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Toward Entrepreneurial Organizations: Meeting Ambiguity with Engagement

Entrepreneurial activities fit poorly with traditional organizational approaches–-the rules, procedures and structure to delimit members’ response that seek to constrain behavior to a predetermined program. Nevertheless, in response to increasing competition, organizations have emerged to support broad entrepreneurial activity. Three interrelated elements appear necessary to support organizational entrepreneurship: pervasive sharing of managerial tasks and responsibilities, mindful alertness to anomalies, and ambiguity absorption by means of mutual support and information sharing. These elements render organizations more flexible, but also increase ambiguity, requiring further action incompatible with traditional organizational approaches. Entrepreneurship is not only inconsistent with traditional organizations, but with traditional organization theory. To effectively analyze entrepreneurial organizations requires a shift from the static, deterministic paradigm of traditional organization and theory to a cognitive paradigm which focuses on individual sensemaking and collective decision processes, and on the organizational context that shapes and influences them. This article outlines basic elements of an emerging cognitive paradigm to describe organizational entrepreneurship in theoretical and pragmatic terms, contrasting with traditional theory and practice. Benefits and hazards of entrepreneurial approaches are discussed. The Implications for research and management practice are also suggested.