How an Entrepreneur Can Uild an Adaptive Firm

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Innovation is essential to the success of a firm in today's business environment. "Innovation is the lifeblood of the modern economy" (Bridgman, 2001, p.1). Firms must continue to become more and more adaptive and responsive to today's ever changing business environment if they are going to succeed.

The purpose of this report is to "explain how an entrepreneur can build an adaptive firm that balances entrepreneurial characteristics with managerial style." By researching a number of entrepreneurial texts discussions have been made on how this balance can be best achieved.

This report begins by explaining the great importance of innovation and change, and also the great importance of effective management. The many
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Entrepreneurs are characterised as frequently taking many great risks while managers are said to be generally more cautious and risk-averse. This view is however, not upheld in all entrepreneurial texts. In fact, Timmons (1999) maintains quite the opposite, that entrepreneurs certainly can be, and in most cases, are, effective managers. "New ventures that flourish beyond start-up and grow to become substantial, successful enterprises can be headed by entrepreneurs who are also effective managers" (Timmons, 1999, p.240). Although such views differ between entrepreneurial theories, it is still consistently maintained that successful firms must have effective management.

Management in theory is the process of planning, organising, leading and controlling. This process is very important when operating a diversifying and growing organisation in a forever changing business environment. Organisations must be flexible and able to react and respond quickly to change, and workers must be lead effectively through this change. This is especially relevant in the initial stages of a new venture, when growth can be very rapid and innovation and diversification extreme. The founder of the venture must recognise that change is inevitable and therefore must be managed correctly. So from what has been outlined so far, it is now apparent that innovation is essential for business success, therefore change is inevitable, and it is imperative

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