Corporate Entrepreneurship and Human being Resource Management


Today's overall economy is experiencing its ups and downs rapidly: rising competitiveness and quickly changing technology create pressure to the companies that want to stay near the top of their markets. This isn't going to slow down, so the need for tools of success is arising. At the same time we are moving away from the Morris and Kuratko (2002) belief that "entrepreneurs are delivered, not made". That's the reason the wanting, thinking, wishing, planning must be followed by doing. As already Confucius said: "When it's obvious that the goals cannot be reached, don't adjust the goals, adapt the action steps". It is time to use it and one form from it that suits different businesses nowadays - is corporate entrepreneurship (CE).

Stated by Sharma and Chrisman (1999), commercial entrepreneurship is "the procedure whereby an individual or group of individuals, in association with an existing organization, create a fresh corporation or instigate renewal or creativity within that organization". There are lots of meanings for CE nowadays, but most of them do not change the actual fact that CE is an instrument for differentiation and competitive benefits in today's overall economy.

Corporate Entrepreneurship (CE) and Man Resource Management (HRM)

A great deal of researches, studies were conducted in order to discover the inevitable fact that CE positively affects the performance of any company: it generates competitive advantages, really helps to differentiate, adjust to new or quickly changing markets, and offer with external and internal problems. As CE sometimes appears as a multifaceted tool, the level of CE in an organization can be explained by five different proportions determined in a meta-analysis by Saly (2001): innovativeness, risk propensity, proactiveness, corporate venturing and self-renewal. When making an organizational composition, as well as inside culture, these dimensions should be a scale measuring the future success of an company. Coping with the globalization and fast paced changes, an organization must take hazards, be proactive and strive for technology. Nurturing these features, adapting to the surroundings (self-renewal) and fostering creation of something valuable that generates profits - are CE key success factors in the economy of today.

Of course no CE can be fostered without Individual Capital. To be remembered as an innovative, entrepreneurial business need the data, skills, experience the human capital can provide. This is why HC should be one of the most crucial and valuable advantage for every company. Investing in HC will be a first rung on the ladder towards building and pushing the entrepreneurial route of the overall company.

As from the employee-organization relations (EOR) books (Rhoades and Eisenberger, 2002), the best influencers of staff affect are the organization's market leaders. Their HRM practices can valuably contribute to effective development of CE. Different HRM techniques can create a suitable inside culture for an organization to become impressive, flexible and much more entrepreneurial. Therefore EOR strengthened with HRM practice can become an efficient tool for creating a collective entrepreneurial atmosphere inside any firm.

HRM procedures fostering CE inside the company

HRM procedures should be an important drivers of CE since it includes organizational learning influenced by collaboration, ingenuity, and individual dedication (Kaya, 2006). To foster CE in a firm the first activity is the inner culture and environment. Pursuing different studies conducted on this issue of CE and HRM routines, how to establish a suitable inside environment for intrapreneurship appears to be predicated on these organizational agreements/managerial tools:

Staff selection - the objective of personnel selection is to create an appropriate resource base of human capital to foster entrepreneurial activity.

As the human capital of any business is one of the most crucial facilitators of CE, selective hiring can be considered a tool for influencing the CE level. The choice conditions should fit the organizations' culture, be in range with the CE measurements and mirror the needs of the business.

During the process of selecting personnel it is effective to think about the skills are needed in the industry the company manages, how the employees could work together and create a brain trust. Emphasizing the team spirit is vital, because the emphasis on collective entrepreneurship is growing. New members should have new ideas and enhance the staff by being different and experts of their own sphere. New management staff should have relevant KSAOs, be creative, shoot for action and be supportive. Finally, a possibility to increase in one's own profession should also be seen during this process, because it will provide as a determination tool and foster better environment in the business.

Management support - the positive attitude as well as encouragement of the bigger hierarchy degrees of the business for generating and developing new business ideas.

Management support is important because it indicates the willingness of the managers to accomplish, promote and institutionalize the entrepreneurial heart and activity within the organization's system and techniques (Hornsby at al. , 2002) which would encourage the intrapreneurs to activate in innovative assignments. If the business provides support plus some autonomy it may then depend on the commitment via employees. Still coordinating the utilization of resources, contributing to the fulfillment of the separate individual ideas or attempts will finish up with an increase of overall efficiency.

Management support for problem dealing with and conflict image resolution in the intrapreneurship process is necessary in the theory generation, development, and especially implementation (execution) levels of the ideas (Damanpour, 1991). This may positively effect a corporation's entrepreneurial behavior and boost potential intrapreneurs' recognized trustworthiness with their corporations in conditions of detecting opportunities and willingness to develop book or useful ideas and or assignments and also to take risks to actualize them (Stevenson and Jarillo, 1990). Internal supportive environment, tolerance for risk taking with their intrapreneurs, and a superior quality HC will contribute to the ground breaking performance.

