Corporate entrepreneurship | Assignment Help
Introduction:
Global competition, increasing demand and enhancement of technologies have persuaded the companies to restructure their polices, management and strategies. Defining Corporate Entrepreneurship in simple language is establishing a new business setup carrying forward the principal’s resources and market positions. Organizations operating under a single entrepreneur in the past were well competent to cope up with the demand and market competition, but the growth and rapid changes in the market trend has convinced that the top management needs modifications to pace up with the challenging market. As stated by Sharma (2010) that however, no single marketing strategy is best for all companies. Though there are few examples of successful entrepreneurs but they are tales from the past now. Even these, once successful entrepreneurs are now opting for a corporate management.
An organization holds some share in its country’s economy and held responsible for enhancing the status of its nation. Need for corporate entrepreneurship is now considered advantageous for the growth of an organization. Importance of corporate entrepreneurship is in the nation’s interest not only because large firms account for much of the nation’s economic output and jobs, but also because corporate and independent entrepreneurship complement and compete with one another (Sathe, 2003).
A well planned policy is compulsory in corporate entrepreneurship to produce best results. Designing a clear plan considering all the factors that could be advantageous for enhancing the business will be the best support in establishing a new business or modifying the same. Policymaking is the top management’s job, and unless the top management jointly plan a policy with same intentions of company’s progress any policy might be ineffective.
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Large organizations that are in position of competing with the global challenging market plays a wide role in looking after external and internal organizational affairs. Managing all such affairs needs a teamwork or in other words a Corporate Entrepreneurship. In a corporate entrepreneurship scenario the top managers come up with their own ideas and jointly plan the successful implementation of the same. Moreover different tasks are assigned to different departments headed by a senior management. Besides many successes in the part of Corporate Entrepreneurship there are some flaws in the same as well. Hisrich, Peters & Shepherd (2008) states that the reason cited were the corporation’s difficulty in maintaining a long term commitment, a lack of freedom to make autonomous decisions and a constrained environment.
An entrepreneurship and a corporate entrepreneurship have a deep impact on the performance of different departments within the organization, top management plays independent role for each individual department. The top management by their actions and behavior affects the performance of any new business setup. Below we will discuss that how performance of different departments is affected in a corporate entrepreneurship.
Benefits of Corporate Entrepreneurship:
Many companies are in the process of restructuring, it is due to the challenges faced by the global competitive market and customers demand for more companies due to the increase in choices. Companies have to enhance their competency to create more innovations to comply by the customer’s needs. A corporate entrepreneurship is the most preferred choice of the companies willing to increase the level of their performance and to survive in the highly competitive market. In a corporate entrepreneurship, companies accept the risk factor and acknowledge the freedom of employees to be creative and innovative, thus producing more innovative products and earning higher profits. Similarly, all persons affiliated with the company works for the same goal, this creates a better understanding among all the persons resulting in a positive innovative behavior in decision making and risk taking.
Effects of Corporate Entrepreneurship on Employers:
Starting a new business setup or making modifications in the traditional setup, will be more advantageous if lead by a team of entrepreneurs rather than a single entrepreneur. It is most advisable for the employers to boost their business they should opt for a corporate entrepreneurship practice. It’s like instead of one brain, multiple brains working to achieve one single goal. In a corporate entrepreneurship the top managements share their ideas and utilizes each other’s experiences and skills in decision making. Moreover the organizational responsibilities are divided among the senior managers, making each department more productive. When a particular department is independently managed by an individual senior manager, the manager gets a better chance to get closer to the workers of that department and more efficiently supervise it. Creativity and innovations are the basic element for the growth of any organization; joint efforts of entrepreneur team members can generate the best. All these advantages cannot be achieved by a single entrepreneur.
Most importantly, employers may face hurdles in getting financial support for their business, it has been witnessed that investors and financing companies prefer to invest with the organizations under a corporate entrepreneurship culture.
Besides advantages of a corporate entrepreneurship there are disadvantages as well. Members of the corporate entrepreneurship shares the power of the employer, which is a bit risky as a tussle may arouse in power sharing. Secondly, in the decision making process if individual ideas are not accepted by other team members it may create a conflict, affecting organization’s operation and reputation. Such conflicts are resolved in many cases but if not then it may lead to heavy losses to the organization. When considering a corporate entrepreneurship culture, employers must induct the entrepreneur’s team members after their proper screening.
Impact of Corporate Entrepreneurship on HRM:
To maintain a prominent position in the global competitive market, an organization should give more priority to its human resource department. The same department holds a significant position in an organization as it is responsible for providing a competent work force. Entrepreneurs and top managers in the present business scenario give more importance to human resource management in the development of an organization. It is regarded by the top managers that the employees are the real strength of an organization. The failure and success of an organization is entirely depended on the performance of its human resource management, as well as creating a platform in which the HRM could produce desired result is the responsibility of the top management. Now here the difference between entrepreneurship and a corporate entrepreneurship can be defined, as a corporate entrepreneurship may provide the HRM with more innovative ideas and aid in effective policy making as compare to an entrepreneurship.
The concept of research and development as a support in innovative process is now being denied by many managers as they consider that emphasizing more on internal activities will improve the chances of innovations. On the other hand innovative and development work is performed by competent employees, sharing their ideas and participating in the development work. This is where the importance of HRM is proved as making the employees competent enough to be beneficial for the organization, is the job of HRM. Though without a proper support and directions of a corporate entrepreneurship, HRM performance would be useless.
