The phase specificity of factors

influencing entrepreneurial activity in

corporate settings

Preliminary Survey Results

By
Mikkel Draebye
 Structure

1. Context and definitions

2. Theory Background
3. Research Question
4. Hypotheses
5. Research Design
6. Data Analysis
a) Sample profile
b) Scales
c) Scale reliability & factor analysis
d) Correlation analysis and hypotheses testing
e) Development of empirical model
7. Discussion
8. Implications & Future research
 Context and definitions
The field of Corporate
Entrepreneurship (CE)
• The research is inserted in the “stream” of
entrepreneurship research that deals with
entrepreneurial behaviour and activity within existing
structures.
• This stream started to distinguish itself in the early
80ies with authors like Pinchot & Zahra (Pinchot, 1985 &
Zahra, 1991) labelling concepts like “intrapreneuring”
and “intrapreneuship”, but has developed into a well-
defined research area with several textbooks written and
a good share of articles in the peer reviewed
Entrepreneurship Journals
• CE is defined as: “the process whereby an individual or
a group of individuals, in association with an existing
organization, create a new organization or instigate
renewal or innovation within that organization” (Sharma
& Chrisman 1999)
 Demarcation: CE vs Independent
Entrepreneurship

Entrepreneurship

Independent Corporate
Entrepreneurship Entrepreneurship

Strategic Corporate
Innovation
Renewal Venturing

Internal
External
corporate venturing
corporate venturing
Potential outcomes:
Potential outcomes:
• integration
• Joint ventures
• new divisions
• Spin off
• new ventures
• Venture capital initiat.

Source: Sharma / Chrisman (1999)

 Research Question & Theory Background

• The research investigates phase-specificity of the

determinants of corporate entrepreneurship
• We know quite a lot of what in general influence
entrepreneurial activity in corporate settings
– Organizational Structure( Covin & Slevin , 1988, 1990 – Mair, 2002 –
pettigrew 2000)
– HRM Systems and Practises (Sykes 1992, Hayton 2005, Kuratko 2008)
– Psychometrical profile of the corporate entrepreneur (Begley & Boyd
1987, Frese 2007, Baron 2007, D’intino 2008)
– Social Captial & Contracting Skills (MacMillan 1990, Zimmerman 2002,
Casson 2003)
– Innovation Competencies (Hayton&Kelly 2006)
– Organization Skills (Zott&Huy 2003, Grichnik 2010)
Literature review revealed these
established relationships
 Research Question

• What we DO NOT know so much about is how the different

determinants influences different PHASES in the
entrepreneurial process
• Entrepreneurship is a process. It can be described in 6
phases
– Opportunity identification
– Business Concept definition
– Resource requirement assessment
– Resource acquisition
– Venture management
– Harvesting
• The research question is whether different factors
affect different phases differently and how
 Relevance

• In CE in general, but especially in champion research,

the process is “blacked-boxed”. It’s Input-Output
without looking at the throughputs. An innovation
process might be blocked at the venture management stage
because there’s a lack of organization skills, but if
the phase specificity is not monitored, researchers (and
practitioners) don’t know where it went “wrong” or where
to intervene.
• Examining the phase-specificity of the determinants can
shed light on this and is therefore relevant
Research Question
 7 Hypotheses were developed
Hypothesis 1: Corporate entrepreneurial activity can be measured on different levels
that correspond to the phases in the corporate entrepreneurial process. The level of
entrepreneurial activity in terms of : 1) Ideas that are generated, 2) Ideas that are
formalized through concept definition and communication , 3) Ideas that have been
subject to a formalization in terms of resource planning and assessment, 4)
Ideas/Projects for which resources for their implementation has been acquired , 5)
Implemented ideas and projects and 6) Successfully implemented projects, will be

a) H1a: significantly correlated, indicating that successfully implemented

ideas depends on activity in the 5 preceding phases .
b) H1b: significantly decreasing, indicating that the number of successfully
implemented ideas will increase if the preceding phases outcome levels
will be increased and/or “kill-rates” between phases can be affected.

