AN ASSESSMENT OF THE CORPORATE ENTREPRENEURIAL …
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AN ASSESSMENT OF THE CORPORATE ENTREPRENEURIAL CLIMATE WITHIN A DIVISION OF A LEADING SOUTH AFRICAN AUTOMOTIVE RETAIL GROUP by MARK ROUSE Submitted in partial fulfilment of the requirements for the degree of MAGISTER COMMERCII In BUSINESS MANAGEMENT in the FACULTY OF MANAGEMENT at the UNIVERSITY OF JOHANNESBURG SUPERVISOR: DR. D. GROENEWALD October 2012
Transcript of AN ASSESSMENT OF THE CORPORATE ENTREPRENEURIAL …
AN ASSESSMENT OF THE CORPORATE
ENTREPRENEURIAL CLIMATE WITHIN A DIVISION OF A
LEADING SOUTH AFRICAN AUTOMOTIVE RETAIL GROUP
by
MARK ROUSE
Submitted in partial fulfilment of the requirements for the degree of
MAGISTER COMMERCII
In
BUSINESS MANAGEMENT
in the
FACULTY OF MANAGEMENT
at the
UNIVERSITY OF JOHANNESBURG
SUPERVISOR: DR. D. GROENEWALD
October 2012
i
ABSTRACT
AN ASSESSMENT OF THE CORPORATE ENTREPRENEURIAL CLIMATE OF A LEADING SOUTH AFRICAN AUTOMOTIVE
RETAIL GROUP
By
MARK ROUSE
Supervisor: Dr. D. Groenewald
Department: Business Management
Degree: Masters of Commerce
Corporate Entrepreneurship is often described as a process that goes on inside an existing
organisation and which may lead to new business ventures, the development of new
products, services, or processes, and the renewal of strategies and competitive postures. As
such, it can be seen as the sum of an organisation’s innovation, venturing, and renewal
efforts.
Corporate Entrepreneurship can be regarded as the innovation of products, services and
processes and the formation of new business enterprises are crucially important to every
industry and economy. Innovation and new business development can be initiated by
independent individuals or by existing enterprises. The latter is referred to as Corporate
Entrepreneurship, which is ever more considered as a valuable instrument for rejuvenating
and revitalising existing companies.
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It is brought into practice as a tool for business development, revenue growth, and profitability
enhancement and for pioneering the development of new products, services and processes.
With change today being consistently continuous, unpredictable and in some cases abrupt,
failure to anticipate change can and in most cases will result in organisational stagnation.
Corporate Entrepreneurship is a tool that allows organisations to revitalise and rejuvenate a
competitive advantage and simultaneously create new value for customers through
innovation, business development, and renewal. New value creation is only possible through
high levels of entrepreneurial activity.
Imperial Automotive Dealerships division is a leading motor retail division within the Imperial
Automotive group, providing customers with a range of integrated motor vehicle usage
solutions. The South African operations represent passenger, light, medium and heavy
commercial brands and include, motor vehicle finance, insurance and related products and
services. The purpose of this dissertation is to assess the climate of Corporate
Entrepreneurship within the Imperial Automotive Dealerships division. This was achieved by
means of a literature study and a measurement of thirteen constructs related to an
entrepreneurial climate.
The empirical evidence indicates that there are significant statistical differences that exist
between employees in management roles who are appointed to the different departments
within the Dealerships division of Imperial Automotive. The results of the study revealed that
the perceptions of Corporate Entrepreneurship are differed among employees who are
customer facing, that is, the Dealer Principals and Sales Managers to those employees in a
management position who are more operational or financially orientated, such as the
Departmental Managers.
The empirical study affords Imperial Automotive Dealerships division the opportunity to
recognise the results and recommendations and encourage a better entrepreneurial climate.
A clear and committed focus on Corporate Entrepreneurship within the Imperial Automotive
Dealerships division will result in a sustainable creation of value for all stakeholders which
remain central to the automotive business units’ activities.
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ACKNOWLEDGEMENTS
I sincerely want to show my appreciation for the following people, who have assisted and
encouraged me to achieve all thus far:
First and always, for you Lord, because all I need is You!
My supervisor, Dr. Darelle Groenewald for her patience, her guidance and without whom this
dissertation would not have happened had she not been so supportive.
My daughter, Hannah, your patience and understanding for the time sacrificed here far
exceeds your young years; I aim to make it up to you through a better life for us all.
My father, who is with his heavenly father, thank you for the seed of inspiration and self-
determination, your spirit will always be my guide
The organisation and respondents who participated in this research study, thank you for your
interest showed by a wonderful organisation with many wonderful characters within.
To my syndicate members, Ben Britz and Morne Eloff, for all their efforts and motivation and
for their contribution to our assignments.
My employers, Mix Telematics, availing me time and access to resources.
The University of Johannesburg’s Business Management unit for a wonderful degree, time
and commitment to me as a student. Rika, we miss you so much, blessings to a wonderful
lady!
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DECLARATION OF OWN WORK
I, Mark Rouse, student no 802054007 hereby declare that this dissertation is my own unaided
work. Any assistance that I have received has been duly acknowledged in the dissertation. It
is submitted in partial fulfilment of the requirements of Masters of Commerce at the University
of Johannesburg. It has not been submitted before for any degree or examination at this or at
any other university.
Signature Date
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TABLE OF CONTENTS
ABSTRACT
ACKNOWLEDGEMENTS
DECLARATION OF OWN WORK
TABLE OF CONTENTS
LIST OF FIGURES
CHAPTER ONE
INTRODUCTION AND BACKGROUND TO THE STUDY
1.1 INTRODUCTION ............................................................................................................. 1
1.2 LITERATURE REVIEW ................................................................................................... 4
1.2.1 Defining Corporate Entrepreneurship ................................................................. 4
1.2.2 The role and benefits of Corporate Entrepreneurship ......................................... 6
1.2.3 Creating a culture of Corporate Entrepreneurship .............................................. 7
1.2.4 Transformational Change, Innovation and Corporate Entrepreneurship ............. 9
1.2.5 Research conducted in South Africa ................................................................. 11
1.3 THE RESEARCH PROBLEM ........................................................................................ 12
1.4 PURPOSE OF THE STUDY .......................................................................................... 13
1.5 RESEARCH OBJECTIVES ........................................................................................... 13
1.5.1 Primary objective .............................................................................................. 14
1.5.2 Secondary objectives ........................................................................................ 14
1.6 HYPOTHESIS ............................................................................................................... 15
1.7 RESEARCH METHODOLOGY ..................................................................................... 16
1.7.1 Research design ............................................................................................... 16
1.7.2 Sampling ........................................................................................................... 17
1.7.3 Data Collection ................................................................................................. 18
1.7.4 Data Analysis .................................................................................................... 19
1.7.5 Research Ethics ................................................................................................ 19
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1.7.6 Referencing Technique ..................................................................................... 20
1.8 IMPORTANCE AND BENEFITS OF THE STUDY ........................................................ 20
1.9 OUTLINE OF THE STUDY ............................................................................................ 21
CHAPTER TWO
CORPORATE ENTREPRENEURSHIP - A THEORETICAL OVERVIEW
2.1 INTRODUCTION ........................................................................................................... 23
2.2 DEFINITION OF CORPORATE ENTREPRENEURSHIP.............................................. 24
2.3 THE IMPORTANCE OF CORPORATE ENTREPRENEURSHIP .................................. 26
2.4 CORPORATE ENTREPRENEURSHIP CONCEPTUAL MODELS ............................... 29
2.4.1 Important antecedents identified from these models: ....................................... 36
2.5 THE ORIENTATION OF AN ENTREPRENEURIAL ORGANISATION ......................... 38
2.6 CORPORATE ENTREPRENEURSHIP AND INNOVATION ......................................... 40
2.7 ENTREPRENEURIAL CULTURE AND CLIMATE FOR CORPORATE
ENTREPRENEURSHIP ................................................................................................ 41
2.8 CORPORATE ENTREPRENEURSHIP AS A STRATEGY WITHIN THE
ORGANISATION ........................................................................................................... 47
2.9 CONCLUSION .............................................................................................................. 50
CHAPTER THREE
RESEARCH METHODOLOGY AND DESIGN
3.1 INTRODUCTION ........................................................................................................... 52
3.2 RESEARCH METHODOLOGY ..................................................................................... 53
3.2.1 Research design strategy ................................................................................. 53
3.2.2 Purpose of the study ......................................................................................... 53
3.2.3 Time dimension ................................................................................................ 54
3.2.4 Research environment ...................................................................................... 54
3.3 HYPOTHESIS ............................................................................................................... 54
3.3.1 Hypothesis testing ............................................................................................ 55
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3.4 SAMPLING DESIGN ..................................................................................................... 55
3.4.1 Data Collection ................................................................................................. 56
3.4.2 Instrument used to collect the primary data ...................................................... 57
3.4.3 Development of the research instrument .......................................................... 59
3.4.4 Reliability of the measurement instrument ........................................................ 59
3.4.5 Validity of the measuring instrument ................................................................. 60
3.4.6 Factor analysis.................................................................................................. 60
3.5 DATA ANALYSIS .......................................................................................................... 61
3.5.1 Descriptive statistics ......................................................................................... 61
3.5.2 Inferential statistics ........................................................................................... 62
3.5.3 Test for significant relationship and difference .................................................. 62
3.6 CONCLUSION .............................................................................................................. 64
CHAPTER FOUR
FINDINGS OF THE RESEARCH STUDY
4.1 INTRODUCTION ........................................................................................................... 65
4.2 DESCRIPTIVE STATISTICS OF THE SURVEY FINDINGS ......................................... 66
4.3 VALIDITY AND RELIABILITY OF THE MEASURING INSTRUMENT .......................... 69
4.4 INFERENTIAL STATISTICS OF THE SURVEY FINDINGS .......................................... 70
4.5 CLIMATE SURVEY ....................................................................................................... 76
4.6 RESULTS OF THE ENTREPRENEURIAL CLIMATE SURVEY .................................... 76
4.6.1 Chi - Square Test .............................................................................................. 76
4.6.2 Mann – Whitney U Test .................................................................................... 78
4.7 KRUSKAL-WALLIS H TEST .......................................................................................... 83
4.8 CONCLUSION .............................................................................................................. 95
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CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 INTRODUCTION ........................................................................................................... 96
5.2 SUMMARY .................................................................................................................... 97
5.2.1 Research objectives ......................................................................................... 97
5.2.2 Overview of the literature study ........................................................................ 98
5.3 LIMITATIONS OF THE STUDY ................................................................................... 102
5.4 RECOMMENDATIONS FOR MANAGEMENT ............................................................ 103
5.5 RECOMMENDATIONS FOR FUTURE RESEARCH .................................................. 108
5.6 Conclusion ................................................................................................................... 110
REFERENCES
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LIST OF TABLES
Table 4.1: Gender of respondents…………………………………………………………………66
Table 4.2: Age Group of respondents…………………………………………………………….67
Table 4.3: Department of respondents…………………………………………………………....68
Table 4.4: Cronbach Alpha values of the Climate questionnaire………………….................70
Table 4.5: Rotated Factor analysis of the measuring..............................................................71
Table 4.6: Factors identified as constructs …………………………………………………........73
Table 4.7: KMO and Bartlett’s Test………………………………………………………………...73
Table 4.8: Keizer’s criterion technique……………………………………………………….…...74
Table 4.9: Keizer’s criterion technique: Factor (constructs) eigenvalues………….………….. 75
Table 4.10: Chi – Square values for factors (constructs)..........................................................77
Table 4.11: Pair 1 Departmental Manager / Dealer Principal………………………………......79
Table 4.12: Pair 2 Departmental Manager / Sales Manager………………………………….....80
Table 4.13: Pair 3 Dealer Principal / Sales Manager………………………………………….....81
Table 4.14: Pair 4 Age groups……………………………………………………………………...82
Table 4.15: Kruskal – Wallis H Test Mean result………………..……………….…………….... 83
LIST OF FIGURES
Figure 2.1: A Model of Sustained Corporate Entrepreneurship……………………………......30
Figure 2.2: An Integrative Model of Corporate Entrepreneurship Strategy…………………....31
Figure 2.3: A proposed framework for Corporate Entrepreneurship……………………….......33
Figure 2.4: A Model of Middle – Level Managers Entrepreneurial behaviour…………….......36
Figure 2.5: Enabling environment for Corporate Entrepreneurship…………………….….......43
Figure 4.1: Gender of respondents…………………………………………………………….......66
Figure 4.2: Age group of respondents……………………………………………………….….….67
Figure 4.3: Department of respondents………………………………………………………........68
Figure 4.4: Entrepreneurial Climate Analysis (Clustered Bar Chart)……………………………85
Figure 4.5: Entrepreneurial Climate Analysis (Radar Graph)……………………………………86
Appendix
Climate of Corporate Entrepreneurship Questionnaire (© Oosthuizen 2006)…………….…116
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CHAPTER ONE
INTRODUCTION AND BACKGROUND TO THE STUDY
“He that will not apply new remedies must expect new evils, for time is the greatest innovator”
Francis Bacon (1561 - 1626)
1.1 INTRODUCTION
Change is continuous, change is constant and change is everywhere, no matter
what industry, sector or organisation. Keeping ahead of this change and keeping
ahead of the competition mean that organisations must be able to reinvent
themselves through continuous innovation. The corporate environment whether
locally or globally, is revolutionary in terms of competition; and the ability to survive
and thrive amongst competitors will only takes place when organisations have the
ability to embrace continuous change.
It is the author’s view that in the South African context, for desired economic growth
and prosperity the need for continuous change is crucial to ensuring that both social
and corporate change results in overall prosperity and equality amongst all intended.
To provide a background to the research problem, this section will describe briefly
the changing global landscape and then demonstrate the context of Corporate
Entrepreneurship within the organisation. The purpose is to highlight the changes
taking place globally and the challenges faced locally in South Africa by
organisations trying to remain locally and globally competitive. The role that
entrepreneurship plays within the organisation in the context of an organisational
entrepreneurial climate will then be explained.
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(Scheepers 2007:18) acknowledges these global competitive challenges faced by
South African organisations and states that many large organisations in South Africa
are being forced to review their competitive strategy so as to be competitive. The
rate of global change is putting pressure on organisations to look inwards into doing
things differently, so as to remain competitive, and to compete locally and globally.
Business executives in South Africa agree that being locally and globally competitive
complements an organisation in its ability to drive growth and competitive advantage
through innovation, creativity, and being proactive.
Seshadri and Tripathy (2006:17) support the notion of strategic competitive evolution
and suggest that the relentless pressures of competition stemming from
globalisation, technological changes and today’s business challenges are
increasingly threatening the competitive advantages of organisations.
Seshadri and Tripathy (2006:17) argue further that one of the pathways for
organisations to weather these storms is through unleashing the entrepreneurial
spirit latent in its employees enabling these employees to carve out new paths,
initiate new ventures, defy the status quo in their organisations, and break fresh
ground.
Ferreira (2002:2) argues that more and more corporate organisations are showing a
growing and vested interest in the use of Corporate Entrepreneurship (CE) as a
means for organisations to enhance the innovative abilities of their employees, and
at the same time, increase corporate success through the creation of new
entrepreneurial ventures. However, the creation of entrepreneurial activity in an
organisation seeking a competitive advantage will be more likely when the climate
within the organisation is conducive to innovation, creativity and has a spirit of
entrepreneurship
This growing interest is echoed by Thornberry (2001:526) who postulates that many
large organisations are seeking ways of reinventing or revitalising their
entrepreneurial strategies and long for some of the spark, innovation, speed and risk
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taking that they once had, but which have slowly been eroded under the weight of
size, bureaucracy, complex processes and hierarchy.
Morris and Kuratko (2002:4) concur that because organisations operate in an
extremely dynamic and turbulent global environment; to remain competitive, if not
just to survive in this highly competitive market, corporate organisations have to
change their mindset and adopt a creative and innovative culture within their
organisations. It is those organisations which have the vision to create a climate of
innovation and source employees who think creatively and get them to produce
innovative products and services, which will achieve a sustainable competitive
advantage.
Ireland, Covin, and Kuratko (2009:19) suggest that conditions in the global business
environment demand that established organisations look to adopt entrepreneurial
strategies as part of the means to succeed and maintain competitive advantage
where necessary.
Morris and Kuratko (2002:5) state that the quest for competitive advantage is no
longer to be found in lower costs, or higher quality or better service. Instead, it lays in
adaptability, flexibility, speed, being opportunistic, and innovativeness, in short,
entrepreneurship.
Morris and Kuratko (2002:10) further posit that CE is the opportunity focused
approach to venturing that requires a creative state of mind that can see a way
around impossible barriers and react to unexpected problems and opportunities.
Organisations that claim to have an entrepreneurial spirit or climate that encourages
innovation and creativity within the workplace and amongst its employees, must be
measured for their entrepreneurial conduciveness to Corporate Entrepreneurship.
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1.2 LITERATURE REVIEW
The literature review section will allow for historically significant research studies,
journals, company data and industry reports to complement a better theoretical
understanding of the research study undertaken. The objective is to familiarise one
with the relevant theoretical developments and debates currently in the area of this
research study.
The literature review will also highlight the important relationship between innovation,
risk-taking and proactiveness; the role and value that Corporate Entrepreneurship
brings to an organisation and how antecedents of Corporate Entrepreneurship can
induce or improve the activities that lead to an entrepreneurial climate within
organisations.
The literature review will elaborate on the key antecedents that are theoretically
deemed to be conducive in determining whether an organisation can create a
climate of Corporate Entrepreneurship and sustain it, and how this knowledge
gained can be utilised better within the organisation to be more entrepreneurially
effective.
Lastly, the literature review will highlight what other research has been conducted in
South Africa in terms of assessing other possible climates of Corporate
Entrepreneurship of local organisations.
1.2.1 Defining Corporate Entrepreneurship
Ferreira (2002:2) states that Corporate Entrepreneurship is an ever-evolving area of
research that today, has no universally acceptable definition and that despite the
growing interest in Corporate Entrepreneurship, there appears to be nothing near a
consensus on what it is or comprises.
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Ferreira (2002:2) declares that Corporate Entrepreneurship is a process of extending
an organisation’s domain of competence and corresponding opportunity set through
internally generated new resource combinations. Thus, Corporate Entrepreneurship
is conceived as the effort to extend an organisation’s competitive advantage through
internally generated innovations that significantly alter the balance of competition
within an industry or create entirely new industries.
Christensen (2004:301) states that Corporate Entrepreneurship refers to the process
whereby organisations engage in diversification through internal development. Such
diversification requires new resource combinations to extend the organisation’s
activities in areas unrelated or marginally related to its current domain of
competence and corresponding opportunity set. Christensen (2004:301) suggests
further that entrepreneurship encompasses acts of organisational creation, renewal,
or innovation that occur within or outside an existing organisation.
Kuratko, Morris and Covin (2011:11) simplify CE to a basic level of where it involves
the generation, development and implementation of new ideas and behaviours by an
organisation. Kuratko et al (2011:12) argue that Corporate Entrepreneurship can
include formal or informal activities aimed at creating new business inside of
established organisations through product and process innovations and market
developments.
Venter, Urban and Rwigema (2008:498) explore the notion that Corporate
Entrepreneurship focuses on the integration of entrepreneurship within the
organisation, and postulate that entrepreneurial like employees are innovative
employees who either rejuvenate existing organisations or create new ventures
within a corporate structure.
