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Entrepreneurial organizations are dynamic entities that foster creativity, provide room for innovative ideas, and actively support and realize these ideas. Innovation, as the specific tool of entrepreneurs, serves as a means to capitalize on change, turning it into an opportunity for the development of unique products or processes. The journey of an entrepreneur involves considerable initiative and risk, as exemplified by the story of Ray Kroc, the visionary behind the global phenomenon, McDonald's.
Ray Kroc's story is a testament to the entrepreneurial spirit.
Starting as a paper cup salesman for the Lily-Tulip Cup Co., Kroc's life took a transformative turn at the age of 37. He encountered Earl Prince, the inventor of the Multimixer, a groundbreaking five-spindle milkshake mixing machine. Recognizing the potential of this innovation, Kroc seized the marketing rights, propelling the Multimixer across the nation. However, the turning point came when he discovered a small hamburger stand run by the McDonald brothers.
Impressed by the simplicity and originality of the McDonald's restaurant model—a storefront with no seats offering burgers, fries, drinks, and milkshakes—Kroc purchased the McDonald's method.
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This decision marked the inception of a global empire, with over 25,000 McDonald's outlets worldwide. Kroc's initiative and risk-taking not only made him a millionaire at the age of 61 but also established McDonald's as an iconic entrepreneurial success story.
Entrepreneurial organizations seek innovation when there is an organizational need, a principle demonstrated by United Parcel Service (UPS). Facing the challenge of optimizing delivery routes, UPS developed its own route optimization system.
This system computerized daily schedules, providing more efficient routes, saving delivery time, offering driving directions to reduce errors, and decreasing gas consumption.
UPS's innovation not only streamlined its operations but also positioned the company as a major player in the delivery industry. By addressing a specific organizational need through innovation, UPS not only saved resources but also strengthened its competitive edge. This example underscores the importance of identifying internal challenges and leveraging innovation to enhance organizational efficiency and effectiveness.
A prime example of sustained innovation in entrepreneurial organizations is Apple Inc. Since the introduction of the first Macintosh computer in 1984 by Steve Jobs, Apple has consistently been a pioneer, being the first to market with innovative designs and features. The company's commitment to delivering cutting-edge products has solidified its leadership in the technology arena. From the Macintosh to the iPad, Apple maintains a reputation for setting industry standards and boasts a dedicated customer base willing to pay a premium for its products.
As the iPhone 5 prepares to enter the market, Apple's history suggests that its loyal customer base, often composed of early adopters, eagerly awaits the new release. Apple's ability to continually innovate and captivate consumers exemplifies the significance of remaining at the forefront of technological advancements, thereby sustaining its competitive advantage in the market.
The creative edge in entrepreneurial companies is a fundamental aspect that sets them apart. Companies like 3M have established rules to strengthen their innovative culture. These include requirements such as 25-30% of annual sales coming from new products aged five years or less, a commitment to research and development, and the encouragement of intrapreneurship. Intrapreneurship allows employees to pursue personal research interests even if unrelated to the company's current projects, fostering a culture of creativity and exploration.
Maintaining small, autonomous departments with access to the company's information and technical resources, awarding good ideas, designing products with the customer in mind, and embracing the inevitability of failures are all part of fostering a culture of creativity. This emphasis on innovation not only propels the company forward but also cultivates an environment where employees are empowered to contribute groundbreaking ideas.
Remaining competitive is a crucial aspect of entrepreneurial organizations, and the example of Honda's strategy exemplifies this. In 2008, Honda began manufacturing cars in the United States at its facility in Greensburg, Indiana. The company's $550 million investment was strategic, allowing for the production of 200,000 vehicles and employing 2,000 associates at full capacity.
Honda's decision to standardize its assembly process, making it more flexible to shift from producing pick-up trucks to fuel-efficient cars, showcases its commitment to adaptability. This strategy ensures that the company can respond to market demands effectively, staying competitive and maintaining its position as a leader in the automotive industry.
Entrepreneurial innovation is not confined to business; it permeates all aspects of life, including the realm of music. The Rolling Stones serve as a quintessential example of adaptability in the new age. Formed in London in 1962, The Stones have retained their status as the longest-living and still-performing rock and roll band. Their ability to adapt to evolving sounds and styles without straying far from their blues-loving, guitar-based rock and roll origins is a testament to their enduring success.
The Stones' music has changed with the times, staying contemporary while preserving their signature sound. From their first #1 hit, "It's All Over Now," in 1964 to Maroon 5's 2011 video "Moves Like Jagger," paying homage to Sir Mick Jagger, The Stones have consistently adapted to evolving musical landscapes. After more than four decades, The Stones continue to roll, showcasing the importance of adaptability to stay relevant and thrive in an ever-changing world.
In conclusion, entrepreneurial organizations seek innovation for multifaceted reasons, ranging from preventing personal and professional stagnation to unleashing the creative genius within individuals. The journey of entrepreneurial giants like Ray Kroc, the innovative strategies of companies like UPS, Apple, and Honda, and the timeless adaptability of The Rolling Stones collectively illustrate the transformative power of innovation. It is through embracing change, taking risks, and fostering a culture of creativity that entrepreneurial organizations pave the way for sustained success in an ever-evolving landscape.
Innovative Entrepreneurship: Pioneering Success. (2016, Sep 09). Retrieved from https://studymoose.com/why-entrepreneurial-organizations-seek-opportunities-for-innovation-essay
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