In Search of Business Discipline
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Transcript of In Search of Business Discipline
In Search of Business Discipline
Togar M. Simatupang
School of Business and Management
Bandung Institute of Technology
Presented on the 7th Indonesia International Conferenceon Innovation, Entrepreneurship and Small Business
4-6 August 2015 – H Clarity Hotel - Bandung
Proposition…
The cluster of business discipline consits of four fields, namelyManagement
Administration
Entrepreneurship
Stewardship
Togar M. Simatupang in Pikiran Rakyat on Wednesday, 15 may 2013, p. 26
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Overview
1. Introduction
2. Research Approach
3. Disputes
4. Business Discipline
5. Cluster of Business Discipline
6. Body of Knowledge of Business Fields
7. Concluding Remarks
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Introduction
• The field of entrepreneurship has been organized to merely redefine the phenomenon of business creation not as a field of business.
• The question remains unanswered to look the posture of entrepreneurship as one of fields of scholarship within the discipline of business.
• This paper thus intends to contribute to the theoretical knowledge of entrepreneurship within the business discipline.
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Disputes
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Disputes
• Imperialism:– M > A = Management is greater than Administration
– A > M = Administration is greater than Management
• Annexation:
– E ∈ M = Entrepreneurship is an element of Management
– E ∈ A = Entrepreneurship is an element of Administration
• Equality:– M = A = Management is the same as Administration
• Which one is appropriate?– Non of them subject to uniqueness , co-existence, and evolutionary
– A new paradigm Complementary
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Administration versus Management
Basis of Difference Administration Management
Nature of work It is concerned about the determination of objectives and major policies of an organization.
It puts into action the policies and plans laid down by the administration.
Type of function It is determinative fuction. It is an executive function.
Scope It takes major decisions of an enterprise as a whole.
It takes decisions within the frmework set by the administration.
Level of authority It is a top-level activity. It is a middle level activity.
Nature of status It consists of owners who invest captal in and receive profits from an entreprise.
It is agroup pf managerial personel who use their socialised knowledge to fulfil the objectives of an entreprise.
Nature of usage It is popular with government, military, educational, and religious organizations.
It is used in business entreprises.
Decision making Its decisions are infuenced by public opiniton, government policies, social, and religious factors.
Its decisions are influenced by the values, opinions, and beliefs of the managers.
Main functions Planning and organizing functions are involved in it.
Motivating and controlling functions involved in it.
Abilities It needs administrative rather than technicalabilities.
It requires technical activities.
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Administration does not resemble Management
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Top Management
Lower Management
Administration
Management
Entrepreneur and manager are different
Entrepreneur Manager
Owner: An entrepreneur is the owner of his own business.
Servant: A manager is a servant of his employer.
Profits: An entrepreneur earns profits from his business which is uncertain and unlimited.
Salary: A manager earns salary which is generally certain and limited.
Full risk bearing: An entrepreneur is a person who has to take high risks for starting and running venture.
Less or no risk bearing: A manager takes less or no risk while performing his job.
All functions: An entrepreneur has to look after all the functions of his organization.
Selective functions: A manager looks after selective functions of an organization.
Innovator: An entrepreneur is always an innovator, in the lookout for new products and services.
Executor: A manager is simply an executor who is responsible for executing the decisions of the owner and entrepreneur.
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Entrepreneurship does not resemble Management
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A manager is the person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary.
An entrepreneur is a person who establishes business unit and utilizes the other factors of production like land, labor, and capital.
Basis of Differences ENTREPRENEURSHIP ADMINISTRATION
Strategic Orientation Driven by perception of opportunity
Driven by resources currently controlled
Commitment to opportunity
Revolutionary with short duration
Evolutionary of long duration
Commitment of resources Multi-staged with minimal exposure at each stage
Single-staged with complete commitment upon decision
Control of resources Episodic use of rent of required resources
Ownership or employment of required resources
Management structure Flat with multiple informal networks
Formalized hierarchy with clear authority
Reward philosophy Value-driven Performance-based Team-oriented
Security-driven Resource-based Promotion-oriented
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Entrepreneurship and Administration are Different
Source: “The Heart of Entrepreneurship” by Howard H. Stevenson and David E. Gumpert (March 1985) at https://hbr.org/1985/03/the-heart-of-entrepreneurship
Literature Review
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Previous Works
Miller, L.M. (1989), Barbarian to Bureaucrats: Corporate Life Cycle Strategies, Clarkson N. Potter, New York. 13
Four Workplace “Languages”
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Adizes, I. (1979), How to Solve the Mismanagement Crisis, Dow Jones-Irwin, Homewood, Illinois.
Previous Works
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Business Discipline
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Source: http://www.column2.com/2006/10/proforma-conference-day-1-geary-rummler-x-2/
Business System
BUSINESS PROCESS
ORGANIZATIONAL STRUCTURE
MANAGERIAL PROCESS
RESOURCESSERVICES
AND GOODS
BUSINESS FUNCTIONS
CUSTOMERSVENDORS
Regulation, Competition, Trading,
Social, Culture
GOVERNANCE
KNOWLEDGE AND TECHNOLOGY
Scope of Business
Business Ecosytem
ORGANIZATIONAL FORMATION
STRATEGY
BUSINESS COMMUNICATION
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Legal Aspect of Business as Applied Science
• Higher Education Act Number 12 on 10 August 2012• Clause 10 about Cluster of Science and Technology:
– Applied Science• Explanation Clause 10
– Letter f: The cluster of applied science constitutes of the branch of science and technology which studies and examines the application of sciences for human life including agriculture, architecture and planning,
business, education, engineering, forestry and environment, family and consumer, health, sport, journalism, mass media and communication, law, library and museum, military, public administration, social work, and transportation.
