The Entrepreneurial Manager

ENTREPRENEURIAL MANAGER ~ 2 ~ SUBMITTED BY: REHMAN ASLAM
a) With reference to current academic understanding, discuss the
organisational and managerial factors which influence the degree of
innovative and entrepreneurial activity occurring within an organisation.
This assignment discusses the factors, both organisational and managerial,
which influence the degree of innovative and entrepreneurial activity
occurring within Engro Corporation Limited (Engro) and its subsidiaries.
Engro’s portfolio consists of seven businesses which include chemical
fertilizers, PVC resin, a bulk liquid chemical terminal, industrial automation,
foods, power generation and commodity trade; each of which has its own
history of innovation and entrepreneurial decisions and projects (Engro,
2012).
Entrepreneurship has been defined as creating a vision and communicating
it to the team while demonstrating the leadership and motivating people to
embrace the change (Wickham, 2000). It has been observed that Small &
Medium enterprises (SMEs) are more successful in innovation and
entrepreneurial activities because of the size of operations, employees and
small number of customers. Their ability to respond to and implement the
change quickly makes these organisations more successful with innovation
(Hashi & Krasniqi, 2011). However, Engro has proved to be among the few
large organisations to be entrepreneurial and innovative in its business.
Innovation and creativity can be defined as the implementation of an idea,
product or practice which is regarded as new and better by the organisation
adopting it (Martins & Terblanche, 2003).
Figure 1 shows the process flow of a change, creativity or innovation to go
through the acceptance and implementation. Engro observes and practices
the same flow while going for any innovation.

Source: (Martins & Terblanche, 2003)

Entrepreneurial managers should posses some qualities and skills which
include the propensity to take risks, passion towards what they believe, able
to shape strategy and foresee conditions, able to gather and motivate the
team, communicate and market the strategy and usually have varied
experience (Chakravarthy & Lorange, 2008).
Engro’s leadership possesses most of the desired skills and capabilities of
entrepreneurial managers. It comprises of some of the most enterprising
leaders of the corporate world in Pakistan who encourages innovation and
employee participation in constructing business objectives. The work
environment promotes leadership, integrity, teamwork, diversity and
excellence.
The history of innovation within Engro has its roots from the year 1991
when Exxon Chemical decided to divest its fertilizers business across the
world. The employees of the company bought out 75% equity of the
company. This was the most successful employee buy-out at that time and
unprecedented as well because it included the complete employee
population of the company at that time (Mirza, 1992). The employees as well
as the new management to run the company showed the qualities of risk
taking and passion towards their goal of buying out the business. This
innovated idea came from within the organisation by the employees in
higher management. They convinced all the employees to make a team and
buy out the company together. This management style relates to the Adair’s
Centered Leadership Model that describes achieving of task, building and
maintaining the team and developing the individuals (Mullins, 2007).
The management had shown their willingness to go an extra mile to achieve
what they had believed in. The journey of innovation didn’t stop there, but it
turned into a never-ending journey to encourage innovation and out of the
box thinking. The organisational culture of Engro and its subsidiaries is a
mix of all four roles described by Harrison (1972) & Handy (1982) including
power oriented culture, role oriented culture, task oriented culture and

person oriented culture (Mullins L. , 2007). The management applies what is
needed in a given situation.
Entrepreneurial managers are expected to launch and lead the change
schema in already established organisations (Thompson, 2004) and this is
the success factor behind all the remarkable innovations within Engro that
reflect entrepreneurial thinking. The list of innovations and entrepreneurial
decisions in long but few of the remarkable ones are discussed in this
assignment.
Drivers for innovation are the organisation’s strategy, culture and systems
all working together towards innovation (Omta, 2002) which all are the part
of Engro’s commitment towards excellence making the shareholders to
portray their confidence in the policies of the management.
Research has described the barriers to innovation and entrepreneurial
activity as, but not limited to, lack of support by top management,
insufficient resources, lack of harmony among the departments of the
organisation, and lack of experience with innovation (Kirby, 2003).
The management of the company had shown the ability to take risks and
breaking the barriers by entering into new business time and time again.
However, some researchers claim that success of the entrepreneur managers
lies in the way they think about and perceive risk and not the tendency of it
(Busenitz, 1999).
Engro has been the second largest fertilizer producing company in Pakistan.
Its management has always looked for an opportunity in new businesses,
investing into food business is one of the breakthroughs. The New Ventures
Department (NVD) in Engro prepared an extensive feasibility for the dairy
plant and its products. It was a huge investment of more than GBP 10
million. Engro had no prior experience of running a food or dairy products
business but it had very strong ties with the farmers who are the customers
of Engro. By entering into food business, these farmers were about to

