Description
Entrepreneurship Can Only Be Grasped, If It Is Experienced
1
Karl Zehetner & Peter Herbek
Close Reality - An Entrepreneurial
Component in Management Education
„Entrepreneurship can only be
grasped, if it is experienced“
2
Introduction
• You can only teach students to be entrepreneurs when
you make them act like entrepreneurs.
• No fictional business plans, but creation of a real business
• Ensure that they do not only understand the normative-
rational dimension of being an entrepreneur, like strategy
and financials, but also feel the socio-cultural dimension,
like resistance against change, different opinions on the
strategy, or discomfort and maybe fear of failure
• Working on a real case can initiate emotions like passion,
confidence in one’s own concept, and identification with
the idea
• Essential for a holistic understanding of entrepreneurship
3
Controversy over management / entrepreneurship education
“Less success than meets the eye”
(Pfeffer & Fong 2002)
“Teaching the wrong people in the wrong ways with the
wrong consequences”
(Mintzberg 2004)
“The three skills that an entrepreneur needs to know and
master are selling, managing people, and creating a new
product or service. And none of them are taught in the
business school”
(D. Birch in Aronsson 2004)
4
Deficiencies in entrepreneurial education
1. Overemphasis on analysis
MBA = management by analysis
„Management is reduced to decision making, decision making is reduced
to analysis, and analysis is reduced to technique“ (Mintzberg 2004)
2. Narrowed view on new firms
Various motives are ignored, every start-up is seen as a new Google or Microsoft
3. Teaching entrepreneurship
instead of making it an experience
Central educational problem in applied social and economic science:
The normative-rational dimension can easily be explained (yet sometimes not
immediately understood) in the laboratory-like situation of the lecture room or in the
study of business cases, but the socio-cultural dimension usually eludes being
imparted authentically, and transporting the inherent rules of a social system in a
lecture auditorium is virtually impossible.
5
Overcoming the deficiencies:
Systemic-constructivist management approach
• Techno-causalistic management assumes that tasks,
processes and systems can be composed in the “right”
way to design the optimal organization. It focuses on the
normative-rational dimension and entirely fades out the
socio-cultural dimension.
• Systemic-constructivist management follows the
organism analogy. Social systems are never made; they
develop, learn from mistakes, perish, and are replaced by
new ones. Social systems are widely self-organizing.
6
The features of our entrepreneurial MBA program (1)
1. Content
• Start with strategy, innovation, and organizational
behavior
• Deploy leadership skills and emotional intelligence (social
psychology lecture)
• Reduce analytical skills training (financials, IT, process
management, project management, marketing and law)
to the ability to communicate with experts
7
The features of our entrepreneurial MBA program (2)
2. Didactic elements
• Concentration on experienced students
• Coaching element (“competence development”) based on
the solution-focused approach and the concept of
competence as self-organization disposition. Includes
Goals-setting and leadership lab.
8
The features of our entrepreneurial MBA program (3)
3. Clinical component: “Close Reality”
• Holistic consideration of both normative-rational issues
and socio-cultural issues
• Affiliation of knowledge and experience, intellect and
intuition
• High degree of motivation based on a real case with
proximate impact on the students’ personal social and
financial success or professional advancement
• Immediate feedback
9
An alternative approach: The clinical component (1)
• Creation of a new enterprise, establishment of a new
business segment within an existing enterprise, takeover
of an existing enterprise in a turnaround situation
foundation of a new subsidiary of an existing enterprise
in another country
• Students either start their own real business or they have
an explicit client
• This triggers a high degree of motivation because the real
case has proximate impact on the students‘ personal
success
• Groups of two or three students, period of six months
• Monthly presentation of status, immediate feedback
10
An alternative approach: The clinical component (2)
How is the socio-cultural dimension involved?
• To what extent do the members of the student group
believe in the project and the acting persons (client)?
• What kind of relationship between the group and the
client develops and to what intensity?
• How does the history of the company interfere with the
project?
• If, what is common, resistance against change, but also
willingness to change appear in the course of the project,
where or who are the activating and where/who are the
obstructing forces?
• Precariousness, discomfort or even alienation in the client
system may be perceived.
