Dollinger index

Creating the Organization 371

customer, the manager serves the worker. Table 9.2 compares the organizational culture

of the traditional firm with that of the entrepreneurial organization.

Entrepreneurial Ethics

An important part of a new venture’s culture is its ethical climate. The ethics of the

organization are never clear enough and are frequently ambiguous and shifting.

Stereotypically, entrepreneurs are seen as having low ethical standards. The great robber

barons of the American industrial revolution—the Rockefellers, Fords, Mellons, and

Carnegies—were all seen in their time as ruthless and unethical. In today’s Chinese eco-

nomic revolution, the use of public office for private gain, the lack of a rule of law, and

the endemic use of bribery contribute to the belief that the entrepreneur is an unethical,

selfish economic animal. In fact, entrepreneurs and small business owners are neither

more nor less ethical than other people, but they have different tolerances for different

types of unethical behavior. Table 9.3 reports the results of a large study of the ethical

differences between managers of small and large businesses.

Entrepreneurs repeatedly face ethical dilemmas, all involving the meaning of honesty.

At times the entrepreneur may feel that to be “completely honest” does a disservice to

the new venture and his or her efforts to create it. Yet to be less than completely honest

puts the credibility and reputation of both the entrepreneur and the new venture in ques-

tion. These are the dilemmas of the promoter, the innovator, and the transactor.

Promoter Dilemma. When entrepreneurs are in the early stages of promoting their

businesses to financial supporters, customers, potential partners, and employees, a cer-

Efficiency

TABLE 9.2 Organizational Culture: A Comparison

Dimension

Strategy

Productivity

Risk

Opportunity

Leadership

Power

Failure

Decision making

Communication

Structure

Creativity

Traditional Organization

Status quo, conservative

Short-term focus, profitability

Averse, punished

Absent

Top-down, autocratic

Hoarded

Costly

Centralized

By the book, chain of command

Hierarchical

Tolerated

Valued: accountants are heroes

Entrepreneurial Organization

Evolving, futuristic

Short-long term, multiple criteria

Emphasized and rewarded

Integral

Culture of empowerment

Given away

OK; teaches a lesson

Decentralized

Flexible, facilitates innovation

Organic

Prized and worshiped

Valued if it helps realize overall goals

SOURCE: Adapted from J. Cornwall and B. Perlman, Organizational Entrepreneurship (Homewood, IL: Irwin, 1990).