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Global Journal of
Case Study Flexible Systems Management
2006, Vol. 7, Nos. 1&2, pp 37-44
K. Momaya
Department of Management Studies
Indian Institute of Technology Delhi
Viswakarma Bhawan, Shaheed Jeet Singh Marg
New Delhi – 110016
e-mail- momaya@dms.iitd.ernet.in
Abstract
In order to remain competitive in global markets, an organization needs to focus on corporate entrepreneurship. This requires
an organizational structure that allows organizational flexibility. A study on logistics and transportation organization, FedEx
Corporation has been conducted to analyze the practice of strategy formulation and implementation based on corporate
entrepreneurship. The case has been developed to find out the organizational flexibility issues in much greater depth. The study
is based on Flexible Systems Methodology and was conducted through interviews. The synthesis of the learning reveals that
there is a need for proper understanding of corporate entrepreneurship and flexible approach of organization to make the
concept more effective.
New business is defined as entry into an entirely new market It has become important for the firms to operate in highly
or introduction of an entirely new product or service as new dynamic market environment to have a high degree of
business. The logic for calling such business is that entry flexibility in the product development activities. Some firms
into an entirely new market requires much new learning develop links with customers to co-develop the product in
about logistics, distribution channels, advertising, and so the iterative process.
on; and the development of an entirely new product requires Case Study of FedEx
similar new learning about design, development and
manufacturing (Dougherty and Hardy, 1996). Corporate FedEx began as a pioneering venture providing full range
entrepreneurship refers not only to creation of new business of transportation, information, and supply chain services.
ventures, but also to other innovative activities such as FedEx consists of four operating companies. FedEx
development of new products, services, technologies, Corporation has grown and diversified into a multi-business
administrative techniques, enterprise, rapidly building a
strategies and competitive An entrepreneurial firm nurtures innovation by formidable presence in ten
postures. Previous views of major areas. The details of
practicing flexibility and responsiveness. these business areas have been
corporate entrepreneurship
can be classified on four shown in Figure 3.
dimensions: (a) new business venturing, (b) innovativeness,
(c) self-renewal, and (d) proactiveness. New business FeDex
venturing is the most salient characteristic of corporate
entrepreneurship since it can result in new business creation
within an existing organization (Stopford & Baden-Fuller,
1994) by redefining the company’s products or services and/ Business Area Services Industries Applications
or by developing new markets. In large corporations, it
Aerospace & E-shipping
could also include formation of more formally autonomous Defence Tools
or semi-autonomous units or firms. In contrast, the Automation
Inbound Automotive Products Sheets
innovativeness dimension refers to product and service Logistics
Banking & Capital E-shipping
Business Unit Advisor
innovation with emphasis on development and innovation Markets
Communication
in technology (Covin and Slevin, 1991). The third Outbound Services
Logistics
dimension, self-renewal, reflects the transformation of Discrete
Manufacturing
organizations through the renewal of key ideas on which Utilities
they are built. The innovativeness dimension refers to
Healthcare
product and service innovation with emphasis on
High
development and innovation in technology (Baden-Fuller, Technology
1995). Proactiveness is related to aggressive posturing and Life Sciences
leadership relative to competitors (Covin and Slevin 1991), Consumer
risk-taking (Stopford & Baden-Fuller, 1994), initiative taking Packaged Goods
• A percentage of company’s profits are shared with • The employees know about the risk tolerant behavior
employees to encourage them and make them of the organization, which motivates them to take risks
understand their efforts’ contribution to the company’s with innovative ideas.
competitive edge. Change Agents
Providing Work Discretion for Corporate Entrepreneurship • FexEx is a company of young professionals, unafraid
of change, who feel responsible for the work they are
• The employees are empowered for executing work.
entrusted to perform, each ensuring that his work carries
• They have the autonomy to take their own decisions his personal stamp of quality.
about following their ideas but had to update the top
• The speed of response, open and honest
management with their decisions.
communication, and a positive determined attitude are
• Employees’ suggestions and recommendations are evident all over the group. The universal values inspire
always included. a humane and vibrant work environment where all strive
• FedEx involves everybody in decision-making. constantly to improve the level of customer care.
1. Which variants of flexibility do you envision in a practical situation of identifying “Strategy based on
Corporate Entrepreneurship and Flexibility” on the following planes:
! Flexibility in terms of “options”
! Flexibility in terms of “change mechanisms”
! Flexibility in terms of “freedom of choice” to participating actors.
2. Identify and delineate the types of flexibility pertinent to establishing a regime for competitive strategies
based on corporate entrepreneurship and flexibility appropriate to your organization. On which planes, the
flexibility needs to be enhanced?
3. Attempt mapping the socio-technical system of your organization on the following continua.
(Please tick mark in the appropriate box (es)).
Strategy Formulation
4. Develop a SAP-LAP (Situation Actor process –Learning Action Performance) model of “Corporate
Entrepreneurship and Flexibility based strategy" appropriate to your organization's competitiveness.
B. R. Bhardwaj is pursuing PhD student at IIT Delhi. She was also working as a faculty in Bhararti Vidyapeeth Institute of
Management & Research, New Delhi. She is teaching marketing and entrepreneurship. She has authored a book on Marketing
of Services: Growth Strategies and published papers in International conferences. She received engineering degree in
Biochemical Engineering and MBA from IIT Delhi. Her interest areas include corporate entrepreneurship, entrepreneurship,
knowledge management, international marketing and retailing management. Contact: brot-orauth@yahoo.com, Phone: 312
208 7502
Dr. K. Momaya is an Associate Professor in Strategic Management Group at the Department of Management Studies (DMS),
IIT Delhi. His core research areas of interest are Competitiveness, Strategic / Technology Management. He has worked on
projects for Shimizu Corp., APU and Rikkyo in Japan, ICICI-Knowledge Park, Sona Koyo, Vidyatech Solutions, DST,
TVTC and Gherzi Eastern. He has published (singly / jointly) more than 35 papers in refereed journals and authored/edited
2 books. He can be reached at momaya@dms.iitd.ac.in
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