St. Petersburg University
Graduate School of Management
Master in Management
CORPORATE ENTREPRENEURSHIP INTENSITY
IN RUSSIAN IT COMPANIES
Master’s Thesis by the 2nd year student
Concentration — MITIM
Professor, Galina Shirokova
ЗАЯВЛЕНИЕ О САМОСТОЯТЕЛЬНОМ ХАРАКТЕРЕ ВЫПОЛНЕНИЯ
ВЫПУСКНОЙ КВАЛИФИКАЦИОННОЙ РАБОТЫ
Я, Толмачева Екатерина Александровна, студент второго курса магистратуры
направления «Менеджмент», заявляю, что в моей магистерской диссертации на тему
«Факторы влияющие на интенсивность внутрифирменного предпринимательства в российских
ИТ компаниях», представленной в службу обеспечения программ магистратуры для
последующей передачи в государственную аттестационную комиссию для публичной
защиты, не содержится элементов плагиата.
Все прямые заимствования из печатных и электронных источников, а также из
защищенных ранее выпускных квалификационных работ, кандидатских и докторских
диссертаций имеют соответствующие ссылки.
Мне известно содержание п. 9.7.1 Правил обучения по основным образовательным
программам высшего и среднего профессионального образования в СПбГУ о том, что
«ВКР выполняется индивидуально каждым студентом под руководством назначенного
ему научного руководителя», и п. 51 Устава федерального государственного бюджетного
государственный университет» о том, что «студент подлежит отчислению из СанктПетербургского
квалификационной работы, выполненной другим лицом (лицами)».
STATEMENT ABOUT THE INDEPENDENT CHARACTER OF
THE MASTER THESIS
I, Ekaterina Tolmacheva, (second) year master student, program «Management», state
that my master thesis on the topic «Factors affecting corporate entrepreneurship intensity in Russian
IT companies», which is presented to the Master Office to be submitted to the Official Defense
Committee for the public defense, does not contain any elements of plagiarism.
All direct borrowings from printed and electronic sources, as well as from master theses,
PhD and doctorate theses which were defended earlier, have appropriate references.
I am aware that according to paragraph 9.7.1. of Guidelines for instruction in major
curriculum programs of higher and secondary professional education at St. Petersburg University
«A master thesis must be completed by each of the degree candidates individually under the
supervision of his or her advisor», and according to paragraph 51 of Charter of the Federal State
Institution of Higher Education Saint-Petersburg State University «a student can be expelled
from St. Petersburg University for submitting of the course or graduation qualification work
developed by other person (persons)».
Название магистерской диссертации
Описание цели, задач и основных результатов
Толмачева Екатерина Александровна
Факторы влияющие на интенсивность
внутрифирменного предпринимательства в
российских ИТ компаниях
Высшая школа менеджмента
Менеджмент (Master in Management - MIM)
доктор экономических наук, профессор Г.В.
Целью исследования является определение
влияния внутренних и внешних факторов на
внутрифирменное предпринимательство в
российских ИТ компаниях. К внутренним
факторам, имеющим положительное влияние на
предпринимательства были отнесены высокий
уровень сложности организационной структуры,
нематериальна мотивация, гибкость системы
планирования и ориентация системы
планирования на потребности рынка. К
внутренним факторам, негативно влияющим на
предпринимательства относятся высокий
уровень формализации и долгосрочное
планирование. Внешние факторы – динамизм,
гетерогенность рынка и уровень конкуренции положительно влияют на интенсивность
факторы влияющие на внутрифирменное
предпринимательство, инновации, ИТ
Master Student's Name
Master Thesis Title
Main field of study
Academic Advisor's Name
Description of the goal, tasks and main results
Factors affecting corporate entrepreneurship
intensity in Russian IT companies
Graduate School of Management
Professor Galina Shirokova
The goal of the research is to understand how do
internal and external factors impact CE in Russian
IT companies. Internal factors positively related to
CE intensity are high level of complexity, nonmonetary motivation, flexibility of planning and
market scope of planning. Internal factors negatively
related to CE intensity are high level of
formalization and long-term horizon of planning.
All external factors, dynamism, heterogeneity and
level of rivalry are proved to be positively related to
Corporate entrepreneurship, factor of corporate
entrepreneurship, innovations, IT
Table of Contents
Chapter 1. Corporate entrepreneurship: theoretical background and modern interpretation ..........7
Approaches to corporate entrepreneurship definition ...................................................7
Historical perspective of corporate entrepreneurship research ...................................10
Benefits of corporate entrepreneurship .......................................................................14
Internal and external factors influencing the intensity of corporate entrepreneurship 15
Chapter 2. Factors influencing corporate entrepreneurship intensity: results of empirical
Case study design ........................................................................................................28
Results of cross-case analysis .....................................................................................32
Findings from a case study ..........................................................................................41
List of References ..........................................................................................................................47
Appendix 1. Results of literature analysis .....................................................................................57
Appendix 2. Interview questions ...................................................................................................60
Appendix 3. Short interviews’ results ...........................................................................................62
The following master thesis investigation is devoted to internal and external factors
affecting corporate entrepreneurship in Russian IT companies.
The IT industry by way of a research object was selected due to the fact that the IT
industry is highly associated with innovations – ICT patents applications amount 40% of all
patent applications and ICT R&D expenditures account up to 33% of overall business
expenditures on Research and Development (OECD, 2015). In order to stay competitive in this
industry company need to support a process of constant product development, possible only with
innovations. There are two ways to stay innovative: merge innovations or develop innovation
within a company. First way probably takes less effort, but second provides an internal source of
Corporate entrepreneurship importance for a company is hard to overemphasize:
according to multiple scientific researches, it not only improves financial, market and innovation
performance, but also enhances capabilities and helps in creating of learning organization.
Companies with intensive corporate entrepreneurship tend to be more competitive in hostile
markets, what has a special concern for companies currently operating on Russian market. The
analysis of corporate entrepreneurship predictors has a significant importance for companies
operating on highly innovative markets where lack of innovativeness, failure to diversify
products portfolio and product updates’ delays leads to wane of a market share or to company
bankruptcy. Ability to create an outstanding product is a main success driver on markets where
customer’s preferences are formed by companies operating on this market. Moreover, constant
development of new products and services is able to help a company to differentiate product
portfolio and to avoid a company failure at a moment when product’s lifecycle is over.
The purpose of the study conducted is in building a working model of external and
internal factors, influencing the intensity of corporate entrepreneurship and giving a description
of how do elements of internal and external environment influence corporate entrepreneurship in
Russian IT companies. Research question established is how external and internal factors affect
corporate entrepreneurship. Answer on this question will give managers an understanding of
which factors impact corporate entrepreneurship directly, which factors are just supportive and
what direction company should work in order to establish intensive corporate entrepreneurship.
This paper consists of the investigation of approaches to corporate entrepreneurship
definition, the theoretical research of corporate entrepreneurship theories with segregation on
stages according to time and to the object of a research, identification of corporate
entrepreneurship benefits and the observation of existing findings in corporate entrepreneurship
antecedents. The study of theoretical sources is following with building 13-factors model, taking
into consideration influence of external and internal environment. Farther as a result of research
of connections between external and internal environment is suggested a model, taking into
consideration key role of the industry influence on corporate entrepreneurship intensity.
The theoretical part is supported with the case study of five Russian IT companies
consisting of interviews with companies’ founders and executives and the analysis of the results
collected and adjustment of a theoretical model aligning it to the case study findings.
The last step of this research is comparison of results expected according to the
theoretical model and results obtained from an empirical study, a discussion on matches and
assumptions of reasons of mismatch, a managerial implication of the results obtained, a
description of limitations and suggestions for further researches.
CHAPTER 1. CORPORATE ENTREPRENEURSHIP: THEORETICAL
BACKGROUND AND MODERN INTERPRETATION
Approaches to corporate entrepreneurship definition
Before the term “corporate entrepreneurship” became acknowledged, in scientific
researches were developed several concepts describing the same phenomenon under various
names. In 1984, Pinchot used a term “intrapreneurship” describing process of corporate
innovations inside the existing company (Pinchot 1984, p. 29), repeating internal corporate
entrepreneurship of Schollhammer made in 1981 (Schollhammer, 1981). Ellis and Taylor in
1987 and Guth and Ginsberg in 1990 applied to use “corporate venture” term for designation the
process of innovation within an existing organization (Ellis and Taylor, 1987; Guth and
First possible approach is to focus on personal characteristics of an individual
intrapreneur. In 1984, Pinchot defined intrapreneur as person “who take hands-on responsibility
for creating innovation of any kind, within a business” (Pinchot, 1984, p. 29). Ross and Unwalla
in 1986 described intrapreneur as an ambitious and competitive person changing current
situation, focused on results and motivated by challenges and innovation (Ross and Unwalla,
1986). Bagby and Luchsinger in 1987 suggested that an intrapreneur differs from entrepreneur
by the psychological nature: while first is looking for changes and innovations in the context of
existing organization, second is more independent and oriented on stat-up mode (Bagby and
Luchsinger, 1987). McKinney in 1989 supposed that intrapreneur is a person able to support
innovativeness and sustain an entrepreneurial activity within a big corporate environment
(McKinney, 1989, p. 79).
Second approach makes an accent on corporate venture formation. In 1979 Biggadike
told that corporate venture is "marketing a product or service that the parent company has not
previously marketed and that requires the parent company to obtain new equipment or new
people or new knowledge” (Biggadike, 1979, p. 104). Cooper in 1981 suggested a concept of
intracorporate ventures giving a birth to new businesses and developing, producing, and
marketing a new product (Cooper, 1981, p. 41). Ellis and Taylor in 1987 defined corporate
venture as “a strategy of unrelatedness to present activities, to adopt the structure of an
independent unit and to involve a process of assembling and configuring novel resources” (Ellis
and Taylor, 1987, p. 528). Guth and Ginsberg in 1990 named internal venturing a one of the
possible forms of corporate entrepreneurship, characterized with a new businesses creation
within an existing organization, while second form is a transformation of an organization (Guth
and Ginsberg, 1990, p. 6).
Burgelman in 1983 defined corporate entrepreneurship as a process of innovation through
an internally invented new combination of sources (Burgelman, 1983, p. 1349). This definition
sends to Schumpeter’s specification, which has become a classic, observing the main function of
entrepreneurship as a recombination of existing factors or a new combinations invention
(Schumpeter, 1934). In 1986 Zahra distinguished five forms of corporate entrepreneurship:
administrative, opportunistic, acquisitive, imitative and incubative (Zahra, 1986) and afterwards
gave a definition of corporate entrepreneurship as formal or informal activities aimed at creating
new businesses in established companies through product and process innovations and market
developments (Zahra, 1991). In 1995 Zahra named corporate entrepreneurship the combination
of company's innovation, renewal, and venturing efforts (Zahra, 1995, p. 227).
Sathe in 1988 stated two types of corporate entrepreneurship: deep and surface; surface is
a pattern where entrepreneurship perceived as a business objective, when in deep it perceived as
a shared value (Sathe, 1988). Corporate entrepreneurship includes not only entrepreneurial
processes within an existing organization but also includes observation of external environment
looking for new markets and opportunities (Russell, 1992; Covin and Slevin, 1998). According
to Stopford and Baden-Fuller in 1994, exists three types of corporate entrepreneurship: a creation
of new business activities within an existing organization, a transformation or a renewal of
existing organizations and a change of rules of competition in its industry (Stopford and BadenFuller, 1994). Birkinshaw in 1997 identified four types of initiatives based on the locus of the
market opportunity: local, internal, global and hybrid (Birkinshaw, 1997).
Further development of the concept accepted corporate entrepreneurship not only as a
way of new combination of existing resources, but also as a way of resource creation (Zahra,
Jennings, and Kuratko, 1999).
In 2001 Ahuja and Lampert identified three organizational pathologies that inhibit
breakthrough inventions: the familiarity trap – favoring the familiar; the maturity trap – favoring
the mature; and the propinquity trap – favoring search for solutions near to existing solutions
(Ahuja and Lampert, 2001).
Corporate entrepreneurship is also similar to a concept of an entrepreneurial organization,
because this concept suggest entrepreneurial organization as a company with innovations and
improvements constantly developing within an organization (Morris, 2001). Corporate
entrepreneurship strategy is manifested through the presence of three elements: an
entrepreneurial processes and behavior (Ireland, Covin, Kuratko, 2006a).
Entrepreneurship intensity depends on frequency and degree of entrepreneurship (Ireland
et al., 2006a). The degree of entrepreneurship indicates the extent to which an organization’s
efforts are innovative, risky, and proactive (Ireland et all, 2006a, p. 12). Corporate
entrepreneurship intensity is connected to a definition of entrepreneurial firm: risk-taking,
innovative, and proactive (Barringer, 1991). Proactiveness means that company strategy is more
oriented on launching new product than responding a competition (Covin and Stevin, 1990;
Zahra, 1993; Barrett, 1996). Quinn in 1979 defined innovation as development of original
decision for new or already existing need (Quinn, 1979). Frequency of entrepreneurship
estimation is based on amount of entrepreneurial initiatives company is taking (Ireland et al.,
In the following research, corporate entrepreneurship is interpreted as an innovation
process occurring within an existing organization aimed on new product creation, existing
product development, organizational processes improvement and general observation of new
opportunities for a company.
Three approaches to corporate entrepreneurship definition: through the initiator of
innovations – intrapreneur; corporate venturing and corporate entrepreneurship are presented in
Table 1 Approaches to corporate entrepreneurship definition
A person who take hands-on
Who is the Intrapreneur? In:
responsibility for creating
Intrapreneuring: Why You Don't Have to
innovation of any kind, within a
Leave the Corporation to Become an
Entrepreneur. Harper & Row. p.29
An ambitious and competitive
Who is an intrapreneur?, Personnel, 63
person changing current situation, Unwalla
focused on results and motivated
by challenges and innovation
A person able to support
Forget the Corporate Umbrella-innovativeness and sustain an
Entrepreneurs Shine in the Rain. Sloan
entrepreneurial activity within a
Management Review 30, no. 4, p. 79
big corporate environment
Marketing a product or service
The risky business of diversification.
that the parent company has not
Harvard Business Review. 57(3). p. 104
previously marketed and that
requires the parent company to
obtain new equipment or new
people or new knowledge
Intracorporate ventures giving a
Strategic Management: New Ventures and
birth to new businesses and
Small Business. Long Range Planning
developing, producing, and
14(5) p. 41
marketing a new product
A strategy of unrelatedness to
Specifying entrepreneurship. Frontiers of
present activities, to adopt the
entrepreneurship research p. 528
structure of an independent unit
and to involve a process of
assembling and configuring novel
Internal venturing is a one
Guest editors’ introduction: Corporate
possible forms of corporate
entrepreneurship. Strategic management
journal 11, no. 5p. 6
with a new businesses creation
within an existing organization,
while second form is a
transformation of an organization
A process whereby the firms
Corporate entrepreneurship and strategic
engage in diversification through
management: Insights from a process
study. Management science 29, no. 12 p.
A conceptual model of entrepreneurship
involves extending the firm's
as firm behavior. Entrepreneurship:
domain of competence and
Critical perspectives on business and
corresponding opportunity set
management 3 p. 7
through internally generated new
The extent to which new products Jennings and Functioning modeling corporate
and/or new markets are
entrepreneurship: An empirical integrative
developed. An organization is
analysis. Journal of management 15, no. 3
entrepreneurial if it develops a
higher than average number of
new products and/or new markets
A process of organizational
Environment, corporate entrepreneurship,
renewal that has two distinct but
and financial performance: A taxonomic
related dimensions: innovation
approach. Journal of business
and venturing, and strategic
venturing 8.4 p. 321
The sum of a company's
Contextual influences on the corporate
innovation, renewal, and
relationship: A longitudinal analysis.
Journal of business venturing 10, no. 1 p.
Historical perspective of corporate entrepreneurship research
The foundational research made from 1980 to 1990 years mostly established the
terminology, concept and factors of corporate entrepreneurship. For example, Burgelman in his
work (Burgelman, 1983) separated different types of the strategic behavior, one of which is a
creating opportunity corresponding with company strategy and the second stands out of current
corporate strategy and suppose that executive’s critical contribution consists in strategic
recognition rather than planning. Further analysis touches areas that are more detailed as work by
Ian Macmillan (MacMillan, Block and Narashima, 1986), examining the factors of success of
corporate ventures and suggesting a new planning tool appropriate for a modern
entrepreneurship organization. Sathe investigated two patterns of corporate entrepreneurship:
surface entrepreneurship and deep entrepreneurship (Sathe, 1988); conduction of the longitudinal
investigation of eight big companies let him make a conclusion that the common pattern in
surface entrepreneurship is perception of entrepreneurship as a business objective, while in deep
type entrepreneurship is perceived as a shared value. In 1989 the analysis of factors in
conservative and entrepreneurship organizations held by Jennings and Lumpkin found that in
entrepreneurial firms decision making is more participative, more specialized personnel are
employed, performance objectives are developed from a shared objectives, managers are not
penalized in case of project failure compared to conservative firms (Jennings and Lumpkin,
Period from 1990 to 2000 years suggests researches of more practical sides of corporate
entrepreneurship as financial performance improvement from it (Zahra, 1991, 1993, 1996;
Vozikis et al., 1999) showing significant positive relation between financial performance and
intensity of corporate entrepreneurship, the capabilities improvement (Zahra, Nielsen, and
Bogner, 1999) and knowledge sharing enhancing (Anders et al., 1999; Floyd and Wooldridge,
1999). It was also concluded that corporate entrepreneurship makes companies more competitive
in a hostile market (Filatotchev et al, 1999; Zahra, Covin and Slevin, 1995; Zahra and Garvis,
2000). Birkinshaw investigated corporate entrepreneurship within MNCs subsidiaries with
detailed inductive study of 39 initiatives in MNC subsidiaries to determine whether there were
differences between the different initiative types and found that four types of initiatives could be
identifiable, on the basis of the locus of the market opportunity: local, internal, global and hybrid
(Birkinshaw, 1997). Russel and Russel in 1992 evaluated impact of organizations’ structural and
environmental characteristics on innovation by investigation of 77 companies (Russel, 1992).
Jones and Butler the same year investigated how agency problems affect the dynamics of
internal corporate entrepreneurship and the level of entrepreneurial behavior (Jones and Butler,
1992). Further, Barringer and Bluedorn in 1999 were looking for a relationship between
corporate entrepreneurship intensity and five specific strategic management practices by
providing hierarchical regression analysis to find a correlation between corporate
entrepreneurship intensity and five in a sample of 169 U.S. manufacturing firms. As a result of
those researches were suggested factors affecting establishment of corporate entrepreneurship
such as level of control (Russel, 1992, Barringer and Bluedorn, 1999), environmental uncertainty
(Russel, 1992, Jones and Butler 1992), planning system (Barringer and Bluedorn, 1999),
organizational structure and size (Russel, 1992, Jones and Butler 1992), risk preferences (Jones
and Butler, 1992).
During the period from 2000 to 2009 were continued precious analyses of all areas of
corporate entrepreneurship and presented articles analyzing the effect of intellectual capital and
HRM research policies on corporate entrepreneurship (Schmelter, Mauer, Börsch, and Brettel,
2010; Zhang and Jia, 2010), the effects of CE on company performance in the international
context (Kemelgor, 2002), opportunity recognition (O’Connor and Rice, 2001) and difficulties of
innovations in established firms (Ahuja, Lampert, 2001). Rutherford and Holt tested a model of
entrepreneurship: context, process and individual characteristics on a sample of 264 employees
of a mid-sized organization (Rutherford and Holt, 2009). Hornsby, Kuratko, Shepherd and Bott
found that the relationship between managers' perceptions of an organizational environment and
a number of implemented entrepreneurial ideas depends on managers’ structural level by usage
regression analysis on a sample 458 managers (Hornsby et al., 2009). Kelley, Peters and
O'Connor examined on how network capacity on tree levels can form an innovation-based
corporate entrepreneurship by providing comparative case analysis of 246 interviews in twelve
industry-leading global corporations (Kelley, Peters and O'Connor, 2009). Furthermore was
took an attempt to integrate knowledges about CE in one model (Ireland, Covin and Kuratko,
2009) concluded that corporate entrepreneurship strategy is manifested through the presence of
three elements: an entrepreneurial strategic vision, a pro-entrepreneurship organizational
architecture, and entrepreneurial processes and behavior.
From 2010 till 2016 scientist mostly investigated narrow an specific aspects of corporate
entrepreneurship, such as differences of corporate entrepreneurship in variety of cultural context
(Marcotte, 2011, Li and Zahra, 2012), directors’ human and relational capital influence on firms
R&D spending (Dalziel, Gentry, Bowerma 2011), utilization of cross-functional teams in order
to augment corporate entrepreneurship practices (Ferdousi, 2012) and development of corporate
entrepreneurship in different stages of organizational life-cycle (Duobiene, 2013). In 2015 were
evaluated a role of organizational size on difference of forms ofcorporate entrepreneurship
(Nason, McKelvie, and Lumpkin, 2015), explained how corporate entrepreneurship creates
variety of knowledge and the role of entrepreneurial hubs in capturing, accumulating, converting
and translating, and integrating this knowledge (Zahra, 2015), estimation of how three different
types of corporate entrepreneurship: strategic renewal, innovation and corporate venturing
influence firm performance (Bierwerth et al., 2015), overlap of corporate entrepreneurship and
entrepreneurial orientation (Todorovic and Ma, 2015; Wang et al., 2015).
Table 2 contains description of five stages of corporate entrepreneurship researches:
foundation, application, typology, antecedents and integration, their periods, main findings and
authors, associated to each stage.
Table 2 Stages of Corporate Entrepreneurship Research
Corporate entrepreneurship is
an innovation process within
Pinchot, 1984; Sathe,
Application Benefits from
performance, capabilities and
supports learning organization
(Zahra, 1991, 1993;
Zahra, Nielsen, and
Filatotchev et all,
Internally and externally
Typology Which types of CE
could be identified
and how do they
Four types of initiatives:
local, internal, global and
Antecedents Factors affecting
Integration Integration of all
CE researches in
planning flexibility, locus
of planning, strategic
controls, organizational size,
complexity, effects of risk
norms, degree of
decision making, objectives,
opportunism affect corporate
Russell, 1992; Jones
and Butler, 1992;
Zahra, 1991; 1993;
CE strategy is manifested
through the presence of three
Kuratko, 2009; Zahra
et all, 2013)
elements: an entrepreneurial
strategic vision, a proentrepreneurship
organizational architecture, and
entrepreneurial processes and
Benefits of corporate entrepreneurship
Plenty of theoretical sources evidence that companies with intensive corporate
entrepreneurship demonstrate financial performance improvement (Zahra, 1991, 1993, 1995;
Vozikis et al., 1999); knowledge sharing enhancing (Anders et al., 1999; Floyd and Wooldridge,
1999; Dushnitsky and Shaver, 2009); improvement of innovation performance (Lekmat,
Laddawan, and Chelliah 2014; Michalski et al 2006; Alegre and Chiva 2013; Goodale, Kuratko
and Covin 2011; Chen et al. 2015); and they are more competitive in hostile market (Filatotchev
et al, 1999; Zahra, Covin and Slevin, 1995; Zahra and Garvis, 2000).
Corporate entrepreneurship has a positive influence on corporate financial performance
(Zahra, 1991, 1993, 1996; Vozikis et al, 1999; Todorovic and Ma, 2008; Moreno and Casillas,
2008; Lekmat & Chelliah, 2014). In 1991, Zahra stated positive impact of corporate
entrepreneurship intensity on both accounting and market-based components of organizational
performance. Corporate entrepreneurship helps to get financial results going above the market
and decreases unsystematic risk (Zahra, 1991). Further, investigation of corporate
entrepreneurship and financial performance within environmental clusters supported the strong
positive association of corporate entrepreneurship with financial performance (Zahra, 1993).
Finally, longitudinal analysis by Zahra and Covin published in 1995 proved that corporate
entrepreneurship is positively associated with company’s financial performance measured by
both profitability and growth indicators, and the strength of this relationship tends to grow over
time (Zahra and Covin, 1995). The following attempt to align corporate entrepreneurship theory
with financial theory showed that properly managed corporate entrepreneurship activities creates
additional value for a company (Vozikis et al, 1999).
Second benefit from corporate entrepreneurship is knowledge management enhancing
(Anders et al, 1999; Floyd and Wooldridge, 1999; Guadamillas et al., 2008). Corporate
entrepreneurship efforts have significant impact on organizational learning and knowledge
creation, they enhance overall organizational learning and drive the wide range of knowledge
creation that becomes the foundation of new organizational competencies (Anders et al., 1999).
Floyd and Wooldridge supposed that knowledge is distributed within an organization and owned
by separate employees, while the developed mechanism of corporate entrepreneurship creates
opportunity to transfer this knowledge into initiative and further into a project (Floyd and
Wooldridge, 1999). Knowledge management as resource for corporate entrepreneurship is
considered in research of Guadamillas in 2008 (Guadamillas et al., 2008).
Third benefit from corporate entrepreneurship is an improvement of innovation
performance (Lekmat, Laddawan, and Chelliah, 2014; Michalski et al., 2006; Alegre and Chiva,
2013; Goodale, Kuratko and Covin, 2011; Chen et al., 2015). Goodale, Kuratko and Covin in
2011 found a significant positive relation of corporate entrepreneurship antecedents moderated
by effect of control variables (Goodale, Kuratko and Covin, 2011). Lekmat, Laddawan and
Chelliah suggested that innovation performance is an outcome of corporate entrepreneurship
mediated by process innovation (Lekmat, Laddawan and Chelliah, 2014). Michalski, Nafe and
Usein found that corporate venturing has a positive influence on innovative success (Michalski et
al., 2006). Exploration of the IT capabilities, corporate entrepreneurship and innovative
performance showed that corporate entrepreneurship activities significantly improves product
innovation performance (Chen et al., 2015). Alegre and Chiva in 2013 founded that
entrepreneurial orientation of a company enhances innovation performance (Alegre and Chiva,
Last benefit from corporate entrepreneurship is an increase in competitiveness in a hostile
market (Filatotchev et al, 1999; Zahra and Covin, 1995; Zahra and Garvis, 2000). Longitudinal
analysis provided by Zahra and Covin concluded that corporate entrepreneurship is an efficient
practice for company operating in hostile environment. Filatotchev and Wright in 1999
concluded from analysis of post-USSR enterprises that corporate entrepreneurship increased
survival chances for a company in an unstable and hostile market environment (Filatotchev and
Wright, 1999). Corporate entrepreneurship is highlighted as a success factor in the hostile
environment (Zahra and Garvis, 2000).
Internal and external factors influencing the intensity of corporate
Corporate entrepreneurship intensity according to the “Entrepreneurial Health Audit”
depends on frequency and degree of entrepreneurship (Ireland et al., 2006a). The degree of
entrepreneurship indicates the extent to which an organization’s efforts are innovative, risky, and
proactive (Ireland et all, 2006a, p. 12). Corporate entrepreneurship intensity is connected to a
definition of entrepreneurial firm: risk-taking, innovative, and proactive (Barringer, 1991).
Proactiveness means that company strategy is more oriented on launching new product than
responding a competition (Covin and Stevin, 1990; Zahra, 1993; Barrett, 1996). Quinn in 1979
defined innovation as development of original decision for new or already existing need.
Frequency of entrepreneurship estimation is based on amount of entrepreneurial initiatives
company is taking (Ireland et al., 2006b). Corporate entrepreneurship intensity could measured
with absolute number of new products launched by a company and product changes made for
last 2 years, comparison with amount of products launched by competitors and innovativeness of
company’s products for a market (Shirokova et all, 2009).
In order to create a model describing factors affecting corporate entrepreneurship were
studied and assessed multiple theoretical models. Main sources for creating a model were
following models: a model by Jennings and Lumpkin, 1989, a model by Zahra, 1991, a model by
Russel and Russel, 1992, a model by Barringer and Bluedorn, 1999 and a model by Hornsby,
Kuratko and Zahra, 2002 (Jennings and Lumpkin 1989; Zahra 1991; Russel 1992; Barringer and
Bluedorn 1999; Hornsby, Kuratko and Zahra, 2002). First model consists of four factors:
centralization of decision making, specialization, performance objectives and rewards and
sanctions (Jennings and Lumpkin, 1989). Second model includes factors describing external
environment, grand strategy and organization (Zahra, 1991). Third model evaluating connections
between organizational structure and environmental uncertainty and entrepreneurial strategy
(Russel and Russel, 1992). Fourth model describes relationship between corporate
entrepreneurship intensity five strategic management practices: scanning intensity, planning
flexibility, planning horizon, locus of planning, and control attributes (Barringer and Bluedorn,
1999). Model by Hornsby, Kuratko and Zahra, 2002. Fifth model explores five sets of
organizational factors that have effect of entrepreneurial activities promotion and influence
middle manager's participation in corporate entrepreneurship activities: Management support,
work discretion/autonomy, rewards/reinforcement, time availability, and organizational
boundaries (Hornsby, Kuratko and Zahra, 2002).
Model by Jennings and Lumpkin, 1989
The research made was aimed on investigation of internal environment differences in
entrepreneurial and non-entrepreneurial organizations. Model consisted of four elements:
centralization of decision making, specialization, performance objectives and rewards and
sanctions (Jennings and Lumpkin, 1989).
Researchers concluded that decision making in entrepreneurial organization is
participative, while in conservative organizations it is unilateral. The reason of this phenomenon
is that the bigger amount of decision-making groups leads to variety of opinions and tends to
support innovations (Jennings and Lumpkin, 1989).
It was found that entrepreneurial organization more take into account opinion of
specialized personnel in decision-making process than conservative organizations due to the fact
that highly specialized professionals are good in recognizing opportunities and companies with
bigger amount of specialists are more innovative than others (Jennings and Lumpkin, 1989).
From the research could be concluded that performing objectives established from a
shared participation enhance innovativeness of organizational members. Ultimate objectives
going from top to down do not support employees’ innovations and lead to passive job duties
accomplishment (Jennings and Lumpkin, 1989).
Encouraging risk taking and being patient to ideas’ failures tends to be true for
management of entrepreneurial organizations, than conservative ones. Entrepreneurial
organization supports employees who are ready to take risks and to be innovative and perceive
failure as a normal phenomenon (Jennings and Lumpkin, 1989).
Model by Zahra, 1991
The exploratory study by Zahra in 1991 provided results indicate that: environmental
dynamism, hostility, and heterogeneity enhance corporate entrepreneurship; growth-oriented
strategies are associated with increased corporate entrepreneurship, but a strategy of stability is
not conducive to corporate entrepreneurship; the scanning, formal communication, and
integration components of formal organizational structure are positively related with corporate
entrepreneurship, while increased differentiation and extensive controls restrain corporate
entrepreneurship; clearly defined organizational values are positively associated with corporate
entrepreneurship (figure 1) (Zahra, 1991).
Figure 1 A model of predictors of corporate entrepreneurship, (Zahra, 1991, p.262)
Model by Russel and Russel, 1992
Russel and Russel provided a model describing connections between organizational
structure, environmental uncertainty and entrepreneurial strategy. The model also considers
management of innovation process as a predictor of corporate entrepreneurship, influenced by
organizational culture (figure 2) (Russel, 1992).