Nieman and Nieuwenhuizen (2009:408) have come to the conclusion after
considering many researchers’ point of view regarding the definition of Corporate
Entrepreneurship, is that it is a process whereby an individual or a group of
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individuals, in association with an established enterprise, create a new organisation
or integrate renewal or innovation within the current organisation.
For the purpose of this study, the definition of Corporate Entrepreneurship will be
that of Sharma and Christensen (1999:18) as cited in Ireland et al. (2009:21) ‘as the
process whereby individuals or a group of individuals, in association within an
existing organisation create a new organisation or instigate renewal or innovation
within that organisation.’
1.2.2 The role and benefits of Corporate Entrepreneurship
Scheepers (2007:21) states that Corporate Entrepreneurship is an important element
in organisational and economic development. Entrepreneurial behaviour and
attitudes are key determinants in the abilities of large organisations to survive and
prosper in turbulent competitive times.
Nieman and Nieuwenhuizen (2009:410) echo this sentiment that Corporate
Entrepreneurship is an important element of organisational and economic
development and have found that a positive relationship does exist between an
organisation’s Corporate Entrepreneurship activities and its long term organisational
(financial) performance.
Nieman and Nieuwenhuizen (2009: 411) found a positive relationship between
Corporate Entrepreneurship and value creation and that Corporate Entrepreneurship
can therefore enable organisations to drive growth and experience improved
financial performance and value creation for shareholders.
Ramachandran, Davarajan and Sougata (2006:87) concur that Corporate
Entrepreneurship makes a significant difference to an organisation’s ability to
compete, and that it can be used to improve competitive positioning and transform
organisations, both operationally and financially as well their markets, and even the
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sectors or industries that they might compete in when opportunities for value creating
innovations are developed and exploited.
Scheepers (2007:21) posits that in summary, organisations which compete either
locally or globally are always seeking ways to be sustainable and maintain their
competitive advantage. This advantage may come from being financially astute or
operationally effective. However, in today’s competitive climate organisations need to
be opportunistic, proactive and innovative. Organisations that are more adaptable to
change, that are more dynamic when reacting to external forces in the market and
have the flexibility to be innovative and aggressive, are those originations that
become market leaders and agents of change. These are the organisations that are
entrepreneurially orientated.
1.2.3 Creating a culture of Corporate Entrepreneurship
Ramachandran et al. (2006:87) highlight that most organisations lose their
entrepreneurial spirit once they cross the start-up phase, and that the transition from
an entrepreneurial growth organisation to a more formal well managed business is
usually accompanied by a decreasing ability to identify and pursue opportunities. It
seems that initiatives and excitement give way to structure and systems.
Ramachandran et al. (2006:88) also declare that entrepreneurial organisations will
institutionalise practices that establish an organisational environment in which
innovation must be considered and accepted as an appropriate response to
organisational problems as and when they arise, as well as fostering a shared sense
of commitment and purpose amongst employees to strive for and achieve certain
goals and objectives of the organisation.
Ramachandran et al. (2006:87) highlight further that it is through this sense of
purpose that a culture of creativity and innovation is fostered and implemented and
individuals can nurture their passion for innovation.
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Nayager and Van Vuuren (2005:31) reinforce that Corporate Entrepreneurship can
be sustained in an organisation if it is embedded in the culture of the organisation.
Entrepreneurial culture should encourage employees to be creative and innovative,
to experiment with new products, to make suggestions for the improvement of
products and internal processes, to take risks and responsibility for their creations,
thereby determining that culture is a system of shared meaning held by members
who distinguish the organisation from other organisations. Culture serves as a
control mechanism that guides and shapes the attitudes and behaviours of
employees.
Scheepers, Bloom and Hough (2008:50) state that the ability of Corporate
Entrepreneurship activities to improve an organisation’s long-term financial
performance and create and added value over the longer term has attracted interest
in the internal factors that facilitate entrepreneurial behaviour. These key internal
factors range from the culture and value system of the organisation, structure,
processes, availability of resources and organisational leadership.
Scheepers et al. (2008:50) suggest those factors such as empowered, responsible,
accountable, and autonomous employees, the use of appropriate rewards for
Corporate Entrepreneurship, and the availability of certain resources such as time
and a supportive organisational structure, all contribute to the entrepreneurial
behaviour success of the organisation in its pursuit of sustainable competitive
advantage. However, to possess these resources alone are insufficient to gain a
competitive advantage and realise value creation.
Sephardi and Treaty (2006:29) noted that entrepreneurial behaviour from
entrepreneurially orientated individuals is explained as follows:
They work hard and are driven by an intense commitment and determined
perseverance.
They see the cup half full, rather than half empty and they strive for integrity;
They burn with competitive desire to excel and win.
They are dissatisfied with the status quo and seek opportunities to improve
almost any situation they encounter.
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They use failure as a tool for learning and eschew perfection in favour of
effectiveness.
They believe they can personally make an enormous difference in the final
outcome of their ventures and their life.
Sephardi and Treaty (2006: 29) state that in this context, the climate of an
organisation is also determined by the attitudes and goal orientations of individuals
who are influential within the organisation.
Sephardi and Treaty (2006:29) further postulated that entrepreneurially minded
individuals will, through their values and behaviour, influence the climate of an
organisation by the fact that their own values, goals and objectives are
indistinguishable from those of the organisation, and therefore correspond with the
values of the organisation. The entrepreneurial individual places high importance on
ambition, achievement, reliability, honesty, creativity, social recognition, optimism,
innovation, aggressiveness, and growth.
1.2.4 Transformational Change, Innovation and Corporate Entrepreneurship
Bhardwaj, Sushil and Mornay (2007:131) are of the view that entrepreneurial
transformation within organisations and change itself within most organisations is
becoming more discontinuous, abrupt and seditious, and therefore the failure to
anticipate change timeously always inevitably results in organisations becoming
fossilised.
Bhardwaj, Sushil and Mornay (2007:131) suggest that to avoid this, a continuous
high growth rate is required to meet the challenges of this ever changing scenario
and is only possible when organisations are competitive in creating new value for
customers and when Corporate Entrepreneurship is used as tool to allow for
rejuvenation and revitalisation so as to create new value through innovation.
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According to Kuratko et al. (2011:20), Corporate Entrepreneurship represents a
framework for facilitating ongoing change and innovation within established
organisations, and opine that it provides a blueprint for coping effectively with the
new competitive realities. This in turn will allow traditional, hierarchical organisations
to transform to a point where sustainable entrepreneurship becomes a meaningful
and important component of the organisation.
Antoncic and Hisrich (2003:14) support the notion of innovation and state that
organisational innovativeness is inherently more concerned with product,
technological, and to some extent, administrative innovations, whereas the concern
of entrepreneurship is more with emergent activities and orientations that represent
departures from the customary, and that may or may not be product or technology
innovation related, that is, innovation from the entrepreneurship perspective also
includes additional elements such as creativity and vision.
Morris, Kuratko and Covin (2008:54) posit that innovation can be in the form of new
or improved products or services, however it is in the change or evolution of these
goods and services where the real innovation lies. It is therefore the ability to
differentiate the processes and procedures of manufacturing either through lower
costs and faster operations, and distributing through seamless networks, selling
through creative marketing campaigns that represent innovation. The pressure to
innovate is due to external forces including the emergence of new and improved
technologies, the globalisation of markets, and the fragmentation of markets,
government deregulation and global social change.
Morris et al. (2008:208) posit that yesterday’s competitive advantages can be today’s
disadvantages and that innovation is key to developing and exploiting competitive
advantages. Innovation with continuous learning provides the edge and this
combination brings new products, new internal processes, new business models and
new markets. It also enables organisations to bring new products more rapidly, to
customise products with more functionality; ideally, the challenge is to develop
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innovation as a core competence within the organisation and part of the
organisation’s overall strategy.
According to Kuratko et al. (2011:50), a framework namely ‘A model of Sustained
Corporate Entrepreneurship’ demonstrates that sustainability is contingent upon
individual members of an organisation continuing to undertake innovative activities
and positive perceptions of these activities by the executive management, which in
turn will lead to further allocation of necessary organisational support and resources.
Kuratko et al. (2008:50) suggest further that the framework centres on the individual
employee’s decision to behave entrepreneurially and sustain entrepreneurial activity.
The model demonstrates that a transformational trigger (something external or
internal to the organisation that creates a threat or opportunity) initiates the need for
strategic change.
In summary, to achieve this change, Kuratko et al. (2011:51) propose that
entrepreneurial activity derived from new a product, services or process and the
decision by employees to behave entrepreneurially will effect this change. Sustained
entrepreneurial activity is the result of the perception by the individual that several
organisational antecedents are present, such as top management support,
autonomy, rewards, resources and flexible organisational boundaries.
1.2.5 Research conducted in South Africa
Reasonable research within the field of entrepreneurship and Corporate
Entrepreneurship exists, however limited research exists in the South African
Automotive industry.
According to Van der Merwe and Oosthuizen (2011:541), the questionnaire used for
this study has been used by other researchers and other dissertations are available
based on research done with a broader basis in various sectors and by researchers
who have used the questionnaire designed by Oosthuizen in 2006. This
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questionnaire was originally formulated to assess whether a climate of Corporate
Entrepreneurship exists within the South African mining industry. (Oosthuizen,
2006).Oosthuizen’s questionnaire was used in various research studies, and
researchers have found the questionnaire to be reliable and support the research
and thirteen identified constructs that positively stimulate and support Corporate
Entrepreneurship and a climate thereof.
From the abovementioned research studies it is evident that there has been
reasonable research conducted in various sectors and industries within South Africa,
all attempting to assess their respective climates of Corporate Entrepreneurship. In
spite of this, there has however been no empirical research regarding an
assessment of the climate of Corporate Entrepreneurship within the retail sector of
the South African automotive industry.
1.3 THE RESEARCH PROBLEM
Ferreira (2002:3) states that more and more organisations are showing a growing
interest in the use of Corporate Entrepreneurship as a means for organisations to
enhance the innovative abilities of their employees, and at the same time, increase
corporate success through the creation of new corporate ventures. Fostering
entrepreneurial behaviour and norms within an organisation is vital to the embedding
of an entrepreneurial culture that will be conducive to cultivating a climate of
Corporate Entrepreneurship within an organisation.
Possibly some automotive retailers lack a climate of Corporate Entrepreneurship
within the retail environment of their respective business units and that the
opportunity always exists to determine whether a climate of CE can be instilled by
management employed within these respective businesses units and so therefore;
the objective of this assessment will be to determine whether the internal
environment, and the role played by the management of this leading automotive
retailer are conducive to creating a climate of Corporate Entrepreneurship within the
organisation.
13
The background scope has resulted in the following research question:
What is the climate of Corporate Entrepreneurship within a leading automotive
retailer group in the South African Automotive Retail Industry?
1.4 PURPOSE OF THE STUDY
The purpose of the study is to make use of an instrument, formulated and
copyrighted by Oosthuizen originally in 2006, to assess the entrepreneurial climate
within the South African Mining Industry.
According to Van der Merwe and Oosthuizen (2011:550), this instrument has been
proven statistically successful, and has been used by other researchers to assess
other sectors and organisations, and is suitable to assess the possible climate of
Corporate Entrepreneurship within a leading South African automotive retailer. The
purpose of the study is to assess the climate of Corporate Entrepreneurship within a
leading South African automotive retailer.
The study will also inform other likely divisions within the parent organisation of the
value of assessing their environment in terms of entrepreneurial and innovative
processes, policies, and mindsets that contribute to a competitive advantage for the
organisation. The purpose is to consider, for possible development, an internal
organisational programme that initiates entrepreneurial activity, fosters
entrepreneurial behaviour and encourages entrepreneurial processes and policy.
1.5 RESEARCH OBJECTIVES
With various programmes and initiatives already implemented to create value for all
stakeholders within all the various business units, the aim of this study is to
determine whether managers genuinely perceive the working environment to have a
corporate entrepreneurial climate and whether current value creation initiatives are
14
true to all stakeholders concerned within the organisation. The primary and
secondary objectives are set out in the next section.
1.5.1 Primary objective
The primary objective of the research will be to assess whether a climate of
Corporate Entrepreneurship exists within the leading automotive retail division
identified for this research, and to determine whether the corporate activities
currently executed are conducive to creating and fostering a climate of Corporate
Entrepreneurship within the division.
1.5.2 Secondary objectives
In order to achieve the primary objective, the following secondary objectives will be
formulated:
To determine by means of a literature study:
The definition of Corporate Entrepreneurship (CE).
The role of Corporate Entrepreneurship within an organisation.
The role of innovation for an entrepreneurial organisation.
The role of entrepreneurial leadership within an entrepreneurial organisation.
Entrepreneurial culture and its influence to foster, develop and implement an
innovative climate of Corporate Entrepreneurship within an organisation.
How to sustain Corporate Entrepreneurship and innovation.
How the following antecedents of Corporate Entrepreneurship influence the climate
of Corporate Entrepreneurship within an organisation:
o Entrepreneurial Leadership
o Management Support
o Sponsors (Champion)
o Tolerance for risks, mistakes and failure
o Innovation and creativity / new ideas encouraged
15
o Appropriate rewards and reinforcement
o Vision and strategic intent
o Discretionary time and work
o Multidiscipline teamwork and diversity
o Resource availability and accessibility
o Continuous and cross-functional learning
o Strong customer orientation
o Flat organisational structure
To determine by means of survey study design:
How to assess an entrepreneurial climate within a leading automotive retailer
by means of administrating a questionnaire designed to determine
entrepreneurial climate within organisations.
1.6 HYPOTHESIS
The following hypotheses are formulated for this study so as to highlight the
importance thereof to management, who are the custodians of the potential
entrepreneurial climate of the identified organisation.
H1: Entrepreneurial Leadership is not evident within the Imperial Automotive
Dealerships division to create a climate of Corporate Entrepreneurship that promotes
operational success and financial profitable performance.
H2: Management support within the Imperial Automotive Dealerships division does
not have a propensity towards calculated risk taking and possible failure.
H3: Sponsors (champions) within the Imperial Automotive Dealerships division are
not present to encourage Corporate Entrepreneurship.
H4: Tolerance for risks, mistakes, and failure within the Imperial Automotive
Dealerships division is low.
H5: Innovation, creativity, and new ideas encouraged, are not present within Imperial
Automotive Dealerships division.
16
H6: Appropriate rewards and reinforcement are not visible within the Imperial
Automotive Dealerships division.
H7: Vision and strategic intent are not fully understood within the Imperial
Automotive Dealerships division.
H8: Discretionary time and work are not acceptable to management within the
Imperial Automotive Dealerships division.
H9: Empowered teams / multidiscipline teamwork and diversity are not visible within
the Imperial Automotive Dealerships division.
H10: Resource availability and accessibility are very limited within the Imperial
Automotive Dealerships division.
H11: Continuous and cross-functional learning is not evident within the Imperial
Automotive Dealerships division.
H12: Strong customer orientation is not encouraged within the Imperial Automotive
Dealerships division.
H13: Flat organisational structure with open communication and a strong sense of
belonging is not evident within the Imperial Automotive Dealerships division.
1.7 RESEARCH METHODOLOGY
1.7.1 Research design
Babbie and Mouton (2010:74) refer to a research design as a blueprint as to how a
research should be conducted in which the focus is on the end product of knowing
what kind of study is being planned and what results are being aimed at.
A survey strategy will be used to execute the exploratory research for this study.
The survey strategy allows for the collection quantitative data which can be analysed
quantitatively using descriptive and inferential statistics; additionally the data
collected using the survey strategy method can be used to suggest possible reasons
17
for particular relationships between variables and to produce models of these
relationships.
The opportunity exists within this research to collect a large amount of data from a
sizeable population in a highly economical way. The quantitative research will be
done with the aid of a questionnaire; this will be achieved by studying a population
identified for this purpose.
1.7.2 Sampling
Babbie and Mouton (2010:175) suggest that the ultimate purpose of sampling is to
select a set of elements from a population in such a way that descriptions of those
elements (statistics) accurately portray the parameter of the total population from
which the elements are being selected.
Babbie and Mouton (2010:175) suggest further that probability sampling enhances
the likelihood of accomplishing this aim and provides methods for estimating the
degree of probable success.
The target population for this study will be all the employees within the Dealerships
division of Imperial Automotive and the sample identified for this study will be the
management within each business unit that is a dealership of the Dealerships
division of Imperial Automotive, a leading automotive retailer with a national footprint
of retail outlets situated throughout Southern Africa.
The management employees considered for this study are those who are in a
frontline managerial role and who have a direct influence over the retail success of
each of the business units of the division. These managers, totaling around 304, are
either in a middle management, senior management or franchise director position.
18
1.7.3 Data Collection
Saunders, Lewis and Thornhill (2007:152) suggest it is in the collection of data for
purposes of research that there is probably the greatest danger of logic leaps and
false assumptions. The objective is to move from a mountain of data to where the
research delivers a set of conclusions and presents itself coherently, whilst being
intellectually challenging and highly creative.
The data required for this study will be collected by means of a self-administered
questionnaire. Data will be collected by the initial distribution of the questionnaires to
those individuals identified as to be part of the study population.
This questionnaire was developed and copyrighted by Oosthuizen in 2006 in his PhD
thesis, and the measuring instrument utilised in this study consisted of items whose
reliability and validity have been confirmed statistically.
According to Van der Merwe and Oosthuizen (2011:550), the measuring instrument
utilised for this study consisted of items whose reliability and validity have been
confirmed statistically in previous studies.
The instrument was developed by Oosthuizen (2006) when publicised items were
not available, self-developed items were used and which deemed this as a credible
instrument which has subsequently been used in several other South African
research dissertations in their respective measurements of other industries and
prospective climates of Corporate Entrepreneurship.
The distribution and collection of the survey questionnaire will be done via electronic
mail so as to monitor the initial distribution and to have control over the allocated
timeline for responses, and then finally to facilitate the feedback process and the
success rate. All responses will be treated as anonymous and respected as such,
and were originally agreed upon by the initial respondents requested by organisation
to participate in the study.
19
For the literature review part, of the study and information relative to this study will be
collected by means of textbooks, journals within the field of entrepreneurship and
Corporate Entrepreneurship, databases, periodicals and the Internet.
1.7.4 Data Analysis
Data Analysis will be provided through Statkon (statistical consulting service) as
supported by the University of Johannesburg. The quantitative data of the
questionnaire will be analysed using a statistical package called SPSS. Descriptive
statistics and factor analyses will be conducted and non-parametric tests such as the
Mann – Whitney U Test and the Kruskal – Wallis H Test will be executed to test the
hypotheses and to make statistical inferences.
1.7.5 Research Ethics
Cooper and Schindler (2010:32) define ethics as norms or standards of behavior that
guides moral choices one’s behavior and one’s relationship with others, that is, the
goal of ethics is to ensure that no one is harmed or suffers adverse consequences
from research activities.
Cooper and Schindler (201: 32) posit further that that when data is gathered in an
experiment, interview, survey or observation the participant has many rights to be
safeguarded. In general research must executed in manner that doesn’t bring
physical harm, discomfort or embarrassment to a participant. The following
guidelines are applicable:
Explain study benefits.
Explain participant rights and protection.
Obtain informed consent.
20
1.7.6 Referencing Technique
The Harvard referencing technique will be used for this study.
1.8 IMPORTANCE AND BENEFITS OF THE STUDY
The research will attempt to measure whether automotive retailer groups within the
South African automotive retail environment have certain behaviour and norms in
place that induce entrepreneurial activity and that create or foster a climate of
Corporate Entrepreneurship. The significance of the research is to inform all
employees who are in a managerial position of the current climate within the
organisation being measured, and to determine whether their climate is conducive to
Corporate Entrepreneurship.
Management has the opportunity to understand and contribute to the creation or
ongoing commitment to ensure that the climate of employment within the
organisation is conducive to Corporate Entrepreneurship. As for the automotive
industry itself, several main role players in the industry made up of automotive retail
groups have a wide stake in the success of retail automotive sales.
The main role players who are in direct competition to Imperial Motor Holdings are
McCarthy’s of the McCarthy’s group, Williams Hunt of the Unitrans group, Combined
Motor Holdings (CMH) and Barloworld Automotive of the Barloworld Holdings Group.
All of these groups are seeking to ensure a competitive advantage so as to maximise
profitability and organisational growth, and therefore seek to possibly pursue
entrepreneurial antecedents within their organisations.
An opportunity exists to determine the climate of Corporate Entrepreneurship across
all major retailers to assess their conduciveness to Corporate Entrepreneurship. The
importance of the research is to contribute to the greater understanding of
21
entrepreneurial behaviour within the automotive retail environment of a market-
leading motor group, and to the overall research and body of knowledge of
Corporate Entrepreneurship in South Africa.
1.9 OUTLINE OF THE STUDY
Chapter Two: A literature review of the field of Corporate Entrepreneurship and its
theoretical overview.
The purpose of this chapter is to discuss the literature review relevant to the
research that will be undertaken. Corporate Entrepreneurship will be defined; the
role it plays in the broader economic environment within an organisation and then
the literature review will give theoretical insight into conceptual models of Corporate
Entrepreneurship that have been identified as supportive of the antecedents
identified for creating a climate of Corporate Entrepreneurship in an organisation. A
chapter conclusion will conclude the content thereof.
Chapter Three: Research Methodology
The purpose of this chapter is to discuss the research methodology. By definition the
type of research approach will be introduced and how followed. The research design
will be introduced and the sample, data collection method, and method of data
analysis will be provided. A chapter conclusion will conclude the content thereof.
Chapter Four: Findings and Presentation of results
The purpose of this chapter will be to introduce the findings of the research
undertaken and the either successful support or the refutable denial of the
hypothesis. A chapter summary will conclude the content thereof. Specific focus will
be to include the literature review interpreted in chapter two, validity, and
methodology of the questionnaire. Other valuable interpretation will be that of the
22
hypothesis outcome as well as the limitations of the study and recommendations for
further study. A chapter conclusion will conclude the content thereof
Chapter Five: Summary, Conclusion and Recommendations
The purpose of this chapter is to discuss the conclusion drawn from all the preceding
chapters, as well as the recommendations for concluding the research undertaken
here within. A chapter conclusion will conclude the content thereof
23
CHAPTER TWO
CORPORATE ENTREPRENEURSHIP - A THEORETICAL OVERVIEW
“Corporate Entrepreneurship is not about business as usual, it is about unusual business or unusual approaches to business”
Thornberry (2001:10)
2.1 INTRODUCTION
Saunders et al. (2007:57) suggest that there must be a critical and purposeful review
of literature, this so as to provide a foundation on which the research will be built.
This will assist with building a good understanding and insight into relevant previous
research and the trends that have emerged.
Saunders et al. (2007: 57) highlight further that the purpose of the literature review is
not to provide a summary of everything that has been written on the research topic,
but to review the relevant and most significant research available for the research
topic. The literature review will define and include theoretical sources of knowledge,
textbooks, journals, and previous research studies, all within the scope of Corporate
Entrepreneurship.
Considering the introduction in chapter one and the viewpoint of researchers and
authors within this chapter, there is a consideration that CE is a critical means to
differentiate an organisation in the marketplace on a sustainable basis, and seek out
those unfulfilled spaces in the marketplaces where innovation and related activities
will contribute to the differentiated market leadership.
24
This chapter will address the following important aspects concerning Corporate
Entrepreneurship:
There will be an overview clarifying the definition of Corporate Entrepreneurship.
The importance of Corporate Entrepreneurship will be explained.
The conceptual models that are relevant to the antecedents identified and
considered for a climate of Corporate Entrepreneurship will be discussed.
The entrepreneurial orientation of an organisation will be defined.
Corporate Entrepreneurship and innovation will be highlighted.
Entrepreneurial culture and climate for Corporate Entrepreneurship will be explained.
Corporate Entrepreneurship as a strategy within the organisation will be highlighted.
2.2 DEFINITION OF CORPORATE ENTREPRENEURSHIP
Hough (2008:1) indicates that Corporate Entrepreneurship generally refers to the
development of new business ideas and opportunities within large and established
organisations. In most cases, Corporate Entrepreneurship describes the total
process whereby established organisations act in an innovative, risk-taking and
proactive way.
Kuratko et al. (2011:11) define Corporate Entrepreneurship as a term used to
describe entrepreneurial behaviour inside established mid-sized and large
organisations, and postulate that several other popular terms such as ‘organisational
entrepreneurship’, ‘intrapreneurship,’ and ‘corporate venturing’ are also means to
define CE. Definitions have evolved over the years and have maintained the
essence of generation, development, and implementation of new ideas and
behaviours that lead to innovative capabilities by organisations.
Nieman and Nieuwenhuizen (2009:408) meaningfully state that CE is regarded as a
process through which formal and informal creative activities are encouraged and
intangible resources are managed and that additionally, CE is aimed at creating new
products, services, innovation, processes, strategies and business units with the
25
objective of improving the organisation’s competitive position and financial
performance.
Antoncic and Hisrich (2003:7) clarify that CE is an emerging and evolving field of
enquiry. Corporate Entrepreneurship research has been expanding its boundaries by
exploring and developing explanations and predictions of entrepreneurship
phenomena in terms of events such as innovation, new venture creation and growth,
and in terms of characteristics of individual entrepreneurs and entrepreneurial
climates within organisations. It is further supported that at the organisational level,
CE refers not only to the creation of new business ventures, but also to other
innovative activities and orientations such as development of new products and
services, technologies, administrative techniques, strategies and competitive
postures.
Venter et al. (2008:498) highlight that CE focuses on the integration of
entrepreneurship within the entire organisation and that entrepreneurs are innovative
employees who rejuvenate existing organisations or create new ventures within a
corporate structure and those corporate ventures have the capacity to revitalise
parent organisations and ultimately raise profits.
Scheepers, Bloom and Hough (2008:2) define CE as multi-dimensional and that
corporate venturing, intrapreneurship and strategic renewal are different components
of Corporate Entrepreneurship which focus on the creation of new business,
entrepreneurial individuals who drive the business processes and strategy
reformulation, reorganising and organisational change respectively; all of which lead
to new combinations of resources which often result in an organisational competitive
advantage.
Christensen (2004:305) defines CE as a term used to describe entrepreneurial
behaviour inside established, mid-size and large organisations, and Corporate
Entrepreneurship can also be seen as the process whereby an individual or a group
26
within an organisation creates a new venture within an existing organisation which
then revitalises renews and innovates.
Christensen (2004:305) suggests that CE is mainly classified into two strategic
managerial choices, that is, corporate venturing and strategic renewal. Corporate
venturing is one way of achieving strategic renewal, and making acquisitions
resulting in new combinations is another way and thus actions like refocusing the
organisation competitively through improved and innovative products and services
comprise a way for improving entrepreneurial activity within an organisation.
For the purpose of this study the definition of CE will be that of Sharma and
Christensen (1999:18) as cited in Ireland et al. (2009:21) ‘as the process whereby
individuals or a group of individuals in association within an existing organisation,
create a new organisation or instigate renewal or innovation within that organisation.
2.3 THE IMPORTANCE OF CORPORATE ENTREPRENEURSHIP
Ireland et al., (2009:19) posit that globalisation has become a major factor in
ensuring that change is substantial and continuous in organisations. The continuous
changes in the marketplace, consumer expectation and competitor behaviour have
affected the rethink and execution of how to produce and deliver products and
services. Virtually all organisations, whether a small startup or an existing well
established major organisation will aspire and hopefully strive to exploit their product
or services market opportunities in some innovative and proactive manner so as to
be successful and sustainable.
As organisations grow and develop and start to compete on the global stage there is
a profound need to ensure that the sustainable growth and profitable business model
encompass entrepreneurial processes, procedures and individual behaviours that
trigger sustainability, innovation, flexibility, proactiveness, all of which are closely
associated with CE (Ireland et al., 2009:19).
27
Mcbeth and Rimac (2006:17) suggest the concept of CE has been around for at
least twenty five years. Broadly speaking it refers to the development of new
business ideas and opportunities within established organisations. In these turbulent
times a sustainable competitive advantage will increasingly depend on the capacity
of individuals, organisations and societies for innovation. Innovation is the
development of something new and ultimately depends on the knowledge, skills and
creativity of individuals.
Scheepers et al. (2008:2) concur that both academic and popular business literature
have emphasised that CE could be an important survival strategy for many
organisations in the new economy. In most cases Corporate Entrepreneurship
describes the processes whereby established organisations act in ‘innovative, risk-
taking and proactive ways to influence outcomes of new products, services or
business development, and that in some cases new organisations are even created
as a spin-off from these activities and achievements. Scheepers et al. (2008:2)
Nieman and Nieuwenhuizen (2009:410) state that CE is an important element in
organisational and economic development and that entrepreneurial behaviour and
attitudes are key determinants of the ability of large organisations to survive and
prosper in turbulent environments.
Ramachandran et al. (2006:87) declare that CE can make a significant difference to
an organisation’s ability to compete. It can be used to improve competitive
positioning and transform corporations, their markets and industries when
opportunities for value creating innovations are developed and exploited.
As a source of competitiveness, Bhardwaj, et al. (2007:131) state that CE is a tool
within an organisation that allows for organisations to revitalise and rejuvenate, thus
creating new value through innovation, business development and renewal. New
value creation is only possible through high levels of entrepreneurial activity.
28
Bouchard (2001:2) suggests that the importance of CE associates the contrasting
notions of individual initiative on the one hand with corporate development on the
other. From a corporate strategy perspective, this association appears somewhat
hazardous, since it reinforces the risk of strategic misalignment and the risk of
competitive advantage erosion. In effect, organisations cannot rely on personal
initiative without increasing the autonomy of individuals and the risk that their
personal projects might diverge significantly from key strategic alignments.
Bouchard (2001:3) highlights furthermore, that it is very important for organisations
to favour the progressive transformation of certain employees into highly valuable
and marketable entrepreneurs, thus reducing the level of embeddedness of their
most valuable human resources and, consequently, the sustainability of their
competitive advantage. In order to successfully implement CE, organisations have to
face and mitigate the risks inherent to it.
Thornberry (2001:530) indicates that CE should be of utmost importance to
established organisations which are ever increasingly competing in turbulent
markets, and environments and which face many opportunity focused competitors,
who by their start-up nature are probably less bureaucratic and less lethargic in
terms of innovation, speed and agility. Small startups that are quicker and more agile
normally see and act upon opportunities much quicker than large slow-moving
bureaucratic organisations and therefore are at risk of being marginalised in the
marketplace.
Ireland, Kuratko and Morris (2009:11) summarise that CE is a very important
process used in established organisations seeking to use innovation as the means to
pursue entrepreneurial opportunities. CE helps an organisation create new business
through product and process innovations and market developments, and foster the
strategic renewal of existing operations with the unifying objective of improving the
organisation’s competitive position and financial performance.
29
2.4 CORPORATE ENTREPRENEURSHIP CONCEPTUAL MODELS
In the field of Corporate Entrepreneurship, there are many conceptual models that
have been developed by researchers and authors to facilitate a better understanding
of all the related variables and processes that contribute to the field of Corporate
Entrepreneurship.
There are various key elements that contribute to CE, such as entrepreneurial
activities, behaviours, organisational architecture, resources, internal organisational
processes and strategies, to name a few. All of which contribute to the success of
the entrepreneurial actions of both the individuals and organisation as a whole.
For the purpose of this study and to link relevancy to the hypotheses that were
referred to in Chapter one and formulated for this study, the following models are
identified and discussed:
The Model of Sustained Corporate Entrepreneurship in Kuratko et al (2011: 51) by
Kuratko et al (2011) is depicted in Figure 2.1. This model focuses on the
organisation’s ability to sustain entrepreneurship on an ongoing basis, and depicts
that sustainability is contingent upon individual members of the organisation
continuing to undertake innovative activities and positive perceptions.
The Integrative Model of Corporate Entrepreneurship Strategy by Ireland et al.
(2009:24) is depicted in Figure 2.2. The model focuses on Corporate Entrepreneurial
Strategy and the requirements therefore. The strategy highlights the three elements,
namely, an entrepreneurial strategic vision, pro-entrepreneurship architectural
structure, and entrepreneurial process and behaviour.
The proposed framework for Corporate Entrepreneurship by Christensen (2004:310)
is depicted in Figure 2.3. The model focuses on Corporate Entrepreneurship in terms
of four perspectives; that is, corporate venturing, internal resources,
30
internationalisation and external networks. These perspectives indicate where an
organisation can become more innovative.
A Model of Middle Level Managers’ Entrepreneurial Behaviour by Kuratko, Ireland,
Covin and Hornsby (2005:701) is depicted in Figure 2.4. The model focuses on how
middle manager entrepreneurial behaviour is linked to successful Corporate
Entrepreneurship. The model focuses on the organisational antecedents that
contribute to entrepreneurial behaviour.
Figure 2.1: A Model of Sustained Corporate Entrepreneurship
Source: Kuratko et al. (2011:51)
According to Kuratko et al. (2011:51), the model of sustained Corporate
Entrepreneurship illustrates the key relationships that combine to produce ongoing
entrepreneurship. The model demonstrates a transformational trigger that is
something external or internal to the organisation that creates a threat or opportunity
31
and initiates the need for strategic change, and that the model centers on the
individual employee’s decision to behave entrepreneurially. It also reflects that
sustained entrepreneurial activity is the result of the perception by the individual, that
several organisational antecedents are present, such as top management support,
autonomy, rewards, resources and flexible organisational boundaries. The outcomes
realised from the entrepreneurial activities are then compared at both the individual
and organisational level to previous expectations.
Figure 2.2: An Integrative Model of Corporate Entrepreneurship Strategy
Source: Ireland, Covin and Kuratko (2009:24)
32
Ireland, Covin and Kuratko (2009:25) believe that economic and financial conditions
in the current business environment demand that established and global
organisations adopt entrepreneurial strategies as a path to success and long-term
survival.
The proposed model has a distinguished premise comprising that is that
entrepreneurship can be pursued as a corporate strategy per se, and that CE
strategy is a distinct type of organisational strategy that the entrepreneurial
cognitions proposed in the integrative strategic model include antecedents of CE
strategy (i.e. individual entrepreneurial cognitions of the organisation’s members and
external environmental conditions that invite entrepreneurial activity) and the
outcomes of CE strategy (i.e. organisational outcomes resulting from entrepreneurial
actions, including the development of competitive capability and strategic
repositioning) are shown in the model. Ireland et al. (2009:25)
33
Figure 2.3: A proposed framework for Corporate Entrepreneurship
Source: Christensen (2004:310)
Christensen (2004:302) declares that over some decades now, organisations have
been characterised by reductions in workforce, downsizing, rightsizing budget cuts,
and the lowered moral of employees. Organisations are being faced with increasing
demands for both faster product development and more features in smaller products
with higher uniform quality.
Christensen (2004:302) posits further that for organisations to maintain their
competitive advantage, organisations have to accomplish differentiation and
continuous innovation either through new products and services, efficient production
and organisational processes, or business models. Corporate Entrepreneurship is an
overall term for all other ‘labels’ and perspectives and that the Corporate
Entrepreneurship ‘umbrella’ can be divided into four perspectives:
34
Corporate venturing: Is a means of planning for organisational ambiguity in
entrepreneurial action by separating one or a group of entrepreneurs from the
organisational structure. The main reason for creating corporate ventures is the
isolation and nurturing of innovative ideas that cannot survive in the bureaucratic
structures and formal procedures of a large organisation, and by dedicating
resources to corporate venturing allows for an organisation to follow different routes
in the pursuit of innovations. The Research and Development department ought to
concentrate on radical technological inventions, while the corporate ventures explore
market opportunities for both radical and incremental innovations. Christensen
(2004:302)
Internal (intangible) resources: Many organisations possess a bundle of unexploited
resources; mainly intangible knowledge resources held by employees. The
knowledge resources are a mixture of skills, experience, competencies and
capabilities that cannot easily be articulated, and therefore cannot be transferred at
arm’s length or imitated by others. The strength of the organisation is to bring
together employees possessing different specialised knowledge resources and to
enable the creation of new knowledge resources or a combination of existing ones to
generate innovations and competitive advantage. Christensen (2004:302)
Internationalisation: The Corporate Entrepreneurship perspective on
internationalisation is primarily seen as the opportunity to expand the market scope
of the organisation. When organisations clear their inaugural costs of
internationalisation into foreign markets, overall performance begins to improve as
new knowledge and capabilities are developed, competitiveness is enhanced and
more market opportunities are captured by the organisation’s investment activities.
This allows for potentially engaging more markets that stimulate innovation and the
development of a global mindset through the improvement or development of new
knowledge resources, capabilities and innovative skills, thus enhancing the
economies of scale and scope. Christensen (2004:302)
35
External networks and alliances: The main purpose of entering a network is to gain
access to the resources needed and to learn new competencies outside the
organisation’s core competencies. However, alliances with selected customers or
suppliers may also enhance product development and technology development and
take the form of Research and Development partnerships, licensing, market
agreements, subcontracting, joint ventures or strategic alliances. Christensen
(2004:302)
Kuratko et al. (2005:700) state that there are many conceptualisations of Corporate
Entrepreneurship and that some researchers see Corporate Entrepreneurship as
embodying entrepreneurial behaviour requiring organisational sanctions and
resource commitments for the purpose of developing different types of value creating
innovations. In particular two major phenomena, being new venture creation within
existing organisations and the transformation of ongoing organisations through
strategic renewal will qualify as new value creation innovations.
Kuratko et al. (2005:701) state that the role of middle level managers focuses on
effectively communicating information between the organisation’s two internal
managerial stakeholders (top level managers and operating level managers). To fulfil
this role, middle managers actively synthesise information and then disseminate that
information to both top management and operational management. Middle managers
are enablers of individual entrepreneurial actions such as those taken to create new
ventures or engage in strategic renewal. Facilitating information exchanges between
the other two managerial levels is how middle managers help shape entrepreneurial
actions (as determined by top management) and their use in the form of
competencies by first level managers. It is the central positioning enjoyed by middle
managers within the organisation that allows them to gather and absorb innovative
ideas from inside and outside the organisation.
36
Figure 2.4: A Model of Middle – Level Managers’ Entrepreneurial behaviour
Middle-Level Managers’Entrepreneurial
Behaviour Endorse, refine and shepherd entrepreneurial opportunitiesIdentify, acquire and deploy resources needed to pursue entrepreneurial opportunities
PerceivedActivity-Outcome
Relationship
Perceived Decision Outcome-
Relationship
Individual Outcomes(Intrinsic & Extrinsic)
Contribution to strategy implementationEnhancement of skills setStronger link to core competenciesBonusesSalary increasesPromotionsRecognition
EntrepreneurialOutcomes
Organsational Outcomes
Strategic renewalCreation of new venturesEnhanced reputationDevelopment of value-creating core competenciesEffective strategic adaptationIncrease in organisational knowledgeMore innovative behaviourMore innovationsImproved financial performanceIncreased market share
(Firm Comparison)
(Individual Comparison)
OrganisationalAntecedents
Management SupportWork DiscretionRewards/Reinforce-mentTime AvailabilityOrganisational Boundaries
existence
perception
Model of middle-level managers’ entrepreneurial
behaviour
Source: Kuratko et al. (2005:701)
2.4.1 Important antecedents identified from these models:
Entrepreneurial Leadership – Executives and top management set the vision,
intent, and space for employees to be innovative and creative.
Management Support – Willingness by management to facilitate and promote
entrepreneurial behaviour and activity.
Sponsors (Champion) – Endorsement, mentoring and coaching by management
of employees, providing resources for entrepreneurial action.
37
Tolerance for risks, mistakes and failure – Allowing for calculated risk-taking,
experimentation by employees and management inevitably builds
entrepreneurial spirit.
Innovation and creativity / New ideas encouraged – Innovation and creativity
influence corporate performance in a positive and entrepreneurial way.
Appropriate rewards and reinforcement – Rewarding creative and innovative
thinkers and doers in the organisation contributes to the creation of an
entrepreneurial climate.
Vision and strategic intent – Leaders who articulate an inspiring vision and
entrepreneurial strategy promote employee willingness to pursue innovation and
creativity.
Discretionary time and work – Exploration of new ideas and autonomy of task
determination encourage innovation and entrepreneurial behaviour.
Multidiscipline teamwork and diversity – Cross-functional teams create new
knowledge, new ideas and new perspectives.
Resource availability and accessibility – Managers with autonomy and resources
tend to be creative and induce a climate of entrepreneurial activity.
Continuous and cross-functional learning – Learning organisations encourage
education and experimentation and employees to identify opportunities and be
proactive.
Strong customer orientation - The belief that customer needs and satisfaction
should always be of the highest priority throughout the organisation and upheld
by all employees and management.
Flat organisational structure – Creativity and innovation initiate from flexible,
flatter and more people-centred and team-orientated environments.
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2.5 THE ORIENTATION OF AN ENTREPRENEURIAL ORGANISATION
Kuratko et al. (2011:58) asked the question – ‘What does it mean to characterise an
organisation as ‘entrepreneurial?’ Considering that there is some level of
entrepreneurship or entrepreneurial individuals within all organisations, irrespective
of how much bureaucracy there might be, the answer to the question lies in the three
underlying dimensions of entrepreneurship: innovativeness, risk-taking and
proactiveness.
Innovativeness: With innovativeness the concern is with the relative emphasis on
concepts or activities that represent a departure from what is currently available
within the organization, and to what extent the organisation is doing things that are
unique or different. Innovativeness could vary from new product and services or
improving existing ones that resulted from external market forces, globalisation of
markets, or the rapid emergence of new and improved processes, technologies and
thus possibly reducing any possible competitive advantages; that is, lower costs,
faster operations, rapid delivery, and quality and customer service. (Kuratko et al.
2011:58)
Antoncic and Hisrich (2003:14) suggest that organisational innovativeness is more
concerned with product, technological and administrative innovation and that
intrapreneurship is more congruent with going beyond these activities so far as to
create new units or even organisations. Kuratko et al. (2011:58)
Risk-taking: Anything new involves risk. Risk-taking involves a willingness to pursue
opportunities that have reasonable likelihood of producing losses or significant
performance discrepancies. The emphasis is on risk that is moderate and calculated
and involves a reasonable awareness of the all risks, including financial, technical,
market and personal. These risks are reflected in the various resource allocation
decisions as well as in the choice of products or services and markets the
organisation emphasises. Kuratko et al. (2011:58)
39
Risk taking is therefore viewed as an individual level trait and an organisational level
concept. (Kuratko et al., 2011:58). Morris and Kuratko (2002:41) emphasise that
anything new involves risk, or some likelihood that actual results will differ from
expectations. Risk taking involves a willingness to pursue opportunities that have a
reasonable likelihood of producing losses or significant performance discrepancies,
and thus furthering that the emphasis is not on extreme uncontrollable risks, but on
the risks that are moderate, calculated and absorbable. Kuratko et al. (2011:58)
Proactiveness: This dimension of entrepreneurship is concerned with
implementation, with taking responsibility, and doing whatever is necessary to bring
an entrepreneurial concept to fruition. It usually involves considerable perseverance,
adaptability and a willingness to assume responsibility for failure. Proactiveness,
according to Antoncic and Hisrich (2003:18), is related to pioneering and initiative
taking in pursuing new opportunities or entering new markets and they suggest
further that the future orientation of proactiveness is expressed in anticipation of an
action taken, on the basis of future needs, and that proactiveness includes
pioneering and initiative taking that is reflected in the orientation and activities of top
management. Kuratko et al. (2011:58)
Yiu and Lau (2008:43) suggest that some of the most important characteristics of
organisations comprise that established organisations, through entrepreneurial
behaviour and action, transform into market orientated enterprises and that as
economies become more market based, it is necessary for these organisations to
undergo an entrepreneurial transformation at the organisational level in order to
adapt to the transitional institutional environment and maintain competitiveness in
both local and global markets.
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2.6 CORPORATE ENTREPRENEURSHIP AND INNOVATION
Ireland, et al. (2009:10) concur that in the twenty-first century, knowledge and the
ideas flowing from it are a more important source of competitive advantage than an
organisation’s physical assets, and that knowledge is information that is laden with
experience, judgment, intuition and value. Enabling knowledge sharing or transfer
through developed procedures across individuals and business units allows for
organisations to become competitively successful to simultaneously develop and
nurture today’s and tomorrow’s competitive advantages, advantages that are
grounded in innovation. Organisations increasingly rely on Corporate
Entrepreneurship and individuals in established organisations pursue entrepreneurial
opportunities to innovate without regard to the level and nature of currently available
resources.
Morris et al. (2008:97) highlight that as organisations respond to the innovation
imperative, they are increasingly relying on a model of innovation widely known as
open source innovation or more commonly known as open innovation. This implies
that an organisation is not solely reliant upon its own innovative resources for a new
technology, product or business development purposes but that the organisation
rather acquires critical inputs to innovation from outside sources and that the open
innovation model encourages organisations to exploit creative ideas through different
innovation modes such as technology sharing, joint ventures, and research and
development partnerships.
Morris et al. (2008:97) posit further that many multinationals see this as a way to
improve the globalisation strategies in foreign markets and to exploit innovation in a
boundary-less manner.
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2.7 ENTREPRENEURIAL CULTURE AND CLIMATE FOR CORPORATE ENTREPRENEURSHIP
As South Africa forges its global and local competitive ideals, it is imperative for
management within organisations to foster and implement CE so as to sustain a
competitive advantage and seek out continuous improvement. Therefore, the
purpose of this study is to assess in essence the climate of Corporate
Entrepreneurship within a leading automotive retailer in the South African automotive
industry. Nieman and Nieuwenhuizen (2009:416)
Ireland et al. (2009:19) state that conditions in the global business environment
demand that established organisations adopt entrepreneurial strategies as a path to
success, thus highlights that entrepreneurial strategies suggest ways to revitalise
existing organisations and make the organisations more innovative and that when
individuals within the organisation are empowered to leverage these strategies, there
is the opportunity to position the organisation regularly to systematically recognise
and exploit entrepreneurial opportunities.
Nieman and Nieuwenhuizen (2009:416) suggest that there has been much research
done to identify which activities of CE have within organisations contributed to the
improvement of financial performance and value creation. Several researchers have
attempted to identify the key internal factors that create an enabling environment for
Corporate Entrepreneurship. These factors are as follows:
Top Management support for Corporate Entrepreneurship – this factor captures
the willingness and encouragement of managers to facilitate corporate
entrepreneurial activity within the organisation. Management encourages employees
to believe that innovation is expected of all in the organisation.
Work discretion and autonomy of employees – this factor refers to the degree of
autonomy given to employees in their jobs, to the discretion given to employees, and
the extent to which employees are empowered to make decisions about performing
42
their own work in the way that they believe is most effective. In entrepreneurial work
environments, employees are allowed to make decisions about their work processes
and are very seldom criticised for making mistakes when innovating.
Appropriate use of rewards – rewards and reinforcement develop the motivation of
individuals to engage in proactive, innovative, and moderate risk-taking behaviour.
Innovative organisations are characterised by providing rewards based on
performance, offering challenges, increasing responsibilities and promoting the ideas
of innovative people in the organisation.
Resource and time availability – to consider acting in entrepreneurial ways,
employees need to perceive resources as accessible for CE activities. For new and
innovative ideas to thrive, individuals should have time to develop and incubate their
ideas, and in entrepreneurial work environments employees are allowed to conduct
creative entrepreneurial experiments within a limited portion of their working time.
Supportive organisational structure and flexible organisational boundaries – a
supportive organisational structure provides the administrative mechanism by which
ideas are evaluated, chosen and implemented. Bureaucracy leads to perceived
boundaries and people should be encouraged to look at the organisation from a
holistic perspective and not be dependent on narrow, standard operating
procedures, rigid performance standards, or stifling job descriptions.
43
Nieman and Nieuwenhuizen (2009:427) highlight the fact that South Africa is part of
the global competitive landscape and therefore South African organisations also face
a turbulent business environment filled with ambiguity and discontinuity. Some large
organisations in South Africa are cognisant of the benefits that CE has to offer and
realise that downsizing, outsourcing, the formation of profit centres, and the
establishment of ventures within large organisations are becoming common place in
large organisations and that unprofitable subsidiaries are either retrenched or
unbundled.
Figure 2.5: Enabling environment for Corporate Entrepreneurship
Enabling environment
Management support
Autonomy
Time availability
Organisational boundaries
Appropriate use of rewards
Supportive organisational
Climate
Source: Nieman and Nieuwenhuizen (2009:416)
Ramachandran, et al. (2006:85) indicates that most organisations find that their
ability to identify and innovatively exploit new opportunities decreases as
organisations move from the entrepreneurial to the growth phase. However, the key
External environment
Munificence
Hostility
Organisation’s characteristics
Size of the organisation
Age and venture life cycle
Capacity development
Management Intervention
Team roles Individual
Examples of formal programmes
Champion’s programme
Corporate venturing
New
Product
Development
44
to success in the highly competitive and dynamic environment that most companies
presently operate in is to retain this ability. Therefore, organisations need to adopt an
entrepreneurial strategy – seeking competitive advantage through continuous
innovation to effectively exploit identified opportunities – in order to sustain and grow
under such circumstances.
Ramachandran et al. (2006:87) are of the view that most organisations lose their
entrepreneurial spirit once they cross the start-up phase and that the transition from
an entrepreneurial growth company to a ‘well managed’ business is usually
accompanied by a decreasing ability to identify and pursue opportunities. They thus
become blind to these opportunities in the process and neglect to understand that an
entrepreneurial organisation will institutionalise practices that establish an
organisational environment where innovation is considered and accepted and
appropriate response to organisational problems, and that this helps in developing a
culture that encourages creativity and creates a passion for innovation within the
organisation.
Nayager and van Vuuren (2005:31) reinforce that Corporate Entrepreneurship can
be sustained in the organisation if it is embedded in the culture of the organisation.
Entrepreneurial culture should encourage employees to be creative and innovative,
so as to experiment with new products, to make suggestions for the improvement of
products and internal processes and to take risks and responsibility for their
creations. Nayager and Van Vuuren (2005:31) determine that culture is a system of
shared meaning held by members that distinguishes the organisation from other
organisations. Culture serves as a control mechanism that guides and shapes the
attitudes and behaviours of employees.
45
Morris et al. (2008:258) highlight that culture has many elements and that the
challenge lies in determining the ones that are the most conducive to
entrepreneurship. A variety of elements that share a commonality in Corporate
Entrepreneurship, are:
Focus on people and empowerment
Value creation through innovation and change
Attention to the basics
Hands on management
Doing the right thing
Freedom to grow and to fail
Commitment and personal responsibility
Emphasis on the future
A sense of urgency
Morris et al. (2008:259) further suggest that because organisations are quite
complex, their internal environments are filled with competing demands, a multiplicity
of tasks and commitments, and people operating under differing time horizons; thus
as a result organisations are confronted with a number of conflicting value choices
which potentially encounter certain values of choice conflict and some values that
coexist with other values within the organization. It is thus it is important that
management within an organisation strike a balance between these certain values.
Kuratko et al. (2011: 214) refer to the individual ‘champion’ or ‘corporate
entrepreneur’ as the most critical element for successful Corporate
Entrepreneurship. They further highlight that without the visionary leadership and
persistence demonstrated by the individual, little would be accomplished because it
is the individual or “champion’ who initiates the concept, vision or dream that must be
translated into products or processes within the organisational context.
Kuratko et al. (2011: 225) highlight that the decision to behave entrepreneurially
results from the interaction of several factors. An individual has an idea or
46
recognises an opportunity, and the tendency to act upon it is due to the congruency
of both personal characteristics and attributes, and the strategic goals and objectives
of the organisation.
Morris and Kuratko (2002:77) posit that of all the elements necessary for successful
Corporate Entrepreneurship, the individual champion or entrepreneur is the most
critical. Without the visionary leadership and persistence demonstrated by this
individual, little would be accomplished and therefore someone must come up with a
concept, a vision, and a dream, and he or she must translate this dream into
products and processes within some sort of organisational context and then
champion the concept to a wide range of publics and partners. These individuals
must adapt the concept to reflect the realities encountered within the environment
and must persevere in overcoming the normal and arbitrary obstacles that thrown
into their path.
Mcbeth and Rimac (2006:14) note that the most sought after professionals in the 21st
century economy will be a new breed of corporate entrepreneur. These individuals
whose education and experience are both broad and deep and who have the
required skills for identifying and exploiting opportunities, fostering team-based
innovation, or intercreativity, and managing change they will be the ones who
become successful entrepreneurs and will be highly opportunity focused, results
driven and calculated risk takers.
Mcbeth and Rimac (2006:14) posit further that they will work collaboratively and
expect flexibility, autonomy, and rewards that commensurate with the level of
responsibility they assume and the results they achieve, emphasising further that
entrepreneurs are people who tend to systematically analyse opportunities, detect
risk, and try to minimise it as much as possible. Whilst this might be described as a
conservative personality, they refer to it as risk aware and opportunities focused, and
believe that it can be taught and fostered in a properly structured environment.
47
Mcbeth and Rimac (2006:19) conclude that given the accelerated pace of change,
complete development and commercialisation require the complete knowledge of a
team, and above all, new entrepreneurs who recognise the value of a collective
effort. Individual skills and knowledge will fuse with broad organisational skills, and a
group capacity to innovate will emerge.
Kuratko et al. (2011:241) notably highlight that the entrepreneurial personality takes
on many forms, while there are some characteristics common to most
entrepreneurial individuals, such as achievement, motivation, internal locus of
control, calculated risk-taking and tolerance for ambiguity. There is no single profile
or prototype. Furthermore, entrepreneurs are not born but made, and the
entrepreneurial potential is rich in every employee in an organisation, no matter what
their background or position in the organisation.
2.8 CORPORATE ENTREPRENEURSHIP AS A STRATEGY WITHIN THE ORGANISATION
Kuratko et al. (2011:147) declare that Entrepreneurship is more than a course of
action one pursues; it is more than a mindset. At the level of the organisation, as a
strategic approach, entrepreneurship can serve as an integral component of a
company’s overall strategy and has the capability to deliver an organisation to its
predetermined and planned future more efficiently and effectively. However, some
organisations choose to ignore entrepreneurship in their strategies.
Kuratko et al. (2011:147) suggest further that as organisations focus their strategic
objectives in achieving efficiencies in marketing, operations, finance or perhaps
sales, all of which to differentiate themselves in the marketplace they don’t include
entrepreneurship as a variable that could enhances any or all of these to take the
organisation to where it wants to go. The integration of entrepreneurship can take
many forms and implies that innovation and new value creation can play a significant
part of an organisation’s strategic direction and success.
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Ireland et al. (2006:10) highlight that there are certain factors that contribute to an
organisation defining its Corporate Entrepreneurship strategy. Among the most
important are:
Where does the organisation want to be in terms of its level of entrepreneurial
intensity?
Does the organisation seek a condition of creativity and innovation?
Does the organisation engaging in simultaneous entrepreneurial initiatives?
Are there few innovative, risky, or proactive initiatives?
To what extent are the organisation’s entrepreneurial efforts orientated
towards growing new businesses and starting new ventures outside of the
current portfolio of businesses versus transforming the existing businesses
with the objective of developing new products and or serving new markets
that are new to the organisation?
In what areas does the organisation want to be an innovation leader versus
being an innovation follower vis a vis the industry?
In what market spaces does the organisation seek to be a first mover?
In what spaces does the organisation want to be a fast second mover?
In what areas of the organisation are managers seeking higher versus lower
levels of entrepreneurial behaviours?
Which business units or product areas are expected to be the most innovative
and to serve as a model for the remainder of the organisation?
Ireland et al. (2006:13) further suggest that organisations with a carefully designed
Corporate Entrepreneurship strategy tend to elicit entrepreneurial behaviours that
are more tightly integrated which leads to better operational efficiencies. Such a
strategy allows managers and employees to potentially waste significant resources
on exciting initiatives that make little sense for the organisation or that have little
likelihood of long-term success.
49
Morris et al. (2008: 212) state that strategy does not exist in a vacuum; rather that
strategy and strategic management go hand in hand and that there are some key
ingredients to a well conceptualised entrepreneurial strategy. These are as follows:
Developing an entrepreneurial vision – It is important that senior management
conceptualise and communicate a vision of organisation wide
entrepreneurship. Vision comes from the top, while entrepreneurial behaviour
comes from throughout the organisation.
Increasing the perception of opportunity – Entrepreneurial behaviour is
opportunity seeking behaviour. Entrepreneurial strategy represents a quest to
find and exploit untapped opportunities that may arise from areas of
uncertainty either from both inside or outside the organisation.
Institutional change – Change is good. It enriches people and ads to the
experiences and deepens their insights. In entrepreneurial organisations
strategy should be conceived as vehicle for change.
Instilling the desire to be innovative – A strategy that encourages innovation
will be effective only if the organisation’s leaders make clear what types of
innovation the organisation seeks, and from where in the organisation these
innovations are expected to come.
Investing in people’s ideas – Ideas, together with an individual’s personal
commitment to them, represent the single greatest asset to the organisation.
Sharing risks and rewards with employees – Entrepreneurship is about risk
and reward. Ignoring the risk and reward relationship when striving to develop
entrepreneurial strategies within an organization, misses the whole point of
entrepreneurship.
Recognising the critical importance of failure – Failure is a sign of experience,
learning and progress. Doing something entrepreneurial means
experimenting, and experimentation is about trying something new and when
it doesn’t work, trying something else.
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2.9 CONCLUSION
The aim of this chapter was to give an overview of the literature review of the
aspects of Corporate Entrepreneurship that are deemed influential to this study. The
literature review is clear on what requirements must be undertaken by organisations
as well as their respective individuals, managers and executives from within to
formulate, foster, and execute the antecedents that nurture a climate of Corporate
Entrepreneurship within an organisation.
The benefits that arise from the entrepreneurial behaviour of employees and having
an overall climate of Corporate Entrepreneurship permeating the organisation are
immensely valuable in terms of progressive innovation and gaining and sustaining
competitive advantage. The conceptual models identified are used to address the
various aspects, concepts and phenomena of Corporate Entrepreneurship that are
applicable to this study.
The framework for sustainable Corporate Entrepreneurship used in this chapter, is
the primary model identified for this study and is supported by the other models to
corroborate and guide this study.