Hypotheses H1a and H1b basically state that phases exist and therefore establish an
empirical rationale for analyzing them.
Hypothesis 2: The activity level of the “idea generation” phase will mainly
depend on the individual’s creative skills and the entrepreneurship
“friendliness” of the organizational climate

Hypothesis 3: The activity level of the “concept definition” phase will mainly
depend on the individual’s organization skills and self-confidence

Hypothesis 4: The activity level of the “resource assessment” phase will mainly
depend on the individual’s organization skills in particular business planning
skills
Hypothesis 5: The activity level of the “resource acquisition” phase will mainly
depend on the individual’s social capital and social networking skills

Hypothesis 6 : Project/Venture management teams that contains at least one

original “ideator” will be more successful in harvesting the venture

Hypothesis 7: “Efficient” corporate entrepreneurship processes, defined as

processes with low kill rates in phases following concept definition, are
processes that combines individual skill sets together with systems of
departmental/functional integration and communication in the organization
 Research design

• To test the hypotheses a questionnaire composed of

90 questions was designed (see attached)
• Sampling strategy was based on collecting
responses from managers / employees with at least
2 years of employment history in the same company
• Questionnaire was an on-line internet
questionnaire (coded in google docs)
• The questionnaire form requires post-
stratification considerations for the data-
analysis (see Simsek, Veiga, Lubatkin: “Challenges
and Guidelines for Conducting Internet-Based
Surveys in Strategic Management Research”, in
Research Methodology in Strategy and Management,
Emerald, 2005 )
 Data Analysis

• The questionnaire was closed on October 15°. 195

responses had been collected.. After data-
validation 190 were retained
• Because of distribution method (directly to
companies AND through professional forums on
networks like LinkedIn) it’s not possible to
calculate a precise responserate, but the rate is
low – less than 0,3% (at least 5000 potential
respondents were exposed to the questionnaire)
• In the following slides some summary statistics
are presented
 Summary Sample Statistics
Educational level

140

120

100

80
count

60

40

20

Bachelor High School Master PhD

 Summary Sample Statistics

Field of degree

120

100

80
count

60

40

20

Bussiness/Economics Engineering Humanities Law Other Sciences

 Summary Sample Statistics
Which functional responsibilities was/is associated you position?

30

20
count

10

General Management Marketing Project Management Sales

 Summary Sample Statistics
Gender

140

120

100

80
count

60

40

20

Female Male
 Summary Sample Statistics

Which functional responsibilities was/is associated you position? 1. "Chemicals, raw- and basic materials"
2. "Distribution and sales of equipment and
30
material to other businesses"
3. "Distribution and sales of consumer products"
4. "Industrial manufacturing"
25 5. "Information Technology & Software"
6. "Non profit/Public administration/association"
7. "Other / Not Applicable"
20
8. "Pharmaceuticals and medical equipment"
9. "Services- Consulting/Training"
10. "Services-Banking/Finance"
count

15

10

1 10 2 3 4 5 6 7 8 9
 Summary Sample Statistics
Size of organization in term of employees (excluding volunteers)

60

50

40
count

30

20

10

0-50 1001-2500 2501-5000 251-500 5001-7500 501-1000 51-250 More than 7501
 Summary Sample Statistics
System (stage-gates)

100

80

60
count

40

20

No Yes
Summary Sample Statistics
 Summary Sample Statistics
Type of Entrepreneurial Ideas
12. Change of internal
work processes /work
flows /habits / behaviors
not mentioned above 1. Ideas for launching new
11. Ideas for 12% products/services
launching one-off 17%
events (with
business impact) 2. Identifying new customer
8% groups /markets for the
organization’s
products/services
10. Changes in
9%
administrative processes
7%

