research

?id=89

Corporate Entrepreneuship in the SA construction industry

Nature of the study

How do top management teams (TMTs) manage to strike a balance between the corporate entrepreneurship (CE) growth modes namely external corporate venturing (inorganic) and internal corporate venturing (organic). Organic and inorganic CE growth modes represent establishment of independent start-ups and acquisitions, respectively. Previous studies suggest that these growth modes not only require different set of skills; abilities etc., from TMTs, but also demand distinct organisational processes, strategies and structures. Recently, scholars (see: Gold et al., 2012; Fischer, 2015) have introduced the concept of the “spin-along approach” (SAA). The SAA is considered to be a hybrid corporate strategic approach; in which TMTs combine both internal and external corporate venturing (Fischer, 2015). The current study is interested in contributing a better understanding of this concept and integrates recent research in corporate entrepreneurship and entrepreneurial orientation (Kreiser et al., 2002; Dess & Lumpkin, 2005; Urban & Barreria, 2010).

Methodological approach:

The intentions is to explore a series of case studies (a handful of largest construction firms’ in South Africa), and describe in detail, how they simultaneously or in series, strategically, and structurally manage to adopt a SAA. This current study therefore is interested in exploring the role of corporate entrepreneurship and TMT strategic practices, in a longitudinal study.

Context:

In general, businesses based in transition economies such as South Africa (SA), are not only challenged by dynamic market conditions; hostility; short-product life cycles etc., but also by political, economic unrest. Here, the chosen forms of corporate entrepreneurship can be particularly critical for the profitability and survival of the firm (Antoncic & Hisrich, 2001; Urban & Barreria, 2010). Project-based industries like construction are known to have a hype-competitive nature because they are driven by contract-tenders, which by definition are unique temporary projects. The rivalry among the largest firms in the SA construction industry has been intense and thus the industry's environment can be viewed as being hostile and is heavily influenced by external environmental factors including; huge demands from political and legislative forces, international market changes and domestic market recession. Initial evidence suggest that large SA corporations in this industry and their TMTs act entrepreneurially. The question is, in which ways, and under what conditions? 

Xolani Nghona
Center PhD student, Tilburg University
Cape Peninsula University of Technology