An Analysis of the Company Entrepreneurs Alliance

Introduction

Entrepreneurial organizations are by far the most challenging to establish and sustain. This is because they are mainly grounded on the aspect of bringing new ideas into the market; ideas that may not readily be accepted by the consumers. Most entrepreneurial establishments face somewhat similar problems and it is easy for a start-up to learn from the strengths and weaknesses of an established company in the same field.

This report shall serve as an evaluation of the company Entrepreneurs Alliance (EA), which is a consortium where different types of entrepreneurial organizations come together for mutual benefits. In the ensuing analysis, the paper shall strive to provide an understudy of the entrepreneurial nature of the institution in the face of its associates such as competitors, suppliers and customers. This report shall also establish the various methods that the company uses to support and stimulate innovation as well as identify the specific area of the company’s innovation. Finally, the report shall provide pointers that could guide the company to attain its target objectives including the goal to be more entrepreneurial.

Entrepreneurial Allance

The concept of entrepreneurship is defined as a combination of principles and business that when put into use can convert innovation into an economic venture (Hisrich, Peters & Shepherd 2005). Therefore, it can be said that entrepreneurship is the process of creating something new with value-generating within time and effort, and considering risks and rewards from value creation.

EA is an entrepreneurship-based organisation located in the United Kingdom and it is a general community of entrepreneurs, their peers and mentors (Cross 2010, p. 1). The institution serves 26 top countries around the Texas Panhandle and employs the services of 11 resource centres from Amarillo, Borger, Dumas, Pampa, and Perryton. EA works as a non-profit consortium for these organizations aside from offering financial and consultative business assistance with an aim of minimising risks, maximising likelihood of success, and wealth generation for the local economies of its alliances (Entrepreneur Alliance 2010).

Organizational structure

The organisational structure of EA is illustrated in the relational chart below.

EA’s organizational strategy can generally be defined as transformational. It is worth noting that every entrepreneur’s ambition should be to become the most competitive that they possibly can be. This is a learning process and once the optimum has been attained it can contribute to the general growth of the organization. Minniti et al. (2006) concluded that those organizations that work towards encouraging the development of entrepreneurial skills are better at dealing with competition. The transformational approach comprises strategies that can enable an organization’s founders to become effective entrepreneurs.

The transformational approach has been described by Peter Northhouse (2001) as a process that brings about changes and generally gives an individual a different viewpoint. This simply means that the entrepreneur makes a point to convince his/her associates to seek change and to make general improvements in the way that that they handle the day-to-day growth of the establishments. This process starts with an assessment process to analyze the motives of the associates and then ensure that their needs are satisfied as well as valued (Northouse 2001).

EA’s Organizational structure

The organizational structure of a company will determine the communication processes that will be in operation within the ranks. Most business strategy scholars support the notion that a distinct hierarchy that clearly identifies the chain of command encourages proper communication as all individuals have a person to whom they report. However, some studies have revealed that a flat organizational structure that allows all members of staff direct communication to the head and to fellow associates will easily encourage an uninhibited flow of information (Krueger 2002). EA generally falls in the latter category, whereby there are no definite structures giving certain individuals supreme authority over others. It is by her encouraging open channels of communication. The senior management staffs of EA are able to take into consideration the brilliant opinions of their associates; an aspect that has made the company achieve some unprecedented growth.

All in all, no one organizational structure can be said to have uniform positive results. This is because all institutions are different and with each difference in structure come a lot of variables that would require the communication pathways to be tweaked to suit the particular needs of the company. Below is a brief analysis of the principles of application of the two organizational structures mentioned earlier. The strengths and weaknesses of the two structures shall also be provided.

The hierarchical organizational structure with a definite chain of conduct operates in a military-like fashion. This is because it categorically identifies which individual has the necessary authority to make a particular decision. In this structure, junior associates have to comply with instructions from their department heads whether or not the instructions make sense to them (Swedberg 2000). This structure has the advantage of ensuring that decisions are made well in time and also supports the idea of accountability. The major drawback with this structure is that it can end up causing both departmental and organizational paralysis. This is because once the commanding authority is absent, major decisions cannot be made and all the junior associates can assume redundancy and blame it on this absence. The hierarchy structure also limits the free flow of information and generally discourages open communication. The creativity and risk-taking tendency of the company is diminished because in this structure the leader is always expected to pull rank when relating to junior associates, in the process stifling communication.

