CHAPTER 3

Entrepreneurial
Architecture
 Architecture

Architecture is the relational contracts

within and around an organisation - with
customers, suppliers & staff. It is based
on trust & underpinned by mutual self-
interest
(John Kay, 1993)
 Architecture

It replicates the entrepreneur’s ability to build

relationships
It is informal
It allows organisation to act quickly
It creates organisational learning & knowledge
It is difficult to copy
It creates barriers to entry
 The Learning Organization
 Facilitates learning for all its members
 Continuously transforms itself, thriving in
a changing environment
 Encouraging systematic problem solving
 Encouraging experimentation & new approaches
 Learning from past experience & history
 Learning from best practice & outside experience
 Being skilled at transferring knowledge in the
organization
 The Wheel of Learning
Know-How Form
concepts

Reflect Test
concepts

Experience

Know-Why

Mental Models
 Assumptions
 Theories about the
world (Daniel Kim, 1993)
 Learning Organization Concepts

True learning happens by understanding

causality - acquiring both know-how and
know-why through the wheel of learning
Mental models are shaped by & help shape
experience
Learning happens when you share, examine
& challenge mental models
The most effective learning is social & active
– not individual & passive
The most important things to learn are tacit
things – intuition, judgement, expertise
 Dominant Logic

 The ways managers conceptualize the

business & make resource allocation decisions
 The mind-set with which they see the
organization
 It filters information
 A social construct which is the accumulation
of mental models which can be changed over
time
 Dominant Logic

Indesit Company (Household Appliances Division of Merloni Industries):

DOGMAS: a principle or set of principles laid down by an authority as
incontrovertibly true.

“Refrigerators should always reflect on the outside what they do on the inside –
provide a sterile, clean environment for preserving food.”
“Our products are not made for children, rather for adults who can decide to buy.”
“Innovation means a brand-new product.”

INNOVATE IDEA:

Where is the refrigerator? It is in the kitchen.

What is the kitchen? For people with young children, it is the communication
center for the family.
How do people communicate? They leave notes, shopping lists and reminders on
the refrigerator door.
So, why not make it easy to communicate by providing a surface to write and
rewrite on?
 Complexity Theory
Three requirement for self-organization:
 Relationships: the pathways through
which information is transformed into
intelligent, coordinated action
 Identity: permits a common sense-
making process within the organization
 Information : provides the possibility of
synchronized behavior
 Entrepreneurial
Architecture

LEADERSHIP

CULTURE STRATEGIES

STRUCTURES
 Shaping Architecture

Environment
Culture

Leadership Architecture Strategy

Structure
Environment
 External Environment

Entrepreneurial organizations thrive in:

 Changing, unstable, disruptive, chaotic
environments
 Times of recession & growth
 But appropriate architecture varies across
markets & countries with different leaders
 Internal Environment:
Entrepreneurial Intensity
Degree of
entrepreneurship
High In
cr
Periodic/ ea Revolutionary
sin
Discontinuous g
nte
re
pr
en
eu
Dynamic ria
l in
ten
sit
y
Periodic/ Continuous/
Incremental Incremental
Low High
Frequency of entrepreneurship
Morris and Kuratko (2002)