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The corporate entrepreneurial climate within the South African banking sector

by

Brett Andre van der Merwe
Submitted as part of the requirements for the degree

MPHIL: ENTREPRENEURSHIP
in the

Faculty of Economics and Management Sciences

University of Pretoria
November 2007 Study Leader: Dr. Alex J. Antonites

ACKNOWLEDGEMENTS

TO THE LORD GOES THE GLORY, HONOUR AND MY DEEPEST THANKS I would like to thank the following people, without whom the successful completion of this dissertation would not have been possible: • Dr. Antonites for his guidance, encouragement and unwavering support during the entire course of this study. • Dr. Rene van Wyk for her help in editing both the literature and statistics. Her assistance and motivation, made me realise my true potential and capabilities. • Mrs. Rina Owen for turning a pile of questionnaires in valuable, meaningful information. • • Mondi van Zyl for her quick and efficient language editing. My family Mom, Dad, El Rad, Kex and Kels, thank you for your love and constant support. It has enabled me complete this dissertation and look to the future with great excitement. • • Stewart Clegg for walking the road with me, for the many late nights and laughs. Renee Lombard for her constant encouragement and support, and always helping me see the positive side to everything. • Malcolm and Nelis for your non-stop support and invaluable advice.

I, Brett Andre van der Merwe, declare that this dissertation, The corporate entrepreneurial climate within the South African banking sector, is my own original work. Where other sources have been quoted or used I have given due acknowledgement by means of complete references made according to departmental requirements.

Brett Andre van der Merwe Student No: 21059293

Date

ABSTRACT
Due to the current competitive nature of the banking sector, South African banks are continually striving to better competitive postures and competitive advantages (Mboweni, 2007:2). This can be achieved through continual innovation (Ireland, Ireland, Kuratko, & Morris, 2006a:10). In order to increase levels of competition and innovation, a higher degree of corporate entrepreneurship (CE) has to be achieved (Kellermanns &Eddleston, 2006:809). This can be done by creating a conducive CE climate which supports the establishment and development of CE within the organisation (Taylor, 2006:15). The main objective of this study is to investigate the corporate entrepreneurial climate within the South African banking sector. This will be achieved using the Corporate Entrepreneurship Assessment Instrument (CEAI), taking into consideration the five factors of the CEAI: Management support, work discretion, time availability, rewards and reinforcements and organisational boundaries. A non-parametric Kruskal-Wallis One-Way Analysis of Variance was employed to investigate the differences in the biographic and demographic variables as independent variables, and the five identified CE factors of as dependent variables. Both the descriptive and inferential statistics will be reported and findings discussed. The research conducted contributes to a better understanding of CE, as well as the CE climate within the sector, and can be used as a basis for the successful rehabilitation of CE in the banking sector. KEYWORDS: Entrepreneurship, Corporate Entrepreneurship, Intrapreneur, Innovation, Corporate Entrepreneurial Climate, CEAI (Corporate Entrepreneurship Assessment Instrument).

TABLE OF CONTENTS
CHAPTER 1: Introduction and Background 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Introduction...……………………………………………………………….1 Problem formulation……………...……………………………………….4 Problem statement..……………………………………………………….6 Aim/Importance of this study….. ……………………………………….7 Research methodology…. ……………………………………………….7 Demarcation of chapters... ……………………………………………….8 Conclusion... ……………………………………………………………….9

CHAPTER 2: Literature Review 2.1 2.2 2.3 Defining Entrepreneurship …………………………………………….11 Corporate entrepreneurship…….……………………………………..14 Corporate venturing…….............................................................…..18

2.1.1 Defining the entrepreneur...........……………………………………...13 2.2.1 Defining the intrapreneur……….………………………………………16 2.3.1 Internal corporate venturing…...………………………………………20 2.3.2 External corporate venturing…..………………………………………20 2.4 2.5 2.6 Corporate entrepreneurial culture….... ………………………………21 Corporate entrepreneurial climate…………………………………....23 Organisational areas of influence……. ………………………………24

2.6.1 Management support...........……………………………………………25 2.6.1.1 Middle Management....... ………………………………………………26 2.6.1.2 Operational Employees..………………………………………………27 2.6.2 Organisational boundaries……………………………………………..27 2.6.3 Rewards and reinforcements…………………………………………..28 2.6.4 Time availability…………………………………………………………..29 2.6.5 Work Discretion…………………………………………………………..30 2.7 2.8 Innovation………………………………………………… .............…….30 Corporate entrepreneurship, innovation and competition……….33

2.8.1 Entrepreneurship and Corporate Entrepreneurship………………33 2.8.2 Corporate Entrepreneurship and Innovation……………………….33 2.8.3 Innovation and competitive advantage…………………………….34

2.8.4 Competitive advantage and competition…………………………..35 2.8.5 Corporate entrepreneurship, innovation and competition……..35 2.9 Developing a corporate entrepreneurial strategy………………..36 2.9.1 Developing a vision……………………………………………………38 2.9.2 Encouraging innovation………......................................................38 2.9.3 Forming venture teams………………………………… …………….39 2.9.4 Structuring for corporate entrepreneurial climate……………….39 2.10 South African banking sector………………………………………..40 2.10.1 Introduction and background………………………………………40 2.10.2 Current competitive climate in the South African banking sector………………………………………………………...42 2.10.3 How South African banks can use innovation to compete…...43 2.10.4 Corporate entrepreneurship and innovation in the South African banking sector……………………………………………....44 2.11 Conclusion……………………………………………………………….46

CHAPTER 3: Research Methodology 3.1 3.2 Introduction………………………………………………. ..................47 Aims and objectives of the study………………………….............47

3.2.1 Primary objective……………………………………………………...47 3.2.2 Secondary objectives…………………………………………….......47 3.2.3 Propositions……………………………………………………………48 3.3 Research Methodology………………………………………………48 3.3.1 The research design………………………………………………….48 3.3.2 Population and sample design……………………………………..49 3.3.3 Data Collection………………………………………………………...51 3.3.4 Measurement Instrument…………………………………………….52 3.3.5 Data Analysis…………………………………………………………..54 3.3.6 Limitations……………………………………………………………...54

CHAPTER 4: Results and Findings 4.1 4.2 Introduction…………………………………………………………….55 Construct discussion…………………………………………………55

4.2.1 Dependent variables…………………………………………………..55 4.2.2 Independent variables………………………………………….. ……55 4.3 Conclusion……………………………………………………………...74

CHAPTER 5: Conclusions, recommendations and limitations 5.1 Conclusions and Recommendations……………………...……....75

5.1.1 Management support……. …………………………………………...75 5.1.2 Work discretion…………………... .......……………….……………..76 5.1.3 Rewards and Reinforcements……………………………………….77 5.1.4 Time availability………………………………………………………..78 5.1.4 Organisational boundaries…………………………………………..78 5.1.5 Management Implications……………………………………………79 5.3 Limitations………………………………………………………………...80 5.4 Future Studies…………………………………………………………….80 5.5 Conclusion………………………………………………………………...81 REFERENCES…………………………………………………………………82 APPENDIX……………………………………………………………………...95

LIST OF TABLES
Table 1: Components of an Entrepreneurial Culture: Three Perspectives……………………………………….. 22 Table 2: Underlying variables which form part and make up the CEAI………………………………………………..53 Table 3: Educational level of participants…………...............……………..56 Table 4: Position of participants………………………………………………57 Table 5: Number of years in the company…………………………………..58 Table 6: Number of years in the banking sector…………………………...59 Table 7: Management level (Authority and Responsibility)……………...60 Table 8: Gender of participants……………………………………………….61 Table 9: Age of participants…………………………………………………...62 Table 10: Mean, standard deviation, minimum and maximum of the five CE factors……………………………………………….63 Table 11: Results of Kruskal-Wallis One Way Analysis of Variance withfactor one, the management support sub-scale (CE1) as dependent variable (N = 63) .....................................................70 Table 12: Results of Kruskal-Wallis One Way Analysis of Variance with factor two, the work discretion sub-scale (CE2) as dependent variable (N = 63) …………………………………………………….71 Table 13: Results of Kruskal-Wallis One Way Analysis of Variance with factor three, the rewards and reinforcement sub-scale (CE1) as dependent variable (N = 63)…………………………………..72 Table 14: Results of Kruskal-Wallis One Way Analysis of Variance with factor four, the time availability sub-scale (CE1) as dependent variable (N = 63) …………………………………………………….73 Table 15: Results of Kruskal-Wallis One Way Analysis of Variance with factor five, the organizational boundaries sub-scale (CE1) as dependent variable (N = 63)………………………………………74

LIST OF FIGURES
Figure 1: Categories of Corporate Entrepreneurship……..……………….16 Figure 2: An illustration of corporate entrepreneurship and intrapreneurship…………………………………………………18 Figure 3: The 5 influential factors of corporate entrepreneurship……....24 Figure 4: The relationship between corporate entrepreneurship, Innovation, competitive advantage and competition………….35 Figure 5: Flowchart of the key steps in developing a Corporate entrepreneurial strategy.............................................37 Figure 6: Educational levels of participants…………………………………56 Figure 7: Position of participants……………………………………………...57 Figure 8: Number of years in the company………………………………….58 Figure 9: Number of years in the banking sector…………………………..59 Figure 10: Management level (Authority and Responsibility)……………60 Figure 11: Gender of participants……………………………………………..61 Figure 12: Age of participants………………………………………...……….62 Figure 13: Means of the five CEAI factors…………………………………...63 Figure 14: “The rewards I receive are dependent upon my work on the job”…………………………………………………64 Figure 15: “My supervisor will increase my job responsibilities if I am performing well in my job”……………………………………64 Figure 16: “My supervisor will give me special recognition if my work performance is especially good”.................................65 Figure 17: “I always seem to have plenty of time to get things done”……….66 Figure 18: “I have just the right amount of time and workload to do everything well”…………………………………………………...66 Figure 19: “I feel that I am always working with time constraints on my job”…………………………………………………………….67 Figure 20: “There are many written rules and procedures that exist for doing my major tasks”…………………………………………..68 Figure 21: “On my job I have no doubt of what is expected of me.”…………68 Figure 22: “My job description clearly specifies the standards of performance on which my job is evaluated.”…………………..69 Figure 23: “I clearly know what level of work performance is

expected from me in term of amount, quality and time line of output”......................................................................69

CHAPTER 1 INTRODUCTION AND BACKGROUND TO STUDY
1.1 Introduction

Since the dawn of the global economy, competition posture has begun to influence organisational performance and success. Similarly, as a result of globalisation there is currently a global increase in levels of competition (Blanke, 2007:5). Sources and methods of competing have to be identified and utilised, and one such source of competition is innovation (Hoy, 2006:832). Innovation is deemed to be a powerful driver of organisational growth and competition (Scheepers, Hough & Bloom, 2007:238). Many leading organisations claim to be innovative and attribute their successes to innovation, or innovative stances by them (McGregor, Arndt, Berner, Rowley, Hall, Edmondson, Hamm, Ihlwan, & Reinhardt, 2006:1). According to recent studies and research, innovation is directly related to, and is a resultant product of, entrepreneurship and corporate entrepreneurship (CE) (Antoncic, 2006:59; Bhardwaj, Camillus & Hounshell, 2006:47; Kamffer, 2004:4; Kuratko, Ireland, Covin & Hornsby, 2005:699). Organisations have realised that embracing CE, and creating a CE enabling climate, fast-tracks the innovation process, resulting in increased levels of innovation, competitive advantage and competitive stature (Åmo & Kolvereid, 2005:9; Dess, Lumpkin & McFarlin, 2005:149) South African banks are following international trends of successful organisations and have started placing substantial emphasis on innovation, as well as the adoption and development thereof (Planting, 2004:1). According to Planting (2004:1) innovation is prevalent and a priority for South African banks. Due to the direct relationship between innovation and CE, if some form of innovation is present, the assumption can be made that some degree of CE is consequently also present (Bhardwaj & Momaya, 2007:131). The assumption can therefore be made that some degree of CE is present within South African banks and the banking sector.

In order to increase levels of competition and innovation, a higher degree of CE has to be achieved (Kellermanns &Eddleston, 2006:809; Nayager & Van Vuuren, 2005:30). This can be done by creating a conducive CE climate which supports the establishment and development of CE within the organisation (Taylor, 2006:15). The theory of corporate entrepreneurship is currently a very popular and constantly evolving topic of research and study. It is the subject of an ever-growing field of research amongst academic scholars and corporate organisations alike. CE caters for the need for infusion of dynamic entrepreneurial behaviour into larger, established organisations and structures, in order to revitalise and give them a fresher, newer, more dynamic approach to conducting business (Morris, Kuratko & Covin, 2008:8). CE has also been proven to have a significant influence and impact on organisational growth and performance (Hitt, Ireland, Camp & Sexton, 2002:173; Kuratko, Ireland & Hornsby, 2001: 69; Zahra, 1995:240). Corporate entrepreneurship, however, still remains a very contemporary ever evolving subject (Lassen, 2007:1). The concept of corporate entrepreneurship is comprised and made up of many different forms. Three of the most predominant forms, which will be discussed in this study, are organisational CE, intrapreneurship, and corporate venturing, both internal and external corporate venturing (Bouwmeesters, 2006:1). Corporate entrepreneurship is the term referring to a multidimensional phenomenon incorporating the individual, a group of individuals, or the entire organisation as well as the business culture and orientation of the organisation (Michalski, 2004:7). It is the process through which individuals or a group of individuals within an established organisation pursue entrepreneurial opportunities through innovation (Ireland, Kuratko & Morris. 2006a:10). Organisational CE is therefore the label given to the form of entrepreneurship existing within large organisations and can be defined as the entrepreneurial spirit permeating throughout the entire organisation, resulting in entrepreneurial behaviour and orientation within organisation (Chen, Zhaohui & Wang, 2005: 529).

Intrapreneurship, a subfield of corporate entrepreneurship, can be generally defined as entrepreneurship in existing organisations, with the main focus upon the individual entrepreneur within an existing organisation. (Antoncic & Hisrich, 2003 a:7). The individual corporate entrepreneur, defined and more commonly known as the intrapreneur, has been a successful catalyst in the initiation of innovation and creation of a beneficial, and often more profitable organisational revival (Zhao, 2005:36). Intrapreneurship involves the employees (individuals and teams) working within the existing organisations who identify new ideas and opportunities, and transform these into profitable, commercial successes (Maes 2003:24; Shepherd & Krueger, 2007:176). These intrapreneurs share the same characteristics of their independent entrepreneur counterparts, the only aspects which differ in comparison are the environment in which they operate, and the associated risk (Thornberry, 2003:330). The environment is that of an established organisation, enabling them greater accessibility to resources, yet less autonomy while the organisation bears the associated risk. Corporate venturing can best be described as a business development strategy that aims to create new business for the parent or host organisation, and is often used as a means to encourage corporate renewal and rejuvenation therein (Husted & Vintergard, 2004:297). Corporate venturing characterises the promotion of internally or externally originated ventures, the soul purpose of these ventures is to pursue both strategic and financial goals from which the parent organisation is able to benefit (Little, 2002:4). External corporate ventures are established outside of the parent organisation and primarily focus on opportunities identified outside the host organisation, and the core commercial focus of the organisation (Birkinshaw & Hill, 2003:247). Internal corporate ventures on the other hand can be defined as businesses that are created, grown and owned by the parent organisation (Morris, Kuratko & Covin, 2008:81). This type of venture unit focuses on opportunities which have been identified within the organisation, and are closely linked to the core commercial focus and objectives of the organisation (Rajagopal, 2006:704).

For the intended purpose of this study corporate entrepreneurship will be used in the context of describing the behaviour in large established organisations which engage in both entrepreneurial and innovative activities, as well as the promotion of entrepreneurial orientation, mindset, and culture. Due to the highly competitive nature of modern business, organisations have to constantly remain competitive in order to remain successful (Meyer, 2007:1; Shepherd & Krueger, 2007:167). According to Maes (2003:1), the higher the frequency of CE, the greater the levels of innovation and resulting competitiveness. In order to increase the frequency of CE, a supportive, fostering climate has to be established (Taylor, 2006:15). Corporate entrepreneurial climate can be defined as a set of existing internal conditions; administrative and social arrangements; and organisational stimuli that influence the behaviour of individuals in the manner in which they act, over which management has some control, and which results in the diffusion of CE throughout the organisation (Gantsho, 2006:42; Hayton, 2005: 140; Rutherford & Holt, 2007:432). The focus of this chapter is to briefly introduce and clarify the scope of the study. The corporate entrepreneurial climate of the South African banking sector will be investigated by means of testing the perceptions of employees within the South African banking sector. 1.2 Problem formulation

The inclusion of South Africa into an emerging, dynamic, free-market global economy has resulted in resurgent economic growth and has increased the business potential within the South Africa economy (Saville, Bader & Spindler, 2005:675). This has led to the introduction and increase in the number of foreign businesses and operations in the country (Petrou, 2007:377). Both these factors have ultimately shaped the competitive landscape of the economy, making it intensely competitive. Hence, local businesses have to now compete with each other, as well as international players. The flipside to this coin, however, is the expansion of South African businesses into the international arena (Saville, Bader, Spindler, 2005:689). This is apparent in the South African banking sector.

There are currently forty four international banks operating in South Africa (Reserve Bank, 2007b:1). Coupled with this is the introduction of new legislation (Basel II compliance framework and the National Credit Act), as well as continual pressure in the regulation of banking competition, which has transformed the South African banking sector into a very competitive environment, forcing banks to commit to innovation as a source of competition and competitive advantage (Planting, 2007:1) In a rapidly changing world, organisations need to continually identify new opportunities beyond existing competencies if they are to survive and remain competitive (Shepherd & Krueger, 2007:167). The banks have to maintain, and also try to increase, their respective market share through enhancing their competitive position (Martin, 2006:1). The question has to be asked: What can be done to improve the level of competitiveness of South African banks? The answer is simple - to develop forms of sustainable competitive advantage over other competitors (Bonaglia, Goldstein & Mathews, 2007:369). Competitive advantage is seen as a measure to increase the competitive stature of an organisation (Nieman, Hough & Nieuwenhuizen, 2003:85). Competitive advantage is a product of innovation, and is achieved through the continuous adoption and implementation of innovation objectives and innovative measures (Bertola & Texeira, 2003:185; Echecopar, Fetters & McDermott, 2003:2). Innovation is a strategic process and source that enables organisations to establish a position of competitive advantage (Poon & MacPherson. 2005:259). Innovation provides a basis for profit and is a resultant product of entrepreneurship (Antoncic & Hisrich, 2003a:8; Shepherd & Krueger, 2007:167). In order for banks to increase their competitive postures they have to increase their respective levels of CE (Scheepers, Hough & Bloom, 2007:239). Maes (2003:1) roughly defined corporate entrepreneurship as a tool which can be used to initiate innovation. Hence the presence of CE in existing organisations leads to a competitive advantage through established innovation, as well as organisational growth and improved financial performance (Hitt et al., 2002:173; Kuratko et al., 2001:69; Marvel, Griffin, Hebda & Vojak, 2007:753). Organisations therefore have to increase the levels of CE and CE activities in an attempt to maximise potential innovation and competitive advantages.

Corporate entrepreneurship (CE), corporate entrepreneurial behaviour, and

corporate

entrepreneurial activities are promoted and encouraged by the structuring of a CE climate which fosters and develops such directives within organisations, and stimulates CE and intrapreneurial behaviour and activities (Dhliwayo, 2007: 144; Ireland et al., 2006b:27; Kuratko & Welsch, 2001:354). Banks are like any other organisation and are no exception to this statement, thus they have to establish a CE climate if they are to foster increased levels of CE and innovation. There are climate-related organisational factors that represent and potentially encourage corporate entrepreneurship (Cates, 2007:IV). They are namely: management support, time availability, rewards and reinforcements, organisational boundaries and work discretion (Morris & Kuratko, 2002:291; Wilkinson, 2006:104). The purpose of this study is to investigate the current corporate entrepreneurial climate within the South African banking sector. This will be achieved by establishing how supportive and conducive the CE climate in the banking sector is when it comes to inducing and promoting corporate entrepreneurship, by testing employees’ perceptions within the South African banking sector. Although current studies and literature have recognised numerous corporate

entrepreneurial variables and factors, only a few have been consistent throughout. For the purpose of this study the above-identified climate-related constructs and factors will be concentrated on, namely: managerial support, work discretion, rewards and reinforcements, time availability, and organisational boundaries (Cates, 2007:IV; Morris & Kuratko, 2002: 299). 1.3 Problem statement

Due to the current competitive nature of the banking sector, SA banks are continually striving to innovate and maintain competitive postures and competitive advantages (Hedley, 2007:2; Mboweni, 2007:2). In order to do so it is suggested to develop a fostering CE climate. The main aim of this study is to investigate and explore the current corporate entrepreneurial climate within the South African banking sector.

1.4

Aim/Importance of this study

This study is exploratory in nature and will investigate the climate of corporate entrepreneurship within the South African banking sector. It will also identify variables which have a direct influence upon the CE climate. Furthermore it will also allow us to briefly evaluate how supportive the corporate environment is in the promotion of corporate entrepreneurship within the South African banking sector, which may be used for application in non-performing sectors. A study such as this can be used to establish the degree of entrepreneurial orientation and promotion thereof, and be used as a basis or foundation for a more in depth and thorough research on the same subject at a later stage. This study will focus on previously highlighted and identified variables which have an influential effect a corporate entrepreneurial climate. Thus allowing for possible suggestions to be made in terms of what steps and actions should be taken in improving and creating a more favourable climate which will result in a higher degree of CE and innovation in the South African banking sector. 1.5 Research methodology

The research design is comprised of a formal, ex post facto, design. The study is based on the four major commercial role players of the South African banking sector, namely: ABSA, FirstRand (FNB), Nedcor (Nedbank) and Standard Bank (Hazelhurst, 2004:1). These four banks constitute the sample which will be used for this study. The intention of this study was to test employees’ perceptions of the corporate entrepreneurial climate in South African banking sector. For the purposes of this study, the employees’ perceptions which will be tested will be those of middle managers and operational level employees. The time dimension was taken over the period of 60 days, thus making it a cross-sectional study (Anderson, Sweeney & Williams, 2003:7). Further statistical analysis will be conducted on all empirical data obtained, and will be used to draw inferences and descriptive statistics. The relevant propositions will be tested quantitatively.

The highest measurement of reliability and high construct validity will be pursued, while the only foreseeable limitations of the study design being used could be the lack of depth and inside perspective. Potential sources of error that can occur can be singled to and attributed to questionnaire error, incorrect answering of questionnaires, or possible data capturing errors. The measurement instrument used is known as the Corporate Entrepreneurship Assessment Instrument (CEAI). CEAI is a specific structured questionnaire and has been designed to evaluate the manner in which an individual of an organisation perceives his/her current work environment and to tap the climate-related organisational factors that represent and potentially encourage corporate entrepreneurship (Cates, 2007:IX; Morris & Kuratko, 2002:295). The CEAI has been designed to measure the five key corporate entrepreneurial variables: management support, work discretion, time availability, rewards/reinforcement, and organisational boundaries (Morris & Kuratko, 2002:295). All answered questions are measured according to the Likert scale. Results will be analysed and scrutinised according to these specific variables and scale The demographic variables have been broken into age, gender, number of years at the organisation, management level, position, highest qualification obtained, and how many years experience the individual has within the banking sector. Non-probability sampling will be used and the sample will consist of 63 respondents. The data will take the form of empirical data, and the data will be analysed descriptively as well as inferentially. Means, standard deviations, frequencies, and variances will be determined for further comment and analysis of data. Such data and results will be used to draw conclusions for the findings of the study. 1.6 Demarcation of chapters

Chapter one: The first chapter, as above mentioned, provides a background and introduction to this study and the associated problem, as well as a condensed version of the methodology which will be used for this study.

Chapter two: This chapter is primarily the literature review for this study. The literature used is done so as to provide a clearer insight into the study, and a better conceptualisation of the associated variables and constructs of the study, as well as to substantiate and support the propositions of this study. A brief discussion of the South African banking sector and its associated history and trends, will be given in this chapter. All the related constructs which make up the theory of corporate entrepreneurship will be discussed, defined, explained and explored, in order to provide a clearer understanding of the study and the associated variables. All other related elements which are pertinent to this study will also be explored and elucidated for the same reason. Chapter three: The third chapter will contain all the associated research methodology used in the study. An exact explanation will be given in terms of the aims and objectives of the study, the research design, research sample, and the methods of data collection and analysis. A detailed description of the questionnaire used will be given in this chapter. Chapter four: The forth chapter will contain all the findings of the study, comprising of all the relevant, interpreted data which will be commented on and explained. Chapter five: The final chapter will contain an overall conclusion of the study. Areas of interest, specifically areas of corporate entrepreneurship, within the South African banking sector will be highlighted, explained, and recommendations given. 1.7 Conclusion

This chapter serves as a brief overview of the study. It has introduced corporate entrepreneurship, its relevance as well as importance in any organisation, with a focus on South African banks. In this chapter CE and its relative construct have been introduced briefly and discussed, highlighting the influential effect it has on organisations. More importantly the relationship and link between CE and innovation has been established. The link will be used as a basis, in context of the South African banking sector, to investigate the corporate entrepreneurial climate within the sector.

In this chapter it is explained how the state of corporate entrepreneurial climate in the South African banking sector will be investigated and evaluated by employees’ perceptions of it. After all the data has been collected and evaluated results will be used to identify influential areas of CE which can affect the CE climate. Areas of importance and value will be discussed and recommendations will be given with the purpose of increasing levels of CE by improving entrepreneurial climate within the South African banking sector.

CHAPTER 2 LITERATURE REVEIW

The purpose of this chapter is to give an extensive review of the relative constructs and factors associated with corporate entrepreneurship. This will be achieved using all applicable literature to define, explain and elucidate the constructs and factors associated with corporate entrepreneurship and the establishment of a corporate entrepreneurial climate. The literature in this chapter will be used to create foundation for this study. 2.1 Defining Entrepreneurship

Entrepreneurship, entrepreneurial thinking and entrepreneurial actions are changing the way business is conducted at every level and in every country (Kamffer, 2004:1). Entrepreneurship is both an individual and organisational behavioural phenomenon which is fast gaining recognition as an important element in economic growth, as well as an effective means of attaining a sustainable competitive advantage; and positive financial returns for both independent business ventures and organisations alike (Antoncic & Hisrich, 2003a:8; Scheepers, Hough & Bloom, 238:2007; Urban, 2007:91). The term entrepreneurship originates from the French word "entreprendre" and the closely related German word "unternehmen”, both these words mean to "undertake" (Anderson, 2003:1). The entrepreneurial mindset denotes a way of thinking about business and its opportunities that capture the benefit of uncertain dynamic environments (Dhliwayo, 2007:144), and revolves around the actions associated with the perceiving of opportunities and “undertaking” the creation of means to pursue them (Nieman, Hough & Nieuwenhuizen, 2003:9), whether it be in an individual capacity or in an organisational context (Antoncic & Hisrich, 2003b:8). Entrepreneurship involves a process of creating value by bringing together a unique combination of resources to exploit an opportunity (Morris, Kuratko & Covin, 2008:10; Schumpeter, 1934:74).

The process of entrepreneurship can be summed up as the undertaking of all the functions, activities and actions associated with the identifying of opportunities; the creation of methods and organisations which are harnessed to exploit and seize these opportunities for commercial gain; through a process of innovation (Anderson, 2003:1; Jones, 2005:502; Kuratko & Hodgetts, 1989:47). From a Schumpeterian point of view entrepreneurship is the key catalyst which is needed for innovation to occur and it is a critical component of the entrepreneurial process (McFadzean, O’Loughlin & Shaw, 2005a:350; Wickham, 2001:9). According to Ireland, Kuratko and Morris (2006a:10) entrepreneurial behaviour is the foundation for organisational innovation in which competitive advantages are grounded. Entrepreneurship is thus equated with the concept of innovation, stating that if innovation was present it constituted entrepreneurship (University of Colorado, 2007:1). Innovation lies at the heart of entrepreneurship (Wickham, 2001:57), and entrepreneurship is termed as the act of innovation, inside or outside an existing business (Kamffer, 2004:11). Innovation is the most relevant factor linking entrepreneurship to economic and organisational growth (Wennekers & Thurik, 1999:34) Entrepreneurship, in a nutshell, can be described as dynamic process of pursuing an opportunity and creating incremental wealth and value (Echecopar, Fetters & McDermott, 2003:2). Exploiting an opportunity, whether through an independent personal capacity, or through an organisational capacity, constitutes the core of entrepreneurship (Antoncic & Hisrich, 2003a:8; Hitt, Ireland, Camp & Sexton, 2002:6). Key elements of entrepreneurship include adaptability, flexibility, speed, aggressiveness, risk taking, and innovativeness (Kuratko & Morris, 2002:15; Zhoa, 2005:26). Below is a list of some additional dominant characteristics of entrepreneurship and entrepreneurs synthesised and compiled by Kirby (2003:210): • • • • • • Innovative Proactive Able to cope with uncertainty, risk and ambiguity Goal-orientated Visionary Opportunistic

• • • •

Tolerant of Failure Flexible Informal Committed to growth

In its broadest conception, entrepreneurship is a comprehensive term that captures all actions related to the discovery, evaluation, and exploitation of opportunities, in the process of value creation. 2.1.1 Defining the entrepreneur The entrepreneurial process always involves teams and individuals (Morris, Kuratko & Covin, 2008:167). The entrepreneur is an individual who carries out the effective application of a number of enterprising attributes such as: creativity and innovation; new combinations; taking proactive initiative; responsibility and autonomy; managing risk and uncertainty; dogged determination and persistence; creating new novel innovations; developing solutions to problems; and focusing on new, fresh and ground-breaking activities (Business Network, 2007: 1; Gantsho, 2006:24; Johnson, 2001:137 ; Pirich, Knuckey & Campbell, 2001:4; Schumpeter, 1934:74). Entrepreneurs are the people who identify an opportunity, gather the required resources, or effectively arrange new combinations of the resources they have, and create and grow a business venture to meet these needs. They bear the associated risk of such an undertaking, yet are rewarded with the profits if it succeeds (Nieman et al., 2003:9). “Schumpeter positioned the entrepreneur as an agent of change, whose creative behaviour in terms of different innovation aspects was seen as a creative disruption” (Antoncic and Hisrich, 2003:8). Being innovative is therefore a prominent personality trait of entrepreneurs, and it is safe to classify the entrepreneur as an innovator (McFadzean et al., 2005a; Wickham, 2001:9).