9 .Changes in the 3. Changes in marketing mix

organization’s Human and/or processes (including
Resource Management pricing)
Practices 9%
5%
8. Changes in
production
processes
6%

6. Changes for
partnerships used by 4. Changes for
7. Changes technology used the organization technology/components used
internally in the firm 10% in products /services
5% 8%
5. Changes for material used in
products /services
4%
 Data Analysis: The Scales
Table 5.9: The scales used

Scale Number of questions

Social capital 9
Organization skills 16
Innovation skills 7
Opportunity identification 12
Concept definition 4
Assessing Resource requirements 11
Resource Acquisition 6
Venture/project management 9
Harvesting 6
Organization climate 15
 Data Analysis: Scale Reliability

• To test the reliability of the scales, Cronbach’s

alphatest with alpha values > 0,7 was used. ALL
scales proved reliable

Cronbach’s Alpha values for scales used

raw_alpha std.alpha
Soc_cap 0.7 0.71
Org_skill 0.88 0.88
Inn_skill 0.74 0.75
Org_cli 0.81 0.81
Opp_id 0.81 0.82
Conc_def 0.86 0.85
Res_need 0.92 0.92
Res_acq 0.82 0.83
Vent_mgmnt 0.7 0.7
Harvest 0.72 0.74
 Data Analysis: Factor analysis
• To identify the individual weights of the
questions, a simple factor analysis without
rotation was applied
Factor weights and constructs following factor analysis
Factor formula for obtaining z-scores
Soc_cap -5.97 + Soc_cap_1*0.15 + Soc_cap_2*0.06 + Soc_cap_3*0.17 + Soc_cap_4*0.2+Soc_cap_5*0.29 +
Soc_cap_6*0.19 + Soc_cap_7*0.09 + Soc_cap_8*0.34+Soc_cap_9*0.11
Org_skill -5.24 + Org_skills_1*0.04 + Org_skills_2*0.08 + Org_skills_3*0.13 + Org_skills_4*0.1 +
Org_skills_5*0.08 + Org_skills_6*0.19 + Org_skills_7*0.06 + Org_skills_8*0.08 + Org_skills_9*0.06 +
Org_skills_10*0.08 + Org_skills_11*0.09 + Org_skills_12*0.1 + Org_skills_13*0.08 +
Org_skills_14*0.09 + Org_skills_15*0.09 + Org_skills_16*0.08.
Inn_skill -5.1 + Inn_skills_1*0.3 + Inn_skills_2*0.17 + Inn_skills_3*0.18 + Inn_skills_4*0.19 +
Inn_skills_5*0.09 + Inn_skills_6*0.29 + Inn_skills_7*0.14
Org_cli -3,42 + Oc_1*0.14 + Oc_2*0.23 + Oc_3*0.11 + Oc_4*0.14 + Oc_5*0.08 + Oc_6*0.08 + Oc_7*0.07 +
Oc_8*0.11 + Oc_9*0.01 + Oc_10*0.03 + Oc_11*0.01 + Oc_12*0.03 + Oc_13*0.02 + Oc_14*0.02 +
Oc_15*0.03
Opp_id -0,99 + Opp_id_1*0.05 + Opp_id_2*0.02 + Opp_id_3*0.03 + Opp_id_4*0.01 + Opp_id_5*0.03 +
Opp_id_6*0.04 + Opp_id_7*0.07 + Opp_id_8*0.03 + Opp_id_9*0.06 + Opp_id_ 10*0.02 +
Opp_id_11*0.04 + Opp_id_12*0.04
Conc_def -0.95 + Conc_def_1*0.03 + Conc_def_2*0.03 + Conc_def_3*0.01 + Conc_def_4*0
Res_need -0.77 + A_res_req_1*0.01 + A_res_req_2*0.02 + A_res_req_3*0.02 + A_res_req_4*0.01 +
A_res_req_5*0.01 + A_res_req_6*0.01 + A_res_req_7*0.01 + A_res_req_9*0.01 +
A_res_req_10*0.01 + A_res_req_11*0.01
Res_acq -0,7 + Res_acq_1*0.02 + Res_acq_2*0.04 + Res_acq_3*0.02 + Res_acq_4*0.01 + Res_acq_5*0.03
Vent_mgmnt -0.62 + Ven_man_1*0.02 + Ven_man_2*0.02 + Ven_man_3*0.02 + Ven_man_4*0. 04 +
Ven_man_6*0.01 + Ven_man_7*0.02 + Ven_man_8*0.02 + Ven_man_9*0.05 + Ven_man_10*0.02
Harvest -0.7+ Harvest_1*0.04 + Harvest_2*0.03 + Harvest_3*0.06 + Harvest_4*0.03 + Harvest_5*0.03 +
Harvest_6*0.04
 Data Analysis: ANOVA analysis for
objective variables in the sample

