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Article Excerpt
There is a dearth of literature on stakeholder relationships and organizational posture as they affect entrepreneurial intensity inside established organizations. Corporate entrepreneurs are depicted as those managers or employees who do not follow the status quo and increase the entrepreneurial intensity of a firm. A stakeholder theory framework is presented as a guideline for exploring the relationship between stakeholder salience, organizational posture, and entrepreneurial intensity. This paper presents the view that if a company is to be more entrepreneurial, it must first consider its stakeholders as a source of opportunity and acceptance of new ideas.
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Corporate entrepreneurship is being embraced today by many companies as more than simply a component of a company's strategy, but rather as the very framework for the company's future goals and activities (Morris, Kuratko, & Covin 2008; Meyer and Heppard, 2000). As Hamel (2000:115) advises, "In these suddenly sober times, the inescapable imperative for every organization must be to make innovation an all-the-time, everywhere capability." Dess, Lumpkin, and McGee (1999) note that, "Virtually all organizations--new start-ups, major corporations, and alliances among global partners--are striving to exploit product-market opportunities through innovative and proactive behavior"--the type of behavior that is called for by corporate entrepreneurship. This paper posits the potential for a relationship between stakeholder theory and organizational posture which in turn increases the entrepreneurial intensity of an organization. If executives can put in place incentives to encourage organizational members to pursue entrepreneurial activities that benefit outside stakeholders as well as themselves, the firm can become a community of ongoing excellence. Entrepreneurial intensity (Morris, 1998) involves taking a proactive approach to the innovative pursuits of organizations. Focusing on problem solving for internal constituencies (managers, employees, and investors) and external constituencies (suppliers and community) should be a part of the successful implementation of a corporate entrepreneurial strategy.
The purpose of this paper is to provide a different perspective on the corporate entrepreneurship process by investigating the relationships between stakeholder salience, organizational posture, and entrepreneurial intensity. Recent literature (examples: the Journal of Business Ethics and the 2002 Ruffin Series special issue in Business Ethics Quarterly) has focused on the impact of stakeholder relationships and the entrepreneurial process. Also, Vandekerckhove and Dentchev (2005) suggest that increased understanding of the roles all stakeholders play can provide opportunities for the development of new products and services. Specifically, by maintaining relationships with multiple stakeholders, the organization is exposed to the needs of its constituencies leading to the potential of more proactive entrepreneurial behavior. Those organizations who take a more reactive stance are less likely to be aware of these entrepreneurial opportunities. Furthermore, Clarkson (1988, 1991, 1995) suggests that organizational posture is an evaluative result stemming from the level of stakeholder salience.
As stated earlier, recent literature has suggested the potential for relationships between stakeholder salience, organizational posture, and entrepreneurial activity. This paper attempts to organize these relationships and suggest a framework for how these variables relate to each other. While instruments have been developed to measure stakeholder salience, internal antecedents of corporate entrepreneurship, and entrepreneurial intensity, organizational posture has no recognized instrument for measurement. One major contribution with this paper is the introduction of an effective instrument to measure the organizational posture component.
Stakeholder salience refers to the perceived importance of internal and external constituencies in organizational performance. A stronger focus on critical stakeholders such as investors/stockholders, employees, managers, customers, and the community may have direct impact on the successful implementation of a corporate entrepreneurship strategy. Posture refers to how an organization reacts to changes in its environment. Four general postures have been discussed in the literature: reactive, defensive, accommodative, and proactive (Carroll, 1979; Wartick & Cochran, 1985; Clarkson, 1988, 1991, 1995). Finally, entrepreneurship intensity refers to the degree and frequency of entrepreneurship in the organization (Morris, 1998; Ireland, Kuratko, & Morris, 2006). In a sense it represents the strength of the entrepreneurship strategy. Also of interest is the moderating effect of internal antecedents (i.e., factors affecting the internal environment) on the corporate entrepreneurial process, specifically affecting the relationship between organizational posture and entrepreneurial intensity. Many factors encourage entrepreneurial actions. Past research suggests at least five categories including top managerial support, use of rewards, available resources, organizational boundaries, and work discretion (Hornsby, Kuratko, & Zahra, 2002).
If a company does not focus on stakeholders as a factor in influencing the organizational posture of the organization then further problems may develop in successful implementation of entrepreneurial activity. This perspective may be the key in establishing a more far reaching approach to the innovative strategies involved in corporate entrepreneurship. The model depicted in Figure 1 describes the hypothesized relationships described in this paper. Each element of the model is described and propositions regarding the nature of the relationships between each component of the model are then offered.
Corporate Entrepreneurship
Corporate entrepreneurship (CE) and the behavior through which it is practiced has been initiated in established organizations for a host of purposes, including those of profitability (Vozikis, Bruton, Prasad & Merikas, 1999; Zahra, 1993), strategic renewal (Guth & Ginsberg, 1990), innovativeness (Baden-Fuller, 1995), gaining knowledge to develop future revenue streams (McGrath, Venkataraman & MacMillan, 1994), international success (Birkinshaw, 1997), and the effective configuration of resources as the pathway to developing competitive advantages (Borch, Huse & Senneseth, 1999; Covin & Miles, 1999; Covin, Slevin, & Heeley, 2000; Ireland, Kuratko, & Covin, 2003). Regardless of the reason the firm decides to engage in CE, managerial behavior affects the degree of success achieved from these efforts. From the perspective of long-term firm growth through CE, creative and innovative managerial behavior must be displayed and consistently reinforced.
Some scholars have observed that corporate entrepreneurship (CE) is an inevitable byproduct of organizational activity and, therefore, has existed as long as organizations themselves (e.g., Burgelman and Sayles, 1986; Covin and Miles, 1999; Drucker, 1985; Kuratko, Ireland, and Hornsby, 2001). However, CE as a concept has surfaced within the academic literature largely over the last four decades. The depictions of CE as a concept have varied considerably over time.
Early scholars tended to use the label CE solely in reference to the pursuit of new business venturing opportunities within established firms (e.g., Hill and Hlavacek, 1972; Peterson and Berger, 1971). The terms CE and corporate venturing were often used interchangeably and in reference to this same "new business" phenomenon.
More recent conceptualizations of CE suggest that entrepreneurship also exists in other forms within established firms. For example, Guth and Ginsberg (1990) and Zahra (1991) have argued that CE may occur as strategic renewal, whereby an established firm instigates significant changes to its strategy and/or structure in pursuit of greater organizational efficiency or effectiveness. In their review of the CE literature, Sharma and Chrisman (1999) proposed that CE may exist as corporate venturing, strategic renewal, or innovations "--that is, innovations involving "the introduction of an original invention or idea into a commercially usable form that is new to the marketplace and has the potential to transform the competitive environment as well as the organization" (p. 19). In our context, we envision CE centering on re-energizing and enhancing the firm's ability to develop the skills through which innovations can be created. CE is linked to firms' efforts to establish sustainable competitive advantages as the foundation for profitable growth (Ireland, Kuratko, & Covin, 2003; Kuratko, 1993; Zahra, 1991; Zahra, Kuratko, & Jennings, 1999).
Ireland, Kuratko, and Covin (2003) define CE strategy as a "vision-directed, organization-wide reliance on entrepreneurial behavior that purposefully and continuously rejuvenates the organization and shapes the scope of its operations through the recognition and exploitation of entrepreneurial opportunity." However, as Amit observed, "entrepreneurial strategies allow people to be innovative, creative, and responsible for...
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