Developing an Entrepreneurial Culture

E  A simple way to think about culture is that it captures the personality of the company and what it stands for.  Entrepreneurship is not only affected by the culture in a company, it is also a core element of the culture.

E Question 1: What is an organizational culture?

E Culture can be defined as “an organization’s basic beliefs and assumptions about what the company is about, how its members should behave, and how it defines itself in relation to its external environment”  A culture reflects the unique history of a group of people interacting over time, but it also is subject to continuous change as people come and go, and is based on developments in the external environment.

E  Finally, cultures are fuzzy. They include elements that may seem contradictory or paradoxical.  Cultures tend to differ along some key dimensions: Positive vs. negative Positive vs. negative Strong or weak Strong or weak Homogeneous or heterogeneous Homogeneous or heterogeneous Consistent or inconsistent Consistent or inconsistent

E Question 2: What are the six (6) elements of culture? Briefly describe each.

E  Values—things employees think are worth having or doing; intrinsically desirable  Rules of conduct—accepted norms and rules of the company  Vocabulary—the language, acronyms, jargon, slang, signs, slogans, songs, etc.  Methodology—perception of how things actually get done in the company  Rituals—rites, ceremonies, and taboos (e.g., recognition ceremonies, retreats, etc.)  Myths and stories—the history, sagas, myths, and legends of the organization

E Cultures consist of substance and forms.  Substance refers to shared systems of values, beliefs, and norms.  Forms are the concrete ways in which the substance is manifested in the organization.

E  “Organizational cultures can enhance and inspire us. They can remove us from the boxes and traps in which we exist, making our lives richer and giving meaning to our daily tasks. [This] is the goal of cultural management.”

E Core ideology includes core values, or what the company stands for, as well as core purpose, or the reason the company exists.  Google created a Chief Culture Officer (COO) to ensure a culture of ideas and creativity.  At Disney, creativity, dreams, and imagination form some of the core values.

E Question 4: What are eight (8) elements of an entrepreneurial culture? How might each contribute to firm entrepreneurship?

E  People and empowerment focused  Value creation through innovation and change  Attention to the basics  Hands-on management  Doing the right thing  Freedom to grow and to fail  Commitment and personal responsibility  Emphasis on the future and a sense of urgency

E Question 5: What are the differences between individualism and collectivism?

E  Individualism – a self-orientation, an emphasis on self-sufficiency and control, the pursuit of individual goals that may or may not be consistent with those of the employee’s colleagues.  Collectivism– the subordination of personal interests to the goals of the larger work group.

E  Positive Aspects  Negative Aspects

E Question 6: How do firms balance individualism and collectivism to promote entrepreneurship?

E The ability to achieve sustained entrepreneurship in a company is dependent upon a balance between the need for individual initiative and the spirit of cooperation and group ownership of innovation.

E High Low Entrepreneurial Intensity Strong individual orientation Strong group or collective org. Ideal balance

E Managers struggle with the concept of failure  There is a tendency within companies to develop “zero error cultures” as companies strive to meet ever-higher performance standards in a hypercompetitive marketplace  This results in innovation incompetence, where bold initiatives are avoided and initiatives are pursued only when there is an apparent guarantee of outcomes

E The culture in the entrepreneurial firm celebrates failure.  Fear of failure is a certain recipe for mediocrity.  Failure is perceived – employees attach certain costs to it Is it job loss, a smaller pay raise, a missed promotion, a blemished record, loss of autonomy, personal embarrassment, loss of stature, or something else? Is it job loss, a smaller pay raise, a missed promotion, a blemished record, loss of autonomy, personal embarrassment, loss of stature, or something else?

E Question 7: How does leadership interact with culture to encourage entrepreneurship?

E  An entrepreneurial leader and an entrepreneurial culture are not completely synonymous If leader leaves without ENT culture in place, so does the ENT culture If leader leaves without ENT culture in place, so does the ENT culture  ENT leaders help to encourage and facilitate an ENT culture  Remember, this is a slow process