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

2.3.7. Industrial Relations and Corporate Entrepreneurship

Relatively few studies investigated the link between industrial relations and corporate entrepreneurship or innovation in formal organisations. Most of these few focus concepts that are related to or elements of industrial relations, rather than industrial relations itself. This is probably because earlier perception of the role of industrial relations in organisations is that of a conflict- prone process that basically prevents the expression of entrepreneurial work behavior (Ezeagba, 2014).

In an empirical analysis of innovation in large and small firms in different industries in the United State of America, Acs and Audretsch (1988), found that the total number of innovations in these firms is negatively related to unionization which is often associated with industrial relations. Also, in a study of labour-management relations, job security and perceived workers productivity in industrial organisations, Akintayo (2010) found a negative relationship between labour-management relationship and technological innovation. He reported that hamonious labour-management relations have always been compromised in the course of managing technological innovations. It is therefore common for employers, especially in the private sector, to prefer a union- free status for their organizations (Nkiinebari, 2014). This derives from the conception of industrial relations as being mainly concerned with oppositional struggles between workers and employers (Adekunle, 2014), leading to the discipation of motivational forces in industries in opposite directions (Charles, 2014) and hence hinders the expression of innovative work behaviors required for survival and growth (Oshinyemi, 2014).
It is therefore not suprising that, studies, such as Hayton (2005), which linked HR management practices with corporate entrepreneurship, are noted for their exclusion of industrial relations practice as independent variable as they do for other HRM practices. The most common study in this area are those that examined factors that may be linked to industrial relations, but not unionisation. In this category is Castrogiovanni, Urbano and Loras (2011). In an empirical study of the HRM practices adopted in SMEs for promoting CE in Spanish context, they found that elements of industrial relations such as the creation of personal relationship, development of open communication between owner, managers and employee explain the dynamics of entrepreneurial work behaviour between and within firms.
Along this line, Gyes (2003) in a study of industrial relations systems in Europe identifies five types: market oriented industrial relations system, based on voluntarism; conflict oriented industrial relations system, based on antagonistic conflict of interest between the industrial relations parties; State oriented industrial relations system, where coordination and regulation depend strongly on public/State governance; coordination oriented industrial relations system, where social partners discuss non-market mechanisms and arrangements in order to establish agreements on conditions of employment; and cooperation oriented industrial relations system, which is based on the long term positive-sum conception of the common interest between all organized IR actors. He found that, in market oriented industrial relations system-based on voluntarism approach involvement of industrial relations, innovation is weak; innovation is low in conflict oriented industrial relations system - based antagonistic approach. Industrial relations play only a secondary role in innovation strategy in a system which depends on State regulations, whereas there is a strong linkage between industrial relations settings governed by coordination approach and innovation issues. He contended that the strongest workers involvement in innovation matters is found where industrial relations systems are governed by the principles of cooperation and coordination orientation to industrial relations.
This orientation, according to the study, would further innovation through facilitating the conditions for industrial harmony required for channeling all productive energies in industry for optimum achievement of corporate goals for the mutual benefits of the parties. On the basis of this he concluded that a mutual and cooperative relationship between management and employee representatives have a positive impact on the innovation culture and job performance of a company. This is because, according to Gyes (2003), on the basis of such a partnership, the employee representation will support the innovation climate of a company, not only by pushing management to innovate, but by interfacing communications and removing employee resistance in this respect.

Also, Pfeiffer (1994) found that employee participation is positively related to job satisfaction, performance, and productivity of employees. However, in a related study, Antoncic and Antoncic (2011) examined the relationship between employee satisfaction, intrapreneurship and firm growth with data collected from one hundred and forty nine (149) firms from the Slovenia, using structural equation modeling. He concieved of employees’ satisfaction to include satisfaction with working condition and employee relations and loyalty. They found that employee satisfaction and good employee relationship are positively related with corporate entrepreneurial work behaviour. Based on this, they conclude that firms need to take a detailed and systematic appraoch to employees satisfaction and relationship in order to improve intrapreneurial work behaviour and growth.

