St. Petersburg University
Graduate School of Management
Master in Management
The Relation between Organizational Design and Corporate Entrepreneurship:
Evidence from Russian SMEs
Master’s Thesis by the 2nd year student
Concentration – Management
Professor, Galina V. Shirokova
Филимонова Анна Андреевна
Связь между организационным дизайном и
внутрифирменным предпринимательством: на примере
Описание цели, задач и
российских малых и средних предприятий
Высшая школа Менеджмента
Широкова Галина Викторовна, профессор
В связи с тем, что нынешняя экономическая ситуация в
России очень нестабильна, малые и средние предприятия
всячески пытаются найти новые возможности для бизнеса,
чтобы успешно конкурировать на рынке. Однако, зачастую
малые и средние предприятия не имеют достаточных
ресурсов, чтобы соперничать с большими предприятиями, а
и н о гд а д а ж е д ру г с д ру гом . В н у т р и ф и рм е н н о е
предпринимательство может предложить возможное
решение данных проблем без дополнительных денежных
вложений. Главная цель данного исследования, понять связь
меж ду элемент ами организационного дизайна и
внутрифирменным предпринимательством, чтобы выявить
лучшее их сочетание. Для этой цели, было выявлено
не сколько задач: выявление о сновных элементов
о р г а н и з а ц и о н н о го д и з а й н а и в н у т р и ф и рме н н о го
предпринимательства, исследование этих элементов и их
связей на основе реальных примеров, оценка как
полученная информация может быть полезна для
российских МСП. Было проведено изучение пяти
российских малых и средних
компаний. На основе
полученной информации, было выявлено, что
децентрализация, формализация и свобода действий
сотрудников имеют влияние на внутрифирменное
предпринимательство в организации, однако существуют и
другие внутреннее факторы, которые иногда влияют на
в н у т р и ф и р м е н н о е п р е д п р и н и м ат е л ь с т в о . А вт о р
сформулировал ряд практических советов для российских
предприятий малого и среднего бизнеса.
Внутрифирменное предпринимательство, малый и средний
предпринимательство, организационный дизайн, МСП
Master Student’s Name
Master Thesis Title
The Relation between Organizational Design and Corporate
Main field of study
Academic Advisor’s Name
Description of the goal,
Entrepreneurship: Evidence from Russian SMEs
Graduate School of Management
Professor Galina V. Shirokova
Due to the fact that the current economic situation in Russia is
tasks and main results
unstable, nowadays, Russian SMEs are desperately searching
for new business opportunities in order to successfully
compete. However, small and medium enterprises usually do
not have enough resources to compete with big companies, or
sometimes even with each other. Corporate entrepreneurship
can provide a possible solution to find new competitive
advantages without extra expense. The main goal on the
research is to explore the existing relation between
organizational design and corporate entrepreneurship, in order
to figure out the best configuration of those elements. For this
reason there were set several objectives: to identify the main
organizational design and corporate entrepreneurship elements,
to explore these elements and link between it in the real-life
cases, to evaluate how the received information can be useful
for Russian SMEs. It was conducted and analyzed five cases of
Russian SMEs. Based on this analysis, it was found that
decentralization, formalization and employees’ autonomy
influence on the level of corporate entrepreneurship within an
organization, however, there are also some internal factors that
in some cases may have even stronger effect on the corporate
entrepreneurship within an organization. For Russian SMEs
author has formed a number of particular implications.
Corporate entrepreneurship, intrapreneurship, organizational
design, SMEs, small and medium enterprises
Table of Contents
Chapter 1. Organizational Design and Corporate Entrepreneurship
Theoretical model……………………………………………….....….. 12
1.1. Corporate Entrepreneurship: contemporary understanding.. ……..……...13
1.2. Organizational Design: contemporary understanding……………………...21
1.3. Interaction’s Concepts between Organizational Design
And Corporate Entrepreneurship…………………………………………….27
1.4 Theoretical model…………………………………………………………….....31
Chapter 2. Impact of Organizational Design on
Corporate Entrepreneurship Development: Empirical Analysis ………37
2.1. Methodology …………………………………………………………………...37
2.2. Research Sampling…………………………………………………………......39
2.3. Data Collection ………………………………………………………...…........39
2.4. Cases Description……………………………………………………...…….…43
2.5. Cross-case analysis …………………………………………………….....……48
CONCLUSIONS AND IMPLICATIONS……………………………………..……72
List of references…………………………………………………………………....77
Appendix 1. The Interviews’ Guideline ………………………………………......84
Today’s world faces new challenges such as globalization, intense competition, rigorous
ethical scrutiny and the demand for sustainability, a need for rapid response, adapting to the
digital world, and increasing diversity (Daft, 2013). On the one hand, these circumstances
seem to be aggressive, however, on the other hand – it provides a lot of opportunities such as
new resources, new products, new services. In order to gain the market, large, medium and
small organizations are needed to be proactive, to react fast. Therefore, an entrepreneurial
behavior is required for them. The process of implementing entrepreneurial behavior in interest
of organization called corporate entrepreneurship (CE). Recent studies of Covin and Ireland
showed that the corporate entrepreneurship improves the firm performance (Covin and Ireland,
2009). As well as it positively effects on the organization’s resistance to constant environmental
changes. As a result, according to the research of the most influence scholars in the field of
corporate entrepreneurship, S. Zahra ad D. Kuratko, in their study of 1999, it was identified that
CE can make a significant difference to a company’s ability to compete (Zahra, Kuratko, 1999).
As recent study showed (Bailey, 1992), the organizations where the corporate
entrepreneurship is developed, the profit is higher than in organization, where it’s not. Also,
other studies (Covin, Selvin, 1991; Zahra, Covin, 1995) provided information, that corporate
entrepreneurship improves effectiveness of the organizations, and accelerate its growth, and as
results, it increases its profit. CE also has a practical application for an organization; for
example, it cuts expenses and improves organizational processes.
The need of using corporate entrepreneurship was discussed by many researches. For
example: Kuratko wrote in 1990, that importance of usage of CE arose when organizations
understood that they need to avoid the stagnation by using innovation; that their employees are
disappointed of traditional bureaucratic organizational structure; that there is a need to avoid
traditional weakness and threats (Kuratko, 1990).
It became even more important when
organizations operate in unstable environment, at the emerging market such as Russian.
Russian small and medium enterprises are the most vulnerable by facing these conditions. Most
part of Russian SMEs is relatively young. Since Russia took a market-oriented direction only in
early 1990, Russian SMEs needed to develop fast, to change its habits and rules to suit the
market requirements and to gain market power. At the same time, these organizations needed to
be able to compete with the foreign companies that started to enter the Russian market. In such
hostile conditions, it is crucial to be able to resist and save the existed market position.
Corporate entrepreneurship is one of the approaches that helps to the organizations to do so. It
provides the organization strategic advantages that allow performing well and gaining a bigger
market share. With collaborating of existing organizational design and corporate
entrepreneurship theories, Russian SMEs may create new competitive advantages without high
additional investments. Since the SMEs are especially depending from resources, this aspect
has a crucial importance.
CE shows entrepreneurship at the level of the firms (Miller, 1983), which depends upon
the entrepreneurial behavior of the individuals that work on it. Zahra, Hayton, George pointed
that the field of CE is quite distanced from the strategy literature, where CE has become
overshadowed by the concept of entrepreneurial orientation, a strategic orientation akin to
market orientation (Gotteland, Haon, Jolibert, 2009).
The main purpose of CE is to create more innovative processes inside an organization.
CE can be seen when an organization deligates some responsibilities and authority to create and
develop new products or servicees to employees, or an employee/a group of employees must
improve already created products/ services. This system must help an organization to avoid the
rigid and bureaucracy organizational structure. At the same time, in a new substructure (a group
of employees or an employee who responsible for a concrete product/service) it can be found
centralization of decision-making. This leads organization to react fast to the changing
environment and to rapid realization of its business projects. Since a decision making process is
proactive in this case, the organization spends less time to find and estimate possibilities.
Therefore, such an organization became more flexible, because it starts to have time to find
alternatives, for resources allocation.
Research gap for CE
The external environment, that firms face these days can be characterized as hostile,
dynamic and heterogeneous (Zahra, 1991). External factors mainly characterized by uncertainty
and influence directly on the organizations performance. Its hostility can damage, the firms
development; dynamism may negatively effects at the stable working process, and
heterogeneous obstacles do not allow to have a clear view at the competitors’ performances.
Current circumstances in Russian market changed significantly in the last 3 years. As it
was mention by the lot of government officials such as former finance minister, prime minister
etc. Russian economy is in crisis these days. The Western ranking agencies also emphasize the
unfriendly business environment. For example, this year Fitch Ranking as well as Standard &
Poor's, in 2016 gave Russia “BBB” (the same ranking have: Brazil, India, Vietnam, Zamia
etc.). This ranking usually is given to the countries that are close to default or already in the
default. Also due to the sanctions, low price for oil and other political games, the business
environment is suffering a lot. The market conditions are unpredictable and the resources
became less affordable. Many researchers mentioned that the emerging economy countries
have fewer possibilities to restrain the hostile environment (Hoskisson et al., 2000; Peng et al.,
2008; Puffer et al., 2010). Thus, the Russian organizations, and precisely Russian SMEs need to
think not just how to compete between each other, but also how to survive on the market. The
possible solution to succeed on the market may provide corporate entrepreneurship. Some
researchers have emphasized that the significant changes in a firm’s external environment also
are working as a kind of stimulus for companies’ internal entrepreneurial development.
