Increasing organisational performance through entrepreneurship
Entrepreneurship and organisational performance. There is a growing amount of evidence to show that entrepreneurial qualities can boost the performance of any organisation or service, which has given rise to the idea of the intrapreneur or an individual with entrepreneurial attributes who is employed and embedded in an organisation, rather than running their own business. As a result an increasing amount of research effort is focusing on exactly what it is that makes a difference for organisations….
- Entrepreneurship attributes
- The three dimensions of entrepreneurship
- Entrepreneurial leadership does not increase performance
- A lack of entrepreneurial leadership
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Essentially, entrepreneurship is the process of creating value from, often hidden, opportunities. This value can be in any form and is essentially seen as an innovative and creative process. In market oriented organisations entrepreneurial behaviours are the critical success factors that develop an organisation’s competitive advantage.
Recent research has found that entrepreneurship comprises more than a single dimension of attributes. Indeed, the current thinking is that there are three distinct dimensions which, when brought together, create the ideal foundation for entrepreneurial activities.
The three dimensions of entrepreneurship
- Entrepreneurial orientation which is made up of
- proactive orientation
- Entrepreneurial competencies which include:
- sporting opportunities
- valuing ideas
- ethical and sustainable thinking
- self efficacy
- motivation perseverance
- mobilising resources
- financial and economic literacy
- mobilising others
- taking the initiative
- planning and management
- dealing with uncertainty, ambiguity and risk
- working with others
- learning through experience.
- Entrepreneurial leadership. Entrepreneurial leadership has many of the attributes of transformational leadership however it also includes high levels of innovation and creativity. Entrepreneurial leadership has two dimensions:
This triad has been found to underpin the most successful entrepreneurial endeavours.
Entrepreneurial leadership does not increase performance
The study found that entrepreneurial leadership can only contribute to an organisation’s performance if both an entrepreneurial orientation and entrepreneurial competencies exist within the organisation. In other words, entrepreneurial leadership on its own does not enhance an organisation’s performance and requires the presence of an entrepreneurial orientation within the organisation which includes:
- creativity and innovation
- an orientation towards risk-taking and experimentation
- a preference for autonomy.
Secondly, entrepreneurial leadership can only increase an organisational performance if the organisation contains people with entrepreneurial competencies, as well as an entrepreneurial orientation.
A lack of entrepreneurial leadership
The study also discovered that, where individuals within an organisation have an entrepreneurship orientation and entrepreneurial competencies, but there is a lack of entrepreneurial leadership or transformational leadership, then it is highly unlikely that the two elements of entrepreneurial orientation and competencies increase an organisation’s performance on their own.
This useful study highlights the need for all three dimensions of the entrepreneurship triad to exist within the organisation before entrepreneurial behaviours can increase an organisation’s performance.
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