Corporate entrepreneurship in development finance institutions

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The Corporate Entrepreneurship construct

In defining entrepreneurship, Schumpeter (1934) did not limit his notion of the ’pursuit for a discontinuous opportunity’ to new ventures only, he also allowed for entrepreneurship to exist within established organisations. Gartner (1989) disagreed and defined entrepreneurship as the creation of new organisations, thus excluding many of the activities commonly associated with corporate entrepreneurship, such as championing and creation of supportive structures and cultures to foster innovation. Other authors, such as Pinchot (1985) perceive corporate entrepreneurship as an extension of individual entrepreneurship within the context of existing organisations, that is: intrapreneurship. Still others approach corporate entrepreneurship from an organisational perspective and are concerned with the organisational and environmental factors that influence the entrepreneurial process (Covin & Covin, 1990; Zahra, 1991; Russell & Russell, 1992; Zahra & Covin, 1995). Bygrave (1995) excluded intrapreneurship from his definition of entrepreneurship.
His exclusion was based on the assumption that a typical entrepreneur ‘risks all his personal cash-flow, some or all of his personal capital, and his career in starting a new venture, which would not be viable without him’. Bygrave’s exclusion assumes that corporate entrepreneurs do not risk personal cash-flow or personal capital, nor do they place their careers at risk. Carton et al. (1998) dispute this exclusion by asserting that these entrepreneurs also do risk personal cash-flow streams by placing their personal careers or jobs at risk should the corporate ventures or innovations they promote fail. As indicated in the previous chapter, it is documented in the literature that an integral part of the entrepreneurial process is innovation. As such, in literature, corporate entrepreneurship and innovation concepts are used interchangeably. Covin (1999) states that innovation, broadly defined, is the single most common theme underlying all forms of corporate entrepreneurship. Covin (1999) goes further and defines corporate entrepreneurship as the presence of innovation, and adds competitive superiority to his definition. Schindehutte et al. (2000) mention several authors who link the process of ‘organisational renewal’ with ‘innovation’ (Miller & Friesen, 1985; Burgelman, 1984; Kanter, 1983; Naman & Slevin, 1993; Miller, 1990; Zahra & Covin, 1995). For Russell (1999), fostering entrepreneurial behaviours and practices assumes prime importance in the grand strategies of many firms where innovation is perceived as key in establishing and maintaining competitive advantage and initiating corporate renewal. Barrett, Balloun and Weinstein (2000) posit that corporate entrepreneurship is an organisational process that encourages and practises the utilisation of innovation, constructive risk-taking, and pursuit of new opportunities. In modern times, the entrepreneurial function is widely exercised through strategic management, corporate planning, research and marketing structures within corporations. Strategic management can therefore be a process that deals with the entrepreneurial work of the organisation and with organisational renewal and growth (Morris & Kuratko, 2002: 153). Senior management in large corporations has become increasingly aware of the need for entrepreneurial thinking, such as the infusion of organisations with innovative behaviours (Ginsberg & Hay, 1994; Schindehutte et al., 2000). Morris and Kuratko (2002) refer to this infusion as corporate entrepreneurship, while Pinchot (1985) uses the term intrapreneurship. Simon et al. (1999) call it a managerial approach that will stimulate innovation and re-energise employees. A review of these and other definitions indicates that entrepreneurship in established organisations is a multi-dimensional phenomenon that incorporates individual, organisational and environmental elements, and is defined by the innovative nature of the actions performed. Figure 4.1 portrays a conceptual interactive relationship between individual, organisational/internal and environmental/external factors in corporate entrepreneurship.

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Covin and Slevin CE model

According to Covin and Slevin (1991), CE involves extending the firm’s domain of competencies and corresponding opportunity set through internally generated new combinations of resources. These authors developed a model, as illustrated in figure 4.4, which seems to improve on that of Guth and Ginsberg (1990) in at least two ways: by depicting feedback loops between CE factors and corporate entrepreneurship; and by not being too specific about the type of corporate entrepreneurship – reference is only made to entrepreneurial posture. The key feature of the model is the recognition that entrepreneurial orientation influences the external environment and the internal variables, albeit to a weaker extent. Conversely, organisational performance has a weaker effect on entrepreneurial orientation. Significantly, it also highlights the acknowledgement that the three CE factors – environment, strategic variables and internal variables – have a moderating effect on the relationship between entrepreneurial orientation and organisational performance.

PART I: Research orientation section 
Chapter 1 Introduction
Chapter 2 Research design and methodology `
PART II: Entrepreneurship literature review section 
Chapter 3 Entrepreneurship theory
Chapter 4 Corporate Entrepreneurship theory
PART III: Experimental research section 
Chapter 5 CE measurement instrument development and validity testing
Chapter 6 Pre-intervention CE assessment (O1): Comparisons between employee groups of experimental DFI
Chapter 7 CE Training Intervention in experimental DFI (X)
Chapter 8 Post-intervention CE assessment (O2): Comparisons between pre-, post- & control groups (O1, O2, O3)
PART IV: Research synthesis and recommendations 
Chapter 9 Conclusions, recommendations, limitations and future research
Bibliography
PART V: Appendices
1 Reference list
2 Questionnaires
3 Biography

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