The Nature of the Gap

The Nature of the Gap

DOI: 10.4018/978-1-7998-5685-6.ch005
(Individual Chapters)
No Current Special Offers


This chapter describes the gap between the complete firm and the TSU and the challenge it presents to the enterprise and to the entrepreneur/owner. First, the different aspects of the gap are presented. The description of the required changes follows. This includes the establishment and growth of missing units/activities in the TSU required to make it a complete firm along with the demands this change places on the entrepreneurs/owners. The issue of the required learning relating to the required accumulation of managerial capabilities is presented. This leads to a discussion of the potential crisis that may result from the need to address the new demands. Some potential risks for the entrepreneur are presented regarding the change.
Chapter Preview

The Nature Of The Gap

In the chapters above we described each type, the TSU and the Complete Firm. In this chapter we shall describe the gap between the TSU and the Complete firm, from all the aspects described above. The difficulties in covering the gap and the actions required to do so. As in most fields of management, here as well there are several possible solutions for the difficulty in overcoming the gap. We shall focus on the main solutions and the reasons for selection of each one, in the following chapter.

For clarity purposes we shall first define what is not the gap we are discussing here. There are different gaps in the value creation process of a TSU. There can be a gap between each of the development stages described below as TRLs. There can be a gap between a small entrepreneurial group working on an idea in their free time, and a case in which some people are being employed and paid for their work. Each of these gaps, can be crucial for the TSU to cross successfully, and TSU that fail to do that – perish, or become something else.

These gaps in the value creation, R&D process, are not the gap we refer to here. Our gap as mentioned above and further described below is not financial in nature. It is also not a question of size and additional tasks, but rather a radical shift in the concept of the firm and its culture.

It is important to remember that the issue of the gap, and the differences in the culture, as well as the organizational structure of the complete firm and the TSU, influence the atmosphere in which the employees and the entrepreneurs operate. The move from one to the other results, among other changes, also in changes to the organizational culture, and the work environment, and this is not always a welcome change to the entrepreneurs.

It is important to recall at this point, that the “perpetual / repetitive” entrepreneur is in fact a person who likes the special work environment of the TSU and thus prefers to move from one TSU to another, as the first one matures into a complete firm. One needs to take that into account, that while the process may not be easy to the employees who may also wish to move to another TSU and continue to work at a similar environment, it is more problematic to the entrepreneurs, who in many cases must lead the change. We can all recall that in the movie “The Intern” with Robert De-Niro and Anne Hataway, the manager of the successful SU, was pressured into selecting an experience manager to take over the firm that she had founded by her board, as they felt that the firm required a more experienced manager to face the challenges of its growth and expansion. While the firm in the movie was already a complete firm it was in the process of growing to a more mature level and the main challenge was making sure it could remain efficient and provide the required service to the clients.

There are many ways to describe the development process all the way from the early idea to the final product sold on the market. One of the more widely accepted is the Technology Readiness Level (TRL) of the EU1.

The TRL gives each stage a definition regarding its progress towards the market. Please see below the quote from the EU document: “

Key Terms in this Chapter

Perpetual/Repetitive Entrepreneur: An entrepreneur who like the entrepreneurial stage so much that each time the TSU matures, the entrepreneur leaves the enterprise in favor of starting another one.

Value Creation Process: For the purpose of our discussion this is the process in which by advancing along the steps of the development chain from basic technology to finished product in the market, a TSU increases its value for investment.

Complete Chapter List

Search this Book: