Posted at 01.01.2019
Today's overall economy is experiencing its pros and cons rapidly: increasing competitiveness and fast changing solutions create pressure to the firms that want to stay near the top of their markets. This is not going to slow down, so the need for tools of success is arising. At the same time we are leaving the Morris and Kuratko (2002) belief that "entrepreneurs are delivered, not made". That's the reason the wanting, thinking, expecting, planning must be followed by doing. As already Confucius said: "When it is clear that the goals can't be reached, don't modify the goals, adapt the action steps". It is time to use it and one form of computer that suits different businesses nowadays is - Corporate Entrepreneurship (CE).
As it was mentioned by Sharma and Chrisman (1999), corporate entrepreneurship is "the procedure whereby an individual or group of individuals, in colaboration with an existing corporation, create a fresh firm or instigate renewal or innovation within that organization". There are lots of definitions for CE nowadays, but most of them do not change the fact that CE is an instrument for differentiation and competitive gain in today's economy. To make a go of this phenomenon, organizations have to develop their strategies how to put into action the entrepreneurial nature in the day-to-day practices. In this manner corporate and business entrepreneurship - spontaneous or induced by the company itself - will be not unusual and unexpected, however in contrary, turn into a tool of overcoming inside issues, as well as exterior pressures.
A lot of studies, studies were conducted to discover the inevitable fact that CE positively impacts the performance of your company: it creates competitive advantages, helps to differentiate, adapt to new or quickly changing markets, and package with external and internal difficulties. As CE is seen as a multifaceted tool, the intensity of CE in an group can be described by five different dimensions identified in a meta-analysis by Saly (2001): innovativeness, risk propensity, proactiveness, commercial venturing and self-renewal. When making an organizational structure, as well as inside culture, these sizes should be a scale measuring the near future success of the company. Dealing with the globalization and fast paced changes, a corporation must take hazards, be proactive and shoot for innovation. Nurturing these attributes, adapting to the surroundings (self-renewal) and fostering creation of something valuable that generates returns - are CE key success factors in the economy of today.
Of course no CE can be fostered without Human being Capital (HC). In order to become a forward thinking, entrepreneurial corporation needs the data, skills, experience the HC can provide. That is why HC should be one of the most crucial and valuable property for every business. Investing in HC should be considered a first step towards building and encouraging the entrepreneurial route of the entire company.
As from the employee-organization relations (EOR) books (Rhoades and Eisenberger, 2002), the strongest influencers of employee affect are the organization's leaders. Their Human being Recourse Management (HRM) tactics can valuably contribute to effective enhancement of CE. Different HRM techniques can create a suitable inside culture for a business to become progressive, flexible plus more entrepreneurial. Each HRM practice can be addressed to different employee characteristics and in this manner design the employee-organization associations towards a collective entrepreneurial cooperation. Therefore EOR strengthened with HRM practice may become a competent tool for creating a collective entrepreneurial atmosphere inside any corporation.
As organizations nowadays become living entities, diving into the development of organizational learning, you can find less dread that it'll develop a strategy and become stagnant. That is why the HRM practices also evolve during the life of any company. Bringing out new projects, renewal of the personnel with different KSAOs (knowledge, skills, abilities and other characteristics) needed at the time, allocating resources needed for development and inside learning - all of this organizational support is currently more essential than luxury. So, understanding that without a learning attitude and readiness to improve according the situation, any HRM routines will never be able to effect the company's corporate entrepreneurship level, is essential. Following the idea of George Bernard Shaw: Improvement is impossible without change, and those who cannot change their imagination cannot change anything".
HRM practices should be an important driver of CE since it includes organizational learning powered by collaboration, creativeness, and individual commitment (Kaya, 2006). To foster CE in a corporation the first activity is the set up of inner culture and environment (studies also show there need to be available resources, management support and a trusted organizational composition right at the start for a company could start entrepreneurial activities). Following different studies conducted on the topic of CE and HRM techniques, how to establish a suitable interior environment for intrapreneurship appears to be predicated on these organizational arrangements/managerial tools:
Staff selection - the aim of personnel selection is to create an appropriate source base of HC to foster entrepreneurial activity.
As the HC of any company is one of the most crucial facilitators of CE, selective hiring can be considered a tool for influencing the CE level. The selection conditions should fit the organizations' culture, be in range with the CE measurements and reflect the needs of the business.
During the procedure of selecting staff it is effective to think about the skills needed on the market the company manages, how the employees could work together and build a brain trust. Emphasizing the team heart is very important, because the prominence of collective entrepreneurship keeps growing. New members should have new ideas and go with the staff by being different and experts of their own sphere. New management staff must have relevant KSAOs, be creative, shoot for action and become supportive. Finally, a possibility to expand in one's own career should also be seen in this process, since it will serve as a desire tool and foster better environment in the company.
Management support - the positive attitude as well as encouragement of the higher hierarchy degrees of the business for making and developing home based business ideas.
Management support is important because it indicates the willingness of the managers to assist in, promote and institutionalize the entrepreneurial heart and activity within the organization's system and processes (Hornsby et al. , 2002) which would encourage the intrapreneurs to engage in innovative jobs. If the organization provides support and some autonomy it may then depend on the commitment via employees. Still coordinating the utilization of resources, contributing to the fulfillment of the independent individual recommendations or attempts will end up with a rise of overall efficiency.
Management support for problem dealing with and conflict image resolution in the intrapreneurship process is required in the idea era, development, and specifically implementation (execution) levels of the ideas (Damanpour, 1991). This will likely positively effect a corporation's entrepreneurial patterns and enhance potential intrapreneurs' perceived trustworthiness with their corporations in terms of detecting opportunities and willingness to develop book or useful ideas, and/ or assignments, and also to take hazards to actualize them (Stevenson and Jarillo, 1990). Internal supportive environment, tolerance for risk taking to their intrapreneurs, and a superior quality HC will contribute to the innovative performance.
Company's 3M procedure could be studied as an illustration of the management support importance. This firm known and experienced that able and enthusiastic employees can turn the company into a profitable, progressive and successful company. That's the reason the management was wanting to create an environment that supports individual entrepreneurship: "a environment that stimulates ordinary people to produce incredible performances".
Allocation of free time - provision of sufficient the perfect time to work on producing novelties with no burden of tedious workload. Delivery of free time inevitably stimulates employees to take chances for adding their novel ideas into practice. When given time for convincing the management level about assembling your project success, employees aren't so distracted using their company main obligations and usually show more commitment towards the business. But this creates a necessity for extra control that the allocated free time would be used for purposes that profit both attributes. Here it comes out that before any significant changes there's a need of HRM tactics that boost common understanding, better ties between employees and the organization, and make sure their values and visions are on the same path.
Organizational composition - should be convenient related to decentralization level or decision-making autonomy.
Employees must have the chance to express and suggest their ideas easily. The best decentralization level differs among every company, but it is an instrument to become more flexible, impressive, and productive - suit the sizes of CE. If company provides autonomy for employees who actually perform the work, this will encourage their commitment to do something in the best way for the company. Having a well-balanced marriage between autonomy and willpower creates an environment where employees can work, take weighted dangers and innovate towards successful results of the company. Companies that have become rigid really slow down all the ground breaking processes as well as cannot implement all of the possible improvements.
When considering new ventures, assignments in order to boost the competitive edge and profitability of the company it is important they fit the organization in conditions of context and organizational framework. There's a probability to foster integrated or different CE. For better knowledge of the importance of these methods some companies can be taken for example.
Analyzing the case of the company Polaroid, you can note that the impact of bureaucracy, biases and downsizing was a huge obstacle for nurturing inside entrepreneurship. The business was big-sized and stagnant, becoming a market follower. The entrepreneur in the corporation (Joline Godfrey) experienced troubles to add her project because of the hard-to-reach attention of the managers, not flexible corporation culture. The within culture was also not women-friendly and did not show enough fascination with projects that were not fully in the area the company operated. In such instances, when an organization becomes rigid, does not answer market needs mainly as a result of compilation, slow operations - CE must be fostered and carried out. Among the first steps should be an entrepreneurial-oriented framework that allocates the energy of decision making never to the bigger level employers, but considers the employees who know the most about the jobs being carried out.
In the situation of Lucent (a telecommunication equipment supplier), their New Venture Group formed another organizational entity. This entity was working as basics of research for new opportunities, products, and businesses. Being separate has its advantages, because in this way the produced CE device does not suffer from the bureaucratic guidelines of the mother or father company, still may use the support needed, creates its own inside environment and culture that can foster CE more easily. That is excatly why, when forming new entrepreneurial task each company must evaluate its easily fit into the business.
Usually small jobs are of better use inside the business: they could be accessible for all those employees, motivate these to focus on their tasks too, but at exactly the same time never to be too distracted from the mainstream of the business. An example of such an strategy could be the case of the business Ohio Bell. The program "ENTER-PRIZE" (Brilliance Through Employee Technology) was designed to be able to support, prize the employees who had ideas how to cut operating costs or generate revenues. The program was an integrated ethnic change of the Ohio Bell company. Being nurtured inside the company and connected with all employees, this project had where inside the business, fitted the mainstream functions and strategy. Fostering ground breaking ideas, the program was also a good example of the power of rewards towards CE expansion.
Incentives and rewards - availability of a performance based reward system motivating innovativeness is ways to foster entrepreneurship among employees.
If the management attempts to persuade the employees to act like intrapreneurs, it must also be happy to pay them as business people (Thornberry, 2003). Having trust in the rewarding system boosts the employee commitment, willingness to take risks and disclose the projects that may benefit both factors. An incentive system that is based on achievements in creativity assignments, may lead the brightest & most ambitious players to avoid innovation jobs with uncertain results.
Building a reward system shows a good attitude on the employees and can significantly increase their inspiration to benefit the business. It is important to see the reward methods as a long-term thing, make resources available rather than punish the employees straight following the first failure of the entrepreneurial job.
Failure or errors tolerance - in case of creative undertakings or risky project implementations.
Such demonstrated tolerance as well as managerial support is a solid tool creating positive environment for CE. A conventional managerial attitude will block the willingness to innovate and cause insufficient assurance of the employees. To be able to beat the possible aggravation, organization should support the HC even during failures and continue buying the projects which may have high potential. Taking failures as an inevitable step towards success will help to maintain the level of confidence for further improvements and profitable ideas.
Of course, to be able not to lose control and take "healthy" dangers, company's should build an organizational system to decide which innovation projects will probably tolerate fruits and that ought to be restarted with no trial-errors. For example, a well known company 3M carried out a more disciplined approach to defining, selecting and financing projects. Rather than running 100 of these as earlier, the procedure shifted to 12 assignments that 10 are anticipated to be successful. In this way companies are more focused, quickly responding and can create true competitive advantages through expedient CE.
Training and development - appropriate abilities can be had through training and development - strongest results towards improving CE. Training can get over the factors that lower employees' job performance and satisfaction. Personnel development viewed as activities that increase employees' certification and performance by any means hierarchical levels through education, job management, and work structure. All these practices can promote entrepreneurial behavior and increase the environment in the company. Training programs should be oriented towards building useful CE skills, fostering the dimensions than it inside the business: change approval, willingness to take risks, suppose responsibility, and the value of teamwork and distributed achievements. Training activities that enforce interpersonal skills should be fostered. Also training that holds creativity will reinforce innovativeness and potentially enhance self-renewal and new business development. Finally, training about how to transfer new ideas into business will lead to raised intensity for risk propensity and proactiveness.
For effective training, programs should fit the business's strategy and work process. To unfold their full influence on CE, expert knowledge, communal competence, creativeness, and methodical competence are specially important to be considered.
Specialist task - specialists can predict and estimate specific problems previously and therefore identify needs for alterations quicker.
As CE is more often regarded as a collective process, rather than putting the focus on one individual, firms must encourage assistance among specialists to increase successful innovation processes. That is stressed because as environment impacts on organizational behaviors it is also observed in change of romantic relationships between employees and company or professionals inside the organization. To be remembered as competitive and impressive, firms have to look at new strategies, as well as different employee-organization romantic relationship (EOR) patterns. The importance of this is significantly growing, because commercial entrepreneurship requires not only product technology, risk taking or proactive reactions to environmental forces, but also organizational learning, powered by cooperation and determination. Here the collaboration of specialists could be observed as a connection between employees, managers and their potential to foster corporate and business entrepreneurship mutually.
