Features of Corporate Entrepreneurship in Established Companies
Discuss about the Influence of Corporate Entrepreneurship on State Corporations.
Entrepreneurship in corporations is vital to the endurance, productivity and performance of a firm. This is because corporate entrepreneurship initiative have a propensity to ignite creativity and innovation in addition to encourage a culture of taking calculated risks in the course of organizational operations that would strengthen the organization’s stand in the market by entering into new and more profitable market segments (Zahra, Filatotchev & Wright, 2009).
Features of corporate entrepreneurship that exist in established companies consist of initiatives like innovativeness pro-activeness and risk-taking. From an empirical standpoint, many studies on this issue have been done and specifically so in developed economies. Focus on most of these earlier studies has been on the correlation of corporate entrepreneurship elements in distinct analysis scenarios. They include comparisons between countries (Antoncic & Scarlet, 2008), between new and established firms (George, 2005; Antoncic & Scarlet, 2008; Aktan & Bulut, 2008) and between manufacturing and non-manufacturing entities (Antoncic & Scarlet, 2008).
The term used in Australia for a Commonwealth Government State-Owned Enterprise is Government Business Enterprise (GBE). According to the Australian department of finance there are six GBEs. Two of them are corporate Commonwealth corporations while there are four Commonwealth companies. In general, private companies are allowed to compete with public enterprises within the same terms and conditions in respect to markets, credit among other business initiatives for instances, licenses and supplies. There is no operational advantage accorded to public enterprises in Australia (International Trade Administration, 2017).
Current organizations continue to relate corporate entrepreneurship as a collective concept that captures all the entrepreneurial activities. The origin of this field is associated with strategic management literature where early researchers suggested that entrepreneurial firms can be identified by three dimensions. Namely: innovativeness, pro-activeness and risk-taking.
Miller (1983) as cited by Linyiru (2015) postulated that the entrepreneurial firm as one that conducts product-market innovation, engages in seemingly risky endeavors, and is first to initiate proactive innovations. One the other hand, a non- entrepreneurial firm is one that participates in little or no innovation, avoids high risk ventures and copies the moves of its competitors instead of leading the way. Therefore, entrepreneurship can hesitantly be perceived as a combined weighting of these three variables (Linyiru, 2015).
According to Rauch, Wiklund, Lumpkin and Frese (2009), in an environment of constant business change, there is tendency for firms in search of new frontiers in the marketplace whereby they can develop as well as uphold their competitiveness and outdo their competition. In various areas, entrepreneurial initiatives, that is risk taking, pro activeness, market aggression, ability to innovate and independence of an enterprise gives rise to better firm performance. Therefore, firms have a tendency to be more entrepreneurial so as to advance their location in the marketplace. In Australia, the experience of GBE reforms is not identical. Australia uses a federal system of governance that consists of six states, two territories and a federal government. The level of privatization in these GBEs reflects on the tremendous pressure from the firms to privatize. The term ‘government business enterprise’ (GBE) is widely used. However, there is no universally acceptable definition attached to the term yet if we are to discuss accountability in GBEs it would be prudent to comprehend the term because GBEs are amalgamations that have attributes of both private and public sector firms. Similar to private organizations, GBEs are involved in profit making activity frequently competing with other private sector firms.
Statement of the Problem
Earlier studies have explored the essential organizational, environment related, and individual factors on entrepreneurial attributes. However, there is no empirical evidence that has examined the direct contributions of these initiatives on GBEs performance in Australia because of the challenges of quantifying better performance brought about by entrepreneurial activities (Kim, 2010). To properly study public entrepreneurial attributes utilized in new environments, these attributes ought to be defined adequately and the level of their influence on organizational performance ought to be calculated properly. In response to these activities, this study will explore the influence of public entrepreneurial characteristics on performance in Australia’s government business enterprises in a bid to feel the research gap between conceptual discussions and empirical findings of public entrepreneurship.
The rationale of this research will be to establish the influence of corporate entrepreneurship on performance of state corporations in Australia. The research will be steered by the following specific objectives:
- To establish the influence of pro activeness on performance of state corporations in Australia
- To determine the influence of risk taking on performance of state corporations in Australia
- To evaluate the influence of innovativeness on performance of state corporations in Australia
- To establish the influence of competitive aggressiveness on performance of state corporations in Australia
This study can be vital to a number of stakeholders. Key among them that will find the results of this research as important will include the GBEs, employees, the federal government, educationists and fellow researchers.
The federal government in its bid to recognize its strategic mandate and promotion of growth of the economy will value the need for entrepreneurship within corporations in regard to the process of growth. The results of this study may assist in empowering leaders with proactive mindset of the management of entrepreneurship and influence an improvement in service delivery.