2.2

Corporate entrepreneurship

Entrepreneurship does occur in large companies and organisations and manifests in the form of corporate entrepreneurship. Much like the field of entrepreneurship itself, a considerable degree of ambiguity surrounds the corporate entrepreneurship (CE) construct. While it is beyond the scope of this paper to resolve these issues, it is important to clarify, define and conceptualise the CE construct. It is also imperative to explore and define other pertinent aspects which are closely related and fall under the umbrella of CE, which include organisational corporate entrepreneurship, intrapreneurship and corporate venturing (Antoncic, 2006:59; Morris, Kuratko & Covin, 2008:11). Corporate entrepreneurship is the term referring to a multidimensional phenomenon incorporating the presence of entrepreneurship and entrepreneurial behaviour within an established organisation; encompassing innovative, proactive, or risk-seeking behaviours; in both formal and informal structures; where the organisation is holistically described as being entrepreneurial; and where the entrepreneurial spirit permeates throughout the entire organisation (Birkinshaw, 2003: 3; Chen, Zhaohui & Wang, 2005:529; Doh & Pearce II, 2004: 648; Gantsho, 2006:3; Kamffer, 2004:14; Morris et al., 2008:11; Scheepers, Hough & Bloom, 240:2007). Expanding upon this definition CE can be defined as a process through which individuals within an established organisation pursue entrepreneurial opportunities, through innovation, without regard to the level of resources currently available (Bhardwaj & Momaya, 2007:134; Ireland, Kuratko & Morris. 2006a:10). The function of CE is to seek feasible opportunities, utilise the resource base to pursue and exploit the opportunities, with the aim of creating additional value (Teng, 2007:123), and CE is a result of entrepreneurial culture, behaviours and activities, or a combination of all three within the organisation (McFadzean et al., 2005a:350). Generally speaking the main objective of corporate entrepreneurship is to utilise and harness the successful characteristics of smaller entrepreneurial businesses and organisations, and apply them to larger, more established organisations (Maes, 2003:20). This was supported by Thornberry (2003:330) who elaborated on this by stating that corporate entrepreneurship is merely an attempt to take the mindset, skill and entrepreneurial culture of an independent, individual entrepreneur and inculcate these characteristics into the cultures and activities of a larger organisation, in order to achieve

the same resultant effect. For the purpose of study, the term corporate entrepreneurship (CE) will be used to describe entrepreneurial behaviour within an already established organisation. Corporate entrepreneurship is not confined to a specific industry, sector or particular organisational size, and is not dependent on the stage in the organisation’s life cycle (Kamffer, 2004:15; Zhoa, 2005: 28). Hence, CE can happen in any organisation, at any time and often acts as a reenergising factor for the organisation through the utilisation and acquisition of innovative skills and capabilities (Åmo & Kolvereid, 2005:9; Morris et al., 2008:11) In order to remain competitive, organisations have to continually utilise these innovative skills and capabilities to discover new methods through which they can create, increase and maintain levels of competitive postures (Bhardwaj & Momaya, 2007:134; Maes; 2001:1). As a business tool CE stimulates business rejuvenation and revitalisation, development, revenue growth, profitability, pioneers the development of new products, services and processes through innovation (Nayager & Van Vuuren, 2005:29; Pirich, Knuckey and Campbell, 2001:1; Scheepers et al., 2007:240). CE acts as the spark and catalyst which is required to assist the organisation to become more dynamic and more competitive, by changing their competitive profile through innovation (Goosen, De Coning & Smit, 2002b:21; Kellermanns &Eddleston, 2006:809; Nayager & Van Vuuren, 2005:30). There is a positive relationship between the CE and financial performance, and all these factors lead to greater levels of profitability and competitive standing for the organisation (Goosen et al., 2002b:26; Maes; 2003:1; Michalski, 2004:4;). In addition to this, CE acts as a mechanism to leverage the existing resources and competencies within an organisation, to achieve new and increased levels of innovation, resulting in optimal opportunity realisation and value creation (Michalski, 2004:8). CE, for that reason yields above-average returns and is a means to creating a sustainable competitive advantage, and superior organisational performance culminating in the promotion of corporate competitiveness (Dess, Lumpkin & McFarlin, 2005:147; Gantsho, 2006:3).

CE can be broken down into three closely, interrelated categories, which form the basis for corporate entrepreneurship (organisational within an organisation: individual (intrapreneurship); (corporate organisation entrepreneurship); and environment

entrepreneurial climate) (Gantsho, 2006:30; Kuratko & Hodgetts, 1989:47; Michalski, 2004:7; Pirich et al., 2001:10). Figure 1: Categories of Corporate Entrepreneurship

INDIVIDUAL

ORGANISATION

ENVIRONMENT

Source: Adapted from Adonisi, 2003:24 From the above characteristics it can be concluded that corporate entrepreneurship, for the most part is an organisational process and that businesses with an entrepreneurial orientation are innovative, proactive, and prepared to take risks. Corporate entrepreneurial organisations are by definition more proactive than traditional organisations. Their quick market response therefore gives them added competitive advantage (Bhardwaj & Momaya, 2007:131). 2.2.1 Defining the intrapreneur

Corporate entrepreneurship is an area of growing research, to which intrapreneurship is a closely related subfield. Intrapreneurship can be roughly defined as the science of the individual entrepreneur within an existing organisation (Antoncic and Hisrich, 2003a:7). Individuals and employees that exercise entrepreneurial orientation and insight are referred as intrapreneurs (Åmo & Kolvereid, 2005:10; Michalski, 2004:7; Pirich et al.,, 2001:10).

Intrapreneurs are corporate entrepreneurs and can be defined as individuals who promote entrepreneurial activities, innovation and organisational change by championing new and fresh ideas and outlooks, while at the same time mobilising support for the acceptance and willingness to adopt change within established organisations (Jones, 2005:491; Kamffer, 2004:15; Maes, 2003:24; McFadzean et al., 2005b:400). Intrapreneurs share the same characteristics of their independent counterparts, with the only significant difference being the environments in which they operate, and their risk associations (Thornberry, 2003:330).

Intrapreneurs are creative and resourceful individuals by nature who are comfortable with ambiguity, uncertainty and risks, and don’t mind long lead times. They are also highly motivated by problem-solving, thus, they can’t be appointed they have to be volunteers (Morris & Kuratko, 2002:236). From a Schumpeterian point of view the intrapreneur is seen as the heart of the organisation and acts as a catalyst for innovation, developing new innovative ideas, and innovations (Hellstrom, Jacob & Malmquist, 2002:175; Hitt et al., 2002:8). The role of the intrapreneur is to systematically generate innovations in the shape of new successful products, services, processes, new technologies, and new business, as well as to maximise all levels of efficiency within an already established organisation (Goosen et al., 2002a:26; McFadzean et al., 2005b:400; Michalski, 2004:7). Corporate entrepreneurs use basic management procedures and skills, while embracing behavioural attributes and style that challenges contemporary bureaucracy, by being prepared to break organisational rules and challenge norms to implement change and pursue potential opportunities (Barringer & Bluedron, 1999:429; Jones, 2005:491; Wickham, 2001:389). Intrapreneurs are determined, take decisive action and decisions. They are the corporate risk takers and due to their dedication and commitment they see projects through until completion (Kamffer, 2004:72).

Figure 2: An illustration of corporate entrepreneurship and intrapreneurship

Answer to a request

Corporate Entrepreneurship INNOVATION BEHAVIOUR AMONG EMPLOYEES Intrapreneurship Self-determined

Source: (Åmo & Kolvereid, 2005:10) As seen in Figure 2.2.1 innovation and CE must initially be encouraged by a “top-down” approach and entrepreneurial strategy implemented by top management. Whereas intrapreneurship on the other hand, conversely, has the opposite origins where many of the best ideas are self-determined and come from the “bottom-up”. Individual employees exercise entrepreneurial and innovative behaviour (Åmo & Kolvereid, 2005:10; Dess et al., 2005:149). Intrapreneurship is the process of creating innovation and pursuing potentially feasible opportunities within an organisational setting, through the adoption and replication of the mindset and approach of independent entrepreneurs, by the individual employees of an organisation. (Thornberry, 2003:331).

2.3

Corporate venturing

In modern organisations there is a management dilemma of how to foster and encourage innovation and CE from within. Corporate venturing is a simple answer to this problem and is regarded as a vehicle and a means for identifying new trends, technologies, markets, and opportunities, as well as a means to fostering of entrepreneurial activity (Hellstrom, Jacob & Malmquist, 2002:172; Little, 2002:34). The traditional definition of corporate venturing (CV) pertains to the fostering of new young ventures by larger, more established parent organisations (Little, 2002:3).

Corporate venturing is focused on new opportunities for growth (Teng, 2007:119), therefore CV acts as a business development strategy. Strategic corporate venturing aims to create new businesses for the parent organisation and is often used as a means to encourage corporate renewal and rejuvenation therein as it stimulates and increase levels of innovation (Husted & Vintergard, 2004:299). Corporate venturing can be used by an organisation to increase its knowledge base, to strengthen its ability to innovate, and is a powerful supplement to own research and development (Little, 2002:11). Corporate venturing activities involve substantial risks, but also have the potential for extraordinary returns (Hayton, 2005:137). Gompers (2002:2) made light of the fact that the corporate ventures have, on average, been more profitable and successful than independent ventures. He attributed this to the flexibility and adaptability, through innovation, of corporate ventures and the pool of resources (both financial and human) at their disposal. Little (2002:6) is of the opinion that there are two main types of corporate ventures, and both are differentiated by their reasons for existence. The author believed one is a financially motivated corporate venturing, and this type of venturing has the sole objective of rapidly increasing the financial gains and position of the parent organisation. The second type is strategically motivated corporate venturing, and is primarily involved in the increasing of value in the organisation. This can take the form of new skills and expertise, or even a new direction of business operations and activities. (Birkinshaw & Hall, 2005:252; Little, 2002:6). The highest form of sustained profitable growth comes from when an organisation expands and pursues avenues of operations and business which differ from its core business activities (Zook & Allen, 2003:2). Corporate venturing acts as a means to exploit this because it involves the starting of new business ventures within an established organisation, usually stemming from totally different core competencies and activities of the host organisation (Thornberry, 2003:330). Corporate venturing provides for an alternative medium to pursue other business opportunities and facilitate continuous growth by harnessing high levels of innovation and cutting-edge technologies, as well as intense levels of skills and entrepreneurial flair (Rajagopal, 2006:704). CE and innovation are generated from both internal and external

sources (Morten, Neubaum & Gabrielsson. 2005:315), therefore CV is used as a means to encourage corporate renewal and rejuvenation within an organisation, and takes the form of both internal and external corporate venturing (Birkinshaw and Hill, 2005:247; Husted & Vintergard, 2004:297; Little, 2002:3; Thornberry, 2003:330). 2.3.1 Internal corporate venturing Morris et al., (2008:81) define internal corporate venturing as new business creation, grown and owned by the parent organisation. The authors are of the opinion that internal corporate ventures generally fall within the parent organisation’s organisational structure, either as additions to pre-existing sections or as totally new entities. Internal corporate venturing can thus be defined as the establishment of a separate entity within itself in order to enter new markets or develop entirely new products or services (Rajagopal, 2006:704; Zahra, Jennings & Kuratko, 1999:52). 2.3.2 External corporate venturing This type of corporate venturing focuses on external opportunities, outside to the organisation and refers to entrepreneurial activity in which businesses are created by parties which do not form part of the host organisation; which are ventures separate from the original organisation; and are subsequently invested in or acquired by the parent organisation (Morris, Kuratko & Covin, 2008:81; Zahra et al., 1999:52). External ventures often take on the form of independent start-ups (Birkinshaw & Hill, 2005:247). Often it is more beneficial for the organisation to pursue a combination of both the internal and external opportunities than to focus purely on one type of corporate venturing. This is known as cooperative corporate venturing or joint corporate venturing, and it has recently become very popular among larger organisations. It refers to the entrepreneurial activity in which business are started and owned by both the organisation and external parties (Birkinshaw & Hill, 2005:247; Morris et al., 2007:81).

2.4

Corporate entrepreneurial culture

Organisational culture is a very powerful governing dynamic of the organisation and can be seen as “a social energy that drives or fails to drive a firm” (Ireland et al., 2006a:16). Organisational culture is often referred to as “the way we do things around here” (Zhao, 2005:29), and can best be defined as a set of expected behavioural patterns, beliefs, norms and value (Nieman et al., 2003:81; Logenecker, Moore & Petty, 2003:377). A CE culture forms the foundation for corporate entrepreneurship and entrepreneurship within an organisational context (Gantsho, 2006:65). The implications of this framework suggest that culture and beliefs act as catalysts rather than causal agents of entrepreneurial outcomes. Essentially this means that there has to be an established culture to enable a conducive CE climate, which in turn fosters and encourages increased levels of CE within a favourable environmental setting (Pirich et al., 2001:11; Urban, 2007:91). The first step to establishing an entrepreneurial culture is securing the commitment and support of management (Gantsho, 2006:58). Once management is committed and is supportive of a CE culture within the organisation employees are persuaded to both act and think entrepreneurially within the business environment (Kirby, 2003:211). This is very influential in the promotion of corporate entrepreneurship as it stimulates creativity, new opportunity identification, innovation and encourages employees to take the initiative and to think “outside the box” (Ireland et al. 2006b:27; Gantsho, 2006: 65; Pirich et al., 2001:11; Zhao, 2005:29). Morris et al., (2008:252) considered culture to be comprised of substance and forms. Substance refers to the shared system of expected values, beliefs and norms, while forms refer to the ways in which substance is manifested throughout the organisation. Culture substance refers to the shared beliefs, values and doctrines within the organisation. These doctrines are logically integrated sets of beliefs that create a shared, combined meaning throughout the organisation (Adonisi, 2003:28). While culture form, serves as a control mechanism that guides and shapes the attitudes and behaviours of employees, and takes the form of the ‘social glue’ which binds the organisational members into a cohesive entrepreneurial unit (Nayager & Van Vuuren, 2005:31)

Table 1: Components of an Entrepreneurial Culture: Three Perspectives Timmons (1999)
Clarity, being well-organised High standards, pressure for excellence Commitment Responsibility Recognition Espirit de corps

Cornwall and Perlman (1990)
Risk Earned respect Ethics, integrity, trust and credibility People Emotional commitment Work is fun Empowered leadership throughout firm Value wins Relentless attention to detail, people, structure, and process Effectiveness and efficiency

Peters (1997)
Listening Embracing change Customer focus Total integrity Excellence Involve everyone in everything Experimentation Fast-paced innovation Small starts and fast failures Visible Management Measurement/ Accountability

Source: Morris, Kuratko & Covin (2008:259) Table 2.4 presents a synopsis of the work done by the respective writers on influential elements which shape an organisational culture, which fosters innovation and CE. According to Morris et al. (2008:259) these can be synthesized, resulting in the essential elements required in the establishment of a conducive and successful entrepreneurial culture: • • • • • • • • Focus on people and empowerment Value creation through innovation and change Attention to basics Hands-on, involved management Doing the right thing Freedom to grow and to fail Commitment to personal responsibility Focus on the future and a sense of urgency

When an organisation adopts an entrepreneurial culture, the employees increase their ability to act entrepreneurially, and this is further complimented by the development of a supportive corporate entrepreneurial climate (Ireland et al.2006a:16). 2.5 Corporate entrepreneurial climate

In order to stimulate CE in organisations the CE culture has to work in conjunction with the correct complimentary organisational CE climate (Ireland et al. 2006b:27). The environment, rather than the individual determine the employees' involvement in CE, innovation, and change, meaning that the fostering of a CE climate in organisations stimulates CE, because individuals are encouraged to engage in innovative and entrepreneurial activities freely. (Åmo & Kolvereid, 2005:9; Dess et al., 2005:149; Ireland et al. 2006b:27; Kuratko & Hodgetts, 1989:66). Corporate entrepreneurial climate can be defined as a set of existing internal conditions; administrative and social arrangements; organisational stimuli that influence the behaviour of individuals in the manner in which they act, and over which management has some control, and which results in the diffusion of CE throughout the organisation (Gantsho, 2006:42; Hayton, 2005: 140; Rutherford & Holt, 2007:432). A corporate entrepreneurial climate is based upon the organisation’s openness to new ideas and willingness to take risks, as well as the extent to which intrapreneurs are recognised, appreciated and supported (Taylor, 2006:15). The consequence of this is a direct relationship: the higher the employees’ perception of a supportive CE climate, the greater the levels of intrapreneurship and corporate entrepreneurial activity (Kuratko & Welsch, 2001:354). The identification of CE characteristics needs to be done so that organisations can focus on these characteristics in order to develop an entrepreneurial climate (Adonisi, 2003:24). Management has control over the organisational factors, which have a direct influence on the CE climate. Climate is therefore top management’s commitment to establishing an environment conducive to the creation and development of corporate entrepreneurship (Dhliwayo, 2007: 144; Ireland et al. 2006b:27). Factors such as management support, time availability, rewards and reinforcements, organisational boundaries, and work discretion are all assumed to affect the corporate entrepreneurial climate of an organisation (Morris & Kuratko, 2002:291; Wilkinson, 2006:104).

