Surviving the Next Economic Crisis Corporate

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employment production and national income as well as providing opportunities to lessen poverty. Limsavarn 2004 Thus the focus on upgrading the capabilities of the Thai auto parts manufacturing. companies is critical As such exploring CE may be one way to increase awareness of the auto parts. manufacturing sector s competitiveness, However there has been very little research in antecedents and performance of CE in developing. countries and emerging economies particularly Thailand Sebora and Theerapatvong 2010 Sebora et al. 2010 Thailand is worthy of research in this area because it has one of the fastest growing economies in. South East Asia In addition CE performance relationships have been examined mainly based on. financial aspects particularly growth and profitability while non financial criteria have not been. explicitly examined Mair and Rata 2004 Further the literature has a quantitative bias Zahra. Jennings and Kuratko 1999 which gives rise to the possibility of enriching the body of knowledge with. more qualitative research This paper aims to fill these gaps in the literature using a mixed method. approach The paper attempts to address these problems by investigating and exploring both external and. internal environments that stimulate entrepreneurship inside organizations and entrepreneurial activities. outcomes in terms of both financial and non financial performance. THEORETICAL MODEL AND HYPOTHESES, CE is defined as entrepreneurship in an existing organization Antoncic and Hisrich 2001 CE is. viewed as an internal process in an existing firm that leads to a variety of innovations such as the renewal. of operations and the creation of new products services processes and markets resulting in sustain. growth and competitive advantage Yiu and Lau 2008 Thus CE has been highlighted as a key factor for. economic transformation and development to foster innovation and wealth creation Kontoghiorghes. Awbre and Feurig 2005 Zahra et al 1999 argue that CE is a knowledge creation process Dess et al. 2003 support this view suggesting that CE promotes organizational learning and develops new. knowledge CE is therefore recognized as an effective means for emerging economy firms to revitalize. reconfigure resources and transform into knowledge based or innovation oriented firms that are ready to. compete in the global economy Antoncic and Hisrich 2004 Yiu and Lau 2008 This suggests that the. development and enhancing entrepreneurial mindset could also be of benefit to the Thai auto parts. manufacturing firms, Antoncic and Hisrich 2001 developed a multidimensional CE construct by integrating previous. research studies Covin and Slevin 1989 Knight 1997 and found that their redefined measure of CE is. more complete due to a combination of four dimensions in a single study and is more parsimonious in. eliminating redundancy in the innovative dimensions and is valid in a cross cultural setting Antoncic. and Hisrich s 2001 study was conducted in the United States a developed country and Slovenia a. transition economy According to Antoncic and Hisrich their research classified CE into four. characteristics First new business venturing refers to the creation of new business within the existing. company that are related to the firm s current products and markets Second innovativeness involves. creation of new products services and technologies Third self renewal refers to strategy reformulation. reorganization and organizational change Finally pro activeness reflects top management orientation to. take risk and aggressively and proactively compete with industry competitors. This paper extends the CE literature by integrating previous research findings of researchers such as. Antoncic and Hisrich 2001 Covin and Slevin 1991 and Zahra et al 1999 Based on the works of these. researchers the rationale for the development of a theoretical model of CE antecedents and performance for the. auto parts manufacturing sector in Thailand is detailed and the relationships are illustrated in Figure 1 The. theoretical model is based on the simple premise that conditions in the environment and the organization. influences entrepreneurial activities in the firm which affects organizational performance. Figure 1 The theoretical model of CE antecedents and effects. ENVIRONMENTAL CONDITIONS, The external environment has historically been the focus as the predictor of CE Covin and Slevin. 1991 Dess et al 1997 Morris et al 2008 Environmental conditions are viewed as a multidimensional. concept Zahra 1993b which provides initial conditions that either facilitate or constraint a firm s. entrepreneurial behaviour Kollmann and Stockmann 2008 Zahra 1993a. Environment variables including dynamism hostility and heterogeneity based on Miller and. Friesen s 1983 study are widely used in literature and are found to influence CE Covin and Slevin. 1989 Kollmann and Stockmann 2008 Lumpkin and Dess 2001 Dynamism refers to the perceived. instability and continuing changes in the firm s market Organizations often respond to challenging. conditions found in dynamic or high technological environments by adopting an entrepreneurial posture. Antoncic and Hisrich 2004 Hostility on the other hand represents the degree of threat to the firm. posed by the intensity of the competition and the downswings and upswings of the firm s principal. industry It is more likely that firms will be entrepreneurial when competitors products change rapidly or. when customer needs fluctuate Kollmann and Stockmann 2008 Zahra and Garvis 2000 Further. heterogeneity encompasses variations among a firm s markets that require diversity in production and. marketing orientations Firms operating in many different markets are likely to learn from their broad. experience with competitors and customers Thus it is likely that entrepreneurial behaviour will follow. Entrialgo et al 2001 Morris et al 2008 Therefore environmental dimensions are expected to be. predictors of CE and the following hypothesis is put forward. Hypothesis 1a Environmental dynamism will have an impact on CE. Hypothesis 1b Environmental hostility will have an impact on CE. Hypothesis 1c Environmental heterogeneity will have an impact on CE. ORGANIZATIONAL STRATEGY, The firm s strategy is another variable influencing CE The literature is highly supportive of the use.
