It is “recognize that organizational culture and leadership are intertwined” (Mann & Gotz, 2005, p.68). Dorsey used his management skills to set the organizational structure and culture by communicating his vision, not only the organizations goals but goals for those in the organization. Fanning allowed those around him to set the organizational structure which led to everyone working in different directions. Dorsey’s prior experience was a benefit to him while Fanning was new to technology management. “Most organizations are created by one individual whose vision is the driving force” (Mann & Gotz, 2005, p.69). The leader of the organization needs to be the one to define the organization’s vision.
“In the entrepreneurial stage, the emphasis is on survival, and whatever structure exists tends to be organic” (Mann & Gotz, 2005, p.289). Any entrepreneur needs to have good management for their organization so their innovation can survive and grow. They either need to be the one with the management skills or need to ensure they hire the right management team. Defining the organizational structure and culture are important as it helps with competitive advantage, manages diversity, and increases efficiency as well as promotes the ability to be innovative (Jones, 2013, p.11).
While Napstar’s premise to share music files was great for its customer base, its legality was under question from the start. Fanning “felt like that once he built something really good” and it seen as cool than the music artists would buy in and the legality issue would be solved (Nieva, 2013). Napstar was infringing on copyrights of music artists which called into question its ethical standards. Since Napstar did not have the permission of the music artists to distribute their work, the music artists exercised their legal rights, given to them under the copyright of their music, to ask for protection via the court system (Shane, 2013, p.207). This affected Napstar’s reputation since their “integrity had been questioned in public court” (Nieva, 2013).
Square created a reputation of providing their device for free and created a pricing structure that makes their product affordable to small businesses. The percentage of sales charged is smaller than most card service companies charge businesses to use their services. Dorsey felt it was more important that the company has a reputation that promotes customer service. “When value of a new product’s attributes is unknown, customers often look to the reputation of the seller as an indication of that value” (Shane, 2013, p.231).
Napstar’s start caused them to become “a company of litigation, and not an innovative, disruptive technology company” (Nieva, 2013). Their reputation was called into question as society began to realize they were not being fair to music artists by providing their music for free without their permission. “Ethics and social responsibility have come into play in increasing roles in recent years in shaping organizational strategy and hence organizational design” (Mann & Gotz, 2005, p.293) Square’s “goal is not necessarily to supplant the tools we use on a daily basis, but to make them more useful” (Hamburger, 2013). Square thought only about servicing their customers and not the overall profit they might gain.
Reputation is important for survival of companies and “an organization is held in high regard and trusted by other parties because of its fair and honest business practices” (Jones, 2013, p.71). How an organization’s leader manages their culture relating to ethics, social responsibilities and values translates to how their reputation with society is perceived. Without a good reputation, an organization will have a limited life cycle.