Jack Sprat - Relationship between Restaurant Entrepreneurship, Innovation, and Organisational Activities - Case Study Example

Jack Sprat’s Restaurant “Entrepreneurship” Name Course Title Instructor Date Table of Contents 1.Introduction 4 2.Literature Review 5 2.1Organisational Culture 7 3.2 Operational Environmental 9 3.3 Organisational Resources 12 3.4 Market 14 3.5 Areas of Development 15 3.Recommendations 15 4.Appendix 17 Bibliography 19 Executive Summary This summary is going to look at a brief view of the contents of this paper, some of which include the evaluation of Jack Sprat’s Restaurant in terms of it being capable of achieving the status of a high potential venture, which will be done by the use of the key areas used in the assessment of a new venture. This paper aims to look at the progress that Chris has made over time up to date based on the case study that has been provided. Any piece of advice that is available and relevant in regards to the business plan that Chris has will be mentioned and discussed within this paper. This paper is going to look at entrepreneurship with special focus on the case study of Jack Sprat’s Restaurant which is the brain child of Chris Harami, which was developed over time, as a result as a desire to own a chain of restaurants and the drive to succeed. This means that Chris is an entrepreneur. The word entrepreneur is a French word which means a person who is keen on innovations and finance with an aim of transforming these innovations in to goods of economics. This may give rise to new organizations or may even modify existing organizations with regards to the opportunity that was perceived by the individual or group of individuals. The most common form of engaging in entrepreneurial activity involves the starting of a new business venture, but lately there have been inclusions of political and social activity in this field happening, which has altered the definition of the term itself. Intra-preneurship is when the activities of entrepreneurship are described within an organization that is relatively large and it includes such activities such as corporate venturing. The activities that are involved in entrepreneurship differ depending on the type of venture that an individual or group is keen on initiating. The activities of an entrepreneur may range from activities that are solo, meaning that it involves only the entrepreneur, to activities that are capable of creating employment for other unemployed individuals. Chris Harami decided to start a chain of fast food restaurants that mainly dealt with food that are considered healthy in the sense that they are low in fat or fat free. This was due to the passion that he had always had ever since he was in Business School, and also due to the fact that he had an uncle and an aunt who had succeeded in the restaurant business, and he would have loved to emulate them considering that they were regarded as celebrities in their town. The paper is going to look the background of the franchise that Chris started, and how he managed to get into the restaurant business. The paper is also going to attempt and answer the questions that are expected of it while at the same time referring to different theories and models of entrepreneurship. In doing this, the purpose of the report will be highlighted and thus, proving that the module under study was fully understood, and also applied in theory and in practice through the study of the case of Jack Sprat’s Restaurant case study. Innovation and entrepreneurial activities are important to organizations and are central to development of robust strategies. Innovation as a process is highly affected by the culture that defines an organization, available resources and the prevailing conditions in the segments that an organization operates in. Success in innovation is simply a measure of how well an organisation's strategies interact with the prevailing conditions to come up with competitive advantage. Skills, both academic and creative come in handy thus organisations should prioritise availability of information, development of skills and creating an environment that is suitable for innovative activities. Cost of entrepreneurship and the fear of failure are some of the key threats to entrepreneurial activities. Risks should only be taken if they are well evaluated, it should be remembered that the fear of failure with respect to innovation simply translates to fear of success. Entrepreneurs as individuals and innovative organisations are defined by their ability to continuously take risks and therefore develop operations that are way above others' in terms of performance. In the modern competitive world where consumers are picky and reputation is everything, innovation should be promoted by dealing with threats and developing conditions that are relevant to innovation since it plays a role that is larger than just gain of competitive advantage; it is the way to survival. 1. Introduction Management is a vast and complex discipline for there are several processes that have to be developed in a way that ensures attainment of set goals. Irrespective of the industry or market segment and organisation operates in there is need for entrepreneurial activities. At look at the current operational environment spells out doom to organisations that fail to utilise their opportunities due to the high levels of competition. Efficiency in management as a process is measured by levels of success that an organisational achieves irrespective of the nature of its operational environment. The company that Chris started, which is a franchise chain of restaurants that offers healthy foods, low in fat or even free in fat, started out as a desire and it turned into reality. This was due to careful planning and extensive research that Chris conducted, by attending several food service conventions and getting the opinions of many entrepreneurs who are already in the restaurant business or the food service segment. 