ENTREPRENEURSHIP HEALTH ASSESSMENT

Introduction

The overall corporate health of an organization is important in enhancing the entrepreneurial activity of a company (Morris, Kuratko & Covin, 2011 Pg. 34). The corporate health of an organization is usually measured by determining the entrepreneurial intensity of an organization and the climate of entrepreneurship.  The purpose of this report is to assess the corporate entrepreneurial performance of an Australian high-tech medical equipment manufacturer company called ABC Company.  The company has been developing and exporting various products for the last 15 years. This paper will assess the corporate entrepreneurial performance of Australian ABC Company.

THEORETICAL CONCEPT

The state of entrepreneurial health in an organization is determined by a number of factors such as the entrepreneurship intensity (EI) and the climate for corporate entrepreneurship (Kessler & Bailey, 2007 Pg. 65). The concept of EI is measured using various dimensions that include the level of innovativeness, pro-activeness and risk taking. The corporate environment determines the corporate health of an organization based on the level of innovativeness it enhances. The climate for corporate entrepreneurship varies conceptually with the entrepreneurship intensity in that it refers to the overall corporate environment that enhances entrepreneurial activities such as innovation and availability of resources. The EI emphasizes on the number of times a company engages in entrepreneurial activities and the degree of entrepreneurial activities.

RESERCH METHODOLOGY

The data collection methods used in the study was the survey method. The survey method used a close-ended questionnaire that involved the use of the Likert questions scale (Brace, 2008 Pg. 76). The Likert scale consisted of a linear scale with varying degrees of acceptance. The linear scale ranged from the numbers 1-5 with 1 representing strongly agree response, 2 represented agree response, 3 represented neutral choice or uncertainty, 4 represented the disagreement option while the number 5 represented the strongly disagree option. The scale showed varying degrees of acceptance or rejection of a choice.  The Likert scales are used to capture data that cannot be measured by other instruments (Brace, 2008 Pg. 76). Surveys are validated instruments because they reflect the actual responses of the respondents and can be referred to validate a research.

The research involved the selection of a sample from the whole population. The population was the entire fraternity of the ABC pharmaceutical Company in Australia that had a total of 250 people. A sample was chosen from the population to enable the easy examination of the population views. A sample enables the researcher to save time and have an in-depth analysis of the variables. The sample chosen for the research included both males and females. The males were ten while the females were five for the CECI survey. In the EI survey, the respondents consisted of one CEO and five managers. The total respondents in EI survey were six.

 

DATA ANALYSIS AND DISCUSSION

The statistical techniques used in the analysis of data included the average and standard deviation. The average measures the most typical data that is obtained in the research. The standard deviation measures the variation of each variable from the mean (Zahra, Neubaum & Hayton, 2016 Pg. 67). A widely variable data may not be reliable in research.

Degree of entrepreneurship

Innovation average score 1.8+2.8+2.2+1.8/4=2.15
Proactiveness average score 1.7+2.5+2.0+2.5/4=2.175
Risk-taking average score 1.8+2.3+3.2+3.3/4=2.65
Total average of the degree of entrepreneurship scores 2.15+2.175+2.65=2.325

 

Frequency of entrepreneurship

Average Product frequency 3+3+3+3+3+6/6=3.5
Average Service frequency 0+0+0+0+0+3/6=0.5
Average Process frequency 0+0+0+0+0+3/6=0.5
Total average frequency of entrepreneurship score 3.5+0.5+0.5/3=1.5

 

Competitive aggressiveness scores

Average product competitive score 2.3+1.8/2=2.05
Average service competitive score 1.5+1.5/2=1.5
Average process competitive score 1.5+1.5/2=1.5
Total average aggressiveness score 2.05+1.5+1.5=1.64

 

Entrepreneurship Intensity

The entrepreneur intensity is measured using two dimensions that include the degree of entrepreneurship and the frequency of entrepreneurship. Other factors can be included such as autonomy and competitive aggressiveness (Gartner, 2004 Pg. 54). The average entrepreneurship score was calculated by finding the average score among the three EI dimensions (degree of entrepreneurship, frequency of entrepreneurship and competitive aggressiveness). The average EI score was 2.325+1.5+1.64/3=1.82

A strong Entrepreneurship Intensity score should show a strong positive correlation between the degree of entrepreneurship and the frequency of entrepreneurship (Sefalafala, 2012 Pg. 129). This is important because in some instances the degree of entrepreneurship may be high while on the contrary the frequency of entrepreneurship is low (Burns, 2013 Pg. 72). In such circumstances, the Entrepreneurship Intensity score is usually low. A correlation score between the two variables (degree of entrepreneurship and frequency of entrepreneurship) was calculated (Sharma, 2005 Pg. 29).

