Entrepreneurial business cultures

In a rapidly changing business environment, entrepreneurial managers must continually seek new technology that will allow them to develop new products, new services, and new business models. The process of turning a discovery and invention into a successful and commercial innovation will happen most readily if the business or organisation has an entrepreneurial business culture . But what does that mean?

An entrepreneurial business culture can be defined as:

A situation in which the members of the organisation have the joint commitment that the organisation must change and continue to change pro-actively in response to market forces and market opportunities.

This definition emphasises the three aspects critical for this culture to exist. In a new business venture this may occur naturally, since having an entrepreneur at the top will tend to cause the culture of the business to develop along entrepreneurial lines. But there are many cases where a new business has not developed an entrepreneurial culture due to the chief executives autocratic leadership style, refusal to share authority, refusal to listen to other viewpoints and ideas, and so on.

Larger and older ventures can similarly develop entrepreneurial cultures, and indeed they must do so if they want to avoid becoming extinct like the dinosaurs. Without innovation and change, the firms product life cycle will become the firms life cycle. As other firms re-invent themselves and introduce new products, new processes, and/or new organisational structures, those firms will gain market share at the expense of firms that maintain the status quo. Eventually the firm that does not innovate and change will lose market share and become part of history.

An entrepreneurial culture is necessary to foster and encourage innovation within the business firm. All employees of the firm should be involved in and responsible for innovation, rather than it being the responsibility of some ˜planning committee. This is parallel to the development of the Total Quality Management (TQM) movement in the 1980s, where quality eventually came to be seen as the responsibility of all employees rather than the responsibility of a few quality control inspectors. For all employees to be involved in innovation, however, top management must foster an environment that provokes, encourages and rewards innovation.

To repeat, this is applicable to all firms, big or small, new or old, if they want to survive in the increasingly competitive global business economy.