The Entrepreneur and the Hierarchy

With global enterprises and entrepreneurial behaviour, hierarchy does not and cannot suffice. Being part of a supportive community becomes the basis for repeated, mutually beneficial transactions. Collaboration becomes the underlying mode of operating. Contracts are incomplete and often only marginally enforceable through judicial processes. Legal systems and ethical systems are often in conflict. Therefore, to interact effectively and efficiently, individuals must sense that they are part of a community that cares, protects, and ensures legitimate behaviour on the part of others. Trust, caring, agreed-upon standards for performance, and agreed-upon sanctions are the lubricant easing the friction inherent in free exchange. Building a sense of community is a leadership task. Learning to live as part of a community that is dispersed, asynchronous, and diverse is one of the initiatives that shapes character as well as knowledge. Such a community is created and linked by the technology that is evolving.

 

These four challenges for the future are mutually reinforcing. Scholars and practitioners who attempt to deal with one of the challenges without under- standing the others do so at their own peril. Entrepreneurship creates the technology and is enabled by it. Communities that form across traditional boundaries enable globalization and enable growth through entrepreneurship. Entrepreneurs build community by managing networks rather than hierarchies and by reinforcing the community through celebration and reinvestment in other community members’ new ideas. They share the rewards of innovation with customers, suppliers, and other partners in the enterprise in order to assure cooperation.

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