In Search of Business Discipline

1. In Search of Business Discipline Togar M. Simatupang School of Business and Management Bandung Institute of Technology Presented on the 7th Indonesia International Conference on Innovation, Entrepreneurship and Small Business 4-6 August 2015 – H Clarity Hotel - Bandung

2. Proposition… The cluster of business discipline consits of four fields, namely  Management  Administration  Entrepreneurship  Stewardship Togar M. Simatupang in Pikiran Rakyat on Wednesday, 15 may 2013, p. 26 2

3. Overview 1. Introduction 2. Research Approach 3. Disputes 4. Business Discipline 5. Cluster of Business Discipline 6. Body of Knowledge of Business Fields 7. Concluding Remarks 3

4. Introduction • The field of entrepreneurship has been organized to merely redefine the phenomenon of business creation not as a field of business. • The question remains unanswered to look the posture of entrepreneurship as one of fields of scholarship within the discipline of business. • This paper thus intends to contribute to the theoretical knowledge of entrepreneurship within the business discipline. 4

5. Disputes 5

6. Disputes • Imperialism: – M > A = Management is greater than Administration – A > M = Administration is greater than Management • Annexation: – E ∈ M = Entrepreneurship is an element of Management – E ∈ A = Entrepreneurship is an element of Administration • Equality: – M = A = Management is the same as Administration • Which one is appropriate? – Non of them subject to uniqueness , co-existence, and evolutionary – A new paradigm  Complementary 6

7. Administration versus Management Basis of Difference Administration Management Nature of work It is concerned about the determination of objectives and major policies of an organization. It puts into action the policies and plans laid down by the administration. Type of function It is determinativefuction. It is an executive function. Scope It takes major decisions of an enterprise as a whole. It takes decisions within the frmework set by the administration. Level of authority It is a top-level activity. It is a middle level activity. Nature of status It consists of owners who invest captal in and receive profits from an entreprise. It is agroup pf managerial personel who use their socialised knowledge to fulfil the objectives of an entreprise. Nature of usage It is popular with government, military, educational, and religious organizations. It is used in business entreprises. Decision making Its decisions are infuenced by public opiniton, government policies, social, and religious factors. Its decisions are influenced by the values, opinions, and beliefs of the managers. Main functions Planning and organizing functions are involved in it. Motivating and controlling functions involved in it. Abilities It needs administrative rather than technical abilities. It requires technical activities. 7

8. Administration does not resemble Management Top Management Administration Lower Management Management 8

9. Entrepreneur and manager are different Entrepreneur Manager Owner: An entrepreneur is the owner of his own business. Servant: A manager is a servant of his employer. Profits: An entrepreneur earns profits from his business which is uncertain and unlimited. Salary: A manager earns salary which is generally certain and limited. Full risk bearing: An entrepreneur is a person who has to take high risks for starting and running venture. Less or no risk bearing: A manager takes less or no risk while performing his job. All functions: An entrepreneur has to look after all the functions of his organization. Selective functions: A manager looks after selective functions of an organization. Innovator: An entrepreneur is always an innovator, in the lookout for new products and services. Executor: A manager is simply an executor who is responsible for executing the decisions of the owner and entrepreneur. 9

10. Entrepreneurship does not resemble Management A manager is the person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary. An entrepreneur is a person who establishes business unit and utilizes the other factors of production like land, labor, and capital. 10

11. Entrepreneurship and Administration are Different Basis of Differences ENTREPRENEURSHIP ADMINISTRATION Strategic Orientation Driven by perception of opportunity Driven by resources currently controlled Commitment to opportunity Revolutionary with short duration Evolutionary of long duration Commitment of resources Multi-staged with minimal exposure at each stage Single-staged with complete commitment upon decision Control of resources Episodic use of rent of required resources Ownership or employment of required resources Management structure Flat with multiple informal networks Formalized hierarchy with clear authority Reward philosophy Value-driven Performance- based Team-oriented Security-driven Resource- based Promotion-oriented Source: “The Heart of Entrepreneurship” by Howard H. Stevenson and David E. Gumpert (March 1985) at https://hbr.org/1985/03/the-heart-of-entrepreneurship 11

12. Literature Review 12

13. Previous Works Miller, L.M. (1989), Barbarian to Bureaucrats: Corporate Life Cycle Strategies, Clarkson N. Potter, New York. 13

14. Four Workplace “Languages” Adizes, I. (1979), How to Solve the Mismanagement Crisis, Dow Jones-Irwin, Homewood, Illinois. 14

15. Previous Works 15

16. Business Discipline 16

17. Source: http://www.column2.com/2006/10/proforma-conference-day-1-geary-rummler-x-2/ 17

19. Business Ecosytem Business System Regulation, Competition, Trading, Social, Culture Scope of Business MANAGERIAL PROCESS STRATEGY GOVERNANCE BUSINESS FUNCTIONS BUSINESS PROCESS SERVICES AND GOODS RESOURCES VENDORS CUSTOMERS KNOWLEDGE AND TECHNOLOGY BUSINESS COMMUNICATION ORGANIZATIONAL STRUCTURE ORGANIZATIONAL FORMATION 19

20. Legal Aspect of Business as Applied Science • Higher Education Act Number 12 on 10 August 2012 • Clause 10 about Cluster of Science and Technology: – Applied Science • Explanation Clause 10 – Letter f: The cluster of applied science constitutes of the branch of science and technology which studies and examines the application of sciences for human life including agriculture, architecture and planning, business, education, engineering, forestry and environment, family and consumer, health, sport, journalism, mass media and communication, law, library and museum, military, public administration, social work, and transportation. 20