become the supplier of the company. The business gurus in the market
rejected the idea of a fertilizer company entering in to food business. This
decision of entering into new business is diversification according to Ansoff
Growth Matrix.
Another innovative decision of Engro was to set-up the first corporate dairy
farm in Pakistan on commercial basis. This time it was taken by the
subsidiary itself i.e. Engro Foods Limited. The decision was welcomed by the
food industry of Pakistan as a good initiative. Initially 1,500 joined cows (a
term used for pregnant cows) were imported from Australia. A state-of-the-
art dairy farm was set up on 400 acre in a rural area with highly qualified
veterinary professionals from around the world. The premium quality milk
from the Australian cows is used in premium products of the company.
Running the first of its kind farm is a huge challenge in itself. By doing
something new, the company becomes the role model for others and this
brings huge pressure of succeeding.
The never ending thirst of the management to grow resulted in entering into
the power sector, again a new business with no prior experience in the
power industry, named as Engro PowerGen Limited. It had to face difficulties
as a new entrant in an existing market which can be related to the new
entrant’s force from Porter’s Five Forces model.
Setting up the world’s largest single train ammonia-urea plant is another
example of entrepreneurial thinking and innovation. Constructing
something that is largest in the world requires lot of thinking and extensive
homework to get it approved by the management and shareholders. But the
history of success with innovations made it easier for the team to get it
accepted by both. By the commissioning of this new plant with the capacity
of 1.3 million tones annual production, the overall annual capacity of
fertilizer production went upto 2.3 million tones. This has helped in
reducing the import of fertilizer and overall cost reduction for the

customers as well as contributing towards the national economy by saving
precious foreign exchange because of less import of fertilizer.
Acquisition and setting up the business overseas has given Engro the status
of first Pakistani food company to go multinational. This relates to the
global strategic thinking of the management. Engro has acquired a business,
Al-Safa Halal, supplying halal meat and frozen food products to the
supermarkets in Canada and North America. It is now named as Engro Foods
Canada Limited with a subsidiary named Engro Foods USA, LLC. The
management has spotted opportunity and has foreseen potential growth in
the halal food products markets in the North American region. The business
was initially managed by an entrepreneur with a staff less than ten
members. Most of the services were outsourced by Al-Safa Halal Meat. Now
Engro Foods Limited is managing the operations overseas.
All the innovations and entrepreneurial activities in Engro and its
subsidiaries were possible because of the management and the
organisational culture created by them. Employees feel the sense of
responsibility and ownership in every single task they do and they find it
important no matter how small or simple it maybe. The reward system of
the company for individual’s contribution towards the innovation and
creativity to make the processes more simple and cost effective has resulted
in boosting motivation among the employees. All such cases are usually
reported in the Collage (official magazine) published quarterly under the
head ‘My Engro’. It reflects the contributions of the individuals towards the
corporate goals of the company.
Wolcott and Lippitz (2007) have discussed four models of corporate
entrepreneurship. These include the opportunist, the enabler, the advocate
and the producer. Each of these has distinguished characteristics
categorized under two dimensions, namely ownership of organisation and
the resource authority. It discusses who has core responsibility of creating

new business and from where the project would be financed (Wolcott &
Lippitz, 2007).
The Opportunist refers to the role where the company is self contend and
has no deliberate approach to the innovation or corporate entrepreneurship.
The Enabler refers to the state where company provides resources, both
financial and personnel for the prospective projects and ideas.
The Advocate refers to the state where company has strong belief in
innovation and entrepreneurship but the financial resources are provided by
the business units.
The Producer plays the role to encourage hidden entrepreneur within the
person to become active. It aims to build cross functional teams,
opportunities for executives to pursue a career outside their departments
acting as an entrepreneur and protect emerging ideas to implement those.
Figure 2: Four Models of Corporate Entrepreneurship

As evident from the discussion regarding innovations and entrepreneurial
activities carried out by Engro and its subsidiaries, it fell under the umbrella
of ‘The Producer’. It has established a separate department in each
subsidiary to look for opportunities for corporate growth and supports the
function of that department.
b) In the light of the findings, identify the areas for personal development
with respect to entrepreneurial and innovative practices.
The qualities of an entrepreneur as discussed with reference to the
management of Engro in part ‘a’ of this assignment can be summarized as a
person who takes risks, embraces change, thinks differently, spots
opportunities and able to convince people about the new ideas.
Three major themes are considered to be constituting and developing
entrepreneurial qualities (Rae, 2005), namely:
i. Personal and Social Emergence; includes the formation of a sense of
self and future aspired person. It is developed from the early age that
includes family life, education, career and social belongings.
ii. Contextual Learning; participation in social gatherings, community
and industry based networks helps in acquiring contextual learning.
These enable a person to the ability to spot opportunities and develop
intuition.
iii. The Negotiated Enterprise; the business is not managed by an
individual; it requires negotiated relationship with people supporting
in running the business.

