Discuss the way in which managed learning impacts on an entrepreneurial organisation.
This essay will discuss the method in which organisations use to develop their entrepreneurial skills, to become an entrepreneurial organisation. To understand an entrepreneurial organisation, requires an understanding of the unique skills of the individual entrepreneur. These skills are utilised within an organisation, encouraging individualism, taking responsibility for decisions they make within the organisation. The majority of training interventions within an organisation are formal and managed, which contradicts the skills that define an entrepreneur; therefore it is argued that this development stifles the natural skill of the individual.
Most organisations (even the very large) have their foundations in one or two individuals who had the determination to turn a vision into reality. These founders are said to possess entrepreneurship. These leaders are embedded in the culture of organisations. These organisations have primarily developed around the ideas of entrepreneurial individuals, for example the development of Virgin around Richard Branson, Dyson around James Dyson Microsoft around Bill Gates. The growth of successful small enterprises into medium-sized firms and beyond presents a multitude of managerial and organisational challenges for these entrepreneurs (Cunningham, I. 2002).
Today there are organisations emerging that are based on entrepreneurship. Some originations have attempted to keep this individualism and diversity in the work force by carefully recruiting and training individuals that will add this value to the organisation. Although organisations are made up of individuals, they are successful from the collective actions of individuals being greater than the sum of the parts. This synergy is the organisation operating together (Morrison 1998).
To understand entrepreneurial organisations, there needs to be understanding of the individuals that are entrepreneurs. An entrepreneur is an individual who assumes the responsibility of the risk for a business operation; this is with belief of making a profit The entrepreneur decides on the product, acquires the facilities, and brings together the labour force, capital, and production If the business succeeds, then the entrepreneur reaps the reward of profits and status; if it fails, he or she takes the loss (Bates, T. 1997).
Entrepreneurship is a vital factor in many businesses. It is described as “The innovative process, involved in the creation of an economic enterprise, based on a new product or service, which differs significantly from products or services in the way its which production is organised, or in its marketing”(Curran and Burrows (1986) cited in Morrison 1998:2). While the entrepreneur is described is “a person who attempts to profit by risk and initiative”. This relates directly to the person, and their business sense (Morrison 1998).
However the terms ‘entrepreneur’ and ‘entrepreneurship’ are most commonly linked to small businesses. The environment of the entrepreneur is a constantly changing, with high levels of risk, ambiguity and uncertainty. They are always willing to take the risk, but they will calculate it thoroughly to minimise the chances of the risk going wrong (Stokes, 1998). When an entrepreneur is running a small business, the majority of them are self employed, working for the self.
Typically, successful entrepreneurs share the following character traits: (a) Well rounded: a person who can make the product, promote it, sell it and count the money (b) Able to bounce back: a person who can cope with mistakes and have the confidence to try again (c) Innovative: Not an “inventor” in the traditional sense but a person who is able to carve out a new niche in the market, often a niche invisible to others (d) Results-orientated: To make the business successful requires a drive that only comes from setting goals and targets and getting pleasure from achieving them (e) Professional risk-takers: To succeed means taking measured risks. Often successful entrepreneurs use a step-by-step approach to risk-taking, at each stage exposing themselves to only a measured amount of personal risk and moving from one stage to the next only as each decision is proved. (f) Totally committed: Hard work, energy and single-mindedness are essential elements in the entrepreneurial profile (Morrison 1998).
These skills are vital to the entrepreneurial organisation, and they have sought methods to transfer them. Contrary to this formal Management training was considered the intervention that would give the organisation the edge it was seeking. Formal training plans were developed for employees that would place them on a pre-set career path.
For organisations to remain competitive and/or move forward they needed to develop the human capital. This has taken a rigid format of HRD, which is widely used as the answer to all issues associated with training and development. HR and training literature highlights the organisational benefits to be gained from adopting a systematic approach to HRD, therefore the ongoing development of employees’ skills underpins the wider business objectives (Keep, 1989). This systematic approach to training often includes models that identifying needs, planning, delivery and evaluation. Harrison developed an eight stage model to identify monitor and evaluate training. The evaluation stage is possibly the most problematic part of the training process (Reid, M. and Barrington, A. 1997).
It is argued that the theory of HRD appeals more to academics that the practioners. Garrick (1999) noted that academics rather than practitioners are more eager to pursue the ‘learning perspective’. This opinion defines HRD as being solely concerned with employees’ rather than organisational Strategy (Garrick 1999). Although this view is not shared by all authors, Garavan et al. (2000) defines the learning perspective that defines HRD as “responsible for fostering the long-term, work related learning capacity at an individual, group and organisational level” (Garavan et al. 2000:66).
Training and development activity has largely focused on change at the individual level. This in theory helps individuals to develop knowledge, skills, and competences to increase the value of the human capital of the organisation. People are better equipped to do their jobs if the process works. However, it is well acknowledged that by merely developing the human capital of the organisation, it is not enough to guarantee success. In the 1960s and 1970s the evidence that training alone was insufficient fuelled the Organisation Development; the focus became the development of the total organisation (Cunningham, I. 2002).
The buzz word for development in the past few decades was the learning organisation, Dixon (1994) describes the essence of a learning organisation as “the organisation’s ability to use the amazing mental capacity of all its members to create the kind of processes that will improve its own” (Dixon 1994 cited in Wilson 1999). They are organisations where individuals constantly expand their capacity to create the results they truly desire. They have systems, mechanisms and processes in place, that are used to continuously enhance their capabilities to achieve sustainable objectives To achieve this strategy there is an open culture which promotes learning in both formal and informal methods. Mistakes are discussed and reviewed, theoretically without blame being apportioned (Wilson 1999).
