Behavioral agency and corporate entrepreneurship: CEO equity incentives & competitive behavior

Scholars have long studied drivers of entrepreneurial behavior among established firms. Yet little is known about how individual factors shape a firm’s choice to pursue entrepreneurship. We draw on behavioral agency theory to explore the role of equity incentives in driving corporate entrepreneurship. Our findings suggest CEOs avoid corporate entrepreneurial behaviors as their option wealth increases. However industry dynamics also prove to be an important contingency when predicting the effects of both restricted stock and stock options on the likelihood that the CEO engages in corporate entrepreneurship. Our findings provide a theoretical platform for predicting dimensions of entrepreneurial behavior and highlight effects of CEO equity ownership.

     

Corporate entrepreneurship: a test of external and internal influences on managers’ idea generation,risk taking,and proactiveness

Because upper managers have the responsibility to set the corporate entrepreneurship agenda, their entrepreneurial characteristics matter to a firm's successful implementation of corporate entrepreneurship. This study investigated influences on the idea creation, risk taking, and proactiveness perceptions of upper managers in a random sample of 105 Thai manufacturing firms. Results indicate that these managers' idea generation was influenced by the type of product produced, the size of the company, and the extent of firm support for individual entrepreneurship. Managerial risk taking was associated with firm size and extent of support for personal entrepreneurship. Managerial proactiveness as associated only with the scope of firms' competition, firm size, organizational entrepreneurial climate and support for personal entrepreneurship. Results suggest that firm context can influence the basis for corporate entrepreneurship.     

A comparative analysis of corporate entrepreneurial orientation between selected firms in the Netherlands and the USA

Firms in turbulent or fast-changing environments must continually innovate to remain competitive. This study examined how a firm's strategic management practices influence its entrepreneurial behaviour as compared to an international competitor. Four firms in the Netherlands were each matched with a key competitor in the USA. Several survey measures related to the strategic management process were used along with an instrument related to corporate entrepreneurship practices. Both managers and employees participated in the study. Results revealed significant differences between the Netherlands firms and the US competitors in entrepreneurial orientation. Results also supported these comparative differences along three key dimensions of strategic management as they relate to corporate entrepreneurship. The final set of data revealed a relationship between corporate entrepreneurship and three measures of firm performance. The implications focus upon the key role that culture may play in facilitating corporate entrepreneurship and adaptable organizational practices. Suggestions for further research are also made.     

System‐Spanning Values Work and Entrepreneurial Growth in Family Firms

Culture and values are key drivers of corporate entrepreneurship in early stages of family firm development, but value conflicts often arise over time that progressively inhibit their entrepreneurial efforts. How can family firms reconcile conflicting values to sustain corporate entrepreneurship over time? Our 45‐year longitudinal case study of a large global family firm shows that family business leaders’ practices of invoking and flexibly using family and business values were crucial to achieve sustained entrepreneurial behaviour and growth over an extended period of time. We theorize these efforts as system‐spanning values work enfolding through specific family, business, and temporal mechanisms. By identifying and elucidating three types of values work (i.e., rooting, revitalizing, and spreading), our study advances current understanding of the micro‐foundations underpinning the relationship between values and entrepreneurship in family firms.     

Maintaining Leadership Legitimacy in the Transition to New Organizational Forms

Numerous new organizational forms have been proposed for ensuring the continuous strategic renewal of a firm. In essence, these forms are distinguished by: (1) their emphasis on bottom-up entrepreneurship, and (2) their reliance on a co-operative network that allows these entrepreneurial units to share their competencies with one another. One of the key behaviours required for the success of such an organization is employee empowerment. We argue in this paper that the legitimacy of corporate leadership during the restructuring of a traditional bureaucratic organization is crucial to its eventual transformation to one of the new organizational forms. The current wisdom of a two-stage transformation process, where an authoritarian restructuring precedes the more participative revitalization, is thus challenged. The transformation may get stalled after the restructuring stage because of top management’s inability to empower the firm’s employees at will, having lost their trust during restructuring     

The Impact of Managerial Environmental Perceptions on Corporate Entrepreneurship: Towards Understanding Discretionary Slack's Pivotal Role

abstract    This study seeks to further delineate how a firm's competitive environment influences the firm's pursuit of entrepreneurial activities. To do so, we develop and test a parsimonious model that establishes the role of discretionary slack as a salient mediating mechanism through which managerial environmental perceptions influence corporate entrepreneurship. In addition, we examine two contingencies that further explain discretionary slack's impact on corporate entrepreneurship, including managements' market sensing capacity and use of outcome-based incentives. Using single- and multi-source survey data from 495 small- to medium-sized firms, we find support for our model and its associated hypotheses. Specifically, we find that discretionary slack is significantly influenced by managerial perceptions of environmental munificence and dynamism and, in turn, mediates the impact of these perceptions on corporate entrepreneurship. In addition, we find that discretionary slack's impact on corporate entrepreneurship is significantly enhanced by managements' market sensing capacity but, interestingly, not by outcome-based incentives.     

An analytical model for human resource management as an enabler of organizational renewal: a framework for corporate entrepreneurship

This article presents the development of a model of types of work based on organizational theory. It analyzes the different characteristics of work and efficient forms of Management, and joins all these aspects together in terms of corporate entrepreneurship. Organizational theory provides the instruments needed to manage work, the causes that make decentralization desirable and the technical, social and institutional mechanisms for its control. The literature on corporate entrepreneurship provides material for forms of discovery or creation of opportunities based on accumulated experience in the firm, on the collective relationships linked to entrepreneurship and on the way in which resources are managed. This article contributes to existing knowledge by systematically addressing these two fields, showing how the instruments that allow for the efficient management of work are the same as those necessary for corporate entrepreneurship and how the efficient management of work is a prerequisite and an enabler of entrepreneurial activity.     

Resources,Capabilities and Entrepreneurial Perceptions*

abstract We review and develop a subjectivist theory of entrepreneurship that focuses on individuals, their knowledge, resources and skills, and the processes of discovery and creativity, which constitute the heart of entrepreneurship. First, we establish the fundamental importance of subjectivity in entrepreneurial discovery and creativity. Second, we build on Penrose (1959 ) to elaborate how entrepreneurs' perceptions and personal knowledge shape a firm's subjective productive opportunity set. Third, we explain that entrepreneurial perceptions and knowledge partly originate from entrepreneurs' experiences in specific business settings such as the firm, the management team, and the industry. Fourth, we highlight the causal connections between subjectivity in entrepreneurship and observed heterogeneity in firm‐level economic performance. Lastly, we suggest directions for further advancing a subjectivist resource‐based approach to future entrepreneurship research.     

Shaping the organisational context for corporate entrepreneurship and performance in Iran: the interplay between social context and performance management

Abstract

Prior research highlighted the importance of an organisational context stimulating autonomous behaviour when trying to increase levels of corporate entrepreneurship. From a social exchange perspective, we argue that firms in developing countries need to complement such supportive practices with performance-oriented practices. Our findings indicate that Iranian firms with an organisational context characterised by an interaction of social context and performance management have more engagement in corporate entrepreneurship, and that corporate entrepreneurship mediated the relationship between the organisational context and firm performance. This provides a better understanding of the way firms in developing economies can shape their organisational context to promote corporate entrepreneurship in order to achieve better firm performance.     

The impact of human resource management practices and corporate entrepreneurship on firm performance: evidence from Turkish firms

This paper outlines the important role of human resource management practices with a link between corporate entrepreneurship and firm performance. Data were collected from a survey of 124 firms operating in different industries in Turkey. The findings of this study indicated that human resource management (HRM) practices partially mediated the relationship between corporate entrepreneurship and firm performance. In other words, corporate entrepreneurship affects firm performance, both directly and through its effects on HRM practices. In addition to corporate entrepreneurship, it is found that HRM practices explain a significant level of additional variance (9 per cent) in firm performance. The theoretical and managerial implications are discussed.     

The behavioural gap between entrepreneurial SME’s and high growth: evidence from Canada

Entrepreneurial orientation (EO) describes a firm’s attitude towards entrepreneurial activity; however, it does not measure the specific behaviors likely to contribute to high growth. This research applies the resource-based and dynamic capabilities views to propose a mediation model between EO and high growth. The theoretical framework is drawn from the strategic management and entrepreneurship literature. Competing models are tested against a sample of Canadian SMEs to validate the proposed explanation for the presence of high-growth firms among the population. The study finds that the relationship between EO and high growth is perfectly mediated by innovation performance, a behavioral measure of innovation. This research contributes to firm growth theory while providing further insight into the drivers of high growth useful to policy makers endeavoring to stimulate, and overcome barriers to, entrepreneurship and innovation. Determining the factors associated with firm growth can have implications for management as well as policy. If a firm’s goal is to grow it must be able to focus its limited resources using a strategy appropriate for growth.

     

The Entrepreneurial Theory of the Firm and the Theory of the Entrepreneurial Firm*

abstract The entrepreneurial theory of the firm argues that entrepreneurship, properly understood, is a crucial but neglected element in explaining the nature and boundaries of the firm. By contrast, the theory of the entrepreneurial firm presumably seeks not to understand the nature and boundaries of ‘the firm’ in general but rather to understand a particular type of firm: one that is entrepreneurial. This paper is an attempt to reconcile the two. After briefly delving for the concept of entrepreneurship in the work of Schumpeter, Kirzner, and (especially) Knight, the paper makes the case for the entrepreneurial theory of the firm. In such a theory, the firm exists as the solution to a coordination problem in a world of change and uncertainty, including Knightian or structural uncertainty.     

Corporate entrepreneurship in Switzerland: evidence from a case study of Swiss watch manufacturers

The purpose of this study is to examine the extent to which Swiss companies engage in corporate entrepreneurship. To that end, a case study was undertaken to better understand how corporate entrepreneurship is practiced in the watch-making industry. Using a stratified sampling method, 18 corporate-level managers of Swiss watch manufacturers were interviewed over a 5-month period to determine their perception of their firm??s entrepreneurial orientation in terms of proactiveness, risk taking, innovativeness, competitive aggressiveness, and autonomy. Findings were mixed. As anticipated, given the conservative nature of Swiss culture and tradition, the executives reflected corporate values that inhibit proactiveness, risk-taking, and competitive aggressiveness. On the positive side, these executives espoused values that support a corporate culture of innovativeness and autonomy reflecting a resurgence of innovativeness in an otherwise mature industry.     

Configuring absorptive capacity as a key process for research intensive firms

Absorptive capacity is a dynamic capability which creates new firm resources by searching, acquiring, assimilating, transforming and exploiting external knowledge with internal resources and act as a process framework for innovation. Despite being one of the most frequently cited strategic management concepts, absorptive capacity as a dynamic capability has limited empirical evidence with unverified assumptions. The concept is at risk of reification. With this study we contribute to the literature by providing empirical evidence for absorptive capacity which challenge the assumptions of how the construct is configured. We follow the strategic factor of intellectual property rights (IPR) in European biopharmaceutical firms using a qualitative process study with temporal bracketing. By tracking IPR, we found evidence for absorptive capacity in all firms we studied, but the process framework in use is different to Zahra and George’s (2002. Acad. Manage. Rev. 27, 185–203) and Todorova and Durisin’s (2007. Acad. Manage. Rev. 32, 774–786) theoretical models. Based on our evidence and literature review we develop some theoretical insights and propose a modified absorptive capacity model. This new model puts a greater emphasis on assimilating knowledge from outside the firm and provides more clarity on how research intensive firms might use absorptive capacity.     

To be entrepreneurial,or not to be entrepreneurial? Explaining differences in franchisee entrepreneurial behavior within a franchise system

Although franchising scholars largely acknowledge that franchisees may behave like entrepreneurs, little is known about whether and why franchisees differ in their entrepreneurial behaviors. Franchisees are semi-autonomous entrepreneurs running geographically dispersed units within established organizations. We therefore use corporate entrepreneurship (CE) literature to define and measure franchisee entrepreneurial behavior, and we build on an entrepreneurial motivation framework to develop an integrative set of hypotheses that explain differences in franchisee entrepreneurial behavior. We test these hypotheses using survey data on 119 franchisees within a single Dutch franchise system. Our results show that the extent of franchisee entrepreneurial behavior varies considerably, even within a single franchise system. The differences in franchisees’ entrepreneurial behaviors can be explained by differences in franchisees’ intrinsic goals, relational satisfaction and local competition.     