Figure 3: Triadic model of entrepreneurial learning
Eleven sub themes were identified within the three as shown in figure 3. All
of these related themes are helpful in developing an entrepreneur within a
person (Rae, 2005).
The five factor model of personality (Holt, Rutherford, & Clohessy, 2007)
defines it as:
a) neuroticism, an individual’s tendency to be anxious, tense and
insecure.
b) conscientiousness; an individual’s leaning to be thorough, confident
and dependable.
c) extraversion, an individual’s inclination to be social, active and self-
confident.
d) openness, an individual’s tendency to be inventive, imaginative,
unconventional and out of box thinking.

e) agreeableness; an individual’s tendency to be accommodating,
trusting and selfless.
I believe my standing in these five factors is as follows:
Factor My standing
Neuroticism Low
Conscientiousness High
Extraversion High
Openness Medium
Agreeableness High
I remain calm under pressure and produce results that are required out of
me. Anxiousness is never an option while working in tense situations. This
makes me low on the scale for neuroticism.
I have developed confidence and become reliable during the years of work at
my organisation. I consciously made efforts to enhance my confidence and
reliability among my colleagues that made me a champion for all situations
at work.
Socializing has become synonym with my profile at work; people like to
share their problems with me at work. My friendly nature has helped me
gaining the status of a good listener.
Openness require out of the box thinking and imagination about new and
better ways of completing a task or seeking an opportunity. I am trying to
build this skill in my personal matters so that I can practice the same at
work once gets successful in my personal life. Being unconventional and
accepted by the people surrounding us is a highly difficult task but it gives a
competitive advantage to us over others.

Accommodating and selfless are the skills that have been gifted to me and I
try to use these whenever I lack in any other factor. This helps me in getting
space within the team as a supportive team player. These qualities have
helped me in becoming the part of many projects that require high
unconventional thinking.
Hence in my opinion, I need to develop myself as an entrepreneurial
manager and to learn how to balance all the five factors to become
successful. Working in a company like Engro has helped me develop all
these skills.

References
 Busenitz, L. (1999). Entrepreneurial risk and strategic decision making:
it’s a matter of perspective. The Journal of Applied Behavioral Science,
35 (3), 325 - 340.
 Chakravarthy, B., & Lorange, P. (2008). Driving renewal: the
entrepreneur-manager. Journal of Business Strategy, 29 (2), 14 - 21.
 Engro. (2012). Our Company. Retrieved June 3, 2012, from Engro Corp:
http://engro.com/our-company/
 Hashi, I., & Krasniqi, B. (2011). Entrepreneurship and SME growth:
evidence from advanced and laggard transition economies.
International Journal of Entrepreneurial Behaviour & Research, 17 (5),
456 - 487.
 Holt, D., Rutherford, M., & Clohessy, G. (2007). Corporate
Entrepreneurship: An Empirical Look at Individual Characteristics,
Context, and Process. Journal of Leadership & Organizational Studies,
13 (4), 40 - 54.
 Kirby, D. (2003). Entrepreneurship. Maidenhead: McGraw-Hill.
 Martins, E., & Terblanche, F. (2003). Building Organisational Culture
that stimulates Creativity and Innovation. European Journal of
Innovation Management, 6 (1), 64 - 74.
 Mirza, S. (1992). ECPL employees led buy-out experience. Retrieved
June 3, 2012, from Resource Library:
http://findarticles.com/p/articles/mi_hb092/is_n5_v23/ai_n28617100
/
 Mullins, L. J. (2007). Management and Organisational Behaviour (8th
ed.). Harlow: Pearson Education Limited.
 Mullins, L. (2007). Management and Organisational Behaviour (8th ed.).
Pearson Education Limited.
 Omta, S. (2002). Innovation in chains and networks. Chain and
Network Science , 2.

 Rae, D. (2005). Entrepreneurial learning: a narrative-based conceptual
model. Journal of Small Business and Enterprise Development, 12 (3),
323 - 335.
 Thompson, J. (2004). The facets of the entrepreneur: identifying
entrepreneurial potential. Management Decision, 42 (2), 243 - 258.
 Wickham, P. (2000). Strategic Entrepreneurship: A Decision-Making
Approach to New Venture Creation and Management (2nd ed.).
London: Pitman Publishing.
 Wolcott, R., & Lippitz, M. (2007). The Four Models of Corporate
Entrepreneurship. MITSloan Management Review (Fall07), 74 - 82.

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