PRINT Traditional Managerial Vs Entrepreneurial Management

 

Question : Entrepreneurship represents a mode of managing existing firms that is distinct from the way existing firms are traditionally management. Describe the natures of the differences among traditional managerial and entrepreneurial management. Answer: Managers are constantly asked to behave like entrepreneurs. The other way round, entrepreneurs are often asked to behave like managers. The manager is supposed to develop the drive and opportunism of the entrepreneur, and the entrepreneur is expected to learn the methodical disciplines of the manager. The pressures on both have become more intense as the economy has  become more competitive, more entrepreneurial, more demanding. The nature of management responsibility at work is rapidly changing and traditional methods of measuring effectiveness are no longer adequate. Performance now needs to be viewed from a totally new perspective. But how real is the difference of management style of a traditional manager and entrepreneur? The traditional managers usually follow their traditional managerial while the entrepreneurs are prone towards implementing entrepreneurial management. Further it is discussed of the differences between the two mentioned managements. In a traditional managerial, the manager was responsible for monitoring and checking work of subordinates, for example - checking on efficient levels of ‘inputs, raw materials, staff time, time, use of capital equipment and monetary budgets. In an entrepreneurial management, the entrepreneur’s focus shifts to prioritizing activities, allocation of resources (time and money) and  particularly the effective ‘purchase’ of optimal talent, expertise expertise and services. The assessment of ‘outputs’ is now the primary focus. This is because the modern markets are moving towards more varied product and service lines (e.g. Dell Computer) therefore, there is a greater need to combine more types of specialization and expertise. Also in a traditional managerial the focus of manager is on delegation of duties within traditional bureaucratic structures where each member knows his or her role and 1+1=2. Conversely in an entrepreneurial management the entrepreneur’s duty is now the selection of individuals and project teams to balance talent and creative output where 1+1 needs to = 3, 4, 5 or more. This is due to the the trend towards projects rather rather than long term jobs jobs and the modern customers desire for the purchase of the innovative solutions. A good place to start checking where an organization stands today is by reviewing current  position descriptions to see if they reflect the way it was or the way it now needs to be.

 

 Now, arises a critical question – do managers really understand their role in an organization? organization? In traditional managerial, the managers coordinate and tell their subordinates what the company wants and how to do it right the first time. In an entrepreneurial management the entrepreneur acts as managers to troubleshoot and facilitate between entrepreneurial employees, other stakeholders, production equipment and corporate systems. The increasing use of sophisticated information and technology systems and the need for direct multi level & cross function communications necessitates and requires a more sophisticated manager/leader type approach. Further in traditional managerial, the managers being the ‘technical expert’ or ‘company policy and procedure’ expert was a primary function for many in the past. But in an entrepreneurial management, the entrepreneur provide liaison between technical experts and traditional delivery sections of the organization. This is because the need for interpretation of what the “experts” are saying to senior executives is charged with responsibility for overall investment decisions. In traditional managerial, the managers adjudicate on customer requests, ‘tell him we can’t deliver until next type functions, In contrast an entrepreneurial  the week’ entrepreneur tends to inward be adeptfocusing. at providing resources needed to compete in the management market place and be outward focused due to increased customer demands for immediate decisions due to ever increasing levels of competition. Again, now emerges another question are the job descriptions and procedural documents focused on the customer or the good old ‘way things were’?  In traditional managerial, assessments of efficiency where based on top down periodic  performance reviews, appraisals where given against pre-set standards and often only conducted on an annual basis. But in an entrepreneurial management the entrepreneur need to implement  performance management on a continuous basis through a system of reviews, personal development discussions and 360-degree analysis of effectiveness. Management’s responsibility also needs to be focused on real time feedback on an as it happens basis as it is crucial for an organization or management to be proactively managed for future rather than ‘navel gazing’ over  the past, thus the feedbacks should be b e retrieved instantly and frequently.  Power is central to a manager’s ability to act and in traditional management companies, it still seems to be linked mainly to a system of delegation of legitimate power through written authority. In an entrepreneurial management companies the power needs to be shared and the manager’s primary function is to empower others to act. This is because power has shifted away from position to knowledge and the knowledge required to satisfy different customer situations will change across different team members depending on how situations develop.

 

In traditional managerial, the operation managers fought for assets and resources to enable their departments or divisions to function effectively. In entrepreneurial management  operation managers need to act more as “brokers” that facilitate the bringing together of diverse d iverse internal groups with ideas and seek out and streamline relationships with external suppliers of resources. This is because today’s market is influenced by a much greater push for customized  products to suit individual needs and wants, for example: Acer or Dell computers. To wrap up this discussion, we’ll explore two key areas of both managements -traditional managerial and entrepreneur management: In traditional managerial the organizations much was done to train managers to act as the leader. Leadership traits were researched continuously and developed. People studied how to  become more powerful and influential and how to control communication flows, corporate  budgets and scarce assets whilst still maintaining maintaining cordial relationships with staff they were trying trying to motivate. Humans where seen a resources to be used (or manipulated) effectively. In entrepreneurial management the organizations leadership needs to be shared across the entire workforce and true empowerment needs to take hold with people being seen more as ‘potentials’ that are inspired to contribute for personal growth and achievement. This is because of the need for the most knowledgeable to lead at each stage of complex project cycles. The need to solve  problems or satisfy individual customer ‘wants’ ‘wants’ utilizing more customized products and services means greater levels of complex expertise have to be brought to bear. In traditional managerial organizations managers had to be planners - they where responsible for annual plans and allocation of budgets. In entrepreneurial management organizations the emphasis now needs to be managers as strategists. Managers need to come up with broad directions and implement rolling targets that account for current levels of market knowledge plus they need to be able to put together feasibility studies to capitalize on bottom up opportunities. This is because rapid changes in market conditions including; competitors, customers,  politicians, regulators, environmentalists, environmentalists, unions, consumer groups and the general public. Opportunities in modern market can be fleeting. Even more dramatic events such as the 2008/09 economic downturn can destroy plans as quickly as they are made and only those with competent overall strategists can quickly change direction. Overall, there is an distinctive and obvious difference between b etween traditional managerial and entrepreneurial management.

 

References: 1.

http://www.managementparadise.com/forums/entrepreneurship/1118-evolutionentrepreneurship.html

2.

 Enterpreneurship And Management from http://www.123helpme.com/preview.asp? id=64355

3. Manager vs. entrepreneur: Major personal differences from

http://www.helium.com/items/220312-manager-vs-entrepreneur-major-personaldifferences

4. Entrepreneurial Management: What's the difference between management and

entrepreneurship? From http://www.thinkingmanagers.com/management/entrepreneurialmanagement.php

5. Entrepreneurial Management for the Twenty-First Century: Three Breakthroughs from

http://www.invest-suggest.com/entrepreneurial-management.html