The onto-politics of entrepreneurial experimentation: re-reading Hans-Jörg Rheinberger’s understanding of ‘experimental systems’

ABSTRACT

In this article, we argue that there is a need to theorize the relationship between entrepreneurship and the political beyond the currently dominant neo-liberal and emancipatory narrative by turning to an onto-political conception of entrepreneurship based on the processes of entrepreneurial experimentation. In entrepreneurship studies, the relevance and the potential of experimentation for shaping new organizational realities has only been explored marginally. Through re-reading the thinking on ‘experimental systems’ by the science historian Hans-Jörg Rheinberger and connecting it to Annemarie Mol’s notion of ‘ontological politics’, we develop a conceptual framework for entrepreneurial experimentation which we document with the illustration of an art enterprise. The framework that we propose focuses on the interwoven embodied, material and processual dynamics of entrepreneurial experimentation and reframes entrepreneurial world-making as a speculative process driven by material reconfigurations and bodily connections. As a consequence, we argue that this model is able to emphasize the intricate political dimension inscribed in processes of entrepreneurial experimentation through their onto-political force of reconfiguring systems of ‘self-others-things’. Furthermore, the model highlights that this capacity of ‘world-making’ cannot be realized without articulating the tensions and resistances that entrepreneurial endeavours often need to navigate and negotiate while reconfiguring and challenging dominant socio-material orders.     

Coping with rivals’ absorptive capacity in innovation activities

Two factors jointly determine the likelihood of a firm′s competitors obtaining information on its intangible assets and using it to damage the firm′s innovation performance. Those factors are the absorptive capacity of the rival firm and the appropriability regime of the innovating firm. However, the precise roles of the two factors in affecting performance outcomes are not well documented. Furthermore, we lack knowledge of the interplay between an appropriability regime and absorptive capacity, although they clearly have the capacity to exert positive and negative effects both on each other and on innovativeness. This study presents findings derived from theoretical discussion and an empirical examination of 155 firms that suggest that while competitors’ absorptive capacity does not play a direct negative or positive role on the innovation performance of a firm, an appropriability regime exerts a strong positive influence. Nevertheless, high rival absorptive capacity is not without importance, since the significant interaction effects suggest that a strong appropriability regime has positive effects on innovation performance especially in the context of a rival having high absorptive capacity.     

公司创业导向、能力、战略与竞争优势的关系研究

旨在分析创业导向对于企业竞争优势的影响机制,重点进行公司创业、企业能力、竞争战略、竞争优势等相关理论的探究和模型的构建,并在理论分析的基础上提出若干命题。分析表明,创业导向通过企业能力和竞争战略内外两条互为补充的路径,实现竞争优势。不仅丰富了公司创业和战略管理理论研究,还为企业如何在动态、复杂、不确定的全球环境中生存和发展提供借鉴和指导。     

Individual entrepreneurial orientation and performance: the mediating role of international entrepreneurship

This paper analyses the role that individual entrepreneurial orientation (IEO) plays in the success of international entrepreneurship moves. We focus on the mediation effect of international entrepreneurship in the relationship between IEO and firm performance. We argue that entrepreneurial experience constitutes an important source of IEO and propose an objective measure of IEO. The hypotheses are empirically analysed using a 22-year panel of family SMEs. Our results confirm the hypotheses and provide a better understanding of the role of IEO in the success of corporate strategies such as internationalisation. Specifically, IEO is found to improve firm performance indirectly by increasing the speed of internationalisation, and this effect is non-linear. Our study contributes to the literature by extending international entrepreneurship literature by offering a more complete view of the causes and consequences of IEO. Finally, our results also contribute to the literature on family firm heterogeneity.

     

Strategic entrepreneurship and competitive advantage of established firms: evidence from the digital TV industry

Although strategic entrepreneurship in established firms is recognized as a vital source of sustainable competitive advantage, this field has no clearly developed research paradigm. This study proposes a conceptual framework to investigate dimensions of strategic entrepreneurship and its function in sustainable competitive advantage of established firms in a modern volatile environment, through the lens of the dynamic capability view. By conducting a systematic literature review of previous research documents and considering conceptual interrelationships between strategic entrepreneurship and dynamic capabilities, we propose categories that comprise dimensions of a firm’s strategic entrepreneurship: environmental sensing, opportunity seizing, strategic flexibility, entrepreneurial orientation and organizational learning. We establish a conceptual framework of strategic entrepreneurship in which entrepreneurs’ managerial capabilities of environmental sensing, opportunity seizing, strategic flexibility and entrepreneurial orientation closely interact with organizational learning, thereby facilitating sustainable performance of established firms. Following empirical studies of established firms in the digital TV manufacturing industry, the proposed conceptual framework suggests that each dimension of strategic entrepreneurship plays a critical role in competitive advantage of firms. In addition, case study results indicate that a firm’s position and evolutionary path form antecedent factors influencing entrepreneurs’ managerial capabilities and organizational learning of established firms.