2.6

Organisational areas of influence

In order to foster successful innovation and corporate entrepreneurship, management has to be flexible and support employees by giving them a certain degree of autonomy and responsibility, provide adequate time and resources for innovation, as well as rewards for successful innovation and intrapreneurial activities (Nayager & Van Vuuren, 2005:32). There have been 5 main factors which have been identified and highlighted as factors which dictate and influence the corporate entrepreneurial climate, and how supportive an organisation is of CE (Hornsby et al., 2002:267; Ireland et al., 2006b:25; Kuratko & Morris, 2002: 295). They are namely: • • • • • Management Support Organisational boundaries Rewards and reinforcement Time availability Work discretion and autonomy

Figure 3: The 5 influential factors of corporate entrepreneurship

COPORATE ENTREPRENEURSHI P

Man age men t sup port

Org anis atio nal bou ndar ies

Rew ards and reinf orce men ts

time avai labil ity

WO RK DIS CRE TIO N

Source: Own compilation

These 5 factors form the basis of the CEAI (Corporate entrepreneurial assessment instrument) which is used to test how supportive an organisation is of CE, ultimately the corporate entrepreneurial climate within an organisation (Kuratko and Morris, 2002: 295). Intrapreneurs are very dynamic people and often leave the larger organisations to pursue their own interests and ideas by themselves, rather than the achievement of corporate objectives. This often happens because these entrepreneurially minded individuals become frustrated by the exhaustive bureaucratic process and systems of the organisation. Another contributing factor of the loss of these intrapreneurs is the lack of sufficient or adequate compensation (Kirby, 2003:302). 2.6.1 Management support Management support is defined as the willingness of top level management to facilitate and promote both corporate entrepreneurial behaviour and activities within an organisation; including the championing of innovative ideas and providing the resources intrapreneurs require to take entrepreneurial actions (Bhardwaj et al., 2007:51; Ireland et al. 2006b:27) According to Thompson (2004:1082) the main reason behind the failure of CE is that intrapreneurs do not receive the required support from management, and are unable to develop their true entrepreneurial potential. Successful corporate entrepreneurship is initiated from management and management tends to adopt a mentorship role to create, support and encourage CE and entrepreneurial behaviour within the organisation, as managerial values will also influence which strategic objectives are pursued, in this case CE objectives (Åmo & Kolvereid, 2005:9; Hayton, 2005: 140; Kamffer, 2004:100). Rutherford & Holt (2007:431), identified management support as one of the crucial variables of successful CE implementation. Management support captures the introduction, support, encouragement and willingness of managers to facilitate entrepreneurial activity within an enterprise (Kamffer, 2004:4; et al., 2007:242)

Support can take many forms, including championing innovative ideas, providing necessary resources or expertise, or institutionalising intrapreneurial behaviour and activity within the organisation’s systems and processes (Hornsby et al., 2002:255). In order to achieve this, management’s role is not only direct, but also influential, thereby shaping managerial processes and resource deployments (Bhardwaj & Momaya, 2007:133). Levels of CE are highest when controls are very informal, and where management encourages uncertainty, promotes risk tolerance, encourages focused experimentation, and empowers employees to act entrepreneurially (Morris, Allen, Schindehutte & Avila, 2006:476). Within the CE context, positive perceptions about the organisation and its management’s supportive nature will positively influence employees’ receptivity towards the organisational efforts to introduce and implement CE, causing employees and intrapreneurs to act more entrepreneurially (Rutherford & Holt, 2007:433). While all managerial behaviour and influence is critical to attaining CE success, successful corporate entrepreneurship hangs on the dependence of middle managers (Kuratko et al., 2005:699). For the purposes of this middle management will be deemed to fall under management support, and hence will be explored. 2.6.1.1 Middle Management Management, especially middle management, have a key role in supporting and promoting CE (Hornsby et al.,). They are responsible for the identification and exploitation of opportunities, as well as providing unwavering support for CE throughout the entire organisation (Kamffer, 2004:76). Middle managers (middle management) have a very influential and supportive role when it comes to fostering entrepreneurial behaviour, and they are able to influence all facets of the organisation, as they are less vulnerable to organisational boundaries (Hornsby, et al., 2002:260). The role of middle managers is to initiate and lead CE (Srivastava, Singla & Chaturvedi, 2004:62), and to focus on effectively communicating information between the firm’s two internal stakeholders: top managers and operational level employees. (Kuratko et al., 2005:707).

2.6.1.2 Operational Employees The most informative and often most innovative employees are the operational level (lower management) employees (Fearon, Cavaleri & Prairie, 2006:66). This is because these employees have a direct ‘hands on’ contact, hence they have direct experiences with business operations. Fearon et al. (2006:66) were of the opinion that operational level employees are the most intrapreneurial as they are in the best position to identify new opportunities, as well as to make decisions, give feedback on what works best, and what doesn’t work in practice to middle managers. Middle managers communicate their own ideas and these ideas from operational levels employees, entrepreneurial activities and innovation to upper management (Hornsby et al., 2002:256). The fact that middle managers interact with all levels within the organisation they are successfully able to convey communication about the company’s mission, goals, and priorities throughout (McFadzean et al., 2005b:402) 2.6.2 Organisational boundaries In order to have a successful corporate entrepreneurial climate in an organisation employees must be encouraged to diversifying their skills by operating outside of their specified job descriptions (Ireland et al. 2006b:28). This can be done by talking and interacting with people in other departments and by pursuing areas of interest, and can only be supported by fewer and more flexible organisational boundaries (Bhardwaj & Momaya, 2007:136). Organisational boundaries can be referred to as the precise confines and structures implemented by respective organisations. These boundaries form expected measures of organisational work and become mechanisms used for evaluating and bench marking (Ireland et al. 2006b:28). Boundaries can be real or imaginable and could either prevent or encourage employees to act entrepreneurially or not (Adonisi, 2003:31). Researchers have identified fewer and flexible organisational boundaries as critical for the success of corporate entrepreneurship (Bhardwaj & Momaya, 2007:136).

Organisational boundaries are enforced through organisational structure, thus the structure needs to have fewer boundaries to be supportive of innovation and entrepreneurship (Gantsho, 2006: 59). Formal centralised structures have many boundaries and layers, they tend to also be very bureaucratic and restrictive in nature (Adonisi, 2003:32; Goosen, De Coning & Smit, 2002b:22). Hierarchical and elongated structures tend to create an old “one-way top-down” approach with many different boundaries that smother CE development, leading to opportunity loss identified in lower organisational levels (Srivastava et al., 2004:62). An organisational structure which best facilitates and promotes CE is one consisting of fewer barriers and boundaries, which is flatter; with fewer layers; decentralised; more horizontal over vertical in structural design; and a network-orientated structure which encourages entrepreneurial activities by allowing for free-flowing movement of knowledge, information and skills (Adonisi, 2003:32; Bertola & Texeira. 2003:189; Bhardwaj et al., 2007:50; Dhliwayo, 2007: 112; Hellstrom et al., 2002:173; Ireland et al., 2006a:14; Scheepers et al., 2007:242; Viswanathan & Nagarajan. 2004:20). 2.6.3 Rewards and reinforcements Our review of the literature revealed that reward structures in particular are critical for aligning individual goals with organisational goals (Rutherford & Holt, 2007:432). Intrapreneurs are goal-oriented and seek rewards, feedback, and recognition. An appropriate reward system keeps these individuals motivated and committed, constantly striving for new ideas and opportunities (Adonisi, 2003:35; Viswanathan & Nagarajan. 2004:21) The rewards and reinforcement philosophy influences the degree of continued commitment that management can expect from individuals (Nicholson-Herbert, Mkhize & Schroder, 2004:44), and develops individuals’ motivation to engage in innovative, intrapreneurial behaviour. Innovative organisations are characterised by the awarding of bonuses and rewards subject to performance, offering challenges, increasing responsibilities, and making the ideas of innovative people known to others in the organisational hierarchy (Scheepers et al., 242:2007).

Use of appropriate rewards can enhance employees’ willingness to assume the risks associated with entrepreneurial activity (Ireland et al., 2006b:28). An effective reward system that spurs entrepreneurial activity must consider goals, feedback, emphasis on individual responsibility, and results based incentives (Bhardwaj & Momaya, 2007:136). Rewards are very influential in motivating employees, and rewards can take on both financial and intangible forms (Kirby, 2003:304). Financial rewards in the forms of bonuses, incentives or resources needed for new ideas/ innovations (Ireland et al.2006b:28). Intangible rewards in the form of greater responsibility and autonomy, status through promotion, recognition, career enhancement, and social rewards (Morris et al., 2008:175). 2.6.4 Time availability Time availability involves the relationship of employees/team’s workloads and time needed for the pursuit of new innovations. It is defined as evaluating workloads to ensure that individuals have the time needed to complete workloads detailed in their job description, as well as having enough additional time to pursue innovations and opportunities (Ireland et al., 2006b:28). Employees’ jobs are structured in ways that support efforts to achieve short-term and long-term organisational goals (Bhardwaj & Momaya, 2007:131; Ireland et al., 2006b:28). Time availability becomes of greater importance when innovation is the focus. More time is needed in the successful development of innovations and CE (Gantsho, 2006: 59). Organisations need to devote “work time” to intrapreneurs to create and develop new innovative ideas. 3M is a testimony to this approach as they deliberately foster innovation and CE through people by devoting 15% of their overall “work time” to the development of employees’ new ideas, thereby cultivating organisational entrepreneurship (Thompson, 2004:1084). Researchers have emphasised the criticality of availability of time for CE, stating that in successful entrepreneurial work environments, employees are permitted to conduct creative, entrepreneurial experiments in a limited portion of their working time (Scheepers et al., 242:2007).

2.6.5 Work Discretion Work discretion refers to the degree of autonomy given for entrepreneurial efforts (Bhardwaj et al., 2007:51). Autonomy refers to employees’ discretion and the extent to which they are empowered to make decisions on the performance of their own work in the way they believe is most effective (Scheepers et al., 2007:242). The facilitation of entrepreneurship appears more consistently with role flexibility and autonomy, which can be achieved if employees are given greater responsibility and selfgovernance, thereby being empowered and able to use their own discretion whilst conducting business operations (Gantsho, 2006: 58). In the organisational environment, work discretion induces and contributes to a corporate entrepreneurial culture and climate by allowing the employees and intrapreneurs of an organisation the freedom to “break the rules”; work outside of their job description; make their own decisions and use their own judgement regarding their direct areas of activity and operations (Ireland et al., 2006b:27). People should be encouraged to diversify and develop their skills, ultimately broadening their job description. This can be done by talking and interacting with people in other departments and by pursuing areas of personal interest (Hellstrom et al., 2002:173; Ireland et al., 2006a:14; Ireland et al., 2006b:28). It should be the employees own responsibility to decide how the job should be done and this is achieved through work discretion (Ireland et al., 2006b:27). 2.7 Innovation

The modern day organisations are faced with slow growth, commoditisation and global competition, innovation is an extremely, influential economic multiplier an effective solution to this ever-growing dilemma (Hitt, et al., 2002:6; Montalvo. 2006:312; Sawhney, Wolcott & Arroniz. 2006:75). To be successful, a firm must have the capacity to innovate faster than its best competitors. Essentially, this capacity is about identifying opportunities, new ways of doing business, as well as developing new technologies and products, (Bhardwaj & Momaya, 2007:131; Teng, 2007:119).

Traditionally, innovation has been defined as the successful development and implementation of creative ideas, which initiate the creation of new, or improved products, services and technologies, resulting in some form of value creation (Hayton, 2005:33; Ireland, Kuratko & Morris. 2006a:10; McFadzean, et al., 2005a:353; Pirich et al., 2001:15; Scheepers et al., 2007:240). From an entrepreneurial perspective innovation can best be defined as the application of creativity to create, identify and exploit opportunities (Kirby, 2003:132). This organisational creativity and experimentation leads to efforts to improve or develop new resources, discover new opportunities, or novel solutions. The net result of this approach is the improvement or development of new products, new services, or improved technological processes (Dess et al., 2005:150; Lassen, Gertsen & Riis, 2006:361; Teng, 2007:122). Innovation is currently recognised as a key means of initiating change and from a broad, organisational perspective, innovation can consequently be referred to as the creation of substantial value by creatively initiating some form of change in the dimensions of the organisational business systems (Montalvo, 2006:312; Pirich et al., 2001:11; Sawhney et al., 2006:79). This change often comes in the form of applied research in one or more dimensions in the organisational business systems, allowing for the successful transfer of new opportunities and knowledge into new commercially feasible products and processes (Gantsho, 2006:25). It focuses on developing new resources and capabilities that offer growth potential, and tends to be the most important and influential driver of organisational performance and growth (Antoncic, 2006:59; Teng, 2007:122; Zhoa, 2005:28). It should also be noted that, as with all business operations, such changes and the innovation process is also susceptible to failure, hence involves some degree of risk, but has the potential for extraordinary returns (Hayton, 2005: 137; Kamffer, 2004:83). Another key feature of innovation is its knowledge orientation, as it deals with generating know-how for doing things differently, this results in greater effectiveness and efficiencies for the organisation (Ireland et al., 2006a:10; Teng, 2007:131).

The main goal or purpose of innovation within in an organisation is for the entire organisation and its employees to work proactively in locating or identifying new ideas and opportunities which, once exploited, will render an increase and added value to the organisation. An organisation’s innovativeness is positively correlated to its ability to identify applications, products and opportunities, and to also commercialise them for profitable success (Poon & MacPherson, 2005:270). Innovations can be distinguished in three forms: (1) Product/service innovation- the development of new and improved products and services, (2) Process innovation- the harnessing and implementation of new technologies in business activities, and (3) Organisational innovation- the establishment of new organisational structures and administrative systems (Morten et al., 2005:316). Product/ service innovation: This is the organisation’s pursuit to create new products and services by means of radical innovation, or the improvement of existing products and services by means of incremental innovation (Canibano, Garcia-Ayuso & Sanchez, 2000:331). This is often the area of the most concentrated focus and need for innovation (Morten et al., 2005:316). Process innovation: represents the organisation’s effort in introducing (radical innovation) or improving (incremental innovation) the methods, processes, and procedures in which business operations and activities occur. Often the main objective with process innovation is increasing the overall organisational innovation and efficiency (Morten et al., 2005:316; Pirich et al., 2001:15). Organisational innovation: reflects on an organisation’s attempt to encourage and promote innovation through various organisational structures and systems (Poon & MacPherson. 2005:270). The organisation’s structure, decision making procedures, and reward systems, as well as training programs can be changed to make the innovation process easier, by the introduction of effective administrative systems to foster innovative and entrepreneurial behaviour (Morten et al., 2005:316).

2.8

Corporate entrepreneurship, innovation and competition

2.8.1 Entrepreneurship and Corporate Entrepreneurship The greatest most significant factors differentiating entrepreneurship and corporate entrepreneurship are the respective environments in which they work and the associated risk they deal with (Thornberry, 2003:330). CE is the process of creating innovation and pursuing potentially feasible opportunities within an organisational setting, through the adoption and replication of the mindset and approach of independent entrepreneurs, through the individual employees of an organisation (Thornberry, 2003:331).

Entrepreneurs and intrapreneurs share the same personality traits, qualities and characteristics (Pirich et al., 2001:10; Thornberry, 2003:330). Both entrepreneurship and intrapreneurship are fairly grounded in innovation, and both entrepreneurs and intrapreneurs actively engage in innovation and are catalysts for the innovation processes. (Åmo & Kolvereid, 2005:10; Hellstrom et al., 2002:175; Hitt et al., 2002:8; Ireland et al., 2006a:10; Zhoa, 2005:28) Therefore it is logical to assume that corporate entrepreneurs think, act, and behave in the same manner as their independent counterparts. 2.8.2 Corporate Entrepreneurship and Innovation Innovation cannot be ignored as a defining element of both intrapreneurship and entrepreneurship. Innovation is the most relevant factor linking any form of entrepreneurship to economic and organisational growth (Wennekers & Thurik, 1999:34). CE and innovation are increasingly understood as the basis for wealth and value creation within larger organizations (Echecopar et al., 2003:2). There are strong complimentary interdependencies and direct relationship between corporate entrepreneurship and innovation (McFadzean et al., 2005b:402; Zhoa, 2005:34). There is a definite, positive relationship between entrepreneurship and innovation (Åmo & Kolvereid, 2005:16; Bhardwaj & Momaya, 2007:131; Lassen et al., 2006:359).

