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Strategic Management
INTRODUCTION
From the schools of perception now we move towards the school of thought that seeks to understand the process of strategy formation. The entrepreneurial school not only focuses on the strategy formulation process exclusively on single leader but it has also stressed on the most innate mental states and processes-intuition, judgment, wisdom, experience & insight. This promotes a view of strategy as perspective, associated with image and sense of direction, namely vision. Here, however, the strategic perspective is not so much collective or cultural, as in some of the other schools to be discussed, as personal, the construct of the leader. Consequently, in this school the organization becomes responsive to the dictates of that individual subservient to his or her leadership. And the environment, if not exactly subservient, becomes the terrain on which the leader maneuvers with some ease, at least in terms of directing the organization into a protective niche. The most central concept of this school is vision: a mental representation of strategy created or at least expressed in the head of the leader. That vision serves as both an inspiration and a sense of what needs to be done a guiding idea, if you like. True to its label, vision often tends to be a kind of image more than a fully articulated plan that leaves it flexible, so that the leader can adapt it to his or her experiences. This suggests that entrepreneurial strategy is both deliberate and emergent: deliberate in its broad lines and sense of direction, emergent in its details so that these can be adapted.
ORINGIN IN ECONOMICS
Like other school of thoughts such as (positioning school of thought) Entrepreneurial school of thought also grew out of economics. There were economists, however, who considered this narrow view of the entrepreneur to be a major failure of economics. Karl Marx, oddly enough, was one of them. He lavished praise on entrepreneurs as agents of economic and technological change, but was highly critical of their impact on society at large. The seminal figure who brought the entrepreneur into prominence in economic thought was Joseph Schumpeter. To him it was not maximization of profits that explained corporate behavior. Schumpeter introduced his famous notion of creative destruction. This is the engine that keeps capitalism moving forward, and the driver of that engine is the entrepreneur. For Schumpeter, the entrepreneur is not necessarily somebody who puts up the initial capital or
invents the new product, but the person with the business idea. Ideas are elusive, but in the hands of entrepreneurs, they become power.
chapter there was a term used in-trapreneurship describes those people who take initiatives within large organizations. Here we will talk about the literature of entrepreneurial school of thought.
Entrepreneur Vs Administrative
In looking into the Entrepreneurial personality, a number of writers have contrasted it with the Administrative. For example, in making decisions, administrators and entrepreneurs often proceed with a very different order of questions. The typical administrator asks: What resources do I control? How can I minimize the impact of others on my ability to perform?
What opportunity is appropriate? The administrators actions are evolutionary actions, with long duration. What happens is that the window of opportunity would often be gone by the time all the necessary information became available for more rational decision making. The entrepreneur tends to ask: Where is the opportunity? How do I capitalize on it? What resources do I need? How do I gain control over them? What structure is best? Entrepreneur actions tend to be revolutionary, with short direction. Entrepreneurs perceived more strength versus weaknesses, opportunities versus threats, and potential for performance improvement versus deterioration. Characteristics of such personalities according to Mintzberg: In the entrepreneurial mode strategy making is dominated by the active search for new opportunities. The entrepreneurial organization focuses on opportunities, problems are secondary. As Drucker wrote: Entrepreneurship requires that the few available good people be deployed on opportunities rather than frittered away on solving problems.
In the entrepreneurial organization, power is centralized in the hands of the chief executive. Power here is believed to rest with one person capable of committing the organization to bold courses of action. He or she can rule by order, relying on personal power and sometimes on charisma. In one Egyptian firm described years ago, but characteristic of todays entrepreneurial firms nonetheless. There is no plan for organization, no formalized procedures for selection and development of managerial personnel, no publicized system of wage and salary.
In the entrepreneurial mode Strategy making is characterized by dramatic leaps forward in the face of uncertainty. Strategy moves forward in the entrepreneurial organization by the taking of large decisions those bold strokes.
In the entrepreneurial organization, Growth is the dominant goal. According to psychologist, the entrepreneur is motivated above all by the need for achievement. Since the organization's goals are simply the extension of the entrepreneur's own, the dominant goal of the organization operating in the entrepreneurial mode would seem to be growth, the most tangible manifestation of achievement.
Further the interview suggested that many entrepreneurs don't bother with well formulated plans for good reasons. They thrive in rapidly changing industries and niches that tend to deter established companies. And under these fluid conditions, an ability to roll with the punches is much more important than careful planning.
Visionary Leadership
As the entrepreneurial school focuses solely on the individual leader and what their goals and visions are. Vision is the primary focus of this school and in this chapter vision is the mental representation of strategy. To choose a direction, a leader must first have developed a mental image of a possible and desirable future state of the organization. The great leader is someone with a vision would come and save the organization; with his or her true vision which is something you can see in your mind's eye. Bennis and Namus devote a good deal of attention to vision are mentioned below: To choose a direction, a leader must first have developed a mental image of a possible and desirable future state of the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or mission statement. A vision is a target that beckons. A vision always refers to a future state, a condition that does not presently exist and never existed before. With a vision, the leader provides the allimportant bridge from the present to the future of the organization.
By focusing attention on a vision, the leader operates on the emotional and spiritual resources of the organization, on its values, commitment, and aspirations. The manager, by contrast, operates on the physical resources of the organization, on its capital, human skills, raw materials, and technology. If there is a spark of genius in the leadership function at all, it must lie in this transcending ability, a kind of magic, to assemble out of the variety of images, signals, forecasts and alternatives.
Vision as a drama
In a paper co-authored by Frances Westley and Henry Mintzberg (1989) contrasted two views of visionary leadership. One, more traditional, is likened to a hypodermic needle the active ingredient vision is loaded into a syringe of words, which is injected into the employees. That causes them to jump up and down with great energy. the authors, drawing upon Brooks, book on theatre, conceive strategic vision as drama as beginning in that magical moment when fiction and life blend together. Drawing upon Peter Brooks theatrical literature the authors introduce three concepts namely repetition, representation and assistance. Repetition (rehearsal) the concept of repetition suggests that success comes from deep familiarity of the subject at hand. Just as an actor perfects his/her lines by constant rehearsal, similarly the visionary leaders success stems from constant experience in a certain field. Representation (performance) the concept of representation means not just to perform but to make the past live again, giving it immediacy, vitality. To the strategist, that is vision articulated, in words and actions, but of a particular kind: the words are pictures. What distinguishes visionary leaders is their profound ability to use language in symbolic form as metaphor. They do not just "see" things from a new perspective; they get others to so see them too. Assistance (attendance) the concept of assistance suggests that the audience of the drama, whether in the theater or the organization, empowers the actor no less than the actor empowers the audience. Leaders become visionary because they appeal powerfully to specific constituencies at specific periods of time.
People are distracted by visions if they are already working with unknowable futures successfully
The entrepreneurial is school is weak because it relies upon one persons health and whims and if something happens to that man the whole organization starts falling. Thats is also said by Phill and Collins that its better to make visionary organization than to rely on a visionary leader. Although the school has few drawbacks but it still is applied and needed in few specific situation like new organization that are starting definitely need a leader and vision and passion , similarly organization which are in big crisis are look for a messiah and there have been various incidences when the such organization have been pulled out of the trouble by visionary leaders.