Nevertheless, the corporate entrepreneurship may provide the necessary flexibility for
companies that operate in such as conditions. Many researchers found that the today’s core
competitive advantages tied with innovativeness and proactiveness. For the more, as Kuratko
pointed out, organizations must realize ‘‘the entrepreneurial imperative of the twenty-first
century’’ (Kuratko, 2009). Revealing corporate entrepreneurship concepts, it is important that the
influence of corporate entrepreneurship on the organizations performance is different on Western
countries markets and emerging countries markets. The previous studies were mostly made
based on the companies that were operating in relatively stable economic conditions, mostly on
the companies that operate in developed countries. However, this study has a concrete focus on
small and medium Russian enterprises that have the specifics not just due to the external
economic conditions, but also specifics that related to the organizational design as well.
Generally in the literature the SMEs are characterized as organizations with the simple structure,
clear strategic orientations of managers, however we should not to oversimplify it (Bouchard,
Basso, 2011). At the same time these companies are very depended on the resources (external
and internal). That makes them especially vulnerable in the current economic situation. It is
important to explore the SMEs’ nature, to help them save their positions, since these days these
companies are seen not just a source of social and political stability, but also as a source of
innovative and competitive power (Wennekers, Thurik, 1999). By collaborating of existing
theories of organizational design elements and corporate entrepreneurship theories we can
provide some insights for Russia SMEs on how to operate more efficient on the market and
create the competitive advantages. Taking into account Russian particularities on the market, it is
believed that this research have not just academic, but also managerial implication.
The study aims to find the relationship between organizational design (OD) and
corporate entrepreneurship, but also it is important to analyze the impact of organizational
design on corporate entrepreneurship development if it is exist one. It would be interesting, to
understand whether the triggers of CE lay in the field of OD, or may be in external areas. These
findings help to understand how firms can gain on the market, which elements of
organizational design can be improved in order to become competitive advantages of an
organization, how in real-life the organizational design interacts with corporate
In order to conduct the study, the following research questions were stated:
How organizational design elements impact on the corporate entrepreneurship
development within Russian SMEs?
How should Russian firms perform in order to find the best link between their
organizational design and corporate entrepreneurship elements?
Therefore, in this study there will be deeply investigated and revealed several
organizational factors that have significant impact on the stimulation and, as a result, creation
the corporate entrepreneurship within the organization. These internal factors may have
different effects on the CE. Focusing on these factors, some insights concerning
competitiveness, wealth creation, and innovativeness of the organization will be discovered.
One of the aspects of this research is to focus on particular small and medium size firms
that exist on a market for at least five years. Small and medium size firms are the key indicators
of its-country economic situation, the amount of it and its success show, whether the economy
is healthy and stable, supportive and people oriented. The research showed that in countries
where the amount of small and medium sized firms is growing, the national income is growing
respectively (Bouchard, Basso, 2011). Therefore, It may be consider that the findings in the
field of studying the small and medium sized enterprises (SME) lead to some insights that
might be helpful for both: governmental and entrepreneurial understanding of the situation. The
focus of this thesis is mostly on the entrepreneurial understanding, since it will be explored the
internal part of SMEs. The results of this study will help to already existed SMEs to improve
their day-to-day work and operation process, as well as will help to improve its profit
generation, by providing some insights on creation some new competitive advantages.
In order to conduct the research, a case study has been chosen as a research strategy.
The particular reason to use the case study is that it allows to discover the field deeper and to
have more applicable insights. It will provide illustrative picture of the studied impact and as
well as it will provide a possibility to explore the interaction of concepts. Therefore, the casual
links will be examined.
In this study, it will be linked the elements of organizational design and corporate
entrepreneurship activities in Russian small and medium enterprises. The relationships between
these concepts will be described. It is expected that the study could also provide insights into
the competitive strategies that Russian SMEs may use in the market. Basically,
entrepreneurship is the engine by which companies define opportunities and create innovations.
But entrepreneurship inside the company is impossible without appropriate organizational
design elements. Therefore the liaison between these two concepts is quite clear. However, it
will be more relative to focus on particular elements of organizational design, those that have
the biggest impact on the process of developing of CE within the organization.
Chapter 1. Organizational Design and Corporate Entrepreneurship theoretical model
The main purpose of this chapter is to provide a theoretical analysis of the existing
scientific literature in the fields of organizational design, corporate entrepreneurship and it
interconnections. In the first part of this chapter, it is shown the different research approaches
that were conducted in order to understand the corporate entrepreneurship. The second part
introduces the theories that exist of organizational design understanding. The third part presents
the way the corporate entrepreneurship concept was understood from the prism of
organizational design and the relation between these two concepts. The last part presents the
theoretical model of this research that was made through deep analysis of existing literature.
In order to conduct the literature review there was made deep literature analysis through
several steps article selection. The choice of articles for this research was directed to the wide
field of corporate entrepreneurship and organizational design studies. Due to the fact that the
present study is an interdisciplinary one, and that it was found out the main and the most
important researches, there was organized two steps articles’ selection.
At the first stage, it was made a search of related articles in one of the most
authoritative journals’ reviewing databases, such as EBSCO, Scopus and Emerald. It helped to
go through the most significant studies in the fields of CE and OD. Therefore, as key words it
was used the expression like: Corporate entrepreneurship, organizational design, Corporate
entrepreneurship AND organizational design, elements of organizational design, and some
synonymous like, intrapreneurship, corporate venture, SMEs. The key words among articles
were found in titles, among key words and abstract. At the beginning, it was not set any time
boundaries and it was found a lot of theoretical articles, but then in order to find the most recent
and more practical studies, further it was set the time gap from 1990 till present time. Overall it
was at the end more than 100 articles to deal with.
The second stage was to divide these articles into some groups according to the Journals
where it was published. That helped to estimate the quality and correspondence to the research
subject. Mostly it was used the ABS 2015 journal ranking, made by Association of Business
Schools Academic Journal Quality Guide February 2015; and Financial Times Survey of Top
Business Schools 2006/2010. At the end of the selection it was about 80 articles to explore.
The articles that were used, came from 38 scientific journals, and 21 of them are A and
B category (ABS ranking). It has been approximately 70 % of articles that were published in
these journals, approximately 30% of them from category A journals and 40% of them category
B journals. Most part articles were in Journal of Business research, Entrepreneurship Theory
and Practice, Journal of Business Venturing, Journal of Small Business Management.
The selected articles were published from 1981 to present time. It can be said that the
articles concerned the CE started to appear from 1960th and the most important work was done
from 1986 to present time.
Corporate Entrepreneurship: contemporary understanding
The concept of corporate entrepreneurship began to evolve more than 40 years ago. It
was Hill and Hlavacek, Peterson and Berger, Hanan, and Quinn, who stressed the importance of
CE (Hill, Hlavacek, 1972; Peterson, Berger, 1972; Hanan, 1976; Quinn, 1979). Generally
speaking, corporate entrepreneurship can be defined as different entrepreneurial behaviors that
include different actions, active or passive. A lot of authors explain the term CE as innovations
that lead to sustain growth of organizations. Rule and Irwin (1988) wrote that companies
established culture of innovation through: the formation of teams and task forces; recruitment
of new staff with new ideas; application of strategic plans that focused on achieving innovation;
and the establishment of internal research and development programs that were likely to see
tangible results. Robert A. Burgelman (1983) describes corporate entrepreneurship as the
internal development diversification in company’s activity. When the author describes the
process of diversification, he includes new resources to help the firm to extend its activity in
the new spheres of opportunities. Summarized it, the author explains that such diversification is
presented the process of individual entrepreneurship in the corporate one (Burgelman, 1983).
Latter, Zahra (1991) defines CE a little bit wider, and explains it as formal or informal activities
aimed at creating new businesses in established companies through product and process
innovations and market developments.
Therefore, in can be said that corporate entrepreneurship is a result of combining the
entrepreneurial activities of multiple participants.
Corporate entrepreneurship also is known as intrapartneurship (Macrae,1976) or
corporate venturing (Burgelman, 1983). CE is the practice of developing a new venture within
an existing organization, to exploit a new opportunity and create economic value (Pinchot,
1985). Many researches used these concepts in order to interpret organizational phenomena
such as innovation, proactive behavior, and strategic renovation. Stevenson H.H. and Jarillo
J.C. in their paper “A paradigm of entrepreneurships: entrepreneurial Management” wrote that
corporate entrepreneurship happens when the big firms understood that in order to compete on
the market they need to have some features of small business organizations, such as flexibility,
innovativeness, growth. (Stevenson and Jarillo, 1990)
According to Guth and Ginsberg there are two main directions of development of the
concept CE: 1) When inside the one organization appears a new business, in other words
corporate venture or innovations; 2) When transformation or renovation are the key, basic
elements that organization based on (Guth and Ginsberg, 1990).
Gifford Pinchot, is one of reputable researchers in a field of intrapreneurship, wrote a lot
about possible changing within the big organizations, in order to overcome the bureaucracy and
rigid system. For example, he proposed to create a system of outsourcing contracts within the
organization, that might help to organizations improve the quality of certain performed work
(Pinchot, 1965). Most part of his works was concentrated on the exploration of individual
personal level. He thought that it is crucial for organizations to develop the spirit of
entrepreneurship, innovative orientation.
Some researchers studied CE not just as a phenomenon, but they link it with
organizational life cycle. In light of it, they emphasized that it is important for organizations to
support entrepreneurial function not on a stage of growth, but also on a stage of maturity. It will
help for the next stage of renewal, because it will help to adapt to new circumstances as well as
help to occur some new innovative ideas and business development.
Researches tried to understand CE through different prisms.
Some of the authors focused on companies’ external contexts. Hayton, George, and
Zahra (2002) explored the effects of national cultures and industry conditions. Some other
researchers, such as Covin, Slevin (1990) have looked through some industry’s conditions and
checked it as the effect of CE on company performance. They tried to point to some of the
conditions under which CE enhanced company performance. There is a large volume of
published studies describing the internal or firm-specific elements of CE. For instance, some
authors have focused on the organizational structure (Covin, Slevin, 1988; Zahra, 1991),
organizational culture (Zahra, 1991), incentives (Zahra, 1991) and managerial systems (Zahra,
1991) of firms. They have also tried to find the correlation between the effect of firms’
ownership and CE (Zahra, 1996), also in this sense they have linked CE activities to firm
strategy (Zahra, 1991). The author discovered that firm-specific variables influence employees’
perceptions, attitudes and behaviors, thereby determining potential investments in CE. It is
important for employee to be able to take risks for its career. To be proactive is required from
employees. It was found that innovation requires managerial support, in order to use the
creativity and apply their knowledge to find the solutions in complex organizational issues
In the 1990s some trends can be identified in research of CE. Many authors verified
sets of variables (for example, environmental characteristics), but they did it without taking into
account consideration of their particular places and connections. Such studies ignored the
relationships between these sets and their dimensions. There are a very small amount of
literature studies that tested the causal chain among these variables. It can be problematic for
the future works, because the causal chain might change over time or under particular
conditions. It is a fact that in the literature, there are very few studies that provides longitudinal
As it has been already discussed, an innovation is a core element of corporate
entrepreneurship where one can take an idea or invention and create something new and
valuable. CE occurs when organizations try to “exploit product-market opportunities through
innovative and proactive behavior” (Dess, Lumpkin, McGee, 1999). As such, CE facilitates a
firm’s efforts to exploit its current competitive advantages as well as explore new opportunities
and the competencies required to successfully pursue them (Covin and Miles, 1999; Covin,
Slevin, and Heeley, 2000; Ireland, Kuratko, and Covin, 2003). In established organizations, CE
has been recognized as a separate identifiable organizational strategy that is directed at the
recognition and exploitation of new opportunities (Ireland, Covin, Kuratko, 2009).
Hornsby, Kuratko, and Zahra (2002) found five key factors that influence corporate
entrepreneurship to include management support, work discretion and autonomy, rewards and
reinforcement, time availability, and organizational boundaries (Hornsby, Kuratko, Zahra,
Summarized different researches in this field, Wickham
(2004); Guth & Ginsberg,
1990; Zahra, 1996, Covin, Miles, 1999; Sharm, Chrisman, 1999; Antoncic, Hisrich, 2001;
Antoncic, 2007), we can make a basic framework of corporate entrepreneurship. The figure
(Figure 1: Core elements of CE) below presents the general approach of understating the core
sense of CE.
Figure 1. Core elements of CE (Duobiene, 2013).
According to this figure, it can be highlighted three main characteristics that determine
the CE operations: innovations, strategic objectives, and potential for growth.
Managerial practices, entrepreneurial culture and manager’s attitudes toward
entrepreneurship are three main factors that influence on CE processes. It is identified through
analyze of different conceptual and empirical researches (Russell, 1990; Covin, Slevin, 1991;
Zahra, 1991; Russell, Russell, 1992; Hornsby , 1993; Baden-Fuller, Stopford, 1994; Van de
Ven, Poole, 1995; Chung, Gibbons, 1997; Jucevičius, 1998; Sharma, 1999; Dess , 1999; Zwell,
2000; Crome, 2000; Antoncic, 2001; Hornsby et al., 2002; Diaz, Rodriguez, 2003, McGuire,
2003; Kuratko et al., 2005; Chen et al., 2005).
Russell (1990) wrote that internal factors provide possibilities to create corporate
entrepreneurship, and organizational culture in this sense is extremely important. CE makes the
organization achieve a competitive advantage through entrepreneurial culture that consists of
embeds values, norms and believes (Russell, 1990).
Barringer and Bluedorn (1999), in their research, described several key rules that helped
us to understand the successful CE operations within an organization (Barringer, Bluedorn,
1) It is necessary to scan activities. The hard constant job of scanning a firm’s
environment helps to recognize the existing opportunities.
2) Firms should be proactive, but moreover they should be flexible in their strategic
plans. It is important to be able to change plans rapidly and easily according to the
3) The strategic plans on the entrepreneurial behavior have to be with several planning
4) It is required to have a high level of employee involvement in strategic planning
facilitates. The employee participation at all levels supports the entrepreneurial process and
helps to pursue new opportunities (Burgelman, 1984; Sathe, 1988).
5) Control system should be able to pursue a rewarding creativity and innovations. A
well-designed control is important to sustain entrepreneurial activities through stimulation and
incentive of rewarding system.
Covin and Slevin (1990) have proposed that the firm with the entrepreneurial behavior
has the following structural characteristics:
1. Freely varied operating style;
2. Top-managers are experts;
3. Flexibility to environmental changes;
4. Result-orientation rather than on the processes;
5. Friendly cooperative atmosphere with informal control;
6. Diversified team with a flexible on-the-job behavior;
7. Concentration on team-creating and team-working;
8. Free communication.
It is important to mention that CE is a part of corporate culture. These two concepts
intertwine with each other, and both have some similar elements. Numerous studies have
attempted to explain how culture relates to innovations and entrepreneurship (Timmons, 1999;
Peters, 1997; Cornwall and Perlman, 1990). To sum up the research in this field it can be
described several common characteristics of entrepreneurial culture, that lead to CE:
- People and authority are focused on positive results;
- Challenge of innovations and risk-taking;
- Hands-on management;
- Freedom to grow and to fail;
- Personal commitment and responsibility;
- Orientation on a future and a sense of urgency.
To generalize recent studies, it is possible to identify some general components of CE as
well. The components are made from strategic point of view. The CE strategy model has
1) The antecedents of CE strategy (external environmental conditions that provoke to
entrepreneurial activity, the individual entrepreneur’s strategic point of view);
2) The elements of CE strategy (i.e., top management’s entrepreneurial strategic vision
for the firm, organizational architectures that encourage entrepreneurial processes and behavior,
and the generic forms of entrepreneurial process that are reflected in entrepreneurial behavior);
3) The outcomes of CE strategy (i.e., organizational outcomes resulting from
entrepreneurial actions, including the development of competitive capability and strategic
Many studies were conducted in order to have a deeper understanding of the nature of
CE and the trigger factors of it. The table below presents the main studies in the relationship
between CE and organizational design elements (Table 1. The relationship between CE and
Table 1. The relationship between CE and OD (created by author).
USA/ 56 firms Modeling of
In an entrepreneurial
organization, managers of
each level are participated
in the decision-making
process. All levels of
management support risk
taking. There is no
USA / 180
punishment for mistakes.
High levels of
and the Modern
individualism are not lead
Companies where the
corporate environment is
collectivistic, the level of
entrepreneurship is low.
The cultures where the
level of individualism and
collectivism are balanced,
the level of
The relationship The study shows that
of vertical and intrapreneurship is
explained by horizontal
and collectivism personality alone shows a
small amount of
intrapreneurship; there is
a strong dependency on
There is a positive
& Asia/ 169
relation between the
a n d s t r a t e g i c flexibility and
participation of employee
in corporate planning.
There are five factors that
perception of the
time availability, and
boundaries. These factors
managers to foster
entrepreneurial activity in
The study shows that
entrepreneurship is a
direct predictor of
creation, as well as
profitability and growth;
support is an important
direct predictor of CE.
The formal control
system has positive
correlation with CE
The high level of control
and formalization tend to
have the organizations
with low level of CE.
A case study Switzerland/
The successful firms need
to have strong
orientations to compete
and survive technology
To summarize, there were made many researches to analyses the key triggers for CE.
There are a lot of different approaches to understand the sense of CE, some authors refer to
intrapreneurship (Kuratko et al., 1990); some of them to internal corporate entrepreneurship
(Schollhammer, 1982), corporate ventures (Ellis, Taylor, 1987; MacMillan et al., 1986), venture
management (Veciana, 1996) etc. CE is the process of creation and extension of organization’s
competitive advantages, of exploration new opportunities and renovation existing process
within an organization. Most part of studies was made in order to find main characteristics of
CE, and at the same time, there were made some significant studies on discovering the relations
between OD and CE. Today it can be revealed that corporate entrepreneurship and
organizational design are strongly tied concepts. Basically saying, corporate entrepreneurship is
developing and existing with the mix of certain OD elements.
1.2 Organizational Design: contemporary understanding
More than 90 years ago Henri Fayol and Max Weber formulated the basic concept of
organizational design, they offered the structure of principles for managers to pursue.
Those principles gave a start for huge amount of studies and developments in this field.
Over more than a century, there were made a lot of different research in a field of
organizational design. The scientist studied the content of organizational design (Haberstroh,
1965; Mintzberg, 1979; Harris, Raviv, 2002), as well as they tried to formulate the most
appropriate collaboration of elements taking into account different circumstances (Schon, 1983;
Weick, 1993; Akin, 1994; Yoo, 2006).
Organizational design can be seen as the combination of vision, mission, values,
operating principles, strategies, objectives, tactics, systems, structure, people, processes, culture
and performance measures in order to deliver the required results in the operating context of the
organization (Stanford, 2007). The importance of this concept was emphasized by Cunlife, who
wrote that the suitable organizational design allows organizational members to: (1) deal with
contingencies (constant changes in technology, markets and competition); (2) gain a
competitive advantage (by creating the key competencies); (3) make a supportive, effective and
responsive working environment; and (4) increase efficiency and innovation (Cunlife, 2008).
