The Influence Of Employee Engagement And Hostile External Environment On Corporate Entrepreneurship Behaviour
The 21-century brought into the business world not only the new technologies, disruptive innovations alongside with turbulent environment, but also shaped the management perception and understanding that challenging the status quo is the essential key for companies’ survival. One of the options that business leaders of all levels of the organization could use to enhance their firms' performance and lead in the marketplace is to foster corporate entrepreneurship as it allows to firm create the new ways and invent new strategies to pursue the business goals. For the last fifty years in the field of corporate entrepreneurship was done a tremendous amount of research, but despite this fact, many aspects of corporate entrepreneurship have lack of study. Thus, in this article we examined the promotion factors of corporate entrepreneurship as the employee engagement (internal factor) and the hostile external environment (external factor) from the individual perspective. To assess these research variables, we used the self-reported questionnaires filled by the pen-and-paper method. In this research, participated forty employees from four companies which operated in both, private and government sector.
Introduction
Many scholars found correlations between the corporate entrepreneurship and organizational profits, market share and even companies’ survival. Therefore, many organizations in both, private and public sectors which invest resources in corporate entrepreneurship could enhance their overall organizational performance, which could lead to the significant competitive advantage against their rivals. Zahra (1991) pointed out that corporate entrepreneurship positively linked with financial performance and company growth. Others found the positive correlation between corporate entrepreneurship activities and intangible organizational benefits as knowledge and skills development. These and other beneficial outcomes of corporate entrepreneurship sparked researchers’ interest in this emerged field. Now the central focus of the research directed at discovering enhancing and prohibiting factors of corporate entrepreneurship, as also aimed to identify the mediating variables in this process. Thus, the rationale for our research was to spotlight the lucking of research enhancing factors of corporate entrepreneurship from the individual rather than strategic perspective.
Literature Review
Corporate Entrepreneurship
Research in Corporate Entrepreneurship (CE) as we know it nowadays was established by the last fifty years. Despite the amount of the research done in the field of CE and similar or related areas, the term of CE does have plural meanings. The most accepted definition of the term CE understands as entrepreneurial behaviour, evolving new processes or establishing new ventures inside of established organizations of all sizes. Another similar or close terminology that used in the literature is intrapreneurship, organizational entrepreneurship, corporate venturing, and strategic entrepreneurship. Therefore, in this article, we equal the term corporate entrepreneurship with all of the above terms.
First articles about corporate entrepreneurship (CE) emerged by the 1970’s and examined how organizations coped with turbulent environments employing entrepreneurship and corporate venturing strategies. Peterson and Berger (1971) did the first research on CE, they found that corporations operated in a hostile market environment could successfully apply the entrepreneurship strategies to handle these external obstacles. These and other findings raised the interest of the management and the research society, and the topic of CE in terms of turbulent environment become popular during the succeeding decades. Furthermore, nowadays researchers understand the vital role of external factors on organizational performance and hence on the corporate entrepreneurship. Thus, in our research, we will examine how the hostile external environment is influencing the corporate entrepreneurship behaviour inside established organizations.
Meanwhile, the research in corporate entrepreneurship (CE) continued to grow, some scholars in the early 1980’s started characterizing CE as a strategic process for firms. This process involved innovations and corporate venturing inside the firm or looking for a new opportunity for merger or acquisition outside the firm. Burgelman (1984) in his article reviled the model how the top performing companies of that time as 3M, Hewlett-Packard, and others, incorporated CE in their existed corporate strategy systems. Furthermore, in his article, he developed the framework for middle and senior management, that helped them to assess the CE behaviour inside of their organizations. This framework included two perspectives and suggested for managers to approach the evaluation of new CE proposals from future strategic importance perspective, as also from existed operational capacities of the firm. This and other articles viewed CE from the strategic viewpoint and consider it as creating new ventures inside or outside established organizations. Recent research articles were focused on the other perspective of corporate entrepreneurship (CE) and examined it by individual entrepreneurial behaviour rather than by organizational strategy perspective.
De Jong, Parker, Wennekers, and Wu (2011) in their research developed the nine-item measures for an assessment of CE behaviour inside established organizations, as also supported their findings with the empirical research of 179 employees and their pears. Furthermore, they found correlations between individual and contextual (job-related) variables and CE behaviour. These variables included proactive attitude, level of education and age of employees as also the job type and job autonomy of individuals. In another study, Antoncic and Antoncic (2011) researched whereby the overall employee satisfaction that included general satisfaction with work, employee relationships, remuneration, benefits, organizational culture, and employee loyalty are influencing CE. This and other articles highlighted the importance of the research on CE from the personal perspective, but they also marked that there is still a lack of the research done from that perspective. Thus, in our article, we will examine CE from the individual perspective and will measure the influence of the individual variables and specifically the employee engagement on CE behaviour.
As was noted above, today the field of corporate entrepreneurship (CE) have no single agreement between the researchers about the term, thus in our article, we will use the definition proposed by Stopford and Baden-Fuller (1994) and it is understood as evolving new processes or establishing new ventures inside of established organizations of all sizes. Also, it is important to highlight that as we mentioned earlier, in the literature one could found that researchers examine CE from the different organizational perspectives and as we saw, CE could be viewed as more macro and strategic approach for the business renewal, creating or acquisition of new ventures and inner innovations that involve top-down processes and require high-rank managers into decision making. The other point of view on CE, that is also used in this article, focused on the individual level of contribution and based on the bottom-up approach and understood as De Jong et al. , (2011) described “initiation and implementation of activities by individual workers to explore and exploit business opportunities”
Hostile external environment
In this article, we understand the term hostile external environment as a definition proposed by Kohli and Jaworski (1990), and it is including three characteristics: market turbulence, competitive intensity, and technological turbulence. The market considered as turbulent when the structure of its customers and their choices are changing fast. The term competitive intensity means that the customers could effortlessly choose between the products or services supplied by different companies. The last environmental characteristics meant by Kohli and Jaworski (1990) was technological turbulence, and it is understood as the velocity of technological changing in the market. As noted earlier, the research suggests that firms that employing the corporate entrepreneurship strategies could handle better with a hostile external environment.
Narver and Slater (1990) in their research proposed that if the firm more market oriented then it will gain greater value for their buyers and as a result will gain meaning competitive advantage. Also, O'Cass and Weerawardena (2010) suggest that a hostile external environment would urge managers to allocate their strategic resources for better understanding of their customers' choices and competitors’ further steps, which would lead them to use their marketing instruments more effectively and perform better in the marketplace. Moreover, it is widely recognized that businesses that operate in the more hostile environments invest more recourses in their innovative capabilities as also in their research and development (R&D) programs and as a result, they enhance their corporate entrepreneurship behavior and therefore would lead that companies to better competitive positioning and market share among their rivals. Thus, considering all of the above and building on this rationale, in our article, we will argue that the hostile external environment will be positively correlated with the corporate entrepreneurship behavior. In other words, we hypothesize that if the firm operates in an external environment that characterizes with high levels of market turbulence, competitive intensity, and technological turbulence, then the level of corporate entrepreneurship behavior in that organization will be also significant.
Employee engagement
The first articles about the employee engagement started to emerge in the second half of the twenty centuries. Less than thirty years ago, the scholars as also the practitioners undermined the importance of employee engagement in the organizations, but since the seminal work of Kahn (1990) about the individual engagement in corporate settings, the research field of employee engagement received a spotlight from the research society and the practitioners. As a result, within the last thirty years in the field of employee engagement was done a tremendous amount of the research as also was exceedingly written in management literature and the popular magazines, therefore now everyone understands the importance of employee engagement in corporate settings.
Nowadays, do not exist a single definition of the employee engagement and it has a similar or close term as organizational citizenship behaviour and organizational commitment. Furthermore, it could be looked from the different perspectives such from the group, individual, cognitive, emotional and many others. For our article we will use the simplified construction of the term employee engagement and will understand the term as defined by Porter, Steers, Mowday, and Boulian (1974) and described as: […] strength of an individual's identification with and involvement in a particular organization. Such commitment can generally be characterized by at least three factors: (1) a strong belief in and acceptance of the organization's goals and values; (2) a willingness to exert considerable effort on behalf of the organization; and (3) a definite desire to maintain organizational membership.
In the literature, one could find many articles that associate employee engagement with high levels of employee performance. Many researchers founded the statistical relationship between the employee engagement and organizational performance, profitability, customer satisfaction, employee retention, and safety. Moreover, Park, Song, Yoon, and Kim (2014) found that employee engagement associated with innovation behavior. Thus, considering all of the above and building on this rationale, in our article, we will argue that if in the organization the level of employee engagement is high it will be positively correlated with higher levels of corporate entrepreneurship.
Research methods
Data collection
Data were collected from four Israeli companies with more than 100 employees at each company. In the research participated in total 40 randomly selected employees and in every company, we surveyed at least 1 manager and 4 his subordinates. Two companies were operated in retail business and included 21 employees from the sample (52. 5%), one more company specialized in logistics and included 5 employees (12. 5) and the last company were from the government sector and included 14 employees respectively (35%). The respondents worked as a full-time employee and were hold both, managerial (17. 5%) and non-managerial job positions (82. 5%). In the sample participated 12 females (30%) and 28 males (70%). At the time of data screening process, where found 4 incomplete questionnaires from the non-managerial job positions, leaving for data analysis in total 36 usable forms.
