Why Tight Controls Stifle Creativity, Innovation and Entrepreneurship?
Creativity, innovation and entrepreneurship are core drivers of success of any organisation (Butler 2012). Successful businesses have managers that give a chance of improvement to these factors. However, in some organisations tight controls in business practice stifle these factors in many ways. This essay will therefore examine why tight controls stifle creativity, innovation and entrepreneurship both from managerial and structural point of view.
Tight controls refer to procedures, codes of conduct or management practices that are followed by certain organisation without allowed deviation from them. An employee of such company is expected to follow the company’s blue print practices so as to fulfil business objectives. In business, creativity is defined as a non-formal problem solving procedure that generates new business ideas and opportunities that are helpful for an organisation to meet their goals (Burns 2013). The ideas are original in nature and give a business competitive advantage over other businesses.
Innovation refers to the act of creating more effective processes, ideas or products that increase the likelihood of business success (Butler 2012). An innovative business creates efficient processes of better performance and productivity. Entrepreneurship is an activity of producing economic goods and services by an individual or a group of people with an aim of earning profit. Entrepreneurs should be creative and innovative in their business procedures to maximise profit in a competitive environment (Burns 2013).
Tight control on efficiency is a drawback of creativity, innovation and entrepreneurship. In a highly efficient organisation, there are no slack resources available. The jobs are strictly defined and employees are forced to conform to the requirements. This type of environment leads to a high degree of efficiency but causes a bad entrepreneurial and innovation ground. This is because employees are known to be more innovative when they have a certain degree of autonomy in their work. This gives the employee a chance to borrow some time, resource, expertise, equipment and research material so that they can engage in new projects and realise innovative ideas. In a tightly controlled environment employees do not have a chance to implement their ideas or present them to anyone for implementation.
Tight controls enforce standard procedures, rules and regulations. This practice leads to missed opportunities in entrepreneurship exploitation and innovation. In an entrepreneurial organisation, rules need to be flexible and rigid only in definite circumstances (Burns 2013). However, as situation changes with time the rules should be changed as well to take care of the prevailing circumstances. Adopting a culture of strict regulation does not promote innovation and only makes the employees practice according to those regulations. An employee who has some innovative entrepreneurial idea will not promote it for fear of being punished according to the rules of the organisation.
Tight controls prompt employees to avoid risks. Avoiding risks is a way of missing opportunities that exist in business environment. Entrepreneurial and innovative organisation fosters its development and that of its employee through risk taking. Tight controls inhibit entrepreneurial assessment of an innovative idea by an employee of an organisation. Successful organisations advocate for the evaluation of a risky innovative venture and if it matches the goals of the organisation then it is implemented in stages while at the same time understanding the risks as it progresses. Mechanisms are put in place early to quit a venture if the organisation is not able to handle the risks (Down 2013).
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Tight controls on budget stifle creativity and innovation. Strict budgets do not have a room to accommodate an expenditure that may come by in the course of an accounting period. In case there is an innovation that requires funding or further research, the budget cannot be accommodated. In a successful business organisation budgets should be made with an allowance to cover emerging business activities that are profitable to the organisation (Burns 2013). This budget should also be able to cover rewards of the employees responsible for the innovative and creative ideas.
Tight controls advocate management functionality with rigid job descriptions. This practice stifles creativity, which often requires a holistic approach when dealing with a particular problem. Creativity and entrepreneurial skills are discouraged by standard procedures which an employee is required to strictly follow when handling tasks. Successive entrepreneurial organisation usually creates a multidisciplinary team to find out various avenues for handling a task and determine the one that best fits the organisation goals. This approach is essential for breaking barriers to innovation and encourages creativity during problem solving. Creativity and innovation require a flexible job description so that an employee is able to input his or her own ideas provided the task meets the organisation goals. Evaluation should be based on the end product rather than job description (Down 2013).
Tight controls advocate for long-term plans and control against them. In a dynamic business environment, this practice hinders creativity, innovation and entrepreneurship in an organisation. If a manager discovers a new business venture, they will not be able to implement it since there are already control structures that tie them to the original plan. It also prevents employees from being vigilant of innovation and creativity. An organisation needs to learn the changing entrepreneurial environment in order to maintain competitive advantage in the market. In addition to this, the organisation plans should be flexible enough to incorporate new creative ideas, and if possible the plans should be changed completely as long as they do not deviate from the organisation goals (Mohanty 2005).
In tight controls system, decisions are based on past experience. If the organisation’s products belong a category of products that are dynamic and changeable with time, e.g. the electronic and technology related products, then, past experience is not a proper predictor of future. Definitely, the future will require new entrepreneurial skills, creativity and innovation. And if decisions are based on past experience then it will not be possible to incorporate new ideas to handle the current situation (Burns 2013). An entrepreneurial organisation will make a decision depending not only on the past experience but also on the present circumstances surrounding a situation. This way, it will be possible to incorporate creativity invention and innovation.
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Tight controls system promotes individuals who conform. Individuals who conform are employees who are able to strictly follow the organisations guidelines. This type of practice in an organisation will keep creative, innovative and entrepreneurial employees away from promotion, and eventually erode their ideas. Employees will not be able to implement innovative ideas for fear of failure to conform to the guidelines and eventual lack of promotion. Consequently, this system will stifle creativity among employees as they work towards getting promotion and rewards. Ideas that are geared towards fulfilment of organisation’s goals need to be rewarded as well as those who accomplish them (Drummond 2009). This way, everybody in the organisation will be innovative and creative for the sake of the organisation’s success.
Tight controls systems create structural barriers as another factor that stifles innovation, creativity and entrepreneurial skills. These natural barriers are discussed below.
The first one is too many policies and procedures. This kind of structural barrier creates complex approval procedures, performance criteria, unnecessary mass documentation and reliance on existing rules that are not based on any evidence. This discourages fostering of creative ideas and innovation by employees due to many cumbersome procedures and policies (Mohanty 2005). Successive organisations eliminate bureaucratic procedures that hinder communication of ideas.
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The second structural barrier created by tight controls system is ill-defined culture. This is a culture that is characterised by lack of congruence, consensus over priorities and values that contradict with innovative, creative and entrepreneurial culture (Burns 2013). This culture stifles creativity among employees of an organisation and a change becomes paramount to encourage employees search and foster innovative entrepreneurial ideas.
The third structural barrier created by tight controls system is bad people’s character. This character includes but is not limited to protection of own sphere of activity, inappropriate skills and talents and fear of failure (Drummond 2009). Employees will fail to foster creativity and innovation for fear of losing their job, for example, in technological sphere. Others may not be ready for change while some employees are not entrepreneurial due to lack of appropriate skills that are necessary for their jobs.
Another structural barrier created by tight controls is inappropriate systems. These systems are characterised by strict budgets, rigid and formal planning procedures and inappropriate reward systems (Butler 2012). These systems create a barrier between employees on the one side and innovation, creativity and entrepreneurship on the other. An employee, who knows that he or she will not be rewarded for his or her ideas, will not implement the idea in the business and may even sell it to a competing business. As said before, budgets should be designed in away to cover unexpected profit venture and compensate an employee.
In summary, a successful business organisation needs to put in place favourable managerial and structural strategies to attract creative, inventive and entrepreneurial ideas from employees.