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

2.2.6. Behavioural Theory of Entrepreneurship

As a result of the above weakness, entrepreneurial research has moved away from the study of the traits of the individual to that of the features of the entrepreneurial organizations and the entrepreneurial behavior of the individuals (Zahra, Nielsen & Bogner, 1999). Researchers like Vesper (1990) have therefore categorized entrepreneurs as falling in one of several categories. While the trait approach focused on who is the entrepreneur, the behavioral approach assumed that the entrepreneur is part of the complex process of new business creation. This is based on the perspective that entrepreneur characteristics constitute a function on a continuous distribution. Along this line of thinking, Carland, Hoy, Boulton and Carland (1982), contend that everyone has entrepreneurial tendencies, though not in the same intensity and that entrepreneurship is a continuous variable. Hence, Carland, Hoy, Carland (1988) in another study, describe intrapreneurship as a drive which is stronger in some people and weaker in others. Based on this, they developed a model of entrepreneurship which links intrapreneurship to individual motivation, thus supporting the position that any organized living body has the potential to act as an entrepreneur. This is logically so because, according to Hofer and Bygrare (1982), entrepreneurship is initiated by human actions which are learned. Based on this conclusion, Carland et al. (1988) developed an index on entrepreneurial drive which demonstrates that entrepreneurship is a continuous function and answer the question of what makes a person an entrepreneur or cause entrepreneurship.

There is now a reasonable convergence on the position that entrepreneurial action is produced by proactive, innovative and risk taking behaviour. That is, an intrapreneur is one who manifests innovative, proactive and risk-taking behaviour, irrespective of who he is or where this is done; outside or inside of established organisation or his/her personality characteristics. That is, according to Gartner (1989, 6), “the personality characteristics of the entrepreneur are only auxiliary to the entrepreneurs behavior” and therefore research on the entrepreneur should focus what the entrepreneurs do and not who they are. Van- de-Ven (1980), in support of this, warned entrepreneurship researchers not to focus studies of traits and characteristics. Thus, intrapreneurship (or corporate entrepreneurship) is generally expressed in terms of intrapreneurial behavior which is an expression of the concept of entrepreneurial orientation (EO). Muchiri (2013) suggest that the main assumption of EO concept is that it is a behavioural phenomenon. They further contended that all firms fall within a conceptual continuum that ranges from highly conservative to highly entrepreneurial. From this, they maintained that, while entrepreneurial firms are described as innovative, risk-taking and proactive, conservative firms are less innovative, risk averse and typically adopt a “wait and see posture”; suggesting a continuum of different and opposite domains of managerial styles (administrative and entrepreneurial) as shown in Brizek (2014):



Figure. 2.6. Dimension of Attributes of Entrepreneurial Organisation

Source: Brizek (2014)
The same may be logically inferred at the individual level since the activities of a firm are the activities of the individuals that comprise it. This admits a critical and more elabourate role for HRMP in the development of corporate entrepreneurship or intrapreneurial work behaviour.
2.2.7. Model of Human Resource Management (HRM)

As a concept, human resource management is rooted in two models which originated from American scholars. Armstrong (2007) christened these as the ‘Matching Model’ and the ‘Harvard framework’. They are discussed as follows;

The Matching Model of HRM

The first set of explicit statements of the human resource management concepts was made by Fombrum, Tichy and Devanna (1984). In these statements, they differentiated the concepts and tools of the traditional personnel administrator from those of the strategic human resource management concepts and assert that organization structure and human resource management system should be managed in a way that is consistent with organizational strategy. These suggest that managers should be committed to considering human resource issues with the same level of importance as the sustainability of the enterprise or the economy.

The Harvard Framework

In line with the assertions of Fombrum, et al (1984), Beer, Spector, Lawrence, Quinn and Walton (1994) submit that today, many social and economic pressures are demanding that organizations adopt broader, comprehensive and strategic approach for the management of their human resource. These have, according to Beer, et al (1994), created a need for a long-term perspective in managing people; the perception of people as potential assets instead of just a variable cost; coherence in human resource management policies and the position that human resource management belongs to line managers. Building on this, Walton (1985) emphasizes the need to shift from a control strategy to a commitment strategy, which increases attachment and loyalty by means of developing shared goals and reducing the tightness of management control. This view suggests the idea that human resource management is composed of policies that promote mutuality of goals, responsibility, influence, reward and respect. This understanding of human resource management implies that policies of mutuality will elicit commitment, which will, in turn yield both greater mutual influence and commitment to organization’s entrepreneurial goal and consequently, economic performance.