 Correlation results

Degree of entrepreneurship means                             Frequency of entrepreneurship means

Degree of entrepreneurship means Frequency of entrepreneurship means
2.15 3.5
2.175 0.5
2.65 0.5

 

Correlation results

  Column 1 Column 2
Column 1 1
Column 2 -0.53793 1

 

The correlation between the degree of entrepreneurship and the frequency of entrepreneurship is negatively correlated. The negative correlation showed that as the degree of entrepreneurship increased, the frequency of entrepreneurship decreased. The results were inconsistent with the high score of Entrepreneurial intensity that showed the respondents agreed that the company performed well in the EI parameters (Idowu, Capaldi & Das Gupta, 2013 Pg. 10).

Entrepreneurship grid

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High        Continuous/incremental                                                        Revolutionary

 

Frequency of

Entrepreneurship                             Dynamic

(Number of events

 

 

 

Periodic/incremental                                                                              Periodic/Discontinuous

 

Low

Low              Degree of entrepreneurship                          High

(Risk-taking, innovativeness,   proactiveness)

 

Part B

Indices for CECI

The average score for the management support was (1.5+1.0+1.7+1.6+1.0+2.7+1.5+1.3+2.1+1.9+1.5+1.2+2.3+1.0+1.1+2.2+1.0/19)=1.4.

The average score for the work discretion component of corporate entrepreneurship assessment was (2.1+2.5+2.5+3.4+3.9+1.8+2.8+1.9+2.1+1.7/10)=2.47.

The average score for the rewards/reinforcements was (4.2+1.9+4.1+4.5+4.7+4.3/6=3.95 or approximately 4.0

The average score for the time availability component of corporate entrepreneurship assessment was (2.2+1.4+1.3+4.3+4.5+2.3/6=2.66 or 3.0

The average score for the component of organizational boundaries was (2.1+1.0+3.3+3.3+3.8+4.7+4.1/7)= 3.18

        The average score for the specific climate variables was (1.8+2.0+1.5+1.3+1.1+3.2+2.8+1.3+5+4.2+4.5+1.7+4.8+4.9+2.2+4.4+4.3+5+5+5+1.5+4.6+1.7+5+1.3+4.5+1.6+5+1.0+2.8/30=3.16

Correlations of the variables using their means

Management support Work discretion Rewards/reinforcements Time reliability Organizational boundaries Specific climate variables
1.4 2.47 4.0 3.0 3.18 3.16

 

(A)

Management support 1.4
Work discretion 2.47
Rewards/reinforcements 4.0

 

(B)

Time reliability 3.0
Organizational boundaries 3.18
Specific climate variables 3.16

 

 

Correlation results

1.4 3.0
2.47 3.18
4.0 3.16

 

  Column 1 Column 2
Column 1 1
Column 2 0.74722 1

 

The correlation between the two classes of variables was 0.7472.

Analysis of the different categories

Several questions deviate significantly from the mean. The questions had a standard deviation of 0.7 and above.

First category

Management support for corporate entrepreneurship

The management support for the corporate entrepreneurship focuses on the willingness of the top management to promote and facilitate entrepreneurial behavior in the organizations.  The management support measures the willingness of the top management to provide financial resources to facilitate projects even if some of them may fail (Burns, 2008 Pg. 78). The average score for the management support was 1.4. The score can be interpreted using the Likert scale to show that the respondents strongly agreed that the organization’s management supported the entrepreneurial activities in the ABC Company. Supporting the entrepreneurial activity is important in boosting the organizational performance.

