How can we discover whether a firm has a valid entrepreneurial formula? And how can we recognize when the entrepreneurial formula calls for renewal? To answer these questions, we need to conduct an analysis at both a strategic business unit (SBU) level and a corporate level. To identify the management traits of a firm for each of its SBUs, two critical dimensions must be considered: competitive success and economic success. Only if both are strong is the entrepreneurial formula internally coherent or stable at an SBU level, assuming that the entrepreneurial formula is not invalidated by threats which can be dealt with only through a radical renovation. If competitive and economic success is not strong, the ensuing instability can lead, even immediately, to corporate economic crisis. To complete our diagnosis of the entrepreneurial formula at a firm level, we then need to correlate economic success with social accomplishments. This pertains to the firm's ability to satisfy the expectations of different members of the organization. Striking a balance between the performance/contributions of different stakeholders and the remuneration that the firm can and will provide is essential to its enduring economic success.
The Evaluation of the Entrepreneurial Formula
CODA, VITTORIO
2012
Abstract
How can we discover whether a firm has a valid entrepreneurial formula? And how can we recognize when the entrepreneurial formula calls for renewal? To answer these questions, we need to conduct an analysis at both a strategic business unit (SBU) level and a corporate level. To identify the management traits of a firm for each of its SBUs, two critical dimensions must be considered: competitive success and economic success. Only if both are strong is the entrepreneurial formula internally coherent or stable at an SBU level, assuming that the entrepreneurial formula is not invalidated by threats which can be dealt with only through a radical renovation. If competitive and economic success is not strong, the ensuing instability can lead, even immediately, to corporate economic crisis. To complete our diagnosis of the entrepreneurial formula at a firm level, we then need to correlate economic success with social accomplishments. This pertains to the firm's ability to satisfy the expectations of different members of the organization. Striking a balance between the performance/contributions of different stakeholders and the remuneration that the firm can and will provide is essential to its enduring economic success.
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