The concept of organizational design in a wide sense means the all processes that make
an organization works. It can be said that this concept includes many aspects such as:
organizational culture, organizational structure, organizational strategy, mission, people that
works in this organization and the way all processes are organized insight this organization etc.
Speaking generally about organizational design, it can be define as a process of creation
or change the structure of organization. The sense of organizational design often is mixed up
with a sense of the concept of organizational structure. However, the organizational structure
has a bit different purpose, it is a formalization of jobs. It encompasses the list of positions,
duties, titles, reporting structure etc. It is a current description of the “skeleton” of an
organization. Therefore the concept of organizational design is more about creating proper
designed and aligned elements of an organization to efficiently and effectively deliver the
purpose of an organization, the ideas and intentions of an organization(Hinrichs, 2009). It is a
plan to how an organization should function to make its performances better.
According to Bollingtoft the organization design is aimed to enhance the firm’s adaptive
capacity to ensure a dynamic fit between environmental conditions and organizational
characteristics (Bollingtoft, 2009). There are different approaches that aimed to determine an
organizational design building process. It is clear that the environmental factors influence the
intraorganizational level. Therefore, these factors should not be excluded in organizational
design process reviewing (Pfeffer, Salancik, 1978). There is different understanding of how the
external factors influence on the organizational design.
The contingency theory suggests that the organizational design and the quality of the
organizational performance depend upon the different external or environmental events or
factors. According to the theory, the organizational design elements adopt to the environmental
factors. Paul Lawrence and Jay Lorsch in 1967 tried to understand whether the various in the
environment of the company from different industries would correspond with differences in the
internal structuring if the firms (Lawrence, Lorsch, 1967). Also they stated that one of the most
important dimension of environment for the organization wellbeing is the degree of certainty or
stability. One of the results of this study is that the there is a positive relation between the
environmental certainty and formalization within an organization. Therefore, in stable
environment can fixed the routine and formalized the processes. According to them, in order to
be successful an organization must find the balance between differentiation and integration of
the organizational systems (Lawrence, Lorsch, 1967). The studies of Lawrence and Lorsch are
correlated to the studies of Tom Burns and G.M. Stalker that were made in 1961, and that can
be seen in a contingency theory perspective as well (Burns, Stalker, 1961). By the examination
of the organizational structure and management style, they proposed to divide the
organizational structure into two types: organic and mechanic.
The mechanistic organization has a high level of formalization, centralization, narrow
span of control, clear chain of command, a high level of specialization and rigid
departmentalization (Burns, Stalker, 1961). Therefore, there are: formal hierarchy of authority;
supervisors that control each employee. There are also a big distance between the top –manager
and low-level managers, and there isn’t a direct control from top-managers to low-level
managers. Each job is specified.
The organic organization is a vice versa type, where there are: a low level of
formalization, decentralization, wide spans of control, free flow of information, cross hierarchy
teams and cross-functional teams (Burns, Stalker, 1961). These organizations are more adaptive
to the constant changes and flexible. In such an organization, the employees are high-trained
professionals; there are still divisions of labor, but the jobs aren’t standardized. Because of their
professionalism, these employees require lees control; therefore there are fewer rules.
According to T. Burns and G.M. Stalker, these types of structure exist in different
environment circumstances: mechanic structure is more suitable for the stable environment,
while an organic structure is more effective in unstable environment (Burns, Stalker, 1961).
The other theoretical approach that is used in literature is resource dependence theory.
According to this theory, an organization in order to survive needs to have some resources. An
organization transacts with other for the resources; the control over the resources provides with
a power over the organization. Therefore, an organization needs to cope with environmental
contingencies with a focus of organizational actions (Pfeffer, Salancik, 1978). This theory
suggests that the organization needs to have a proactive strategy in order to successfully deal
with environmental circumstances.
The institutional theory sees an organization as an institution, as an established order
comprising rule-bound and standardized behavior (Jary, 1991). It is suggested that organization
as sociological institution, is aimed not just to produce goods/services, but also it may be driven
by the emotions and traditions. Therefore, as Selznick mentioned, an organization as an
institution has history, culture, set of values, routines and interests (Selznick, 1957). In his
research, Selznick noticed that the initialization as the organizational policies and practices is
the readiness with which organization’s structure changed in response to new circumstances
Today’s scientists mark out six key elements of organizational design, which are: work
specialization, departmentalization, chain of command, span of control, centralization and
decentralization and formalization (Daft, 2009). Work specialization is dividing the work
activities into small jobs. According to Niedefhoffer (2011) it can be refer to job division that is
the separation of a job up into parts usually performed by different individuals. It helps to use
efficiently the different skills that usually workers have. Departmentalization is the way, in
which common work activities are grouped together, in order to coordinate and to integrate
better. Lennick in 1995 proposed several types of departmentalization, which were fulfilled
lately by other scientist. At the moment, there are five basic types: functional, geographical,
product, process, and customers’ departmentalization. Speaking about chain of command, it is
the way hierarchy’s reporting is organized within an organization. This concept includes three
elements: authority, responsibility and unity of command. An appropriate chain of command
makes it certain that every task, job position and department has one person assuming
responsibility for performance (Crumpton, 2013). Span of control is about the effective and
efficient management of employees, in other words the hierarchy of authority. Determined span
of control means determined the number of levels and managers in an organization (Mintzberg,
1979). That also leads to the efficient performance of an organization. The wider the snap the
more efficient an organization is at least in terms of cost, however if the manager doesn’t have
time to supervise all subordinates, it may reduce the quality of performance (Bell &
McLaughlin, 1974, 1975; Ouchi & Dowling, 1974). Some studies showed that the well-trained
and experienced employees can function with wider span of control (Rama Rao, 2010). The
larger span of control leads to speed up the decision-making process, as well as increase
flexibility within the organization. Centralization and decentralization refers to the way
decisions are made in an organization, and what level (Aghion, Tirole, 1997). Centralization
happens when the manager within the organization makes key decisions with a small input
from the subordinates. Decentralization is the other way to make the decisions, it happens when
decisions are pushed down and distributed among the employees (Melumad, Reichelstein,
1987). Traditional organizations are more structured in a pyramid way, and are more
centralized. In order to decide which way should organization chose, it is necessary to take into
account several factors like: first of all organization’s goals, also environmental factors, the size
of an organization, the quality of lower –level managers, whether the company geographically
dispersed. Recent studies showed, that the recent trend is to decentralize, to give employee
more authority (Amar, Hentrich, Hlupic, 2009). Referring to formalization means the
standardization of an organization’s jobs, to create a guide of rules and procedures for
employees. The degree of formalization is different in different organizations. The less
formalization, the more creativity appears in an organization (Jansen, 2006). Although some
formalization is still needed, nowadays many organizations allow their employee act according
the circumstances, even thought some times it leads to a kind of “breaking” rules. But this way
helps to the organization be closer to its customers (Foss, 2001).
In the organizational design studies there were also created a lot of different models that
were aimed to clearly show the way organizational design is organized and the way it can
change. For example, in 1965 Harold Leavitt proposed a model with four dimensions,
commonly called Leavitt’s diamond (Leavitt, 1965). These four dimensions refer to the
structure, people, task, and technology as main organizational design elements. Among these
elements there are a strong dependency and interconnection, so any change or modification of
the at least one of the elements leads to the modification of the all the rest elements. This
model became a start for the deep thinking about the organizational design as a system for the
other scientist, it became a basis for the new models as well.
The other model that was built on the Leavit’s diamond model is Galbrath’s star model
(Galbrath, 1973). This model has five elements: strategy as a direction, people as a mindset and
skillset, rewards as motivation, processes – information, structure as power. In this model all
the dimension also have an interconnection, however, the main is the strategy, which is the head
of the star. The model extends the Leavitt’s diamond, and provides all necessary direction to
maintain while creating, establishing and analyzing the work design within an organization.
However, this model cannot be used for accounting the input or output of the organization.
In 1976 there was proposed also another model by Marvin Weisbord that contained six
“boxes” or elements: purpose, relation, structure, rewards, relationships, helpful mechanisms,
in the middle of it leadership as a lever. All these elements exist in the context of environment
that might influence on it.
Based on the M. Weisbord model in 1977 Nadler and Tushman proposed their model
that was based on the assumption that the organization is an open system, therefor it is
influence by the environment which creates the input, then the organization build in this
environment trough transformation of its elements, and as results it creates the outputs. Though
as for the inputs in this model it was used history, environment, resources; the transformational
process has for elements: task, informal organization, individuals, formal organizational
agreements; and for the outputs there were used: system functioning, group and individuals
behavior, inter group relation.
Pascale and Athos in 1981 are proposed a new model – 7S, that later was used by
McKinsey& Company. The elements that were taken for this model are following: strategy,
structure, style staff, skills, systems, shared values. According to the authors of the model, it is
crucial to find a right balance between these elements. The elements can change differently;
therefore, they are needed to be analyzed differently. These elements were divided into two
groups: soft and hard elements. The soft elements are: shared values, skills, staff and style.
While hard elements group contain of strategy, structure and system. The hard elements can be
identified rapidly and directly influenced by managers, while it is difficult precisely identify the
soft ones. These elements are less tangible. All of these models a commonly used, however,
they not include the external factors that might have influence at any of these elements. The
critics of this model emphasized that it does not take into account the external environmental
factors that obviously influence on the elements of the model.
