Creating and Growing Entrepreneurial Organizations Flashcards
(19 cards)
What is the difference between a Variance View and a Process View?
When we have a variance perspective within our business research we expect a precise outcome and assume the world is fixed. Eg. What factors made this change? Does this bring me to success or failure?
When I have a process view, I ask myself which dynamics and developments across a period of time lead to this consequence? Eg. In this case I can identify critical periods.
How is the graph about survival rates of startups in Germany related to process view? compared to variance view?
Instead of indicating how many companies fail after opening as a standalone value, the startup graph about companies in Germany indicates the development across 60 months and indicates how much initial investment they had. This allows us to see the development over time (not only a snapshot) and also which potential critical factors influenced it.
What is in business the Valley of Death?
The Valley of Death is the space between opportunity identification and product development. This is a particularly hard transition period because it involves the utilization of a completely new skillset +(organizational variables matter > external market, supply chain and practicalities)
Which figures does the Entrepreneur “need” across his idea journey?
The entrepreneur needs initially awareness and recognition (champion) to boost his research, then a sponsor to continue financially moving his activity, then the support of a Gatekeeper that is able to define his product as revolutionary and share as a good product. Gatekeeper= expands the boundaries of the market to fit in the product. (Markham)
Which two models does Greiner introduce when it comes to organizational change?
Greiner introduces how companies grow (age of the organization , state of organization) and the five phases of growth.
How companies grow indicate whether an industry is within a fast paced or slow industry and aims at indicating how one shall move. Instead, the five phases of growth explain that after every challenge called “revolution” the company obtains a skill set but also unlocks a new challenge.
Eg. After having creativity we have a leadership crisis, we obtain then direction but we have an autonomy crisis. We obtain delegation but we need now to solve our excess of control of everything.
Which crisis or revolutions does the Life Cycle model of organizational change mention? By whom was it proposed?
The Life cycle model of organizational change was proposed by Greiner. It contains roughly 4/5 challenges such as leadership, autonomy, control, red tape and ?.
What are some criticisms of the Greiner model also called the Life Cycle model of organizational change?
1) Different phases might take place at the same time (ex. transitional times)
2) It is too DETERMINISTIC. There is agency that cannot be eliminated by a series of steps we must undergo.
3) Not all companies face all these phases.
4) Past-oriented > not simply because these were the phases in the past they have to be in the future as well.
Which alternative was pubblished after the Life Cycle model by Greiner? What is it composed of?
After the Life Cycle model by Greiner, Picken in 2017 pubblished its own version composed of 4 phases: startup, transition, scaling and exit.
Picken gives particular attention to the Transition since it encloses a series of challenges and skills needed to face them.
What is the difference between Startup and Transition phase according to Picken?
According to the Life Cycle model suggested by Picken the startup phase is the period to validate and understand its surroundings. While the transition phase requires further organizational capabiltiies and get the correct PRODUCT-MARKET FIT. It is not enough to identify an opportunity, one have to ensure that their MVP fits the market and is demanded.
What are the eight transition challenges within the Life Cycle model? Who mentions them?
According to Picken (2017) there are 8 transition challenges such as: 1) building organization and management team
2) setting a direction and a focus
3) act quickly within an expanding market
4) maintain responsiveness (eg. Paypal did not have enough people to answer all questions by costumers)
5) Build financial resilience and stability
6) improving internal processes
7) developing an appropriate culture related to the business
8) managing risks and vulnerabilities
Who talks about not all startups having growth ambitions? How can we classify them?
Ritter and Lund talk about not all startup having the growth ambitions. They can be divided in:
- Startups (growth and not yet the right business model)
- Scale ups (right business and right growth)
- Standups (no growth ambition but right business)
- Shape-ups (no growth and no business model) > need to reinvent
How can we classify different growth patterns across enterprises? Who talks about it? What affects it?
Brush talks about the different growth pattern and divides it into Rapid, Incremental (stairs), Episodic (with some ups and downs), Plateu (growth but then stands there).
All these fluctuations can be affected by Management, Marketing and Money available. > Remember companies with initial invesments have more chances of continuing to exist.
What is the main difference between Growing and Scailing?
Scailing is a type of business growth. The main difference relies on the fact that growing implies also an increase in the production costs while scailing happens to take place when the costs are fixed. This has to do either with the number of components produced or with specific online products.
What is the winner-take-all strategy and how is it related to scailing?
The winner-take-all all concept/logic proposed by Varga indicates that in digital businesses, the enterprise that moves first or is more present gets the bigger portion of customers. This happens because the existing networks have an exponential connection to people> meaning, the more customers you have the more customers you are about to get.
Key concept: Network, Rapidity/Velocity and Market share.
What is an Indirect Network Effect and or Data Network Effects?
An indirect network is frequently mentioned in digital businesses when their growth/scailing processes is aided by the fact that the more costumers they have, the easier it is to get more costumers (eg. Instagram). An example might be: Just Eat. The more restaurants I am able to get, the more restaurants will also joint them later.
What is the Just Eat scailing example? What can we learn from it?
The Just Eat scailing example indicates that the TMT (Top Management Team) had to correctly move from growing to scailing at the right time. They had to first focus on expanding locally and then globally. It shows also the network effect which means having more restaurants also imply more easily obtaining new restaurants to join.
What is Blitzscailing? Who proposed it?
Blitzscailing was proposed by Hoffman. The goal is to quickly enter and dominate the market. This means moving regardless of the potential consequences, prioritizing growth over efficiency even without having the full product or mechanism ready.
Why is Blitzscailing mainly applicable to Softwares and similar industries?
Blitzscailing requires a massive scailing/development prioritizing it over having an efficient or fully functional method. This works with softwares because there are minimal marginal costs for each user usage + Network effects help having more and more users > easier to dominate the market. No need for regulations, no need for inventory.
Why is the timing in scailing important? What are the benefits and the potential negative consequences of scailing?
Scaling early implies dominating the market (with a MVP) but it can also lead to an increase of commitment that either leads the entrepreneur out of their goal or capability to understand what is a good/bad business model and what needs to be altered. > they cut experimentation too early.
An MVP is usually only acceptable in certain industries like software for beta testing. Additionally, the company culture might not be so secure and create a sense of turmoil.