The flat organizational structure tends to encourage open communication. This is generally a very effective strategy in small to mid-sized institutions where leaders can be said to have very open relations with their associates. The major advantage of this structure is that it fosters the growth of the company by ensuring that all the opinions of workers in the institution are considered when implementing certain strategies. This approach also goes a long way in reducing the burden for those in managerial positions by encouraging staff to be more independent (Covey 2004). The major weakness of this structure is that it can end up creating chaos, particularly in larger organizations. This is because all the varied opinions of the associates within the company have the potential to reach the senior management in the process of overloading them with information. In such a case the executive officer(s) have to spend extra time to figure out which idea is strategically important and filter it out from the rest, in the process missing out on opportunities and leading to a reduction in productivity.

Team management

The EA team comprises various categories of individuals based on their roles in the establishment: These include:

1. Board of Directors
2. Staff Members
3. Customers
4. Community groups
5. Investors
6. Franchisors

Within any organizational structure, it is desirable that all departments and their leaders embrace the principles of accountability. This is achieved by ensuring that individuals support the notion of ownership and clearly map out their areas of contribution to the accomplishment of the strategic initiatives set out by the institution. This is where the aspect of team management comes by allowing managers to work alongside each other in an effort to attain common goals (Lakomski 2005). The founders of EA have on various occasions admitted importance of team participation in the growth of the company. Effective team management involves the induction of a number of principles (Chemmers 1997). These are explained below:

• Accountability-This is the most important aspect of team management and is given primary consideration in every initiative. Generally, employees would like to be given some distinguished level of accountability and most of them will easily embrace responsibility as long as the institution supports the principle of empowerment.
• Oversight-Effective team management encourages individuals to work towards the mission and vision of the company without necessarily having some commanding authority looking over them (Clegg 2006). This creates a sense of responsibility and individuals are generally more innovative and creative in conducting their roles. This however demands that very effective communication channels be established.
• Leadership-For effective team management, the entrepreneur and other company heads need to acquire leadership skills. This can be achieved by ensuring that they are subject to regular training. These heads should also be trained to encourage regular discussions with their associates, to determine the performance of the organization and how it can be improved. The regularity of these discussions should be strictly adhered to.
• Performance– Measurement of performance and its management greatly contribute to the improvement of the team. Goals set out to be achieved should be framed in such a way that they address a specific issue and they should also be measurable. The entrepreneur and other company leaders should create scorecards that can be used effectively in the improvement of the performance of the team.
• Information– Communication holds the key to the success of effective team management. The aspect of information should be encouraged and all the teams within the company must have unlimited access to information relevant to their operation. Individuals on a team who are regarded as untrustworthy should essentially be locked out of the team
• Managerial skills– The managerial skills of the entrepreneurs must be constantly analyzed and taken through the review process. This specifically refers to skills involved with mentoring and coaching. If they are found to be below par efforts should be made to ensure that they are well upgraded. The role of the entrepreneur must be redefined depending on the organizational structuring and level of growth of the company. The leadership style that has been established to contribute adequately to team management is the servant leadership approach.

Generally, Institutions that embrace the aspect of team leaders have high success rates in the attainment of their goals (Kuratko, 2008). The entrepreneurs behind such organizations are well skilled in the process of encouraging problem-solving techniques as a function of the team. Such entrepreneurs also tend to ensure that collaborative efforts are implemented across all the micro-teams of the entire company. In such companies, the communication strategies in force e are founded on the basis of mutual understanding and respect.