• To examine the relationship between the factor

drivers and the objective variables (gender,
education, size of company etc), students-t or an
ANOVA analysis was performed (depending on the
number of categories)
• Factor values are given in Z-scores: arithmetical
mean of z-score is 0, standard deviation is 1, 50%
of the sample is in the range -0.66 to 0.66 z-
scores, so the difference between groups close to
0.66 is the criterion for significant conclusion.
Data Analysis: ANOVA analysis for
objective variables in the sample
Table 5.50 : Gender
Female Male t P
soc cap -0.14 0.05 -1.32 0.19
org skills -0.21 0.08 -1.72 0.09
inn skills 0.02 -0.01 0.18 0.86
Oc -0.01 0.01 -0.12 0.904

As seen from the table, gender does not influence the factor values
 Data Analysis: ANOVA analysis for
objective variables in the sample
Table 5.51 : Field of degree
Business/
Economics Engineering t p
soc cap -0.02 0.19 -1.55 0.124
org skills 0.19 0.07 0.84 0.403
inn skills 0.08 -0.11 1.4 0.165
Oc 0.23 -0.38 3.54 0.001

As seen from the table, the respondents who have a Business / Economics degree
have a significantly more positive perception of the entrepreneurship friendliness of the
climate in the organizations where they work. It’s likely that this is due to either position
in the company (see below) or a different way of interpreting the organizational reality.
 Data Analysis: ANOVA analysis for
objective variables in the sample
Table 5.52: What is/was your position

Functional Manager

General Manager /
Division Manager
Business Unit /

Team Manager
Employee

CEO F p
soc cap -0.14 -0.18 -0.13 0.03 0.25 1.76 0.139
org skills 0.13 -0.06 -0.2 0.36 -0.1 1.74 0.144
inn skills -0.05 -0.05 -0.08 0.12 0.06 0.29 0.885
Oc 0.01 0.02 -0.2 0.74 -0.13 4.69 0.001

The respondents, who have a job of General Manager / CEO depict the higher index of
organization climate than the employees. The rest has the average scores.
Data Analysis: ANOVA analysis for
objective variables in the sample
Table 5.53: Industry

Information Technology &

Industrial manufacturing
Distribution and sales of

Other / Not Applicable

Services- Consulting /
consumer products

Software

Training

p
soc cap -0.31 0.13 0.15 -0.18 0.27 2.24 0.069
org skills -0.16 0.56 0.23 -0.47 0.1 5.62 0
inn skills 0.03 -0.08 0.08 0.06 0.07 0.15 0.963
Oc 0.18 0.01 -0.13 -0.25 0.25 1.39 0.241

As seen from the table, there is a significant variance in the level of organizational skills
across industries. The categorization is too high level to allow for an interpretation of
the differences though
 Data Analysis: ANOVA analysis for
objective variables in the sample
Table 5.54: Size of organization
0-50 51-250 More than 7501 F p
soc cap -0.06 -0.19 0.05 0.71 0.492
org skills -0.38 0.05 0.14 4.06 0.02
inn skills -0.08 0.17 0.07 0.76 0.47
Oc 0.28 -0.15 0.04 1.58 0.21

