Collective Entrepreneurship: Meaning, Characteristics & Examples – The past few years indicate that teams are what generate business opportunities. The global entrepreneurial climate is beginning to value collective entrepreneurship more than heroic individual enterprise.

Throughout the entrepreneurial process, collective dimensions take precedence over individual dimensions, and the percentage of new companies founded by teams is steadily rising.

Through this article, we are discussing:

The Emergence of Collective Entrepreneurship

There isn’t much discussion of collective entrepreneurship today, but it needs to be.  Particularly given that it can overcome some of the difficulties that the majority of entrepreneurs or entrepreneurial ventures today experience. For issues like resource limitation, intense competition, and economic instability.

When the entrepreneur is viewed as a single person starting his own company, entrepreneurial projects become increasingly numerous and complex. Today’s business opportunities are the result of a collection of people joining forces to launch a company. Because of this, substantial research has been conducted recently to better understand the emergence of this new entrepreneurial phenomenon.

The conditions for the success of this collective component are the common purpose that must prevail among the various entrepreneurs to explore the potential of an entrepreneurial initiative. Cooperation is related to the interaction and cooperation that entrepreneurs require to exchange values. The collective productivity produced by teamwork proves to be more significant than that generated by a solidarity entrepreneur.

The different entrepreneurs must respect communication, which is dependent on the level of trust created between members as well as the level of efficiency of its functioning and complementarity, ownership, and shared responsibility. These conditions must be fulfilled for collective entrepreneurship to be established.

These collective entrepreneurship definitions are separated into two parts

1. Collective entrepreneurship is the cooperative attempt of an organization’s internal members. (More likely than Corporate Entrepreneurship)
2. Collective entrepreneurship extends beyond internal limits and forms formal collaborations with outside parties (External Parties) under various conditions. 

Collective Entrepreneurship within Internal Organization

We mostly consider two types of organizational structures in management.

1. Organic Structures

Collective entrepreneurship is simple to execute within organic structures. Because this organizational structure allows us to easily cooperate with cross-functional and cross-sectional organizational members. Organization members communicate with one another much more frequently.

For example, organizations have a problem with labor turnover. Currently, it is 18% and the organization needs to decrease this to 6%. Then all the members in the organizational decision-making group (Marketing, HRM, R & D, and Finance) discuss, proposing solutions, helping to implement decisions, and analyzing the outcomes regarding this problem.

2. Mechanistic Structures

These are strongly formalized and centralized structures. Employees are typically provided with detailed job descriptions outlining their tasks and responsibilities, and communication is typically done through formal channels. Collective entrepreneurship is challenging to implement within these organizations, but it is possible. We can now see mechanistic structures changing into organic structures.

For example, organizations have a problem with labor turnover. Currently, it is 20% and the organization needs to decrease this to 8%. In a mechanistic structure organization, this problem needs to be fixed by the Organization’s HRM manager and HRM management team. Other members of the organization were not involved for solve this problem.

Read – Green Entrepreneurship

Definition of Collective Entrepreneurship

Collective entrepreneurship, in our opinion, goes beyond corporate entrepreneurship. It is also a partnership with third parties under certain conditions. Because collective entrepreneurship is the synergy that emerges from a collective and pushes it beyond its current state by seizing opportunities regardless of the resources at its disposal.

Collective entrepreneurship is the practice of a group of individuals engaging in entrepreneurial endeavors. This group of individuals could be one organization or several organizations with different capacities and business scopes.  Organizations work with outside partners to conduct entrepreneurial activities. This collaboration can involve sharing resources, company values, competitive advantages, or entrepreneurial expertise.

For example, we are creating tech-based platforms for farmers by collaborating with different skilled people. One knows agriculture, one knows coding, one knows networking, and one has knowledge about entrepreneurship. As a part of our business implementation, our company decided to collaborate with external parties like farmer training organizations, farming equipment supplying organizations, and fertilizer supplying organizations. So we collaborated with those organizations with collective agreements to implement our business effectively.