Environmental uncertainty is an external factor that tends to support innovativeness due
to the fact of constant adoption needed and opportunity seeking. However, big amount of
innovations in an industry or in a company creates a high level of perceived uncertainty. Both
correlations exists, but any case high level of uncertainty creates more opportunities to innovate
than moderate one (Russel, 1992).
Organizational structure according to the research has significant impact on corporate
entrepreneurship. Entrepreneurial organizations are generally characterized with decentralized,
complex organizational structures with lack of formality (Russel, 1992). Decentralized structure
first, creates a context appropriate for innovations, second, let different levels of management
initiate innovations through testing new ideas using resources available (Russel, 1992). Informal
exchange of information and lack of formality new idea need to overcome increase chances that
initiative will turn into an innovation. Increased level of complexity makes possible regular
communication between employees with different expertise and backgrounds and enhance
corporate entrepreneurship (Russel, 1992).
In addition, Russel and Russel underline the importance of innovation norms, supporting
and encouraging innovative behavior and rejecting change resistance as an inappropriate
behavior within a company (Russel, 1992).
Figure 2 A Model of Corporate Entrepreneurial Strategy (Russel, 1992, p. 645)
A model by Barringer and Bluedorn, 1999
A model by Barringer and Bluedorn describes relationship between corporate
entrepreneurship intensity and five strategic management practices: scanning intensity, planning
flexibility, planning horizon, locus of planning, and control attributes.
Scanning intensity tends to support entrepreneurial process, decreasing level of
uncertainty and giving to managers a vision of possible changes needed. Intensive scanning
regime is widely used by entrepreneurial organizations, while in conservative organizations it
takes less effort.
Planning flexibility is an important feature of a company with intensive corporate
entrepreneurship because it characterizes company’s ability to adjust strategy according to
environmental changes and opportunities appearing.
Longer horizon of planning is appropriate for conservative organizations, operating on a
relatively stable market, while short-term planning is more suitable for entrepreneurial firms
open for innovative ideas and ready to change together with the environment or faster than it
Strategic control enhances corporate entrepreneurship, while financial control scope stifle
it. Mechanical budget cuts break employees’ involvement and decrease chances of the long-term
projects to be realized.
Model by Hornsby, Kuratko and Zahra, 2002
This model explores five sets of organizational factors that have effect of entrepreneurial
activities promotion and influence middle manager's participation in corporate entrepreneurship
activities (Hornsby, Kuratko and Zahra, 2002). Management support, work discretion/autonomy,
rewards/reinforcement, time availability, and organizational boundaries represent are sets of
internal organizational factors that influence middle managers to foster entrepreneurial activity
within established companies (Hornsby, Kuratko and Zahra, 2002).
Figure 3 A factor model of middle manager's perception for corporate entrepreneurship (Hornsby, Kuratko and Zahra, 2002, p.
Management support in facilitating and promoting entrepreneurial activity in the
organization, support of innovative ideas and willingness to provide necessary resources,
expertise or protection encourage middle managers on entrepreneurial behavior (Hornsby,
Kuratko and Zahra, 2002).
High perceived level of autonomy while working and feeling of trust from a company
increase willingness to innovate within an organization (Hornsby, Kuratko and Zahra, 2002).
Effective rewards system based on performance of employee and considering goals,
feedback, emphasis on individual responsibility enhance corporate entrepreneurship on a middlemanagement level (Hornsby, Kuratko and Zahra, 2002).
Having some free time during job hours, moderate time pressure and ability to work on
long-term perspectives supports corporate entrepreneurship (Hornsby, Kuratko and Zahra, 2002).
The structure must foster the administrative mechanisms by which ideas are evaluated,
chosen, and implemented. Structural boundaries tend to be a major stumbling block for middle
management in corporate entrepreneurial activity (Hornsby, Kuratko and Zahra, 2002).
Building a new model
According to many in the field, corporate entrepreneurship intensity highly depends on
internal and external environment and an organization have to take into consideration both of
them (Zahra, 1991, Russell, 1992, Jones and Butler, 1992, Wyk, Rene and Adonissi, 2012),
consequently, the traditional model depicts intensity of corporate entrepreneurship as a variable
depending on set of internal and external factors.
However, four of five model described do not count connections between external and
internal environment, and the one that includes suppose only influence of environmental
uncertainty on corporate culture (Russel, 1992). Nevertheless, environmental uncertainty is not
the only one factor of external environment affecting internal environment; and corporate culture
is not the unique factor in organization influenced by external environment. The following
analysis of influence of external environment gave a vision that at least part of internal factors is
predetermined by external environment. Strong impact of industry on organizational culture
(Hofstede, 1990; Gordon, 1991; Chatman and Jehn, 1994; Phillips, 1994; Abrahamson, 1997;
Christensen and Gordon, 1999; Chaudhry et al., 2016), leadership style (Schlegelmilch, 1995;
Reynaud et al, 2007) and organizational structure (Kloviene and Gimzauskiene, 2009).
Researchers insists on some consistent patterns and common trends found in companies
operating in one industry, even the organizational culture is unique for separate company,
consequently, corporate culture is partly formed with demands of external environment (Gordon,
1991; Chatman and Jehn, 1994; Christensen and Gordon, 1999; Chaudhry et al., 2016).
Moreover, Hofstede’s four of six culture values are determined by market, company operating in
and a type of organizational specialization (Hofstede et al., 1990).
In a consequence of integration of corporate entrepreneurship researches and
investigation of external environment impact on organization’s characteristics created an updated
model assuming that corporate entrepreneurship appears supported by internal factors,
influenced with both internal and external environment and external factors predicted by external
environment (Figure 3).
Figure 3 Updated model of CE antecedents
This model better matches the definition of corporate entrepreneurship telling CE is a
process going inside the existing organization (Burgelman, 1983, Guth and Ginsberg, 1990,
Antoncic and Hisrich, 2001) because of accentuating the key role of internal environment,
simultaneously not negating the particular influence of external factors on corporate
Factors of external environment
Concerning external environment researchers emphasize, dynamism (Miller and Friesen,
1984; Zahra 1986; Oster 1990; Russell, 1992; Naman and Slevin, 1993) level of rivalry (Miller
and Friesen, 1984; Zahra, 1986; Drazin and Schoonhoven, 1996) and heterogeneity of the market
(Peterson and Berger 1971; Miller and Friesen, 1984; Keats and Hitt, 1988; Zahra, 1991)
Dynamism is a substantial source of creativity and innovation (Russell, 1992, Keats and
Hitt, 1988) due to the fact that unstable and turbulent environment creates the need for the
constant change (Naman and Slevin, 1993), while constant and unchangeable context tends to
bear the leaden organizations with no ability to the fast changes and impervious to new ideas and
opportunities. Nevertheless, uncertainty have not to be conjugated with the high level of risk,
which negatively influence on the entrepreneurial activity in general and especially on the
innovative activity. Generally, IT companies operate on new and undeveloped markets, where
the level of uncertainty is sufficiently high, or operates on a developed market, but providing an
innovative product (Hauschild et all, 2011; Robinson, 2014).
High level of rivalry is perceived as a motivation factor for innovative and
entrepreneurship activity (Drazin and Schoonhoven, 1996) because of the competitors pressure
and the intensive contention for the customer. As it was already mentioned, IT companies
operate on new and undeveloped markets and use a strategy of “Blue Ocean” (Kim, 2005) or
provide an innovative product for a developed market, accordingly the level of rivalry could
significantly differ within a group (HE, 2015; Halkos and Nickolaos, 2007, OECD, 2015).
High heterogeneity of the market tends to increase organizational innovativeness and
positively influence on corporate entrepreneurship intensity (Keats and Hitt, 1988; Zahra, 1991)
due to the fact it means diversification of requests demanded by variety of segments served by
the company (Miller and Friesen, 1984). This variety creates a need in constant development and
impressive elaboration in market analysis and product improvement for reaching all segments
satisfaction (Robinson, 2014; Halkos and Nickolaos, 2007).
Factors of internal environment
The internal environment could be described with ten attributes:
1. level of centralization (Sathe, 1988; Jennings and Lumpkin, 1989; Russell, 1992);
2. level of complexity (Jennings and Lumpkin, 1989; Russell, 1992; Ferdousi,
3. decision making process (Sathe, 1988; Jones and Butler, 1992, Ahuja and
Lampert, 2001; Karol, 2015);
4. control system (Sathe, 1988; Jennings and Lumpkin, 1989; Zahra, 1991; Russell,
1992; Barringer and Bluedorn, 1999);
5. level of formalization (Sathe, 1988; Russell, 1992);
6. leadership style (Jones and Butler, 1992; Ahuja and Lampert, 2001; Dalziel,
Gentry, Bowerma, 2011; Karol, 2015);
7. motivation to innovate (Russell, 1992; Sathe, 1988);
8. planning flexibility (Jones and Butler, 1992, Ahuja and Lampert, 2001; Ireland,
Covin, Kuratko, 2009; Kuratko, 2012);
9. planning horizon (Jones and Butler, 1992, Ahuja and Lampert, 2001);
10. scope of planning (Burgelman, 1983, Jones and Butler, 1992, Barrett and
Weinstein, 1999; Ahuja and Lampert, 2001).
Level of centralization is negatively correlated to the corporate entrepreneurship intensity,
which is caused by increasing of discussion and decision time for innovation process (Russell,
1992). In companies with a low level of centralization, creative and innovative ideas about
operation improvement could be implemented immediately and strategic innovations takes less
time to be launched. As a general rule, IT companies are decentralized due to the high
specialization of employee, which could overhead expertise of his supervisor (Murugan, 2009;
Neves, 2012; Jacks and Prashant, 2014)
Level of complexity is positive correlated to the corporate entrepreneurship intensity, due
to the big amount of horizontal connections, involvement of employees in wider variety of tasks
inside the organization, interdepartmental connections and shared responsibility (Jennings and
Lumpkin, 1989; Russell, 1992; Ferdousi, 2012). Generally, IT companies are characterized with
a complex structure, including big amount of horizontal connections and sometimes, project
organizational structure (Lin, 2008; Neves, 2012; Simonen et al, 2015).
Shared participation in the decision-making process increases involvement and
motivation of employees (Sathe, 1988), decisions made based on the opinion of specialized
personnel tend to be more successful than sole ones. Involvement of the employees with various
background and expertise in decision-making process increase opportunity to view the challenge
from diversified scopes and find optimal decision (Russell, 1992). Due to the high level of IT
company employees’ education and general expertise all levels of company are generally
involved in decision-making process (Murugan, 2009; Neves, 2012; Simonen et all, 2015)
Control scoped on strategic part rather than on financial part prevent mechanical budget
cut in case of negative difference between planning parameters and real, support an individual
approach to every project and based more on trust, than on control (Sathe, 1988). A serious
weakness with this argument, however, is that in case of control lack company can meet an
opportunistic behavior or excessive wastefulness. Control systems are different within an IT
business (James and Lissy, 2012; Jacks and Prashant, 2014).
Level of formalization is negatively correlated to the intensity of corporate
entrepreneurship (Russell, 1992). Key roots of this are long way of initiatives, attempts to
overwhelm creativity, lack of ability to inform the manager about possible initiatives and lack of
employees’ commitment (Sathe, 1988). Informal atmosphere in IT companies is widely known
(Lin, 2008; Collins and Ken, 2006; Ojha, 2005; Murugan, 2009).
Democratic leadership style tends to be more efficient than autocratic or bureaucratic in
aspect of corporate entrepreneurship because of shared responsibility, ability of employees to
influence on the performance objectives and decision making in general (Dalziel, Gentry,
Bowerma, 2011). Leadership style is different within an IT business (Ojha, 2005; Murugan
2009; Jacks and Prashant, 2014).
Motivation to innovate differs in entrepreneurial firms, monetary motivation doesn’t play
an important role, but factors as recognition, commitment, low personal and professional risk
and perception of failure as a way to study encourage employees to innovate and support
entrepreneurial approach (Russell, 1992; Sathe, 1988). Non-monetary motivation is very
important for employees in IT companies (Murugan, 2009; Jacks and Prashant, 2014; Kesler,
Planning flexibility is positively correlated to corporate entrepreneurship intensity (Jones
and Butler, 1992; Barringer and Bluedorn, 1999; Ahuja and Lampert, 2001). Ability to change
plans and relocate resources is one of the root characteristic of entrepreneurial organization,
because otherwise high risk exists to lose a right moment for innovative decisions or products.
Flexibility of planning is generally high in the IT company due to the fast changes in the industry
(Ching, 2014; Sharma and Mahima, 2003).
Planning horizon is negatively correlated to corporate entrepreneurship intensity
(Barringer and Bluedorn, 1999; Ahuja and Lampert, 2001) due to the complexity of innovations
Using market scope of planning stimulates corporate entrepreneurship more than a
strategic scope (Burgelman, 1983; Barringer and Bluedorn, 1999; Barrett and Weinstein, 1999;
Ahuja and Lampert, 2001). It is connected with ability to analyze the future impact of the
initiatives. There was no information found about scope of planning in IT companies.
According to the factors analyzed was suggested a following theoretical model,
describing how do factors influence on intensity of corporate entrepreneurship (figure 4).
High level of complexity
High level of centralization
Shared decision-making process
High level of formalization
Democratic leadership style
Control system oriented on budget
Long-term horizon of planning
High flexibility of planning
Market scope of planning
Level of rivalry
Heterogeneity of the market
Figure 4 Factors affecting corporate entrepreneurship
In a model internal factors are separated in two groups according to a direction of their
influence on corporate entrepreneurship. Internal factors positively related with corporate
entrepreneurship intensity are high level of complexity, democratic leadership style, nonmonetary motivation, high flexibility of planning and market scope of planning. To internal
factors negatively related with corporate entrepreneurship intensity were grouped high level of
centralization, high level of formalization, control system oriented on budget and long-term
horizon of planning. All external factors, dynamism, heterogeneity and level of rivalry are
supposed to be positively related to corporate entrepreneurship intensity (Table 3).
Table 3 Factors affecting corporate entrepreneurship
Level of complexity Internal
Shared decision- Internal
Flexibility of Internal
Market scope of Internal
Level of Internal
Level of formalization Internal
Control system Internal
oriented on budget
Long horizon of Internal
Level of rivalry External
Heterogeneity of the External
Jennings and Lumpkin, 1989; Russell,
1992; Ferdousi, 2012
Sathe, 1988; Jones and Butler, 1992,
Ahuja and Lampert, 2001; Karol, 2015
Jones and Butler, 1992; Ahuja and
Lampert, 2001; Dalziel, Gentry,
Bowerma, 2011; Karol, 2015
Russell, 1992; Sathe, 1988
Jones and Butler, 1992; Barringer and
Bluedorn, 1999; Ahuja and Lampert,
2001; Kuratko 2012
Burgelman, 1983; Barringer and
Bluedorn, 1999; Barrett and
Weinstein, 1999; Ahuja and Lampert,
Sathe, 1988; Jennings and Lumpkin,
1989; Russell, 1992
Sathe, 1988; Russell, 1992
Sathe, 1988; Jennings and Lumpkin,
1989; Zahra, 1991; Russell, 1992;
Barringer and Bluedorn, 1999
Barringer and Bluedorn, 1999; Ahuja
and Lampert, 2001
Miller and Friesen, 1984; Zahra 1986;
Oster 1990; Russell, 1992; Naman
and Slevin, 1993
Miller and Friesen, 1984; Zahra, 1986;
Drazin and Schoonhoven, 1996
Peterson and Berger 1971; Miller and
Friesen, 1984; Keats and Hitt, 1988;
In the theoretical chapter was conducted an investigation of approaches to corporate
entrepreneurship definition, exploring three concepts: intrapreneurship, corporate venturing and
corporate entrepreneurship. It could be concluded that intrapreneurship and corporate
entrepreneurship terms describes the same processes within a company, while corporate
venturing could be synonymic to them or describe one type of corporate entrepreneurship
Further was provided the theoretical research of corporate entrepreneurship theories with
segregation on stages according to time and to the object of a research, were identified five
stages of corporate entrepreneurship research: foundation, application, typology, antecedents and
The research was continued with identification of corporate entrepreneurship benefits:
financial performance improvement, knowledge sharing enhancing, improvement of innovation
performance and increase of competitiveness in hostile market.
Finally, were investigated five existing models of internal and external factors affecting
corporate entrepreneurship and builded 13-factors model, taking into consideration influence of
external and internal environment. Farther as a result of research of connections between
external and internal environment is suggested a model, taking into consideration key role of the
industry influence on corporate entrepreneurship intensity.
CHAPTER 2. FACTORS INFLUENCING CORPORATE ENTREPRENEURSHIP
INTENSITY: RESULTS OF EMPIRICAL RESEARCH
Case Study Design
For an investigation of the internal and external environment influence on corporate
entrepreneurship intensity was decided to conduct a case study within 5 Russian IT companies.
Main goal of the case study was not verify results of the previous researches obtained by
quantitative methods but understand how do factors and their combinations affects corporate
entrepreneurship, which factors could be perceived as the main drivers of corporate
entrepreneurship in the Russian IT industry and which factors has secondary, supportive
First part of the research was a sample selection. In order to gain a research validity for a
research were chosen company of different sizes, operating on different markets and of various
age (table 4).
Table 4 Companies’ description
Feature Company A
position in a
Company C Company D
Data collection process was conducted with three methods: non-structured interviews
with executives, analysis of the web sites and participant-observation (only for two of five
Interviews were composed from preliminary set of 30 open questions that were supported
with specifying questions appearing during the interview process. Duration of interview counts
from eleven to thirty minutes, excluding preliminary talk and acquaintance. All interviewees
were assured in confidentiality of results obtained and usage of it only for scientific purposes.
All the respondents are executives of Russian IT companies of different sizes, operating on
different markets, what can be perceived as evidence of the research validity.
Questions were aimed on exploration of mechanism of following factors influence:
3. Level of formalization;
4. Decision making process;
5. Control system;
6. Leadership style;
7. Motivation to innovate;
8. Horizon of planning;
9. Flexibility of planning;
10. Scope of planning;
12. Level of rivalry;
13. Heterogeneity of the market.
In order to explore corporate entrepreneurship intensity interviewees were asked to
evaluate number of new products launched by a company for last 2 years, product changes and
new versions made for last 2 years and estimate what is the relation of the amount of company’s
new products and company’s competitors new products and suggest how innovative are
launched products for a market (Shirokova et all, 2009).
For understanding level of centralization and complexity representatives were asked on
which level of their company most decisions are made, how many horizontal connections exists
in a company and how often employees from different departments are involved in common
projects. It was suggested from theoretical sources that level of centralization is negatively
related with intensity of corporate entrepreneurship while level of complexity is positively
related with intensity of corporate entrepreneurship.
For evaluating decision making process interviewees should answer how many people are
involved in a decision making process and who is the final decision-maker. According to the
theoretical source shared decision making process with attraction of many employees is
associated with high level of corporate entrepreneurship.
In order to have an overview of company’s control system were asked questions about its
locus and potential reaction of a company on strategically important project not profitable for a
long time and decision and actions in case if a project manager promises that soon the situation
described will change. Control system oriented more on strategy than on budget and absence of
mechanical budget-cuts are both antecedence of corporate entrepreneurship according to the
Level of formalization was considered from various dimensions: a main way of
communication in a company, presence or absence of dress-code and communication style
between employees and between employees and senior management. Level of formalization was
suggested to be negatively related with intensity of corporate entrepreneurship.
Interviewees were asked to estimate how much freedom of action has, in their opinion, an
employee of a company, to describe leading style common for a company and evaluate how
strict is regulation of employees activities in order to have a vision of leadership style in a
company. Democratic leadership style was expected to be associated with insensitive corporate
Motivation to innovate was evaluated by following questions to representatives: what is
the motivation for innovations in a company and how would the executive management reacts if
the idea suggested by employee will fail. Non-monetary motivation was expected to have a
higher influence in companies with high intensity of corporate entrepreneurship, the same as no
policy of punishment for failure.
System of planning within a company was evaluated by asking employees to estimate
three points: horizon of planning, flexibility of planning and scope of planning. Horizon of
planning was expected to be negatively related with intensity of corporate entrepreneurship,
flexibility of planning was expected to be positively related with intensity of corporate
entrepreneurship and planning system oriented on market more than on budget is one of
antecedents of intense corporate entrepreneurship.
External environment was evaluated from three dimensions: dynamism, level of rivalry
and heterogeneity of the market.
In order to evaluate dynamism companies’ representatives were asked about a length of
technological cycle in a market they are operating on, frequency of new products appearance in
the market, velocity of a customer’s preferences change. Level of dynamism is positively related
with intensity of corporate entrepreneurship according to the previous researches of connection
between corporate entrepreneurship intensity and external antecedents.
Level of rivalry was estimated based on answers of interviewees on following questions:
how many competitors does a company have, a perceived level of competition in a market ,
strength of customers influence on a company, strength of suppliers influence on a company.
Level of rivalry was expected to be positively related with intensity of corporate
Interviewees were asked to evaluate heterogeneity of the market from two perspectives:
how do the existing products on the market differ and how do the tariffs on existing market
differ. High heterogeneity is traditionally associated with intensive corporate entrepreneurship.
Web-site analysis was used mostly for evaluating reliability of information got from the
interviews. It allowed verify objective information about companies markets, market position,
number of employees, etc. Further investigation of markets companies are operating in gave a
vision of how adequately executives see external environment.
Company B and company D investigation was supported with a participant-observation,
company B for nine months and company D for two months in the role of trainee or employee.
Direct observation helped to get an overview of the company and to get a deeper understanding
of company’s organizational structure, culture and to obtain another source of evidence for a
case study. The limitation of this source of evidence was inability to evaluate level of corporate
entrepreneurship and strategic features, due to the low position in companies.
Analysis of the results was conducted with following steps:
Integration of data in a table;
Comparison and combination of the results from various sources;
Search for similarities and patterns among the companies;
Search for differences and patterns among the companies;
Detailed analysis of sources of evidence;
Patterns and trends description;
First step, integration in a table, was aimed in representing data collected from a different
sources in a format, allowing to compare companies one to each other. On this stage starts
looking for patterns. Right organization of primary data helped to have all data in one page
which made subsequent analysis possible.
Second step, comparison and combination of the results from various sources, includes
comparison of data obtained from various sources in order to evaluate its reliability and
unification of all results in one database aligning in into sets of information about companies
Third step, search for similarities and patterns, consists of company’s comparison and
understanding which features are similar or equal in order to evaluate influence of factors
Fourth step, search for differences and patterns, was aimed on looking which questions
were answered differently, how many features of each company do not fit patterns found on a
previous stage, how could it influence on corporate entrepreneurship intensity and how those
differences are connected among themselves.
Fifth step, detailed analysis of data obtained, helped to confirm or disprove intermediate
conclusions made during the steps third and fourth, basing on concrete words, links,
explanations, notes made by interviewees. This step created a basement of results and
On the sixth step, patterns and trends description, were clearly formulated all patterns
found during the study for each of thirteen factors, they were connected to the intensity of
corporate entrepreneurship, were described connections among those factor, were found
companies which do not fit patterns observed and were given explanation of this distinction.
On the last step were made conclusions, formulated inferences on how do factors affects
corporate entrepreneurship, how are they connected one to each other, which factors are main
drivers of corporate entrepreneurship and which are supportive and secondary.
Results of cross-case analysis
After comparison and matching of companies’ representatives answers were made
following consequences and patterns, allowing describing factors affecting corporate
Intensity of CE
Corporate entrepreneurship intensity was measured with absolute number of new
products launched by a company and product changes made for last 2 years, comparison with
amount of products launched by competitors and innovativeness of company’s products for a
market (Shirokova et all, 2009).
Companies’ representatives mentioned that 5-10 new products were launched for last 2
years. The company A launched “3 new products for 10 months of existence”, with assumption
that is a normal speed of new launches for the company A could be suggested that the company
fits in indicated interval (Company A). This data was supported by company’s page on Apple
Store and Google play. Company B launched “5 products for last 1,5 years” (Company B.
Company D launched “around 10 product” for 2 years (Company D). Company E launched “a
bit more than 10 products” for 2 years (company D). Company C representative told that only 2
products were launched for 2 years, apparently it is connected to the type company’s services:
software development and IT solutions, both of them require individual approach, so innovations
are aimed on a product for client, not inside (Company C). No one company was able to name
amount of product changes and new versions due to the fast implementation and constant
improvement of process, companies’ representatives indicated intensive rivalry pressure in the
industry. On question how many product changes and new versions were made for last 2 years
were given answers: “more or less 20 for 10 months” (Company A), “unnumbered” (Company
B), “enhancing all the time” (Company C), “every week” (Company D), “constantly and
coherently” (Company E).
Most of the companies told that they are faster than competitors what is critical factor of
their success and speed of new product launches or changes is a key competitive advantage in
fast-changing industry: “a bit faster than competitor” (Company A), “the same speed because
otherwise you are late” (Company B), “company outstrips competitors” (Company C),
“somewhat faster, there is a high competition in our market if we are not faster we will retire
from top 10” (Company D), “our speed of launces is faster than competitors’, in general we have
more features and services” (Company E). Company E representative words are supported by
comparison of their web-page and sites of their direct competitors. Participant-observation of
company D supports statement above.
Majority of the companies told that at least part of their products are completely
innovative for the market and they are the first who launched those product and services: “all
free are innovative, nothing common exists before” (Company A) (supported by Apple Store
analysis), “nothing similar exists before” (Company B) (supported by web-site analysis;
participant observation), “there was a market of payment systems, but we are the first company
who decided to aggregate them” (Company D) (supported by web-site analysis; participant
observation), “I think quite innovative, for example we are the only one e-commerce suggesting
bargaining to a client” (Company E) (supported by company and direct competitors web-sites
analysis). However, company C mentioned that “ our services are disruptive for Russian market
but has analogies in Western Europe and USA” (Company C).
According to the respondents’ answers could be concluded that intensity of corporate
entrepreneurship is high and ability to launch innovative products earlier than competitors is
perceived as a key competence for a company (table 5).
Table 5 Observation of intensity of corporate entrepreneurship
Amount of new
3 for 10
5 for 1,5
products launched by a
company for last 2
Amount of product 20 for 10
changes and new
development development development development
versions made for last
Relation of the amount
Same speed Much higher
of company’s new
products for a market innovative, innovative,
no analogs some unique
no analogs no analogs
but not for
All companies are characterized with a high level of centralization and most of decisions
are made on the level of the founder or CEO. “Last word is on me” (Company A), “most of
decisions are made on a level of co-founders” (Company B) (supported by participantobservation), “most decisions are made on a level of top-management without participation of
stakeholders” (Company C), “on a level of founder, taking CEO position” (Company D)
(supported by participant-observation), “different levels” (Company E). Is interesting to notice,
that all companies except company C are headed by founder or CEO from A with five
employees to E with five thousands employees (companies’ representatives interviews, webpages).
While conducting interviews were mentioned multiple times that wish and vision of
founders is a main driver for companies’ activities and determinant of direction companies are
going: we take a new idea if the owner will be interested (company B, company D, company E),
“company is governed by one person, who from time to time change a concept and goal setting,
today he wants more image, tomorrow he wants more money, the day after tomorrow he wants
fast company’s development and expansion of its activity and after everything could change
back to image” (Company E), “our strategy is unclear, sometimes not sounded to everybody and
sometimes sounded to nobody” (Company D), “usually I am that person, who believes in bright
future and convince everybody in it” (Company A).
Hundred percent of respondents interviewed described companies with high level of
complexity, plenty of horizontal connections organized with different patterns: projects,
meetings, PMO. “Horizontal connections exists between all employees” (Company A), “we are
too small for a vertical hierarchy” (Company B), “amount of contacts with co-founder is higher
than horizontal” (participant-observation of company B) “there are more horizontal connections
than vertical” (Company C), “we have a project department and every new activity we call a
project, and in those projects are involved people from different departments” (Company D)
(supported by participant-observation), “horizontal contacts counts 80% of all contacts within
the company” (Company E). Most of the interviewees mentioned that horizontal contacts have a
high importance for company’s activities, which is relevant for both big and small enterprises.
Two of three big companies referred market specificity as a main driver of project organizational
structure: “horizontal contact are a basement of our activity” (Company D), “specificity of the
company’s activity asks for creating a working group consisted from employees from different
departments” (Company C).
All strategic decisions in companies are made by owners or CEO and few executives,
thus final decision is always made by a head of a company. On questions “How many people are
involved in the decision making process?” and “Who is the final decision-maker?” were given
following answers: “all five, owner” (Company A), “co-founders plus two more people”
(Company B), “five people, CEO” (Company C), “founder and 7 heads of departments, CEO”
(Company D), “depends on situation it could be CEO or he can give a right of decision to head
of department and inform him which decision was made” (Company E). Founders are key
personalities in companies; they are inspiring people on activity and on the same time are aimed
on control all decisions those could influence enterprises’ performance (participant-observation
of companies B, D).
3 of 5 companies in controlling their project and activities are oriented more on strategy,
than on budget (company A, company C, company D), for example, if strategically important
project is not profitable for a long time company is ready to wait some time and not to
automatically cut costs on this project. However, three companies told that detrimental projects
should be closed (company B, company D). On question “What will be company’s decision if
strategically important project is not profitable for a long time, but a project manager promise
that soon the situation will change?” were gotten following answers: “depends on situation,
usually we continue to work on it” (Company A), “close” (Company B), “try to reach a
breakeven but no longer than 1,5 years” (Company C), “individually, may be stopped and after
recommenced” (Company D), “close if not connected with offline activity and with image
aspect” (Company E). This difference is also based on personal interest of company’s founder
(company A, company B, company D); in case he believes in importance of the project for brand
image (company D, company E), future financial success (company A, company B, company C,
company E) or just interested in project it would be continued despite of financial aspect.
Consequently, no common conclusion about control system could be made from
interview results; all projects in all companies are overviewed from different dimensions. Two
companies also mentioned the customers’ satisfaction is highly important element of control
All companies are characterized with low level of formalization, communication mostly
goes with personal meetings, calls or messengers. Main named way of communication is voice
(company A, company B, company D), internal or public messenger (company A, company C),
meetings (company C, company E), mail (Company E).
No one company has a dress code, communication process between employees and
between employees and senior management could be described as democratic, sometimes even
friendly. “Absolutely friendly and everybody communicates on an equal footing” (Company A),
“democratic” (Company B), “Democratic” (Company C), “Democratic” (Company D), “they
only don’t use profanity among themselves” “informal” (Company E). Culture of companies
does not imply usage of patronymic names, but sometimes a conversation between employees
and senior management obliges to usage of formal you (participant-observation of companies B,
D). Some interviewees connected it with high level of education and qualification of employees
and some with time pressure conditions when communication and negotiation processes have not
to take plenty of time and decisions must be made promptly: “we have no time on ceremonies”
(Company D), “we are more or less on the same level, so we need no formalities” (Company B).