In a study relating conflict management and innovative performance, Song, Dyer and Thieme (2006), identify and classify conflict management strategies into two; destructive conflict management and constructive management. They found that there is a strong positive association between constructive management strategy and innovative performance. Specifically, they found that destructive management tends to lead to lower innovative performance, while constructive management was associated with higher innovative performance.
Edralin (2010) examined the relationship between human resource management and corporate entrepreneurship among managers in manufacturing firms in the Asia region. This study, unlike most others, directly added industial relations among HRMPs under investigation. The study showed that there is a positive correlation between corporate entrepreneurship and elements of human resource management, including industrial relations (IR). Surprisingly, this study reports that IR was the most strongly correlated with corporate entrepreneurship. This is a significant development in line with the notion that industrial relations could be a tool of achieving organization objectives rather than just controlling conflicts as it is now being most commonly held (Akintunde 2007).
Gyes (2003), reports that a small but growing body of research is finding empirical evidence of a positive link between innovation and high involvement and direct employee participation in firms. He however stress that, though the evidence of this link between industrial relations and innovation is certainly increasing, the question remains about whether these work practices are particularly suited to every business innovation. However, the paucity of industrial relations and corporate entrepreneurship research suggests the need for a replication of these studies in varied contexts to add to the validity of their conclusions on the relationship between the two variables. It is therefore necessary to determine and confirm how the manner in which IR is conducted can influence the level of intrapreneurship among the workers. From the above, it may be hypothesized that harmonious industrial relations will be positively related to high level of intrapreneurship among the workforce, represented in proactive, innovative and risk taking work behavior.
2.3.8. Human resource management and innovative work behaviour

Among the early studies of the relationship between HRMP and innovation is Aluahene Ginia (1996). This study examined the relationship between creative capabilities through trainning and hiring practies in selected firms. The analysis of the finding showed that when firms use creative capabilities and innovative characteristies as hiring and selection crireteria, their employees are likely to show diversity of ideas and commit to more innovative work behaviours. Brockbank (1999) which examined the same problem confirmed this findings. In another study, Jaw and Lin (2003) investigate the role of training in promoting innovative work behaviour. This study confirmed that Training would facilitate employee exposure to variety of knowledge and opennees to innovative ideas. Another insight was added in Edralin (2007) studies which addresses the role of training also reported that the implementation of extensive and continuous training and development programmes not only for improving technical competence but also for the development of cultural behavour and values congruent with company’s core values and philosophy stimulate innovative behaviours among workers.

Madu (2011) on his own investigates the role of compensation practices on intrapreneurial work behaviour among 2009 respondents from different organizations. He found a positive relationship between compensation practices and key dimensions of intrapreneurship including innovative work behaviour. In like manner, Donate, Pena and Pablo (2015) found that HRMP influence social capital, which, in turns affect innovative capabilities in technology firms in Spain.

2.3.9. Human Resource Management and Proactive Work Behaviour

Proactive work behaviour refers to anticipatory actions that employees display to initiate changes in their surrounding (Grant & Ashprd, 2008). Rhoades and Eisenberger (2002) studies establish a positive relationship between perceived organisational support (POS) and employee extra-role behaviour including proactive work behaviour. However several studies have also estabilished that POS is positively influenced by high performing work system (HPWS) which consist of recruitment, training, performance-based remuneration, flexible job environment, participative management (Aretin, 2015; Allen, Shore & Grifletto, 2003). Aretin (2015) for example shows that employees with high POS feel more comfortable and less constrained by their job and tend to help others and be proactive in performing their jobs. This is in line with Snape and Redman, (2010) studies which found that HPWS lead to POS which in turn positively influence employee proactive work behaviour. More specifically, Parker (2009) found that job autonomy, as a form of participative management motivates employees to show proactive work behaviour. Also, Selanva and Schaufeli (2012) undertake a cross-national study of work engagement as a mediator between job resource and proactive work behaviour. They found that work engagement fully mediate the impact of job resources on proactive behaviour at work. This means that an increase in job resource is related to an increase in workers’ engagement which in turn, is positively related to proactive work behaviour.

2.3.10. Human Resource Management and Risk Taking Behaviour

Few studies directly focus the relationship between human resource management and risk taking work behaviour. Example of such studies is Morris and Jones (1993) which found that HRMP encourage risk taking behaviour of employees in selected firms in the USA. Most of the other studies made only an indirect reference, while fewer still examined the role of different “stand alone” human resource management practice on risk taking behaviour (Hayton, 2005). In relation to performance appraisal, what is measured, rewarded or penalized have been found to influence risk taking behaviour. For example, Basu and Green (1997) found that employees are more likely to assert their ideas and engage in risk taking behaviour if they are confident that they would not be penalized for doing so. In relation to job design, Eisenberger, Meli and Pretz (1998) found that narrowly defined job roles tend to discourage risk taking behaviour.