The antecedents for Corporate Entrepreneurship that are crux to this study and have
been identified are as follows:
Entrepreneurial leadership
Management Support
Sponsors (Champion)
Tolerance for risks, mistakes and failure
Innovation and creativity / new ideas encouraged
Appropriate rewards and reinforcement
Vision and strategic intent
Discretionary time and work
Multi-disciplined teamwork and diversity
Resource availability and accessibility
51
Continuous- and cross-functional learning
Strong customer orientation
Flat organisational structure
The South African Automotive retailer environment has been under considerable
pressure due to the economic downturn over the last three years and that the
traditional retailing modus operandi in this industry has been completely stripped of
its complacency and casualness.
This economic experience has forced certain automotive groups to seriously
evaluate how, where and when they do business with consumers, whether business
to business or business to consumer.
The need for profitability and sustainability is now paramount and supersedes the
traditional ways of selling on volume alone. The need for entrepreneurial thinking
and action is more evident than ever to maximise revenues and engineer
sustainability.
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CHAPTER THREE
RESEARCH METHODOLOGY AND DESIGN
“Seeing through to the truth needs patience more than activity and allows managers to break out of their old habits, questioning old ways
to find new solutions”
Cooper and Schindler (2010)
3.1 INTRODUCTION
The extent or ability of Corporate Entrepreneurial activities to improve any
organisation’s performance whether financially, operationally or both, forms part of
realizing when an organisation understands and accepts that change with
innovation is prevalent to remaining competitive and sustainable.
The question therefore that the management of an existing division within a leading
South African automotive retailer group needs to address is: to what extent can their
‘climate of Corporate Entrepreneurship’ be measured?
The research undertaken in this study is based around this question, and the
objective is to assess whether a climate of corporate entrepreneurship could exist
within a leading automotive retailer through the execution of various corporate
entrepreneurial activities. To be able to address this question a literature review will
be undertaken to promote an empirical research. This chapter focuses on the
research design and methodology to be used to address the research question.
This chapter will present the research methodology and will expand on the research
design, sampling, data collection, and data analyses. The research outline was
defined in Chapter One that is the research proposal.
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3.2 RESEARCH METHODOLOGY
The research methodology presented in this section focuses on the research design
objectives, the methods and procedures for the collection, measurement, and
analysis of data acquired for this study.
3.2.1 Research design strategy
The research is designed as a formal study. The objective of this formal study is to
test the hypothesis, answer the research question posed, and contribute to this field
of research. The formal study consists of a literature review and an empirical study.
Saunders, et al. (2007:138) state that the survey strategy is usually associated with
the deductive approach and it is a popular and common strategy in business and
management research and is most frequently used to answer the who, what, where
and how much questions. It therefore tends to be used in exploratory and descriptive
research.
Saunders et al. (2007:138) state further that the survey strategy tends to be very
popular as it allows for the collection of large amounts of data from a sizeable
population in a highly economical way; often administered as a questionnaire to a
sample. The survey strategy allows for the collection of quantitative data which can
be analysed using descriptive and inferential statistics. Using a survey strategy will
allow for more control over the research process, and the data collected is unlikely to
be as wide ranging as those collected by other research strategies.
3.2.2 Purpose of the study
The purpose of the study is to make use of a questionnaire formulated by
Oosthuizen (2006), to assess the possible climate of corporate entrepreneurship
within a leading South African automotive retailer. The study will also inform other
54
likely divisions within the organisation of the value of assessing their environment in
terms of entrepreneurial and innovative processes, policies and mind-set that
contribute to a competitive advantage for the organisation.
3.2.3 Time dimension
The time dimension of this study is cross sectional. Babbie and Mouton (2010:92)
highlight that most research projects are designed to study some phenomenon by
taking a cross section of it at one time and analysing that cross section carefully.
Exploratory and descriptive studies are often cross sectional.
3.2.4 Research environment
Cooper and Schindler (2010:142) posit that research outcomes differ as to whether
they occur under actual environmental conditions, that is field conditions, or whether
staged or manipulated conditions, that is laboratory conditions. The research will be
done in a field environment in the South African automotive retail industry.
3.3 HYPOTHESIS
Cooper and Schindler (2010:65) suggest that the role of hypothesis is to serve
several functions:
Guides the direction of the study
Identifies facts that are and are not relevant
Suggests which form of research design is likely to be most appropriate
Provides a framework for organising the conclusions drawn as result
55
Cooper and Schindler (2010:64) suggest further that a strong hypothesis should fulfil
three conditions:
Adequate for its purpose
Is testable
Better than its rivals
3.3.1 Hypothesis testing
Zikmund, Babin, Carr and Griffen (2010:509) state that descriptive research and
causal research designs often climax with hypothesis tests. Hypotheses are defined
as formal statements of explanations stated in a testable form, and that hypothesis
should be generally being stated in a concrete fashion so that the method of
empirical testing seems almost obvious.
For the purpose of this study the null hypothesis is used for testing and has been
stated as such in Chapter One.
3.4 SAMPLING DESIGN
Babbie and Mouton (2010:164) state that today, probability sampling remains the
primary method for selecting large representative samples for social science
research; however there are times when this is impossible or inappropriate. Non-
probability sampling techniques are often the most appropriate. As this is not a
random study the technique of non-probability sampling will be applied, and
according to Saunders et al. (2007:226) non-probability sampling is most suited for
survey styled research because of its practicality. Selecting the most appropriate
technique for the sample should not be discounted, as it will provide the most
sensible insight to answering the research question of the study.
56
This study will use a non-probability purposive or judgmental sample.
Saunders et al. (2007:230) state that purposive or judgmental sampling enables
researchers to use their judgment to select cases that will enable them to answer
their research question and to meet their objectives. Purposive sampling may also
be used by researchers adopting the grounded theory strategy as is the case of this
study.
In this study the population is the employees in a management position of a leading
automotive retailer division, and the reason for the study is to determine whether a
climate of corporate entrepreneurship exists to promote entrepreneurial and
innovative behaviour.
According to Saunders et al. (2007:70), the parameters of interest are to determine
what subject matter is relevant to complementing the study being undertaken. This
allows for clarity and accuracy of the subject matter and the sample framework to be
used in the study. For this study the parameters of interest are as follows: The
employees selected are all employed within the Dealerships division of the
automotive retailer identified for this study.
The employees selected and who make up the sample size population of around
304, are all currently full-time employees in a management role and work in the
dealer network of the automotive retailer identified for this study. All employees
identified to participate in this study have been surveyed via e-mail and are
considered to be part of the sampling framework for this study.
3.4.1 Data Collection
Babbie and Mouton (2010:78) posit that for empirical studies the collection of primary
data can be done using surveys, experiments, case studies, programme secondary
data evaluations or ethnographic studies.
57
For the purpose of this study a questionnaire will be administered to potential
respondents as part of the survey strategy methodology. The responses are deemed
confidential and this will be declared with respect to the study. This will be done to
ensure respondents are confident about their anonymity being ensured. The
questionnaire will be dispatched electronically and will be accompanied by a
covering letter.
Babbie and Mouton (2010:230) highlight that survey research is the most frequently
used research design in the social sciences and is accredited as the most common
‘type of study’. One of the most important factors that contribute to the popularity of
surveys using questionnaires is the ongoing advances being made in information
and computer technology which allows for the improved analysis of data sets
possible.
According to Saunders et al. (2007:354), the questionnaire is one of the most widely
used data collection techniques within the survey strategy. This is because each
respondent is asked to respond to the same set of questions, and this provides an
efficient way of collecting responses from a large sample prior to quantitative
analysis.
The secondary data collected for this study will support the literature review
presented in Chapter One and Two, of this study. Sources of literature considered
were peer reviewed journals, textbooks, academic databases and Internet searches.
3.4.2 Instrument used to collect the primary data
For the purpose of this study, a questionnaire developed by Oosthuizen (2006) will
be used. The questionnaire was specifically developed to measure the perception of
entrepreneurial climate within an organisation.
Section A of the questionnaire will identify thirteen constructs that should be evident
in an organisation perceived to have an entrepreneurial climate.
58
Each of the constructs has five items that identify and evaluates that specific
construct. The questionnaire uses a four-point Likert scale as measurement tool and
managers have to indicate the extent of agreement or disagreement with a specific
question or statement.
The thirteen constructs are:
1) Visionary and Entrepreneurial Leadership.
2) Management support.
3) The presence of a champion or sponsor.
4) Tolerance for risk, mistakes and failures.
5) Innovation and creativity through the encouragement of new ideas.
6) Appropriate rewards and reinforcement.
7) Vision and strategic intent.
8) Discretionary time and work.
9) Empowered teams, multidiscipline teamwork and diversity.
10) Resource availability and accessibility.
11) Continuous and cross-functional learning.
12) Strong customer orientation.
13) Flat organisational structure with open communication and a sense of
belonging.
Section B of the questionnaire will gather certain demographical information from
the individual correspondents: These include their level of management, age and
gender.
Data will be gathered by distribution of electronic copies via e-mail to individuals
identified as being part of the target population. The Chief Executive Officer for the
automotive retailer was the agent for distribution. An introductory brief will
accommodate the initial request to participate in the study. The brief will declare the
importance and assure the confidentiality of successful participation in the study.
Data collection will be coordinated via a central return e-mail address. After two
weeks of the questionnaire being available to the target population, a reminder e-
59
mail will be sent to them to remind them that the deadline for replying is nearing and
that all questionnaires were voluntarily to be returned by the end of the final week.
This will be done to solicit maximum response from the target population.
3.4.3 Development of the research instrument
As highlighted in Chapter One; according to Van der Merwe and Oosthuizen
(2011:550), the measuring instrument utilised in this study consists of items whose
reliability and validity have been confirmed in previous studies. The questionnaire
was developed by Oosthuizen (2006). When publicised items were not available,
self-developed items were used.
Van der Merwe and Ooosthuizen (2011: 551) further state that based on the above-
mentioned instruments and a literature review, Oosthuizen (2006:130-132) identified
seven organisational-based variables affecting corporate entrepreneurship. These
variables were: existence of a clear vision, fostering creativity and innovation,
tolerance for risks, mistakes and failure, customer orientation, resources availability
and accessibility, appropriate rewards and reinforcement, and supportive
organisational structure.
The measuring instrument used in this study will assess the seven selected latent
variables with 35 statements on the basis of a 4-point Likert type scale ranging from
Strongly Disagree (1) to Strongly Agree (4). In respect of each statement,
respondents have to indicate the extent to which they agree or disagree on a certain
statement.
3.4.4 Reliability of the measurement instrument
Zikmund et al. (2010:305) posit that reliability is an indicator of a measure’s internal
consistency. Consistency is the key to understanding reliability, and a measure is
reliable when different attempts at measuring something converge on the same
result.
60
Zikmund et al. (2010:306) state that Coefficient alpha (ɑ) is most commonly applied
estimate of multi-item scale reliability, and that scales with a coefficient of 0.70 and
0.80 are considered to have good reliability.
The measuring instrument to be used in this study has according to Van der Merwe
and Oosthuizen (2011:556), been proven to consistently maintain a successful
coefficient of 0.70 and greater in virtually all of the research studies where it has
been used as an instrument to assess the climate of corporate entrepreneurship
within an organisation.
3.4.5 Validity of the measuring instrument
According to Cooper and Schindler (2011:280), one widely accepted classification of
validity consists of three major forms:
The content validity of a measuring instrument is the extent to which it provides
adequate coverage of the investigative questions guiding the study.
The criterion related validity reflects the success of measures used for prediction
or estimation.
The construct validity attempts to identify the underlying constructs being
measured and determine how well the test represents them.
For the purpose of this study, the instrument, a questionnaire designed by
Oosthuizen in 2006, has been utilised in several other research undertakings and
has been proven to be reliable and valid. Some of the research studies have been
highlighted in Chapter One.
3.4.6 Factor analysis
According to Babbie and Mouton (2010:472), factor analysis is used to discover
patterns among the variations in values of several variables. This is done essentially
through the generation of artificial dimensions (factors) that correlate highly with
61
several of the real variables and that are independent of one another. A computer
must be used to perform this complex operation.
Babbie and Mouton (2010:473) further state that factor analysis is an efficient
method of discovering predominant patterns among a large number of variables, and
that factor analysis also presents data in a form that can be interpreted by the
researcher, allowing for the researcher to discover whether a given factor the
variables are loading high or whether the factors are loading low.
Pallant (2011:181) posits that there are two main approaches to factor analyses;
they are, exploratory and confirmatory. Exploratory factor analyses are often used in
the early stage of research to gather information about (explore) the
interrelationships among a set of variables. Confirmatory factor analysis on the other
hand is a more complex and sophisticated set of techniques used later on in the
research process to test (confirm) specific hypotheses or theories concerning the
structure underlying a set of variables.
3.5 DATA ANALYSIS
Zikmund et al. (2010:70) define data analysis as the application of reasoning to
understand the data that has been gathered and that in its simplest form, analysis
may involve determining consistent patterns and summarising the relevant details in
the investigation.
3.5.1 Descriptive statistics
Babbie and Mouton (2010:459) simplify that descriptive statistics is a method for
presenting quantitative descriptions in a manageable form whereby sometimes a
single variable description is required, or sometimes there is a need to describe the
associations that connect one variable with another.
62
Saunders et al. (2007:433) emphasize the use of diagrams to understand data better
and declare that descriptive statistics enable the researcher to describe and
compare variables numerically and that statistically the focus will then be on two
aspects:
The central tendency – that is when data is described for both samples and
populations quantitatively. It is usual to provide some general impression of values
that could be seen as common, middling or average.
3.5.2 Inferential statistics
Zikmund et al. (2010:509) suggest that empirical testing involves inferential statistics,
meaning that an inference will be drawn about some population based on
observations of a sample representing that population.
Babbie and Mouton (2010:475) describe that many, if not most, social scientific
research projects involve the examination of data collected from a sample drawn
from a larger population, and that in most cases the ultimate purpose is to make
assertions about the larger population from which the sample has been selected.
Saunders et al. (2007:211) highlight that the process for coming up with conclusions
about a population on the basis of data describing the sample is called statistical
inference; this allows for calculation to determine how probable a result, given the
sample size, could be obtained by chance. Such probabilities are usually calculated
automatically by statistical software, however, providing they are not biased,
samples of larger absolute sizes are more likely to be representative of the
population from which they are drawn, than smaller samples.
3.5.3 Test for significant relationship and difference
Saunders et al. (2007:441) suggest that testing the probability of a relationship
between variables occurring by chance alone if there was no difference in the
63
population from which the sample was taken, is known as significance testing. The
use of statistical analysis software will consist of a test statistic, the degrees of
freedom (df) and, based on these, the probability of the test result (p-value) or one or
more extremes occurring by chance alone. If the probability (p value) of the test
result or one or more extremes occurring by chance alone is very low (usually p=
0.05 or lower), then there is a statistically significant relationship. Statisticians refer to
this as rejecting the null hypothesis and accepting the hypothesis.
Subsequent analysis will involve describing the data and exploring relationships
using statistics. The choice of statistics is influenced by the research questions and
objectives and level of measurement at which the data was recorded. The data may
involve using statistics such as the mean, median and mode to describe the central
tendency.
Other tests considered for the purpose of this study are as follows:
Chi Square Test: - According to Cooper and Schindler (2010:469), this is probably
one of the most widely used non-parametric tests of significance. It is particularly
useful in tests involving nominal data, but can also be used for higher scales. This
test is useful in cases of one-sample analysis, two independent samples, or k
independent samples and must be calculated with actual counts rather than
percentages.
Mann Whitney U Test: - Pallant (2011:227) suggests that the Mann Whitney U Test
is used for differences between two independent groups on a continuous measure.
The test is the non-parametric alternative to the T-test for independent samples. The
test compares the medians and not the means of the two groups.
Kruskal – Wallis Test: - According to Pallant (2011:235) the Kruskal – Wallis H Test
is the non-parametric alternative to a one way between groups analysis of variance.
It allows a comparison of the scores on some continuous variable for three or more
64
groups. Scores are converted to ranks and the mean rank for each group is
compared.
3.6 CONCLUSION
This chapter provides a description of the research methodology applied to this
study. The research problem was summarised in Chapter One of the study. There
are thirteen hypotheses formulated and the main objective is to assess whether a
corporate entrepreneurial climate exists within a leading automotive retailer in South
Africa.
The research design used to test these hypotheses will be a formal survey design
and the instrument to be used to assess whether a climate of corporate
entrepreneurship could exist within a leading automotive retailer in South Africa, is a
questionnaire, designed by Oosthuizen in 2006.
65
CHAPTER FOUR
FINDINGS OF THE RESEARCH STUDY
‘For many students, the thought of completing a statistics subject or using statistics in their research, is a major source of stress and
frustration’
(Pallant 2010)
4.1 INTRODUCTION
The literature study illuminated the necessity for organisations to embrace corporate
entrepreneurship. The literature highlighted that before an organisation can
implement corporate entrepreneurship, the organisation should first understand and
determine the current level of entrepreneurship within it.
The first section of this chapter deals with and will report on the demographic profile
of the respondents by means of descriptive statistics. The second section will focus
on the reliability and validity of the instrument used in this study. In the third section
of this study, the focus will be on the performance of the respondents in terms of the
potential entrepreneurial climate of the organisation identified in this study.
The significant differences of the respondents will be reported by means of the Chi
Square Test, Mann – Whitney U Test and Kruskal – Wallis Test. Finally the
interpretation of the entrepreneurial climate findings will be presented.
All statistical analyses in terms of the findings were executed using SPSS for data
analysis.
66
4.2 DESCRIPTIVE STATISTICS OF THE SURVEY FINDINGS
Cooper and Schindler (2010:423) state that descriptive statistics allow for a
researcher to determine how effective the edited, coded and entered data
summaries can be. Descriptive statistical measures are used to depict the centre,
spread and shape of the distribution and are helpful as preliminary tools for data
description. Descriptive statistics will be provided on the respondents’ gender, age
group, and current department in which he or she is employed.
Table 4.1: Gender of respondents
Frequency (n) Percent
Valid Percent
Cumulative Percent
Male 172 87.8 87.8 87.8 Female 24 12.2 12.2 100.0 Total 196 100.0 100.0
Figure 4.1: Gender of respondents
Source: Author’s own construct
172
24
Male
Female
67
Both Table 4.1 and Figure 4.1 indicate that 24 of the respondents, equalling 8.1%
were female and 172 of the respondents, equalling 91.9% were male. For further
analysis, gender will not be considered as there is not a representative sample of
females.
Table 4.2: Age Group of respondents
Frequency Percent
Valid Percent Cumulative Percent
40 years or younger
91 46.4 46.4 46.4
Older than 40 years
105 53.6 53.6 100.0
Total 196 100.0 100.0
Figure 4.2: Age group of respondents
Source: Author’s own construct
Both Table 4.2 and Figure 4.2 indicate the age grouping of the respondents. The
respondents who are under the age of 40 represent 46.4% and the balance of the
respondents at 53.6%, are older than 40 years of age. This representation is in lieu
of the lack of representation by females as indicated in Table 4.1 and Figure 4.1.
91
105
40 years or younger
Older than 40 years
68
Table 4.3: Department of respondents
Frequency Percent Valid
Percent Cumulative
Percent Departmental
Manager 95 48.5 48.5 48.5
Dealer Principal 55 28.1 28.1 76.5 Sales Manager 46 23.5 23.5 100.0
Total 196 100.0 100.0
Figure 4.3: Department of respondents
Source: Author’s own construct
On the questionnaire, the respondents had the opportunity to indicate in which
department they currently worked. These were Dealer Principals - those individuals
who head up the business unit. Sales Managers - those individuals who are
responsible for all sales related activities within the business unit. Departmental
Managers are those individuals who are responsible for all operational activities
within the business unit. All the respondents were deemed as those employees who
have certain roles and responsibilities for potentially making each of their respective
business units an entrepreneurial and profitable success. In summary, the average
95
55
46
Departmental Manager
Dealer Principal
Sales Manager
69
respondent was the individual who was appointed into a managerial role to execute
the overall strategy set out by the executive and to ensure that employees within the
respective dealerships aspire to a successful career that delivers on their own goal
and objectives, but also aligns with those performance and financial goals of the
organisation.
4.3 VALIDITY AND RELIABILITY OF THE MEASURING INSTRUMENT
The instrument used for this study has been used in several research studies, as
previously indicated in Chapter One, in assessing the respective climates of
corporate entrepreneurship within their identified organisations and industries of
interest. To add further support to the validity and reliability of the instrument used in
this study, a factor analyses was conducted.
Van der Merwe and Oosthuizen (2011:552) state that the items used to measure the
organisational based factors affecting corporate entrepreneurship were done by
performing an Oblimin oblique rotation on the principle components of the
exploratory factor analysis. Kaizer’s criterion was used to determine the number of
factors to be extracted, and factor loadings greater than 0.35 were considered
significant. Van der Merwe and Oosthuizen (2011:556) further state that the reliability
of the measuring instrument was successfully determined by assessing the internal
consistency between the items of the measuring instrument, and this was achieved
by calculating the Cronbach alpha coefficients. To confirm the reliability and
accuracy of Oosthuizen’s climate questionnaire, the Cronbach alpha values were
calculated for the thirteen factors. The Cronbach alpha values were all above the
customary cut-off values of 0.50 suggested for internal consistency (Nunnally &
Bernstein 1994:265).
Table 4.4 summarises the Cronbach alpha values for the thirteen factors indentified
in this study. As can be seen, the values are all above the recommended value of
0.500 (Nunnally & Bernstein, 1994:265). It is therefore deduced that the accuracy is
70
acceptable and supports the reliability of the corporate entrepreneurship climate
questionnaire. Values above 0.7 are acceptable, values above 0.8 are preferable.
Table 4.4: Cronbach Alpha values of the Climate questionnaire
Factor Description Cronbach
alpha value Factor One Entrepreneurial leadership .941 Factor Two Management support
.876 Factor Three Sponsors (Champion)
.876
Factor Four Tolerance for risks, mistakes and failure
.822
Factor Five Innovation and creativity / New ideas
encouraged
.865
Factor Six Appropriate rewards and reinforcement
.784 Factor Seven Vision and strategic intent
.770 Factor Eight Discretionary time and work
.743
Factor Nine Multidiscipline teamwork and diversity
.697
Factor Ten Resource availability and accessibility
.703 Factor Eleven Continuous and cross-functional learning
.747 Factor Twelve Strong customer orientation
.774
Factor Thirteen Flat organisational structure
.748
Source: Author’s own construct
4.4 INFERENTIAL STATISTICS OF THE SURVEY FINDINGS
Pallant (2010:179) states that factor analysis is different from many other techniques
and that it is not designed to test hypotheses or indicate whether one group is
significantly different from another. There are two main approaches to factor
analysis, that is, exploratory factor analysis which is often used in the early stages of
research, and confirmatory factor analysis which is used in more complex research
when having to test specific hypotheses or theories concerning the structure
underlying a set of variables. In support of the validity and reliability of the
71
questionnaire used in this study a factor analysis was conducted and the factors are
constructed as follows:
Table 4.5: Rotated Factor analysis of the measuring instrument
1 2 3 4 5 6 7 8 9 10 11 12 13 14Q36 .638 .271Q29 .592 .265Q23 .544 .298Q16 .522 .365 .310Q27 .513 .251 .257Q62 .500 .272 .339 .299Q22 .476 .383Q33 .472 .401 .255 .314Q49 .468 .349 .256Q42 .462 .334 .296Q44 .457 .439 .302Q38 .450 .338 .316 .279Q14 .411 .353 .300 .328Q47 .397 .360 .262Q10 .638Q8 .600 .268
Q24 .284 .591 .280Q11 .544 .251Q18 .525 .325Q6 .498 .341
Q28 .313 .474 .253 .263 .337Q57 .252 .341 .314 .298 .322 .301Q21 .678Q34 .674Q13 .657 .307Q31 .330 .520 .516Q53 .391 .484Q52 .478 .271Q15 .388 .430 .335 .415Q9 .308 .359 .413 .330
Q35 .327 .398 .345 .352
Rotated Factor Matrixa
Factor
72
Source: Author’s own construct
Q60 .377 .271 .340 .251Q4 .372 -.359Q7 .777
Q20 .699Q1 .296 .614 .299
Q50 .264 .646Q59 .478 .509 .270Q32 .487 .318 .279Q39 .301 .472 .337 .274Q65 .470Q40 .391 .434 .316Q48 .293 .404 .346 .257Q64 .685 .256Q12 .305 .272 .565 .265Q51 .256 .552 .317Q25 .311 .394 .316 .280Q37 .362 .364 .384Q26 .323 .333 .339Q19 .742Q58 .357 .595Q54 .749Q55 .387 .616Q41 .345 .320 .257 .318Q63 .294 .329 .305Q5 .572Q2 .296 .273 .283 .455Q3 .292 .344 .416
Q45 .349 .297 .617Q46 .391 .307 .431Q17 .291 .345 .261Q30 .253 .251 .624Q56 .771Q43 .759Q61 .366 .295 .375
73
Pallant (2010:152) states that to support the suitability of the factor analysis, there
are two main issues to consider in determining whether a particular data set is
suitable, these are sample size and the strength of the relationship among the
variables (or items).
Table 4.6: Factors identified as constructs
Factor 1 = Entrepreneurial leadership
Factor 2 = Management support
Factor 3 = Sponsors (Champion)
Factor 4 = Tolerance for risks, mistakes and failure
Factor 5 = Innovation and creativity / New ideas encouraged
Factor 6 = Appropriate rewards and reinforcement
Factor 7 = Vision and strategic intent
Factor 8 = Discretionary time and work
Factor 9 = Multidiscipline teamwork and diversity
Factor 10 = Resource availability and accessibility
Factor 11 = Continuous and cross-functional learning
Factor 12 = Strong customer orientation
Factor 13 = Flat organisational structure
Source: Author’s own construct
To determine the adequacy of the sample size, a Kaiser–Meyer–Olkin (KMO) test in
conjunction with a Bartlett’s test of sphericity should be significant (p< 0.05) for the
factor analysis to be considered appropriate. The KMO index ranges from 0 to 1,
with 0.6 suggested as the minimum value for a good factor analysis.
Table 4.7: KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.937
Bartlett's Test of Sphericity Approx. Chi-Square 1595.154 df 91
Sig. .000 Source: Author’s own construct
74
In order to be considered appropriate, a good factor analysis should have a KMO
range of 0 to 1 with a minimum suggested value of 0.6. The factor analysis value for
this study has a value of 0.937, which is well within the range. In determining which
factors to retain; the Keizer’s criterion technique was used. Pallant (2010:185) states
that the Keizer’s criterion technique is one of the most commonly used techniques.
Using this rule, only factors with an eigenvalue of 1.0 or higher will be retained for
investigation.
Table 4.8: Keizer’s criterion technique
Factor
Initial Eigenvalues
Total % of Variance Cumulative % Entrepreneurial leadership 24.183 37.205 37.205
Management support 3.018 4.644 41.849
Sponsors (Champion) 2.559 3.937 45.785
Tolerance for risks, mistakes and failure 2.186 3.362 49.148
Innovation and creativity / New ideas
encouraged
1.884 2.899 52.047
Appropriate rewards and reinforcement 1.798 2.766 54.812
Vision and strategic intent 1.715 2.639 57.451
Discretionary time and work 1.607 2.472 59.923
Multidiscipline teamwork and diversity 1.515 2.331 62.254
Resource availability and accessibility 1.475 2.269 64.523
Continuous and cross-functional learning 1.271 1.955 66.479
Strong customer orientation 1.212 1.865 68.344
Flat organisational structure 1.077 1.657 70.000
75
The accumulative variance for the factors ranging above 0>1 is statistically
calculated at 71%. This indicates that there is a strong structure present and all
factors are suitable for loading.
Table 4.9: Keizer’s criterion technique: Factor (constructs) eigenvalues
Factor Description of factor Eigen value
1 Entrepreneurial leadership 24.183
2 Management support 3.018
3 Sponsors (Champion) 2.559
4 Tolerance for risks, mistakes and failure 2.186
5 Innovation and creativity / New ideas
encouraged 1.884
6 Appropriate rewards and reinforcement 1.798
7 Vision and strategic intent 1.715
8 Discretionary time and work 1.6.07
9 Multidiscipline teamwork and diversity 1.515
10 Resource availability and accessibility 1.475
11 Continuous and cross-functional learning 1.271
12 Strong customer orientation 1.212
13 Flat organisational structure 1.077
Source: Author’s own construct
The eigenvalue of a factor represents the amount of the total variance explained by
that factor. The factor analysis also reported the thirteen factors originally identified
in Oosthuizen’s study of 2006.
76
4.5 CLIMATE SURVEY
The questionnaire used for the survey has thirteen identified constructs that are
antecedents for an entrepreneurial climate within an organisation. Each construct
has five statements that are randomised and using a four-point Likert Scale, each
respondent had the opportunity to respond to a total of sixty five statements. Each
respondent was to indicate his or her level of agreement or disagreement with each
statement.
The following options were available:
1. = Strongly disagree
2. = Slightly disagree
3. = Slightly agree
4. = Strongly agree
4.6 RESULTS OF THE ENTREPRENEURIAL CLIMATE SURVEY
The survey embodies the respondents’ collective perceptions about the Dealerships
division of Imperial Automotive with regard to the thirteen factors that are conducive
for an entrepreneurial climate. The significant differences of the respondents will be
reported by means of the Chi square Test, Mann – Whitney U Test and Kruskal –
Wallis Test, whilst the findings of the climate survey are depicted in two graphs
namely:
A clustered bar chart that compares the values across the different constructs
indicating the average mean score of each department.
A radar graph to display the changes in values relative to the lowest point and to
provide an overview of the status quo within the division.
4.6.1 Chi - Square Test
Pallant (2010:215) states that the Chi-Square Test, which is also referred to as the
one sample Chi-Square, is often used to compare the proportion of cases from a
77
sample with hypothesised values or those obtained previously from a comparison
population. This test is also used when you wish to explore the relationship between
two categorical variables.
Table 4.10: Chi – Square values for factors (constructs)
Factor Chi-Square P value.
Entrepreneurial leadership 13.548 .001**
Management support 6.776 .034
Sponsors (Champion) 13.403 .001**
Tolerance for risks, mistakes and failure 9.800 .007
Innovation and creativity / new ideas
encouraged
13.033 .001**
Appropriate rewards and reinforcement 10.188 .006
Vision and strategic intent 11.259 .004**
Discretionary time and work 4.947 .084
Multidiscipline teamwork and diversity 8.081 .018
Resource availability and accessibility 10.402 .006
Continuous and cross-functional learning 10.308 .006
Strong customer orientation 7.094 .029
Flat organisational structure 3.394 .183
P** statistically significant at the 5% level or below
Source: Author’s own construct
The Chi-Square Test results for the survey indicate that four of the factors, (1)
Entrepreneurial leadership, (2) Sponsors (champion), (3) Innovation and creativity /
new ideas encouraged, and (4) Vision and strategic intent are statistically significant,
that is, their P- values are lower or equal to 0.05 (5% level). The rest of the factors
are considered as not significant as all their P - values are higher than 0.05 (5%
level).
78
4.6.2 Mann – Whitney U Test
Pallant (2010:227) states that the Mann – Whitney U Test is used to test for
differences between two independent groups on a continuous measure. This test is a
non-parametric test alternative to T–test for independent samples. Instead of
comparing the means of the two groups as in the case of the T-test, the Mann –
Whitney U Test actually compares medians.
For the purpose of this study, it is the author’s view that the constructs were
identified as the continuous variable and the comparison between each means of
two groups, in this case, between each departmental manager and then each age
group. Some of the most significant differences between groups were found between
the Dealer Principles and Sales Managers and the Departmental Managers and the
Sales Managers. This was more evident in the age group comparison test, indicating
the difference in perception of the younger management individuals compared to the
older, longer employed individuals.
79
Table 4.11: Mann-Whitney U Test for Departmental Manager / Dealer Principal
Comparison
Departmental Manager / Dealer Principal
Mann-Whitney U Test Z
P –Value. (2-tailed)
Entrepreneurial leadership 1827.000 -3.087 .002
Management support 2232.500 -1.494 .135
Sponsors (Champion) 2089.000 -2.055 .040
Tolerance for Risks, mistakes,
and failure
2107.000 -1.990 .047
Innovation and creativity / new
ideas encouraged
1863.000 -2.945 .003
Appropriate rewards and
reinforcement
1884.500 -2.858 .004
Vision and strategic intent 2095.500 -2.034 .042
Multidiscipline teamwork and
diversity
2067.000 -2.147 .032
Resource availability and
accessibility
2236.000 -1.477 .140
Continuous and cross
functional learning
1959.000 -2.562 .010
Strong customer orientation 2062.500 -2.161 .031
Source: Author’s own construct
The results of the Mann – Whitney U Test between Departmental Manager and
Dealer Principle identified as statistically significant are highlighted in Table 4.11.
The statistically significant differences between the two groups only indicate that
there is a difference. The differences that are statistically different were the following
constructs with a P value greater than 0.05: Management support and Resource
availability.
80
Table 4.12: Mann-Whitney U Test for Departmental Manager / Sales Manager
comparison
Departmental Manager / Sales Manager
Mann-Whitney U Test Z
P-Value. (2-tailed)
Entrepreneurial leadership 1521.000 -2.939 .003
Management support 1618.000 -2.512 .012
Sponsors (Champion) 1391.500 -3.508 .000
Tolerance for Risks, mistakes, and
failure
1534.500 -2.881 .004
Innovation and creativity / new
ideas encouraged
1522.500 -2.936 .003
Appropriate rewards and
reinforcement
1664.500 -2.303 .021
Vision and strategic intent 1482.500 -3.122 .002
Multidiscipline teamwork and
diversity
1624.000 -2.487 .013
Resource availability and
accessibility
1465.000 -3.187 .001
Continuous and cross functional
learning
1574.500 -2.699 .007
Strong customer orientation 1690.000 -2.193 .028
Source: Author’s own construct
The results of the Mann – Whitney U Test identified as statistically significant are
highlighted in Table 4.12. The statistically significant differences between the two
groups only indicate that in this test there is no difference between Departmental
Managers and Sales Managers as none of the constructs had P values greater than
0.05.
81
Table 4.13: Mann-Whitney U Test for Dealer Principal / Sales Manager comparison
Dealer Principal / Sales Manager Mann-Whitney
U Test Z P – Value. (2-tailed)
Entrepreneurial leadership 1230.000 -.241 .809
Management support 1120.000 -.998 .318
Sponsors (Champion) 1033.000 -1.591 .112
Tolerance for Risks, mistakes, and failure
1082.000 -1.257 .209
Innovation and creativity / new ideas encouraged
1154.000 -.762 .446
Appropriate rewards and reinforcement
1200.500 -.444 .657
Vision and strategic intent 1054.500 -1.461 .144
Multidiscipline teamwork and diversity
1201.500 -.437 .662
Resource availability and accessibility
1023.500 -1.657 .098
Continuous and cross functional learning
1231.500 -.230 .818
Strong customer orientation 1221.500 -.300 .764
Source: Author’s own construct
Table 4.13 indicates that none of the P- values are less than or equal to 0.05, so
none of the results of the Mann – Whitney U Test are not significant, all are
significant and only indicate that there is a difference. In this particular test, the P
values are all significant due to the fact that they are all above 0.05 and indicate the
significant difference between Dealer Principles and Sales Managers.
82
Table 4.14: Mann-Whitney U Test for Age groups comparison
Age groups Mann-Whitney
UTest Z P- Value. (2-tailed)
Entrepreneurial Leadership 4735.000 -.108 .914
Management Support 3951.500 -2.102 .036
Sponsors (Champion) 3913.000 -2.195 .028
Tolerance for Risks, mistakes, and
failure
3501.500 -3.246 .001
Innovation and creativity / new ideas
encouraged
4147.000 -1.602 .109
Appropriate rewards and
reinforcement
4061.500 -1.820 .069
Vision and strategic intent 4464.500 -.799 .425
Multidiscipline teamwork and
diversity
4074.000 -1.788 .074
Resource availability and
accessibility
4639.500 -.351 .725
Continuous and cross functional
learning
4590.000 -.476 .634
Strong customer orientation 4385.500 -.995 .320
Source: Author’s own construct
The results of the Mann – Whitney U Test identified as statistically significant are
highlighted in Table 4.14. The statistically significant differences between the two
groups are higher in the forty years or younger group, which only indicates that there
is a difference with the majority of the constructs. The only constructs that showed
no statistical difference were as follows: Management Support, Sponsors
(Champion), and Tolerance for risks mistakes, and failure.
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4.7 KRUSKAL-WALLIS H TEST
Pallant (2010: 232) states that the Kruskal – Wallis H Test is the non-parametric
alternative to a one-way between groups’ analyses of variance. It allows for the
comparison of scores on some continuous variable for three or more groups. It is
similar in nature to the Mann – Whitney U Test, the difference being the opportunity
that exists to compare more than two groups.
Table 4.15: Kruskal – Wallis H Test Mean result
Factor Mean
Entrepreneurial leadership
Departmental Manager 3.03 Dealer Principal 3.32 Sales Manager 3.32
Total 3.18
Management support
Departmental Manager 2.75 Dealer Principal 2.85 Sales Manager 3.01
Total 2.84
Sponsors (Champion)
Departmental Manager 2.85 Dealer Principal 3.03 Sales Manager 3.23
Total 2.99
Tolerance for risks, mistakes and failure
Departmental Manager 2.87 Dealer Principal 3.04 Sales Manager 3.10
Total 2.97
Innovation and creativity / new ideas encouraged
Departmental Manager 2.80 Dealer Principal 3.04 Sales Manager 3.13
Total 2.94
Appropriate rewards and reinforcement
Departmental Manager 2.85 Dealer Principal 3.09 Sales Manager 3.10
Total 2.98
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Vision and strategic intent
Departmental Manager 3.17 Dealer Principal 3.39 Sales Manager 3.49
Total 3.31
Discretionary time and work
Departmental Manager 2.95 Dealer Principal 3.13 Sales Manager 3.13
Total 3.04
Multidiscipline teamwork and diversity
Departmental Manager 2.52 Dealer Principal 2.76 Sales Manager 2.84
Total 2.66
Resource availability and accessibility
Departmental Manager 2.47 Dealer Principal 2.67 Sales Manager 2.87
Total 2.62
Continuous and cross-functional learning
Departmental Manager 2.87 Dealer Principal 3.14 Sales Manager 3.17
Total 3.02
Strong customer orientation
Departmental Manager 3.20 Dealer Principal 3.38 Sales Manager 3.39
Total 3.30
Flat organisational structure
Departmental Manager 2.95 Dealer Principal 3.16 Sales Manager 3.11
Total 3.05
Source: Author’s own construct
The findings of the climate survey are depicted into two graphs, namely:
A clustered bar chart in Figure 4.4 that compares the values across the different
constructs indicating the average mean score of each department.