Today, it’s hard for a single individual can become a hero. It is an outmoded concept in contemporary business or entrepreneurship. (Heroic concept.) This occurs as a consequence of the world’s implementation of shared economy shared practices. Nowadays, the world is adopting collectivism. Because when challenges become more severe, people seek collective approaches and attempt to implement collective solutions. That is also a reason why collective business is popular nowadays. For example, people identified certain circumstances that happen in the environment and one person’s identifying opportunities, one creating a solution, one perfume a business venture, one investing money on it, taking the risk to build a venture like that collective of people using their capabilities, capacities to create a venture.

Key Points about Collective Entrepreneurship

• A new term that combines business risk and capital investment with collective action’s societal ideals.
• This involves people doing business together and sharing control.
• Collective entrepreneurship can be used to diversify risks and raise funds.
• Individual actors’ capital limitations are addressed, and capital standards are increased.
• In response to the current economic scenario.
• It gives more access to new opportunities, resources, and competitive advantages.
• Collective must not only describe a scenario in which two or more people work together.
• Entrepreneurs must not only be extremely successful, self-employed individuals.
• Collective entrepreneurship is a method of realizing social capital’s intrinsic potential. The trigger is convention.
• Collective entrepreneurship combines business risk and capital investment with collective action’s societal ideals. It is an event that occurs when collective action strives for the economic and social betterment of a community by transforming social norms, values, and networks for an enterprise to produce goods or services.

Read – Modern Entrepreneurship

Characteristics in Collective Entrepreneurship

Collective Entrepreneurship Helps to Overcome Individual Limitations

Collective entrepreneurship considers that people have limitations that can be overcome by working together. As a result, everyone in the group is responsible for achieving success, making the correct decisions, and putting those decisions into action.

This can take as a major core value of collective entrepreneurship. It’s more than working as a team rather than working as an individual.

Collective Entrepreneurship Increase Empowerment.

Employee empowerment in an organization refers to how the organization’s overall practices and culture support transferring responsibility, control, and authority to employees. It means involving workers in decision-making activities such as open discussions, sharing, and collaborative working rather than just in jobs or tasks.

In general, organizational empowerment improves the work environment by constantly providing employees with chances to better their performance, coaching them on how to improve their skills, and allowing continuous feedback on their contributions.

Not only employee empowerment, but collective entrepreneurship can also empower business partners, consumers, and society as well.

Read – Technopreneurship

Unaccepting Heroic Concept

A hero is someone who is widely admired and trusted in moments of crisis. We can quickly identify these people because we depend upon people who voluntarily sacrifice themselves for the greater good.

Workplace Heroes overstretch themselves or allow themselves to be overstretched, taking action while unnecessarily generating the mindset of a ‘Crisis Hero’ rather than a ‘Preventative Hero.’

Collective entrepreneurship rejects heroic viewpoints, dictatorship, and everything a person knows. It acknowledges that we can do things as a team, that we know more things as a team, and that we make collective choices.

Read – Entrepreneurship Education

Collective Entrepreneurship Works With Every Aspect Of Business Process

Collective entrepreneurship is involved in all aspects of the company process. It is involved in the identification of opportunities, market research, competitor analysis, team building, new product development, resource management, and all other aspects of the business.

If the organization has a vision and plan for how to use its limited resources then we can use collective entrepreneurship in every aspect of our business process.

Can be Implemented in any Business Situation or Types

Collective entrepreneurship can implement in any situation. It can implement for new ventures or established ventures. It can implement in private organizations as well as government entities. It can implement in small-scale, medium scale as well as large and multinational companies as well.

It implies that if a company can focus on a collective approach, it can execute in any situation of the business life cycle.

Read – Creativity in Entrepreneurship

Collective Entrepreneurship Is a New Business Approach

Collective entrepreneurship is a novel strategy for business. It approaches involving all members in decision-making as well as company developments. It is more likely to foster a collaborative environment within the company.  It is trending day by day.