According to Ireland et al. (2006a:10) corporate entrepreneurial behaviour is reciprocally related to innovation. This means that where innovation exists in an organisation, corporate entrepreneurial behaviour will be present (Maes, 2003:22) and where corporate entrepreneurship is found some form of innovation will also be present (Viswanathan & Nagarajan. 2004:20). Innovation can be perceived to be a focal point of corporate entrepreneurship and without corporate entrepreneurship there is no innovation (Lassen et al., 2006:361). Consequently, in order to create innovation, the organisation has to have an internal environment and climate that supports entrepreneurship (Nayager & Van Vuuren, 2005:37). CE acts as the catalyst which changes the ‘ideas’ into implemented ‘action’. 2003:132; Michalski, 2004:4). 2.8.3 Innovation and competitive advantage Entrepreneurial activities and innovations have a positive link to organisational performance (Zhoa, 2005: 28). The strength of a business is achieved by the development and maintenance of a competitive advantage, which is the development of unique opportunities through innovation (Bertola & Texeira, 2003:185). Competitive advantage is the product of innovation (Zahra & Covin, 1995: 55) and Ireland et al. (2006a:10) firmly believe that in business, innovation holds greater competitive advantage than the organisation’s physical assets. Innovation has a positive effect on firm performance. “This positive relationship stems from the reasoning that knowledge is, and innovations are, a strategic resource that enables the firm to establish a position of competitive advantage” (Poon & MacPherson. 2005:259). Competitive advantage is what distinguishes an organisation from its competitors and occurs when an organisation is able to provide something unique or superior to customers than its competitors, and is difficult for others to imitate (Nieman et al., 2003:85). The only way an organisation is able to achieve and maintain a sustainable competitive advantage is through continuous innovation (Echecopar et al., 2003:2; Goosen et al., 2002b:22; Morris & Kuratko, 2002:10). The outcome of the methodical application of CE in the marketplace, thus results in innovation (Kirby,

The level and degree of innovation in which a business is involved acts as a source of sustainable competitive advantage (Wickham, 2001:155). 2.8.4 Competitive advantage and competition In South Africa, the innovation imperative is emphasised by intensified competition (Scheepers et al., 2007:239). The competitive posture or competitive aggressiveness of an organisation refers to a firm’s predisposition to directly and intensely challenge its competitors through its competitive advantage (Lassen et al., 2006:362). Competitors can only be out-performed by the establishment of a superior organisational competitive position. This can be achieved by creation of a sustainable competitive advantage (Morris et al., 2008:8). In order to maintain a sustainable competitive advantage, organisations have to continually and constantly reinvent and improve themselves (Morris et al., 2008:8). The competitive position of an organisation is ultimately based upon the organisation’s competitive advantage/s and the rate thereof (Bertola & Texeira. 2003:185). 2.8.5 Corporate entrepreneurship, innovation and competition There is a growing awareness of the beneficial effect that both corporate entrepreneurship and innovation are having on the performances of organisations (McFadzean et al., 2005a:350). Corporate entrepreneurship and innovation are deemed to be the basis for competitive advantage (Echecopar et al., 2003:2). Zhao (2005:25) argued that in the modern business environment of rapid change the combination of entrepreneurship and innovation is imperative to sustainable competitiveness, and organisational stability. Figure 4: The relationship between corporate entrepreneurship, innovation, competitive advantage and competition

CORPORATE ENTREPRENEURSHI P

INNOVATION

COMPETITIVE ADVANTAGE

OVERALL COMPETITIVENESS

Source: Own compilation

Corporate entrepreneurship, innovation and competitive advantage have a direct relationship and a positive influence on organisational growth and performance (Hitt et al., 2002:173; Scheepers et al., 2007:238). Hornsby et al., (2002:254) explored this evident link between corporate entrepreneurship, innovation and competitive advantage. They explained that corporate entrepreneurship, through innovation, could be used as a growth strategy and a means for achieving a superior competitive position through the development and implementation of competitive advantages. Corporate entrepreneurship is becoming an increasingly important means of regulating the organisation competitive posture (Antoncic, 2006:59). CE actions can be used to exploit opportunities, through continual innovation which in turn results in the creation of sustainable competitive advantages (Bhardwaj et al., 2007:47; Kamffer, 2004:4; Kuratko et al., 2006:699). 2.9 Developing a corporate entrepreneurial strategy

It has been established that employees conduct themselves and act in accordance to strategically set objectives and goals which they need to achieved (Montalvo, 2006:312). Strategy is thus an effective means of channelling employees’ behaviour, energy, and actions and aligning them with organisational objectives (Wickham, 2001:108). Strategy can be defined as a plan of action that co-ordinates the allocation resources and commitments of an organisation to achieve its respective and goals (Longenecker, Moore & Petty, 2003:30; Wickham, 2001:163). CE can be developed through integrated management strategies (Michalski, 2004:4). The process of encompassing CE with strategic requirements for an established organisation results in corporate entrepreneurship (Kamffer, 2004:1). Ultimately a company’s strategy has a significant influence on its entrepreneurial efforts (Scheepers et al., 242:2007). A corporate entrepreneurial strategy (CES) has been recognised as an important factor in organisational growth, performance and value creation, adding to a conducive CE climate (Antoncic, 2006:49).

A CES is a bold, opportunity seeking, form of strategy that is implemented to initiate, encourage, and stimulate the development of corporate entrepreneurship within an organisation (Antoncic & Hisrich, 2003a:16; Dess et al., 2005:147; Ireland et al., 2006a:14). CES is a “vision-directed, organisation-wide reliance on entrepreneurial behaviour that purposefully and continuously rejuvenates the organisation and shapes the scope of operations by recognising and exploiting entrepreneurial opportunities that are orientated towards innovation” (Ireland et al., 2006b:21). Through a corporate entrepreneurial strategy, management is able to cultivate an entrepreneurial climate and encourage innovation within an organisation. This involves the building of appropriate flexible structures, empowering employees with an entrepreneurial mindset and skills, all of which are enforced and supported through the implementation of a CES (Åmo & Kolvereid, 2005:16; Dhliwayo, 2007: 144). Figure 5: Flowchart of the key steps in developing a corporate entrepreneurial strategy 2.8.1 Developing the vision 2.8.2 Encouraging Innovation Radical Innovation 2.8.3 Forming Venture Teams 2.8.4 Structuring for an Corporate Entrepreneurial Climate Incremental Innovation

CORPORATE ENTREPRENEURIA L ACTIVITY Source: Adapted from Kuratko and Welsch (2001:349)

2.9.1 Developing a vision The basic definition of entrepreneurial vision would be an indication of what the organisation wants to achieve, and where it wants to strategically be in the future (McFadzean et al., 2005a:365). Morris et al. (2008:167) are of the opinion that a clear organisation-wide entrepreneurial vision has to be given, accepted, and conceptualised within the organisation through strategy, for corporate entrepreneurship and all the associated benefits to flourish. They believed vision to be an initiative that comes from top management, and is conveyed through a CE strategy. 2.9.2 Encouraging innovation The successful promotion, stimulation and implementation of innovation occur through CE strategies, enabling innovation within an organisation is an important means of instigating and maintaining both CE and competitive advantage (Hoy; 2006:832). All forms of strategic CE have one thing in common: the adoption of innovation (Morris et al., 2008:88). Innovation is only made possible through the presence of entrepreneurship, and corporate entrepreneurship within an organisation. Innovation and CE are positively correlated and directly related, so in order to increase CE, innovation is encouraged and in order to stimulate levels of innovation CE objectives are pursued as part of the corporate entrepreneurial strategy (Antoncic, 2006:51; Dess et al., 2005:150; Ireland et al., 2006a:10; Kirby, 2003:212; Morris et al., 2008:167; Poon & MacPherson. 2005:270; Wennekers & Thurik, 1999:34). Innovation allows for the implementation of new products, services, processes, and technology changes. These changes are either incremental or radical in nature, and both form part of the CES (Canibano et al., 2000:331). Radical innovation is the formation of new, revolutionary and untried products, services or processes and is often very experimental and revolutionary, adding new additional product/ service lines to the organisation (Morten et al., 2005:316; Pirich et al., 2001:15). Incremental innovation is the continual improvement; routine adjustments and expansion of current operational lines of products, services and processes (Pirich et al., 2001:15; Zhoa, 2005:27).

2.9.3 Forming venture teams A venture team can be defined as a group of individuals, with different skills, knowledge and experience, that work interdependently to achieve a common goal (Gido & Clements, 2003:324). Venture teams can be seen as a form of collective entrepreneurship (Bouwmeesters, 2006:19). CE can be efficiently maximised by the inclusion of teams in the CES (Gido & Clements, 2003:328). By grouping employees into specific groups intrapreneurs are effectively able to share ideas and knowledge with other intrapreneurs and able to influence the employees who are not entrepreneurially orientated (Hellstrom et al., 2002:173). Organisational teams act with autonomy, greater responsibility and work discretion and these are factors which positively influence corporate entrepreneurship (Kuratko & Morris, 2002:295). Through teams CE is consequently permeated through the organisation as more employees are actively involved, resulting in greater levels of entrepreneurial orientation throughout the organisation (Bouwmeesters, 2006:20) 2.9.4 Structuring for corporate entrepreneurial climate The establishment of a CE climate promotes and increases levels of CE within the organisation (Dess et al., 2005:149). All the expected norms, attributes, values and attitudes are entrepreneurially orientated and motivated with a correctly structured CE climate (Adonisi, 2003:24; Taylor, 2006:15). A CE climate stimulates innovation and CE (Åmo & Kolvereid, 2005:9), and can be defined as the existing internal conditions and organisational stimuli that influence the diffusion of CE throughout the organisation (Gantsho, 2006:42; Hayton, 2005:140; Rutherford & Holt, 2007:432). Climate is the organisation’s and top management’s commitment to establishing an environment conducive to the creation and development of corporate entrepreneurship (Ireland et al. 2006b:27). A successful and complimentary CE climate acts as a stimulant which encourages and motivates employees to think and act intrapreneurially (Taylor, 2006:15). Employees must perceive that the entrepreneurial climate is one where they can engage in intrapreneurial activities freely, in order for the climate to be conducive for CE (Åmo & Kolvereid, 2005:10).

The cultivation of an entrepreneurial climate within an organisation involves the building of appropriate flexible structures, empowering employees with an entrepreneurial mindset and skills, all enforced and supported by a CES (Dhliwayo, 2007:144). Through the structuring of a conducive CE climate, by a CES, greater CE contributions and collaborations occur, as employees feel comfortable and purpose driven with a collective CE objective, resulting in a greater degree of organisational CE (Srivastava et al., 2004:58). The intended purpose of this study is to explore the CE climate within the South African banking sector. In order to give a sufficient background to the study, as well as to establish the link upon which this research is based, the following section will be on the South African banking sector, and South African banks link with innovation and CE. 2.10 South African banking sector

2.10.1 Introduction and background Since the beginning of the 1990s the South African banking sector has gone through substantial changes, resulting in a world-renowned banking industry of the highest standard able to compete internationally (FMD, 2003:1). Over the past decade new bank legislation and regulatory requirements were introduced, foreign banks entered the domestic market, competition from non-bank entities intensified (FMD, 2003:1), resulting in South Africa establishing a well-developed and well-structured banking system, which ranks ahead of those of France and Japan (Harris, 2007:1) and compares favourably with those in many developed countries and which sets South Africa apart from many other emerging market countries. South African banks are currently regulated in accordance with the principles set by the Basel Committee on Banking Supervision (Mboweni, 2004:1). This compliance framework addresses the risk sensitivity much further by allowing capital to vary according to the credit, operational, and market risk of the bank, leveraged off innovations made in risk management within the banking industry (Rosengren, 2007:36).

South Africa’s political transformation and the relaxation of exchange controls effectively opened up the South African economy and banking markets (Standard Chartered, 2007:1). Post 1994 and after amendments to the Banks Act were made (Mboweni, 2004:3), a number of foreign banks entered the country, setting up subsidiaries, branches, and representative offices in an attempt to capitalise and gain market share and be “part of the action” (Lofton, 2007:22; Martin, 2006:2). This resulted in increased competitive pressure within the South African banking sector (Hazelhurst, 2004:1). With the liberalisation of African economies, the market potential in Africa has been realised by the global economy and banks, resulting in a growing demand for value added, structural products and services in Africa (Standard Chartered, 2007:1). From a banking point of view this has led to a surge in South African and foreign banks expanding and establishing themselves on the continent (Standard Chartered, 2007:1). South African banks have started implementing operations and offices in over 18 African countries (Harris, 2007:1), resulting in a new competitive dimension for the banks. The South African economy and banking industry suffered an initial blow as a result of global instabilities in 2002. However, 2003 and 2004 saw a significant recovery in global economies, resulting in greater stability and progressive advancements within the South African banking sector (Mboweni, 2004:3). The National Credit Act came into full effect on 1 June 2007, providing for enhanced transparency, fairness and responsibility in the extension of credit. While in some instances it is likely to result in more rigorous processes in the screening of credit applications (Reserve Bank, 2007:1). The introduction of the new national credit act (NCA) and its associated legislation, as well as recent interest rate increases, greater regulation and pressure put on banks in an attempt to regulate competition, has intensified the competitive aggressiveness between banks in the sector (Geldenhuys, 2007:11). Consequently, South African banks have become more complex, it has become increasingly important for institutions to develop their own internal models and innovations to remain competitive and develop some form of sustainable competitive advantage (Rosengren, 2007:36).

As a result of all these specific changes, the South African banking sector has evolved into a highly competitive environment. In order for banks to remain competitive they have to maintain, as well as try to increase, their competitive posture and this can be achieved through constant and continual innovation (Martin, 2006:1). Innovation can be encouraged and increased through the continual adoption of corporate entrepreneurial orientations and mindsets (Zhao, 2005:25). 2.10.2 Current competitive climate in the South African banking sector According to the annual report by the South African Reserve Bank, the HerfindahlHirschman index - a measure of concentration and competition in the banking system, taking into account both the size and number of institutions - worsened from 0.182 in 2004 to 0.184 in 2005. The higher the index the weaker the competition and the higher the levels of concentration in the banking system (Mafu, 2006:2). The report attributed to the deterioration in the index due to the fact that the four largest banking groups (namely: ABSA, FirstRand, Nedcor and Standard Bank) dominated the banking system, with 83.8 percent, or R1.4 trillion, of the industry's total assets of R1.7 trillion (Hazelhurst, 2004:1). Traditionally South Africa's banking sector has been dominated by the ‘big four’ banks, which tended to stifle competition, as it was difficult for newcomers to break into this sector (Mafu, 2006:2). But since the “spotlight” has been put on banking competition, the competitive state in the banking sector has been unhindered and intensified. This can be attributed to recommendations based on the findings of the Jali commission on banking competition, as well the National Treasury and Reserve Bank’s specialised task teams (Competition Commission, 2004:1; Hazelhurst, 2004:1). The big four banks, nonetheless, still do compete more aggressively with each other, which is a sign of a challenging and competitive environment (Mafu, 2006:2). With global financial and economic stability, a more stable economy and currency, as well as inflation being brought under control, the South African banking sector has been further strengthened. The number of South African citizens holding bank accounts jumped by 11% to 15.9 million in the year 2005, against 4% in 2004 (RNCOS, 2007:2). This shows the growth in the banking sector, and this can be translated into new potential customers and markets for banks.

One of the main reasons for the growth in ‘bankable’ populace is the introduction of an innovative system called Mzansi. The Mzansi account was launched in October 2004 and is a low-cost national bank account which extends banking to low-income earners and those previously living beyond the reach of banking services (SouthAfrica.Info, 2005:1). As it can be well assumed, a decrease in the level of the ‘unbanked’ and a similtaneous increase in the potential ‘bankable’ population has resulted in a new dimension of an ‘untapped’ customer market for South African banks, ultimately resulting in greater levels of competition amongst banks, as they pursue the capture this new market (RNCOS, 2007:2; SouthAfrica.Info, 2005:1). A smaller scale of competition has now emerged at the retail end. New feasible opportunities have risen from the introduction and implementation of the Dedicated Banks Bill, as it opens up for retailers, cellular operators, insurers, and micro lenders to become involved and offer a limited range of banking service business (e.g. Pick ’n Pay GObanking, Vodacom and Discovery credit facilities) (Hazelhurst, 2004:1). The legislation, combined with technological advances, will make it possible for new entrants to deliver cost effectively to the low end of the retail market, thereby placing competitive pressures on the traditional banks (Hazelhurst, 2004:1). Currently major developments within the banking sector have created a climate of heightened competitiveness within the sector. New players both inside and outside the South African banking sector have to enhance their competitive aggressiveness and posture, to remain competitive, and innovation is a manner in which they are able to do that (Hedley, 2007:2). 2.10.3 How South African banks can use innovation to compete Briefly stated, competition drives margins down and thus erodes profits. As a consequence, the bank’s profitability declines, thereby leaving banks with two options (1) take on more risk, which may induce more severe liquidity issues or (2) adopt a new competitive strategy of innovation (Bolt & Tieman, 2004:783). Banks have responded by significantly enhancing their contingency planning, through creative and innovative approaches (Rosengren, 2007:36).