Burke and Litwin proposed the other commonly used model in 1992. This model
proposed different elements based on the perception that the environmental factors are the key
triggers for the organizational design change. Therefore, some key elements such as: mission,
strategy, leadership and organizational culture, are influenced by the environment.
The other paradigm was proposed in 1998 by Ambrosini, Johnson and Scholes, so
called “the cultural web of an organization”. This model combines the idealistic view of an
organization (the paradigm) as well as adopted view of the existed organizational elements (the
elements around the paradigm). This model includes has seven elements linked to each other
and provides a clear vision on the organizational design within a company. These cultural web
or organizational design model is especially useful in monitoring organizational changes since
it allows to look through main organizational design dimensions such as: power structure,
organizational structure, control systems, rituals and routines, stories, symbols and in the
middle the paradigm. The model can be used for different purpose: for the audit the
organization’s culture and the barriers to change; as well as for building an outline vision of the
investigated organization (Balogun, Haily, 2008).
The other recent direction in organizational design is in the way the organization can be
design. The most commonly used model of it, is so called ADIE- model that contains four basic
steps: the analysis of the design, the design of a solution, the implementation of it, and the
evaluation of the results. (Lang, 1978; Van Strien, 1997).
This model may be used from
different perspectives or views. There three basic views on the way an organization can be
designed: in a rational way, dialogical way or pragmatic way. The rational perspective refers to
the traditional understanding of the organizational design. In this perspective the formal
structural characteristics of organization are emphasized: the labor functional division, the tasks
allocation, responsibilities, the hierarchy mechanisms. (Mintzberg, 1979; Harris and Raviv,
2002). As for the dialogical view on the organizational design has a more analytical nature. An
organization is mostly perceived as a political system. The people that have power over the
resource should be satisfied by the way organization is structured. (Hickson, 1971; Pfeffer,
1978, 1981). The rational design approach is aiming to reduce the complexity of an
organization designing from the very beginning (Rittel, 1972; Rittel, Webber, 1973). This
approach includes not just structural characteristics, but also the environmental ones (Schon,
1987; Weick, 1993; Baker, Nelson, 2005).
In order to design an appropriate organizational structure, the scientists emphasized four
main contingency variables, that are necessary to take into account (Daft, 2009):
Organization’s strategy: it should push ahead organization’s goals. Alfred
Chandler found that changes in corporate strategy led to changes in an organization’s structure
that support the strategy. His research said that certain structural designs effect differently to
different organizational strategies, and work with some of them better than with others. For
example, the flexibility and free-flowing information of the organic structure works well when
an organization is pursuing meaningful and unique innovations. The mechanistic organization
with its efficiency, stability, and tight controls works best for companies wanting to tightly
control costs (Chan Kim, Mauborgne, 2009; Bryan Joyce, 2007).
Size: this element also affects the structure; large organizations (with more than
2000 employees) usually have more specialization, departmentalization, centralization, and
rules and regulations. Studies have shown that the size has less influence at the structure once
the organization got one (Gooding, Wagner III, 1985).
Technology: organizations use it in order to make their input into output, and
they use different form of technology. Joan Woodward explored it, and according to her studies,
she divided organizations into different categories according to their technical complexity: 1)
unit production – the production is in units or small batches; 2) mass production - the
production is in large batches; 3) process production – the production is a continuous process
(Woodward, 1965). Some other studies show that the structure is adapting related to the level of
routine of technical process (Rousseau, Cooke, 1984; Miller, Glick, Wang, Huber, 1991). For
instance, the more routine the technology, the more mechanistic the structure can be (Zhang,
Environmental uncertainty; organizations can face stable and simple
environment, but also can face dynamic and complex one. In order to avoid negative
consequences some managers try to adjust an organizational structure (Reilly, 2009). For
example, if the environment is stable, for company is better to use more mechanistic
organizational design. However, in case of environment with a high uncertainty, an organic
design would be more efficient, because it is essential for an organization to be flexible and to
learn fast (Burns, Stalker, 1961).
1.3. Relationship between Organizational Design and Corporate Entrepreneurship
There are a lot of studies about synthesis of corporate entrepreneurship and
competitiveness. At the same time, a lot of authors tried to extend the understanding of CE
concept by developing different models that include other external or internal factors. For
example, Zahra (1991), as well as Russell (1992), focused on CE from the perspective of
environmental, organizational and strategic factors. Horsby in his study in 1993 created and
empirically proved a model of CE development that mostly included organizational and
individual factors (Horsby, 1993). In 1991, Slevin in his studies focused on more organizational
variables, mainly on strategic and structural variables (Slevin, 1991).
Nowadays, a lot of authors confirmed that CE is one of the most important issues in a
successful firm’s strategy. At the same time, for organizations, in order to succeed on the
market, is crucial to have appropriate organizational design. Different scientist researched
organizational design from different perspectives. They noted out key elements of it. Thus, for
example, A. D. Mayer, A. S.Tsui and C. R. Hinings, studied it from the configuration approach.
They believed that all organizations are the systems of elements that are tied and support each
other. Therefore the appropriate organizational design means the one where all elements are
coherent, and they pursue the same purposes as its organization (Mayer, Tsui, Hinings, 1993).
Ireland in his paper in 2009 proposed a model so called “pro-entrepreneurial
organizational architecture”, that was described by organizational elements that support a CE
development, like: culture, reward system, resources, structure, capabilities (Ireland, 2009).
Many researches (Stuart, Podolny, 1996; Dess et al., 1999, etc.) showed that exploratory
activity and opportunity seeking activity usually appear in organizations where organizational
design has following features: high level of decentralization and autonomy. At the same time
there were made numerous researches (Ireland et al., 2009; Jansen et al., 2006; Dess et al.,
1999; Shane and Venkataraman, 2000) that showed that centralized and formal organizational
design aren’t help for exploratory activities, but correspond to opportunity realization.
According to Slevin’s and Covin’s (1989,1988) empirical studies, entrepreneurial orientation
connected with organic structure. In addition, many authors (Dess et al., 1999; Kanter, 1986,
1988; Miller, Friesen, 1982, 1984; Zahra, 1991), mentioned that innovative activities can be
triggered by different organizational structure’s elements, such as: autonomy, decentralization,
From the perspective of organizational structure, according to Covin and Slevin,
mechanistic structure has high level of centralization, bureaucracy and formalization, a lot of
hierarchical levels. While the organic structure can be characterized by formality, cross
hierarchy teams and cross-functional teams, decentralization, free flow of information (Covin,
Slevin, 1989). Some researchers, like Burgelman and Sayles (1986) or Pinchot (1985), found
out that organic structure influences positively to CE development within an organization. It
happened, as Burns and Stalker (1961) mentioned, because the information in such a structure
can be delivered and processed faster, that leads to higher level and faster developed
Coven and Slevin, also showed the positive effect of organic structure to
corporate entrepreneurship development by finding the moderate correlation between
organizational structure, strategic orientation and financial performances. However, this strict
division of organizational structure into two groups does not allow understanding the
particularities of the elements that are interconnected with corporate entrepreneurship. As it
was found by Zahra, in his research in 1991, that corporate entrepreneurship might have a
positive influence by formal communication (Zahra, 1991).
In literature there are different points of view in terms of influence of formalization and
decentralization on corporate entrepreneurship. Thus, for example, Foss (2014) in his research
stated, that decentralization not necessarily positively influence the CE, in contrast, he thinks
that it might lead to miss some opportunities in resource sharing synergy, it reduces the inter
communication and as result reduces knowledge sharing and creates lack of coordination. But,
in this study, at the same time he found that decentralization can encourage employees to
entrepreneurial opportunity recognition. Also, Ireland, in his research in 2009, showed that the
organizations activate the high ideas generation if its organizational design characterized by
high level of decentralization and employees autonomy (Ireland, 2009).
Foss (2014) also found that formalization might stimulate the realization of
entrepreneurial ideas. Confirmed the earlier findings by Burgelman and Sayles (1986), when
they emphasized the importance of administrative mechanizes for ideas selecting, evaluating
and implementing. However, formalization might also lead to decrease the entrepreneurial
process by creating a rigid, bureaucratic, time consuming structure (Zahra 199; Covin, Slevin,
According to some researches, like Burgelman, the core sense of CE and its
development is concerned to the diversification by internal firms elements (Burgelman, 1983,
1984). In connection with it, there were made a lot of analyses of corporate strategies and other
organizational factors; that might have influence on the entrepreneurial culture within the
organization. A lot of authors confirmed that CE is one of the most important issues in a
successful firm’s strategy.
D. J. Cambell in his work “Proactive Employee: Managing Workplace Initiative”,
mentioned, that without concrete corporate entrepreneurship strategy, there will be no sense to
have employees with entrepreneurial characteristics, and vice versa, without such employees
there will be no sense to make efforts to stimulate development of corporate entrepreneurship
within organizations (Cambell, 2000).
As Pinchot, pointed, the companies that want to develop and perceive entrepreneurship
should set up an appropriate corporate environment in which employees will be encourage to
pursue the opportunities (Pinchot, 1985). The entrepreneurial activities within the company
require the high interconnection between the internal level of organization and external
environment. However, in this study, it is going to mainly focus on internal elements that
influence on CE directly.
Therefore, it can be considered that there are two main factors for successful corporate
entrepreneurship development: 1) employees personal abilities for entrepreneurship; and 2)
organizational elements that help to actualize and to support these entrepreneurial
Generally speaking, researches describe the interaction between organizational design
and corporate entrepreneurship from two different perspectives. From one side, it can be
analyzed the relationship between the concrete elements of OD and the CE’s elements. For
example, some of researches, like Covin, Selvin, observed the influence organizational
structure elements or some other studies showed the relationship between the control system
and the intension of corporate behavior (Covin, Selvin, 1991).