11
Examples for businesses that originated in “close reality”
• Until now, 60 businesses have been developed by our
students
• Appx. 50% arrived at reality
• Broad range of industries, from dental technology to CNC
plasma cutting, from environmental consulting to
ecological fish farming, from prefabricated houses to the
hotel business, from cancer research to the funeral
industry
• 2 examples:
12
Examples for businesses that originated in “close reality”
A: Overcoming a mental blockade to do something different from
the headquarter
• Austrian company, commercial cleaning business, foundation of
a subsidiary in Romania
• Strategic ambiguity: High-priced and low-priced services
Bunch of problems: Labor cost is different. Training for skilled cleaners in the food
processing industry requires specialized seminars, while instructing office cleaners can be
done on the job. Performance evaluation of high-qualified personnel is oriented on
qualitative criteria, while low-qualified personnel are assessed on the basis of quantitative
rates (like square meters per hour). Supervision of unskilled workers is more direct than
the supervision of skilled staff. Low-priced services need to be standardized, high-priced
services are individualized. The company’s image is shaped by the low- or high-price
profile.
• Socio-cultural problem: It is difficult to do something else than
the headquarter
• Discovering this context was exciting for the project group.
Tough task to complete: convince the headquarter.
13
Examples for businesses that originated in “close reality”
B: The delicate decision to let loose
• Austrian company, manufacturer of forestral machinery,
new product (pelletsmaker)
• Strategic ambiguity: Keep old products
• Socio-cultural problem:
Generation change (the junior did not want to displease
the senior).
14
Conclusion (1)
• Fictional business plans do not enable the experience of
the socio-cultural dimension. We suggest using real
projects instead, where the project team members either
have an entrepreneur or manager as client or develop
their own start-up venture.
• The contact to the client or the personal involvement of a
student who builds up his or her own business is essential
for a holistic understanding of entrepreneurship.
15
Conclusion (2)
• In many projects the conflict between normative-rational
needs and socio-cultural feasibility becomes apparent.
• Integrating both forces without making a rotten
compromise requires (and develops) creativity, emotional
power, empathy and persistence.
• In reality it is usually the normative-rational dimension
that misses out, in academic education it is the socio-
cultural dimension that is ignored.
• “Close Reality” attempts to affiliate both components.
16
Authors
Karl Zehetner
PEF Privatuniversität für Management, Vienna: Professor for Management
res.co.at Dr. Karl Zehetner KG: Partner
www.res.co.at
[email protected]
Peter Herbek
PEF Privatuniversität für Management, Vienna: Program Director MBA
WBG Wirtschaftsberatung GmbH: Partner
www.wbg.at
[email protected]
doc_836364758.pdf
Entrepreneurship Can Only Be Grasped, If It Is Experienced
1
Karl Zehetner & Peter Herbek
Close Reality - An Entrepreneurial
Component in Management Education
„Entrepreneurship can only be
grasped, if it is experienced“
2
Introduction
• You can only teach students to be entrepreneurs when
you make them act like entrepreneurs.
• No fictional business plans, but creation of a real business
• Ensure that they do not only understand the normative-
rational dimension of being an entrepreneur, like strategy
and financials, but also feel the socio-cultural dimension,
like resistance against change, different opinions on the
strategy, or discomfort and maybe fear of failure
• Working on a real case can initiate emotions like passion,
confidence in one’s own concept, and identification with
the idea
• Essential for a holistic understanding of entrepreneurship
3
Controversy over management / entrepreneurship education
“Less success than meets the eye”
(Pfeffer & Fong 2002)
“Teaching the wrong people in the wrong ways with the
wrong consequences”
(Mintzberg 2004)
“The three skills that an entrepreneur needs to know and
master are selling, managing people, and creating a new
product or service. And none of them are taught in the
business school”
(D. Birch in Aronsson 2004)
4
Deficiencies in entrepreneurial education
1. Overemphasis on analysis
MBA = management by analysis
„Management is reduced to decision making, decision making is reduced
to analysis, and analysis is reduced to technique“ (Mintzberg 2004)
2. Narrowed view on new firms
Various motives are ignored, every start-up is seen as a new Google or Microsoft
3. Teaching entrepreneurship
instead of making it an experience
Central educational problem in applied social and economic science:
The normative-rational dimension can easily be explained (yet sometimes not
immediately understood) in the laboratory-like situation of the lecture room or in the
study of business cases, but the socio-cultural dimension usually eludes being
imparted authentically, and transporting the inherent rules of a social system in a
lecture auditorium is virtually impossible.
5
Overcoming the deficiencies:
Systemic-constructivist management approach
• Techno-causalistic management assumes that tasks,
processes and systems can be composed in the “right”
way to design the optimal organization. It focuses on the
normative-rational dimension and entirely fades out the
socio-cultural dimension.
• Systemic-constructivist management follows the
organism analogy. Social systems are never made; they
develop, learn from mistakes, perish, and are replaced by
new ones. Social systems are widely self-organizing.
