Notes- Managerial vs. entrepreneurial approach and emergence of entrepreneurship

Managerial vs. entrepreneurial approach and emergence of entrepreneurship

Managerial vs. entrepreneurial Decision Making: The difference between the entrepreneurial and managerial styles involves five business dimensions.

1.       Strategic Orientation: The entrepreneur’s strategic orientation depends on his or her perception of the opportunity. This orientation is most important when other opportunities have diminishing returns accompanied by rapid changes in technology, consumer economies, social values or political rules. When the use of planning systems is the strategic orientation, there is more pressure for the administrative domain to be operant.

2.       Commitment to Opportunity: The entrepreneurial domain is pressured by the need for action and has a short time span in terms of opportunity commitment. The administrative domain (the ways mangers make decisions) is not only slow to act on an opportunity, but the commitment is usually for a longer time span.

3.       Commitment of Resources: An entrepreneur is used to having resources committed at periodic intervals, often based on certain tasks or objectives being reached. In acquiring these resources the entrepreneur is forced to achieve significant milestones using very few resources. In the administrative domain, the commitment of resources is for the total amount needed. Administrative-oriented individuals receive personal rewards by effectively administering the resources under their control.

4.       Control of Resources: The administrator is rewarded by effective resource administration and has a drive to own or accumulate as many resources as possible. The entrepreneur, under pressure of limited resources, strives to rent resources on an as-needed basis.

5.       Managerial Structure: In the administrative domain, the organizational structure is formalized and hierarchical in nature. The entrepreneur employs a flat organizational structure with informal networks.