Entrepreneurial approach is suitable in those organizations where key strategists have very high stake in the outcomes of a strategy. They are in a position to lead the organization from front sidelining the views of other stakeholders. Usually, such strategists have very high level of aspirations, high level of vision about the future business scenarios, and have high-risk bearing profile. A basic advantage of this approach is that such decisions are made which may defy the basic principles of management text books. This is the reason that such organizations outperform their counterparts adopting formal structured approach. Exhibit presents examples of how organizations have grown faster by adopting this approach.
Application of Entrepreneurial Approach: There are numerous examples throughout the world which suggest that organizations have achieved phenomenal growth through this approach.
- Akio Morita, Chairman of Sony Corporation, Japan, asked his research and design engineers to design a walkman (a minicassette player). Pat came the reaction that this would not succeed in the market. But he insisted on that and walkman made a roaring success.
- Dhirubhai Ambani, Chairman of Reliance Industries, saw the business opportunity in high-priced premium fabrics in India which was unheard at that time. This made roaring success in the market. Later on, he conceived many projects based on this approach. Today, Reliance has become number one in the private sector in India.
The above discussion shows only the positive aspects of entrepreneurial approach This approach has one basic limitation that if the strategists do not have intuition and vision required for doing something new and extraordinary, the strategies are likely to fail. There have been several such cases. For example, Sunrise Industries entered the toilet soap market with Yuva and Piyu brands in 1980s. Both the products failed against the massive competition posed by then existing players particularly Hindustan Lever. Similarly, Suraj Automobiles introduced diesel based motor cycles to provide saving in fuel cost but the product failed. There are numerous such cases of failures. Therefore, entrepreneurial approach is not suitable for all entrepreneurs.