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ENTREPRENEURIAL ORGANIZATIONS.
Term Paper ID:28752
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Essay Subject:
Defomes terms & evaluates new company, Ethetica, to determine if it meetings entrepreneurial criteria. Organization of company. Executive team & personal vision.... More...
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9 Pages / 2025 Words
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Paper Abstract:
Defomes terms & evaluates new company, Ethetica, to determine if it meetings entrepreneurial criteria. Organization of company. Executive team & personal vision.
Paper Introduction:
Introduction
Although often associated with small companies, the concept of the "entrepreneurial organization" was embraced in the 1990s as offering even medium and large organizations a competitive edge over their rivals. Some large companies (such as Hewlett Packard and 3M) are noted for their entrepreneurial strategies, but it is generally new and smaller organizations which are considered entrepreneurial. This research considers the definition of entrepreneurial, and evaluates a relatively new company, Ethentica, located in Lake Forest, in terms of whether it meets the criteria of an entrepreneurial organization.
What is an "Entrepreneurial" Organization?
Although "entrepreneur" and "entrepreneurial organization" are terms which are used with considerable frequency in management and business jou
Text of the Paper:
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Dr. Alex Dickinson. Sharma, P., & Chrisman, J. Lake Forest, CA: Ethentica, Inc. On the services side, Ethentica provides alternatives to traditionalpassword and digital certificate management which is designed to decreasefraudulent network access, prevent identity theft, and provide greaterprotection against privacy violations. Inother cases, "entrepreneurial organization" is used to describe companieswhich have adopted a strategic orientation that allows them to exploitexternal opportunities that so-called traditional organizations would notbe able to realize (Sharma & Chrisman, 1999, p. 1). 49). Dr. Alex Dickinson, formerly the president of Who?Vision, is now itsexecutive chairman. It recentlyannounced a developer's kit so that OEMs can integrate Ethentica'sfingerprint module as part of other devices (such as personal computers,mobile phones and personal digital assistants) which would mean a newmarket for Ethentica, but one which is a natural outgrowth of its currentofferings. Dickinson helped to form the original company, and isone of the partners who sold the organization early on to XL Vision.Dickinson previously worked at Lucent Technologies (which was formerly partof Bell Labs), and brought considerable engineering knowledge to theorganization ("Dr. However, any new company must, bydefinition, bring either innovation (new uses for existing products, orprice innovation) or invention (entirely new products) to the market orthere would be no reason for their existence. At IngramMicro, he oversaw the creation of a newdivision (Frameworks) that assembled and configured computers for corporatecustomers. 1),where he gained experience with large, complicated projects which wouldappear to be the antithesis of an entrepreneurial organization. 1). 1), new employeeshave received various levels of stock options for Ethentica stock (whichcurrently does not exist) but which serves to attract highly talentedindividuals and which may prove lucrative in the future. Somelarge companies (such as Hewlett-Packard and 3M) are noted for theirentrepreneurial strategies, but it is generally new and smallerorganizations which are considered entrepreneurial. Companies which are developing products oftenunderestimate the amount of time and money that will be required to bringthe product to market, and companies which are bringing new types ofproducts (such as fingerprint authentication for laptop computers) mustalso educate the market not only as to why their approach is best, but whya new approach is needed at all. (2 ). (1999, Spring). Sharing long-termsuccess with employees through benefits and stock options is anotherhallmark of entrepreneurship (Covin & Miles, 1999, p. 1). Covin, J. Analysis In determining whether Ethentica can properly be classified as anentrepreneurial organization, it is necessary to consider the variouscriteria for such an organization and whether Ethentica meets thesecriteria. Theproduct side is headquartered in Lake Forest, although the manufacturing,and even some board design, is outsourced. Lake Forest, CA: Ethentica, Inc. Internet address:www.xlvision.com/mission.html. During its first years,the company focused on developing its core products and did not experiencesignificant growth. From this standpoint, the company can be considered anentrepreneurial organization. 47). VanZandtis a recognized expert in his field, and has written what some consider adefinitive text on parallel processing in information systems ("Dr. Selling to developers is a particularly attractive option forEthentica since the company can ensure that its products are placed indevices before they are ever sold to customers, and thus can enjoy greatermarket share by participating at the OEM level. The company was originally founded in thelate 199 s, and was shortly acquired by XL Vision. There is also the personal vision not only of the executive team as awhole (which is remarkably consistent), but also the vision that VanZandthas communicated to the engineering group. J. (2 ). In somecases, companies do not survive the departure of a strong entrepreneur; inother cases, companies are formed by not a single entrepreneur, but byindividuals with entrepreneurial characteristics who form a company whichcan survive any one individual's departure (Sharma & Chrisman, 1999, p.15). By encouraging thinking which runs counter totraditional approaches, entrepreneurial organizations can reinvent thestructure of the entire industry in which they operate (Covin & Miles,1999, p. Recognizing that passwords are notparticularly secure, and that corporate espionage (the most negative aspectof the company's niche markets) and plain carelessness can cost companiesmillions