Due to the increase in the competitive nature of the South African banking sector, and heightened levels of competition in the banking industry, South Africa banks have to be competitive, flexible and dynamic in nature in order to operate successfully and maintain levels of profitability. Competition undermines prudent and conservative banking practices, causing banks to think ‘outside the box’ and more creatively, resulting in banks being more innovative and entrepreneurial (Bolt & Tieman, 2004:784). In order to do so, and to remain competitive, banks have to constantly develop and maintain competitive advantages over other rival banks. This competitive advantage can be developed through successful implementation of innovation by the banks (Bertola & Texeira, 2003:185). There are various ways in which banks in the South African banking sector compete with each other. Generally speaking South African banks compete with each other in terms of levels of pricing, innovation, product and service offering, customer service, relationship management, delivery channels, and advertising (Falkena, Davel, Hawkins, Llewellyn, Luus, Masilela, Parr, Pienaar & Shaw, 2004:18). However, the two most prominent factors of competition, and the most contested factors between banks are (1) pricing and (2) innovation. Innovation in terms of the product range, constantly resulting in new, innovative products and services offered (Falkena et al., 2004: 18). Therefore, innovation can be used as a medium of competitive advantage, or used as a source to develop a competitive advantage for South African banks (Wickham, 2001:155). 2.10.4 Corporate entrepreneurship and innovation in the South African banking sector Hedley (2007:1) stated that innovation is changing the banking industry and that the success of most modern banks is built on a firm foundation of innovation. He believes innovation is important because differentiation is crucial for successful competitiveness in today’s banking environment.

South African banks, and the South African banking sector, have been considered to be world leaders in terms of banking innovation (Harris, 2007:1) and many world-wide banking innovations originated in South Africa. According to Harris (2007:1) South African banks have achieved the following groundbreaking feats:

The first country in the world to introduce interoperability of ATM cards through The first developing country to introduce credit cards. The first African country to introduce ATMs. The first country in the world to introduce biometrics on cards for the payment of The first countries to use satellite communication for branch operations.

SASwitch.
• • •

pensions.

Further indication of high levels of innovation within the South African banking sector has become prevalent in years where competition was stiffest, banks were forced into successful innovative measures which served as an indication that competition not only benefits consumers but can also work as a rejuvenating stimulant for banks (Hazelhurst, 2004:1). The overload of laws weighing down heavily on the South African banking and financial services sector has also forced institutions to utilise innovation in an attempt to find new and innovative measures in which to conduct business (Nyamakanga, 2007a:1). Due to the stability of the South African economy and the banking sector, as well as global financial markets there has been a noted significant increase in the levels of innovation and integration on an unprecedented scale (Mboweni, 2007:2). From all the above evidence it is evident that innovation is rife in the South African banking sector. Corporate entrepreneurship is the foundation and basis for organisational innovation (Zhao, 2005:25). Therefore, it is logical to deduce that if innovation is so ubiquitous in the sector, corporate entrepreneurship and corporate entrepreneurial behaviour is present within the South African banking sector (Hellstrom et al., 2002:175; Hitt et al., 2002:173; Ireland et al., 2006a:10; Maes, 2003:22; Michalski, 2004:4).

2.11 Conclusion This chapter served as an introduction to the study, a well as forming the basis for the study. An extensive review all the relative constructs and factors associated with corporate entrepreneurship and the establishment of a corporate entrepreneurial climate took place, as well as how these constructs and variables are positioned and related within the South African banking. The research methodology will be based upon the above mentioned review and will be discussed in chapter 3.

CHAPTER 3 RESEARCH METHODOLOGY
3.1 Introduction

The purpose of this chapter is to provide a detailed description of the research methodology used in this study, as well as to provide the results of the empirical research. This chapter includes a discussion of the research methodology used, which includes the aims and objectives, the research design, the measuring instrument used, method of data collection, and data analysis which was used in this study. 3.2 Aims and objectives of the study

The intended purpose of this study is to explore and assess the current corporate entrepreneurial climate, as well as to test perceptions towards the corporate entrepreneurial climate within the South African banking sector. This study will also highlight influential factors which have a direct or indirect affect upon it. Recommendations to help encourage and promote a supportive climate for corporate entrepreneurship within the sector will also be given after the relevant conclusions have been achieved. 3.2.1 Primary objective The primary objective of this study is to investigate the corporate entrepreneurial climate within the South African banking sector. 3.2.2 Secondary objectives In order to achieve the primary objective the following secondary objectives have to set: • Establish the management support of corporate entrepreneurial behaviour in the South African banking sector.

• • • •

Determine the level of work discretion permitted for enabling of corporate entrepreneurship within the South African banking sector. Determine employees’ perception towards rewards and reinforcements. Asses the time availability as a resource in inducing corporate entrepreneurial behaviour. Measure organisational boundaries as a factor of corporate entrepreneurial climate. 3.2.3 Propositions Proposition 1: Managerial support contributes significantly to a favourable corporate entrepreneurial climate within the South African banking sector. Proposition 2: Organisational boundaries do contribute significantly to the corporate entrepreneurial climate within the South African banking sector. Proposition 3: Work discretion does contribute significantly to the corporate entrepreneurial climate within the South African banking sector. Proposition 4: Rewards do contribute significantly to the corporate entrepreneurial climate within the South African banking sector. Proposition 5: The availability of time does contribute considerably to the corporate entrepreneurial climate within the South African banking sector. 3.3 Research Methodology

3.3.1 The research design The degree to which the research question has been crystallised indicates that this is a formal study, as the study begins with a research question. This study focuses on precise procedures, specific to a data source, with the main objective of testing the research propositions. It is a formal study with an ex post facto design, as no control was able to be extended over the variables and the outcomes of the study, and data couldn’t be manipulated (Cooper & Schindler, 2003: 149). The fact that the intention of this study is to

quantify findings makes it quantitative study (Diamantopoulos & Sclegelmilch, 2000: 27). It was only possible to report what was happening and what had already happened. The purpose of this study is to derive descriptive results. The method of data collection renders this as a type of interrogation/ communicative study (Cooper & Schindler, 2003: 147) as all relevant data and information was derived through the completion of personal questionnaires by the respondents. The data was collected over a single, particular period in time, a snapshot of approximately 60 days, making it a cross-sectional study. A cross-sectional study is one which is taken over a specific moment in time (Anderson, Sweeney & Williams, 2003:7). All data was collected in a research environment of exact everyday settings where participants’ perceptions were captured and recorded in the actual routine, everyday conditions and approaches to conducting business operations within the South African banking sector. All relevant information sources will be consulted, the majority of them being published academic papers, books and articles. Information gathered from all these different sources will act as basis of the literature review, which will in turn be used to give a greater understanding of the study. 3.3.2 Population and sample design A population is the set of all elements of interest in a particular study, such as a collection of individuals, objects, or events of people (Diamantopoulos & Sclegelmilch, 2000:10; Anderson et al., 2003:14). The population of the current study can be defined as middle managers and operational employees within. Middle managers and operational level employees are in the best position to identify new opportunities, as well as to encourage, promote and initiate corporate entrepreneurship (Hornsby, Kuratko & Zahra 2002:260). A sample is an extract, or subset, of the population which is representative of it (Anderson et al., 2003:14).

A sample of both middle managers (middle management) and operational employees (lower management) was drawn from the four leading banks in South Africa, namely, ABSA, FirstRand (FNB), Nedcor (Nedbank) and Standard Bank. The fact that these four banks hold a combined market share of 83.8 percent (Hazelhurst, 2004:1) deems them sufficient to constitute valid sample, and represent the South African banking sector for the purposes of this study The largest group, which formed the biggest portion and majority of the sample, was the middle managers group. The middle managers group was constituted of and included the some of the following: organisational managers, divisional managers, team leaders, project managers, and bank managers. The operational level employees form the smaller portion of the sample and were made up of two subsets: Influential Employees and Consultants. The latter group Consultants consisted of internal consultants such as human resources consultants, financial consultants, sales consultants, legal consultants, and organisational business consultants. Influential Employees included control analysts, business analysts, and general operational banking clerks. For the purpose of the research a subjective, arbitrary approach using non-probability sampling was applied, meaning that the selection of sample respondents was left to the discretion of the researcher, allowing the “at random” selection of sample elements (Cooper & Schindler, 2003:184). This specific method of non-probability sampling is unrestricted and hence is the best suited method as the researcher has freedom of choice within the sample, in order to find suitable candidates and have the CEAI completed. The sample which was drawn included middle management, managers and operational employees from the four respective banks from within Gauteng. The sample used was drawn from the respective banks’ head offices and larger more commercially active branches, and was selected randomly, irrespective of age, gender, race, department, bank or experience. A total amount of 100 questionnaires (25 per bank) were issued to managerial staff and operational employees within the four banks for the data collection. In total 63 respondents were interviewed and completed questionnaires (n=63), resulting in a response rate 63 percent.

3.3.3 Data Collection All data and responses used in the study were collected by means of the Corporate Entrepreneurial Assessment Instrument (CEAI) questionnaire, developed by Kuratko and Morris (2002:295). The CEAI is a basic self-administered questionnaire, and was distributed using two methodologies, either paper-based or electronic based questionnaires. The researcher conducted personal interviews and questioned a large majority of the respondents, while a smaller percentage was completed by the aid of ‘contacts’ within the respective banks during August and September 2007. The method of data collection used in this type of study is empirical by nature, while the parameter of interest and type of data used consists of nominal and ordinal data. Nominal data is data on a variable that can be classified but no order, distance or origin can be given. Nominal data can be grouped into two or more categories which are mutually exclusive and collectively exhaustive, which is used to determine equality (Cooper & Schindler, 2003:223). The nominal data for this study included the following classifications: age; gender; years in the organisation; management level; position; highest qualification and number of years experience in the banking sector. Descriptive data such as age, gender, years in the organisation, and number of years in the banking sector had to be specifically given by each respondent. They had to select management level from a list of: senior, middle and lower management, as well as highest qualification, from a list of: matric, national diploma, undergraduate degree and posted graduate degree. Each respondent also had to specifically state their position within the organisation, and the researcher grouped these into one of the three groups of: Middle mangers, Consultants and Influential Employees. The groups: Middle mangers, Consultants and Influential Employees were selected because Middle mangers directly perform organisational and administrative functions like

planning, organising, leading and controlling (Venter & Rwigeni, 2005:6). They generally have substantial authority, responsibility and have a direct impact on the manner in which business is conducted. Consultants within the banks have considerable autonomy as well as management influence. They tend to have less restrictive mandates, coupled with greater flexibility and authority, which allows them to act as entrepreneurial managers. Influential employees are employees who have significant impact and say in the manner in which the business operates, and are in a position to effect change, and encourage new changes within the organisation, as they are involved in the ‘frontline’ activities and business operations of the organisation. Ordinal data, on the other hand, is data which can be classified and ordered, yet no distance or origin can be given, and is used to determine a greater or lesser value (Diamantopoulos & Sclegelmilch, 2000:25). Ordinal data was derived from the Linkert Scale, through ranked answers (strongly disagree, disagree, not sure, agree, strongly disagree) which were used for answering the 48 questions contained in the CEAI questionnaire. 3.3.4 Measurement Instrument The measurement instrument known as the Corporate Entrepreneurship Assessment Index (CEAI) is a diagnostic tool which has been developed by leading researchers in the corporate entrepreneurship research field, namely Kuratko, Hornsby and Montango (Morris & Kuratko, 2002:295). It was designed to tap the climate-related organisational factors that represent and potentially encourage corporate entrepreneurship, and is used for evaluating individual’s perceptions of his/ her current work environment and climate within the organisation (Cates, 2007:IV). The questionnaire takes approximately 25 minutes to complete and consists 7 the demographic based questions, in addition to the 48 Linkert-style questions of the CEAI. In the additional demographic questions added by the researcher, the following information was required: • • Age Gender

• • • • •

Years in the organisation Management level Position Highest qualification Number of years experience in the banking sector.

In the CEAI a five-point Linkert scale is used, for the original 48 questions, and respondents have to answer the questions by choosing: strongly disagree, disagree, not sure, agree, strongly agree. Each question may only be answered once and has only one answer. The CEAI as a measurement instrument has been designed to measure the following five key climate-related corporate entrepreneurial variables: (1) management support (2) work discretion (3) rewards/reinforcement (4) time availability (5) organizational boundaries (Hornsby et al., 2002:269; Kuratko et al., 2005:703; Morris & Kuratko, 2002:291). All the results were analysed and scrutinised according to these specific variables, in conjunction with using the five-point Linkert scale. The five key variables are broken down and designated into the following sections in the structure of the CEAI Table 2: Underlying variables which form part and make up the CEAI Section 1. Management Support for corporate Entrepreneurship 2. Work Discretion 3. Rewards/ Reinforcement 4. Time availability 5. Organisational boundaries Questions Q1 – Q19 Q20 – Q29 Q30 – Q35 Q36 – Q41 Q42 – Q48

The CEAI is a practical, reliable and validated measurement instrument, making the results of the instrument equally reliable and valid (Adonisi, 2003:94; Cates, 2007: 27; Gantsho 2006:83). The CEAI which can be easily applied to any business environment and therefore it can be successfully used to gauge the organisational factors that foster corporate entrepreneurial climate and activity within an the banking sector, allowing for the researcher to make deductions regarding the entrepreneurial climate within the South African banking sector (Adonisi, 2003; 93).

3.3.5 Data Analysis For all intensive purposes of this study, the data collected was analysed to yield descriptive statistics which include frequencies, means, and standard deviations of the captured data. Results were received from the statistically analysed data in an attempt to capture the population’s characteristics by making inferences from the sample’s characteristics. The objective of these results was to yield descriptive indicators, which will be used to substantiate of the propositions of the study. A statistical computer package, BMDP Statistical Software, was used by an external researcher in the analysis of collected data. Due to the small sample size nonparametric tests were used instead of parametric test. Nonparametric tests are used to test the propositions and hypotheses with normal and ordinal data (Cooper & Schindler, 2003:531). For this study the Kruskal-Wallis test was used. The Kruskal-Wallis test is a one-way analysis of variance by ranks, across three or more independent groups and does not require the assumption of normally distributed populations (Cooper and Schindler, 2003: 554; Diamantopoulos & Sclegelmilch, 2000:182 and Anderson et al., 2003:775). Inferential statistics involving the analysis of variance (ANOVA) were used to determine results in order to determine differences between the respective groups and management levels, which was used in the culminating of conclusions for the research. 3.3.6 Limitations Certain limitations could have affected the initial outcomes of the study, such as depth and the lack thereof in this study. Depth of the study is listed as a limitation, as the sample size, in a relation to the population, was very small. The sample consisted of 63 respondents, only taken from Gauteng, opposed to thousands who constitute the population. Errors could also have occurred during the course of the study which could have altered the eventual outcomes. These errors include: questionnaire error, interviewer error or undue influence, data capturing errors and analysis errors (Mouton, 2001:153).

