entrepreneurial managment

Why do you think employees do not act entrepreneurially in organizations?

Both organizational factors and environmental conditions play an integral role in enabling

corporate entrepreneurship1. When employees do not exhibit the type of entrepreneurial

behavior that is desired in the organization, it is important to examine the factor and/or

condition that is hindering corporate entrepreneurship. As organizational factors are more

controllable by organizations, this paper focuses on four of such factors, namely

Organizational Structure, Rewards, Culture and Management Support.

A bureaucratic organizational structure can impede corporate entrepreneurship in two ways.

A bureaucratic structure erects perceived barriers for corporate entrepreneurship activities. In

other words, employees narrow their focus solely onto their existing job performance and

ignore the company’s overall progress2. Also, while the availability of information is one of the

hygiene factors for innovation, bureaucracy hinders the transmission of relevant information

within organization3. Hence, a bureaucratic structure may result in employees not acting

entrepreneurially in organizations.

Absence of an effective rewards system may also be a cause of employees not

demonstrating corporate entrepreneurship. Although corporate entrepreneurs may not place

much emphasis on monetary rewards, some form of reward system must be in place for

innovation to sustain4. Corporate entrepreneurs are often driven by rewards that are derived

from results, such as profit sharing and recognition5. The lack of these rewards may thus

discourage employees from acting entrepreneurially.

Another factor would be organizational culture. To inculcate corporate entrepreneurship in the

organization, two conditions must to be fulfilled. Firstly, the organizational culture has to be

pervasive enough for the entire organization to share the same set of values and beliefs6.

However, the strong presence of organizational culture on its own does not suffice. The

element of entrepreneurship and innovation has to be inherent in the strong culture. The

absence of either which would shackle the employees from acting entrepreneurially in the

organization.

The last factor is management support. Management support comes in two forms: tangible

and intangible support. Tangible support refers to the resources that the management grants

to the employees to develop and implement new ideas. Intangible support refers to

management’s encouragement to employees to take calculated risk and management having

reasonable tolerance for failure7. Without these, employees may fear taking on new projects

and/or may not have the resources to execute corporate entrepreneurship.

Apart from the four factors, the characteristics of the individual employee are also a key to

corporate entrepreneurship8. Without characteristics such as risk taking propensity,

employees may not act entrepreneurially even if the four factors are present9. Hence, it is

imperative that organizations selects employee who possess the relevant person-organization

fit during recruitment, like what companies such as South-west Airline are doing.

2) What can universities do to develop their students to be entrepreneurial managers of the future?

There is an increasing number of corporations desiring for entrepreneurial managers10. Since

most students first come across the concept of corporate entrepreneurship in their tertiary

education, the onus now lies with universities to produce graduates that meet the industry’s

need. Universities thus have to devise methods to expose and instill corporate

entrepreneurship in their students. This can be attained via this framework: Opening Hearts,

Opening Minds and Opening Doors.

Opening Hearts – The characteristics of the employee will determine the level of corporate

entrepreneurship that he exhibits in the organization. These characteristics can be converted

to those, which are required of entrepreneurial managers. This can be achieved by creating a

safe environment for the students to take risks and be tolerant of mistakes, traits that are

embodied by entrepreneurial managers. An example would be the new system by the

National University of Singapore to exclude freshmen’s academic performance from their

cumulative grade point11. Such initiative thus fosters the students to exemplify the

characteristics needed for corporate entrepreneurship.

Opening Minds – Universities possess the obligation to impart relevant corporate

entrepreneurship knowledge to its students. At the most basic level, modules on

entrepreneurial management can be carefully crafted to provide students the technical know-

hows regarding entrepreneurial management. At a more advanced level, universities can

integrate these fundamental entrepreneurial management concepts into other disciplines. For

example, Brown University offers a program, which aims to incorporate entrepreneurship into

engineering12. By doing so, students from different fields of study, not just those from strategic

management, would possess some forms of entrepreneurial management knowledge.

Opening Doors – Universities need to provide the avenue for their students to have a real

taste of entrepreneurial management. After all, entrepreneurial management is not simply

theory but rather a skill that needs to be applied and honed in reality. Therefore, universities

can collaborate with firms that have an interest in innovation and corporate entrepreneurship,

and provide opportunities for their students. An example would be the entrepreneurship

internship program, in San Diego State University, which connects students to corporations

that preach corporate entrepreneurship13. Such partnership would expose the students to the

actual entrepreneurial management and allow them to accumulate valuable experience.

(997 words)

References

1 Christensen, K.S. (2005) Enabling Intrapreneurship: The Case of a Knowledge-Intensive Industrial Company. European Journal of Innovation Management, 8 (3): 305-322.

2 Scheepers, M.J., Hough, J. and Bloom, J.Z. (2008) Nurturing the Corporate Entrepreneurship, 12 (3): 50-75

3 Chaka, C.T. (2006) Factors that Promote Corporate Entrepreneurship within the First Rand Bank.

4 Srivastava, N. and Agrawal, A. (2010) Factors Supporting Corporate Entrepreneurship: An Exploratory Study, 14 (3): 163-171



7 Srivastava, N. and Agrawal, A. (2010) Factors Supporting Corporate Entrepreneurship: An Exploratory Study, 14 (3): 163-171

8 Mokaya, S.O. (2012) Corporate Entrepreneurship and Organizational Performance Theoretical Perspectives, Approaches and Outcomes, 1 (4): 133-143 9 Chaka, C.T. (2006) Factors that Promote Corporate Entrepreneurship within the First Rand Bank.

10 Thornberry, N.E. (2003) Corporate Entrepreneurship: Teaching Managers to be Entrepreneurs, 22 (4): 329-344

11 Ong, H. H. (2014, Jan 23). NUS rolls out 'grade-free' system for its freshmen. Retrieved September 23, 2014 from http://www.straitstimes.com/breaking-news/singapore/story/nus-rolls-out-grade-free-system-its-freshmen-20140123

12 Retrieved September 23, 2014 from http://www.brown.edu/academics/gradschool/programs/innovation-management-and-entrepreneurship-engineering

13 Retrieved September 23, 2014 from http://lavincenter.sdsu.edu/programs/Internships/

entrepreneurial managment

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