of dollars, Ethentica set out to invent and innovate products thatwould address this niche need. 5 ). The organization itself is relatively flat, with vice-presidents ofkey areas reporting to the CEO directly. Entrepreneurs are also able to make possible thecapital required to see a company through the difficult start-up period,whether they use their own capital, or find outside sources. At this point, Dickinson providesstrategic advice to the CEO, but is largely removed from day-to-dayactivities. Entrepreneurs are themselves recognized as being risk-takers as wellas being able to recognize talent and bring together highly effectivemanagement and operational teams. This card isinserted into the PCMCIA slot of laptop computers or other devices andprovides a way for users to secure the device using their fingerprintrather than passwords. Ethentica's product offerings aredivided into two distinct lines, products and services, and the company hasorganized itself along these lines. References Benefits. (2 ). Toward areconciliation of the definitional issues in the field of corporateentrepreneurship. Company overview. Ethentica is currently held as a wholly-owned subsidiary of XL Vision(Ethentica's original name was Who?Vision until mid-1999) ("Investors,"2 , p. The difference between emphasizingsuccess rather than punishing failure is critical, because it means thatindividuals within the organization are encouraged to take risks, and arenot personally punished if those risks do not materialize as originallyexpected. Dr. John VanZandt. Mark O'Hara. Internetaddress: http://www.ethentica.com/investors.html. (1999, Spring). The company is seeking to capitalize on thelack of security associated with portable devices, and the damage that canbe done by someone stealing passwords, or, in the case of laptops, stealingthe entire device and having an indefinite period of time to discover thepassword and access to possibly confidential and valuable information. (2 ). On the technicalside, there is an emphasis on developing a "scientific" track so thatemployees can advance within the organization without having to take onmanagerial responsibilities. This is innovation on Ethentica's part in thatother companies are also engaged in fingerprint authentication, butEthentica's approach results in highly effective and fast recognition.Individuals as well as corporations are the target market for these devices(which sell for $199), and installation and "registering" a fingerprinttakes only a few minutes (). Ownership Structure One of the most significant problems that new companies face is thelack of adequate funding. Entrepreneurship: Theory and Practice, pp. 1). Dr. John VanZandt is vice-president of engineering for Ethentica, andhe joined the company in 1999. Internetaddress: http://www.ethentica.com/doug.html. Alex," 2 , p. Lake Forest, CA: Ethentica, Inc.Internet address: http://www.ethentica.com/john.html. (2 ). Subscription programs. However,his experience with XL Vision and his understanding of "incubatee"organizations gained at XL Vision enables him to help guide the activitiesof Ethentica. There is a danger in overusing the entrepreneurial label to describeorganizations which are new to the market, or existing organizations whichare simply going through the necessary steps of regeneration as part oftheir long-term strategy (Covin & Miles, 1999, p. XL Vision is, in turn, a wholly-owned subsidiary of SafeguardScientifics, a company which is now generally considered an Internetincubator, but which was formed in 1953 to facilitate the creation andlaunch of high-technology companies. Internetaddress: http://www.ethentica.com/mark.html. This was well outside of the scope ofdocument control, but the company and its employees have the commitment tothe product that such activities are considered part of the norm. Ethentica has sufficient financialbacking to enable it to fully explore and exploit market opportunities, amanagement team which can use its personal as well as professional contactsto further the company's goals, and a highly dedicated workforce willing totake on tasks outside their "typical" job scope in order to get the jobdone. Typically, investors in Safeguard Scientifics receive theopportunity to participate in the IPOs of subsidiaries (XL Vision) and sub-subsidiaries (such as Ethentica), and receive value when the stockappreciates ("Subscription," 2 , p. In addition to ahighly competitive benefits package ("Benefits," 2 , p. Internet address: http://www.safeguard.com/programs.html. There are rumors that the company will eventually be "spun off" inan IPO during the next three years, a move which would be consistent withits grandparent's overall strategy. Recently, the woman responsible fordocument control was dispatched to northern California to monitor newboards that were being developed. The internal names for variousEthentica products reflect VanZandt's love of Western history; thus thecompany refers to Angel's Camp, Sutter's Mill, and the Custer and Cheyenneboards. Certainly the company is engaged in innovation and, at least on theproduct side, in invention. (2 ). Investors. (2 ). At this point, Ethentica is not considering adding additional productsor services which move it beyond these two core competencies. (2 ). Sebastian, FL: XL Vision, Inc. 1). Entrepreneurial organizations can be recognized not only by innovationor invention but also by an internal environment which encourages successrather than discouraging failure. The product side of Ethentica is strongly influenced byVanZandt's vision for the product as well as his technical expertise andlaissez-faire management style. The company itselfis organized along two distinct functional lines, products and services,with much of the services work done in the company's Dallas location. Doug Antone. As with the product side, there isconsiderable innovation involved with the way that Ethentica handleselectronic authentication (a process that it calls "Ethentication"), andthe company has recognized a large potential market in this area ascompanies struggle to keep security costs under control while maintainingan adequate level of security for themselves, their vendors and theircustomers ("Company", 