Innovative Strategies for Entrepreneurship Organisations in India
Dr. R. Jangalwa*
Vinod Mishra**
Abstract
This is a conceptual paper which attempts to define the entrepreneurship, characteristics, creativity, innovation, challenges such as perpetuity, expansion and future challenges in organisational scenario. It also examines the need of partnership in the entrepreneurship organisations. The author has provided the distinctive managerial practices for Advanced Entrepreneurship Organisations in comparison with Stagnant Organisations. Apart from discussion on inception of Indian Entrepreneurship organisational and scenario, it also discusses the behavioural qualities of entrepreneurs. The paper discusses ‘Cultivating Innovative Culture in the Organisation’ and ‘Innovative Strategies for Entrepreneurs’. Finally the paper focuses on two models, one is the ‘Factors that Underpin a Firm’s Ability to Recognize the Potential of an Innovations’ and the other is ‘The Role of S3P model in Recognizing the Potential of an Innovation’.
The term Entrepreneurship is derived from entrepreneur implying to organize and manage business by considerable initiative and risk (Flexner and Hauck, 1983). Entrepreneurship means different things to different people i.e. no stereotypical model (www.laghu-udyog.com, 2012). Although its etymology is that it is derived from the French word i.e. ‘entreprendre whose literal meaning is ‘to undertake’. It also implies the minimum characteristics of an entrepreneur www.techno-preneur.net (2012). Kaulgud (2003) had described entrepreneurs as a change agent, innovators, risk takers, decision makers and people with definite position. He also gave working definition for entrepreneurship. It is ‘a person who combines various factors of production, processes, raw material, converts raw material into a finished products and creates utility in the product and sales the product into the market in order to earn profit’. They have six Ds, which differentiate them from businessmen viz. ‘Desire, Discipline, Deliberation, Dedication, Devotion and Dignity’. Generally enterprises when incepted are quite small in size. The driving force for establishing an enterprise lies in venturous nature, autonomy, risk taking spirit and/or creativity and innovative ideas.
Creativity is useful novelty defined as associating two seemingly unrelated sets of images in a specific situation. It has certain overlapping steps, such as insight, preparation, incubation, illumination and verification. In insight, people identify and redefine in specific terms the problem. In ‘preparation’ some ground work is required. In ‘incubation’ one should intensely work for solution and then leave it. Thus, the cycles of convergent and divergent thinking over the problem are executed. Next is ‘illumination’ where an idea gets clicked in the mind of an individual known as ‘enlightenment’ as the idea is best fit to the problem as solution. Finally, the last step is ‘verification’ in which one tests and validates the solution on a practical ground. Kaulgud (2003) had mentioned that left hemisphere of the brain is having faculty of intelligence and memory, whereas right hemisphere for creativity, spontaneous memory and intuition. Higher usage of right brain makes people more creative.
Carson (2005) and Weihrich and Koontz (2006) had defined creativity as the ability and power to develop new ideas. Innovation is use of these ideas for any new product, service or purpose.
* Associate Professor at Prestige Institute of Management and Research, Indore.
** Asst. Professor at Prestige Institute of Management and Research, Indore.
Schmahmann (2004) had observed greater degree of neural connections in divergent thinking than convergent thinking. The researchers interpreted it as brain’s high degree of functioning for assessing wide array of memories and fantasies. Baden (2004) had found that both divergent thinking and mental relaxation processes are similar in their functioning in the brain. Trompenars and Hampden-Turner (2004) had stated that creative people reconcile dilemmas as they arise. Mostly successful accomplishments are reconciled dilemmas. If such achievements have been brought spontaneously, this can be explained in retrospect. For example, 2000 years ago Archimedes had creative intuition when he wanted to check the suspected quality of silver crown. He had no other way than to melt the crown, and he was frustrated. Finally, when he entered into the bath tub and water displaced from it, he observed the analogy for the problem. Creativity is a process by which individuals or teams produce novel and useful ideas (Greenberg and Robert, 2003). For both individuals and teams, creativity is composed of three basic components. These are domain relevant skills, creativity relevant skills and intrinsic task motivation. Domain relevant skills refer to the skills in the task domain, such as knowledge, skills, ability and talent in a specific task area. There are prerequisites for the performance as well as for creativity in the individuals and teams.