Business concept and business models

The main business concept that is in an application for the company Entrepreneurs Alliance is to pass on awareness among entrepreneurs with the aim of making them realize that they have a support group that can enable them to expand their business opportunities. This information is usually classified based on the following six components:

• Value Proposition. This describes the customer’s problems as well as evaluates the service provider according to the client’s perception. Since most of EA’s customers are micro-entrepreneurs, meeting their financial, operational, and organizational problems are the main goals of the company Entrepreneurs organization.
• Market Segment. EA is a non-profit organization and the micro-entrepreneurs within the UK are its major market segment.
• Revenue Generation and Margins. EA generates revenues from the support services it provides to other entrepreneurs.
• Position in the value network. EA’ primary focus is on providing the best quality service to micro-entrepreneurs even when faced with challenges that seem to reduce its competitive advantage (Entrepreneur Alliance, 2010)
• Competitive Strategy. There are three main generic competitive strategies that have been developed for EA. These are cost, differentiation and focus and these are related to each other in the cyclic way shown below:

EA maintains a service-based organization for micro-entrepreneurs, and it adopts the concept of “Cost Leadership” as part of the competitive strategy. This causes it to attract more entrepreneurs into its business.

Organizational and national culture

Both organizational and national cultures have strong influences on the development of character for the individuals affected. Generally, company cultures are not established by specific standards and are therefore informal while country cultures tend to be more formal. The cultures are intertwined and many are the times when their individual aspects are seen to conflict. For instance, a country’s culture may not favor risk-taking but an organization within the country may be encouraging and actually rewarding the same. These cultures have been well understood by the EA executive officers and have been positively inculcated to individuals in an organization.

National culture

Recent research has revealed that national cultures have a great influence on the shaping of value systems within the citizens (English 2007). This ends up bringing about shared values and preferences in a way that it is easy to distinguish the individuals of one country from those of another based on their mannerisms and general attitude. The same also applies to the differentiation of the different sub-groups within a particular nation. In the latter sense, the term national culture can be slightly misleading as it can be referring to only a section of individuals within the population of a select country.

Organizational culture

The process of categorically defining a distinguished organizational culture has clear benefits top on the list being the fact that it establishes common values and encourages employees to conduct themselves in a certain way. EA has printed employee handbooks and publications to guide corporate ethics. These are used to standardize the conduct of their employees all over the world.

Organizational cultures to a great extent arise from or are influenced by national cultures (Taylor, Harrison & Kraus 2008). However, they are also defined by a number of other factors. For instance, the United States as a whole is generally seen to support a culture of individualism. However, an analysis of various entities within the country reveals that there is a wide array of organizational cultures some of which may go in tandem with the national individualism culture (Gardner, Avolio, & Walumbwa). Some of these cultures may also arise from other features of the company. For example, the organizational culture of Microsoft that allows individuals to dress for work however they feel was are a reflection of the personality and preferences of Bill Gates, the founder. In some instances, the cultures of the organizations may have been nurtured over extended periods of time resulting in them acquiring some life of their own irrespective of the preference of the heads. This is the case with IBM.

The company Entrepreneurs Alliance has a very open organizational culture and various analysts have credited it as one of the most interesting places to work. the management panel has had to factor in the various national cultures of her employees in order to enable the company to develop a worldwide outlook.

In the book International Dimensions of Organizational Behavior, the author tries to figure out whether organizational culture has a diminishing effect on national culture (Adler 2008). She comes to the conclusion that the contrary holds more water citing the findings of the research by André Laurent which revealed that there were significant disparities in cultures among individuals working for the same multi-national organization than there were among individuals employed by institutions in their native countries. This simply means that when working for multi-national organizations, Japanese tend to appear more Japanese, Somalis more Somali, Americans more American and so on and so forth. Though the reasons for the trends are not very clear, it almost appears that associates may be involved in some spirited rejection of the organization’s corporate culture.

Based on the findings above, it is safe to conclude that the national culture generally surpasses organizational culture in terms of individual influences. This has actually been well presented within EA where the company heads recognize the diverse nature of their associates. This, therefore, means that it is not safe to assume that a very strong corporate culture will overshadow the significance of national culture because when face with a contrast between the two cultural elements, individuals will tend to respond in ways that favor their national culture. It is therefore the responsibility of the institution to carry out tests on its organizational culture and compare the findings with findings obtained from an analysis of the national cultures present amongst individuals and establish ways of resolving conflicts between the two. In essence, it is even desirable for a company to establish a way of merging the two as this would lead to increased productivity.