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Business Discipline
A set of research, practice, education, and the scientific community about business
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Body of Knowledge:Provides the core of
subject
Skills:training as a "disciple"
Practitioners
Scholars
The nature of Business
Business Science
Business Science
ECONOMICS
HUMAN SCIENCE ENGINEERING
Business Science
Business Process
Organizational Behavior
Productivity
TechnologyPsychology
Business Economics
Sociology Ergonomy
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Business science is concerned with investigation, design, and improvement of a business system using technical and scientific business knowledge and human science for understanding, intervention, development, and evaluation of the business.
Business Skills
Note:• Technical skill is a skill to perform each single detailed tasks by applying specialized knowledge or expertise.• Human skill a skill to work with, understand and motivate other people (both individually and a group) to accomplish the company’s goals. • Conceptual skill is a skill to understand the business need and set directions for the company. This is an ability to critically analyze, diagnose a situation and forward a feasible solution. It requires creative thinking, generating options and choosingthe best available option. 23
Cluster of Business Discipline
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Discipline: An academic category for business.Field: An area of study within business discipline.
Research Approach
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Real Life of Business
Philosophy:Critical Realism
Key dimensions of Business
Frameworks for understanding
Reflection over totality of meaning of business
Focused abstraction
Clustering Business Discipline
• Offering a framework for generating scientific research and its application in the area of business studies, not only to optimize the performance of the enterprise at a given time but also overall performance of its life cycle activities.
• Identifying the types of business fields (business discipline cluster framework)
– Two underlying dimensions of Business Discipline
• Interpreting Types of Business Fields
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Two Underlying Dimensions of Business Discipline
• Dimension 1: Concern for PurposeNature of mission orientation that represents mission achievement of an enterprise either to attain enterprise performance or lifecycle performance
1.1. Continuum stage (Enterprise Performance)
1.2. Lifecycle stage (Lifecycle Performance)
• Dimension 2: Concern for SpecificationStructural specification represents the degree to which an enterprise formulating and structuring the tasks and goals that enable and constraint an organization
2.1. Liberation
2.2. Regulation
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Dimension 1: Concern for Purpose
Lifecycle Enterprise System
Ongoing Enterprise System
Responsibility for an organization
Value Added (better profit) to the economy
New venture (new enterprise) to the economy
Continuum Stage of Performance Responsibility
Lifecycle Stage of Performance Responsibility
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1.1. Lifecycle stage of Performance Responsibility
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TIME
PERFORMANCERejuvenate?
Responsibility for Lifecycle Performance
Ideas Start-up Growth Maturity Decline
Divest?
1.2. continuum stage of Performance Responsibility
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TIME
PERFORMANCE
Responsibility for Enterprise Performance
Planning Implementation Evaluation
Dimension 2: Concern for Specification
Deliberated Structure
Regulated Structured
Concern for Structural
SpecificationThomas Hobbes: Leviathan
Adam Smith: The Wealth of Nations
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ORDER FLEXIBILITY
LEGAL CONCENSUS
REGULATION LIBERATION
Formality
Formation
Fomulation
Business Discipline Clustering Framework:the Quadruple Fields of Business
Management Entrepreneurship
Administration Stewardship
Re
gulate
De
libe
rate
Continuum Stage Lifecycle Stage
Concern for Purpose
Structu
ral Spe
cification
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Different Emphasis...
• Management:– A focus on enterprise performance
and deliberation for capability– Starts from an existing concept and
strategic planning – Ensures change and performance
achievement– Provides answers and solutions to
managerial problems
• Administration:– A focus on enterprise performance
and regulation for accountability– Dedication to apply good corporate
governance and credibility– Ensures consistency and stability– Provides answers and solutions to
administrative problems
• Entrepreneurship:– A focus on lifecycle performance
and deliberation for viability– Starts from a unique idea and
orientation for the future– Ensures development and
performance adaptability– Provides answers and solutions to
developmental problems
• Stewardship:– A focus on lifecycle performance
and regulation for sustainability– Willingness and dedication to help
people and the environment– Ensures inclusive growth – Provides answers and solutions to
sustainable problems
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BOK of Management
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BusinessStrategy
Process Functions
Capability
Managerial Activity:POAC
BOK of Administration
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Business Policy
Procedures Governance
Accountability
Administrative Activity:PDCA
BOK of Entrepreneurship
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Business Innovation
Business Models and
Risks
Ecosystem
Viability
Entrepreneurial Activity:Ideation, Initiation, Growing, and Maturity
BOK of Stewardship
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Eco-Socio innovation
policy
Standarization and certification
Sustainable Governance
Sustainability
Stewarding Activity:Social, comercial, and environmental development
The development of social responsibility guideline ISO 26000
Examples of Stewardship
http://ucsdbioadvising.wordpress.com/2011/12/09/the-master-of-sustainable-forest-management-program-at-the-university-of-british-columbia/
Master of Environmental Management (MEM)
Master's of Natural Resources Stewardship
The MBA in Environmental Stewardship
http://www.wilmu.edu/business/mba_concentration_environmental.aspx
International Master in Sustainable Development
& Corporate Responsibility
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Concluding Remarks
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Concluding Remarks
• The task of this research was to further define the entrepreneurship field of business.
• The exposition of the claster of business is based on the epistemological foundations of critical realism that assumes knowledge of business as a social and historical product.
• The quadruple field model of business, with its emphasis on management, administration, entrepreneurship, and stewarship, represents a radical view to promote entrepreneurship as an independent business field.
• This also sets a challenge forfuture research of the quadruple fields of business.
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Thank You
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