2 , p. Prior to joining Ethentica, VanZandt workedat Fujitsu (a company which is working closely with Ethentica in developingauthentication modules for laptops) and has taught college-level courses(including graduate courses) in computer architecture and design. Lake Forest, CA: Ethentica, Inc.Internet address: http://www.ethentica.com/alex.html. (2 ). G., & Miles, M. O'Hara was previously associated with the AircraftCarrier Program for the United States government ("Mark," 2 , p. The wide range of experience among its senior managers also suggeststhat the company has an entrepreneurial strategy in that its executiveshave contacts throughout the industries in which they are participating,and are able to draw on their personal style and relationships in order tocreate opportunities for Ethentica. What is an "Entrepreneurial" Organization? In some cases, "entrepreneurial organization" isused to describe the internal structure of a company and reflectsflexibility, a lack of hierarchical structure, and often a visionary leader(the entrepreneur) who puts his or her personal stamp on the company. Lake Forest, CA: Ethentica, Inc. 47-61. 1). 12). However, during 1999 and 2 , it has grown from ahandful of employees to more than 1 , and continues to expand itsworkforce as well as its market presence as its products are brought tomarket. Innovation or invention isnot sufficient to declare a company entrepreneurial, nor is a lack oftraditional management structure. Lake Forest, CA: Ethentica, Inc.Internet address: http://www.ethentica.com/company.html. 1). XL Vision participates in the imaging industry, andWho?Vision's original goal of using biometrics (in the form offingerprints) as an alternative to passwords fit in with XL Vision'soverall mission ("Mission," 2 , p. Mark O'Hara is Ethentica's chief operating officer (COO) withresponsibilities for many of the day-to-day activities of the company.O'Hara comes to Ethentica from its parent company, XL Vision, and serves asliaison between the two organizations (as well as with the grandparent,Safeguard Scientifics). Conclusion There can be a tendency for new companies to be automatically assignedthe adjective "entrepreneurial" simply because they tend to start small, beflexible in their initial structure, and because they automatically bringinnovation or invention to the market. John,"2 , p. 11-28. Such an environment leads not only to product innovation, butalso to a different (and ideally more positive) approach to the businessenvironment as a whole. The result is a small and relativelyinexpensive product which can be sold directly to end users or todevelopers. It is thus in Safeguard's long-term interests to ensure that its various subsidiaries have sufficientcapital and time to develop their products and markets such that they willbe successful when they are spun off. Description of Ethentica (Products and Services) Ethentica (located at 1 North Pointe Drive in Lake Forest,California), offers authentication products and services for electronicproducts and Internet commerce. Philadelphia, PA: SafeguardScientifics, Inc. This researchconsiders the definition of entrepreneurial, and evaluates a relatively newcompany, Ethentica, located in Lake Forest, in terms of whether it meetsthe criteria of an entrepreneurial organization. At that organization, he formed strategic partnerships withcompanies such as Compaq and Hewlett-Packard, and his high-level contactsin the field as well as his experience in leading new organizations areamong the reasons that he was brought into Ethentica ("Doug," 2 , p. However, true entrepreneurialorganizations incorporate entrepreneurial characteristics throughout thecompany, and pursue new market opportunities with an organization committedto taking risks and rewarding success. Mission. Executive Team Ethentica's president and CEO, Doug Antone, came to the company in1999 from IngramMicro. Safeguard Scientifics is traded onthe New York Stock Exchange under the symbol SFE, and provides value to itsinvestors by creating value in its children and grandchildrenorganizations. New companies canat first appear entrepreneurial because they often have resources that aremore scarce than existing organizations (resulting in fewer people adoptingmore roles than in larger companies) and because they often bringinnovation or invention to the market. Although "entrepreneur" and "entrepreneurial organization" are termswhich are used with considerable frequency in management and businessjournals and texts, there is no clear-cut definition of the terms as theyare applied to companies. The various vice-presidents,including the vice-president of Engineering, can have a large number ofdirect reports, which contributes to the flatness of the organization, andalso provides high visibility for nearly all employees. The organization of the company and the willingness of employees to do"whatever it takes" to meet their goals is another indicator that this isan entrepreneurial organization. The company considers this to be a way toprovide additional incentive to individuals without adding managementlayers and without forcing highly technical people into managementpositions where their technical expertise may be lost. P. Internetaddress: http://www.ethentica.com/benefits.html. Organization As already noted, Ethentica is a subsidiary (child) of XL Vision,which is in turn a subsidiary of Safeguard Scientifics. Introduction Although often associated with small companies, the concept of the"entrepreneurial organization" was embraced in the 199 s as offering evenmedium and large organizations a competitive edge over their rivals. In the product area, the company has developed the MS3 PCMCIAfingerprint authentication card and software developer's kit. Successful entrepreneurs are notnecessarily experts in the industries in which they compete; instead, theyare able to find experts in marketing, finance, engineering and other areaswho can work together to either build a new organization, or transform anexisting organization. Lake Forest, CA: Ethentica, Inc. Corporateentrepreneurship and the pursuit of competitive advantage.Entrepreneurship: Theory and Practice, pp.
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