A radar graph in Figure 4.5 to display the changes in values relative to the lowest
point and to provide an overview of the status quo within the division.
85
Figure 4.4 Entrepreneurial Climate Analysis (Clustered Bar Chart)
Source: Author’s own construct
3.03
3.32
3.32
3.18
2.75
2.85
3.01
2.84
2.85
3.03
3.23
2.99
2.87
3.04
3.10
2.97
2.80
3.04
3.13
2.94
2.85
3.09
3.10
2.98
3.17
3.39
3.49
3.31
2.95
3.13
3.13
3.04
2.52
2.76
2.84
2.66
2.47
2.67
2.87
2.62
2.87
3.14
3.17
3.02
3.20
3.38
3.39
3.30
2.95
3.16
3.11
3.05
0.00 1.00 2.00 3.00 4.00
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
Departmental Manager
Dealer Principal
Sales Manager
Total
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Figure 4.5 Entrepreneurial Climate Analyses (Radar Graph)
Source: Author’s own construct
Figure 4.4 and Figure 4.5 indicate the results of the survey in graph format.
Following the climate questionnaire that analyses the thirteen constructs conducive
for entrepreneurial activity and behaviour, the following conclusions are made using
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
EntrepreneurialLeadership
ManagementSupport
Sponsors(Champion)
Tolerance forrisks, mistakes
and failure
Innovation andcreativity / New
ideasencouraged
Appropriaterewards and
reinforcementVision and
strategic intentDiscretionary
time and work
Multi-disciplined
teamwork anddiversity
Resourceavailability and
accessibility
Continuous andcross-functional
learning
Strongcustomer
orientation
Flatorganisational
structure
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the constructs as a foundation for a constructive conclusion from the measured
outcomes:
The overall climate is not optimally conducive for entrepreneurial behaviour to
manifest. The constructs that were measured are all evidently present; although not
at a desired level to enhance and promote entrepreneurialism.
In order to drill down into the findings of the thirteen identified factors, the following
conclusions were derived at:
Entrepreneurial Leadership
Whilst entrepreneurial behaviour and actions are individual, the practice of Corporate
Entrepreneurship is a collective responsibility. Leadership within the senior ranks of
an organisation must ensure that the entrepreneurial message flows from the top
right through all the echelons of the organisation. Ranked third in the results of the
survey, the outcome was only ‘slightly agreed, which indicates that the executive and
senior management of the organisation must do more to ensure that the
entrepreneurial vision and shaped corporate purpose are sustainable.
Management Support
Middle managers within any organisation are those individuals who are the enablers
of entrepreneurial actions and who are responsible for newly created ventures and
strategic renewal. They are responsible for the execution of vision and purpose set
out by senior management by shaping the performance of the lower level employees
who implement these actions. Ranked eleventh in the results of the survey, this
result is disconcerting, as it reflects the lack of support for the development of ideas
amongst respondents for the improvement of the organisation. Top management
might not always be aware of the creative ideas and possible innovation that could
be within the lower echelons of the employee base.
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Sponsors (Champion)
Ranked seventh in the results of the survey, it is critical to understand the
importance of differentiating between those managers who are helpful in their daily
tasks by removing operational roadblocks, and those managers who are supporting
employees with innovative ideas and new venture creation by giving support,
coaching, as well as providing resources for their entrepreneurial projects.
Managers who become champions to those entrepreneurial employees must build
coalitions so that entrepreneurial initiatives are encouraged further and allow for
those projects to succeed. Respondents with innovative and creative thoughts and
behaviour must not perceive the environment to be unfriendly towards their actions.
Tolerance for risks, mistakes and failure
The automotive retailing industry is highly competitive with so many models and
derivatives available for public consumption. Ranked ninth in the results on the
survey, the appetite for risks, mistakes and failure is low, possibly due to the
subdued economic factors experienced over the last few years with the marketplace.
Unpredictable and risky projects are not highly valued, therefore not often if ever
encouraged.
Innovation and creativity / New ideas encouraged
All organisations grapple with the need to be innovative and the need to be
structured and conformed. This implies what elements of and how much control to
relinquish in terms of employee ownership. Empowering employees to be creative
and innovative means allowing them to be in control of their own performance, and
the impact the performance will have on the organisation. Ranked tenth in the results
of the survey was the perception of the environment as being conducive to
innovation and creativity where new ideas are encouraged, which reflected an area
of concern. It is evident that respondents in non-customer facing roles are not
inspired or encouraged regularly to generate new ideas, to think out of the box
perhaps, or to become involved in innovative and creative projects, whereas those
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who are inspired do perceive encouragement. Therefore, new ideas around work
improvement are perhaps lost due to this lack of inspiration.
Appropriate rewards and reinforcement
Rewards are a very important mechanism within any organisation when it comes to
motivating employees. Rewards are not always financial; there are others such as
career enhancement, promotion, self-actualisation or social reward. Ranked eighth in
the results of the survey, there is slight disagreement with regard to whether
innovation and creativity are appropriately rewarded in relation to the value added by
innovative and creative employees.
Vision and strategic intent
A well supported vision and strategic intent for innovation within any organisation
compromise a core part of ensuring that Corporate Entrepreneurship flourishes. The
support for innovation and its execution is driven by clear organisation-wide
entrepreneurship. Ranked first in the results of the survey, all respondents were all in
slight agreement that the organisation has a clear vision and strategic intent. Good
unambiguous leadership is crucial for communicating clear intentions for the
organisation through all ranks of management.
Discretionary time and work
Ranked fifth in the results of the survey, respondents were given the opportunity to
work with degrees of freedom within the workplace in compliance with organisational
policy and procedures. Autonomy in the workplace is determined by the degree of
supervision necessary to do one’s own work. Free time to pursue innovative ideas is
marginally aligned to management’s vision and strategies and respondents consider
this as not being significantly effective in or conducive to contributing to Corporate
Entrepreneurship.
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Multidiscipline teamwork and diversity
Working in teams is crucially important to the organisation as many of the
dealerships are their own cost centres and therefore the ability of their respective
managements to ensure a cohesive, efficient, and profitable business unit is vital.
Ranked twelfth in the results of the survey, this being one of the lowest scores and
an area for concern, respondents were all in slight disagreement suggesting that
multidiscipline teams and work and diversity are not a high priority or being utilised
effectively.
Resource availability and accessibility
Resources are always a scarce commodity in organisations and therefore are not
always readily available. When there is a contest for those resources between
operational requirements and new ideas and opportunities, it is very seldom that new
ideas and opportunities are afforded sufficient resources.
This lack of resource availability is evident from the survey as this was ranked last in
the survey by the respondents who perceive resource availability and accessibility as
a premium in the organisation. Accessing resources for innovation and creativity is
slow in approval due to financial demands regarded as more important.
Continuous and cross-functional learning
Automotive retailing is well positioned for continuous and cross-functional learning.
Managers within each business unit have the opportunity of being exposed to
various departments within their respective business units, ranging from sales,
finance, operations and human resources. Employees in general are encouraged to
maximise the knowledge base within each of their functional fields and to share this
knowledge.
Ranked sixth in the results of the survey, the tendency seems to be that respondents
don’t actively share their knowledge across functional fields, and this therefore
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doesn’t encourage continuous and cross-functional learning where time or resources
are utilised facilitating other employees outside of their areas of responsibility.
Strong customer orientation
The South African automotive market is highly competitive. Premium brand resellers
of European and Japanese decent are facing tremendous competition from up-and-
coming foreign Asian manufactured brands. South African consumers are smart and
savvy buyers of motor vehicles and command quality and value for money.
Automotive manufactures and their branded retailer networks must cater for service
and product development and requirements that service the needs of astute
consumers.
Ranked highly in second place in the results of the survey, it is clear that all the
respondents are in agreement that strong customer orientation is necessary to
support the innovation of products and services to satisfy their consumers. Customer
retention is a priority with all manufacturers and retailers as this is considered
banked business and there is no room for customer attrition.
Flat organisational structure
Ranked fourth in the results of the survey, a flat organisational structure appropriate
for the successful management of each of the business units with Imperial
Automotive Dealerships division, is perceived as functional and allows for
appropriate levels of communication and for management to engage employees
without having to be bureaucratic in nature. Collaboration is achieved by extensive
personal interaction and face-to-face communication.
As stated in Chapter One, the following hypotheses were formulated for this study so
as to highlight the importance thereof to management, who are the custodians of the
potential entrepreneurial climate within the Dealerships division of Imperial
Automotive. Based on the following empirical research conducted and stated in the
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findings of this chapter, the following hypotheses are either accepted or rejected as
statistically identified in Figure 4.9 and 4.10.
The highest ranked construct was vision and strategic intent at = 3.31, and the
lowest ranked construct was resource availability at = 2.62.
H1: Entrepreneurial Leadership is not evident within the Imperial Automotive
Dealerships division to create a climate of Corporate Entrepreneurship that promotes
operational success and financial profitable performance.
H1: Entrepreneurial Leadership: ( = 3.18) the hypothesis is rejected as the
statistical outcome supports that there is slight agreement to the perception of
entrepreneurial leadership by the respondents.
H2: Management support within the Imperial Automotive Dealerships division does
not have a propensity towards calculated risk-taking and possible failure.
H2: Management Support: ( = 2.84) the hypothesis is accepted as the statistical
outcome supports that there is slight disagreement to the perception of management
support by the respondents.
H3: Sponsors (champions) within the Imperial Automotive Dealerships division are
not present to encourage Corporate Entrepreneurship.
H3: Sponsors (champions): ( = 2.99) the hypothesis is accepted as the statistical
outcome supports that there is slight disagreement to the perception of Sponsors
(Champions) by the respondents.
H4: Tolerance for risks, mistakes and failure within the Imperial Automotive
Dealerships division is low.
H4: Tolerance for risks, mistakes and failure: ( = 2.97) the hypothesis is accepted
as the statistical outcome supports that there is slight disagreement to the perception
of tolerance for risks, mistakes and failure by the respondents.
x
x
x
x
x
x
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H5: Innovation, creativity, and new ideas being encouraged, are not present within
Imperial Automotive Dealerships division.
H5: Innovation, creativity, and new ideas being encouraged: ( = 2.94) the
hypothesis is accepted as the statistical outcome supports that there is slight
disagreement to the perception of innovation, creativity and new ideas being
encouraged by the respondents.
H6: Appropriate rewards and reinforcement are not visible within the Imperial
Automotive Dealerships division.
H6: Appropriate rewards and reinforcement: ( = 2.98) the hypothesis is accepted
as the statistical outcome supports that there is slight disagreement to the perception
of appropriate rewards and reinforcement encouraged by the respondents.
H7: Vision and strategic intent are not fully understood within the Imperial
Automotive Dealerships division.
H7: Vision and strategic intent: ( = 3.31) the hypothesis is rejected as the
statistical outcome supports that there is slight agreement to the perception of vision
and strategic intent by the respondents.
H8: Discretionary time and work are not acceptable to management within the
Imperial Automotive Dealerships division.
H8: Discretionary time and work: ( = 3.04) the hypothesis is rejected as the
statistical outcome supports that there is slight agreement to the perception of
discretionary time and work by the respondents.
H9: Multidiscipline teamwork and diversity are not visible within the Imperial
Automotive Dealerships division.
H9: Multidiscipline teamwork and diversity: ( = 2.66) the hypothesis is accepted
as the statistical outcome supports that there is slight disagreement to the perception
of multidiscipline teamwork and diversity by the respondents.
x
x
x
x
x
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H10: Resource availability and accessibility are very limited within the Imperial
Automotive Dealerships division.
H10: Resource availability and accessibility: ( = 2.62) the hypothesis is accepted
as the statistical outcome supports that there is slightly disagreement to the
perception of resource availability and accessibility by the respondents.
H11: Continuous and cross-functional learning is not evident within the Imperial
Automotive Dealerships division.
H11: Continuous and cross-functional learning: ( = 3.02) the hypothesis is
rejected as the statistical outcome supports that there is slight agreement to the
perception of continuous and cross functional learning by the respondents.
H12: Strong customer orientation is not encouraged within the Imperial Automotive
Dealerships division.
H12: Strong customer orientation: ( = 3.30) the hypothesis is rejected as the
statistical outcome supports that there is slight agreement to the perception of strong
customer orientation by the respondents.
H13: Flat organisational structure with open communication and strong sense of
belonging is not evident within the Imperial Automotive Dealerships division.
H13: Flat organisational structure: ( = 3.05) the hypothesis is rejected as the
statistical outcome supports that there is slight agreement to the perception of a flat
organisational structure by the respondents.
x
x
x
x
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4.8 CONCLUSION
This chapter addressed various aspects by means of descriptive and inferential
statistics. All relevant data was presented in Table and Figures. Demographic data of
respondents indicated the gender, age group and departments of the respondents.
The assessment of the climate of entrepreneurship within the Dealerships division of
Imperial Automotive was conducted using a measuring instrument designed by
Oosthuizen in 2006, and has been proven to be reliable and valid. The high
Cronbach alpha values support the fact that the instrument is reliable.
Factor Analysis and non-parametric tests were conducted so as to present the
significant statistical differences between continuous variables and independent
variables. From this it was possible to either accept or reject the hypotheses
identified in Chapter One.
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CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
“Organisations cannot be static. They must continually adjust, adapt and redefine themselves. This is a fundamental Principal in a free market
economy”
Kuratko, Morris, and Covin (2011)
5.1 INTRODUCTION
In Chapter One and Chapter Two, the following understanding was indicated and
confirmed, comprising, that the nature of business has been transformed over the
past few decades. Modern organisations must survive in a fast paced, highly
threatening, and ever increasing global environment. Dramatic and ongoing change
forces executives to regularly re-examine the basic purpose of their organisations,
and to become much more flexible in their approach to serving multiple stakeholders.
Organisations find themselves having to continually redefine their markets,
restructure their operations, and modify their business models. The strategy and
structure that works today may be ineffective in six months’ time.
As the rules of the competitive game keeps changing, organisations begin to realise
that sustainable competitive advantage is fleeting and that winning companies have
made a fundamental discovery – the dynamic that drives success is
entrepreneurship. The source of competitive advantage lies in being able to think
and act entrepreneurially, and to be innovative. (Morris et al. 2008: ііі).
In this chapter, a summary, a revisit to the research objectives and an overview of
the literature study will be provided. The hypothesis statements will be summarised
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according to their outcomes, of being accepted or rejected, then limitations of the
study, recommendations for future research, and finally the conclusion will follow.
5.2 SUMMARY
Although the findings of the empirical study were discussed at length in the previous
chapter, summarised conclusions are presented to serve as a basis for
recommendations posed later on in this chapter. The conclusions provide a useful
insight into the entrepreneurial climate of the Dealerships division of Imperial
Automotive and highlight some concerns that inhibit internal entrepreneurial climatic
imperatives.
5.2.1 Research objectives
The primary objective of this research was to assess the climate of Corporate
Entrepreneurship within a leading South African automotive retailer.
This objective was achieved as a result of the assessment of the climate of
Corporate Entrepreneurship through hypothesis H1 to H13 as stated in Chapter One
of this research study.
In order to achieve the primary objective, various secondary objectives were
formulated. They were as follows:
To determine by means of a literature study:
The definition of Corporate Entrepreneurship (CE).
The role of Corporate Entrepreneurship within an organisation.
The role of innovation for an entrepreneurial organisation.
The role of entrepreneurial leadership within an entrepreneurial organisation.
Entrepreneurial culture and its influence to foster, develop and implement, an
innovative climate of Corporate Entrepreneurship within an organisation.
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Sustaining Corporate Entrepreneurship and innovation.
Antecedents of Corporate Entrepreneurship that positively influence the
climate of Corporate Entrepreneurship within an organisation:
o Entrepreneurial leadership
o Management support
o Sponsors (Champion)
o Tolerance for risks, mistakes and failure
o Innovation and creativity / new ideas encouraged
o Appropriate rewards and reinforcement
o Vision and strategic intent
o Discretionary time and work
o Multidiscipline teamwork and diversity
o Resource availability and accessibility
o Continuous and cross-functional learning
o Strong customer orientation
o Flat organisational structure
To determine by means of a survey strategy design, a survey questionnaire was
used to execute the exploratory research for this study so as to determine the
climate of Corporate Entrepreneurship.
The secondary objectives were addressed and achieved by means of the literature
review.
5.2.2 Overview of the literature study
The literature review was covered in Chapter Two. The following is a short overview
of the literature.
In Chapter Two, a review was given on various aspects of the field of Corporate
Entrepreneurship. The main purpose of providing a literature review was to give a
background on what Corporate Entrepreneurship entails and what organisations can
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experience should they be in favour of an entrepreneurial strategy that delivers on a
climate of entrepreneurship.
From the many definitions of Corporate Entrepreneurship provided by researchers,
the definition adopted for the purpose of this study was that of Sharma and
Christensen (1999:18) as cited by Ireland et al. (2009:21) as the process whereby
individuals or a group of individuals, in association within an existing organisation
create a new organisation or instigate renewal or innovation within that organisation.’
The literature review in chapter two also highlighted the importance of how and why
it is important for organisations to embrace and undertake Corporate
Entrepreneurship as a means to grow, become entrepreneurially spirited, and
sustain their competitive advantage.
Kuratko et al. (2011:403) state that the key to Corporate Entrepreneurship
sustainability is the ability of the organisation to move on two parallel paths:
continuous improvement and radical innovation.
Kuratko et al. (2011:403) posit that continuous improvement allows organisations to
inch forward on a daily basis by enhancing organisational capabilities, increasing
customer service levels, improving efficiencies on an ongoing basis, and that
simultaneous step-by-step innovations, whether radical or incremental, allow for
organisations to anticipate their current markets and allow for the creation of new
markets to be created with entirely new value propositions. The benefits to
organisations that are entrepreneurial-like are endless.
They are able to:
Improve financial performance and create new value streams
Improve profitability and future growth
Rejuvenate existing businesses and create new ones
Sustain competitiveness
Become more proactive in their respective markets
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Foster strategy that is entrepreneurially conducive
Corporate Entrepreneurship is a relatively new field of study and therefore various
frameworks and models exist to support the understanding, related theory and
expectations of Corporate Entrepreneurship. Four models were applied to this study,
of which three were to support the primary model identified for the study. They were
as follows:
The Model of Sustained Corporate Entrepreneurship in Kuratko et al. (2011: 51).
This model focuses on the organisation’s ability to sustain entrepreneurship on an
ongoing basis, and that sustainability is contingent upon individual members of the
organisation continuing to undertake innovative activities and positive perceptions.
In support of this model, others were also considered:
The Integrative Model of Corporate Entrepreneurship Strategy by Ireland et al.
(2009:24) which focuses on Corporate Entrepreneurial Strategy and the
requirements thereof. The strategy highlights the three elements, namely, an
entrepreneurial strategic vision, pro-entrepreneurship architectural structure
and entrepreneurial process and behaviour.
The proposed framework for Corporate Entrepreneurship by Christensen
(2004:310) which focuses on Corporate Entrepreneurship in terms of four
perspectives; being corporate venturing, internal resources,
internationalisation and external networks. These perspectives indicate where
an organisation can become more innovative.
A Model of Middle Level Managers’ Entrepreneurial Behaviour by Kuratko et
al. (2005:701) which focuses on how middle managers’ entrepreneurial
behaviour is linked to successful Corporate Entrepreneurship. The model
focuses on the organisational antecedents that contribute to entrepreneurial
behaviour.