2. Literature Review Entrepreneurship as a subject in the modern business setting attracts interest from all quarters. The modern operational environment is characterised by increase in the rate of downsizing, restructuring and high rates of change in technology which have led to change in approaches that organisations employ in creation of value (Southon & West 2002 p 67). The traditional approaches to value generation have failed terribly thus the needs for better innovative approaches. Business operations have to put into considerations the nature of the environment, the industry, market and internal workings of an organisation if they are to operate effectively. These present a large number of variables that display high levels of dynamism and are central to complexity in management (Chisnall 2005 p 73). The main aim in business is to make profit and ensure that profitability are sustained. Organisational processes irrespective of their nature are often designed in a manner aimed at ensuring set organisational goals that will ultimately leads to sustainable profit generation are met (Pinson & Jinnett 2000 p 23). Differences in the levels with which organisations perform in their areas of operations are defined by the eagerness and drive that organisations display in strategies that they develop and implement (Hamel & Breen 2007 p 105). Due to the high level of competition that characterise most market and industry segment, organisations have to ensure that their strategies are daring and speculative by capitalising on opportunities and effectively dealing with threats that may be present in the operational environment (Munro 2005 p 150). Irrespective of the level of competition that exists in a market segment there always is opportunity for an organisation to develop more robust strategies. The nature of the operational market is often determined by a large number of dynamic variables whose mix defines the opportunities and threats that organisations face in their operations (Chanaron 2007 p 14). A change in the mix due to changes in one or multiple variables results in a threat or an opportunity for a business entity. Having the ability to monitor the market, determine the variables that affect the nature of the market, monitor how they change and predict the implications they have on the industry and market segments that an organisation operates in is important to entrepreneurship (Stokes 2002 p 34). Entrepreneurship further plays a great role in shaping the levels of competition being experienced in market segments and is responsible for innovation and increase in accuracy to the needs and expectations of the market (Bolton & Thompson 2000 p 54). Entrepreneurial activities can be attributed the levels of development that have been attained by the modern society and have been central to commercialisation and technological development which are key drivers in the current business environment. There are a number of key factors that have to be put into consideration when one is developing entrepreneurial activities in an organisation. The following are some of the key factors that must be put into consideration: 2.1 Organisational Culture The truth that any organisation must come to terms with is that entrepreneurship is a multifaceted activity. The beauty in entrepreneurship is the different abilities displayed by entrepreneurs, their propensity to risk taking and the ability to coordinate scarce resources to come up with creative workable ideas that if well implemented lead to success (Johnson, Scholes & Whittington 2008 p 43). Chris did this by taking the risk to engage in the restaurant business despite the risks that are involved in the business and managed to forge a strong franchise. Some economies or more so environments appear to be more appreciative of entrepreneurship and are characterised by high levels of entrepreneurial activities. This can also be said of change which appears to bear high levels of correlation to entrepreneurship. Though entrepreneurship is predominantly economic, there is a social context to it hence organisational culture is as important as resource provision to the development and implementation of entrepreneurial activities in an organisational setting. Entrepreneurial activities increase the competitiveness of an organisation and also have an effect on its social setting (Bridge, O’Neill & Cromie 2003 p 83). For any entrepreneurial activity to take root, the environment must be permissive of entrepreneurship and must be able to change to accommodate adjustments that come with entrepreneurial activities. This is seen in the environment in which Chris decided to start his venture which is in the healthy foods business, which is becoming more and more popular as more people start becoming aware of their health. Some entrepreneurs find motivation in addressing social issues and ensuring the well being of the society others find it fascinating and some are just do it for the sake of competing. Organisations that are committed to entrepreneurship must ensure they are well versed on the motives that drive entrepreneurial activity in their workforce. The motivation behind Chris’ venture was the need to cater for the individuals who were keen on keeping a check on their health through their eating