Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
CHAPTER 7
Building the
Entrepreneurial Structure
PART 2
LEADING AND MANAGING
THE ENTREPRENEURIAL
ORGANISATION
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Influences on Organisational Architecture
Architecture Strategy
Leadership
Environment
Culture
Structure
and size
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Structure
‘Corporations have to dismantle bureaucracies
to survive. Economies of scale are giving way
to economies of scope, finding the right size for
synergy, market flexibility and, above all,
speed….To survive, big companies today are all
deconstructing themselves and creating new
structures, many as autonomous units.’
John Naisbitt (1994)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Size and structure
• Size matter – small is beautiful
• Structure matters – but relates to other factors (eg task complexity or environmental turbulence)
….but relationships are the important thing
….and all this influences and is influenced by the management/leadership style
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Experiments with different structures
• Decentralisation
• Delayering
• Outsourcing
• Downscoping
• Using project forms of organising
• Developing strategic alliances
• Communicating horizontally as well as vertically
• Investing in information technology
• Practising new HRM techniquesPettigrew & Fenton (2000)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Hierarchical structure
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Matrix structure
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
It doesn’t make sense to stay true to a structure that makes it more
difficult for people to succeed. Your organisation structure must be
flexible enough to evolve along with your people, rather than work
against them. This is one of the biggest and most challenging
cultural issues we face as a fast growing company.
Michael Dell
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
The entrepreneurial spider’s web
Entrepreneur
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Structure, task complexity and
environment
TASK
Complex
ChangingStable
Simple
ENVIRONMENT
Heirarchical with
matrix sub-
organisations
adhering to
established
protocols
Machine
bureaucracy
Organic
structures
Heirarchical with
matrix sub-
organisations with
considerable
discretion
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Organic structure
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Structure, task complexity and
environment
TASK
Complex
ChangingStable
Simple
ENVIRONMENT
Heirarchical with
matrix sub-
organisations
adhering to
established
protocols
Machine
bureaucracy
Organic
structures
Heirarchical with
matrix sub-
organisations with
considerable
discretion
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
New Organisation Structures
• Networks and the socially embedded
firm
• The knowledge firm in the knowledge
economy
• The globalising firm and its changing
boundaries
Fenton and Pettigrew
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Strategic Alliances
Relatively enduring interfirm cooperative arrangements, involving flows and linkages
that use resources and/or governance structures from autonomous organisations, for the joint accomplishment of individual
goals linked to the corporate mission of each sponsoring firm
Parkhe (1993)
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Strategic alliances
Awareness
& partner
selection
Exploration Expansion
Commitment
to the
relationship
Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns
Michael Dell
Hyper-growth companies are
quintessentially learn-by-doing
organisations. They survival
depends on swift adaptation.
The key is to have enough
structure in place that growth is
not out of control but not so
much that the structure
impedes your ability to adapt
quickly.