Also, based on the Harvard model, Guest (1995) developed four-policy goals of human resource management. First is that of strategic integration, which he referred to as the ability of organizations to harmonise human resource management issues into their strategic plans, ensure that the various components of human resource management are mutually consistent and that line managers incorporate human resource management perspective into their day to day decision-making. The second is high commitment which proposes the intensification of behavioral commitment to pursue mutually agreed goals, as well as the attitudinal commitment reflected in a strong identification with the enterprise. The third is high quality. This refers to all aspects of managerial behavior that bear directly on the quality of goods and services provided, including the management of employees and investment in high-quality employees. The forth is flexibility. Flexibility here implies a sort of functional flexibility and an acceptable organization structure with the capacity to manage innovation.
Guest (1995) advanced the position that the driving force behind these human resource management propositions are the pursuit of competitive advantage in the market place through the provision of quality goods and services and competitive pricing, resulting from competitive productivity as well as the capacity to swiftly innovate and manage changes in response to either changes in the market place or to breakthrough in research and development. It is in this line of thought that Legge (1989) earlier argued that human resources are valuable and a source of competitive advantage; human resources management policies should be integrated into the organizations’ strategic business planning and used to stimulate appropriate organizational culture and that human resources should be optimised effectively by mutually consistent policies that promote commitment which would, as a consequence, foster willingness in employees to act with flexibility in the interest of adaptive and entrepreneurial pursuit of excellence by the organization.
These auguements therefore support the linkage of HR and CE and suggest that the goal of HR should be the creation of an entrepreneurial workforce to achieve competitive advantage for the organization.
Tyson and Fell Models

A related model of human resource management (HRM) is that of the Tyson and Fell (1986). This model describes three succeeding managerial conceptions of the roles of human resource management in organization. The first concept is that of the clerk work model. This concept suggest that all authorities for action is vested in the line managers, human resource policies are formed or created after the actions that created the need and not integral to the business and are short term or adhoc in nature. Also, human resource management practices are therefore largely routine-employment and day-to-day administration issues.

The second conception is that of the contract manager. The contract manager concept proposes that the human resource development department uses sophisticated systems. By this conception, the practices are well established; explicit, with industrial relations emphasis and possible involvement of employers’ association. This conception suggests that the human resource manager is likely to be a professional and or experienced in industrial relations. He is likely not to be on the governing board and, has authority to ‘police’ the implementation of policies and acts mainly in an interpretative; rather than a creative and innovative role.
The third is the architect concept of HRM role. In the architect conception, explicit human resource policies exist as part of the corporate plans and strategy. A long term human resource planning and development view is taken. System for the management of human resource tends to be higly sophisticated and the head of the human resource function is likely to be a professional who is on the board and derives his power from professionalism and perceived contribution to the business bottom line. Akintayo and Alebiosu (2008) added that two types of human resource managers are associated with this concept. They are the conformist innovator and the deviant innovator. The conformist innovators are the type of human resource managers who tend to go along with their organizations’ ends and adjust their means to achieve them. The expertise of human resource therefore becomes a source of professional power which enhances the position of their departments. In contrast, the deviant innovator is characterized by attempts to change the means/ends relationship by developing and mobilising acceptance for a different set of criteria for the evaluation of organizational successful performance and their contribution to it for sustainable development.
These models have implication for our study. While the Tyson and Fell Model suggest that the practitioner of HRM must be entrepreneurial, the Matching Model suggests that the practice must add value through the delivery of entrepreneurial work force. These models, together, help to supply a fresh outlook to the essence of HRM and how it plays the role of contributing to the bottom lines of the organization which is missing in many definitions of the concept. We can therefore begin to see HRM as comprising those strategies, policies and practices meant to develop, enhance the entrepreneurial competences, characteristics and expression of the workers for competitive performance of organizations. This is consistent with and builds upon the Jibran and Sara (2010) description of the future role of HR in their attempt to expand the Ulrich (1997) business partner model of human resource management function. Ulrich (1997) have argued that an HR professional or department becomes the HR business partner of the organization by adding value through strategy execution and administrative efficiency which ensure optimal employee commitment and contribution as well as effective management of organizational change and transformation. Building on this, Jibran and Sara (2010) propose the intrapreneurial role of HR (HR intrapreneur) as an extension in HR business partner model as shown Figure 2.7


Strategic Partner

Administrative

Expert

Change Agent

Future/Strategic Focus

Processes People

Day-to-Day/Operational


HR Intrapreneur




Employee

Champion

Figure 2.7: Entrepreneurial Extention of HRM Business Partner Model.