habits. This understanding is important in developing an environment that promotes the development of entrepreneurial activities. Moreover, having this understanding is important in adapting to changes in the environment in a manner that ensures motivators to entrepreneurship are maintained. Understanding the potential that each and every member of an organisation has is important in understanding the levels of innovation that an organisation can attain (McQuarrie 2005 p 54). The main aim in ensuring innovation is creating an environment where the organisation plays the role of a vehicle for creativity and enthusiasm for enterprising individuals. The organisation must be an avenue through which innovators meet their motivation and express their enterprising behaviour (Burns & Dewhurst 2005 p 80). This business enabled Chris to be able to meet the motivation that he had behind his business plan and achieve it. The organisational cultures should be supportive of serial enterprising which is a level above innovation to harness opportunities or for the sake of creativity and is characterised by high levels of new product development, rapid growth, and constant challenge of assumptions to discover areas that have been assumed and are potentially productive. This is an exploratory culture and an organisation either has it or not (Kirby 2003 p 88). Development of a culture that is permissive to innovation is a challenge to even the most decorated managers. An organisation either has the potential for innovation or it lacks and knowing the exact position an organisation is in is important in developing strategies aimed at promoting innovation. Jack Sprat’s Restaurant being in a competitive market segment developed a strategy of specializing in healthy foods and this is what gave it that competitive edge. Creating a culture that ensures the different abilities displayed by entrepreneurs or innovators are included can be challenging. Generally, innovation is driven by a motivated and goal oriented approach to operations (Drucker 2007 p 23). A highly goal driven culture that is permissive of calculated risk taking and creativity is important in propagating innovation. The culture should be permissive of research and should ensure the integration of individual goals and organisational goals thus development of a platform for innovators to develop their skills and meet their goals while addressing the needs of the organisation. It has been clearly laid out that the culture that an organisation adopts affects the nature of innovation in that organisation. One key area that a culture can impact on an organisation is propensity for risk taking. Some cultures permit taking risks while others are fearful of failure. This has an impact on the levels of innovation that the culture will permit in the organisation. A culture that is more permissive of risk taking promotes innovation while the reverse can be said of a culture that is conscious of failure. It is worth noting that as much as risk taking is important to innovation the risk taken should be calculated or else innovation will be a liability. 3.2 Operational Environmental The main reason as to why innovative and entrepreneurial activities are given so much emphasis lies in the fact that they play a role in the development of business process that ensure an organisation keeps in touch with the nature and needs of the environment it operates in (Stern, Coe, Allan & Dale 2004 p 43). The micro environment and the macro environment do change and sometime they do change considerably (Kish 2004 p 112). Organisations that fail to adapt to changes in the macro environment or fail to acknowledge changes in its micro environment are doomed and so is an innovative process that does not put into consideration the role played by the operational environment. Jack Sprat’s Restaurant is a healthy foods restaurant, and this puts it in an adaptive mode to the current situation in the environment in which there is a health crisis and thus health conscious individuals tend to be attracted to the restaurant. The nature of the operational environment especially changes in its variables is the main input in any innovative process for an organisation. Innovative processes that lead to outputs that are not relevant to the nature of the operational environment are a waste of organizational resources. Organisations that have diverse innovative skills may find it difficult to ensure their employees maintain focus on achievement of set goals (Coulter 2001 p 51). This multiplicity can be put into good use if it can be focused on specific goals; having a good understanding of the nature of the operational environment and what is expected of the organisation if it is to effectively operate is a step to developing common goals in innovation. A look at the nature and the process of innovation shows that there is no way innovation can happen without information. Availability of information and robust information systems are all important to the process of innovation. Any organisation that value innovation must ensure that information on trends in innovation, nature of the operational environment and what is desired of its operations is available. Chris had gathered the relevant information prior to the launch of his business and had even consulted specialists and consultants to aid in his research and decisions of the strategy to use. Innovation is driven by motivation and the knowledge that there are many other innovative processes being carried on elsewhere is important in motivation (Bessant & Tidd 2007 p 138). Moreover, it is for the good of the entrepreneurs