The Importance of Networking

Author: Colin

To the entrepreneur, networks help to develop relationships, make contacts, assemble resources and gain access to finance. Based on trust and respect networks can help entrepreneurs to gain credibility and establish a track record. (Burns, 2005) These are aspects that can prove invaluable when the entrepreneur is starting out, but how can larger organisations utilise networks to encourage intrapreneurial behaviour?

They must look the ways in which the entrepreneur utilise their networks, for example they may use them to make contact with venture capitalists. Larger organisations can mirror this by making sure that those responsible for funding are easily accessibly to employees with ideas or innovations.

Today entrepreneurs are often inventors and: “Gone are the days when lone inventors tinkering away in their attics and sheds could come up with path-breaking discoveries and innovations.” (Suarez-Villa, 2004, p80) It is often the case that entrepreneurs can turn to their peers or even their “rivals” for help and advice at the early stages of innovation. Larger organisations should bear this in mind if they want to encourage entrepreneurial behaviour in their staff. From an internal perspective; they should make sure different departments and divisions are networked, to allow for information and ideas to flow more easily throughout the organisation. They should discourage rivalry and promote understanding between different parts of the business, encouraging internal collaboration. Networks can make it easier for information to be shared more easily between different levels of the organisation; allowing for a better dialogue between the employees with ideas and other staff, after all: “Every intrapreneur needs colleagues to refine, repurpose, or just plain redraw his or her idea; marketing folks to help figure out exactly what the product is (or is not); and higher-ups who are willing to champion it, even if a return on investment is years in the making.” (Swearingen, 2008)

Organisations must also consider the importance of external networks. It is often a necessity for the entrepreneur to look out with their own organisations for assistance. It may be considered a “luxury” that larger organisations can often avoid this, but it would be unwise for them to totally discount working with external sources. Take the example of the Sony Playstation: “Ken Kutaragi was working in Sony’s sound labs when he bought his daughter a Nintendo game console. Watching her play, he was dismayed by the system’s primitive sound effects. He realized that a digital chip dedicated solely to sound would improve the quality of the games — and the product itself. Keeping his job at Sony, Kutaragi developed the SPC7000 for the next generation of Nintendo machines. Sony execs nearly fired him after discovering his sideline project, but then-CEO Norio Ohga realized the value of his innovation and encouraged Kutaragi’s efforts. With Sony’s blessing, Kutaragi worked with Nintendo to develop a CD-ROM-based Nintendo. But Nintendo decided not to go forward with it, so Kutaragi helped Sony develop its own gaming system, which became the PlayStation. The first PlayStation made Sony a major player in the games market, but the PlayStation 2 did even better, becoming the best-selling game console of all time. Kutaragi founded Sony Computer Entertainment, one of the Sony’s most profitable divisions.” (Swearingen, 2008) In this example we see an organisation allowing collaboration with an indirect competitor that gave them significant advantage when they came to be direct rivals.

Here are a few reasons why networks, both internal and external, can beneficial, but it is clear that organisations can learn from viewing networks from an entrepreneurial point of view.

References

Burns, P (2005) Corporate Entrepreneurship, Building an Entrepreneurial Organisation. 2nd ed (Palgrave MacMillan)

Suarez-Villa, L (2004) Technocapitalism and the New Ecology of Entrepreneurship, Rising Entrepreneurship in a Shrinking World: A Spatial Perspective, p78 – 103, p80

Swearingen J (2008) Great Intrapreneurs in Business History, Bnet [Online], http://www.bnet.com/2403-13070_23-196888.html Accessed 24 April 2008

Pride Goeth Before a Fall

Author: Mark K.

There always needs to be a certain level of business etiquette. As communication is key and in most successful companies established as being so, it’s crucial that companies not only understand this concept but also encourage it within the parameters of the business structure.

For example, jealousy and pride are aspects of human behaviour, but effective management of behaviour within the structure of a business combats and minimises such problems.

Costea and Crump (1999) summarise this well, saying:

“Organisational behaviour is one of the most complex and perhaps least understood academic elements of modern general management, but since it concerns the behaviour of people within organisations it is also one of the most central… its concern with individual and group patterns of behaviour makes it an essential element in dealing with the complex behavioural issues thrown up in the modern business world”

Many companies overlook such aspects as they are not tangible and not seen as a considered driver of a business.

The key I think is to understand the people you are working with whether it is people you are working with in a team, your managers or the people you are managing. By understanding your colleagues you can identify their strengths and weaknesses, their habits and tendencies by doing so you can utilize them to their full potential, create effective group cohesion and identify and prioritise what you superior’s needs and wants are.

Reference:

Costea, Bogdan and Crump,Norman (1999) "Introducing organisational behaviour: issues in course design". Education and Training, Vol 41, Issue 9: 403-415.

Innovation and Corporate Entrepreneurship: A few challenges

Author: Andrzej

Nowadays, as financial markets are integrated and international trade is flourishing, more and more companies become international.

As market competition grows, companies adapt quickly to the changes on the market and the tastes of consumers, requiring flexibility and openness from large companies. The problem is that not every managing board sees it, and still continues to conduct policy as if they owned majority market share. It cannot be denied that in some sectors there is still such a situation, but more and more country economies are developing. As a consequence the markets will still become more competitive.

These needs for change in managing the large companies gave birth to corporate entrepreneurship. In the end of twentieth some researches concentrated on CE as the factor which gives the enterprise the ability to develop the ability thanks to which the innovations can be created.

Kuratko (2007) quotes Zahra (1991) who says “corporate entrepreneurship may be formal or informal activities aimed at creating new businesses in established companies through product and process innovation and market developments. These activities may take place at the corporate, division, functional, or project levels, with the unifying objective of improving a company’s competitive position and financial performance.”

It is worth emphasising the role of innovation in CE due to the fact that all the changes which are introduced in large companies are cannot be included in “old policy box”, this does not work anymore. The key are innovative changes which bring enhancements to the structure of enterprise, logistics, products. As it is commonly known in 21 century technology stands in a very high level and the pace with which is keeps advancing is high, as a consequence the consumers get more and more demanding. This forces the companies to react very quickly and adapt new needs. Shepherd (2004) mentioned very important problem which is “ what are the main problems in managing/creating corporate innovation and entrepreneurship?”

A wide range of factors create obstacles--from inappropriate HRM through bureaucracy to the "stiffness" of a managing board which turns down all projects which might be successful. Shepherd (2004) outlines four problems:

1. Human problem because people and their organisations are focused on and exploit existing practices rather than pay attention to exploring new ideas . The more successful the company is in exploiting existing practices the harder is to convince the managing board finance exploring the new ideas or opportunities
2. The second problem is managing ideas into “good currencies” so new ideas which are innovative and entrepreneurial are implemented. The conceptions of new ideas might be individual but corporate innovation is a group achievement of pushing this idea until it will be put in this good currency.
3. Structural problem. It is very hard to build appropriate infrastructure within the company for entrepreneurship.
4. Various interest of internal and external constituents involved in corporate entrepreneurship.

Are these really the most important problems or are there anymore problems which are as significant as these?

References:

Kuratko, D., F., (2007). Corporate entrepreneurship. Available online. Accesses at 5/04/2008:


Katz, J., A., Shepherd, D.,A., (2004). Corporate Entrepreneurship. Available online. Accesses at 5/04/2008: