A Research project conducted on the practice of corporate entrepreneurship in Meta Abo Brewery

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THE PRACTICE OF CORPORATE ENTREPRENEURSHIP IN META
ABO BREWERY SHARE COMPANY

A RESEARCH PROJECT SUBMITTED FOR THE PARTIAL

FULFILLMENT OF THE DEGREE OF MASTERS OF ARTS IN
BUSINESS ADMINISTRATION

SUBMITTED BY: SUBMITTED TO:

Yared Asamirew Advisor

Ramakrishnan (Phd)

Co-advisor

Ato Wendesen Seyoum (MBA)

JIMMA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

MASTERS IN BUSINESS ADMINISTRATION

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MAY, 2010

JIMMA

JIMMA UNIVERSITY

College of Business and Economics

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The Practice of Corporate Entrepreneurship in Meta Abo Brewery

S.C.

By

Yared Asamirew

Approved by Board of Examiners:

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Advisor Signature

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Internal Examiner Signature

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External Examine Signature

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Chair person Signature

Declaration

I, the undersigned, declare that this study is my original work and has not been presented for a
degree in any other university, and that all sources of materials used for the study have been duly
acknowledged.

Declared by:

Name____________________________

Sign_____________________________

Date_____________________________

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Confirmed by main advisor

Name____________________________

Sign_____________________________

Date_____________________________

Confirmed by co- advisor

Name____________________________

Sign_____________________________

Date_____________________________

Acknowledgement

First of all, I would like to thank my advisors, Professor A. RamaKrishnan and Ato
Wondwossen Seyoum, and Dr. Argaw for their comments and suggestions which made this
project paper possible.

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I would also like to thank employees of Meta Abo Brewery S.C specially W/ro Tsige Gifeom
and Ato Bisrat for cooperating me in all my data collecting efforts and taking time to fill the
questionnaire.

Last but not least, my heartfelt thanks goes to my brother Ato Misiker Tadesse and my friends
Ato Abey Getahun, Ato Taye Amogne, Ato Mekonnen Bogale and Ato Tekabe Sintayehu and
Ato Kibralem Sisay who have been supporting me morally and ideally starting from the
scratch. Thank you brother and friends!

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Table of contents

Content Page

Acknowledgement -------------------------------------------------------------------------------I

Table of contents ---------------------------------------------------------------------------------II

List of Tables ------------------------------------------------------------------------------------III

List of Figures ---------------------------------------------------------------------------------IV

Acronyms --------------------------------------------------------------------------------------- V

Abstract -----------------------------------------------------------------------------------------VI

CHAPTER ONE

1.1 Background of the study------------------------------------------------------------------ 1

1.2 Background of the organization---------------------------------------------------------- 3
1.3 Problem Statement ------------------------------------------------------------------------ 4
1.4 Objective of the study--------------------------------------------------------------------- 6
1.5 Scope of the study --------------------------------------------------------------------------7
1.6 Significance of the study ----------------------------------------------------------------- 8
1.7 Limitation of the study ------------------------------------------------------------------- 8
1.8 Organization of the paper ---------------------------------------------------------------- 9

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Overview of Entrepreneurship ------------------------------------------------------------ 10

2.2 What is Corporate Entrepreneurship? --------------------------------------------------- 11

2.3 Benefits of Corporate Entrepreneurship ------------------------------------------------- 13

2.4 Innovation------------------------------------------------------------------------------------ 14
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2.4.1 Types of innovation-------------------------------------------------------------------
14
2.4.2 Sources of innovation--------------------------------------------------------------- 15

2.4.3. Innovation in organizations---------------------------------------------------------- 17

2.4.3.1 Innovation in functional units of a company--------------------- 18

2.4.3.1.1 Innovation in marketing-------------------------------- 18
2.4.3.1.2 Innovation in production------------------------------ 23

2.5 Corporate entrepreneurship measures------------------------------=-------------- 25

2.5.1 Management support -------------------------------------------- 27
2.5.2 Autonomy/work discretion------------------------------------ 28
2.5.3 Reward/reinforcement-------------------------------------------28
2.5.4 Time availability---------------------------------------- ---------28
2.5.5 Organizational boundary----------------------------------------28
2.5.6 Entrepreneurial culture---------------------------------------------28
2.5.7 Risk-taking------------------------------------------------------- 29
2.5.8 Innovativeness----------------------------------------------------29
2.6 Corporate Entrepreneurship and the Pursuit of Competitive Advantage--------30
2.7 Challenges of corporate entrepreneurship--------------------------------------- 31
2.8 Organizational Characteristics That Encourage Corporate Entrepreneurship-33
2.9 Sustaining corporate entrepreneurship--------------------------------------------34

CHAPTER THREE

METHODOLOGY OF THE STUDY

3.1 Introduction -------------------------------------------------------------------------------36

3.2 Source of data-----------------------------------------------------------------------------36

3.3 Type of data-------------------------------------------------------------------------------36

3.4 Target population-------------------------------------------------------------------------36

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3.5 Sample technique and sample size-----------------------------------------------------37