if they are aware of general trends in innovation and therefore what is expected of their processes or products if they are to be used to gain competitive advantage over other players. Innovation in the current environment requires technical information and this can only be made possible if an organisation implements a robust information system. An organisation that is committed to innovation must have system for collecting information and analysing it. This would provide the entrepreneurs with the rooms and tools (information) required to be innovative. To appreciate the role played by conformance to operational environment in innovation one has to just have a look at Jack Sprat‘s Restaurant. In developing the one of the largest healthy foods restaurants, Chris put into consideration the level of development of the restaurant industry, health consciousness of the modern society and the fact that this area had not been explored. The operational environment is important to innovation due to the role it plays in ensuring that change are incorporated in approaches that an organisation adopts. However, changes in the nature of the internal operational environment can lead to problems. Changes caused by innovative activities and those that innovative activities seek to address have a bearing on how well innovative processes are carried out. An innovation is a change process that seeks to better a process or end products. Organisations are made up of people who develop systems of working and tend to resist changes in the systems that they have developed. Proper management practices require that any change process be carried out with the aid of change management practices to minimise the negative effects of change which have the ability to lead to failure of established organisations. 3.3 Organisational Resources To get any returns one must be willing to invest and take risks. This philosophy is applicable to nearly all business processes but its relevance is brought out clearly in innovation. Innovation is complicated and requires risk taking and organisational commitment to take root. A truly innovative organisation ensures continuous innovation in all areas of operations as seen in fig. 1 which depicts the effects of entrepreneurial activities on organisational processes. Innovation is organisation wide and being a process organisational resource must be channelled towards its support. Information resources must be supportive of the information and communication needs of an innovative process. Innovation in the current information age requires high level of relevance to issues that are effecting business organisation. Though experience is of importance in innovation, organisation should not give it more or less weight compared to professional qualification (Covey 2004 p 72). Organisations should enrol the best and ensure their employees are continuously informed on development in the business world by professional education, attending seminars and encouraging a reading culture. This is seen in the manner in which Chris conducted extensive research prior to the launch of his business. Most innovative processes are a result of well coordinated team work. Team approaches and individual approaches are all important in innovation and these should be appreciated by organisations seeking to implement innovative approaches. Teams are only as effective as their formulation and management and all organizational leaders must be knowledgeable and be appreciative of the principles of team management and team building. By including his former college mates in the venture, Chris promoted team work which was one the factors that led to the success of his venture. Innovative approaches are often developed on a platform which may range from education to technology; the best approach is to implement a myriad of platforms (Barrow & Brown 2002 p 114). Technology is a key determinant of the nature of the operational environment in modern times and any innovative process that does not put this into consideration is likely to be irrelevant to the nature of the operational environment. Employing technology that is not only relevant to innovation but also to the needs of an organization is important (Ulijn, Drillon & Lasch 2007 p 105). Keeping in touch with changes to ensure efficiency in innovation is also important and should be ensured. Innovative organisations treat innovation as an organisational process that requires resources and this should be the case for in the real sense innovation is a key organisational process that may even have a bearing on the survival of an organisation especially in it faces stiff competition. Resource allocation to innovation and its development is important as can be seen in Jack Sprat’s case. With such commitment to innovation it does not come as a surprise that most people consider it the most innovative enterprise in the country. The Jack Sprat’s example clearly shows that any organisation that seeks to employ innovation must be ready to commit its resource and expertise to entrepreneurship. This is a key reason as to why many organisations are fearful of innovation. The cost of innovation can have a great bearing on organisational budgetary allocations. Moreover, some innovative activities lead to benefits that are not quantifiable thus organisations may feel the cost cannot be justified. However, well implemented innovative approaches have benefits that override the costs and ensure the stability of organisations and their reputation in the market and industry segments that they operated in. These are features or benefits that are important to any organisation in segmenting their position in the industry and market segment that they operate in. Moreover, such benefits have no price tags and are therefore a competitive advantage over other players. 