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5.2.3 Conclusions on entrepreneurial climate
To assess the climate of Corporate Entrepreneurship in an organisation, the
instrument designed by Oosthuizen can be used. This instrument has been proven
to be valid and reliable (Van der Merwe and Oosthuizen, 2011:540) and has been
used in other South African studies.
The factor analysis was confirmed as indicated in the instrument used for the survey
which would determine whether a climate of Corporate Entrepreneurship exists with
a leading South African automotive retailer.
These factors are:
Entrepreneurial leadership
Management support
Sponsors (Champion)
Tolerance for risks, mistakes and failure
Innovation and creativity / new ideas encouraged
Appropriate rewards and reinforcement
Vision and strategic intent
Discretionary time and work
Multidiscipline teamwork and diversity
Resource availability and accessibility
Continuous and cross-functional learning
Strong customer orientation
Flat organisational structure
For executive or senior management to create a climate of entrepreneurship within
the Dealerships division, it is imperative that they themselves think and act in an
entrepreneurial manner. In identifying those factors from the findings in Chapter Four
whose hypotheses have been rejected, the overall view is summarised as follows:
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Factors that pose some concern for entrepreneurial behaviour to manifest within
the division are management support, resource availability and accessibility, and
multidiscipline teamwork and diversity. These factors have the propensity to
positively influence an individual’s characteristics such as self-confidence and
optimism, high energy levels and work ethic, as well commitment, perseverance,
and determination.
In general, middle managers have the potential to think and act entrepreneurially
within the division:
Factors that pose some concern for entrepreneurial behaviour to manifest within
in the division are multidiscipline teamwork and diversity and resource availability
and accessibility. These factors have the propensity to negatively influence an
individual’s characteristics such as creativity and innovativeness, independence,
internal locus of control and resourcefulness.
Management who don’t have a customer facing managerial responsibility were all
slightly in a disagreement with regards to a significant number of the constructs.
These managers whose numbers were greater than the front line customer facing
managers were the biggest contributors to the division’s inability of creating a
conducive climate of Corporate Entrepreneurship.
5.3 LIMITATIONS OF THE STUDY
It is the author’s view, that with all research, the findings of any research will be
influenced by the environment and the economic forces that prevail within it. It is
therefore understandable that all research has limitations and in regard to this study
the following limitations are noted.
Only one division of Imperial Automotive Retail, namely, Dealerships division
was researched. All divisions within the group should be surveyed.
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More responses should have been received from more business units to give a
better view of the potential current levels of Corporate Entrepreneurship within
the Dealership division.
The study time line was constrained to a specific period of time and should there
have been the opportunity to conduct the study over a longer period of time, the
results would have increased.
No other assessments of entrepreneurial climate of other automotive retailers
have been concluded, so no benchmarks are available to determine whether the
findings are the norm or whether they are better or worse than other automotive
retailers.
5.4 RECOMMENDATIONS FOR MANAGEMENT
Morris et al. (2008:167) aptly state that each and every employee within an
organisation is rich in entrepreneurial potential. However, most of the employees fail
to capitalise on that potential. Some employees do not recognise their potential,
whilst others believe that the cost of that potential is greater than the potential
benefits. Management must create a work environment that helps employees
understand the kinds of entrepreneurial behaviours that are expected, and accepted,
as well as combined with their own ability to act in an entrepreneurial way.
All employees, in particular middle management, should have an appetite for
wanting to always change the way things are. Having a vigilant discomfort for the
status quo is important for management. The antecedents within the survey
questionnaire are means for better understanding the environment of the
organisation and whether all managers exercise their thoughts, behaviour, and
actions around these antecedents which are conducive to an entrepreneurial climate
within an organisation.
For the organisation to be entrepreneurially sustainable, it is imperative that the
employees and management advocate a sense of urgency throughout. The desire to
continually want innovative change is imperative for entrepreneurial sustainability.
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Ultimately, there are two choices; either be innovative or fall behind. There is no
middle ground for entrepreneurial sustainability.
Recommendations for the organisation follow so as to create and support the
antecedents of an entrepreneurial climate within the Dealerships division of Imperial
Automotive.
Entrepreneurial Leadership
This is one of the most important keys to unlocking an entrepreneurial climate within
an organisation, although it was the third highest scored construct within the climate
survey results. The score was only ‘slightly agreed’ and needs to move to a ‘strongly
agreed’ interpreted mean. This requires that the trait of leadership should not only be
the domain of the executive or top management within the organisation, but should
be an instilled desire by all in positions of responsibility. The entrepreneurial vision
must be permeated throughout organisation by the leadership. Managers and
employees must be clear about the strategic vision and mission, as this will
complement to the organisation’s innovation, growth and sustainable future.
Management Support
This must be improved so as to eliminate the impression that there is a lack of
support. It is the responsibility of all managers, both middle and senior to be able to
assess on a daily basis the extent to which their employees are contributing to the
overall goals and objectives of their respective business units, and thus in turn to that
of the organisation as a whole. Management must be supportive of proactive and
calculated risks that are being taken by middle and senior managers to continually
create value for all their stakeholders.
Sponsors (Champion)
Every executive or manager, both senior and middle, must become a champion
within the organisation. Knowledge transfer and positive entrepreneurial behaviour
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are fundamental to engineering an entrepreneurial climate within the business units.
Employees must be exposed to individuals who voluntarily seek to continuously add
value to themselves, their colleagues and clients. An official champion’s programme
will encourage ambitious and talented entrepreneurs to ‘emerge’ from within the
organisation. This allows for new innovative and creative developments to
continuously take place within product or service requirements.
Tolerance for risks, mistakes and failure
Anything new involves risk; Employees should be educated about positive ways of
taking calculated risks and the benefits of being proactive. This encouragement will
stimulate new idea generation and creativity within the organisation.
Entrepreneurship does not entail reckless decision-making. Employees must be able
to experiment with new ideas, take moderate risks, and enjoy an environment that
absorbs failure when there is trial and error allowed.
Innovation and creativity / New ideas encouraged
Innovation, creativity, and new idea generation should be a central theme to most of
the formalised training programmes offered within the Dealerships division to its
employees. This will encourage entrepreneurial characteristics to be potentially
identified and then further developed. Employees must be encouraged to participate
in creative concepts such as brainstorming, role playing, value analysis and mind
mapping, to name a few. All these mechanisms are designed to solicit creativity,
even inbetween structures, standards and expectations. Managers and employees
must always maintain an entrepreneurial mindset when either dealing with daily
operational requirements or taking on innovative and creative projects.
Appropriate rewards and reinforcement
Recognition for value added efforts should always be positive and given to those
actions that have resulted in success. The recognition should be given openly and
should be publicised throughout the organisation. Recognition should be tailored to
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the needs of the people and so that everyone is motivated to pursue the reward. The
reward must be given soon after the achievement and the relationship between the
reward and the achievement should be clearly understood by the employees. It is
very important for the employee to equate the rewards being offered as equitable to
the innovative behaviour that is being expected and achieved. Highly creative and
innovative outputs should have very distinctive rewards so as to enhance the
recognition and gratuity of the reward.
Vision and strategic intent
Achieving sustainable advantage in the new competitive landscape also requires that
all managers, from the executive to the junior ranks, and even the employees think
and act in an entrepreneurial way so that they complement the appropriate
entrepreneurial strategies. The executive must communicate the application of
creativity and entrepreneurial thinking to the execution of the core strategy of the
organisation. Innovation is a key deliverable with developing and successfully
exploiting competitive advantages. The challenge lies in developing innovation as a
core competence of the organisation.
Discretionary time and work
Employees should have the appropriate freedom to use some time and the work
environment to explore new ideas and techniques to existing procedures. This
degree of autonomy assists to encourage entrepreneurial behaviour from
employees. In turn, the organisation is continuously innovating and creating new
solutions to their competitive portfolio. These portfolios can range from competencies
that are human capital related and competencies that show the organisation’s ability
to adapt, innovate, and manage change. Other competencies might be related to the
resources of the organisation and can include their financial capability or intellectual
resources that are innovation enabling.
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Multidiscipline teamwork and diversity
Processes should be implemented for the existence of cross functional teams that
are not merely for audit purposes. These teams should have the jurisdiction to
challenge policy and procedure and improve systems and structure within the
organisation. Their dual function should be focused internally, comprising employee
wellness and performance, as well as externally, comprising market and consumer
trends and demands. These cross-functional, empowered teams must be
multidiscipline to maximise knowledge acquisition, and diverse enough so as to
embrace all functioning levels of the organisation.
Resource availability and accessibility
Entrepreneurial initiatives are sometimes held back or derailed because of a number
of personal or organisational limitations. To implement Corporate Entrepreneurship,
the relevant stakeholders must be positively influenced to ensure the success of the
concept. Resources are also not always about money; amongst some of the
resources that enhance Corporate Entrepreneurship are high skills sets amongst
employees, motivated and well organised teams, a strong supplier and client
network or most valuable of all, the endorsement of Corporate Entrepreneurship by
senior executives within the organisation.
Continuous and cross-functional learning
Cross-functional interaction and cooperation must become a priority, but the clash of
ideas, from interfunctional interaction should also be encouraged. Processes must
be put in place to facilitate extensive and rapid communication among parties at all
levels and in all functions. There should be less formalisation of roles and positions
within the organisational structure. Employees must be encouraged to always
improve themselves, to identify opportunities, and to solve problems through
collaboration and knowledge sharing.
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Strong customer orientation
Exceeding customer expectation at every interface will achieve a sustainable
competitive advantage and create superior value for customers and other
stakeholders. Customer centricity must be at the forefront of all sales and marketing
initiatives. Training initiatives and employee development must be entrepreneurially
orientated. It is very important to instil in both management and other employees that
customers have a set of needs and wants that that seek satisfaction, and that this
satisfaction is of the highest priority to the organisation.
Flat organisational structure
It is commonly accepted that entrepreneurship flourishes where there are fewer
layers or levels in the structure of an organisation. Furthermore, spans of control are
broader. The general orientation should be towards a more horizontal and less
vertical design. The flow of ideas must be bottom-up and not top-down. With a
decentralised, flexible structure that can react quickly to the changing environment,
an organisation has the ability to be less bureaucratic and more responsive to the
marketplace in which it competes.
5.5 RECOMMENDATIONS FOR FUTURE RESEARCH
For the purpose of this study, there was a focus on the antecedents of Corporate
Entrepreneurship that could possibly be influential in creating a climate of Corporate
Entrepreneurship within an organisation. The immediate recommendation is to
assess whether these antecedents are prevalent to the external environment of the
organisation as well as within the South African Automotive Industry. Corporate
Entrepreneurship in South Africa is still a relatively new field of study, and the
opportunity exists for businesses to understand better how their internal and external
actions and reactions can be improved by becoming entrepreneurial in thought and
execution.
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With future research, exists the opportunity to do further assessments of other
potential climates of Corporate Entrepreneurship within other organisations that
compete for automotive market share within the industry. This research opportunity
has the ability to identify and determine whether there is, or what the overall possible
climate of Corporate Entrepreneurship for the South African Automotive retailer
industry, might be. The major industry players are all under pressure to perform
competitively and to deliver on financial growth, market share and profitability.
For future research the following recommendations can be made:
The empirical research of other automotive retailers in terms of their own
climates of Corporate Entrepreneurship will allow for several benchmarks to be
set and available, which could lead to increased levels of innovation and
creativity within the automotive industry.
Industry-wide empirical research of Corporate Entrepreneurship could lead to
improved climates of Corporate Entrepreneurship within other sectors of the
automotive industry such as parts and distribution.
Future research will identify barriers to Corporate Entrepreneurship for the
automotive industry of South Africa. Once these barriers have been identified,
then strategies can be implemented to circumnavigate accordingly.
Research can determine which South African automotive retailer is
entrepreneurially orientated, and whether an international benchmark could be
executed.
It is recommended that the conceptual models identified in this study are tested
empirically.
The implications for management:
A positive climate of Corporate Entrepreneurship has a direct influence on the
performance and financial wellness of an organisation.
Corporate Entrepreneurship should permeate the entire organisation and should
not be the privilege of or restricted to only a few employees or a few departments
within an organisation.
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Entrepreneurial activity needs to be driven by all employees and the more the
organisation shows its willingness to be entrepreneurially orientated, the greater
the opportunity exists for the organisation to remain sustainably competitive.
Corporate Entrepreneurship should be formally introduced through training and
development workshops to ensure all employees participate in the innovation
and creative processes of the organisation.
Organisations that want to develop and nurture Corporate Entrepreneurship
must have the right leadership that advocates Corporate Entrepreneurship. The
executive of the organisation must make this entrepreneurial strategic intent
outcomes clear to all employees and then guide the organisation into becoming
a leader of innovation in their respective marketplace.
5.6 Conclusion
In recent years, the automotive industry in South Africa has been one of the major
industries that had to deal with global economic downturn, as local markets and
export markets tightened up and bought fewer goods, in this case, automotive items.
Many independent and smaller retailers became unprofitable and therefore closed
down, the market shrank significantly, and many automotive retailers had to re-
assess their positions in terms of retailing.
The challenge for the Dealerships division of Imperial Automotive is sustainable
Corporate Entrepreneurship. For this to materialise, there must be an environment
that is conducive to Corporate Entrepreneurship. Embarking on a sustainable climate
of Corporate Entrepreneurship can bring a theme of direction for an organisation
where the entire operations of the organisation are integral to the organisation’s
strategic intent. Developing a climate of Corporate Entrepreneurship must have the
endorsement from the highest levels of the organisation. Without this endorsement,
the possibility of a climate of Corporate Entrepreneurship will not exist and cannot
flourish
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Ultimately, Corporate Entrepreneurship should be strategic, and must develop and
increase the perception of opportunity, institutionalise change, instil a desire for
innovation, and deliver a sustainable competitive advantage.
Lastly, it is hoped that the contributions of this study will serve as motivation and
guideline to the management of the Dealerships division to keep pursuing ways in
which to instil Corporate Entrepreneurship and to remain creative and innovative in
their pursuits within automotive retailing.
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Appendix: Survey Questionnaire
ENTREPRENEURIAL CLIMATE QUESTIONNAIRE © JH Oosthuizen
Thank you for taking time to participate in this survey. We are attempting to measure the entrepreneurial climate in your organisation, in other words, whether the climate in your organisation is conducive for entrepreneurial conduct, innovation and creativity by its employees. The survey is divided in three parts:- * Part 1 is biographical information * Part 2 is the climate questionnaire Please complete every question / statement to ensure validity and reliability. After you have completed the questionnaire, save it to your hard-drive and e-mail to [email protected] as attachment. (1) BIOGRAPHICAL INFORMATION a) I work in the following function / dept. / division:
b) I fall in the age group: 46-50 years c) Gender: Male (2) CLIMATE QUESTIONNAIRE
The questionnaire consists of 65 statements. On a scale of 1 to 4, please indicate to what extent you agree with the statement made, where:-
1 = Strongly Disagree 2 = Slightly Disagree 3 = Slightly Agree 4 = Strongly Agree Just enter the value of your choice, i.e. 1, 2, 3, or 4
Statement Score Our leaders take a long-term view of our organisation and articulate their vision to all levels of the organisation.
In our organisation, developing ideas for the improvement of the company is encouraged by management.
My manager helps me get my work done by removing obstacles and roadblocks.
Our organisation has been built up by taking calculated risks at the right time.
Our organisation is quick to use improved work methods that are developed by workers.
Individuals with successful innovative projects receive additional rewards and compensation for their ideas and
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Our organisational vision and strategies are clear to me.
An employee with a good idea is often given free time to develop that idea.
Project teams in our organisation have considerable freedom to make decisions and act on them without needing to ask for permission.
There are several options within the organisation for individuals to get financial support for their innovative projects and ideas.
People are keen to share knowledge without regard for crossing departmental or functional boundaries.
A great deal of resources are spent in determining customer needs and satisfaction.
People are allowed to make decisions without going through elaborate justification and approval procedures.
Our leaders challenge the status quo and we are inspired by them to think, reason and act in innovative ways.
Top management is aware of and receptive to my ideas and suggestions.
Originators of new ideas find it easy to implement because of influential people to support them.
Good management of projects involving risk and unpredictability is highly valued, even when things don't always turn out according to plan.
There is considerable desire among people in the organisation for generating new ideas.
In this organisation rewards and encouragements is emphasised rather than criticism.
Our organisation's announced visions and strategies inspire me.
People are given considerable opportunity for independence and freedom in how they do their work.
We use cross-functional teams or cross-business-unit teams effectively.
Money is often available to get new project ideas off the ground.
People are encouraged to talk to employees in other departments of this organisation about ideas for new projects.
Product and service innovation are driven by a strong customer orientation.
This organisation has a specific value system which we all know and live up to.
Our leaders have a good balance between concern for production and concern for people.
Those employees who come up with innovative ideas on their own receive management encouragement for their activities.
Our organisation has people with influence that support, coach, protect, and find resources for an intrapreneurial project and its team.
We have taken some big risks occasionally to keep ahead of the competition in the business we're in.
This organisation provides the chance to be creative and try my own methods of doing the job.
My supervisor will give me special recognition if my work performance is especially good.
Great effort has been made to clarify what the vision and strategy mean to us in our department.
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I have much autonomy on my job and left on my own to do my own work.
Cross-functional team members are left to make decisions without interference from functional Superiors who are not part of the team.
Resources are readily available and accessible in pursuance of new ideas and opportunities.
Our organisation provides ample opportunities for learning and growth.
Our organisation involves customers in service and product development.
Our organisation has an open communication structure in which all employees participate.
Our leaders lead by example and people are eager to voluntarily follow them.
This organisation supports many small and experimental projects realising that some will undoubtedly fail.
Our organisation's managers have the skills, power, commitment, and courage to be effective sponsors of intrapreneurial initiatives.
Experiments are acceptable in the marketplace, not only in the "lab."
Innovative and new ideas are a regular occurrence in our organisation.
In this organisation effective intrapreneurs are generally rewarded.
The vision and strategies often help me in setting priorities.
I am allowed time at work to safely divert from my assigned tasks to explore new ideas I believe have potential.
Project teams have choices in recruiting and selecting new team members.
The process for accessing and acquiring resources to pursue new opportunities is streamlined to realise quick approval.
Employees are encouraged to stay abreast of developments in their functional fields and to share their knowledge across functions.
We regularly ask our customers what they think of our service and product offerings.
The degree of hierarchical control is acceptably low in our organisation.
Our leaders seek to maximise value from opportunity without constraint to existing models, structures or resources.
Senior managers encourage innovators to bend rules and rigid procedures in order to keep promising ideas on track.
In this organisation it is easy to build coalitions of active sponsors to help projects succeed.
If you make a mistake in this organisation you will be forgiven.
In this organisation people are inspired to push their boundaries and to think "out-of-the-box."
In this organisation people are rewarded in relation to the excellence of their job performance.
In this organisation management decisions are aligned and supportive to the vision and strategies.
I have the freedom to use some of my time to explore new ideas and hunches without having to ask permission.
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Cross-functional teams are characterised by diversity based on project skills requirements.
Attracting resource commitment for entrepreneurial ventures in this organisation is relatively easy.
People here spend some of their time and resources helping others outside their area in ways that are not part of their assigned responsibilities.
Customers are treated as very important stakeholders and not just another transaction to be processed.
In general, people enjoy working for this organisation, are satisfied with their jobs, and do not resign easily.
Thank you very much for your valued input. Kindly submit your questionnaire by saving it to your desktop, and then email it as attachment to [email protected].