The most notable in individual HRM/CE studies are those that examined how compensation contributes to the creation of an entreprenurial climate by stimulating entrepreneurial acceptance of career risk (Goosen, 2002). All these studies conclude that reward motivates individual employee to engage in moderate risk-taking behaviour. Another study on compensation/risk taking pattern is that of Larraza-Kintana, Gomez-Mejia and Wiseman, (2011). In a study of chief executive officers (CEOs) of selected firms in America, Larraza-Kintana, et al (2011) found out that compensation of the CEOs indirectly influence the riskiness of their strategic decisions. Kanter (1989) also found that compensation can motivate individual worker to engage in moderate risk-taking behaviour. Masley, Ananu and Saadaoni (2004) however found that this happens only when the reward system is based on performance as employees are encouraged to assume the risk relating to their projects.
A departure from the stand alone study of the effect of HRMP on CE is the Morris and Jones (1993). In a cross-sectional survey of the relationship between comprehensive set of HRMP and CE in selected USA firms, they found that HRMP encourage corporate entrepreneurship and risk-taking in particular.

The summary of other related studies from the private sector are as in Table 2.5.

Table 2.5. Summary of HRMP and CE Studies in the Private Sector






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Source: Phan, Wright, Ucbasaran and Tan (2009)



2.3.11. Emperical Studies in the Public SectorEnvironment

Studies on the impact of HRM on intrapreneurship in the core civil service (ministries) are scanty. This is probably due to the fact that both professional HRM and CE are just being accepted gradually as applicable in the civil services. Most of the studies in this area are more in extra ministerial agencies. Example is the study by Ikiam Udugama and Jayasinglie-Mudalige (2010) in Sri Lanka. The study investigated the dimensions of the internal work environment determining or moderating the development of intrapreneurial work behaviour culture in the context of estate managers in the plantation sector of Sri Lanka. The result highlighted showed that the heavy work load and rather rigid public service organizational system within which managers must operate inhibit intrapreneurial culture. This implies that estate managers’ ability to create an innovative organizational culture and environment is constrained by the rigidities prevailing at the “Head office”. The summary of other studies from the public sector is as follow:

Table.2.6: Summary of HRMP/CE Studies in the Public Sector

Title	Publisher/Place	Author/year	Objectives	Method	Findings	Gaps
Public Entrepreneurship as Innovation Diffusion in Proceedings	8^th European Academic Of Management (ECIRAM) Annual Conference: Emerging European Management Oslo, Norway	Zampetakis L.A& Molistaklis” (2006)	To extend earlier research on empirical assessment of the factors influencing corporate entrepreneurship among front lined staff in the public sector	Survey of literature and 223 public servants full profile, conjoint analysis, cluster analysis, using survey instrument.	The preferred way corporate entrepreneurship factors should be introduced to the public sector setting. Provide a framework in addressing corporate entrepreneurship in formulating a strategy that foster corporate entrepreneurship in the public sector	Need empirical validation
Entrepreneurial Orientation and Human Resource Management: Effect from Human Resource Management Practices	Entrepreneurship and HR research	Henrik Floren, and Jonas Rendquist and Sebastian Fisher	Examine the relationship between human resource management and entrepreneurial orientation in larger firms (link between human resource management practice and corporate objective of entrepreneurial behaviour)	Survey. Swedish and German manufacturing firms in high technology industries. Correlation and Regression Analysis.	Only Training and development is positively related to entrepreneurship orientation .	Limited to high technology industry
Public Sector Corporate Entrepreneurship		Kearney et al (2008)	Examine corporate entrepreneurship in public sector. And develop a method of public entrepreneurship.	Literature review and qualitative method	Developed a method of public entrepreneurship which include internal antecedent (structure/formalization, decision making control, rewards/motivation, culture. Risk taking and proactivity and external anticipants (politics, complexity, munificence and change) with the outcome being organisational performance comprising growth, development and productivity	No adequate justification for changing the role of innovations, risk taking and proactivity as antecedents. Does not go beyond the conceptual analysis and hence required to be empirically tested.
Entrepreneurship in Public Sector.		Zerbinati and Souitaris (2005)	Test whether an entrepreneurial model can be applied to the public sector.	Case study	Identify entrepreneurial pattern in the cases and developed a typology of intrapreneur in the public sector.	Does not investigate the antecedents or outcome of entrepreneurship
Re-inventing Government	U.S.A	Osborne and Gaebler (1992)	Discussed the desirability of entrepreneurship in government	Personal and anecdotal evidences and literature review.	Identify 10 principles that underlie entrepreneurial governments. Qualitative method.	Lack systematic, larger-scale evidence on how entrepreneurship within public sector organisation can be fostered.
Creating Public Value	U.S.A	Moore; 1995	How heroic entrepreneurs change their organisations, striving to create public value.	Conceptual: Illustrative examples. Anecdotal evidence	Illustrate how heroic entrepreneurs can change there organisation with entrepreneurial method. Public value creation is the main task of any public manager; entrepreneurial strategies support public value.	Focus top managers, no clue on how entrepreneurship could be fostered below this level.
Challenges and Effectiveness of Industrial Relation Environment in Indian Industries	Internal Journal of Marketing, Financial Services and Management Research. Vol 2 No 6	Henrik Floren, and Jonas Rendquist and Sebastian Fisher	Examine effect of Industrial Relation on Workers Satisfaction and Productivity and firm success	Survey method	Better relationship between employee and employer is essential for running an organisation successfully.	How does satisfaction result in company success. There is the need to expand the scope of the study for generalizability.
Organisation factors affecting intrapreneurship in Agricultural extension organisation in Iran (Public Sector)	Iran	Yoghoubi Faran, Ahmad, Malek Mohammadi Iraj Hedjazi , Yousef and Hosseni, Mahmood	How intrapreneurship can development Agric extension organization	Survey (6 Provinces) and 215 randomly selected sample size. Questionnaire	There is a significance relationship between organisational variables and the level of intrapreneurship in extension organization	Need to be examined in the main memories (Core Civil Service)
A short review on management principles supporting creation and innovation	Arabian Journal of Business and Management Review (Oman Chapter)	Masoud Khorshidahmadi	Identify management principles supporting creation and innovation	Literature review	Reward behaviour, encouraging individuals support the principles of creativity and innovation and make the organisation capable to achieve novel and significant changes	Empirical validation
Public Sector Large organisation constraints innovation-sponsoring capability research and development and innovation Intrapreneurship	VIKALPA Vol. 31 (1), India	2006	Assess organisational climate for innovation in the public sector organisation in india	Survey of innovators, in-depth interview, qualitative study.	Hinderance to innovation are largely due to absence to innovation strategy at the management level change import skill is lacking among intrapreneurs.	The findings needed to be confirmed in the private sector.
Public Entrepreneurship	U.S.A	Lewis (1980)	Biographies of Public Entrepreneurship	Qualitative: Case Studies	Public entrepreneurs are powerful individuals at the top of organisations; public entrepreneurship has three stages (early entrepreneurship, the leap, mature entrepreneurship) Public entrepreneurs are best suited to overcome public sector-specific obstacles
Pubic Entrepreneurs	Public Administration. Generic	Ramamurti (1986)	To access on public entrepreneurs, motivations and obstacles.	Conceptual: Illustrative examples. Anecdotal evidence	Public entrepreneurs are best suited to overcome public sector-specific obstacles
Policy Entrepreneurs	U.S.A	Roberts and King (1991)	Activities of policy entrepreneurs	Qualitative: grounded theory; six policy entrepreneurs: archival research, 134 interviews, observation survey (demographics)	Identified basic activity structure of policy entrepreneurs (creative/intellectual, strategic, mobilization and execution, administrative and evaluative)
Reconciling Public Entrepreneurship and Democracy	Generic	Bellone and Goerl	Investigate on reconciliation of entrepreneurial role and democratic values	Conceptual	Civic regarding entrepreneurship can overcome gap between public entrepreneurship and democracy.
Toward a theory of the political entrepreneur	U.S.A	Schneider Teske (1992)	Predictors of local political entrepreneurs	Qualitative (inferential): probity estimation, 635 communities (survey among city clerks)	More slack budgetary resources, larger size of rental population, disruptions of population growth, larger racial diversity and higher tax rate predict the emergency of policy entrepreneurs
The Bureaucratic Entrepreneur	U.S.A	Teske and Schneider (1994)	Predictor of entrepreneurial city managers	Qualitative (inferential): multinomial logic analysis; 956 communities (survey among city clerk)	Low unionization and weak taxpayer groups predict the emergence of bureaucratic entrepreneurs; bureaucratic entrepreneurs also emerge more of ten, when local conditions require changes, which politicians do not satisfy.
The changing nature of public entrepreneurship	U.S.A	Moon (1999)	Effect of structure, culture and environment on managerial entrepreneurship	Qualitative Inferential: Regression; 164 top managers from private and public sector organisation (survey)	Structure, culture and environment influence ‘dimensions’ of managerial entrepreneurship in different ways.
Entrepreneurship in Established Organisation: A case study of the Public Sector	South Africa	Morris and Jones (1999)	Role of entrepreneurship in public sector; concept and obstacles	Quantitative (mainly descriptive); 152 public sector managers (survey)	The concept of entrepreneurship is applicable to the public sector in terms of definition, process nature, and underlying dimensions; there are differences in goals, constraints, approaches, and outcomes; the main obstacles are difficulty in defining customers, high public visibility reward system, and multiplicity of goals