On the other side, researchers tend to understand the organizational design through
determining the main characteristics that are important and exist in entrepreneurial companies.
The main purpose of these studies is to find out the factors that help to develop the
entrepreneurial behavior. Also these studies try to find the mechanism that leads to the
entrepreneurial characteristics. So for example, in Jennings and Lumpkin studies, were
emphasized that entrepreneurial companies usually have: no punishments for managers in case
of failure, a desire to take risks among managers, an employees’ involvement in establishment
of target values (Jennings, Lumpkin, 1989). Hans Wissema (1999, 2000), found that one of
crucial elements for CE is a special type of management that must decentralize
entrepreneurship between different business units. He supposed that it might be reached
through- shared responsibilities for some certain product/market combinations among different
business units. Then these business units will report directly to top managers. Integral business
responsibility means the responsibility for all functional level units like marketing, sells, R&D
etc. H. Wissema believed that this decentralized system of responsibilities directly means the
responsibilities of each business level for the profit; it leads to rapid decision-making and to a
potent market orientation (Wissema, 1999). The study of Brown and Eisenhardt, shows that the
organizations that are quite successful in their field, usually have combination of determine
(concrete plan of actions, determining of responsibilities etc.) and non-determine (non-formal
communication at different levels, experiments with new products etc.) characteristics (Brown,
Eisenhardt, 1998). Hornsby, Kuratko and Zahra in their study, showed that the important thing
for the middle-level managers is the support from high-level managers, but also the ability to
have free time, the reward system should also support the entrepreneurial behavior (Hornsby,
Kuratko, Zahra, 2002).
Generally speaking, most of the studies saying that organizational design in
entrepreneurial firms should have the following characteristics: low level of formal rules,
flexibility of internal processes, flexibility of a system of control, intensive horizontal
communications. Also the reward system in entrepreneurial firms should: first of all, stimulate
managers to take reasonable risk: secondary, it should have non-financial aspects such as social
recognition etc.; thirdly, it should be a stable salary that cannot be influenced in case of failure
of taken risk.
It can be consider that the chain of creating benefits from a collaboration of OD and CE
is following: open communication, management support, and formal control help to develop
CE within an organization. An organization with developed CE creates new businesses; it is
more innovative; it has systematic renewal. Therefore this organization operates on the market
more efficiently. As result, active growth, competitive position and high profit.
The concepts will be investigated from a point of view of configuration theory. It is
considered that certain combination of characteristic in a certain condition lead the company to
high level of corporate entrepreneurship and as a result to its successful performances.
1.4 Theoretical Model
According to numerous studies, the organization that entrepreneurially designed
activities creates entrepreneurial potential at all levels of the company (Gibb, 1988, Morris et
al., 2008, Kuratko et al., 2004).
As it was mentioned, it can be defined by two general approaches that are aimed to
study the relations between organizational design and corporate entrepreneurship. The first one
is to investigate the concrete elements of organizational design and how these elements can be
characterized from the corporate entrepreneurship perspective. For example, there were made
several studies to understand the influence of organizational planning on the level of corporate
entrepreneurship (Barringer, Bluedorn, 1999) or in the work of Morris, Allen et al. there were
discussed the level of control and formalization on the level of corporate entrepreneurship
(Morris, Allen, Shindehutte, Aviala, 2006). The other approach is to identify the core
characteristics of the companies with the high level of corporate entrepreneurship. In this type
of study, the researchers usually try to figure out the factors that support the CE development
within an organization. For example, in the study of Jennings and Lumpkin, there was found
that in the organization, that can be characterized as an entrepreneurial, the managers of each
level participate in the decision making process. In such an organization there is also high
support of risk taking (Jennings, Lumpkin, 1989)
Speaking from the relation between corporate entrepreneurship and organizational
design, the CE is big changes that happen inside the company, therefore changes in the
organizational design in the company that might be provoked from both inside and outside
In this research it is planned to check the interaction of the elements of the theoretical
model and corporate entrepreneurship in Russian SMEs. In order to have more deep and precise
understanding of this relation, it was taken not just dimension of corporate entrepreneurship, but
also the elements of entrepreneurial orientation, as determinants of the corporate
entrepreneurship. The concept of entrepreneurial orientation was created by Miller (1983), Covin
and Slevin (1989), Lumpkin and Dess (1996). The entrepreneurial orientation shows the degree
of the level of entrepreneurship within an organization. Just two major and most commonly used
elements of entrepreneurial orientation elements, such as innovativeness and risk-taking are
going to be used for this research. According to most part of corporate entrepreneurship
definitions, most part of authors is explained it through innovativeness and readiness to take
risks, that allows to think that these elements of entrepreneurial orientation may provide the
profound understanding of the level of corporate entrepreneurship as it is and these elements can
be CE determinants (Baden-Fuller 1995; Covin, Slevin 1991; Cunningham, Lischeron 1991;
Lumpkin, Dess 1996; Thomas, Mueller 2000; Tan 2008). The entrepreneurial performance
within a company, many studies tend to identify three dimensions: proactivity, innovativeness
and risk-taking. According to D. Kuratko, a particular organizational context can be
characterized by different combination on these dimensions (Kuratko et al, 2004). For purpose
this study it was decided to focus on the two of these dimensions: risk-taking and innovativeness.
These dimension are used as determinates of CE. Innovativeness appears in the organization,
when the organization tends to have unusual solutions, novel decision, creative approach,
generally it represents by the new products or renovation that are existed. Risk-taking usually
understands by the readiness of the organization to use resources in order to achieve the
opportunities, the results of which may be whether failure or success.
According to the deep analysis of the existing studies and literature, there were made a
lot of studies that investigated the role of formalization, decentralization (centralization) and
employees’ autonomy (i.e. controlling systems) on the SMEs’ performance including the
influence on corporate entrepreneurship (Covin, Slevin, 1988; Morris, Allen, Shindehutte,
Aviala, 2006; Jennings, Lumpkin, 1989; Horsby, Kuratko Zahra, 2002). In this study, these
elements of organizational design are taken as well and checked their relationship with in the
corporate entrepreneurship within Russian SMEs.
In many researches the organizational design was determined by the level of
formalization, decentralization, and employees’ autonomy. It was found that decentralization
may provide the wide range of resources and skills that usually are required by the complex
innovative approaches within an organization (Thompson, 1969). What is more, decentralization
supposes that the managers are more closely attached to the market, to the external knowledge
sources and networks. The high level of decentralization usually makes managers to be able to
identify different opportunities, realizing time, improve day-to-day activities to success.
The level of formalization always has been rising in studies, where the scientists
discussed the influence of organizational design on innovation level (Ahuja et al., 2008; Jansen
et al., 2006). This dimension shows the degree to which the working processes are formalized.
The formalized work process may lead away employees from the opportunity realization,
entrepreneurial understanding of the situation. However, the organizational literature suggests
that formalization may have contradictory attitudinal effects depending on whether it is viewed
as constraining or enabling (Adler, Borys, 1996). The formalization may have a dual effect on an
organization’s performance, on the one hand, formalized working process may reduce the level
of innovativeness, but on the other, by doing the whole process transparent and explicit, in may
have the contradictory effect like assist the experimental approaches (Foss, 2001). Effort
realization requires a deep understanding of the sense on the whole operations within the
company, that process is stimulated by formalization.
Employees’ autonomy or as some researches call this dimension - the coordinating
mechanism, is the way the coordination of different tasks and its accomplishment exist within an
organization. There are different ways to control or supervise the inside organization’s activity.
Explaining a working place with high autonomy Langfrend and Mayoe wrote, that employees
are given individual freedom in scheduling activities and deciding how work should be done
(Langfred, Moye 2004). For large established firms, Lumpkin and Dess explained autonomy as
an environment where actions are taken (and decisions are made) by managers and employees
freely from stifling organizational constraints (Lumpkin, Dess, 1996). It is suggested that the
level of employees’ autonomy represents the existing working environment that shows the way
employees’ ability to work; to accomplish the tasks to coordinate their work that is existed.
In a perspective of SMEs, the organizational design has a crucial role. When it comes to
comparing the small and medium enterprises with big companies, these companies have more
possibility to get a higher level of flexibility, therefore these companies may easier adopt their
organizational design to corporate entrepreneurship. Due to the size, these companies may
rapidly respond on the environment changes (Daft, 2007). However, often SMEs are to depended
from the resources, their economies of scale and their resources are less than those of large
companies, so they finically cannot effort the arisen opportunities (Aragón-Sánchez, SánchezMarín, 2005). Stoica, Liao, Welsch in their research in 2004 indicated that organizational culture
of SME also represents an important factor in determining organizations growth and
performance. It was shown that organizational culture of SMEs has a significant impact on
various dimensions of organizational: information search systems, formalization, flexibility,
organizational reactiveness (Stoica, Liao, Welsch, 2004). For the successful operating of SMEs,
the organizational culture plays a key role. As a study of Ussahawanitchakit (2009) showed
higher earnings quality are achieved in companies with strong organizational culture
For the purpose of this study, it is used the configuration theory approach that allows to
investigate the multidimensional nature of the elements (Doty, 1993; Meyer, 1993). The
configuration theory proposes a complex causality and not necessarily linear relationship
among investigated elements by creating synergy effect. Therefore, through cross sectional
design, this theory will help to not just emphasize the fact of interaction of the elements, but
also to emphasize the effects that they might have on each other.