As seen from the table, organizational skill is related with organization size. The
respondents from the <50 employees have the lowest ones. The very large companies
employees have higher organizational skills.
Data Analysis: Testing the Hypotheses
through correlation analysis
• To test the developed hypotheses, a correlation
analysis using Pearsons correlation coefficient on
the developed factor constructs was applied. The
sample size and the obtained response distribution
accommodated such analysis.
Data Analysis: Testing the Hypotheses
through correlation analysis
Table 5.55: Pearsons r Correlation table: Drivers and Phases

a_res_req
org_skills

inn_skills

conc_def

ven_man
soc_cap

res_asq

harvest
opp_id
oc
soc_cap 1 0.38*** 0.39*** 0.24*** 0.19** 0.1 0.13 0.17* 0.03 0.05
org_skills 0.38*** 1 0.42*** 0.34*** 0.3*** 0.3*** 0.3*** 0.27*** 0.18* 0.23**
inn_skills 0.39*** 0.42*** 1 0.19** 0.36*** 0.26*** 0.23** 0.21** 0.13 0.17*
Oc 0.24*** 0.34*** 0.19** 1 0.18* 0.18* 0.21** 0.14 0.1 0.2**
opp_id 0.19** 0.3*** 0.36*** 0.18* 1 0.63*** 0.54*** 0.55*** 0.47*** 0.48***
conc_def 0.1 0.3*** 0.26*** 0.18* 0.63*** 1 0.85*** 0.81*** 0.62*** 0.61***
a_res_req 0.13 0.3*** 0.23** 0.21** 0.54*** 0.85*** 1 0.87*** 0.53*** 0.54***
res_asq 0.17* 0.27*** 0.21** 0.14 0.55*** 0.81*** 0.87*** 1 0.58*** 0.45***
ven_man 0.03 0.18* 0.13 0.1 0.47*** 0.62*** 0.53*** 0.58*** 1 0.56***
Harvest 0.05 0.23** 0.17* 0.2** 0.48*** 0.61*** 0.54*** 0.45*** 0.56*** 1
* - p≤0.05; ** - p≤0.01; *** - p≤0.001
Data Analysis: Testing the Hypotheses
through correlation analysis

Social capital Opportunity identification

Concept definition
Innovation skills
Cross correlated

Assessing resource
requirements

Organization climate Resource acquisition

Venture / project
Organizational skills management

Harvesting the venture

 Data Analysis: Factor analysis:
Building an empirical model

• Principal axes factorial analysis with varimax rotation was performed. To

choose the most reliable variables randomization method with 100
repitition was applied and different methods to determine the number of
factors was tries: Parallel Analysis , Cattell's scree test , Very Simple
Structure Criterion , Velicer MAP criterion and Bayesian Information
Criterion.
• Following the test a 4-factor model was designed
Data Analysis: Factor analysis:
Building an empirical model
Opportunity identification

Concept definition

Creativity Skills

Assessing resource
requirements
Organizational
E -Un-
reduce Resource acquisition skills
friendlines
s
Lack of Venture / project
reduce
Business management
Analytics Skills
Harvesting the venture
skills
 Conclusions (H1)

5.3.1 H1: Existence of phases in the entrepreneurial process

The hypothesis of the existence of phases in the corporate entrepreneurial process is

fully confirmed. Each phase can be measured by the questionnaire. Measurement
result is a Z-score, which reflect the success of each phase.

The analysis also confirmed the existence of drivers that have a positive influence on
the success of the phases. The identified drivers are not independent, they are
strongly correlated and form a coherent cluster.

