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Implementing corporate entrepreneurship through the influence of leadership

Bachelor thesis research by Iloy Scheerhoorn

 

In July 2015 Iloy Scheerhoorn graduated from the Tilburg School of Economics and Management at Tilburg University. Iloy followed the bachelor Bedrijfseconomie and wrote his bachelor thesis in the area of corporate entrepreneurship.

Corporate entrepreneurship is derived from entrepreneurship and basically means entrepreneurship within organizations or in other words entrepreneurial behavior of employees within firms. Stopford and Baden-Fuller (1994) identified three types of corporate entrepreneurship: 1) creation of new business in existing organizations, 2) transformation or renewal of existing organizations, and 3) the firm changes the rules of competition for its industry. Corporate entrepreneurship could be a strategic tool necessary for the survival of the firm. However, implementing corporate entrepreneurship in an organization requires strong leadership. Therefore, the goal of the bachelor thesis is to answer the question: “to what extent do attributes of a leader stimulate entrepreneurial behavior in followers?” This question is answered by means of a literature study.

Creativity and innovativeness, proactiveness, and risk taking are three types of entrepreneurial behavior of employees and literature shows that corporate entrepreneurship can succeed in organizations when these types of behaviors are stimulated among employees. Gupta, MacMillan, and Surie (2004) describe entrepreneurial leadership as “leadership that creates visionary scenarios that are used to assemble and mobilize a supporting cast of participants who become committed by the vision to the discovery and exploitation of strategic value creation”. In order to stimulate entrepreneurial behavior of employees, leaders should have expertise in the field they operate, especially when it comes to innovation. Next to that social skills are needed for sense making activities and to persuade employees. By displaying emotions and focusing on intrinsic motivation, a leader can stimulate followers to behave entrepreneurially. Literature stresses the importance of leaders having a clear and compelling vision of the future and the ability to communicate this vision to employees.

From a managerial point of view it is interesting to know which steps organization need to take to implement corporate entrepreneurship. First of all top management should be interested and willing to implement corporate entrepreneurship and understand that they play a crucial role in the implementation. Next to that, management should focus on employees within the firm and make sure that they (can) behave in an entrepreneurial way. Managers in the firm should have a clear vision and expertise. Finally, managers who possess the necessary social skills should be selected, because these skills are essential in stimulating entrepreneurial behavior of employees. As a result the firm becomes more “entrepreneurial” which is necessary, because nowadays organizations operate in a complex and fast changing environment.

Gupta, V., MacMillan, I. C., & Surie, G. (2004). Entrepreneurial leadership: Developing and measuring a cross-cultural construct. Journal of Business Venturing, 19(2), 241-260.
Stopford, J. M., & Baden�Fuller, C. W. (1994). Creating corporate entrepreneurship. Strategic Management Journal, 15(7), 521-536.