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Managerial Versus Entrepreneurial Decision making – Fundamentals of Entrepreneurship | Management Notes

Managerial Versus Entrepreneurial Decision making | Fundamentals of Entrepreneurship | BBA | BBA-BI | BBA-TT | BCIS | BBM| BBS |Management Notes

Managerial Versus Entrepreneurial Decision making: Managerial decision making is the process by which managers respond to opportunities and threats by analyzing options, and making decisions about goals and courses of action. As an entrepreneur, you must make different types of decisions on an everyday basis. You must choose the directions. Also, you must solve problems. You must take action. The decision-making process is one of the most critical processes in your company.

Following are the key business dimensions on the basis of which decision-making process between managers and entrepreneurs is analyzed:

Managerial Versus Entrepreneurial Decision making


Managerial Decision Making

Entrepreneurial Decision Making

Strategic Orientation Managerial strategic orientation depends on controlled resources. When the use of planning systems as well as measuring performance to control current resources as is the case of many multinational organizations. The entrepreneur’s strategic orientation depends on his or her perception of the opportunity. This orientation is most important when other opportunities have diminishing returns accompanied by rapid changes in technology, consumer economies, social values, or political rules.
Commitment to Opportunity Managerial focus is on evolutionary with a long duration. The managerial domain is not only slow to act on an opportunity, but the commitment is usually for a longer time span. An entrepreneurial focus is revolutionary with a short duration. The entrepreneurial domain is pressured by the need for action and has a short time span in terms of opportunity commitment. 
Commitment of Resources In the managerial domain, the commitment of the resources is for the total amount needed, and managers normally receive personal rewards by effectively administering the resources under their control. An entrepreneur is used to having resources committed at periodic intervals, often based on certain tasks or objectives being reached. The resources required are usually difficult to obtain thus forcing the entrepreneur to maximize any resource used.
Control of Resources Managers focus on the employment of required resources. Since the manager is rewarded by effective resource administration, there is often a drive to own or accumulate many resources as possible. Entrepreneurs focus on episodic/periodic use of resources. Since, entrepreneurs are under the pressure of limited resources, the risk of obsolescence, a need for flexibility, and the risks involved strive to rent, or otherwise achieve periodic use of the recourses on an as-needed basis.
Management Structure In the managerial domain, the organizational structure is formalized and hierarchial in nature reflecting the need for clearly defined lines for authority and responsibility. In the entrepreneurial domain, the organizational structure is flat with informal networks due to the desire for independence.
Reward Philosophy Managerial Focus for rewards is based on responsibility and seniority. The entrepreneurial focus for rewards is based on value creation.
Growth Orientation For managers, slow and steady growth is their main focus for growth orientation. For entrepreneurs, rapid growth is their main priority for growth orientation.

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Passive Perception


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