The following extract is taken from an essay produced on the topic of Entrepreneurship Entrepreneurship, Risk & Uncertainty
An important dimension for understanding the practice of entrepreneurship, at a firm level, has to do with the presence and play of risk (Williams and Tse, 1995). The process of pursuing a specific idea is highly conditioned with uncertainty for the outcomes of the efforts (Claves-Corte, et. al., 2007). As we have seen from the previous discussion, at a firm level entrepreneurship has to do with the allocation and use of resources. Also, with potential schemes of recognition and reward for those that have produced successful outcomes. However, perceptions of risk can be highly influential for whether individuals become motivated in pursing an opportunity in the organisation. Hitt, et. al., (2001) argue that “Uncertainty can be used to your benefit if you create and employ an entrepreneurial mindset-a way of thinking about your business that captures the benefits of uncertainty” (p.479). Employees can be hesitant in displaying creativity and innovativeness when the organisation has rigid policies and procedures that does not allow such flexibility. Moreover, when the organisation seeks to punish or place restrictions on for the individual who might fail to achieve the set of objectives
According to the argument by Hitt et. al. (2001) the way in which uncertainty is perceived or dealt with is subject to the organisation by its own members. Uncertainty can be perceived as a positive opportunity, but also, as a damaging one. In this context, how an organisation deals with the element of uncertainty and risk becomes parts of the beliefs and values of its leaders/senior managers who are able to influence such perceptions. The culture and processes, by which operations are managed, within the structure of the organisation, can influence where practices of entrepreneurship are fostered or hindered. In this sense, organisational culture is highly significant for appreciating the development of entrepreneurship, especially at a strategic level.