Through the constant reviewing learning organisations are adaptive to their external environment, continually enhance their capability to change/adapt, develop collective as well as individual learning and use the results of learning to achieve their objectives. There is free exchange of information, with systems in place to guarantee that expertise is available where it is needed; individuals network extensively, crossing organisational boundaries to develop their knowledge and expertise. Employees are valued for their ideas, creativity and past experiences (Nixon, B. 2004).
Within this culture employees’ diversity is treated as strength, and individuals are encouraged to develop ideas, to speak out, and confront actions. With organisations requiring innovative skills to survive; this is based on complexity of the chaos theory. Organisations are viewed as self-regulating, emergent, open, whole systems. Capra (2002) discussed the change in organisations as “a contrast in the metaphor of organisations being machines to that of organisations as living systems” (Capra 2002 cited in Nixon, B. 2004:58).
Reinforcing the development of management perspectives on learning within learning organisations is what Hawkins (1994) calls “a change at the heart of our understanding of learning, a shift from viewing learning as being abrupt facts to learning as a more multi-faceted and dynamic process”. As Hawkins suggests, it is not that we are learning any differently than before but “our understanding of how we learn has begun to catch up with what happens in practice” (Hawkins, 1994:9). The learning process has been challenged to create a culture that allows continual learning throughout the organisation. As knowledge is what matters, organisations and individuals alike must become continuous learners (Bennett, J & O’Brien. M, 1994).
There is acceptance in management learning that people are in a constant process of sense making, of evolving and reshaping their identity, and their sense of meaning through what they do and how they talk about it. This notion of “emergence” can explain how people learn continually through acting, experimenting and redefining their sense of how they work in a whole-life process of development (Rae, D and Carswell, M. 2000).
This contradicts the formal and managed process of learning, and conflicts the theories on entrepreneurs learning. There is a consensus that entrepreneurial behaviours are learned through experience and discovery, rather than being formally taught. The skills that entrepreneurs’ posses, it is argued are acquired separately from any formal learning (Gibb, 1987; Deakins and Freel, 1998 cited in Rae, D and Carswell, M. 2000:220).
In formal organisational learning programmes the learner will be introduced to quality assessed resources and an action learning infrastructure of people support in terms of a set adviser and an understanding direct report, a mentor and a coach. Much of these infrastructure resources will remain for general access. This is consistent with any managed learning process, within organisations. It is, therefore, not only the content and delivery mode of entrepreneur training that is important but also the background, attitude and skills of those who provide the intervention (Dealtry, R. 2004).
However the ultimate outcome of learning is to become a self-managed learner. The learner needs to understand the implications of having to set-up and maintain his or her own infrastructures to meet the demands of higher levels of learning. Learning to become an effective self-directed learner is an intellectual and psychological challenge. The transition to taking personal responsibility for one’s own learning confronts each person with their own inherent thinking and behavioural tendencies in terms of strengths and weaknesses. It is about personal strength of character, leadership and achieving social co-operation in a competitive and often selfish world (Dealtry, R. 2004).
The learning process relating to entrepreneurs is of great importance. Deakins (1996) states that “we do not understand how entrepreneurs learn, yet it is accepted that there is a learning experience from merely establishing a new enterprise. The learning process that is involved in business and enterprise development is poorly understood (Deakins (1996) cited in Dealtry, R. 2004:103) If entrepreneurial learning is largely experiential, then it must be considered that entrepreneurs demand specific skills and encounter specific incidents. In particular, to support entrepreneurs as and when they have experienced a critical incident in order to facilitate double-loop learning. The question, therefore, is whether training, education and mentoring could be tailored to meet the needs of individual entrepreneurs’ development (Dealtry, R. 2004).
Many large organisations have cultures with built-in antibodies to entrepreneurship, (apart from the founders) they punish risk taking, leaning towards conservatism and security. Entrepreneurs can come from anywhere in the organisation, there is an inherent inability to predict who could become a corporate entrepreneur (Thornberry, N. 2003). The unique set of skills that entrepreneurs bring to organisations can be suppressed if the training practice is too formal or rigid. Managed training is aimed at reinforcing the organisations culture and value, but can stifle individualism. To encourage individualism within an organisations it should take a relaxed approach to training, were there is time and space to reflect on mistakes that are made. From this life experience the learning takes place (Carswell, M. 2000)
Corporate entrepreneurship is quickly becoming a weapon of choice for many large companies. Corporate entrepreneurship is an attempt to take both the mindset and skill set demonstrated by successful start-up entrepreneurs and implant these characteristics into the cultures and activities of a large company. This can be a powerful remedy to large company staleness, lack of innovation and inertia that is common in mature organisations (Thornberry, N. 2003).
Entrepreneurial thinking is viewed as key drivers in the future success of the organisation. The identification, development, and capture of an entrepreneurial business opportunity should be included in all training interventions. Skills of entrepreneurs that have been identified as being within the scope of training are opportunity identification; shaping; and capturing. The kills that can be developed do not create an entrepreneur, they can only encourage skills that they already posses (Thornberry, N. 2003).
Entrepreneurs will bring individualism to the organisation, taking responsibility for their decisions. These skills have been gain through life experience, rather that any formal training program. If the training offered by an organisation is too rigid then these skills can be suppressed. Self managed training will allow the individual to take responsibility for their training needs, allowing flexibility.
There are potential benefits to organisations that encourage entrepreneurship within although some organisations their training interventions can contradict with this concept. Entrepreneurs can only be managed to encourage them to use their unique skills. Therefore Entrepreneurial organisations should use a less rigid approach to training. Managed training contradicts with the principals of individualism that are present within Entrepreneurial organisations. A less formal approach to training and personnel development will allow the individual to grow, and the organisation to retain its key skills.
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Bibliography
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