Strategic resources

EA has adopted an integral support approach which basically entails integration and strengthening of community groups as well as micro-entrepreneurs related to the organization. There are five key strategies that EA has put into use. These are:

• Access to Knowledge. EA supports community groups and micro-entrepreneurs by ensuring that they have unlimited access to assistance in both material and technical to further their growth.
• Design and Commercialization. EA organizes and manages trade fairs, catalogs, alliances, stores, spaces, blogs, sites, etc for its clientele.
• Capital and Investment. EA provides easy access to capital for its clients mainly in terms of micro-credit.
• Infrastructure and technology. Micro entrepreneurs and community groups are equally supported by the Entrepreneurs Alliance whenever they need tools and equipment for the expansion of their businesses.

Entrepreneurial nature of the company and its impact on clients and competitors

EA is inherently entrepreneurial. This is because the original founders of the organization built a company based on a shortage of organizations for supporting entrepreneurs in their endeavors to cut a niche in the market. The company’s members who in this case are also its clients are strictly committed to entrepreneurship. Membership to the company comes in handy to foster the growth of individual entrepreneurial projects particularly because EA offers both financial and consultative aid to its clients. The success stories from EA’s members have seen other similar organizations come into being. The competition has stiffened and EA has had to restrategize time and again to meet the ever-changing needs of clients

Financial planning

Financial planning is a key part of an entrepreneurial organization. In such a plan there are written documents about the resources that a firm has and the probable and actual expenditure a firm is going to face. EA has financial statements that help it get a clear idea about the position of the organization in the market. As an entrepreneurial organization, the financial plan starts with operating and capital budgeting. Besides budgets, different kinds of analyses have to be done such as break-even analyses and this helps the company set a target based on the inflow and outflow of the financial resources.

Strategies for Firm Growth

Internal growth

Internal growth means the improvement of the components of the inner environment of an enterprise. For firms like EA, internal growth is very important because the effectiveness of the internal attributes of a company will serve the purpose of customer attraction and retention. To measure the internal growth or the possibility of growth of a firm there are many tools that can be used including SWOT analyses and value chain analyses (Pearce & Robinson, 2006). Based on these analyses the strategic strengths of the firm can be viewed in comparison to the weakness. The findings from various analyses guide the company in its there-strategization process which may include turnarounds, aggression, diversification, and defensive approaches.

External growth

External growth means the growth of the outer components of a firm. Improvements in external factors can present in five different factors. These are political, economical, social, technological, and ecological factors. Positive changes in any of these factors will lead to operational excellence for the company analysing these factors has helped EA identify the right strategies for the company to cope with harsh environmental changes.

Strengths and Weakness of the entrepreneurial strategy

Any strategy be it in entrepreneurship or any other business aspect must have both strengths and weaknesses. Entrepreneurial decision-making is, therefore, no exception and various scholars have been able to point out a few of such strengths and weaknesses (Clegg 2006). These have been detailed below:

Strengths

1. By applying the concept of satisfaction of individuals’ needs, EA has been able to secure loyalty and commitment to the vision. This consequently leads to a general positive.influence on the development of the institution.
2. The fact that individuals are encouraged to be self-motivated greatly increases the efficiency of company associates; a factor that leads to increased output for the entire company. This attractive work atmosphere is the one that has seen the growth of EA to where it currently is. This is major because EA workers are always enthusiastic to go to work. If well implemented, individuals would find it easy to work for the leader. This goes even when financial and other gains are less than expected.

Weakness

The business strategy that EA has put into use is generally based on a company’s potential to sell its vision to others. It depends on the entrepreneurial skills that the institution’s management can summon to encourage their associates to put their level best to the development of the institution (Gardner, Avolio, & Walumbwa). Unfortunately for some organizations, it is difficult to identify heads with such characteristics.