Source: Jibran and Sara (2010)

Jibran and Sara (2010) argued that when an HR professional/department becomes an HR Business Partner by perfectly playing the role in the four quadrants (above), it can then move towards an intrapreneurial (Corporate entrepreneurship) role of HR as shown above. However, in their own proposition, the HR department would play this role by being a direct revenue generator of the organization. In this line of thought, they argued that some HR deparments have based on their personal expertise, moved to become consultants for companies outside their organizations, thereby generating profits for their companies (Koch, 1995). From this perspective, according to Mitchell (2000), employees in human resource departments can become corporate entrepreneurs when they develop and implement ideas for providing human resource management solutions to new customers outside their own company. IBM, Disney, and Xerox provide excellent examples of this type of intrapreneurial activities by HR. For example IBM, in 1992 established a new company called Workforce Solution that operates within IBM workforce to offer human resource services and programs to other firms (Mitchell, 2000).

However other writers criticized this model (Chapel, 2007). They considered that, though this conception of intrapreneurial role of HR can establish it’s ability to generate direct income and, therefore, profit for the organization, it also tend justify the claim that the core HR is only a cost center than advancing the domain of human resource practice as done by Ulrich (1997). Hence, Wellner (2000) warns that when an HR department moves towards HR intrapreneur role in this way, it must develop a strategy up front for balancing its internal and external clients. This, according to him is because, when the HR department decides to go outside, it would appear to be missing the point and in danger of taking its eye off the core reason for being in existence in the first place; that is servicing the corporation as an integral part of it essence. Hence, they advanced the case for a more direct link of HR entrepreneurship to organization basic mission, internal processes and entrepreneurial outcome of its workforce. This provides a more direct entrepreneurship development role for the HR and in line with the assertion that HRM interventions on CE is imperative, because there is no other managerial function that has the skills and training to orchestrate the necessary processes (Macmillan, 1987, 8). From this perspective HR entrepreneurial role would not be in terms of generating profit on its own as proposed by Jibran and Sara (2010), but developing profit abilities through directing it basic function of recruitment, training and development, performance appraisal, compensation, job design, industrial relations to develop the entrepreneurial qualities and expression of the workforce. This support our reformulation of the definition of HRM as comprising those management strategies, policies and practices that are desgned to develop, enhance the entrepreneurial competences and expression of the workers for competitive performance of organizations.

2.2.8. Models of Corporate Entrepreneurship

Many models of corporate entrepreneurship have emerged from literatures; highlighting the relationship between corporate entrepreneurial behavior and organizational environment (Gartner, 1988). Some of these models are discussed below;

Guth and Ginsberg (1990) Model

First, this model proposes that corporate entrepreneurship involves two phenomena: first one focusing on the birth of new business within an existing organization while the second concerns the transformation of organization through renewal. The model also identifies variables like environment, strategic leadership, organizational form and organizational performance as antecedents of corporate entrepreneurship, while innovation/venturing and strategic renewal are seen as outcome of corporate entrepreneurship. This is depicted below:

Environment

Competitive

Technological

Social

Political

Strategic leadership

- Characteristics

- Value

- Behaviour

Organization form

- Strategy

- Structure

- Process

Organization performance

- Effectiveness

- Efficiency

- Stakeholder

Innovation/venturing within established corporation

Strategic Renewal of Established Corporation

Corporate Entrepreneur


Figure 2.8 Guth and Ginsberg (1990) Model

Source: Strategic Management Model of CE by Guth and Ginsberg (1990)
Covin & Slevin (1991) Model

The focus of Covin and Slevin (1991) model is entrepreneurship orientation. It tried to demonstrate, as shown below, the link between organisation’s entrepreneurial posture and three key factors (external environment variables, strategic variables, internal variables), resulting in organizational performance. This model suggests that entrepreneurial orientation influences and is influenced by external environment, strategic and internal variables as shown below:

Entrepreneur Posture

Firm performance

External Variables

External Environment

Technological

Sophistication

Dynamism

Hostility

Industrial lifecycle

change

Strategic Variables

Business Strategy

Business practices &

Competitive Tactics

Internal Variables

Top management

Values and Philosophies

Organizational culture

Covin and Slevin (1991) Model

Indicate a moderating effect

Indicate a Strong Main Effect

Figure 2.9: Covin and Slevin (1991) Model

Source: Strategic Management Model of CE by Covin and Slevin (1991)
Lumpkin and Dess (1996) Model

Like the Covin and Slevin (1991), this model describes corporate entrepreneurship ın terms of entrepreneurial orientation, leading to firm performance dimensions of sales growth and profitability. However, unlike in Zahra (1993) model, they elabourated on this orientation to include five dimensions: innovativeness, risk taking, proactiveness, autonomy and competitive aggression. The model is also concerned with the process, practices, and decision-making tasks required for entering a new market along with new products and services for achieving the firm’s performance dimensions. This interaction is however mediated by certain environmental and organizational factors, as shown below:

Environment Factor

Dynamism

Munificence

Complexity

Organization Factors

Size, Structure

Strategy

Strategy-making

Processes
Entrepreneurial Orientation

Innovativeness

Risk taking

Proactiveness

Competitiveness

Autonomy

Performance

Sale growth

Profitability

Overall performance

Lumpkin and Dess (1996) Model

Figure.2.10: Lumpkin and Dess (1996) Model

Source: Lumpkin and Dess (1996) model for corporate entrepreneurship
Barrett and Weinstein (1998) Model

In this model, Barrett and Weinstein (1998) describe the interactive circular movement between corporate entrepreneurship, flexibility and market orientation (CEFMO). The nature of this interaction is, according to this model, influenced by organization’s mission and strategy which, in turn, influence business performance.

Mission/Strategy

-Growth

-Stability

-Build-Hold-Harvet

- Divest

Corporate Entrepreneurship

Flexibility

Market orientation

Business Performance

Barrett and Weinstein (1998) Model

Figure 2.11. Barrett and Weinstein (1998) Model

Source: The CEFMO Model of Barrett and Weinstein (1998)

Goosen, De Conning and Smith (2002) model is presented below;

Management

Innovativeness

Proactiveness

M (1)

I (1)

P (1)

Internal Focus

External Focus

Y(1)

Figure. 2.12: Goosen, De Conning and Smith (2002) Model

Source: The Goosen, De Coning and Smith Model (2002)
In the Goosen, et al (2002) model, Y (1) is the level of corporate entrepreneurship, I (1) is the innovative component, P (1) is the proactive component while M (1) is the management component. From this model therefore, the level of entrepreneurship is a function of and is measured by the level of adherence to best practice in corporate management, innovativeness and proactiveness.
All the above models highlight internal and external factors, incidence of corporate entrepreneurship and corporate performance. They suggest that the nature of internal and external factors influence the level of corporate entrepreneurship which, in turns, influences corporate performance dimensions accordingly. However the later models emphasise the importance of internal factors such as management, corporate vision,and organisation. This is logical as the innovativeness, proactivity, risk taking, competitiveness and autonomy components of entrepreneurship (Lumpkin & Dess, 1996) are tools by which external environmental factors could be brought under control, rather than being subjected to them. This provides an active role for internal factors like human resource management practices in stimulating corporate entrepreneurship.
Model of Public Sector Entrepreneurship

Several models have been constructed to capture the essence and application of entrepreneurship ın the public sector. Building on the models developed in the private sector research in entrepreneurship, Shah and Bhutta (2013) develop a public sector model of entrepreneurship called public entrepreneurship. They present the level of entrepreneurship as a function of the characteristics of the public sector and her external environment, leading to performance as shown below:

Shah & Bhutta (2013) Model of Public Sector Corporate Entrepreneurship
Public Sector Organization

• 
  Structure/Formalization
  
• 
  Decision-Making/Control
  
• 
  Rewards/Motivation
  
• 
  Culture
  
• 
  Risk-Taking
  
• 
  Proactivity
  

Corporate Entrepreneurship

• 
  Innovation
  

Performance

• 
  Innovation
  
• 
  Development
  
• 
  productivity
  

External Environment

• 
  Political
  
• 
  Complexity
  
• 
  Munificence
  
• 
  Change
  
• 
  
  

Figure 2.13: Shah and Bhutta (2013) Model