Instruments
In our article, according to the research objectives, we used three variables included corporate entrepreneurship as a dependent variable and employee engagement and hostile external environment as independent variables. To measure these variables, we used previously-validated and widely accepted instruments and collected the data using the pen-and-paper, self-reported method. All the questionnaires were translated from original language (English) to the Hebrew language.
Corporate entrepreneurship where measured by questionnaire developed by De Jung et. al. (2011) and filled by employees holding non-managerial job positions. It included nine statements and used five-point Likert scale (1 = never to 5 = always). Employee engagement where measured by questionnaire developed by Pearce and Porter (1986) and modified by Black and Porter (1991) and it also filled by employees holding non-managerial job positions. It included nine statements and used the same five-point Likert scale (1 = never to 5 = always). The hostile external environment was measured by the questionnaire developed by Jaworski and Kohli (1993) and was filled by managers. It included fifteen statements in total, the marketing turbulence section included 5 statements, competitive intensity section included 6 statements one of which were a reversed item and in the last technological turbulence section where 4 statements which included one reversed item.
Analysis and Results
To calculate the results, we used the program Microsoft Excel version 16. 7 on macOS Mojave. Items in all questionnaires were equally weighted. The mean score for corporate entrepreneurship was 2. 56, median value 2. 5, and the standard deviation value 1. 43. The mean score for employee engagement was 3. 04, median value 3, and the standard deviation value 1. 28. The mean score for hostile external environment was 3. 47, median value 3. 5, and the standard deviation value 0. 71. The first hypothesis H1 predicted the positive correlation between the hostile external environment and the corporate entrepreneurship behavior. To test this hypothesis, first, we calculated the median for all managerial questionnaires, then we grouped and calculated the median for questionnaires that managerial subordinates filled in.
The estimated standardized coefficient was found positive (r =. 69) and in accordance to H1 hypothesis, but the results was not significant (P > 0. 05) therefore we are rejecting the H1 hypothesis. The second hypothesis H2 were also predicted positive correlation between the employee engagement and the corporate entrepreneurship behavior.
The estimated standardized coefficient was found positive (r =. 52) and significant (P < 0. 01) therefore we are accepted the H2 hypothesis. These results confirm the positive correlation between the employee engagement and the corporate entrepreneurship behavior. The founded standardized coefficient result (r =. 52) could be characterized as a strong correlation between the employee engagement and corporate entrepreneurship behavior. This correlation would be also viewed on the graph and the model below.
Discussion and Summary
From the first regression analysis, we retrieved the P > 0. 05, therefore it was a reason that we rejected the H1 hypothesis. These results contradicted our model as also the previous studies that were done in the past. For this could be multiple causes, that could explain that results. In our study, we had a luck of managers that assessed the external environment of their firms. Hence the most prominent explanation on which we could certainly point, in our research we had insufficient data sample.
The second explanation that could happen and influenced the results, in our study participated companies from both the private and government sector. The government companies usually characterize with a high level of bureaucracy, and low level of autonomy and risk-taking, hence the results of the current study presumably had been influenced by these characteristics. Therefore, in the subsequent studies, it could be a good idea to do the segmentation and check the difference between the private and government companies while analyzing the data. In our article as we mentioned before, we had not enough data sample to perform this segmentation. In the second regression analysis, that studied the influence of the employee engagement on the corporate entrepreneurship behavior, we retrieved the results that confirmed our model as also supported the previous studies. Accordingly, to this research outcomes, it could be useful for managers to reconsider and if needed to improve their employee engagement programs or to establish this kind of programs if they do not have one in their organization.
Limitations
In the current study, we were assessing the influence of only two factors on corporate entrepreneurship behavior, and it did not include other factors that could affect, interrupt or mediate on the correlation between the studied variables and hence on the results of the research. In addition, in this study, we used self-reported questionnaires that could influence the participants and lead them to the self-reported bias. Furthermore, regard to the resource constraints, in the current research we could not gather more data sample, neither we could obtain any additional objective sources of data, to assess the external environment of the firms. Also, for the same resource limitation reason, the questionnaires that were used in the current study was translated from the original language (English) to the Hebrew language but was not back-translated by professional translators, hence the participants of this study may have misinterpreted the questions and therefore affected the results of this study.