Innovation

The innovative aspect of the company presents in the non-traditional way in which it carries out its business. The company has put into use both physical and virtual technologies to stimulate the growth of its clients. The use of the internet has seen the company spread its coverage internationally to the extent that it now covers 26 nations. Various incentives are provided by the company to clients that have great entrepreneurial potentials. These include grants and unlimited technical advice on how to deal with the challenges of the market. The company has also come up with creative television spots to further market itself. The innovation behind these adverts is unprecedented and it can generally be concluded that EA is among the first entrepreneurial organizations to market itself at such great levels. By helping clients apply for licenses and permits, EA innovatively attracts more and more customers and this is one of the incentives that have seen it command a huge population of the market share in the area of operation. Aside from the aforementioned, the company employs the usage of partnership networks and customer interface as some of its strategic business angles. These two are explained below:

Partnership networks

EA achieves unprecedented success by working as a partner with the Volunteer Action Centre of Curitiba (VACC); a volunteer action group. This has seen it further develop its potential to offer even more benefits to the various communities that it has associated with. This is especially achieved by completing specific project works. The partnership has been extremely effective and this is because income generation and capital requirements of community groups are met up by the HSBC Solidarity Institute.

Customer Interface

EA extensively involves the participation of customers, as well as micro-entrepreneurs, and community groups in its projects. This involvement presents in the form of:

• Classes and Training programs
• Support Programmes
• Sales Support
• Methodologies

Increasing the company’s entrepreneurial potential

A number of factors are used to define entrepreneurship and these should be well implemented if EA is to increase its entrepreneurial abilities. Five of these factors will be discussed below in light of their application in EA.

Opportunity Identification

The scope of business that EA is involved in keeps growing on a daily basis. It is gradually exploring new markets and businesses are getting more and more appreciative of the services under its docket. A company that mainly specializes in risk assessment and profit maximization strategies for other enterprises, EA has great developmental opportunities. Some of these opportunities include emerging prospects requiring:

1. Assessment of opportunities for new businesses
2. Creation of opportunities for other establishments
3. Management of risks and returns
4. Differentiation of opportunities based on personal skills and goals of businesses
5. Stabilization of competitive environments

Individual consideration

This is a characteristic that describes entrepreneurs who are also advisors and professional guiders to their associates (Bradley, & Beryerlein 2008). Such entrepreneurs generally encourage their associates to strive to attain certain goals that would enable both their associates and the company to grow to the next level.

Intellectual stimulation

Entrepreneurial decision-makers who elicit intellectual stimulation are those who encourage their associates to be more innovative and creative when faced with challenges within the work environment. These are the kind of managers who front the idea of critical thinking and support problem-solving initiatives by their associates.

Inspirational motivation

Entrepreneurs who possess this trait encourage the aspect of team spirit aimed at attaining the goals that would lead the company to command a substantial share of the market (Bruine and Dupuis 2003). The founders of EA were able to get her employees motivated enough when the company was at its inception levels and because she managed to sell her vision to them, the institution has grown to what it is today.

Idealized influence

This is a characteristic used to describe entrepreneurs who double up as exceptional role models for their associates. Such business founders are very trustworthy and command a lot of respect from their associates. They are very good decision-makers and are unwavering in their authority.

All the above characteristics are additive in the sense that entrepreneurs need to apply them concurrently in order to obtain definite results (Northouse, 2001). According to Northouse (2001), 39 studies carried out to analyze literature on transformational leadership revealed that persons who used this leadership strategy turned out to be generally more effective leaders than those who used other approaches. This was found to apply in the leadership of both large and small institutions.

Conclusion

Entrepreneurs Alliance is one of the success stories in business. The growth of the institution from a humble enterprise to an international organization provides evidence of its great achievements. This report has analyzed the entrepreneurial strategies that the company has put in place. It has been well established that the approaches that the company has embraced are best suited for the kind of business that EA is involved in. These strategies should therefore be maintained even in the wake of the paradigm shift facing many companies in the wake of the recent financial crisis. The report has elaborated on the various features of the strategies adopted by EA, using extensive literature drawing from the works of various scholars. In conclusion, it is important to note that this strategy works for the company and should therefore be reinforced by the various other strategies that have been discussed in this report. It would be unwise for the enterprise to completely abandon a working strategy due to the current transformational changes facing the company, for another that has not been tried and tested for the same market.

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