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Corporate Entrepreneurship

Pawe Godek, Ph.D.

Ewelina Sotysiak
Magorzata Zubiel
Piotr Bartenbach
Bartomiej Staszczyk

How is Entrepreneurial Intensity Measured?

According to literature Entrepreneurial Intensity (EI) is introduced to capture


both the degree and amount of entrepreneurship evidenced within a given
organization. It is hypothesized that levels of EI are significantly associated with
measures of company performance. 1 In order to adequately measure the EI, we have
to look at all of the dimensions of entrepreneurship; such as innovativeness, risktaking, and proactiveness. Each of these dimensions are measured in their own way
and produce their own results. However, the combination of these three allows us to
get a sense of how entrepreneurial a company may be. This kind of information is
mainly beneficial to CEOs, managers or investment companies, especially when
either of these could be contemplating cooperation with the said organization. As a
group, we will attempt to introduce the factors we believe are crucial to the
measurement of Entrepreneurial Intensity and explicate the reasons for their
importance.
The first step in measuring Entrepreneurial Intensity is to find out the degree
of entrepreneurship in the company. The degree of entrepreneurship, represented by
level of innovativeness, amount of risk undertaken in realization of projects and
overall activity, and proactiveness, which indicates tendency to initiate change rather
than being reactive to what happens in the environment of the company. What is
important here, is that high degree of entrepreneurship must be indicated by high
levels of all of its components. For example, when company introduces highly
innovative products, takes a lot of risk in their activity but acts reactively to actions of
their competition, their overall degree of entrepreneurship will not be very high.
Once we have obtained level of degree of entrepreneurship, we have to
calculate how many entrepreneurial actions took place within a company in a given
period of time. This is important for obtaining Entrepreneurial Intensity as it there is
Morris, Michael H., and Donald L. Sexton. Science Direct - Journal of Business Research: The
Concept of Entrepreneurial Intensity: Implications for Company Performance. Science Direct - Home.
22 Feb. 1999. Web. 17 Mar. 2011.
1

a significant difference between companies,


which produce a lot of new products and
companies, which very rarely introduce new
products to the market.
Having

measured

both

degree

of

entrepreneurship and number of entrepreneurial


actions done in a given period of time (or the
frequency of entrepreneurship), we obtain the
Entrepreneurial Intensity. The graph on the right
helps us to more easily understand what certain
values of EI mean.
At this point, we would focus our attention to the score given by our
benchmarking method and ask ourselves a significant question does the score really
matters? Various studies indicates that overall entrepreneurial intensity mark is
subject to the fields like profits, income-to-sales ratio, the rate of growth in revenue,
the rate of growth in employment and a composite measure of twelve financial and
nonfinancial criteria. This strong linkage between benchmark result and overall
performance is especially visible in the organizations which deal with highly variable
environment. As a result of constant changes, such company usually seek for the
ways to became more and more entrepreneurially oriented. On the contrary, all this
does not mean that every industry follows the same pattern. Some of the
organizations i.e. wish to stay more managerial-oriented in one division to be more
entrepreneurial-oriented in other so that once again, like many aspects of the
business it has to be balanced and well conformed.
As we have mentioned at the beginning of our work Entrepreneurial Intensity
really matters in todays business environment. With nowadays competitive
conditions, many executives recognize the need for more entrepreneurship in theirs
organizations. However, they often struggle with the question: what does it really
mean to be entrepreneurial?- as it is not so easy, as someone could think.
Entrepreneurial intensity must become a key activity ratio that is monitored on an
outgoing basis within an organization. It can be used to benchmark and track level of
entrepreneurship, establish norms, and draw industry comparisons, develop
strategies,

establish goals, and access relationships between EI

performance variable on time.

and company

If we talk about individual managerial level,

assessments may be helpful to examine and process their own leadership styles, as
well as in characterizing employee behaviour on time.

BIBLIOGRAPHY:
1. Morris, M. H., and D. L. Sexton. 1996. The concept of entrepreneurial
intensity: Implications for company performance. Journal of Business Research
2. Schumpeter, J. A. 1934. The theory of economic development. Boston, ma:
Harvard University Press.
3. Morgan, R. E., and C. A. Strong. 2003. Business performance and dimensions
of strategic orientation. Journal of Business Research
4. Morris, Michael H., and Donald L. Sexton. Science Direct - Journal of Business Research:
The Concept of Entrepreneurial Intensity: Implications for Company Performance. Science
Direct - Home. 22 Feb. 1999. Web. 17 Mar. 2011.