Academic journal article SA Journal of Industrial Psychology

Employee Perceptions of Risks and Rewards in Terms of Corporate Entrepreneurship Participation

Academic journal article SA Journal of Industrial Psychology

Employee Perceptions of Risks and Rewards in Terms of Corporate Entrepreneurship Participation

Article excerpt

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Introduction

Key focus of the study

Many firms are adopting corporate entrepreneurship (CE) as a way of combating the lethargy and bureaucracy that often accompany business size and cultural lock-ins (Burns, 2004). Schindehutte, Morris and Kuratko (2000) point out that a spirit of entrepreneurship needs to permeate organisations. It is essential to ensure that a continuous flow of innovation and entrepreneurship becomes a specialised function in organisations.

Background to the study

Firms increase the chances of success of CE strategies if they have the necessary skills to structure (accumulate and strategically divest), bundle (successfully combine), and use (mobilise and deploy) their resources (Sirmon, Hitt & Ireland, 2007). Appointing people or teams that drive and stimulate entrepreneurial activities, like creating new ventures, culminate in active change where organisational support and self-efficacy play crucial roles for employees who are willing to take charge in organisations (Onyishi & Ogbode, 2012).

Trends from the research literature

In recent years, CE has been the focus of considerable research activity (Covin & Kuratko, 2008; Ireland, Covin & Kuratko, 2009; Phan, Wright, Ucbasaran & Tan, 2009). With the scope of CE widening, organisations that lack prior entrepreneurial recognition are adopting CE in order to survive and succeed in increasingly competitive and financially constrained environments (Antoncic, 2006; Kuratko & Audretsch, 2009; Neill & York, 2011; Phelps, 2009). CE usually refers to organisations' commitments to pursuing new opportunities, creating new units or businesses, being innovative in terms of products, services and processes, strategic self-renewal, constructive risk-taking and being pro-active (Antoncic & Hisrich, 2004).

Previous research on CE focuses on the attributes that promote entrepreneurial activities. However, it ignores, to some extent, the participation of individual employees and of groups of employees that could promote CE in organisations (Kuratko, Ireland, Covin & Hornsby, 2005). Hornsby, Kuratko, Shepherd and Bott (2009) propose that managers at various levels have different roles that provide a form of structural ability to implement entrepreneurial ideas.

Organisations that pursue CE strategies are likely to exhibit a cascading, yet integrated, set of entrepreneurial activities at the senior, middle and lower levels of management, with managers at the different levels sharing joint responsibility for their organisations' entrepreneurial activities (Hornsby et al, 2009). One often attributes the success of ventures, which practise CE, to the keen participation and specialised skill sets that certain managers and employees bring to the ventures (Hornsby, Kuratko & Zahra, 2002). A sense of coherence often determines employees' perceptions of the helping and restraining forces in organisations (Muller & Rothmann, 2009). The combination of knowledge, skills and judgements of interested and committed employees and managers ensures the success of CE initiatives (Allen, Lucero & Van Norman, 1997).

Recent research confirms that understanding motivational rewards and risks is important to understanding CE participation (Hornsby et al, 2009). Ulis is especially true when decisions to participate in CE initiatives includes various rewards such as financial incentives, opportunities for future growth, intrinsic rewards like feelings of achievement and satisfaction from completing interesting and challenging work as well as increased decision-making autonomy. Furthermore, deterrents to participation include job risk, pay risk, risk of failure, unavoidable costs and extra effort requirements (Arnolds & Venter, 2007).

Brief overview of corporate entrepreneurship

There are various descriptions of entrepreneurship in corporations. …

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