Most of companies told that employees have a high level of freedom within company’s
policies, thus larger companies mentioned that some departments, mostly oriented on
communication with external customers and suppliers has more detailed policies and regulations
than others: “it depends on level, freedom of action is high for top and middle management, and
on department – departments working with customers and serving departments, like accounting,
finance have strict regulation, all about clients – high level of regulation, all about external
processes – low” (Company D), “departments contacting external environment regulation of
course, for others enough to accomplish tasks, nobody will ask how” (Company D). For most of
departments, success of employees is measured according to his ability to perform task given and
regulation of actions could be described as low. However, all interviewees told that leadership
style in their companies is authoritarian democracy, appealing to the need of fast decisions and
tendency of employees to forget they are on working place. Respondents gave the following
explanation of leadership style inconsistency to the theory: employees need enough freedom for
keep them interested in job, but at the same moment, they need to feel borders of this freedom to
Motivation to innovate
All interviewees told that as the main motivation for innovations their employees is
interest in innovation, ability to implement it within the company and general commitment in an
organization they are working for. Company A: “They are just not interested to do not innovative
job” (Company A). Company B: “monetary motivation is the worst. Better works non-monetary
motivation, interest, employees interest in a process and in the company” (Company B).
Company D: “Opportunity to head a project and implement suggested innovations” (Company
D). Company E: “They are interested to do something new and risk doing it within sustainable
company for its money, having regular job is less than open something new outside” (Company
E). Only company C representative told that main driver for innovation is KPI (Company C);
this answer could be connected with a fact, that interviewee from company C takes the position
of CMO, so she has no clear vision of motivation system and corporate culture. All companies’
representatives rejected idea of any penalty or judgement in case if a project based on an idea
suggested by employee will fail, told that it is a normal situation and even a failed project is a
source of experience and technologies (Company A; Company B; Company C; Company D;
Horizon of planning
Horizon of planning is related with company’s size and years of work. For small
companies it doesn’t exceed 6 months while for medium and big budget is stated for 6 months or
1 year and rough strategic plan exists for next 2 years (table 6).
Flexibility of planning
Majority of companies’ representatives signified readiness to develop a new project
staying aside of current strategy in case this project interests a founder or promises financial
results. Companies answers on question “If your company see a new opportunity, in which case
it takes it?” were: “there are two variants, if it promises financial benefits in medium or long
term or it is just interesting for us” (Company A), “if we decided that it is interesting – we are in”
(Company B), “if it fits long-term strategy” (Company C), “if founder believes it” (Company D),
“if founder decides is beneficial or just wants to go for it” (Company E).
Scope of planning
Planning system in companies interviewed is highly market-oriented, because the main
resource needed is a team of qualified employees and companies do not perceive money as a
deficit resource for their industry. On request to evaluate on what planning system is more
oriented, market or resources available were given following answers: “our planning system is
balanced, but market demand prevail” (Company A), “don’t know it could be both” (Company
B), “hard to answer, but likely it is oriented more on resources available, because we serve top
level of clients in our segment so do development when your year portfolio consists from less
than 100 companies is complicated” (Company C), “on market demand, about resources nobody
thinks, team is our main resource” (Company D), “more on market demand we do not have
deficit of resources, more likely we have resources more than really needed” (Company A).
Table 6 Cases internal environment comparison
high guidance democracy,
6 months, 2
strategy for 1
1 year, 2
All markets companies examined are operating in are dynamic. Technological cycle do
not exceed one year, new companies on market of company A appears every week, on market of
company B every month and on market of company D every 2-3 months. On the contrary,
company C and D function on more conservative markets, with new products appearing with less
intensity. Representative of company D elucidated it with high complexity of a technology and
high legal regulation of the market respectively. Nevertheless, all companies described
customers preferences as conservative, referred to the fact that demand is primarily formed by
the market and company need to suggest a disruptive product to attract customers attention.
Company A: “people dwell on what they like and to replace this product you need to make
something really innovative or really interesting” (Company A). Company B: “customers
preferences changes slower than new products appears, the thing is customers preferences on
advertising market are formed by advertising market itself” (Company B). Company C:
“customers preferences changes with the same temp as new product appears” (Company C).
Company D: “customers preferences are stable, this market have to be conservative because it is
connected to private financial security” (Company D). Company E: “customers preferences do
not change, we, players on the market always invents something new and sometimes customers
are even not ready to use our inventions” (Company E).
Level of rivalry
All companies run highly competitive markets. Majority of companies have less than 10
direct competitors (table 7), though the perceived level of competition is high (table 7). All
companies operating on B2B market considered high customer’s influence on company’s
operation (table 7) while company A and D operating on B2C markets mentioned that influence
of their clients is low, but still they are customer-oriented company finding customer satisfaction
their main goal. Four of five companies suppose significant influence of suppliers (table 7), for
three of them termination of an agreement means collapse of all company’s operations. For
companies A and B supplier intends platform they are working on, powerful company working
on oligopoly market.
Heterogeneity of supply
Majority of companies mentioned that companies operating on those markets could be
similar and differentiating only with number of options or cardinally differ one from another. On
all markets products prices are established on similar level and the only possible way to fix
different price is to offer something different from existing products and services (table 7).
Table 7 External environment description
Frequency of new
on the market
1 month –
< 1,5-2 years
need to push
Level of rivalry
Amount of competitors
Level of competition in
Strength of customers
Strength of suppliers
The level of difference
The level of pricing
A lot, but real
profit is less
than 10% of
Heterogeneity of supply
low to high
Findings from a case study
All companies investigated are operating on separate markets for different amount of
time, count various amounts of employees, though patterns of internal and external environment
Most of factors investigated fit trends described in previous investigations of corporate
entrepreneurship. However, 4 of 13 factors showed mismatch of obtained and expected results
Table 8 Comparison of expected and obtained result
Level of formalization
Motivation to innovate
Horizon of planning
Flexibility of planning
Scope of planning
Level of rivalry
Interest and loyalty
For instance, traditionally in corporate entrepreneurship theory level of centralization is
positively related to corporate entrepreneurship intensity. Nevertheless, all of investigated
companies described their companies as highly centralized. The possible explanation of this
phenomenon is that most of companies are headed by founders, who generally tends to control
all companies activities (Gedajlovic et all, 2004; Nelson, 2003, Walters et all, 2015).
The same reasoning could be suggested for mismatch of leadership style expected to be
democratic and found autocratic-democratic (Nelson, 2003; Randøy, and Goel, 2003; Walters et
all, 2015). Another explanation is a need to clearly mark borders for creative and enthusiastic
people, this case democratic style encourage them while autocratic does not let to forget they are
on working place and need to execute their job (Hersey and Blanchard, 1993).
Decision making process expected to be shared with high involvement of employees with
different expertise and background, however, dynamic market and necessity to make decisions
fast does not encourage long discussion and high involvement of a large number of people.
The intensity of corporate entrepreneurship is high in all five companies, is relatively
equal for companies A, B, D and E and slightly lower for company C. It could be connected to
several factors. Firstly, company C is headed by the sided CEO, not by founder as other
companies investigated and leadership style is more lenient comparing to others (Nelsen, 2003).
Secondly, company conduct high guidance for all project steps what could negatively affect
intensity of corporate entrepreneurship according to the theoretical sources. Thirdly, planning
system of company is more oriented on available resources and perceived less flexible than
others. This factor could be correlated with the first one, because other four companies told that
any project which do or does not fit the strategy could be taken if the founder is interested in it
and sided CEO has less freedom in this aspect. Further company has less pressure from external
environment: the most successful on the market, with no influence from suppliers side, moderate
influence from customers side, less dynamic market and ability to influence on price due to the
unique competence for the Russian market. It supports the theoretical suggestion that leadership
style, scope of planning, level of rivalry and dynamism have influence on corporate
The most important and valuable conclusion from the interviews conducted is that
corporate entrepreneurship obligatoriness originates in conservative customers preferences and is
supported by engaged and interested in innovativeness employees.
First driver, conservative customers’ preferences, was concluded from answers of
interviewees on multiple question. Firstly, on direct question “How often do customers
preferences change?” all companies told that changes happens slow and customers’ preferences
are formed by companies operating on the market. Secondly, the comparison of the specified
technological cycle is significantly higher than the speed of customers preferences change. For
instance, in company C those terms are 1,5-2 years for customers preferences change and 2,5
months for a technological cycle what gives a 10 times difference in period. Interviewees
mentioned that only innovativeness could attract and retain clients; company need to invent
something disruptive to make customers switch on their product. Indirectly this theory is
confirmed by the fact that all companies came on market with products having no analog. The
irregular level of differentiation among companies on one market shows that company has two
ways of development: disruptive innovation or creating a similar qualitative product.
On this point high level of innovativeness and high intensity of corporate
entrepreneurship is supported by second, already internal driver, interest and commitment of
employees. “They are just not interested to accomplish not innovative activity” answered one of
interviewees on the question how does he motivate his employees on innovations. This pattern
was clearly traced in all interviews conducted, IT industry attracts people by low level of
formalization and high level of freedom. Except pure interest in a result, employees could
implement their ideas within a company, attracting its resources and expertise with no personal
risk in case of an idea failure.
Consequently, corporate entrepreneurship is driven by need for customers preferences
change and supported by employees interested in innovations and company development.
Juxtaposition of theoretical model and empirical study gives a following model: proved
internal factors positively related with corporate entrepreneurship intensity are level of
complexity, non-monetary motivation, flexibility of planning and market scope of planning. To
internal factors negatively related with corporate entrepreneurship intensity were found level of
formalization and horizon of planning. All external factors, dynamism, heterogeneity and level
of rivalry are proved to be positively related to corporate entrepreneurship intensity.
High level of complexity
High level of formalization
High flexibility of planning
Long-term horizon of planning
Market scope of planning
Level of rivalry
Heterogeneity of the market
Figure 5 Model of how factors influence corporate entrepreneurship in Russian IT companies
The purpose of the research conducted was in building a working model of external and
internal factors, influencing the intensity of corporate entrepreneurship in Russian IT companies
and giving a description of how do elements of internal and external environment influence
corporate entrepreneurship intensity in Russian IT companies.
The research starts with a theoretical part, where were investigated more than 100
scientific researches (most of them is graded higher than 3 by ABS guide) devoted to corporate
entrepreneurship, corporate venturing and intrapreneurship. Were described different ways to
corporate entrepreneurship definitions, historical perspective of corporate entrepreneurship
investigation from 1980 to 2016. Were provided researches evidence that companies with
intensive corporate entrepreneurship demonstrate financial performance improvement,
knowledge sharing enhancing and they are more competitive on a hostile market. Were
evaluated five existing models of factors affecting corporate entrepreneurship and suggested two
models: the first model describes relationships between external and internal environment and
corporate entrepreneurship, and the second model catalogs set of internal and external factors
affecting corporate entrepreneurship intensity, taking into account direction of this influence. It
was suggested that centralization, complexity, level of formalization, decision making process,
control system, leadership style, motivation to innovate, horizon of planning, flexibility of
planning, scope of planning, dynamism, level of rivalry, heterogeneity of the market affects
corporate entrepreneurship intensity.