CHAPTER 4 RESULTS AND FINDINGS
4.1 Introduction

The purpose of this chapter is to report the findings of the study and to give a brief explanation of them. The results of the study are described in this chapter. Both the descriptive statistics of the sample and the inferential statistics of the sample will also be reported in this chapter. The inferential results will be used in answering the research propositions previously establish for the study, in chapter 3. 4.2 Construct discussion

4.2.1 Dependent variables The dependent variables of this study are comprised of the following five CE variables, identified by Morris and Kuratko (2002: 299): management support, work discretion, rewards and reinforcements, time availability, and organisational boundaries. These variables have all been highlighted as playing an important role in the development of a CE climate (Cates, 2007:IV). 4.2.2 Independent variables The independent variables comprised of the following variables: educational level, position, years of employment in current organisation, number of years in the banking sector, management level, gender, and age of the participants respectively. This chapter will be used as a basis to address the research questions and problems discussed in chapter 1, and will also be used in support for forming arguments, conclusions, and interpretation of the study.

The relationship between the independent and dependent variables will be analysed by means of Kruskal-Wallis One Way Analysis of Variance. The descriptive statistics of the participants are displayed in Tables 4.1-4.7, representing the independent variables of the study. Namely: educational level, position, years of employment in current organisation, number of years in the banking sector, management level, gender, and age of the participants respectively. Table 3: Educational level of participants Educational level Matric National Diploma Under-graduate Post-graduate Total Frequenc y 32 9 13 9 63 Percent 50.79 14.29 20.63 14.29 100.00 Cumulative Cumulative Frequency 32 41 54 63 63 Percent 50.79 65.01 85.71 100.00 100.00

Figure 6: Educational levels of participants

Educational Levels

14.29% Matric 20.63% 50.79% National Diploma Under-graduate Post-graduate 14.29%

The above table indicates that the majority of the participants (50.79%) had a matric qualification, followed with 20.63% of respondents holding some form of under-graduate qualification. A small percentage of respondents (14.29%) had either a national diploma or post-graduate qualification.

Table 4: Position of participants

Position of participants Frequency Percent Consultant Middle management Influential employees Total 12 35 16 63 19.05 55.55 25.40 100.00

Cumulative Cumulative Frequency 12 47 63 63 Percent 19.05 74.6 100.00 100.00

Figure 7: Position of participants

Position of Participants

16

12 Consultant Middle management Regular employees 35

Table 4.2 indicates that the majority of the participants (n = 35), were in middle management positions, followed by regular employees that made up just of a quarter of the sample (n=16), forming the focal group of the study with 51 respondents, while the remainder of the sample was made up of consultants (n=12).

Table 5: Number of years in the company Number of years in Frequenc Percent Cumulative Cumulative

the company 0-10 11-20 21-40 Total

y 36 15 12 63

57.14 23.81 19.05 100.00

Frequency 36 51 63 63

Percent 57.14 80.95 100.00 100.00

Figure 8: Number of years in the company

No. of years in the company

19.05% 0 to10 57.14% 11 to 20 21 to 40

23.81%

Of the sample drawn 57.14%, more than half, consist of employees who have been working at their respective banks for less than 10 years. The second longest time frame working for the same bank is between 11 and 20 years which formed 23.81% of the sample, while the rest of the sample (19.05%) have been working for the same bank for anywhere between 21 and 40 years.

Table 6: Number of years in the banking sector Number of years in Frequenc the banking sector 0-10 y 31 Percent 49.21 Cumulative Cumulative Frequency 31 Percent 49.2

11-20 21-40 Total

15 17 63

23.81 26.98 100.00

46 63 63

74.02 100.00 100.00

Figure 9: Number of years in the banking sector

No. of years in the banking sector

17 0 to10 31 11 to 20 21 to 40 15

Thirty one of the 63 people of the sample drawn, the majority of the sample, have been working in the banking sector for 10 years or less. The remainder of the sample was rather evenly distributed into the different classes, with 115 people involved in the banking sector in the last 11 to 20 years, and 17 others for more than 21 years.

Table 7: Management level (Authority and Responsibility) Management level Senior Management Middle Management Lower Management Total Frequenc y 10 20 33 63 Percent 15.87 31.75 52.38 100.00 Cumulative Cumulative Frequency 10 30 63 63 Percent 15.87 47.62 100.00 100.00

Figure 10: Management level (Authority and Responsibility)

Management level (Authority and Responsibility)
15.87%

Senior Management 52.38% 31.75% Middle Management Low er Management

The management levels of the sample were graded according to three tiers of management in terms of authority and responsibility with 52.38% being lower management (limited authority and responsibility), 31.75% middle management (substantial authority and responsibility), collectively making up an area of interest representing percentage 84.13%. Senior management formed the smallest percentage of the sample with only 10 respondents, resulting in forming only 15.87% of the sample (extensive authority and responsibility).

Table 8: Gender of participants Gender Male Female Total Frequenc y 16 47 63 Percent 25.40 74.60 100.00 Cumulative Cumulative Frequency 16 63 63 Percent 25.40 100.00 100.00

Figure 11: Gender of participants

Gender of praticipants

25.40%

Male Female

74.60%

The sample consisted of a skew distribution of men (25.40%) and women (74.60%), with women forming the majority of the sample.

Table 9: Age of participants Age 20-30 31-40 41-50 51-60 Total Figure 12: Age of participants Frequenc y 23 17 13 10 63 Percent 36.51 26.98 20.64 5.87 100.00 Cumulative Cumulative Frequency 23 40 53 63 63 Percent 36.51 63.49 84.13 100.00 100.00

Age of participants

5.87% 20.64% 20-30 31-40 41-50 51-60 26.98%

36.51%

The sample drawn can be generalised as being a relatively young sample as majority of the respondents were below 30 years of age (36.51%). The number of employee decreased as age increased, with 26.98% between 31 and 40 years of age, 20.64% between 41 and 50 years of age. The smallest percentage recorded was 5.87% between the ages of 51 and 60. The mean, standard deviation, minimum, and maximum of each of the five dependent variables identified by the CEAI (Morris & Kuratko, 2002:295) are reported below in Table 4.8.

Table 10: Mean, standard deviation, minimum and maximum of the five CE factors Factor name Management support Work Mean 3.38 3.42 Standard deviation 0.59 0.58 0.64 0.45 0.70 Minimum 2.37 2.00 1.00 2.17 2.00 Maximum 5.00 4.90 4.83 4.00 5.00

discretion Rewards and 3.75 reinforcement Time 2.98

availability Organisational 3.84 boundaries

Figure 13: Means of the five CEAI factors

Means of the five CEAI factors
Organisational boundaries Time availability Factors Rewards and reinforcement Work discretion Management support 0 1 2 Range 3 2.98 3.75 3.42 3.38 4 5 3.84

Table 4.8 and figure 4.1 indicate that none of the CE factors performed significantly above or below average. Only the rewards/reinforcement and organisational boundary sub-scales stood out as performing slightly above average, while time availability seemed to perform slightly below average.

Figure 14: “The rewards I receive are dependent upon my work on the job”

Question 31
40 No. of Respondents 30 20 10 1 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 7 8 9 38

The combined majority of the employees (74.6%) of the sample agreed that receiving of rewards was only dependent upon the work they do, detailed by their job description and

not additional or extra work. While the minority (25.4%) of the sample either were uncertain or disagreed with the statement. This is a possible indication that rewards are used as a means to motivate employees. Figure 15: “My supervisor will increase my job responsibilities if I am performing well in my job”

Question 32
40 No. of Respondents 30 20 10 2 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 7 9 11 34

It is revealed that 17.5% of employees strongly agree that responsibilities are extended as a result of good performances, followed closely by the majority of 54% who merely agree with the statement. Although 14.3% were undecided, a further collective 14.3% opposed this statement, indicating that the majority of respondents felt that superior job performance allowed them to receive an increase in warranted responsibilities. Figure 16: “My supervisor will give me special recognition if my work performance is especially good”

Question 33
50 40

The majority of 40 respondents believed that exceptionally good work performance was recognised and acknowledged by their superiors, 6 respondents were uncertain whether or not recognition was given, and a collective amount of 9 respondents felt no recognition was given for good works. The assumption can be made that superiors give praise and recognition when due and this acts as an additional form of motivation for employees. Upon investigation into time availability some of the following significant results were revealed, which can accounted for the below average of this section.

Figure 17: “I always seem to have plenty of time to get things done”

No. of Respondents
30 20 8 10 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 1 6 8

40

Question 37
40 No. of Respondents 30 20 12 10 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 3 2 29 17

19.1% of respondents strongly disagreed that they do not have sufficient time to get things done, complimented by 46% who disagreed with the statement, making it a collective 65.1% who feel they have insufficient time to get everything done. This is a possible indication that shows that the majority of people need more time to get their jobs done. Figure 18: “I have just the right amount of time and workload to do everything well”

Question 38
40 No. of Respondents 32 30 20 10 0 Strongly Disagree Disagree Uncertain Agree 5 6 0 Strongly Agree 20

An overwhelming amount of 37 respondents feel they do not have the right amount of time to get to get there workload done, and to have it well done. Alternatively 20 respondents do feel the time they have is sufficient to get the job done well, while a remaining 6 are

uncertain. This means workloads, standards of completed jobs and the amount of allotted time are, currently, mismatched and have to be addressed and correctly apportioned should a CE climate be developed. Figure 19: “I feel that I am always working with time constraints on my job”

Question 40
40 No. of Respondents 30 20 10 1 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 9 8 8 37

The collective amount of 45 people, the majority (71.4%), of people feel they are constrained by time on their jobs, opposed to 18 respondents (28.6%) who were either uncertain or disagreed with the statement to some degree. This indicates that people are constantly pressured and restricted by time while doing their jobs, possibly restricting a healthy CE climate. Organisational boundaries were also examined and investigated and revealed the following results which substantiate slightly above average performance in this section.

Figure 20: “There are many written rules and procedures that exist for doing my major tasks”

Question 43
40 No. of Respondents 31 30 20 12 10 1 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 1 18

The majority, 49 of respondents agree to some extent, that there are rules and procedures in place for doing major tasks, while a joint 13 respondents disagreed with the statement. Only 1 respondent was uncertain about the extent of the rules and procedures for doing major tasks. This is proof of the institution of rules and procedures which are adhered to while completing major tasks. Figure 21: “On my job I have no doubt of what is expected of me.”

Question 44
40 No. of Respondents 30 20 10 0 0 Strongly Disagree Disagree Uncertain Agree Strongly Agree 6 5 30 22

The larger majority 87.3% agree, to some extent, that there is no doubt or confusion regarding their job description, followed the remainder 17.4% of respondents who were either uncertain or disagreed with this statement. This is an indication the majority of people clearly understand what their job descriptions entail and what is expected of them. Figure 22: “My job description clearly specifies the standards of performance on which my job is evaluated.”

Question 47
40 No. of Respondents 30 20 10 0 0 Strongly Disagree Disagree 8 3 Uncertain Agree Strongly Agree 15 37

Of the total 63 respondents a total of 37 agree that their job description clearly specifies the standards of performance on which the job was evaluated, while an additional 15 strongly agree with the statement. As a result the minority of the sample believe otherwise with 3 respondents impartial on the matter, while the remaining 8 merely disagree. It is evident that the job descriptions and evaluation benchmarks are made clear to the majority of respondents. Figure 23: “I clearly know what level of work performance is expected from me in term of amount, quality and time line of output”

Question 49
40 No. of Respondents 30 20 10 0 0 Strongly Disagree Disagree 6 1 Uncertain Agree Strongly Agree 33 23

A grouped cluster of 56 respondents (88%) know and understand what level of work performance is expected of them and what there job description involves. 1 respondent (2%) is uncertain and not sure what is expected of them, while 6 respondents (10%) of the

sample don’t know what level of work performance is expected of them. The deduction can be made that, for the most part, employees are clearly aware of what level of work performance is expected from them in term of amount, quality and time line of output, and what is expected of them in their job description. In order to investigate the relationships between the different CE factor-scales, reported in Table 4.8 as dependent variables and the categorical biographic variables as independent variables, a non-parametric Kruskal-Wallis One Way Analysis of Variance was conducted. For the purposes of this study a non-parametric test was used due to the small sample size and lack of the assumption of a normal distribution (Cooper & Schindler, 2003:531). The results are shown in Tables 4.9 to 4.14. Table 11: Results of Kruskal-Wallis One Way Analysis of Variance with factor one, the management support sub-scale (CE1) as dependent variable (N = 63) Independent Variable Age Gender Management level Years in sector Years in org/comp Position Qualification *p = .05 5.82 0.45 1.37 1.31 2.57 12.28 1.08 3 1 2 2 2 2 3 0.1207 0.5018 0.5049 0.5194 0.2764 0.0022* 0.7823 F df p>F

Only groups formed in terms of position were shown to be as significantly different at the 95% level of significance, on the management support sub-scale as dependent variable, as shown in Table 4.9. These differences were further investigated by means of a Z-test on the LS-mean scores on the management support sub-scale. Significant differences were indicated between consultants and middle management and consultants and influential employees at the 95 percent level of significance, with consultants scoring significantly higher than middle management and influential employees on the management support sub-scale.

Table 12: Results of Kruskal-Wallis One Way Analysis of Variance with factor two, the work discretion sub-scale (CE2) as dependent variable (N = 63) Independent Variable Age Gender Management level Years in sector Years in org/comp Position Qualification *p = .05 4.07 3.79 6.08 5.52 3.86 6.44 2.63 3 1 2 2 2 2 3 0.2543 0.0514 0.0478* 0.0633 0.1450 0.0399* 0.4522 F df p>F

Only groups formed in terms of management level and position were shown to be as significantly different at the 95% level of significance, on the work discretion sub-scale as dependent variable shown in Table 4.10.

These differences were further investigated by means of a Z-test on the LS-mean scores on the work discretion sub-scale. Significant differences were indicated between senior and lower management levels on the work-discretion sub-scale at the 90 percent level of significance, with senior management scoring higher than lower management concerning work discretion.

Further differences were indicated between middle managers and influential employees at the 95 percent level of significance, with middle managers scoring higher than the regular employees on the work discretion sub-scale.

Table 13: Results of Kruskal-Wallis One Way Analysis of Variance with factor three, the rewards and reinforcement sub-scale (CE1) as dependent variable (N = 63) Independent F df p>F

Variable Age Gender Management level Years in sector Years in org/comp Position Qualification *p = .05 0.70 0.46 0.93 0.11 1.65 2.14 5.83 3 1 2 2 2 2 3 0.8740 0.4998 0.6277 0.9476 0.4389 0.3432 0.1201

None of the groups formed were shown to be as significantly different at the 95% level of significance, on the rewards and reinforcement sub-scale as dependent variable shown in Table 4.11.

Table 14: Results of Kruskal-Wallis One Way Analysis of Variance with factor four, the time availability sub-scale (CE1) as dependent variable (N = 63) Independent Variable Age Gender Management level Years in sector Years in org/comp Position 5.12 1.14 0.60 0.06 4.16 4.20 3 1 2 2 2 2 0.1630 0.2853 0.7408 0.0484* 0.1252 0.1224 F df p>F

Qualification *p = .05

0.91

3

0.8223

Only groups formed in terms of years in sector were shown to be as significantly different at the 95% level of significance, on the time availability sub-scale as dependent variable as shown in Table 4.12.

These differences were further investigated by means of a Z-test on the LS-mean scores on the time availability sub-scale. Significant differences were indicated between individuals working between 0-10 years in the banking sector and individuals working between 21-40 years in the banking sector, at the 95 percent level of significance. Individuals working between 0-10 years scored higher on the time-availability sub-scale than individuals working between 21-40 years.

Table 15: Results of Kruskal-Wallis One Way Analysis of Variance with factor five, the organizational boundaries sub-scale (CE1) as dependent variable (N = 63) Independent Variable Age Gender Management level Years in sector Years in org/comp Position Qualification 2.10 2.35 5.35 0.15 0.07 3.32 6.42 3 1 2 2 2 2 3 0.5527 0.1256 0.0690 0.9300 0.9638 0.1904 0.0929 F df p>F

None of the groups formed as independent variables were shown to be as significantly different at the 95% level of significance, on the organizational boundaries sub-scale as dependent variable shown in Table 4.13.

