Being thesis submitted in the department of business administration and marketing, school of management

Figure 2.17: HRM Practices Encouraging Corporate Entrepreneurship

Source: Brizek (2014)

This findings is similar to that of Edralin (2010) who examined the degree to which a set of complementary HRM practices (recruitment, training compensation, Performanc appraisal, Job Design and Industrial Relations) stimulate corporate entrepreneurship and which of these is the most significant driver of corporate entrepreneurship in twenty (20) large companies operating in manufacturing and service sectors in the Philippines. This investigation also shows how this set of human resource management practises, (comprising recruitment and selection, training and development, performance management, employee relations and compensation) impact organisation bottom line through their synergetic impact on corporate entrepreneurship as shown below:

HRM Practices

• 
  Recruitment and Selection
  
• 
  Training and Development
  
• 
  Compensation
  
• 
  Performance management
  
• 
  Employee relations
  

Corporate Entrepreneurship

Innovation

Organizational Performance

• 
  Market Growth
  
• 
  Profitability
  
• 
  Market value
  
• 
  Employee engagement
  
• 
  Employee productivity
  
• 
  Customer Satisfaction
  
• 
  
  

Figure 2.18: The Relationship between HRM Practices, Corporate Entrepreneurship And Organizational Performance.

Source: Edralin (2010)
However, unlike the Brizek‘s (2014) study and most other studies, Edralin (2010) investigation added industrial relations among the human resource practices that promote corporate entrepreneurship and found that employees relations and training are the most significant drivers of CE than other HRM practices. Ahmed (2016) confirms this pattern of relationship in the telecommunication sector of Saudi Arabia.
In line with these set of studies, Obasan (2014) investigates the impact of HRM practices on entrepreneurship skill acquisition among human resource managers and supervisors selected randomly from industries in Ogun State southwest of Nigeria. The correlation analysis conducted on the data collected indicates the existence of a weak but positive relationship between human resource management practices and corporate entrepreneurship. He concluded that human resource management facilitates entrepreneurship development and improves entrepreneurship. It is not imposible that the weak relationship found might be due to the fact that the focus of the study is on skill acquisition, rather that entrepreneurship itself.
The above discussions confirms an earlier assertion of Macmillan (1987, 8) that “we are looking at a situation where HRM interventions on CE is perhaps imperative, for surely there is no other function that has the skills and training to orchestrate the necessary informed processes’’.

From the perspectives of these studies, HRM practices influence CE by acting as a tool for creating and re-inforcing entrepreneurial organization culture and values as posited by Schein (1992). Thus, according to Dizgah, Gilaninia and Asgari (2011) and Maes and Roodhooft (2010), the relevance of HRM practices is highlighted by the fact that they interelate with entrepreneurial capabilities that lead to the extension of organizational competencies and performance. This support the position that the more intense and enlightened the human resources management practice (HRMP) of a firm is, the more entrepreneurial the workforce (corporate intrapreneurial work behaviour of pro-activeness, innovativeness and risk taking) will be. Empirical evidencies showing how each of the highlighted human resource management practices (HRMP) contributes to achieving this are discussed here under.

2.3.2. Recruitment and Selection and Corporate Entrepreneurship

Previous studies reveal that the nature of recruitment and selection practices in an organisation influences the level of corporate entrepreneurship that may take place in it. Dizgah et al. (2011), investigate the relationship between high performing human resource management practices and corporate entrepreneurship among 93 small and medium sized entrepreneurial firms in the Ginlan provice of Iran. The survey shows that staffing function (including recruitment and selection) of human resource management has a significant positive relationship with corporate entrepreneurship. In a similar study of human resource management practices in one hundred and twelve (112) firms in different industries, Moris and Jones (1993) found that recruitment practices are associated with coporate entrepreneurship. Further, Delancy and Huselid (1996) study established that firms which deploy clear recruitment and well known recruitment policies as well as sophisticated selection procedures to find the very best-potential employees tend to identify persons that can contribute to their entrepreneurial orientation (EO) than others that do not.

As a result, such firms tend to display more entrepreneurial characteristics than those that placed less emphasis on their recruitment and selection processes. In the same way, Schuler and Macmillan (2010) found that firms that scored high on EO tend to base their staffing practices on deliberately chosen sets of key performance indicators (KPI) with regards to entrepreneurial orientation. This according to them, would enhance a better match between entrepreneurial requirements of the firm and the employee’s characteristics. Schuler and Macmillan (2010) and Kaya (2006) indicate that such firms tend to determine and consider the employee’s problem solving abilities as well as creative, innovative and risk-taking behavior in their selection process. As a result, new recruits tend to be such as could show drive for action, initiate and make appropriate decisions which enable the company to respond quickly to unexpected challenges and opportunities (Kaya,2006).
In line with this, Williamson (2000) found that as small firms grow, they tend to develop more formal methods in employees’ staffing processes in order to maintain their growth. It is by this, that they improve their ability to reach employees who can generate good quality business output required for competitive business and entrepreneurial performance. In this respect, Deshpande and Golnar (1994) also pointed out that the hiring approach of successful entrepreneurial firms tends to be characterized by providing realistic job description and communication of both the positive and negative aspects of job to new recruits. Leung, Zhang, Wong and Foo (2006) added that these firms have strong tendencies to use informal approach to acquiring the core employees through networks. Also, at the beginning, founders of entrepreneurial firms usually hire generalist who can and will put the required efforts into and feel very passionate about new venture and the organization culture. Later, when the firm begins to grow, more seasoned professionals are employed who, through their knowledge and skills, can accelerate the business and foster its growth (Swwiercz & Lydon, 2002; Zotto & Gustafsson, 2007). These support the hypothesis that an emphasis on best practice in recruitment and selection function would be positively related to corporate intrapreneurial work behavior among employees.

2.3.3. Training and Development and Corporate Entrepreneurship

Human Capital is a form of knowledge, skills and abilities of individual or employee (Hayton, 2005; Hayton & Kelly, 2006). Anders (2004) and Wuetal (2006) studies confirm that this capital, is a product of training and development experiences, and have positive effect on innovative performance, which is an element of corporate entrepreneurial work behavior. Edralin (2007) studies focus the direct relationship between training and corporate entrepreneurship and found a strong positive relationship between the two constructs. Dizgah et al (2011) who examined the relationship between a range of high performance human resource management dimensions and corporate entrepreneurship however found the opposite. Contrary to expectation, this study did not find any significant relationship between corporate entrepreneuship and training in particular. This is suprising because, if intrapreneurship is a function of human quality or capabilities as argued by Gries and Nande (2001), then it should logically be subject to improvement by the HR function of training and development interventions. The second attempt of Edralin (2010) on the study of this theme confirmed his earlier finding of a strong positive relationship between training and corporate entrepreneurship.

Edralin (2010) however clarfies that this relationship exist only when training is used specifically for the development of cultural behaviors and value empowerment within a company’s core values and philosophy and not only for technical skill development. This reinforces his earlier findings in Edralin (2007) and subsequently that of Boring, (2017), that implementation of extensive and continuous training and development programmes, not only for the improvement of technical competence, but also for the development of cultural behaviour and value congruent with the company’s core values and philosophy, is one of the emerging best practices that stimulate innovation. This provides logic for understanding why Dizgah et al. (2011) studies may find negative relationship between training and corporate entrepreneurship. For example, Dizgah et al. (2011) highlight the role of procedural justice and organizational citizenship (culture) behavior which relates to company’s core values and philosophy as a variable moderating the relationship between human resource management practices (which include training) and corporate entrepreneurship.
Further, Akpan (2012) investigated the relationship between human capital and innovation. He found that when the quality of human capital, which is a function of training and development, is relatively low, innovative performance is also low. On the other hand, an increase in human capital exerts a positive impact on innovative performance. He then suggests that when innovative performance in organization is low, the quality of HR practices should be increased. These suppose that HR practice of training and development could be a technique of promoting and developing corporate entrepreneurship. Apparently, this has already been realized in respect of independent entrepreneurs by way of the popularity of different forms of education and training programmes being offered by formal, informal, public or private institutions in Nigeria as a way of increasing entrepreneurship in the population. Beside, towards realising the entrepreneurial objective of the national policy on education (NPE, 2004), the Federal government mandated all educational institutions in the country to incorporate entrepreneurship education in their curricula. Many research studies have confirmed the positive influence of these education and training efforts on the level of entrepreneurial orientations and skill of graduates of these academic institutions (Adejimola & Olufunmilayo, 2009; Izedomi & Okafor, 2008). Unfortunately, similar emphasis is not being given to using education and training as a strategy for increasing corporate intrapreneurial behaviour in industry or in government in developing countries, as indicated by GEM, (2012). In fact, there are those who believe that entrepreneurship is a function of nature and not nurture, as in the trait theory discussed earlier, hence the popularity of emphasis on passion and talents, rather than skill, in much of the efforts at promoting entrepreneurship. Such a position leaves little role for training and development function as a means of corporate intrapreneurial work behaviour development. There is therefore the need to find out if the human resource function of training and development could be an effective tool of facilitating intrapreneurship in organizations (CE), especially in African context.
2.3.4. Job design and Corporate Entrapreneurship

Studies such as Bolino, Turnley and Bloodgood (2002) and Malhotra and Muruighan (2002) have pointed to the fact that the way jobs are designed influence the level of entrepreneurial work behavior of the job holder. Specifically, they showed that jobs which have high level of individual autonomy and broadened scope for behavior initiatives, have a positive influence on the formation of trust and social capital which promote corporate intrapreneurial behaviour. Bolino et al., (2002), who conceptualized job design in terms of span of control and span of accountability, report that innovation and proactive job behavior are provoked when the span ofcontrol and accountability are wide. They are stifled when the span of control and accountability are narrow. This agrees with the findings of Hammond, et al (2011) that when employees have job autonomy, task variety, social contacts and when they can make full use of their skills and capabilities, they would be more satisfied and committed; leading to innovative work behavior.

It should however be noted that the Bolina, et al (2002) study also stress that, though widening them is necessary, but not sufficient to inspire innovation. They concluded that entrepreneurial gap exist only where employees’ jobs are such that compel them to think creatively and innovatively for themselves around the lack of resources implies by narrow span of control, combined with wide span of accountability. This is in line with the argument that certain jobs or job holders do not have the capability or need for these elements and hence designing jobs for entrepreneurial behaviours among them is of no consequence, or may even be counter productive (Armstrong, 2009).

The relationship between job design and CE has also been examined from its perception in terms of job autonomy and job variety. Job autonomy provides substantial freedom, discretion, and responsibility to the individual for scheduling his work and in determining the procedures to be used in carrying it out (Hackman & Oldman, 1976). These, according to Hackman and Oldman (1976), have been associated with increased employees’ perceived capability and willingness to engage in entrepreneurial behavior. In the same way they consider that job variety requires a variety of different activities of the person and this would facilitate entrepreneurial behavior. This is because, according to them, workers with more varied tasks are more likely to discover opportunities. Job variety helps employees to interprete and positions their work in broarder work context. This can stimulate them to generate ideas and engage in work related products and processes innovations (Frese, Kring, Soose & Zempel, 1996).

In a more recent study, de-Jong, Parker, and Wenneker (2015), explored how organizational factors influence individual entrepreneurial behavior at work. They do this by investigating the role of job design, based on the job autonomy/job variety characterisation, with data collected from 179 workers in nine Dutch research and consultancy orgainsations. They found that job autonomy is positively related with entrepreneurial behavior (with special reference to its innovation and proactivity sub-dimensions), while job variety is not. However, job autonomy was not related with the risk taking dimension of entrepreneurial work behavior. They therefore suggest that intervensions related to the vertical scope of job will promote innovation and proactive dimensions of entrepreneurial work behavior than horizontal job expansion. In the same way, Spiegelaere, Gyes, Vandekerckhove and Hootegem (2012) investigated the relationship between job design and innovative work behavior. To do this, they used data generated through a survey questionnaire completed by 952 employees from 17 companies from various industries of Flemish region of Belgium. The investigation shows that job control element of job design is positively related to innovative work behavior and work engagement. For the purpose of this study therefore, it is convenient to hypothesize that best practice in vertical job design would facilitate proactive, innovative and risk taking work behaviors.
2.3.5. Compensation Management and Corporate Entrepreneurship

Several studies have examined and confirmed that compensation practice is a key antecedent of corporate enrepreneurship. Such studies include Hornsby, Kuratkto and Zahra (2002), Morris and Jones (1993), Hornsby, Kwatko and Montagno (1999) and Dizgah et al., (2011), among others. Morris and Jones. (1993) investigated the influence of compensation practices among 112 firms from a wide range of industries. They found that compensation practices promote corporate entrepreneurship among workers in these firms. However, they stress that compensation practices that do this are those that are characterized by emphasis on external equity rather than internal equity, lower basic pay, greater amount of pay risk, balances both long and short term performance as well as individual and group performance. The findings of Dizgah et al (2011) studies however negate this position, though pointed out that their own result may be due to conflicting interpretation of different methods of reward and contextual factors observed in the course of the study. Hornsby, Kwatko and Montagno (1999) studies however support the findings of Morris and Jones (1993). This study builds on Morris and Jones (1993) and clearifies the findings of Dizgah et al (2011) by showing that it is only when the use of reward was considered appropriate by the respondents that it facilitates corporate entrepreneurship.

Further, Kanter (1989) and Goosen, De-Coning and Smith (2002) show that rewards and reinforcement stimulate individual workers to engage in innovative, proactive and moderate risk taking work behaviours and suggest that the use of appropriate rewards can develop managers’ inclination to undertake job tasks with uncertain, risky entrepreneurial projects. In addition, Balkin et al. (2000), on the other hand, report that some extrinsic rewards for some positions are associated with greater innovations. Steele and Baker (1986) report that reward system does this through its potential to create entrepreneurial climate.
Zenua (2011) added to our insight into the factors infuencing the relationship between remuneration and entrepreneurial work behaviour. He found that high cost of failure and too small reward for successful action inhibits intrapreneurial work behaviour. Since mistakes are an inevitable part of the entrepreneurial process, this, according to Hayton (2005), poses a paradox between the freedom required to pursue a commonly accepted goal and the need for reward for assuming entrepreneurial risk that is based on inputs and the achievement of significant milestone, rather than some overall performance matrix. Further, Madu (2011) examined the impact of compensation practices on intrapreneurial work behaviour. He gathered empirical data from 2009 respondents in different organizations through a survey questionnaire. He also found a positive relationship between compensation practices and corporate entrepreneurial work behaviour. He however shows that this relationship is dependent on what is measured and how these measures are used. According to this study, compensation system that measures and reward innovative behaviour will produce entrepreneurial workforce than the one that focused on preventing and or purnishing failures.
In line with this, Schuler and Jackson (1987) report that organizations that employs innovative techniques tends to offer higher compensation because of the capacity of this to attract qualified, adaptable, inventive and talented individuals, essential for their advancement through enhanced performance. Further to this, entrepreneurial firms are those willing to reward creativity, innovation, willingness to take risks, interactive behaviour and tolerance for ambiquity and uncertainty ( Zotto & Gustafsson 2007). Their reward systems are usually varied and based on bonuses which include both profit and stock sharing (Cardon & Stevens, 2004; Zotto & Gustafsson 2007) which promote a feeling of ownership and shift some risk of ownership to employees (Barringer, Jones & Neubaum., 2005). As a result of this, rewards do not necessarily follow or reflects employees’ status in entrepreneurial firms. Entrepreneurial firms provide a multi-dimensional reward, based on the pay off from acting in uncertain environments, which includes market innovations and customer satisfaction and the responsibility of having a stake in the business which add up to the percieved feeling of reward (Snell & Dean, 1992). Consequently, we hypothesized that a reward system based on a combination of input and output rewards would promote intrapreneurial work behavior most and that the rewards for intrapreneurship are positively related to intrapreneurial capability, represented by innovative, proactive and risk-taking work behaviour.
2.3.6. Performance Appraisal and Corporate Entrepreneurship

Folorunso (2014) describes performance appraisal as a human resource activity that is critically important for fostering entrepreneurial orientation among workers. In a related study, Shokunbi (2013) reported that seventy four percent (74%) of his respondents believe that performance appraisal could promote corporate entrepreneurship among employees. Per-Mattilaand Mikael (2001), report strong association between performance appraisals and corporate entrepreneurship. This association, according to them, is however dependent on what measures are being used and for what purpose. The study shows that firm with higher entrepreneurial orientation among the workforce are characterized by the use of more non-financial measures than financial measures. They concluded that performance appraisal system play a significant role in entrepreneurial organization and is positively related to entrepreneurial orientation and firm performance. In line with this, Jones, Morris and Rockmore (1995) propose that organizations should deliberately and closely moitor their performance appraisals exercises and reward system to ensure that they are contributing to innovative solutions and reasonable risk taking work behavior among the workforce. McGrath (2001), in this line of thought, pointed to the challenge of HRM to specify expected behavior without constraining individual to predetermined outcome which would inhibit creative contribution by reducing the goal of autonomy. He contended that if employees are aware that compensation and progress within the organization are dependent on their entrepreneurial contribution, they would authomatically try to be entrepreneurial. It is by so doing that performance appraisal can become a tool for fostering entrepreneurial work behavior. This is in line with the findings of Dizgah et al. (2011) that performance appraisal is positively related to corporate entrepreneurship in ninety three (93) SMEs in Guilan province of Iran. Damanpour (1991) studies confirmed that firms can use performance appraisal as a means of motivating staff commitment to get involved in creative thinking and innovation. This, according to Jaw and Liu (2003), results when performance appraisal scores are used to create gentle pressures of challenge as well as a feeling of achievement in innovative activities. This is because, according to Olatoye and Ojo (2007), the process of performance appraisal provides information which influence decisions on training and development, compensation, promotion, placement which are of concern to workers. It is in this way that performance appraisal becomes a tool for monitoring, changing and promoting desired employee behavior, which include entrepreneurial work behavior (Densler, 2008). For the purpose of this study therefore it is convenient to hypothesize that best practice in performance appraisal would facilitate proactive, innovative and risk taking behavior.