6
The features of our entrepreneurial MBA program (1)
1. Content
• Start with strategy, innovation, and organizational
behavior
• Deploy leadership skills and emotional intelligence (social
psychology lecture)
• Reduce analytical skills training (financials, IT, process
management, project management, marketing and law)
to the ability to communicate with experts
7
The features of our entrepreneurial MBA program (2)
2. Didactic elements
• Concentration on experienced students
• Coaching element (“competence development”) based on
the solution-focused approach and the concept of
competence as self-organization disposition. Includes
Goals-setting and leadership lab.
8
The features of our entrepreneurial MBA program (3)
3. Clinical component: “Close Reality”
• Holistic consideration of both normative-rational issues
and socio-cultural issues
• Affiliation of knowledge and experience, intellect and
intuition
• High degree of motivation based on a real case with
proximate impact on the students’ personal social and
financial success or professional advancement
• Immediate feedback
9
An alternative approach: The clinical component (1)
• Creation of a new enterprise, establishment of a new
business segment within an existing enterprise, takeover
of an existing enterprise in a turnaround situation
foundation of a new subsidiary of an existing enterprise
in another country
• Students either start their own real business or they have
an explicit client
• This triggers a high degree of motivation because the real
case has proximate impact on the students‘ personal
success
• Groups of two or three students, period of six months
• Monthly presentation of status, immediate feedback
10
An alternative approach: The clinical component (2)
How is the socio-cultural dimension involved?
• To what extent do the members of the student group
believe in the project and the acting persons (client)?
• What kind of relationship between the group and the
client develops and to what intensity?
• How does the history of the company interfere with the
project?
• If, what is common, resistance against change, but also
willingness to change appear in the course of the project,
where or who are the activating and where/who are the
obstructing forces?
• Precariousness, discomfort or even alienation in the client
system may be perceived.
11
Examples for businesses that originated in “close reality”
• Until now, 60 businesses have been developed by our
students
• Appx. 50% arrived at reality
• Broad range of industries, from dental technology to CNC
plasma cutting, from environmental consulting to
ecological fish farming, from prefabricated houses to the
hotel business, from cancer research to the funeral
industry
• 2 examples:
12
Examples for businesses that originated in “close reality”
A: Overcoming a mental blockade to do something different from
the headquarter
• Austrian company, commercial cleaning business, foundation of
a subsidiary in Romania
• Strategic ambiguity: High-priced and low-priced services
Bunch of problems: Labor cost is different. Training for skilled cleaners in the food
processing industry requires specialized seminars, while instructing office cleaners can be
done on the job. Performance evaluation of high-qualified personnel is oriented on
qualitative criteria, while low-qualified personnel are assessed on the basis of quantitative
rates (like square meters per hour). Supervision of unskilled workers is more direct than
the supervision of skilled staff. Low-priced services need to be standardized, high-priced
services are individualized. The company’s image is shaped by the low- or high-price
profile.
• Socio-cultural problem: It is difficult to do something else than
the headquarter
• Discovering this context was exciting for the project group.
Tough task to complete: convince the headquarter.
13
Examples for businesses that originated in “close reality”
B: The delicate decision to let loose
• Austrian company, manufacturer of forestral machinery,
new product (pelletsmaker)
• Strategic ambiguity: Keep old products
• Socio-cultural problem:
Generation change (the junior did not want to displease
the senior).
14
Conclusion (1)
• Fictional business plans do not enable the experience of
the socio-cultural dimension. We suggest using real
projects instead, where the project team members either
have an entrepreneur or manager as client or develop
their own start-up venture.
• The contact to the client or the personal involvement of a
student who builds up his or her own business is essential
for a holistic understanding of entrepreneurship.
15
Conclusion (2)
• In many projects the conflict between normative-rational
needs and socio-cultural feasibility becomes apparent.
• Integrating both forces without making a rotten
compromise requires (and develops) creativity, emotional
power, empathy and persistence.
• In reality it is usually the normative-rational dimension
that misses out, in academic education it is the socio-
cultural dimension that is ignored.
• “Close Reality” attempts to affiliate both components.
16
Authors
Karl Zehetner
PEF Privatuniversität für Management, Vienna: Professor for Management
res.co.at Dr. Karl Zehetner KG: Partner
www.res.co.at
[email protected]
Peter Herbek
PEF Privatuniversität für Management, Vienna: Program Director MBA
WBG Wirtschaftsberatung GmbH: Partner
www.wbg.at
[email protected]
doc_836364758.pdf