Questions with a high standard deviation

The questions in the first category that had a high standard deviation of 0.7 and above were questions 6, 10 and 13 as shown in the attached sheet. The questions had a standard deviation of 0.8, 0.7 and 0.8 respectively. The large standard deviations showed that the results varied significantly from the mean. The significant variance from the mean can result from the widely varied opinions by the respondents regarding the particular questions. The variations can result if some of the respondents did not understand the questions asked properly.  The position and the level of experience among the respondents could also be an important factor that determined the variations in the responses.  The wide variations can lead to the reduced reliability of the scores.

Second category

Work Discretion

The average score for the work discretion component of corporate entrepreneurship assessment was (2.1+2.5+2.5+3.4+3.9+1.8+2.8+1.9+2.1+1.7/10)=2.47. The score showed that most respondents agreed that the ABC company top level management was committed to tolerate failure and provide effective decision-making latitude. The score also indicated that the management of the company was committed to provide freedom from the excessive oversight. The attitude contributes to the positive growth of entrepreneurial activity in the companies (Burns, 2013 Pg. 76).

Questions that deviated significantly from the mean (below and above)

The questions that deviated significantly from the mean score were questions 20, 26 and 28. The questions had a standard deviation of 0.7 each. The questions focused more on the personal experiences in the workplace that can have a wide range of variations. Personal experiences vary widely among different people and could be the reason for the large standard deviation of the questions.

Third category

Rewards/Reinforcements

The average score for the rewards/reinforcements was 4.0. The results show that the respondents disagreed that the company uses reward systems to encourage entrepreneurial activity in the company. The rewards/reinforcement category measures the understanding of the extent that managers reinforce the innovative or entrepreneurial behavior by linking the achievement and performance to the rewards. Generally research has largely supported the idea that rewards improve performance in an organization through motivation of the employees (McFadzean, O’Loughlin & Shaw, 2005 Pg. 65). Rewards encourage competition in the workplace thus boosting organizational performance.  The company does not reinforce the performance of the employees by rewarding them. The process can lead to the reduction in the performance of the employees.

Questions that deviated significantly from the mean (below and above)

The questions that deviated significantly from the mean were questions 30 and 31 with a standard deviation of 0.7 each. The large deviation could have come from widespread views of the workers regarding the reinforcement issue.

Fourth category

Time availability

The average score for the time availability component of corporate entrepreneurship assessment was 3.0. The score showed that the respondents were undecided about the response. The time availability component is used to measure the perception of the extent that the employees are able to pursue the innovative practices in support for the long-term and short-term goals (Boone, Kurtz & Qualman, 2011 Pg. 76). Time availability is important to enhance innovation that leads to the growth of the organizations.  If the employees have enough time, they can think about the problems and goals of an organization easily. The results show that the employees are not aware of whether or not they find free time to engage in other activities (Hornsby, Kuratko & Zahra, 2002 Pg. 12). Innovation that boosts performance can be compromised by the lack of enough time. Research needs more time and organizations should enhance the creation of free time.

Questions that deviated significantly from the mean (below and above)

The questions that had the greatest standard deviation in this category were questions 36, and 41 that had a standard deviation of 0.7 and 1.1 respectively. As in the previous cases, the large variations in responses came from the widespread opinions of the respondents in the questions asked.

Fifth category

Organizational boundaries

The average score for the component of organizational boundaries was 3.18. The score indicated that most respondents were not certain whether the organization boundaries that exist in their organization. The organizational boundaries component of corporate entrepreneurship is concerned with the organizational structure and the administrative mechanisms that are used to evaluate the ideas that are chosen and implemented. The organizational boundary component evaluates the extent that the employees perceive the existence of flexible organizational boundaries that can enhance entrepreneurial activity by facilitating the information flow between the internal and the external environments.  The innovative outcomes results from the treatment of innovation as a purposeful and structured process (Duane Ireland, Kuratko & Morris, 2006 Pg. 65). To achieve the organizational goals of innovation, uncertainty should be kept at the minimum level.  The organizational boundaries enhance the effective use of the resources that enhance innovation. The results of the analysis show that the company does not use the available resources effectively to enhance productivity through the innovation process.

Questions that deviated significantly from the mean (below and above)

The questions that showed increased deviation from the mean are questions 42, 44, 45, and 46. The questions had a standard deviation of 0.7, 1.2, 1.2, and 0.9 respectively.  The variations occurred due to the varied responses from the respondents.