21. Business Discipline A set of research, practice, education, and the scientific community about business Body of Knowledge: Provides the core of subject The nature of Business Business Science Practitioners Skills: Scholars training as a "disciple" 21

22. Business Science Business science is concerned with investigation, design, and improvement of a business system using technical and scientific business knowledge and human science for understanding, intervention, development, and evaluation of the business. ECONOMICS Business Economics Business Process Organizational Behavior Business Science Psychology Technology Productivity HUMAN SCIENCE ENGINEERING Sociology Ergonomy 22

23. Business Skills Note: • Technical skill is a skill to perform each single detailed tasks by applying specialized knowledge or expertise. • Human skill a skill to work with, understand and motivate other people (both individually and a group) to accomplish the company’s goals. • Conceptual skill is a skill to understand the business need and set directions for the company. This is an ability to critically analyze, diagnose a situation and forward a feasible solution. It requires creative thinking, generating options and choosing the best available option. 23

24. Cluster of Business Discipline Discipline: An academic category for business. Field: An area of study within business discipline. 24

25. Research Approach Real Life of Business Reflection over totality of meaning of business Key Focused abstraction dimensions of Business Philosophy: Critical Realism Frameworks for understanding 25

26. Clustering Business Discipline • Offering a framework for generating scientific research and its application in the area of business studies, not only to optimize the performance of the enterprise at a given time but also overall performance of its life cycle activities. • Identifying the types of business fields (business discipline cluster framework) – Two underlying dimensions of Business Discipline • Interpreting Types of Business Fields 26

27. Two Underlying Dimensions of Business Discipline • Dimension 1: Concern for Purpose Nature of mission orientation that represents mission achievement of an enterprise either to attain enterprise performance or lifecycle performance 1.1. Continuum stage (Enterprise Performance) 1.2. Lifecycle stage (Lifecycle Performance) • Dimension 2: Concern for Specification Structural specification represents the degree to which an enterprise formulating and structuring the tasks and goals that enable and constraint an organization 2.1. Liberation 2.2. Regulation 27

28. Dimension 1: Concern for Purpose Responsibility for an organization Continuum Stage of Performance Responsibility Lifecycle Stage of Performance Responsibility Ongoing Enterprise System Lifecycle Enterprise System Value Added (better profit) to the economy New venture (new enterprise) to the economy 28

29. 1.1. Lifecycle stage of Performance Responsibility Rejuvenate? PERFORMANCE Divest? TIME Ideas Start-up Growth Maturity Decline Responsibility for Lifecycle Performance 29

30. 1.2. continuum stage of Performance Responsibility PERFORMANCE TIME Planning Implementation Evaluation Responsibility for Enterprise Performance 30

31. Dimension 2: Concern for Specification Concern for Structural Specification Thomas Hobbes: Leviathan Adam Smith: The Wealth of Nations Regulated Structured Deliberated Structure ORDER FLEXIBILITY Formation LEGAL CONCENSUS Formality REGULATION LIBERATION Fomulation 31

32. Business Discipline Clustering Framework: the Quadruple Fields of Business Deliberate Structural Specification Management Management Entrepreneurship Entrepreneurship Regulate Administration Administration Stewardship Stewardship Continuum Stage Lifecycle Stage Concern for Purpose 32

33. Different Emphasis... • • Management: – A focus on enterprise performance and deliberation for capability – Starts from an existing concept and strategic planning – Ensures change and performance achievement – Provides answers and solutions to managerial problems Administration: – A focus on enterprise performance and regulation for accountability – Dedication to apply good corporate governance and credibility – Ensures consistency and stability – Provides answers and solutions to administrative problems Entrepreneurship: – A focus on lifecycle performance and deliberation for viability – Starts from a unique idea and orientation for the future – Ensures development and performance adaptability – Provides answers and solutions to developmental problems Stewardship: – A focus on lifecycle performance and regulation for sustainability – Willingness and dedication to help people and the environment – Ensures inclusive growth – Provides answers and solutions to sustainable problems • • 33

34. BOK of Management Business Strategy Capability Process Functions Managerial Activity: POAC 34

35. BOK of Administration Business Policy Accountability Governance Procedures Administrative Activity: PDCA 35

36. BOK of Entrepreneurship Business Innovation Viability Business Models and Risks Ecosystem Entrepreneurial Activity: Ideation, Initiation, Growing, and Maturity 36

37. BOK of Stewardship Eco-Socio innovation policy Sustainability Standarization and certification Sustainable Governance Stewarding Activity: Social, comercial, and environmental development 37

38. The development of social responsibility guideline ISO 26000

39. Examples of Stewardship Master of Environmental Management (MEM) International Master in Sustainable Development & Corporate Responsibility Master's of Natural Resources Stewardship The MBA in Environmental Stewardship http://ucsdbioadvising.wordpress.com/2011/1 2/09/the-master-of-sustainable-forest- management-program-at-the-university-of- british-columbia/ http://www.wilmu.edu/business/mba_conc entration_environmental.aspx 39

40. Concluding Remarks 40

41. Concluding Remarks • The task of this research was to further define the entrepreneurship field of business. • The exposition of the claster of business is based on the epistemological foundations of critical realism that assumes knowledge of business as a social and historical product. • The quadruple field model of business, with its emphasis on management, administration, entrepreneurship, and stewarship, represents a radical view to promote entrepreneurship as an independent business field. • This also sets a challenge forfuture research of the quadruple fields of business. 41

42. Thank You 42