As a good example could be taken the business's 3M strategy - the corporation understood and experienced that capable and stimulated employees can turn the company into a profitable impressive and successful corporation. That's the reason the management was aiming to create an environment that supports specific entrepreneurship: "a weather that stimulates ordinary people to produce remarkable performances".

Allocation of free time - provision of sufficient time to work on expanding novelties without the burden of regular workload. Delivery of free time inevitably promotes employees to take chances for placing their novel ideas into practice. When given time for convincing the management level about your project success, employees are not so distracted from other main responsibilities and usually show more determination towards the business.

Organizational structure - should be convenient regarding decentralization level or decision-making autonomy.

Employees must have the possibility to share and suggest their ideas easily. The best decentralization level differs among every company, but it is an instrument to be more flexible, impressive, and energetic - suit the dimensions of CE. If company provides autonomy for employees who actually perform the work, this will energize their commitment to act in the simplest way for the business. Having a healthy romantic relationship between autonomy and self-control creates an environment where employees can work, take weighted dangers and innovate towards successful effects of the business. Companies that are becoming rigid really slow down all the innovative functions as well as cannot implement all the possibleWindows End user2010-12-28T20:09:00

Case example


When considering new ventures, projects in order to improve the competitive benefit and profitability of the company it is important they fit the organization in terms of context and organizational framework. There is a probability to foster integrated or different CE.

Taking the exemplory case of the company Polaroid, one can see that the impact of bureaucracy, biases and downsizing was a large obstacle for nurturing inside entrepreneurship. The company was big-sized and stagnant, becoming a market follower. In such cases, when a business becomes rigid, will not answer market needs mostly due to compilation, slow operations - CE must be fostered and carried out. One of the first steps should be an entrepreneurial-oriented structure that allocates the power of decision making not to the bigger level employers, but considers the employees who know the most about the tasks being performed.

In the truth of Lucent (a telecommunication equipment maker), their New Enterprise Group formed another organizational entity. In this manner it generally does not suffer from the bureaucratic rules of the parent or guardian company, still may use the support needed, creates its own inside environment and culture that can foster CE more easily. That is why, when creating new entrepreneurial project each company must evaluate its fit in the organization.

Usually small tasks are of better use inside the business: they could be accessible for those employees, motivate these to work on their projects too, but at exactly the same time never to be too sidetracked from the mainstream of the business. A good example of such an strategy would be the case of the business Ohio Bell. House windows User2010-12-30T10:39:00


Incentives and rewards - option of a performance established reward system encouraging innovativeness is ways to foster entrepreneurship among employees.

If the management attempts to persuade the employees to act like intrapreneurs, it must also be eager to pay them as business people (Thornberry, 2003). Having rely upon the rewarding system improves the employee commitment, determination to take chances and show the projects that can benefit both edges. A reward system that is dependant on achievements in invention jobs, may lead the brightest and most ambitious players to avoid innovation jobs with uncertain outcomes.

Building an incentive system shows a good attitude for the employees and can significantly increase their determination to benefit the business. It is important to see the reward tactics as a long-term thing, make resources available rather than punish the employees directly following the first failure of entrepreneurial job.

Failure or mistakes tolerance - in case there is creative undertakings or dangerous job implementations.

Such proved tolerance together with managerial support is a strong tool creating positive environment for CE. A conventional managerial attitude will obstruct the willingness to innovate and cause insufficient self-assurance of the employees. In order to triumph over the possible disappointment, business should support the individuals capital even during failures and continue buying the projects which may have high potential. Taking failures as an inevitable step towards success will maintain the degree of confidence for even more innovations and profitable ideas.

Of course, in order never to lose control and take "healthy" risks, company's should build an organizational mechanism to decide which innovation tasks will probably bear fruits and which should be restarted without having trial-errors. Windows User2010-12-28T20:52:00

Case example

For example, a favorite company 3M applied a more disciplined approach to defining, selecting and financing projects. Instead of running 100 of them as earlier, the process shifted to 12 assignments that 10 are expected to reach your goals. In this manner companies are more focused, quickly responding and can create true competitive advantages through expedient CE.

Training and development - appropriate skills can be acquired through training and development - best results towards boosting CE. Training can beat the factors that lower employees' job performance and satisfaction. Staff development viewed as activities that increase employees' certification and performance by any means hierarchical levels through education, profession management, and work structure. All these tactics can promote entrepreneurial patterns and improve the environment in the business. Windows End user2010-12-28T21:53:00

Case example

Training programs should be focused towards building useful CE skills, fostering the sizes of computer inside the company: change popularity, willingness to take risks, presume responsibility, and the worthiness of teamwork and shared accomplishments. Training activities that enforce interpersonal skills should be fostered. Also training that works with creativity will improve innovativeness and potentially improve self-renewal and home based business development. Finally training about how to transfer new ideas into business will lead to raised depth for risk propensity and proactiveness.