4.3

Conclusion

The current chapter discussed both the descriptive and inferential statistics of the current study. The descriptive statistics indicated and verified the biographic and demographic variables of the participants. A non-parametric Kruskal-Wallis One-Way Analysis of Variance was employed to investigate the differences in the biographic and demographic variables as independent variables, and the five identified CE factors of (management support, work discretion, rewards and reinforcements, time availability, and organisational boundaries) as dependent variables. The significant differences and findings were examined. The following chapter will be a discussion of the findings of the current chapter in combination with the indications of the literature and theory, discussed in chapter 2.

CHAPTER 5 CONCLUSIONS, RECOMMENDATIONS AND LIMITATIONS

This is the final and concluding chapter of the study. All the recommendations, conclusions and limitations of the study will be discussed and interpreted, based upon the findings of this study and related to the literature findings reported in chapter 2. The findings will be discussed in relationship to the five CE factors, identified by Morris and Kuratko (2002:295), namely management support, work discretion, rewards and reinforcements, time availability and organisational boundaries. 5.1 Conclusions and Recommendations 5.1.1 Management support The first factor, management support refers to the introduction, support, encouragement and willingness of managers to facilitate entrepreneurial activity within an enterprise (Kamffer, 2004:4; Scheepers, Hough & Bloom, 2007:242), and promote both corporate

entrepreneurial behaviour and activities within an organisation (Bhardwaj, Camillus & Hounshell, 2007:51; Ireland et al. 2006b:27). It was found that as far as management support is concerned, results indicated that management granted significantly higher support to consultants than to middle management, as well and regular employees at the 95% level of significance. It has been established that a successful CE climate is dependent on support and encouragement from middle management (Kuratko, et al., 2005:699).

The management support for CE seems to be unevenly distributed, with consultants being the focal group opposed to middle managers and regular employees. It is concerning to see that the findings of the current study indicates a lack of support from management for their own middle management and regular employees, but that the expected support is channelled to consultants. In view of Kuratko et al.’s (Kuratko et al., 2005:699) argument that management should be supportive in advancing a climate of CE, as well as the findings of Adonisi (2003:123) that management support contributes to internal, external as well as total job satisfaction, it is concerning that this support did not feature in the current study. 5.1.2 Work discretion The investigation into the second factor, work discretion, refers to the degree of autonomy given to individuals to complete or conduct business operations, as well as entrepreneurial efforts (Bhardwaj, Camillus & Hounshell, 2007:51). Autonomy refers to employees’ discretion and the extent to which they are empowered to make decisions on the performance and direction of their own work in the way they believe is most effective. (Scheepers, Hough & Bloom, 2007:242). Findings indicate that senior management scored significantly higher than lower management at a 90% level of significance, and middle management scored significantly higher than regular employees at a 95% level of significance, concerning work discretion. This reveals that top management have significantly more discretion (extensive authority and responsibility), than lower levels of management (limited authority and responsibility) as far as corporate entrepreneurial authority and responsibilities are concerned.

Gantsho (2006: 58) suggests that in order to develop and maintain a conducive CE climate, a more even distribution of authority, responsibility and autonomy should take place at all levels of the organisation. The indication is that an even distribution of CE authority and responsibility leads to internal, external as well as total job satisfaction (Adonisi, 2003:123&124). The significantly lower authority and responsibility granted to lower management, in comparison to middle management is understandable in the light of their lower experience and therefore exposure to possible risks. Methods should be developed allowing lower management greater work discretion, responsibility and authority, under controlled environments. Similarly in order to create a supportive CE climate, the gap between middle management and regular employees should be decreased. In the light of Adonisi’s (2003:123) study, this can potentially prevent job dissatisfaction.

Indications are that in the current study, responsibility and authority concerning the CE factor of work discretion is significantly uneven and skewly distributed to top management, leaving little or no opportunities of work discretion to lower management and regular employees. 5.1.3 Rewards and Reinforcements The third factor of rewards and reinforcements refers to an appropriate reward system that keeps employees motivated and committed, constantly striving for new ideas and opportunities (Morris and Kuratko, 2002, 296; Viswanathan & Nagarajan. 2004:21). Rewards are the very influential in motivating employees, and rewards can take on both financial and intangible forms (Kirby, 2003:304). According to Adonisi (2003:123&124), rewards and reinforcement also contribute to internal, external and total job satisfaction. The Kruskal-Wallis One Way Analysis of Variance indicated that none of the groups formed were shown to be as significantly different at the 95% level of significance, on the rewards and reinforcement sub-scale. This can be interpreted as an equal distribution to of rewards and reinforcements on the measured independent variables of age, gender, management level, years in the sector and organisation, position and qualification. Thus, rewards and reinforcements can be seen as a constant factor which is impartial to any of

the measured independent variables. The conclusion can therefore be drawn that rewards and reinforcements were equally distributed on the independent variables.

An overwhelming majority of respondents made it clear that rewards and recognition were given in accordance to their work related performances, and they knew what they had to do in order to achieve it. This compliments CE and contributes to the development of a CE climate, as employees are rewarded for acting entrepreneurially. According to Bhardwaj and Momaya (2007:136) an effective reward system is important means of encouraging and promoting entrepreneurial activity and behaviour. Rewards and reinforcements seem to play a healthy role in the corporate entrepreneurial climate of the current study.

5.1.4 Time availability The fourth factor of time availability involves the relationship of employees/ team work loads and time needed for the pursuit of new innovations. It is defined as evaluating workloads to ensure that individuals have the time needed to complete workloads detailed in their job description, as well as having enough additional time to pursue CE activities and opportunities (Ireland et al.2006b:28). Only groups formed in terms of years in sector were shown to be as significantly different on the time availability sub-scale. Significant differences were indicated at the 95% level of significance for individuals working between 0-10 years in the banking sector > than individuals working between 11-20 years and > than individuals working between 21-40 years in the banking sector.

This is an indication that individuals working for les than ten years had more time available for CE activities than individuals working more than 11 years. This finding indicates an implicit possible imbalance, indicating that individuals with the most work experience had the least amount of time to pursue CE activities. The fact that the majority of employees indicate they have insufficient time for CE activities, can contribute to a potentially unhealthy CE climate.

To create a situation which will compliment the CE climate, it’s suggested that there be an equal distribution of time across all groups, with additional time given to pursue CE orientated activities (Scheepers, Hough & Bloom, 2007:242).

5.1.4 Organisational boundaries The fifth and final factor of organisational boundaries can be referred to as the particular precincts and structures which differentiate certain areas within organisations. Organisational boundaries form expected measures of organisational work and become mechanisms used for evaluating and bench marking (Ireland et al. 2006b:28).

None of the groups formed as independent variables were shown to be as significantly different, on the organisational boundaries sub-scale. This means that no differences were found with organisational boundaries as the dependent factor and age, gender, position, qualification, management level, years in the sector and years in the organisation.

There is a distinct indication that employees know and understand what is expected of them in terms of standards, levels of work performance as well as the quality and time frame of output. Hence, a healthy CE climate concerning organisational boundaries is seen to exist in the current study. In a study by Adonisi (2003:123) the CE factors of rewards/reinforcement, work improvement, work discretion had a total prediction of 47.34% in extrinsic job satisfaction as dependent variable. Additionally, the CE factors of rewards/reinforcement, work improvement, work discretion and a significant prediction of 26.98% in internal job satisfaction as dependent variable. Total job satisfaction was predicted 21.42% by the three CE factors of rewards/reinforcement, work improvement, work discretion (Adonisi, 2003:124). This finding emphasises the importance of the nurturing of CE in an organisation, as it is not only advantageous to the development of a CE culture, but it has a direct influence on the external, internal and total experience of job satisfaction of employees. Therefore the notion of CE should be carefully fostered in any organisation to preserve a healthy organisational culture.

5.1.5 Management Implications The fact that consultants enjoy more management support for CE activities than middle management and regular employees is concerning. Similarly senior management scored higher on the work discretion CE scale than middle management and regular employees, which could lead to many frustrations. Time-availability was also unevenly distributed, with individuals with less experience in years in the banking sector enjoying more time availability for CE activities than individuals with more experience in years. Seen in the light of the findings of Adonisi (2003:123&124), that a healthy CE climate leads to job satisfaction, it is concerning that middle management and regular employees do not enjoy the necessary support for CE activities, but that consultants rather enjoy this advantage.

Work discretion is also less allowed to middle management and regular employees than senior management, while time availability is an overall problem, but significantly more so for individuals with more than 11 years experience than those with less than 10 years experience. This could potentially lead to a climate of job dissatisfaction, if the results of Adonisi (2003:123&124) are brought into consideration. Management should therefore take extra care in creating a healthy support climate for CE activities amongst their own employees, not only to uplift the CE climate in the banking sector, but also to implicitly create a culture of job satisfied individuals. 5.3 Limitations The greatest limitation to this study is the lack of depth associated with the relatively small sample size of 63 respondents. It should be indicated that the results should be interpreted with caution. The findings of the current study can only be generalised to the four representative South African banks that took part in the study, namely ABSA, FNB (FirstRand), Nedbank (Nedcor) and Standard Bank. No generalisation or assumptions can be made in relation to the other banks which make up the banking sector.

Due to possible response bias, it could be that results are slightly skewed, however individuals were ensured of anonymity and confidentiality of their responses. 5.4 Future Studies The following six areas might be considered for future research into the subject of CE in the banking sector. Firstly, a more detailed and in-depth study involving a much larger sample, which is more representative of the whole population, should be conducted. Secondly, ‘bank specific’ studies should be conducted upon the respective banks. Meaning each bank’s CE climate should be individually evaluated as comparisons between banks will allow for more accurate conclusions to be achieved. These findings could be used as a guideline to rehabilitate CE short comings in the different banks.

Thirdly, studies should be done comparing the CE climate of the South African Banking sector opposed climates of banking sectors outside South Africa. The fourth possible future study is one which involves the monitoring of the CE climate within the banking sector over time to see changes in CE climate and levels of CE. Lastly, a study should be conducted comparing the CE climate of the banking sector versus, other financial institutions. 5.5 Conclusion This chapter has concluded the research by giving a summary of the climate of the five different CE factors, concerning the independent variables of educational level; position; years of employment in current organisation; number of years in the banking sector; management level; gender and age. The findings illustrate the use of the CEAI as a means of assessing and testing the CE climate in the South African banking sector. The research conducted contributes to a better understanding of CE, as well as the CE climate within the sector, and can be used as a basis for the successful rehabilitation of CE in the banking sector.

REFERENCES

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APPENDIX

APPENDIX 1: The CEAI Questionnaire

CORPORATE ENTREPRENEURIAL CLIMATE WITHIN THE SOUTH AFRICAN BANKING SECTOR
The theory of corporate entrepreneurship (CE) is currently a very popular and constantly evolving topic of research and study. The purpose of this study is to determine and evaluate the corporate entrepreneurial climate within the South African banks which make up the South African banking sector. Corporate Entrepreneurship can be defined as the form of entrepreneurial spirit permeating throughout an organisation, brought about by the visions, actions and mindsets of employees and management alike, and results in entrepreneurial behaviour and orientation within established organisations. Dear Respondent, All the information will be treated as STRICTLY CONFIDENTIAL. Instructions for completion

• • • • •

All information will be treated as confidential and respondents aren’t required Please answer the questions as objectively and honestly as possible. Please answer based on your own business and experiences as much as Please mark the option which reflects your answer the most accurately by Please answer all the questions as this will provide more information to the

to fill in their names or the names of their respective organisations.

possible. making an (X) in the space provided. researcher so that an accurate analysis and interpretation of data can be made

FOR OFFICE USE RESPONDENT NUMBER A 1 BIOGRAPHICAL DETAILS Age V2 V1

2

Gender Male Female 1 2 V4 V3

3 4

Number of years at company Management Level Senior Management Middle Management Lower Management 1 2 3

V5

5

Position V6

6

Highest qualification obtained? Matric (Grade 12/Std 10) National Diploma Undergraduate degree Postgraduate degree 1 2 3 4 V7

7

How many years experience do you have in the banking sector? V8

Strongly Disagree

Please mark the respective column with an ‘X’:

No.

Code: Please mark the respective column with an ‘X’

Strongly Agree

Uncertain

Disagree

Agree

Management Support for Corporate Entrepreneurship Our departmental vision and 1 strategies are clear to me. My organization is quick to use 2 improved work methods that are developed by workers. 3 In my organization, developing ideas for the improvement of the corporation is encouraged. Upper management is aware of and very receptive to my ideas and suggestions. A promotion usually follows from the development of new and innovative ideas. Those employees who come up with innovative ideas on their own often receive management encouragement for their activities. The “doers” on projects are allowed to make decisions without going through elaborate justification and approval procedures. Senior managers encourage innovators to bend rules and rigid procedures in order to keep promising ideas on track. Many top manages are known for their experience with the innovation process. Money is often available to get new project ideas off the ground. Individuals with successful innovative projects receive additional rewards and compensation for their ideas and efforts beyond the standard reward system. There are several options within the organization for individuals to get financial support for their innovative projects and ideas

Q1 Q2

Q3

4

Q4

5

Q5

6

Q6

7

Q7

8

Q8

9 10

Q9 Q10

11

Q11

12

Q12

Disa

Please mark the respective column with an ‘X’:

Agre

Stro

Stro

Unc

ngly Disagree

No.

Code: Please mark the respective column with an ‘X’

13

14

People are often encouraged to take calculated risks with ideas around here. Individual risk takers are often recognized for their willingness to champion new projects, whether eventually successful or not. The term “risk taker” is considered a positive attribute for people in my work area This organization supports many small and experimental projects realizing that some will undoubtedly fail An employee with a good idea is often given free time to develop that idea.

ngly Agree

ertain

gree

e

Q13

Q14

15

Q15

16

Q16

17

Q17

There is considerable desire among people in the organization 18 for generating new ideas without regard for crossing departmental or functional boundaries. People are encouraged to talk to employees in other departments of 19 this organization about ideas for new projects. Work Discretion I feel that I am my own boss and 20 do not have to double-check all of my decisions with someone else. Harsh criticism and punishment 21 result form mistakes made on the job This organization provides the 22 chance to be creative and try my own methods of doing the job. This organization provides the 23 freedom to use my own judgment and initiative

Q18

Q19

Q20

Q21

Q22

Q23

Strongly Disagree

Please mark the respective column with an ‘X’:

No.

Code: Please mark the respective column with an ‘X’

This organization provides the chance to do something that makes use of my abilities. I have the freedom to decide what 25 I do on my job. It is basically my own responsibility 26 to decide how my job gets done I almost always get to decide what 27 I do on my job. I have much autonomy on my job 28 and am left on my own to do my own work. I seldom have to follow the same 29 work methods or steps for doing my major tasks from day to day. Rewards/Reinforcement My manager helps me get my 30 work done by removing obstacles and roadblocks. The rewards I receive are 31 dependent upon my work on the job. My supervisor will increase my job 32 responsibilities if I am performing well in my job 24 My supervisor will give me special recognition if my work performance is especially good My manager would tell his/her 34 boss if my work was outstanding There are a lot of challenges in my 35 job. Time Availability During the past three months, my 36 workload kept me from spending time on developing new ideas. I always seem to have plenty of 37 time to get everything done. 33

Strongly Agree

Uncertain

Disagree

Agree

Q24 Q25 Q26 Q27 Q28 Q29

Q30

Q31

Q32

Q33 Q34 Q35

Q36 Q37

Strongly Disagree

Please mark the respective column with an ‘X’:

No.

Code: Please mark the respective column with an ‘X’

I have just the right amount of time and workload to do everything well. My job is structured so that I have 39 very little time to think about wider organizational problems. I feel that I am always working with 40 time constraints on my job My co-workers and I always find 41 time for long-term problem solving Organizational Boundaries In the past three months, I have always followed standard 42 operating procedures or practices to do my major tasks. There are many written rules and 43 procedures that exist for doing my major tasks. On my job I have no doubt of what 44 is expected of me. 38 45 46 There is little uncertainty in my job. During the past year, my immediate supervisor discussed my work performance with me frequently My job description clearly specifies the standards of performance on which my job is evaluated There are people in the department who always lend a hand when needed. I clearly know what level of work performance is expected from me in terms of amount, quality, and time line of output.

Strongly Agree

Uncertain

Disagree

Agree

Q38

Q39 Q40 Q41

Q42

Q43 Q44 Q45 Q46

47 48

Q47 Q48

49

Q49