Can Practice Inside And Outside Of The Organization

Collective business can be practiced both within and outside of organizations. Connecting government business support groups, for example, to a single platform where entrepreneurs can get all of their requirements in one location. Such as company registration, business taxation, obtaining a patent, export opportunities, and many other things.

Collective entrepreneurship can connect business processes that are part of various groups.

Collective Entrepreneurship Is A Better Approach For Resource Management

Collective entrepreneurship is good for resource management or solution for resource limitations. Organizations can share a common resource pool among others. These resources can be material things and non-material things like human skills and experience.

But organizations need to create a collective agreement that how they use and share those resource pools.

Collective Agreements are Part of Collective Entrepreneurship

Collective entrepreneurship needs collective agreement. It includes how resources were shared, how the business process will run, how profits will be distributed, and terms and conditions among organizations.

Collective Entrepreneurship Helps To Reduce the Cost

Collective entrepreneurship helps to reduce costs. As an organization, we don’t need to do all the stuff in our business process. We can go with business celebrations by implementing collective entrepreneurship. So we can reduce our costs by using business collaborations. For example, we are a food and beverage business and we don’t have a lab to test our product’s specifications and quality. So we can collaborate with an organization that has lab facilities.

Examples of Collective Entrepreneurship

Here we are describing an example of business models and real-world examples of those models in collective entrepreneurship.

Family-owned firms

A family business is owned, operated, and managed by two or more family members. These individuals must be related by blood, marriage, or adoption. A family-owned company must have the following characteristics.

A family business is extremely important to a country’s economy. It is one of the oldest economic systems, making a significant addition to a country’s GNP, total export, and total employment.

• Walmart is a Walton family business established in the USA.
• Tata group is a Tata family business established in India.
• BMW Group is a Quandt family business established in Germany.
• Toyota group is a Toyota family business established in Japan.

Patron owned cooperatives

Cooperatives are member-owned and democratically controlled companies that distribute profits according to an equitable patronage structure.

Most cooperatives follow the seven globally recognized cooperative principles in addition to ownership, control, and patronage-based profit sharing.

However, given the rapidly changing nature of the economy, the increasing interest in worker cooperatives, the consistent growth of employee ownership, and the structural benefits offered by worker cooperatives, the worker cooperative sector is only likely to grow in the coming years. Patron-owned cooperatives are thus instances of collective entrepreneurship.

Clusters and industrial districts

Simply stated, industry clusters are regional concentrations of businesses that are related. Companies, suppliers, and service providers, as well as government organizations and other institutions that provide education, information, research, and technical assistance to a regional economy, make up clusters.

Clusters are defined as a network of economic relationships that give related firms in a specific sector a competitive advantage. This advantage is then used to entice similar industries and their suppliers to expand or relocate to an area.

Franchise Business Model

A franchise is a license granted by the party that owns the brand (franchisor) to an individual or company (franchisee) to access their business proprietary knowledge, processes, and trademarks, as well as sell products or provide services under their name within a territory or region.

Franchisees own and operate more than 80% of their restaurants globally. That is, even though those restaurants use the McDonald’s brand, serve McDonald’s products, and follow McDonald’s standards, they are not owned or managed by McDonald’s.

The franchise company model can also be used to demonstrate collective entrepreneurship.

Conclusion

Now you know day by day world values a collective approach more than a heroic approach. So day by day importance of collective entrepreneurship is increasing.

In this article we discussed the emergence of collective entrepreneurship then we defined what collective entrepreneurship is. Those definitions can be separated into two parts. Those parts are 1. Collective entrepreneurship is the same as corporate entrepreneurship and 2. Collective entrepreneurship goes beyond corporate entrepreneurship.

Then we discussed: collective entrepreneurship in internal organizations and the characteristics of collective entrepreneurship. Finally we discussed how collective entrepreneurship can see in today’s real business world and examples of those collective entrepreneurship models. 

Write down your experience and overviews of collective entrepreneurship in our comment section.

---