3.6 Data collection method and tools-------------------------------------------------------37

3.7 Data analysis------------------------------------------------------------------------------------38

3.8 Data interpretation and presentation----------------------------------------------------39

CHAPTER FOUR

DATA ANALYSIS, FINDINGS AND INTERPRETATIONS

4.1 Analysis of the findings---------------------------------------------------------------- 40

4.1.1 Results from Descriptive Analysis--------------------------------------------- 41

4.1.1.1 Employees Personal Data Analysis------------------------------------- 41

4.1.1.1.1 Age distribution of the employees------------------------------ 41

4.1.1.1.2 Experience of the Respondents---------------------------------- 42

4.1.1.1.2.1 Respondents work experience in Brewery--------------- 42

4.1.1.1.2.2 Respondents work Experience in Other Company----- 43

4.1.1.1.3 Salary of the respondents------------------------------ ---------

44
4.1.1.1.4 Educational level of the respondents------------------------- 45

4.1.1.2 Determinants of corporate entrepreneurship in MAB-----------------

46
4.1.1.3 Marketing and production innovation in MAB------------------------- 50
4.1.2 Results from inferential analysis------------------------------------------- 54
4.1.2.1 The contribution of the determinants to corporate

entrepreneurship-------------------------------------------------------------54

4.1.2.2 Challenges of corporate entrepreneurship in MAB--------------------59

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CHAPTER FIVE

CONCLUSIONS AND RECOMMENDATIONS

5.1 Summary and Conclusions --------------------------------------------------------------60

5.2 Recommendations ------------------------------------------------------------------------62

References----------------------------------------------------------------------------------66

Annexes ------------------------------------------------------------------------------------67

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List of Tables

Tables Page

Table 1: Corporate entrepreneurship: terms and definitions -------------------------- 12

Table 2: Corporate entrepreneurship measures----------------------------------------- 26

Table 3: Sources of and solutions to obstacles in corporate entrepreneurship------ 32

Table 4: Existence of Determinants of Corporate Entrepreneurship----------------- 47

Table 5: Statistics of customers’ response for innovation and marketing

activities-----------------------------------------------------------------------------51

Table 6: Statistics of employees’ response to the practice of innovation and

              marketing activities of MAB---------------------------------------------------- 51

Table 7: Reliability statistics--------------------------------------------------------------- 55

Table 8: Relationship of dependent and independent variables----------------------- 56

Table 9: Analysis of Variance (ANNOVA) table of the regression------------------ 57

Table 10: Summary of the tables--------------------------------------------------------- 58

Table 11: Challenges of Corporate Entrepreneurship in the company--------------- 60

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List of Figures

Figure Page

Figure 1: Age distribution of the respondents shown using Bar graph------------------42

Figure 3: Work Experience of Employees in Brewery------------------------------------43

Figure 4: Experience of employees in other------------------------------------------------44

Figure 5: Salary of the respondents-------------------------------------- -------------------45

Figure 6: Educational Background of employees-----------------------------------------46

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Acronyms

1. MAB Meta Abo Brewery

2. HL Hectoliter
3. SC Share company
4. KM Kilo meter
5. QMR Quality Management Representative
6. M.Sc Masters of Science
7. B.Sc Bachelor of Arts
8. QMS Quality Management System
9. ISO International Standard Authority
10. IPMS Integrated Performance Management System
11. CAD Computer Aided Design
12. CAM Computer Aided Manufacturing
13. CE Corporate Entrepreneurship
14. PM Post Meridian
15. ANNOVA Analysis of Variance
16. ROI Return on Investment
17. R&D Research and Development

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Abstract

Entrepreneurship is the symbol of business strength and growth. Entrepreneurs are the founders
of today’s business success. Development is more than ever linked to entrepreneurship. This
necessity of entrepreneurship is quite significant in companies. Corporate entrepreneurship
activities and orientations can be considered important predictors of organizational performance.

The purpose of this paper is to examine the practice of corporate entrepreneurship in terms of
innovation and marketing development and its level of existence.

A structured questionnaire with two stage sampling approach was adopted and collected from
customers from each distribution route of the organization. Both descriptive statistics like mean,
median, mode, standard deviation, and inferential analysis like linear regression was used for
analyzing the data.

Findings – Corporate entrepreneurship exists in the company under study-Meta Abo Brewery.
However the level of existence in the company is insignificant. It is found that organizational
variables work process flexibility, lack of free time for employees to think of new ideas, low level
of motivation, and low insufficient amount of freedom of organization wide of employees are
significantly related to both innovation.

In order to solve major challenges of the company allowing employees to make decisions about
their work process, giving employees have time to incubate their ideas, providing rewards
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contingent on performance; encouraging employees to look at the organization from a broad
perspective are put.

Concerning marketing and production activity problems of the company, innovation on its
products and efficient and quality marketing services are recommended.

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