3.4 Market Business entities are in place to address the needs of the market. The market in general contribute a great deal to the development of business entities and if an organisation is to develop strategies that will ensure it succeeds in the business segment that it operates in then relevance to the needs of the market is mandatory (Birn 2004 p 83). Jack Sprat’s Restaurant developed strategies that would ensure its success in the healthy foods market segment by conducting a conclusive research of other similar restaurants, finding their faults and correcting them in the application of the restaurant. This is the truth that all organisations must accept and put in mind in developing their strategies. Innovation is definitive of organisational processes and must therefore put into consideration the nature of the market (Dewberry 2004 p 24). In most cases the market is made up of people who have different perception and are affected by different variables and therefore the nature of the market and its needs will always be of key concern to a functional business entity. Irrespective of the measures that have been put in place, knowing the exact nature of the market and the dynamics that affect the needs of the market and its expectation of entities of the industry are all important and must be determined accurately for proper innovation (Deakins & Freel 2005 p 45). This calls for a well developed market research that must implement multiple avenues. 3.5 Areas of Development Failure in any of the four key areas in management of innovation and entrepreneurial activities in an organisation will more than likely lead to failure of the approach. Innovation is associated with an increase in risks taking, resource use, need for proper and objective management, relevance to the needs of the market as shown by the market and the nature of the operational environment. All these aspects that are required of innovation including organisational culture are principles of total quality management. This should be looked at further for there is high correlation between innovation and total quality management to determine the exact nature of their relationship determined. Secondly, innovation is associated with increase in risk taking (Birley & Muzyka 2000 p 3). A look at the nature of the current environment shows high levels of volatility which makes it unsuitable for organisations to implement high risk processes. On the contrary, the need for innovation is highly defined in times of hardship. How then can organisations ensure they employ innovation in the current unbecoming operational environment? This is a key area that must be researched on fully for it plays a large part in the practical application of entrepreneurship and innovation. 3. Recommendations Though the actual manner in which organisations develop their innovative processes vary from one organisation to the other, no one can deny that innovation plays a part in development of robust organisational processes. Like all success stories, to fully implement innovative approaches and reap from them there is need for continuity and immense resource allocation. A poorly implemented innovation process is useless and should Jack Sprat’s Restaurant decide to employ innovations then all guidelines and principles must be followed to the dot. It is upon Jack Sprat’s Restaurant to assess their capabilities and determine according to fig.2, what is desirable by the users, what is possible with the available resource and what is viable in the market before engaging in any innovative process. It is worth noting that innovation and entrepreneurship are strategic approaches and objectivity is important in attaining any set goals. Objectivity which is characterised by setting goals, proper assessment and development of realistic strategies should characterise any innovative process. In assessing the impact of strategies employed their effect as change agents should be determined and proper change management strategies developed to ensure the negative effect are kept at a low. Though innovation and entrepreneurial activities can be quite costly, Jack Sprat’s Restaurant must realise that success resulting from innovation is not directly related to the amount allocated to innovative approaches. Using large amounts of finances to promote innovation and entrepreneurship does not guarantee Jack Sprat’s Restaurant that it will be successful. All resources and processes must be designed in a manner that ensures efficiency in innovation and finances should be used as facilitation rather than drivers to processes. Though innovation and entrepreneurship as business concepts are demanding in their application in practical business environment, Jack Sprat’s Restaurant should be motivated by benefits that come with well formulated and implemented innovative approaches. 4. Appendix Relationship between Entrepreneurship, Innovation and Organisational Activities Fig 1. What is Required of Innovation Fig. 2 Bibliography Barrow, C & Brown R 2002, Principles of small business, London, Thompson Business Press. Beaver G 2002, Small business, entrepreneurship and enterprise development, Upper Saddle Valley, NY, Prentice Hall. Bessant, J & Tidd, J 2007, Innovation and Entrepreneurship, New York, NY, John Wiley and Sons. Birley, S & Muzyka, D 2000, Mastering Entrepreneurship, Edinburgh, Financial Times/ Prentice Hall. 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