforced. New “big-company” processes are introduced gradually as supplements to, rather than replacements for, existing approaches. Hierarchy is minimized. Employees hold a financial stake in the firm.

Confronting the Growth Wall A six-step program was recommended as a process for breaking through the inability to handle environmental change or trends: Get the facts Create a growth task force Plan for growth Staff for growth Maintain a growth culture Use an advisory board

Growth and Decision Making

Effective Delegation Effective delegation: Assigning specific duties Granting authority to carry out these duties Creating the obligation of responsibility

Achieving Entrepreneurial Leadership in the New Millennium Entrepreneurial leadership arises when an entrepreneur attempts to manage the fast-paced, growth oriented company.

Components of Entrepreneurial Leadership Determining the firm’s purpose or vision. Exploiting and maintaining the core competencies. Developing human capital. Sustaining an effective organizational culture. Emphasizing ethical practices. Establishing balanced organizational controls.