Corporate Entrepreneurship: Top Managers and New Business Creation

By Vijay Sathe | Go to book overview

17 The division's organization, competence, and
collaboration for new business creation

This chapter examines how the division's organization, competence, and collaboration influence new business creation (Table 17.1).


Frequent reorganizations hamper new business creation

Xerox OPD had already endured several reorganizations when Greg Gibbons became the fourth DGM in six years. He reorganized OPD once again by breaking up the functional organization, "the silos" as he referred to them, to create strategic business units (SBUs) overseen by an Office of the President, which was subsequently disbanded. Whatever their merits, these frequent reorganizations created confusion and disruption that hampered new business creation.

Monsanto Fab Products also underwent several organizational changes in the quest for the right organization for new business creation. When Dan Stewart became DGM of Fab Products, he broke up the functional organization to create self-sufficient business units (BUs). His successor, Ian McVay, reorganized Fab Products into a matrix.

At 3M Micrographics, there was some organizational disruption when the 35mm lines were peeled off to create the Engineering Products department, but this was the normal 3M practice of "cloning" divisions once they became too large. AMP Sigcom and 3M Micrographics did not hinder their new business creation efforts with frequent organizational surgery.

A moratorium on reorganizations is not being recommended, but there is a lot to be said for less frequent organizational changes. The choice of organization does matter, and changes will be necessary from time to time, but here is the caution: because every organization has its limitations, it is best not to engage in a hunt for the "ideal organization." It is better to focus instead on the commonly neglected tasks of educating, training, coaching, and mentoring people to leverage the advantages and overcome the limitations of whatever organization is used.

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