Theoretical research was supported with a practical part consisting in case study of five
Russian IT companies of different sizes, operating on diverse markets. For the case study were
used multiple sources of evidence: open-end questions interviews with executives, participantobservation and analysis of web sites. After the data-collection process was conducted a crosscase analysis and as a result of this from a theoretical model were excluded centralization,
decision-making process, control system and leadership style.
The analysis provided is aimed to help executives of IT companies to understand how
internal and external environment affects corporate entrepreneurship and which internal elements
of an organization could support or diminish entrepreneurial intensity in conditions of Russian IT
industry. According to the study conducted, corporate entrepreneurship improves financial and
innovation performance, enhance knowledge sharing and makes companies more competitive in
hostile market, which has high importance in current conditions of crisis in Russia.
From this study, managers could make a conclusion that high level of complexity in
organization increases corporate entrepreneurship intensity and pay more attention on horizontal
contacts among employees, create a PMO department or restructure a company in order to create
a project organizational structure, making organization more flexible and sustainable.
On the contrary, high level of formalization diminishes corporate entrepreneurship
intensity and takes extra time which could be critical in the industry where ability to be faster
and more innovative than competitors is perceived as a survival rule. Consequently, decreasing
the amount of formal elements within a company, usage of new types of communications:
internal messengers, popular messengers will have a positive impact on company’s
Further, it could be concluded that non-monetary motivation works better in terms of
corporate entrepreneurship, which could be a signal to change a motivation system if it does not
fit this description. This research also supports the idea that nature of employees in Russian IT
industry plays a significant role in establishing corporate entrepreneurship; this point together
with a previous one gives understanding of HRM practices importance from a recruiting to a
motivation policy. Proper recruiting of high-class specialists and turning them into loyal
employees plays a significant role in future success of a business.
Onward, planning system has an impact on corporate entrepreneurship. Flexible system
of planning, oriented on market and aimed on short or medium term periods is a reasonable
choice for company operating on dynamic and hostile market. Renunciation from long-term
planning could decrease company’s costs on planning adjustments, make company more flexible
and enhance entrepreneurial intensity.
Moreover, the case study conducted evidences that high level of centralization,
periodically autocratic leadership style and renouncement of shared decision making do not
negatively relates to corporate entrepreneurship intensity and could be perceived as a normal
phenomenon in Russian IT companies. On the contrary, these organizational features, especially
cultivated by a company founder could support innovations. It could give managers an
understanding of the fact that freedom of actions given to employees should have clear borders
and most of decisions should be done by the narrow circle of executives. However, this does not
mean that employees’ rights could be impinged and does not suggest a micromanagement as an
appropriate way of company’s governance.
The study conducted met following limitations: difference of the positions held by
interviewees and participant-observation of two companies of five. Difference of the
interviewees’ positions could influence their awareness and point of view on diverse elements of
organization. Two of five interviewees are founders of a company and we could see their equal
awareness in answers to all questions, while representative from marketing definitely had less
knowledge about organizational culture and motivation system and interviewee taking HRD
position had difficulties answering questions concerning product launched and changed. Partly
this limitation was overcame by using other sources of evidence; however, it could have some
impact on the case study result. Second limitation is ability to use participant-observation as a
source of evidence only for two company of the set. It gave us deeper knowledge of those
companies, which could result unconscious preference to results obtained from this source. This
limitation was minimizing by critical thinking and subjectivity reduction.
Further study could observe conclusion made using quantitative methods, in order to
establish better understanding of how and which factors are correlated among themselves, to
entrepreneurship. It could be done by detailed investigation of linkages between factors, their
intensity and reasons. Another direction for further researches could be quantitative investigation
of connections between internal and external antecedents of corporate entrepreneurship,
separating internal factors which are mostly influenced from outside and highlighting internal
factor which are mostly formed from inside.
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Appendix 1. Results of literature analysis
How the strategic
activity in large,
integration of the
organizations and on
the strategic process
Investigation of 2
patterns of CE:
operation of 4 large
USA companies and
4 large EU
with respect to
of factors in
Jones, Gareth How agency
problems affect the
internal CE and the
Survey within 77
and further analysis
of correlated factors
investigation of 10
businesses in UK
trying to develop CE
How the various
types of CE share
five “bundles” of
Analysis of factors
affect internal CE
Firms need both diversity
and order in their strategic
activity to maintain their
Managing diversity requires
an experimentation-andselection approach.
Top management's critical
contribution consists in
strategic recognition rather
Surface is a pattern where
as a business objective, when
in Deep it perceived as a
shared value. Analysis of
difference in control,
motivation and risk in two
In entrepreneurial firms
decision making is more
specialized personnel are
objectives are developed
from a shared objectives,
managers are not penalized
in case of project failure
compared to conservative
organizations use the same
integration processes as
Entrepreneurial strategy is
predefined with innovation
norms, degree of
organizational structure and
Organizational size, age and
complexity contribute to
agency problem and curtail
Uncertainty, effects of risk
preferences and effects of
6opportunism affect internal
Building of CE usually
performs in long drawn out
of processes for many years,
not in single event
All attributes appeared on
five stages, but changed over
How types of
initiatives in MNC
intensity and five
How to integrate
CE in one model
study of 39
initiatives in MNC
to determine whether
to find a correlation
intensity and five in a
sample of 169 U.S.
Integration of the
learning literatures to
develop a theoretical
Empirical study of
one large company
Four types of initiatives
could be identifiable, on the
basis of the locus of the
local, internal, global and
and scanning intensity,
planning flexibility, locus
of planning, and strategic
Identification of three
that inhibit breakthrough
inventions: the familiarity
trap – favoring the familiar;
the maturity trap – favoring
the mature; and the
propinquity trap – favoring
search for solutions near to
Experimenting with novel,
emerging and pioneering
technologies firms can
overcome these traps and
CE strategy is manifested
through the presence of three
and empirical studies elements: an entrepreneurial
strategic vision, a proentrepreneurship
and entrepreneurial processes
The inclusion of corporate
statistical analysis of entrepreneurship indicators,
factors for comparing derived from the
substantially the country
rankings based only on small
in 22 member
countries of the
capital influence on
How utilization of
teams can augment
regression to explore
R&D spending, a
building and models
definitions of the
business ownership rates. A
relationship was found
between individual and
Aspects of directors’ human
and relational capital (e.g.
finance experience, technical
and interlocks) significantly
influence R&D spending
The efficient functioning
and success of crossfunctional corporate
entrepreneurship teams can
innovative climate inside the
Draw attention to the many
of CE such as learning,
building and the facilitating
of organizational evolution.
Appendix 2. Interview questions
Intensity of CE
How many new products were launched by your company for last 2 years?
How many product changes and new versions were made for last 2 years?
What is the relation of the amount of your new products and your competitors new
How innovative are your products for a market?
2.1. On which level of your company most decisions are made?
2.2. How many horizontal connections exists in your company?
2.3. How often employees from different departments are involved in common projects?
2.4. How many people are involved in the decision making process?
2.5. Who is the final decision-maker?
2.6. Is your control system more oriented on budget or strategy?
2.7. If strategically important project is not profitable for a long time, but a project
manager promise that soon the situation will change, what will be your decision?
2.8. What is the way of communication in your company: letters, messages, oral
2.9. If there is dress code in your company?
2.10. Which is the style of communication between employees and between employees
and senior management?
2.11. How much freedom of action has, in your opinion, an employee of your company?
2.12. How would you describe leading style common for your company?
2.13. Are the employees guided by their leader/ manager/superior while achieving their
Motivation to innovate
2.14. What is the motivation for innovations in your company, is it profit sharing,
bonuses, recognition, commitment?
2.15. How would the executive management reacts if the idea suggested by employee
Horizon of planning
2.16. What is the horizon of planning for your company?
Flexibility of planning
2.17. If your company see a new opportunity, in which case it takes it?
Scope of planning
2.18. Is your company planning system more oriented on market or on resources
3.1. The technological cycle in your industry is?
3.2. How often do new products appear in the market?
3.3. How often do the customers preferences change?
Level of rivalry
3.3. How many competitors does your company have?
3.4. How would you describe the level of competition in your market?
3.5. What is the strength of customers influence on your company?
3.6. What is the strength of suppliers influence on your company?
Heterogeneity of the market
3.7. How do the existing products on the market differ?
3.8. How do the tariffs on existing market differ?
Appendix 3. Short Interviews’ results
1.1. How many new
launched by your
company for last 2
1.2. How many
product changes and
new versions were
made for last 2 years?
1.3. What is the
relation of the amount
of your new products
and your competitors
1.4. How innovative
are your products for a
2.1. On which level of
your company most
decisions are made?
3 for 10
5 for 1,5
20 for 10
analogs on the
but not for
2.2. How many
exists in your
2.3. How often
are involved in
80% of all
2.4. How many people
are involved in the
2.5. Who is the final
Founder plus 7
than 1,5 years
If possible –
2.6. Is your control
system more oriented
on budget or strategy?
2.7. If strategically
important project is
not profitable for a
long time, but a project
manager promise that
soon the situation will
change, what will be
2.8. What is the way of
your company: letters,
2.9. If there is dress
2.10. Which is the
employees and senior
more for others
High only for
ability to head
strategy for 1
1 year, 2
freedom of action has,
in your opinion, an
employee of your
2.12. How would you
describe leading style
Authoritarianof soft and
common for your
employees guided by
while achieving their
Motivation to innovate
2.14. What is the
innovations in your
company, is it profit
2.15. How would the
reacts if the idea
employee will fail?
Horizon of planning
2.16. What is the
horizon of planning for
6 months, 2
Flexibility of planning
2.17. If your company
see a new opportunity,
in which case it takes
Scope of planning
2.18. Is your company
planning system more
oriented on market or
3.1. The technological
cycle in your industry
3.2. How often do new
products appear in the
3.3. How often do
1 month –
< 1,5-2 years
need to push
Level of rivalry
3.3. How many
competitors does your
3.4. How would you
describe the level of
competition in your
3.5. What is the
strength of customers
influence on your
A lot, but real
profit is less
than 10% of
3.6. What is the
strength of suppliers
influence on your
3.7. How do the
existing products on
the market differ?
Heterogeneity of the market
low to high
3.8. How do the tariffs
on existing market
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