1 Running Head: BUSINESS ASSIGNMENT Business Assignment Name Institution 2 BUSINESS ASSIGNMENT Why are large businesses with an entrepreneurial orientation more likely to be innovative or intrapreneurial? A Large business with orientation in entrepreneurship is likely to promote innovation and intrapreneurship. This is primary because of advantages that come with having the economics of scale. Economies of scale arise when the cost per unit in production decreases with increases in output. Not only does the large companies earn huge profits but also funds that used in innovation. Entrepreneurial orientation refers to a construct applied at an organizational level that includes pro-activeness, risk taking, and innovativeness. Technical economies occur when elements of the production process become more efficient. Producing in large quantities leads to the use of better machines, better technology, and optimizing capacity. The larger the volume of products made, the more you can invest to make the production process more efficient and cost effective. Needless to say, this comes with inventions and innovation. A culture of intrapreneurship thus develops. Large and modern equipment that automate production can be easily acquired despite huge capital investment required. The Large capital-intensive company ought to use technical economies. Secondly, risk bearing economies are essential for large businesses. This comes with increased variety of its product. The more a business diversifies the less overall risk it assumes in any one line of the business. Diversification involves the production of a wide variety of products and in many different geographical areas (Mellema, 1988).In this way, risks are spread. Spreading of risks for research and development cost will ultimately lead to innovation. Financial economies also play a major role. Financing larger amounts usually lead to a lower cost of borrowing. In the case of automobile companies, for instance, the mortgage lending rates are lower than commercial lending rates. Moreover, large companies have more assets to 3 BUSINESS ASSIGNMENT use as collateral. Hence, they end up paying lower interest rates. The companies can raise equity financing more easily than smaller companies. With these advantages, innovation is likely to proper (Nal, 2013). Also, the managerial economies play a huge role. The larger the number of units produced and the more units that can be spread over staff costs, the more a company can invest in specialized expertise. At first, hiring a professional manager may seem expensive. However, the manager will increase quality and also increase production using the same amounts of input. Specialized labor can also lead to increased efficiency (Tschirky, 2011). It is proven that people who perform tasks repeatedly tend to be effective than those who do it occasionally. Division of the labor is also key in this regard. Many large businesses practice both ways. Some external factors also affect how large companies contribute to innovation. They include industrial growth that leads to lower cost supplies. Low demand and high supply as well may also lead to a reduction in supply costs. In some instances, many large companies are located in the same area. A good example is an industrial area in Nairobi. Consequently, this means there are pre-trained people who can be recruited – availability of skilled labor. In conclusion, the economics of scale are the cornerstone of large companies becoming entrepreneurial. They have led to the organization of entrepreneurial contests. The companies are also investing in startups. Evidently, large companies are leading the pack for the rise of intrapreneurship. How do autonomy, innovativeness, proactiveness, aggressiveness, and risk-taking contribute to intrapreneurial success? Autonomy in business refers to where employees in an organization are accorded freedom and independence to perform their duties. Autonomy can be classified under 4 BUSINESS ASSIGNMENT managerial, employee and team autonomy. The results of autonomy have shown job satisfaction and motivation. Traditionally, autonomy existed only in higher levels of business. However, current trends have led to its inclusion in the lower levels. Employee autonomy makes the employees feel a greater sense of responsibility for the outcomes of their work. Managers have more freedom to make major business decisions as well as personal ones for the good of the organization. Self-managed teams in an organization tend to be more creative and flexible in their tasks. Autonomy in an organization is largely spearheaded by the structure, culture and values under which it is built. The organizations are often successful. Innovativeness is the ability to introduce a new idea, product or process of doing things. In business, it is very critical for the achievement of desired goals. Firstly, it will help a business in responding to changes in trends and competition. This is by assisting in realizing what opportunities exist currently and the ones likely to emerge in the future. Often, a prosperous business does not only respond to current needs of the consumers but also develop ideas for the future. Also, innovation helps a business make most of what it already has. This is simply by focusing on developing the current processes and practices being used to improve efficiency. Last but not least, innovation will lead to the development of a unique selling point for a business. Used properly, it will give you a commercial and competitive edge. Proactive businesses are often significantly ahead of the reactive ones. They are adaptable, flexible and primarily focused on increasing productivity, efficiency, customer service and working environment. The proactive companies, for instance, are always a step ahead in their game. They don't wait for circumstances to dictate their actions. Rather, they affect a change long before the risk materializes. They always maintain a competitive advantage. A proactive company will always focus on self-improvement even during boom cycles (Sinha & 5 BUSINESS ASSIGNMENT Srivastava, 2015). This is when some businesses rest a bit on their laurels. Thus, catching up with these companies proves difficult. By dealing with small problems before they become bigger leads to cost effectiveness. Consequently, they minimize costs and maximize profits. The money saved can be used to lower prices on products and further increasing competitiveness. For success, aggressiveness is key in a business. This refers to the desire to continually pursue your interests, goals, and objectives without tiring. Most affluent companies are led by a top level manager who has the never say die attitude. Aggressiveness involves continuing to invest in innovation to attain the necessary competitive edge you want. This is done without resting until the aim is reached. It also involves covering any moves made by competitors to develop alternatives. In addition, an aggressive business will raise the stakes for competitors to play their game. This is through marketing campaigns, rapid innovations, or even reducing price levels to where competitors find it difficult to reach. Moving onto related markets is also an aggressive strategy that aims at complementing the existing position. Nonetheless, while using this strategy complacency should be avoided at all costs. Risk taking is an integral quality of a successful business entity. Often, superb and world class, otherwise unforeseen opportunities come from risk taking. If you are too afraid to take a risk, success is not guaranteed for you. It is as simple as that. Most top business base their growth on risky challenges that others were unwilling to venture. Taking shows the height of confidence and enhances your ability to stand out (Mellema, 1988). It is an opportunity to come out and present yourself as a leader. Most importantly, we learn from risks. The lessons can help transform us to an all new important path. Taking risks provides an opportunity for internal growth of a firm. It is crystal clear that a business’ success won’t fall like manna. It has to be pursued, and this involves risk taking. 6 BUSINESS ASSIGNMENT In conclusion, all the qualities explained above if embraced correctly and carefully they assure favorable outcomes to businesses. References Mellema, G. (1988). Groups, responsibility, and risk-taking in business organizations. J Bus Ethics, 7(8), 593-603. http://dx.doi.org/10.1007/bf00382792 Nal, A. (2013). Trade Preferences, Economies of Scale and Dynamic Productivity Upgrading in African Manufacturing Firms: The Production Technology–Institutional Context Nexus. African Journal of Science, Technology, Innovation And Development, 5(1), 53-60. http://dx.doi.org/10.1080/20421338.2013.782148 Sinha, N. & Srivastava, K. (2015). Intrapreneurship Orientation and Innovation Championing in Indian Organizations. Global Business Review, 16(5), 760-771. http://dx.doi.org/10.1177/0972150915591431 Tschirky, H. (2011). Managing innovation driven companies. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. 7 BUSINESS ASSIGNMENT
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