Organizations have no choice but to adopt entrepreneurial strategies so as to gain competitive advantage over competitors through continuous innovation.Globalization and advancement in technology have resulted in intense competition and emergence of many focused competitors who target specific market segments rendering current solutions to customer problems obsolete (Morris, Kuratko & Covin 2008).
Organizations are therefore constantly looking for new ways of meeting the unique needs of their customers (Covin & Miles 1999, p.48) for example, by customizing their products and services to their customers needs.
The desire to meet customers’ needs, explosive growth in some sectors and recession like conditions in others have led many organizations to restructure (Alvarez & Busenitz 2001, p. 758) and even change their key business ideas in order to adapt to the changing business environment and innovatively exploit opportunities. The main reason for entrepreneurship is to improve innovation in order to create wealth and sustainable organizational growth.
It entails identifying customers’ problems and formulating creative solutions to meeting them. In most organizations, the ability to identify and innovatively exploit opportunities decrease as the organizations move from entrepreneurial to growth phase (Brazeal & Herbert 1999 p. 30). However, organization should retain this ability to identify and innovatively exploit opportunities because it is critical in sustaining growth and profitability.
Corporate entrepreneurship is the process of recreating or instigating the renewal of an existing organization from within by an individual or a group of individuals associated with the organization in order to perceive and exploit business opportunities (Christensen & Raynor 2003) capable of promoting growth and profitability. Corporate entrepreneurship is necessitated by factors like international competition, increase in the number and sophistication of competitors and the desire to improve productivity and efficiency (Ramachandran, Devarajan & Ray 2006, p.
87) The president of Oticon took the following actions that form the basis of this paper in his effort to transform the organization. As the entrepreneurial manager he linked up discrete pieces of technical information to provide solutions to customers’ problems. With the technical capability and knowledge, he garnered resources and skills that were essential in transforming the organization.
He developed new effective structures that enabled small and large scale redeployment of resources to creative activities thus creating an organization focused on identifying and exploiting opportunities. Kolind introduced new practices in the organization that gave employees freedom to use their creativity and imagination. For example, it was an individual’s responsibility to find some work to do either by initiating a new project or joining a project in progress. The changed workplace environment promoted innovation as a way of solving business problems.
Kolind began transforming the organization by redefining his role as the president. He saw himself not as the captain who steers the ship but as the naval architect who design it. This implies that Kolind was actively involved in all aspects of identifying business opportunities the organization was uniquely positioned to exploit. He developed a high level of trust in his employees and their ability to be responsible. As a result, he abolished all systems of controls in the organization.
In addition, Kolind promoted high levels of interactions and communication within the organization at all levels. Finally, the president established a process of managing failure without victimization. He however took a high risk approach in changing the structure of the organization. Kolind abolished some departments and structures that were critical in the organization’s growth and profitability. For example, there was no established system of control to ensure that the freedom given to employees was not misused.