What is entrepreneurial management?
Discussions About Entrepreneurial Management
The adjective “entrepreneurial” is used in a host of varying contexts and embodies a wide variety of meanings and implications. For instance, “entrepreneurial knowledge,” as J.J. Kao points out in The Entrepreneurial Organization, can be referred to the concepts, skills, and mindset associated with operating large corporations with greater flexibility, innovation, and responsiveness.
However, for our discussions, entrepreneurial knowledge is restricted to the concepts, skills, and mindset that individual business owners must employ in the process of starting and operating high-growth-potential ventures.
Entrepreneurial Management vs. Corporate Management
In their book, Entrepreneurship, Robert Hisrich and Michael Peters say that managing a new venture differs from managing an existing operation along five key management issues:
- strategic orientation
- commitment to opportunity
- commitment of resources
- control of resources
- management structure
The entrepreneurs born with these management skills come from a rare breed of people with intelligence, great heart, and creative skills. They are visionary and self-confident, good communicators with unlimited energy, and have a strong passion for what they do.
Fortunately for those of you who were not born blessed with these skills running through your blood, we know that the most critical skills in launching and running a new venture can be learned. We will teach you some of the most important ones.
Entrepreneurs are directly involved in the dynamic, and very complex, interrelationship between financial management and business strategy. This is the significant difference that sets entrepreneurial management apart from all business management practices. In almost all cases, the person making the decisions has personal risk at stake.
The worst-case scenario for folks “at work” is getting fired. The worst case for entrepreneurs is losing their home, personal credit, and lifestyle, as well as the destruction of family relationships.
Defining Entrepreneurial Management
Peter Drucker remarked that for the existing large company, the controlling word in the phrase “entrepreneurial management” is “entrepreneurial.” In any new business venture, the controlling word is “management.” Therefore, for the purposes of our discussions we lean toward “management” as a discipline for entrepreneurs. We define entrepreneurial management as the practice of taking entrepreneurial knowledge and utilizing it for increasing the effectiveness of new business venturing as well as small- and medium-sized businesses.
The heart of entrepreneurial management is continually juggling these vital management issues:
- What is this venture about? (mission and values statement)
- Where should it go? (goals and objectives)
- How will it get there? (growth strategy)
- What does it need to get there? (people and resources)
- What structure is best? (organizational capabilities)
- How much money does it need and when? (financing strategy)
- How will it recognize the final destination? (vision of success)
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