of the Miles and Snow s 1978 typology in both small and large companies and confirms that their. typology influences entrepreneurial activities Moreno and Casillas 2008 Miles and Snow s strategic. orientation focuses on the direction and influence given by the top management to the firm s overall. vision and direction Four different strategies are identified based on organizational adaptation to the. changing operating environment Prospector Analyzer Defender and Reactor. The Prospector type frequently adds to and changes its products and services and markets consistently. attempting to be first in the market Growth primarily arises from the development of new markets and the. expansion of product offerings Shortell and Zajac 1990 Unlike the Prospector the Defender type tends to. emphasize maintaining market share through low cost and efficiency in narrowly defined market segments. Firms adopting this orientation are non adaptive defensive non innovative and risk aversive Moreover the. Analyzer type is an intermediate hybrid combining the strengths of both the Prospector and the Defender into a. single system Firms adopting this orientation protect existing products and markets through efficiency oriented. strategies while cautiously penetrating new markets through intensified product or market innovation Finally. the Reactor type lacks a consistent strategy Thus because the Reactor strategy responds inappropriately to. environmental change and uncertainty performing poorly as a result and is then reluctant to act aggressively in. the future Miles et al 1978 557 many researchers have tended to exclude the Reactor strategy Conant et. al 1990 Kald et al 2000 Matsuno and Mentzer 2000 Thus this paper uses only three feasible strategy. types Prospector Analyzer and Defender for evaluating the determinant effects on CE The following. hypothesis is therefore put forwarded, Hypothesis 2a Prospector strategy will have an impact on CE. Hypothesis 2b Analyzer strategy will have an impact on CE. Hypothesis 2c Defender strategy will not have an impact on CE. ORGANIZATIONAL CULTURE, A general consensus in the literature is that corporate culture plays a critical role in shaping CE. Morris et al 2008 Russell and Russell 1992 Culture that supports innovation tends to stimulate. organizational members to take CE initiatives Kuratko et al 2001 Russell 1999. Organizational culture characteristics such as management support autonomy and work discretion. reward and reinforcement time availability and loose organizational boundaries Hornsby Naffziger et. al 1993 are critical to foster an entrepreneurial culture in organizations Antoncic and Hisrich 2001. 2004 Antoncic and Scarlat 2005 In Antoncic and Hisrich s 2001 2004 studies the organizational. support dimension is measured by items from Hornsby et al 1993 and the findings indicate that. organizational support can be an important predictor of CE In addition Gray et al 2003 also suggest. that culture influences the management style and shapes entrepreneurial behavior of individuals and. groups in the company at all levels Based on this understanding the following hypothesis is put forward. Hypothesis 3 Organizational culture will have an impact on CE. CORPORATE ENTREPRENEURSHIP AND FIRM PERFORMANCE, The literature highlights the importance of CE for improving a company s performance The most. common measures of performance in CE studies are growth and profitability and the research findings. support a positive association between CE and financial performance Antoncic and Hisrich 2001 2004. Covin and Slevin 1989 Wiklund and Shepherd 2005 Zahra 1993b On the other hand measuring. performance employing non financial criteria has been recognized recently in the CE field and some. researchers argue that non financial criteria can be insightful in the early years of an entrepreneurial. project Dess et al 2003 Zahra 1993a Thus non financial criteria such as customer satisfaction. employee satisfaction quality of product and service and new product and service development can be. useful in evaluating the performance of CE Carton and Hofer 2006 Dess and Lumpkin 2005 Research. findings support a positive association between CE and non financial performance Holt et al 2007. Mair and Rata 2004 Therefore CE is expected to be related positively to performance The following. hypothesis is put forward, Hypothesis 4a CE will have a positive influence on financial performance. Hypothesis 4b CE will have a positive influence on non financial performance. METHODOLOGY, This paper employed a mixed method research where both quantitative and qualitative methods.
were used The questionnaire survey was originally developed in English then translated into Thai and. then back translated into English Brislin 1970 The questionnaire was pre tested with six CEOs of Thai. auto parts manufacturing firms not included in the final sample in order to ensure the integrity of the. translation and to improve the understanding of the questions. 400 companies were randomly selected from the Thailand Automotive Industry directory. 2006 2007 CEOs or their deputies of the sample firms were selected to participate as they would be. most knowledgeable about the overall situation activities and orientations of the firm Fitzsimmons. Douglas et al 2005 Although the generalizability of findings of single industry based studies is limited. a desirable feature of such studies is that they provide a greater degree of control over market and. environmental characteristics Snow and Hambrick 1980. 220 questionnaires were returned with 207 useable responses yielding a 52 response rate The. responses yielded 59 9 small sized to medium sized enterprises SMEs and 40 1 were large. companies Firms below 200 employees were classified as SMEs and 200 and above employees as large. companies The firm size number of employees ranged from 12 to 27 500 The companies had been in. business for between five and 56 years with a mean of 17 99 years SD 10 80 and a median of 16 years. N 207 This shows that some of the companies covered in this study were not early start up businesses. but could be considered to be in the later stages of business development. In addition to the quantitative data from the mail survey 10 CEOs or their deputies who participated in. the survey were selected for the interviews Since quantitative and qualitative methods have different strengths. and weaknesses it has been argued that researchers should try to use multiple research methods to provide. broader insights into issues being studied Creswell and Clark 2007 Therefore in pursuit of broader insights. in relation to CE in the Thai automotive industry both quantitative and qualitative methods were deployed in. this study The data was collected from February to November 2008. MEASUREMENT, A seven point Likert type scale was used in the research and specific reference was provided for. each measure This is discussed below,Environmental Conditions. 13 items were used to measure environmental conditions This instrument consisted of five items. measuring environmental dynamism five items measuring environmental hos. Surviving the Next Economic Crisis Corporate entrepreneurship strategies of to the perceived will have an impact on CE CORPORATE ENTREPRENEURSHIP AND FIRM

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