Organizational skills affects all the phases. This driver has a particularly strong
influence on opportunity identification and concept definition. Organizational climate
has a strong effect only on two phases: Assessing resource requirements and
Harvesting the venture. Innovation skills increases the effectiveness of four phases:
Opportunity identification, Concept definition, Assessing resource requirements,
Resource acquisition. Social capital increases the efficiency of opportunity
identification.
 Conclusions (H2)

5.3.2 H2: The activity level of the idea generation phase will mainly depend on
the individual’s creative skills and the entrepreneurship friendliness of the
organizational climate

This hypotheses is only partially confirmed. Increased idea generation activity does
indeed depend on innovation skills, but the organizational climate has no statistical
correlation with activity in this phase
 Conclusions (H3)

5.3.3 H3: The activity level of the concept definition phase will mainly depend on
the individual’s organization skills and self-confidence

True. Concept definition phase depends on organizational skills. The data collected in
the survey did not allow for testing the relationship between self-confidence and
concept definition
 Conclusions (H4)

5.3.4 H4: The activity level of the resource assessment phase will mainly
depend on the individual’s organization skills in particular business planning
skills

True. Resource assessment phase depends on organizational skills.

 Conclusions (H5)

5.3.5 H5: The activity level of the ―resource acquisition phase will mainly
depend on the individual’s social capital and social networking skills

This hypotheses is only partially confirmed. The resource acquisition phase does not
depend on the individual’s social capital, but only on the persons social networking
skills. Also, the activity level of the resource acquisition phase is also influenced by the
individuals organizational and innovation skills.
 Conclusions (H6)

5.3.6 H6 : Project/Venture management teams that contains at least one

original ideator will be more successful in harvesting the venture

The data collected are insufficient to test this hypotheses

 Conclusions (H7)

5.3.7 H7: Efficient corporate entrepreneurship processes, defined as

processes with low kill rates in phases following concept definition, are
processes that combines individual skill sets together with systems of
departmental/functional integration and communication in the organization.

The factor analysis shows that kill rates exist and that they are influenced by the
individual’s business analysis skills and entrepreneurship UNFRIENDLY organizational
climate, because the negative organizational climate decrease activity levels in the re
source assessment, re source acquisition and harvesting phase. Low levels of
business analysis skills decreases success in the venture / project management phase.

The collected data does not though allow for a detailed analysis of the kill-rates.
 Conclusions (others)
5.7 Other findings

Because not all the hypotheses were fully confirmed an attempt was made to redefine
the theoretical model based on the empirical data collected. This analysis suggests that
a model containing 4 factors
1. Innovation skill (creativity)
2. Organizational climate
3. Analytical business skills
4. Organizational skills.

Has better explanation power than the original theoretical model. Drivers in this model
are independent. This means that is no significant correlations between them. But their
influence on the phases is still remains.
Organizational skill depends on all phases and increase their levels. Innovation
creativity increase activity level of the Opportunity identification, concept definition,
Assessing resource requirements, and resource acquisition. Negative climate in
organization reduce the level of the assessing resource requirements and harvesting.
Low analytic skills reduce the level of the venture/project management phase.
 Implications

6.3 Stimulating corporate entrepreneurship: The case for betting on the

individual

As can be seen from the above consideration, the present research results, support a
case for CE stimulation in corporation which is based on 2 principles
1.1 Eliminate perceptions in the employee and management base that the
organization is NEGATIVE towards entrepreneurial initiatives. This should be
done through policies of ALLOWANCE and FREEDOM
1.2 For corporate entrepreneurship, the entrepreneur matters. Individual skills and traits in terms
of a general business acumen, creativity (phases up to venture management) and sales and
marketing skills (in the venture management) are the key drivers of entrepreneurial activity.
These skills can be developed through HR hiring and assessment practices and post-
recruitment training.
 Un-answered questions and need for
follow-up research
• Understanding the interaction and relationship
between organizational drivers and individual
traits
• Understanding of project management and business
planning skills phase specific role
• Drivers and determinants of “Kill Rates”