Based on the discussed theory in previous parts of this chapter, in the research it is
proposed to use as a basis for theoretical model, the model that was proposed by Ambrosini,
Johnson and Scholes in 1998, the model of the cultural web. This model may help to provide a
profound understanding organizational design with its particularities. According, to Balogun
and Hailey, this model includes all necessarily elements to have a proper view on the
organization and its internal mechanisms. The elements of this model include all the discussed
above elements of organizational design, and what is more allows to see organizational design
in a more broad perspective. Therefore, it can be identified how the organizational design
elements influence on corporate entrepreneurship with its determinants. This model will be
used on the investigation of Russian small and medium enterprises. SMEs have some specifics
that strongly related to organizational design. For example, for this type of organization it is
crucial to have personal involvement to the company, since the amount of employees is usually
limited. Also in this type of companies are strongly depends on the resources, even more than
the big companies. While
SMEs usually have less accesses to
this model as a basis it is
check both hard and soft
of the organization;
therefore, the whole
can be seen with a
of SMEs specifics.
for this research
Picture 1. Theoretical model (Created by author).
As it was mentioned above, for the theoretical model it is used the cultural web model of
Ambrosini, Johnson and Scholes. Balogun And Hailey in their book especially emphasized the
high quality of the analysis that can be done by using this model (Balogun, Hailey, 2008). This
model consists of six elements that surround the seventh. Each of these elements presents
different aspect of organizational design. The elements that are around the paradigm refer to the
behavioral manifestation as well as to legitimations of these assumptions. Each of the six
surrounded elements exist by them self, and at the same time they are deeply tied to each other
and have interconnection. The paradigm in the middle is the core or the key values of
organization, and its mission and idealistic view on it. This element is not created by itself, and
each of the six elements influences on the paradigm as well. Corporate entrepreneurship with its
determinants as elements of this model also exists within the company. Basically, it influences on
the whole picture of organizational design within a company. However, for clearness, in this
picture of theoretical model corporate entrepreneurships a bit a part from organizational design
picture. Because in this research, there will be made an attempt to separate these concepts, in
order to understand how CE interact with OD elements and what are the levers for the corporate
entrepreneurship from the organizational design perspective.
Therefore, it is used the
organizational design model of Ambrosini, Johnson and Scholes with all its elements to
understand the relation of each of them with corporate entrepreneurship and to identify the key
ones for Russian SMEs. It is believed that the seven elements of organizational design including
paradigm influence on the corporate entrepreneurship within an organization.
The paradigm is the beliefs and assumptions about an organization and its environment
(Johonson, 1987). Speaking about the elements of the model: the stories represents the things
that are told by the employees to each other, to the other people that nit working in the company,
usually it is important and the main things about the organization that are considered to be
known, the history of the company, important milestones or events; the symbols are the logos,
titles etc. that the company use in order to represent itself; the power structure –the individuals or
a group within the company that have the most power or the ones that have the most influence
with the company or in other, the once who makes the final decision making; the organizational
structure refers to the hierarchy, structure, strategy that exist within the company, it can be also
seen in the level of decentralization/centralization; the control systems is the reward system and
measurement systems that exist, the way the employees are motivated to full fill their work, the
way the work is formalized; the routine & rituals a complex of understanding the day to day
activities of employees and the organizational particular or special events which are emphasized,
here can be also measured the level of employees autonomy in a day to day work (Johonson,
This theoretical model is aimed to explain the particularities of organizational design of
Russian SMEs. Also, it allows investigate a detailed picture of its organizational design.
Therefore, it will be possible to identify the way organizational design interacts with corporate
entrepreneurship in Russian SMEs
Chapter 2. Impact of Organizational Design on Corporate Entrepreneurship Development:
The aim of this chapter is to provide the description of the process of empirical study. It
also provides the explanation: of the selected methods, process analyzing and the key findings.
The structure of this chapter is following: methodology, research sampling, data collection,
cases description, cross – case analysis, discussion.
Methodology is the way the research was made. Methodology influences the results that
researcher gets. In order to choose a particular type of vary methodological approaches, the
researcher should define three conditions: 1) the type of research question; 2) the control that
investigator may have over actual behavioral events; 3) the focus on contemporary as opposed
to historical phenomena (Yin, 1994).
The qualitative method is to be used in this study; precisely it was taken the case study
strategy. The case study strategy usually provides an opportunity to investigate contemporary
phenomena with its real life context, especially when boundaries between the phenomenon and
context are not clearly evident (Yin, 1994). It also allows measuring the impact and
interdependency of these factors in a concrete situation. For this study, it was collected primary
data. The aim of this research is to find how organizational design elements impact to corporate
entrepreneurship development in Russian firms. So it may provide understanding of how
Russian SMEs used some elements of OD that lead to CE development. Therefore, the research
question is “How”, which leads to choose as a method whether a case study, whether histories
or experiments. In the research, it is supposed that it should be investigated just the
contemporary events. The investigator has not any control over these firms or over the
processes inside these firms. Therefore, the researcher won’t have any control over the process
of investigation. This means that a case study is more appropriate for this research. It is needed
to emphasize, that main purpose of the study is to examine the present or contemporary
situation and present firms; therefore it will be possible to see the real situation on a market.
Summarize it: the most suitable method for this research is a case study or a multiple case
study. For the research, it was chosen a multiple case design, because it will be made the study
and comparison of five cases in their totality according to the proposed theoretical model; and
what is more it will allow to study various units within identifiable cases (Yin, 1994).
As many researches emphasized (Cronbach et al., 1980; Guba, Lincoln, 1981; Yin,
1999) the main characteristics of a case study method are: 1) to explain the casual connections
of the investigating processes; 2) to describe the phenomena in context where it happened; 3) to
illustrate some concrete elements of a research topic; 4) to explore the situations where the
phenomena have been happened (Yin, 1994). All these characteristics directly correspond to the
primary goals of this research.
In order to improve quality of the case study, it was taken into consideration the
following principles: 1) using multiple source of evidence; 2) maintaining a chain of evidence.
The first principle is focused on source of data collection. By sources of evidence, it is
meant: documentation; archival records; interviews; direct observation; participant observation;
physical artifacts. In case of using more than one source of information the situation and the
research topic can be deeply understood. In the research, the main focus was made on the
multiple source of evidence: it was conducted interviews, leaded direct observation and went
through documentation. All the interviews were recorded and transcript.
The second principle means the way the data was collected and organized for this case
study. It must be reliable; the research process can be traced, so it might be used in further
researches. For this purpose, the researcher tries to explain the whole process of data collection.
This case study has its own design. A research design is the logic that links the data
collection to be collected (and the conclusion to be drawn) to initial questions of a study (Yin,
The components of this study will be:
Units of analysis;
The logic linking the data to the propositions;
The criteria to interpreting the findings.
As it was mentioned, the main research questions are following:
How organizational design elements impact on the corporate entrepreneurship
development within Russian SMEs?
How should Russian firms perform in order to find the best link between their
organizational design and corporate entrepreneurship elements?
In order to answer these questions, the main characteristics of organizational design and
corporate entrepreneurship elements were discussed in a previous chapter, and what is more, it
was made the links between organizational design and corporate entrepreneurship
development. However, in this study Russian SMEs’ reality will be in focus, the specifics of
interaction between organizational design and corporate entrepreneurship in real-time Russian
context will be observed. There will be made an analysis to figure out what are the key aspects
of the relation of organizational design on corporate entrepreneurship in Russian SMEs that
lead to competitive advantages.
Based on the research questions it was proposed the theoretical model that was found
after deep analysis of literature.
As it was mention, the main purpose of the study is to understand the relationship
between organizational design elements and corporate entrepreneurship within small and
medium Russian organizations.
The research has theoretical sampling that is designed to generate theory that is
“grounded” in the data, rather than established in advance of the fieldwork (Glaser, Strauss,
1967; Strauss, Corbin, 1990). There was limited number of respondents in order to collect
specific information from representative individuals. Therefore, it was emphasized several
criteria for companies for this research:
Small and medium size enterprises;
Exist on the market for at least 5 years (these companies may be seen as
those that could manage to save their position over the crisis in 2014, therefore their
operating models are viable);
The small and medium sized Russian enterprises that existed on a market for at least 5
years were studied. It was explored five companies from different industries, such as:
travelling, real estate, retail, internet-media, housing and communal maintains. The fact that
these companies are from different industries will provide a possibility to make more reliable
insights that might be useful for different types of business. For the privacy concerns, the two
names out of five companies are encoded, however, the respondents agreed you use their name
in the research in case of any further questions.
2.3 Data collection
For the purpose on this research, as it was mentioned above, there will be used three
methods: 1) In-depth interviews; 2) Observation; 3) Document analysis.
It was decided to make five cross-cases comparisons, based on the results of conducted
in-depth interviews with the representatives of five different Russian small and medium
enterprises, its observation and documents’ analyzes. The choice of this particular method was
conducted by the opportunity of this method to explore the interested topic deeper and get more
In order to get the concrete data about objectives of this research, the individual semistructured interviews were conducted. According to the research that was made by Bloom N.,
the individual interviews are more effective in collecting data and usually the quality of this
data is better than the data from the focus group interviews (Bloom, 1988). That allows
considering that by providing individual interviews, it will be possible to collect more insights
than using other type of qualitative methods. Also individual interviews stimulate the
respondents to provide detailed answers and share their insides understanding of the topic of
The plan for interviews is in appendix 1. Individual interviews as a source of
information helped to focus directly on the topic; it also helps to understand deeper the real
situations inside the company. The questions were posted with regards to the main purpose to
understand how the elements that were emphasized in the research exist in the reality of the
chosen organization. Also, by analyzing the results of the interviews, the understanding of how
these elements are used or implemented inside the organizations will be appeared. For the
interviews, it was used as a basis two questionnaires that were proposed by R.D. Ireland, D.F.
