Corporate innovation succeeds in organization that provide employees with the freedom and encouragement to develop their ideas, but top managers, if they do not believe that entrepreneurial ideas can be nurtured, have been known to hamper innovation. They may find it difficult, for example, to implement policies that endorse unstructured activity. If innovative people are to reach their potential, however, new types of thinking must overcome managerial hesitations. Five important practices for establishing innovation-driven organizations follow:
- Set explicit innovation goals: These goals need to be mutually agreed on by the employer and management so that specific steps can be achieved.
- Create a system of feedback and positive reinforcement: This is necessary for potential innovators or creators of ideas to realize that acceptance and reward exist.
- Emphasize individual responsibility: Confidence, trust, and accountability are key features in the success of any innovative programme.
- Provide rewards for innovative ideas: Reward systems should enhance and encourage others to risk and to achieve.
- Do not punish failures: Real learning takes place when failed projects are examined closely for what can be learned by individuals. In addition, individuals must feel free to experiment without fear of punishment (Kuratko, 2014).
Kilby (1971) identified 14 activities which entrepreneurs carry out in a business enterprise. He assumed that entrepreneurs in developing countries have access to new ideas, new technologies etc already produced in developed economies which are readily available for borrowing or imitation. These activities were organized into four major headings as follows:
(A) Exchange Relationship: which include activities involved in relating effectively with critical elements in the economic environment. The activities under A above are:
- Perception of market opportunities
- Acquiring scarce resources such as sourcing of funds for fixed assets and for working capital, key personnel, acquisition of a suitable location for enterprises etc.
- Purchasing input – raw materials and supplies
- Marketing the product
- Responding to competition – through various appropriate strategies such as product modification, pricing, promotion and effective distribution.
(B) Political Administration: The decisions and behavior of certain individuals and groups in the operating environment of the firm may have immediate impact on the performance of the entrepreneurs. Political administration is the process by which the entrepreneur negotiates a favourable relationship with these individuals and groups in the operating environment.
- Dealing with public officials – for the permits, licenses, and concessions that the firm needs. To negotiate with public officials requires awareness of the appropriate laws, regulations and policies relating to the particular business. Membership of trade groups, associations etc such as MAN, NACCIMA, NECA facilitates this process.
- Human relations within the firm – effective human resource management including maintaining good relationship with trade unions (if any)
- Customer and supplier relation – establishing and sustaining a mutually beneficial relationship with customers and suppliers.
(C) Management Control
- Financial management
- Production management
- Acquiring and setting up the factory or facilities needed for business operation
- Industrial engineering – processes of minimizing use of raw materials including reduction of waste
- Upgrading processes and product quality
- Introduction of new techniques and products (Inegbenebor 2003, unpublished lecture note).
Differences between the Entrepreneur and the Owner Manager of a Business Enterprise
The owner manager of a business does what everybody else does the way everybody else does it while the entrepreneur does it in a significant new and better way. It has been said that all entrepreneurs are self-employed but not all self-employed are entrepreneurs.
The table below shows the major differences between the entrepreneur and the career manager/owner-manager of a business.