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.Mediocre managerscannot make a good idea successful, but good managers can make a mediocreidea successful.A key characteristic of a good management team is that it hasfundamental principles by which they organize the venture.However, not all firms start with a team, but merely the self-employedentrepreneur.Many, in fact, remain entrepreneurs en solo or hire only afew persons.As shown in Chapter 1 a majority of all firms employ less thanfive persons.Only 3 percent of all firms manage to grow to employ more than100 persons.3 Those entrepreneurs that manage to grow their organization arelikely to go through different stages or organizational types.These are (1) indi-vidual, (2) team organization, (3) hierarchy of authority, and (4) complexhierarchy.In the third and fourth type, the organizing starts to resemble thatof large organizations and the activities are often closer to managerial onesrather than entrepreneurial.When an organization grows, it does not always require hiring a lot of newpersons, although increased employment is what most people think of whenreferring to a firm s growth.A firm can grow in terms of profit without addinga massive amount of employees to the firm.This is, for example, possible if 132 Entrepreneurshipthe firm relies on subcontractors.For a starting entrepreneur it is advisable tokeep salary costs down and this can be done not only by using subcontractors,but also by paying on individual actions and outcomes.This is often the pre-ferred form with, for example, the sales staff who might be paid on commis-sion.At some point, tasks may grow in complexity so that a team effort isrequired.Already when the firm grows beyond twenty persons, it begins torequire some kind of hierarchy of authority and the complexity of the hierar-chy is likely to grow as the firm becomes really large.However, in the earlystages most tasks will be carried out by the management team.It is importantthat the entrepreneur finds a form that best fits the chosen strategy.Althougha small firm in the beginning will tend to give multiple areas of responsibilityto the small number of employees, it is important to understand that oneperson can rarely be CEO, CFO, CTO, CIO, and COO at the same time andbe expected to perform each area of responsibility very well.For example, science-based biotechnology firms are often founded by topscientists, where everyone among the founders most likely would be the bestCTO (Chief Technology Officer).However, many times the top scientist willhave to become CEO, CFO (Chief Financial Officer), or COO (ChiefOperating Officer), which are not the areas of their prior core competence.Starting ventures differ with respect to management in other ways too.Inmost management textbooks different forms of organizational structures arepresented, for example, functional organizations, line organizations, and matrixorganizations.Very large organizations are often divided into strategic busi-ness units (SBU).Moreover, large organizations have different departments,that is, marketing department, sales department, human resource depart-ment, production, and the like with respective heads of departments oftencalled vice presidents.However, small firms do not have departments for thesimple reason that they do not need such structures.These become relevantwhen the firm grows and begins to need hierarchies of authorities.For the entrepreneurial firm the more typical forms of organization arethe matrix and the network (Chapter 2).In a matrix organization, func-tional groups like marketing and finance are crossed by projects.In a net-work structure the basic unit of design is the employee, rather than thespecified job or task.Employees, either individually or in teams, contributeto multiple organizational tasks and can be reconfigured and recombined asthe tasks of the organization change.Work groups in a network are organ-ized into crosscutting teams that can be on the basis of task, geography, orcustomers [ Pobierz całość w formacie PDF ]
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.Mediocre managerscannot make a good idea successful, but good managers can make a mediocreidea successful.A key characteristic of a good management team is that it hasfundamental principles by which they organize the venture.However, not all firms start with a team, but merely the self-employedentrepreneur.Many, in fact, remain entrepreneurs en solo or hire only afew persons.As shown in Chapter 1 a majority of all firms employ less thanfive persons.Only 3 percent of all firms manage to grow to employ more than100 persons.3 Those entrepreneurs that manage to grow their organization arelikely to go through different stages or organizational types.These are (1) indi-vidual, (2) team organization, (3) hierarchy of authority, and (4) complexhierarchy.In the third and fourth type, the organizing starts to resemble thatof large organizations and the activities are often closer to managerial onesrather than entrepreneurial.When an organization grows, it does not always require hiring a lot of newpersons, although increased employment is what most people think of whenreferring to a firm s growth.A firm can grow in terms of profit without addinga massive amount of employees to the firm.This is, for example, possible if 132 Entrepreneurshipthe firm relies on subcontractors.For a starting entrepreneur it is advisable tokeep salary costs down and this can be done not only by using subcontractors,but also by paying on individual actions and outcomes.This is often the pre-ferred form with, for example, the sales staff who might be paid on commis-sion.At some point, tasks may grow in complexity so that a team effort isrequired.Already when the firm grows beyond twenty persons, it begins torequire some kind of hierarchy of authority and the complexity of the hierar-chy is likely to grow as the firm becomes really large.However, in the earlystages most tasks will be carried out by the management team.It is importantthat the entrepreneur finds a form that best fits the chosen strategy.Althougha small firm in the beginning will tend to give multiple areas of responsibilityto the small number of employees, it is important to understand that oneperson can rarely be CEO, CFO, CTO, CIO, and COO at the same time andbe expected to perform each area of responsibility very well.For example, science-based biotechnology firms are often founded by topscientists, where everyone among the founders most likely would be the bestCTO (Chief Technology Officer).However, many times the top scientist willhave to become CEO, CFO (Chief Financial Officer), or COO (ChiefOperating Officer), which are not the areas of their prior core competence.Starting ventures differ with respect to management in other ways too.Inmost management textbooks different forms of organizational structures arepresented, for example, functional organizations, line organizations, and matrixorganizations.Very large organizations are often divided into strategic busi-ness units (SBU).Moreover, large organizations have different departments,that is, marketing department, sales department, human resource depart-ment, production, and the like with respective heads of departments oftencalled vice presidents.However, small firms do not have departments for thesimple reason that they do not need such structures.These become relevantwhen the firm grows and begins to need hierarchies of authorities.For the entrepreneurial firm the more typical forms of organization arethe matrix and the network (Chapter 2).In a matrix organization, func-tional groups like marketing and finance are crossed by projects.In a net-work structure the basic unit of design is the employee, rather than thespecified job or task.Employees, either individually or in teams, contributeto multiple organizational tasks and can be reconfigured and recombined asthe tasks of the organization change.Work groups in a network are organ-ized into crosscutting teams that can be on the basis of task, geography, orcustomers [ Pobierz całość w formacie PDF ]