As it can be seen in the Siemens Nixdorf Informationssysteme AG (SNI), a corporation that confronted financial and inside environment issues with a program called "Change Agent Program", managerial support, concentrated staff selection and worker training and development are the tools that foster commercial entrepreneurship nature and help to triumph over the downturn an organization can experience.
The Change Agent program viewed to displace Siemens Nixdorf's rigid corporate hierarchy with a far more versatile and entrepreneurial attitude that might be more attentive to market demands. The business operated in an exceedingly competitive Western european market, was undermanaged and over consulted. As the employees at SNI experienced restructuring at the business during the early 1990s and four years of losses, the inside culture was far away from an organization one could call ground breaking and lead thinking (as the methods operating in IT industry in US). The program though was centered on employees, emphasizing the value of the individuals at the company and growing the opportunities open to them.
The goal of the 13 week program was to build a knowledge of business fundamentals and business change along three sizes: customer, competitiveness and culture. It blended presentations, discussions, workshops, circumstance studies, best practice site sessions, internships, and trainer research. A significant goal was to provide participants with new perspectives about their projects and give them the know-how to put into action them upon come back to the business. The programs aimed to have the sponsors (each member experienced two of them) provide leadership, assistance and support to be able to help them achieve their task goals. That is also an example that specialists' assistance is an instrument fostering corporate and business entrepreneurship and increasing the employees insight. It had been also looking to help find impressive ways to approach and use their jobs.
Each participant of the program had a job drawn from the region that concludes the most crucial challenges the business faces - which were fostered by this program and implemented upon the employee's go back to SNI. Although the 21 Change Agents got varying levels of success, it was clear that they played out a role in generating SNI to profitability in the 1994 - 1995 fiscal 12 months (for the first time in the business's record). That was reflected in your choice by the SNI Exec Mother board to perpetuate the Program on an gross annual basis.
Such training and development programs foster collective and individual entrepreneurship inside the company. This example shows how important it is the fact that such tools would fit desire to and strategy of the complete company. By addressing the right problems, training the right people (at SNI they were thoroughly selected) this training curriculum helped the business to enhance the communication within the company, improve its international functions, overall flexibility and determine new possible guidelines. The employees noticed the greater entrepreneurial soul of the company's culture and were able to channel their passion for changes and revitalization, feel more responsibility, and support what exposed the ways for their projects.
Having the goal of being visible, energetic in the current global current economic climate requires established companies to be increasingly more entrepreneurial in order to handle uncertainty and environmental dynamism. As the importance of CE is growing, more scholars want to define the precise tools that help create and take advantage of the CE inside the business.
Different studies provide positive associations between HRM routines and CE. As knowing the importance of competent HC, so the management practices turn into a source of continual competitive advantage for organizations. CE-related HR procedures are unique to the scope that competition cannot imitate them. However the support from HR tactics must maintain line with that particular organizational culture and steady with what is necessary from employees.
Considering the mixed ramifications of all the OS factors, managerial support and tolerance for risk taking have still exerted significant effects on innovativeness. That is why firms should invest to build such an organizational environment where first, support and tolerance exist to a huge extent. On the other side, organizations should spend more time on recruiting and training professionals to be supportive and hold a beliefs that failure is a stepping-stone to success.
As seen, HRM methods play a substantial role in fostering and keeping high levels of CE. Using a CE-friendly environment, companies should give attention to the HRM procedures of personnel selection, staff development and training, and staff rewards that align employee motivation and entrepreneurial firm development. These tactics show the highest correlation with progressive final results and positive CE results.
Learning from the previously discussed real life good examples it is apparent that CE is a complex phenomena to handle for different organizations. But the conclusion, that corporate and business entrepreneurship is a success factor in today's dense economy, keeps the same. In order to foster the entrepreneurial culture inside the business it is important to keep the focus on all possible resources and modify the HRM techniques to utilize them beneficially.
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