Weihrich and Koontz (2006) had suggested that process of creativity has four overlapping and interacting phases of unconscious scanning, intuition, insight and logical formulation. The unconscious scanning is beyond consciousness, hence can’t be described. It starts when an individual is absorbed in the problem and mind keeps on the problem in the subconscious. Intuition connects the unconscious with conscious. Sometimes the new factors which are given by intuition when put into the practice create contradictory or confusing environment. Intuition needs time in giving results or effect. Authors prescribe brainstorming and synectics for the promotion of intuitive thinking.
Desai (2012) had defined innovation as harvesting the deep insight of an organisation’s human spirit and knowledge, generating a pipeline of ideas that are evaluated, selected and ventured using disciplined tools, methods and processes that advances growth objectives for an organisation. Burns and Dewhurst (1996) had described a small business organisation established by one or more persons who manage in a personalized way without outside control and having small market share. Here small implies that the organisation has negligible national contribution and no capacity to influence the prices of the products or services in the market. It is described as personalized because the entrepreneur contributes to every aspect of the business, whether it is establishment of the project, manufacturing, selling and finance etc. Further such organisations are not being controlled from outside. Therefore subsidiaries are outside the scope of the entrepreneurship. The entrepreneurs are having one biggest challenge is growth i.e. unless the business operation do not cross to a limit and having considerable bigger size, the entrepreneurs can't be able to enjoy the venture. After the expansion of the venture one can enjoy effective and efficient delegation.
Succession of Small Business Organisations:
The perpetuity is another challenge for small business organisations. Barnes and Dewhurst (1996) had found that 10% entrepreneurial organisations deregister during the first year and 50% during the first five years; whereas 66% deregisters during the first 10 years of their establishment. This is the kind of challenge, which needs to keep the eyes consistently on changing business trends and molding organisational practices in such a way that perpetuity can be assured. It is like changing the direction as the surfers keep changing the direction wherever they find the waves and streams. The venerable period is moderately 12 to 30 months if small business organisations sustained during the period then the chances of perpetuity increases. It seems that during that period they gain substantial popularity as well as the entrepreneurs mind is also well set.
Birley (1996) had found that generally majority of entrepreneurs are people who enter into the venture during the 30s. It seems that during 30s the individuals become more realistic in taking the reading of the world around it is they are mature, capable in searching a creative idea, having confidence in the own creativity and innovative skills and also the nature is venturesome. Although the social responsibility aspect can not be ignored, generally at young age the responsibilities are less. Further, he argued that copyright and registered trade name provides to the extent the protection against predators. But small business organisations fail to sustain such things; the reason lies in affordability in most of the cases. The effective bypass is to win ownership that is making entry very fast and establishing the name so that advantage over competitors can be gained. It has been noted that the majority of the entrepreneurs avoid the issue and struggle in future for business expansion, or even for survival. He suggested effective entry strategy for small business organisations. As the entrepreneurial firms have strong personalization with enterprises, therefore entry in market demands for high credibility to be established. By continuously working upon the product credibility can be established in the market. It is like a medium in which entire range of marketing mix can be used whether it is product characteristics, price, promotion, place or distribution channels. As entrepreneurs are directly in touch with customers thus they get immediately their reactions. This becomes the basis of future course of actions. They have flexibility to adopt a desirable change expressed by the customers, this helps in establishing credibility.
Future of Entrepreneurs:
Peters (1987) had described that the ‘world has turned upside down’ where he wanted to say that the business world is becoming Chaos. This implies that the predictability about the product line, product life-cycle, innovation and change in the level of demands and also in the nature of demand has decreased. This has resulted into the low predictability of the business environment. So in future the competition and risk both would increase. Canon (1991) had projected and predicted ‘bear all the hallmarks of a major industrial change or a revolution’. This indicates that the small entrepreneurial organisations have to compete with big business houses. How the small business organisations can face these challenges.
The increase in the purchase power of customers accelerated the growth of retail sector. Despite of the purchase power enhancement, there are other factors too responsible for the growth of retail sector such as increased awareness and sentiments of the customers. Constraints and preferences of the consumers have contributed to the growth of retail sector. Now a days consumers have little time to invest in transportation as it is time consuming, costly, hectic and having exposure to polluted environment. Therefore visiting one place where all the needs can be satisfied is preferred. Another reason is preferences of consumers nowadays consumers need assurance of fashion, quality and reasonable pricing of the products. Therefore, the growth of retail sector has increased.
Challenges Ahead Entrepreneurial Organisations:
For small entrepreneurial organisation the cost of delivery is raising the cost of operation. The quantity per unit transaction is quite less, resulting in increasing efforts and shrinking the profit margin. It seems that in future, entrepreneurial organisations will float on e-commerce and alliance with other small business organisations situated into the remote areas of the market or cities. Stanworth and Grey (1991) had contended that despite of the limitations of the small business organisations, as well as global challenges before them, the number will grow as they are saving potential to meet out efficiently and effectively to the challenges. This has also been affirmed by the John Nesbitt (1994). He argued that entrepreneurs are coming from larger business firms. This is the reason that such forms are known as the incubator organisations. These entrepreneurs are capable in developing and expanding the network, thus they are capable in expanding the business.
Partnership
Generally the nature of small business organisation decides whether the partners are required in the business or not. When business operation demands for dual expertization like management and technical knowledge both then partnership is preferable. Partnership requires for clarity of powers and common goals among the partners (Birley et al, 1992). It also requires behavioural abilities and maturity of mutual respect, tolerance and openness to resolve conflicts.
Growth of Small Business Organisations:
The growth is the major challenge for any organisation, but in case of small business organisations, it is a bigger challenge. On the basis of the practices of the organisations, they can be divided into two broad categories Stagnant Organisations and Advance Organisations. By adopting such advance practices the small business organisations can ensure both survival as well as growth.
Stagnant Organisations / Practice Dimensions / Advanced Organisations1 / Autocratic & Custodial / Paradigm / Supportive & Collegial
2 / Low / Market Alertness / High
3 / Individuals, Group Based / Working Philosophy / Team based operations
4 / Low / Grabbing Opportunities / High
5 / Low / Emphasis on Innovation / High
6 / Low / Experimentation / High
7 / Low / Flexibility Rules & Policies / High
8 / Low / Change in Practices / High
9 / Moderate / Culture / High
10 / Low / Networking / High
11 / Low with Consumers / Communication / High with Consumers
12 / Random& Unsystematic / Reporting System / Detailed & Systematic
13 / Low / Usage of Past Reports / High
14 / Low / Performance Accountability / High
15 / Less / Emphasis on profit / High
16 / Low / Attrition / High
17 / Low / Cost Cutting / High
Some Behavioural Qualities of Entrepreneurs:
· Such people love to be independent: it is basic nature of entrepreneurs that they prefer to work independently. They do not consider the need for future security.
· They get energy from learning on their own: They believe in contemplation, trial and error and also in experimentation. They are motivated by personal development.
· They are realistic in observation: They are good reader of the situations.
· They have high need to be recognized in the society as adventurist.
· They have envisioning ability.
· They have high degree of need for achievement, particularly in producing something artistic.
· They have internal locus of control: They do not believe in destiny, they believe that that they are the master of their own fate. Brookhouse (1982) and Caird (1990) had found that entrepreneurs and higher levels of managers working in larger organisations are having internal locus of control. This indicates that both the categories of people believe that they are the master of their fate.
· Reading Body Language: Entrepreneurs are proficient in reading body language Rajesh Jangalwa has defined it as ‘the art of reading inner intentions of individuals on the basis of various modes such as organisation of words, bodily expressions, movements, postures, gestures, eyes, pitch of voice, physical distance with others etc.