Sixth category

Specific Climate Variables 

        The average score for the specific climate variables was 3.16. The score showed that many respondents were not sure whether the organization had effective measures that could create an innovative environment in the workplace. The results show that the corporate culture does not promote innovation and creativity.  The internal environment has much influence on the benefits and perceived costs that are associated with taking a personal risk and devoting time to the unproven approaches (Gibb, 2011 Pg. 21). The company is lacking an appropriate internal environment that encourages entrepreneurial activities.

Questions that deviated significantly from the mean (below and above)

The questions that deviated significantly from the mean are questions 49 (S.D 0.8), 50 (S.D 0.7), 54 (S.D 1.1), 55 (S.D 0.8), 58 (S.D 0.7), 60 (S.D 0.7), 63 (S.D 0.7), 71 (S.D 0.8), and 78 (S.D.1.1). The increased deviations in the questions were due to the varying opinions of the questions based on individual experiences that differ considerably.

CONCLUSION

The overall assessment of the entrepreneurial performance of the ABC Company showed that the company has high entrepreneurial intensity and a good climate for the corporate entrepreneurship. The main findings of the study showed that the company had a high entrepreneurship Intensity of 1.82. The results were measured by determining the average score for each dimension that affect the entrepreneurial Intensity (degree of entrepreneurship, frequency of entrepreneurship and the competitive aggressiveness). The EI depends much on the degree of entrepreneurship and the frequency of entrepreneurship. The correlation showed a negative correlation of -0.53793. The results of the corporate entrepreneurship assessment did not show good results because the respondents showed positive ratings on two categories (Management support for corporate entrepreneurship and Work Discretion). The other results indicated uncertainty or disagreement with various dimensions of corporate entrepreneurship assessment. The entrepreneurial health of the company needs more improvements.

 

 

 

 

 

 

References

Boone, L., Kurtz, D. and Qualman, E. (2011). Contemporary issues in business. 1st ed. Hoboken, NJ: Wiley Custom Learning Solutions.

Brace, I. (2008). Design of a Questionnaire: how to plan and write survey document for the effective market research. London, Kogan Page.

Burns, P. (2008). The Corporate entrepreneurship: The entrepreneurial organization. Basingstoke, Palgrave Macmillan.

Burns, P. (2013). Entrepreneurship in Corporatse: strategy in Big organizations. Houndmills, Basingstoke, Palgrave Macmillan. http://www.myilibrary.com?id=977525.

Duane Ireland, R., Kuratko, D. and Morris, M. (2006). An audit for the corporate entrepreneurship: innovation at various levels: part I. Journal of Business Strategy, 27(1), pp.10-17.

Gartner, W. B. (2004). Handbook of entrepreneurship dynamics: the business creation process. Thousand Oaks, Calif, Sage Publications.

Gibb, A. (2011). Concepts into practice: meeting the challenge of development of entrepreneurship educators around an innovative paradigm. International Journal of Entrepreneurial Behavior & Research, 17(2), pp.146-165.

Hornsby, J., Kuratko, D. and Zahra, S. (2002). Middle managers’ perception of the internal environment for corporate entrepreneurship: assessing a measurement scale. Journal of Business Venturing, 17(3), pp.253-273.

Idowu, S., Capaldi, N., Zu, L. and Das Gupta, A. (2013). Encyclopedia of corporate social responsibility. Berlin: Springer.

Kessler, E. H., & Bailey, J. R. (2007). Handbook of managerial and organizational wisdom. London, SAGE.

McFadzean, E., O’Loughlin, A. and Shaw, E., 2005. Corporate innovation and entrepreneurship part 1: the missing link. European journal of innovation management, 8(3), pp.350-372.

Morris, M. H., Kuratko, D. F., & Covin, J. G. (2011). Corporate entrepreneurship and innovation: development of entrepreneurial activities within organizations. Mason, OH, South-Western Cengage Learning.

Sefalafala, M. R. (2012). Investigating EI  and capability among the exporting firms of South Africa.

Sharma, A. K. (2005). Text book of regression and  correlation New Delhi, Discovery Publishing House.

Zahra, S. A., Neubaum, D. O., & Hayton, J. C. (2016). Handbook of corporate entrepreneurship research. Cheltenham, Gloucestershire, Edward Elgar Publishing.

 

 

 

 

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