46 ENTREPRENEURSHIP
rations in any given year have appeared in the top 10 many times. The Fortune survey
uses the following eight different criteria for its rankings:- The quality of management
- The use of corporate assets
- The firm’s financial soundness
- The firm’s value as an investment
- The quality of the firm’s products and services
- The firm’s innovativeness
- The firm’s ability to attract, develop, and retain top people
- The firm’s commitment to community and environmental responsibility
Our research indicates that the most important of these criteria are product quality,
management integrity, and financial soundness.
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The value of reputational relationships
goes beyond personal relationships, because reputations continue even after the individ-
uals originally responsible for them are no longer around (either in that job or with the
firm).
Take a moment and reread the case at the end of Chapter 1. It is about a woman
who has her proverbial “15 minutes of fame.” This marks the start of her reputation-
creating and value-capturing strategy. How she manages this good fortune is the key to
her business success.
Organizational Resources
Organizational resources include the firm’s structure, routines, and systems.
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The
term ordinarily refers to the firm’s formal reporting systems, its information-generation
and decision-making systems, and its formal or informal planning.
Organizational resources are what the organization does well. Some of the things that
an organization does well reside in a person, and we will include these under the
Intellectual and Human Resources section below. But many skills reside in a team or
group, a department or a functional area: marketing, operations, finance (see below),
and research and development. These are the primary skill areas.
The organization’s structure is an intangible resource that can make the difference
between an organization and its competitors. A structure that promotes speed can be the
entrepreneur’s most valuable resource. In the postindustrial economy, organizations will
be required to make decisions, innovate, and acquire and distribute information more
quickly and more frequently than they have in the past.^32
Organizational structures that separate the innovation function from the production
function speed innovation; those that separate marketing from production propel
marketing. The appropriateness of the organizational design depends on the complexi-
ty and turbulence in the environment.
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Organizational resources also manifest them-
selves as the skills and capabilities of the people within the organization. Different com-
binations of resources can be associated with the age and life-cycle stage of a business.
Depending on where the firm is in its life cycle, certain resources are more vital than oth-
ers. For example, although human capital and experience are more important early on,
organizational resources dominate later.^34