The report will be valuable to both employer and employees of GBEs by assisting the organizations to comprehend ways they can use and extract the prospects of occasions by means of entrepreneurial direction for business growth. In addition, it is hoped that employers and employees will understand the distinct facets of corporate entrepreneurship accessible and devote in enough resources to these initiatives as well as link them with their particular organizational objectives. Likewise, employees will value the need to develop either through self -development or through their firms and endeavor to advance so as to remain relevant and valuable.
The objective of this study is to contribute to the knowledge on corporate entrepreneurship. Academicians and fellow researchers will benefit from the results of this study by understanding the elements of corporate entrepreneurship and hence may research further on the topic.
This study sought to establish the influence of corporate entrepreneurship on performance of state corporations (GBEs) in Australia. In particular, this paper will examine innovativeness, pro activeness, risk taking and competitive aggressiveness effect on performance of commercial state corporations in Australia. The study population will be all the state corporations and a purposive sample will be taken.
Research Objectives
According to Rauch et al. (2009), pro-activeness reveals an enterprise’s pursuance of chances available in the marketplace and importance on the need to be beginners of innovation in its sector. As such, pro-activeness is seeking opportunity, thinking ahead that is attributed to initiating new products and services before the rivals and anticipating what will be demanded in future.
An entrepreneurial company infuses suppleness and gives an individual and groups the leeway to show their creativeness to develop new ideas (Wang, 2008). These initiatives by a company’s team enable the company to increase its pro-activeness of introducing new products. Pro-activeness postulates importance in starting new activities. It is closely associated with innovativeness. For instance, new product innovation forms part of innovativeness but also is part of pro-activeness by a company.
To take a risk entails taking daring action by going into the unknown, borrowing excessively and or commitment to considerable resources to avenues of uncertainty (Wang, 2008; Lumpkin et al., 2009; Rauch et al., 2009). Linyiru (2015) defines risk taking as a firm’s nature to affirm innovation projects even when the benefits from such ventures are uncertain. In the long run, such activities may improve the firm’s capability to identify and utilize opportunities in the market before its competitors. Independence within the entrepreneurial firm lets individuals to be free in their acting and be capable to identify new ideas that could create competitive advantage (Lumpkin et al., 2009). Behaviour of this kind by individuals in a firm creates an environment of the possibility of implementing new schemes for growth in future.
The way managers insist on following the tested and tried procedures or tend to sustain projects whose outcome of returns is known, have a negative correlation with performance in comparison with taking firm actions by venturing into unknown business environment. Entrepreneurial companies tolerate risk and this attribute mostly stimulates them to eradicate conventional authoritarian structures that prevent joint learning (Wang, 2008). According to Wang firms with managers that tolerate risk and are innovative persuade new techniques of perception by tolerating errors and reward individuals who have new initiatives contributing to innovativeness and organization progress. The culture of letting individuals to make some errors when trying out new techniques to enhance business performance encourages an environment of open-minded perception (Moreno & Casillas, 2008).
There is no clear definition of innovation since the subject has been researched using different approaches: administrative, technological, and organizational among other approaches. However, researchers tend to agree that innovation is new knowledge and ideas that transform to new products or services, new technology, new processes and new structures in the firm. In addition, the capacity to innovate more so in a vibrant business environment, results from a combined effort by employees to divide and collate knowledge (Soto-Acosta et al., 2015).
Significance of the Study
According to Clark (2010), innovation is a reflection of an organization’s propensity to be involved in and support of new ideas, experimenting, distinctiveness and creativity that may bring about new products, services or technological processes. Organizations that operate in competitive environments are mostly characterized by fast and regular creation of new products and high degrees of research and development (Huse et al., 2005). In such turbulent business environments, seem to contribute to influencing corporate entrepreneurship in a firm. Changes in the environment motivate organizations to innovate by introduction of new technologies, new products and services to benefit from opportunities that arise from the vibrant environment. Clark (2010) discovered that firms that innovate, concentrate on new innovation and amount invested in those innovations.
Within each industry, it is vital for organizations to develop competition so as to enhance growth and improve their position in the market. Likewise, competition is important so as to protect already achieved advantages and sustain the current position in the market. In fact, firms depend on one another and that is the reason why there is continued pressure for competitiveness from the industry and monitoring the actions of competitors. The intensity of competition in an industry determines the level of pressure to act (Muhonen, 2017). A sequence of maneuvers and counter maneuvers within organizations in an industry produce vibrant competition in the industry. This can be perceived as a contest whereby each organization depends on how its competitors act and achieved advantages leads to losses of others. The only avenue to sustain one’s performance in relation to other firms is to take action of its own activities. Therefore, every organization in an industry is forced to engage in continued and rigorous actions and finally organizations implement their actions fast (Derfus et al., 2008).
Competitive aggressiveness is an organizations tendency to increasingly challenge its competition to develop its position in the market and overtake industry rivals in the market Organizations that are aggressive in terms of competition are attentive to their competitor’s strategies and begin a sequence of their own strategies. That is to say they have a preference to invest in competitive initiatives like launching new products, vigorous campaigns in marketing and competition in pricing more often than others. It is attributable to the rate and number of competition initiatives carried out by an organization in comparison to its immediate competitors Derfus et al., 2008).
Vibrant competition studies have widely endeavored to expound on the causes and repercussions of aggression in competition with specific focus on organization performance. Organizations that engage in sharing those markets, adopt aggressive competition behaviors by utilizing marketing strategies like price war, increase promotion and or fight over distribution channels or copying the rivals initiatives (Dess, Lumpkin, & Eisner, 2007). Through aggressive competition by means of marketing instruments, they compel considerably bigger competitors to create access hurdles for the current markets. From the perspective of newcomers or existing organizations, the aim of courageous and aggressive behavior are at the outset to stay in competition then reap profits through fulfillment of opportunities in the market.
Pro Activeness and Firm Performance
Research design as defined by Newing (2011) is used for both research methodology and more particularly for the research design structure. Research design deals with the way data collection is structured. A research design is a general plan or tactic for conducting a research study to explore specific research questions of interest (Lavrakas, 2008). This study will employ explanatory research design since it is quantitative in nature. This will because it is hoped the study will provide an insight on the correlation among the study parameters. Explanatory research will be used so as to comprehend the phenomena in relation to its probable causes. This kind of research design is intended to establish what influences a particular change based on existing assumptions and standards. Explanatory research suggests that the study is meant to clarify instead of simply describing the issue under review (Maxwell & Mittapalli, 2008).
According to Newing (2011), a population is a set of sampling divisions or cases that are of interest to a researcher. According to Kothari (2013), it is expected that target population contains observable attributes that a researcher intends to use for the purpose of generalizing the study results. It is recommended that before commencing any research, the researcher has to decide whether to use the entire population or a sample (Kimwomi, 2015). Target population is made up of all members of a real or hypothetical unit of individuals, events or objects whereby a researcher intends to generalize the findings of the study. Accessible population relates to all the persons who can realistically be included in the sample (Borg & Gall, 2007). This study will comprise of all the GBEs in Australia which also form the target and accessible population. The study will concentrate on the commercial state corporations and respondents will be the management. The researcher will concentrate on commercial GBEs only since it is believed that these firms have the appropriate and precise information that is required for the study.
This study will utilize purposive sampling technique, which according to Mugenda and Mugenda (2014) is a sampling technique that lets a researcher to use cases that contains the needed information according to the study objectives. Cases or subjects are therefore handpicked since they are informative have contain the needed characteristics. The reasoning behind using purposive sampling is that only a particular proportion of the population in the GBEs is likely to have the attributes necessary for corporate entrepreneurship. The proportion that will be suitable to fit this description will be commercial GBEs. Kombo and Tromp refer to a sample as a collection of chosen cases from an entire population to represent it.
The study will utilize questionnaires to obtain qualitative data for analysis. As noted by Saunders et al. (2012) a questionnaire is a data collection instrument via which a respondent is asked to answer a set of questions administered either in hard or soft copy. The questionnaire will be made up of closed-ended questions.
The study will employ primary data as the main sources of information. Primary data will be collected in the field and its collection will involve a semi- structured questionnaire. The instruments for primary data collection will be questionnaires, which will be administered by the researcher. According to Yang (2008), questions in a study are directly related to the research questions. While developing a survey questionnaire, the variables from which information need to be gathered have to be noted followed by their operational definition.
Zikmund et al. (2010) describe data analysis as the utilization of reasoning to comprehend the data that has been collected with the objective of establishing consistency and making relevant deductions as revealed in the investigation or findings. To establish the correlation in the collected data pertaining to the selected parameters, data will be analyzed as per the objectives and purpose of the study while the data collected will be sorted, coded and stored in a statistical software such as Statistical Package for Social Sciences (SPSS) by means of tables and graphs for descriptive statistics.
The significance of the effect of the independent parameters on the dependent parameter will be tested using multivariate logistic regression. A variety of statistical applications will be utilized to analyze quantitative data. This will include measurement of central tendency that will include means and median; measurement of dispersion such as standard deviation. Inferential statistics will be analyzed by use of t-tests, Pearson’s correlation coefficient to determine the strengths of the correlation between the study parameters. Multiple regression will be utilized to establish if the independent parameters have a considerable statistical effect on the dependent variables
In a commercial state corporation, the issue of financial performance is a sensitive area since the respondents may feel intruded or may be guided by strict confidentiality rules. The researcher will ensure and assure the respondents that confidentiality is maintained by not disclosing any personal information by coding the questionnaires to avoid any direct reference to the GBEs and or the respondents.
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