For effective training, programs should fit the company's strategy and work process. To unfold their full influence on CE, expert knowledge, public competence, imagination, and methodical skills are specially important to be looked at.

Specialist assignment - specialists can foresee and calculate specific problems previously and therefore identify needs for adjustments more quickly.

As CE is more regularly regarded as a collective process, instead of putting the emphasis on one individual, organizations must encourage cooperation among specialists to increase successful innovation processes. That is stressed because as environment effects on organizational behaviors it is also observed in change of romantic relationships between employees and workplace or professionals inside the business. In order to become competitive and impressive, firms have to look at new strategies, as well as different employee-organization marriage (EOR) patterns. The need for this is significantly growing, because corporate and business entrepreneurship entails not only product invention, risk taking or proactive replies to environmental causes, but also organizational learning, motivated by collaboration and commitment. Here the cooperation of specialists could be observed as a link between employees, professionals and their potential to foster commercial entrepreneurship together.

As it could be observed in the Siemens Nixdorf Informationssysteme AG (SNI), a company that confronted financial and inside environment problems with an application called "Change Agent Program", managerial support, concentrated personnel selection and staff training and development will be the tools that foster corporate entrepreneurship nature and help overcome the downturn a company can experience.

The Change Agent program viewed to displace Siemens Nixdorf's rigid corporate and business hierarchy with a more flexible and entrepreneurial attitude that would be more attentive to market demands. The company operated in a very competitive European market, was undermanaged and over consulted. As the employees at SNI experienced restructuring at the company during the early 1990s and four many years of losses, the within culture was far away from a corporation you can call progressive and lead thinking (as the ones working in IT industry in US). The program though was centered on employees, emphasizing the value of the folks at the company and increasing the opportunities available to them.

The goal of the 13 week program was to build an understanding of business basic principles and business change along three proportions: customer, competitiveness and culture. It merged presentations, discussions, workshops, circumstance studies, best practice site appointments, internships, and coach research. An important goal was to provide individuals with new perspectives about their jobs and present them the know-how to put into action them upon go back to the company. The programs directed to have the sponsors (each member had two of them) provide authority, instruction and support to be able to help them achieve their task goals. This is also an example that specialists' assistance is an instrument fostering corporate and business entrepreneurship and increasing the employees insight. It was also aiming to help find ground breaking ways to deal with and use their assignments.

Each participant of the program had a project drawn from the area that concludes the most important challenges the business faces - which were fostered by this program and implemented after the employee's return to SNI. Although 21 Change Providers had varying levels of success, it was clear that they played a role in driving SNI to profitability in the 1994 - 1995 fiscal 12 months (for the first time in the business's record). That was mirrored in the decision by the SNI Exec Panel to perpetuate this program on an gross annual basis.

Such training and development programs foster collective and specific entrepreneurship inside the company. This example shows how important it is that such tools would fit desire to and strategy of the whole company. By handling the right problems, training the right people (at SNI they were thoroughly determined) this training curriculum helped the business to enhance the communication within the company, improve its international procedures, flexibility and determine new possible directions. The employees felt a lot more entrepreneurial spirit of the company's culture and were able to channel their passion for changes and revitalization, feel more responsibility, and support what opened the ways because of their projects.


Trends in the global economy require established companies to be more and more entrepreneurial in order to handle doubt and environmental dynamism.

The studies provide positive associations between HRM procedures and CE. HR practices include sustained competitive advantage for organizations. CE-related HR tactics are unique to the amount that competition cannot imitate them. There must be support from HR routines consistent with that one culture and regular with what is needed from employees. The main element factor is determining what is needed from employees to be effective at CE. Once this is determined, the organization can describe the precise HR practices the business must use.

Conclusions: HRM practices play a significant role in fostering and retaining high degrees of CE. Companies should give attention to the HRM practices of personnel selection, staff development and training, and personnel rewards that align employee motivation and entrepreneurial organization development.

Support, tolerance, and pay back are located to be related to innovativeness, while work discretion and time allocation aren't. Considering the merged effects of all the Operating-system factors, managerial support and tolerance for risk taking have still exerted significant results on innovativeness. That is why firms should spend to build such an organizational milieu where first, support and tolerance are present to a sizable extent. On the other side, organizations first of all should spend less money and time on rewards and empowerment, plus more on recruiting and training managers to be supportive and maintain a viewpoint that failure is a stepping-stone to success.

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