Kuratko and M.H. Morris in their article “ A health audit for corporate entrepreneurship:
innovation at all levels: Part II”. The first one, “Measuring the firm’s entrepreneurial intensity”
helped to create deeper questions that lead us to understanding of the level of CE inside the
observing firms. The second questionnaire is “Corporate Entrepreneurship Climate Instrument”
helped to create questions concerned “to assess, evaluate, and manage the firm’s internal work
environment in ways that support entrepreneurial behavior” (Ireland et all 2006). Also it was
used the questions that were proposed to by G. Johnson in 2001 in “Mapping and remapping
organizational culture: a local government example” with an adaptation for the SMEs. So it
was discovered the relations between CE and exploring elements.
The interviews are semi-structured and lasted from 25 to 40 minutes. It consists of
several sections. General questions – consists of the general questions about the company
including questions about symbols and stories (questions such as: how many employees work
there/ what are the key values / Are there any particular symbols which denote the
organization) and about the respondent (questions such as: what is your position/ how long do
you work there). Then, the part of questions that measures the corporate entrepreneurship level
(questions such as: How many new products (services) you company introduced over the past
two years?). Next part of the questions was about the organizational structure and inside
atmosphere (questions such as: what is the structure of your organization/What kind of
relationship exists between employees?). Then, it was asked questions that allow measuring the
level of control system by asking questions such as what is how free the employees are in work
accomplishing and methods of control. Also the respondents were asked about power structure
(how is power distributed in the organization/ what are the core believes about leadership in
your organization). The next part of questions was about the determinants of the corporate
entrepreneurship: the level of innovativeness (questions such as: Is there any positive relation
within the company toward the innovativeness?) and the last part was to measure the level of
risk tolerance (questions such as: In your strategic decisions, are you inclined to concentrate on
risk investments?). All interviews were conducted in Russian and recorded and transcribed, so
it can be analyzed, justified the considerations by correct and precise information. The recorded
interviews can be used for the future research. The records of the interviews show transparency
of the research and can be checked. The other opportunity that provides by interviews is to
observe non-verbal evidence by the respondents. So the interviewer can better communicate,
and understand the respondents.
The respondents were directors or deputy directors. The table below (Table 2. General
information of respondents), provides more concrete information about the respondents.
Table 2. General information of respondents (Created by author)
The deputy general director,
Years on the position
the chairman of board of
The director of international
The deputy of general
director of economic and
Document analysis and Observation.
The document analysis and observation were added as methods for this research for the
collecting additional information; therefore, it can be made the more profound understanding of
TJournal allowed only the observation of their working processes. Also it was checked
their web site and they presented their new products and renovations. In case of companies
“A”, they allowed to do both, check their documentation: job regalements, check the latest
documents related to any kind of renovation; and observation: the presence on the meeting, on
the process of decision-making and at day-to-day work. Sletat.ru showed some internal
documents, like job regalements, some corporate internal documents and their application and
web site. Estet & Jeterini allowed observe their work process only. While the last company “B”
provided the internal documents only.
The following figure (Figure 2. Process of Data collection) presets the data collection
process that divided by four stages.
- Selection of
- Selection of
- Creating the
- Looking for
Figure 2. Process
I. Preparation: The preparing stage consisted of several sub steps. First of all, it was
started from the appropriate methods selection. Through deep analysis of academic literature, it
was chosen and agreed about appropriate method – Case study strategy based on interviews,
documentation analysis and observations. Then it was found the companies that would be
representative for the study. Mostly it was used self-resources and connection to find them. At
the beginning, it was around 10 companies that were appropriate for the study. It was tried to
collected additional information through external sources such as website or officials. Then it
was created the interview guideline that covered the all-necessary points.
II. Interviews: Before conducting the interviews, each of the companies was called to
agree the meeting, to all of them confirm the meeting, 4 companies refused. Then, one more
company rejected us; the respondent was very busy. Therefore, at the end it was 5 companies for
this study. It was scheduled the meeting and explained in few words the main purpose of the
study. However, it was not provided them any kind of list of studied factors, so the respondents
were free to answer the questions. All interviews were conducted in two weeks period, at the
beginning of March. All interviews were face-to-face ones and recorded. The language was
Russian. All interviews were transcribed. During the interviews there were made some notes as
well, so it was possible to capture the interviews details and some small details.
III. Documents analysis/Observations: Some companies after interviews provided
some internal documents that were related to the interviews. Some of the companies agreed the
interviewer to observe the daily work in their companies. Also it was shown the companies
websites by the respondents with detailed disruption of new products or renovations.
IV. Post-Data collection: In some cases, during the process of data analyses it was found
a kind of lack of information. So the respondents were contacted one more time, in order to full
fill data analyses.
2.4 Data analysis
The data analysis process is divided into two stages: the case description with
emphasizing the main elements of the study (such as history, main elements) and cross case
analysis where the comparison of all results from each particular case was made.
TJournal: TJournal exists on the market since June 2011. It operates in business media
industry. Generally speaking it is and Internet editor, or an aggregator that rapidly collects the
information about media, technology and trends in Internet and post it at their resources
(website, in social networks, application). Also the journalists’ them-selves write some articles,
take interviews and full fill the content. In other words, through analysis of Internet, mostly
social networks and self-contributions, they provide information about latest news and trends. It
is a quite popular Internet journal. It has 33 673 followers at Facebook, 514 000 followers at VK
and 326 000 followers at Twitter.
The company trends to focus on risky-investments and on ideas that have uncertain
results. Over the past two years they created around 10 new products (by products in this context
understands websites, application, new column) and 5 renewals of existed products. These
numbers are relatively similar to the same metrics of their key competitors. At the same time,
their new products are new and do not exist on the market.
The company originally was established in 1953, when it was milk production-distributer
in Saint Petersburg. In early 1990th, they changed the format of ownership, and a bit latter, the
whole concept of their activity. These days, it is a company that operates in use of real estate
sector: office facilities, storage accommodations and trading accommodations. At the moment,
there are around 25 employees. As the respondent said, he thinks that in terms of combination of
the quality of their services, the amount of clients and profit generation, the company is
successful. The main reason for this, as he mentioned, that the organization was established in
Soviet period, and they save the Soviet values, such as: welfare not just the organization, but also
the all employees: “That’s where well-being started”.
The company tries to avoid any kind of risk. For them, it is important to think deeply
through each of decision, investments and proposition. In terms of innovations, they do not seek
particularly for it, but they have an interest to the new approaches that might improve the work
process, but it is not the main interest.
Due to the very specifics of the company, such as traditional objectives of activity, lately
have not been any new products. As the respondent said: “The best innovation for us in the
healthy, deliberate conservatism”. However, they tried to improve the existing products (by
product in this context it was understood the unit of accommodation) or services.
Sletat.ru operates in the IT- tourism field. Generally speaking, it is a travel-aggregator
that provides the most interesting existing all kind of travels’ special offers: travel packages,
tickets, excursions, hotels etc. The company was established in 2010. These days, it works in 91
cities in Russia and has around 60 000 users per days, that find an appropriate travel package.
The company works with 130 travel providers all around Russia. At the moment, there are 122
employees. Among the direct competitors for their direct products, they have the leading
position. At the same time, there are some different directions of their business, such as
franchising, for example, and among these competitors they are on the top. The key values of the
company are: to create relevant products that are interesting for the customers.
The amount of new products over the past 2 years were approximately 5-7, and it was
around 5-6 renewal of existing products, based on the feed back of customers or environmental
changes, by analyzing market trends. The product usually already existed, but there is updated
and more comfortable to use for the clients.
The company does not stimulate the innovative approaches for the improvement the
working process, however, if the employee has an idea, he/she might discuss it with manager,
and if the implementations will be successful, the employee might have some financial
The company does not focus on risks, due to the crises and the present situation on the
travel market. Every new idea is calculated. Uncertainty about the results is not supported,
mostly once again, due to the situation on the market. Thus, there is no such a system that
would support the risk taking.
Estet & Jeterini:
The company operates in a retail field, has around 30 shops in Saint - Petersburg and
other regions of Russia. It exists on the market since 1997, the company operates under two
brand names, but all employees work as for one company. At the moment, they have around
100 employees. The company supposes that they are quite successful, however, still they have a
lot to develop like Internet selling, more regions to operate, and developing in Saint-Petersburg
direction. The key values of the organization based on the honesty, responsibility, hard work.
The amount of new products is big, because each product line they try to fulfill each
season of some new models. It is their priority to find, to present and to sell new products, new
brands. They consider even small suppliers to work with. They also try to fulfill the product
line for different price category and for different segments. Compare to their direct competitors,
they try to be the first in terms of new models, and create wide the range of products. These
days, they do not search for new brand names, “the company’s name work for them” and new
brands find them.
There is a high interest for the new ideas and the directors are support it. For example,
they even provide new models that are not so certain about the success of them, but they try to
be proactive. However, in terms of big investments, they prefer not to risk, mostly they explain
it by the specific of the industry.
The company is a management company, a part of big holding. It is responsible for
maintenance (housing and communal services) of the houses that were build by the by the other
company of this holding. The company exists on the market for the last 5 years; at the moment
they have around 75 employees. As it is a part of big business system, the company “B” is not
the core business inside the holding. The key value is “that the end user was satisfied.” At the
moment, the company has 5 housing estates under control, in the next two years the company
expects to grow in three times, due to the fact that the holding are going to open new housing
Speaking about new products or services, in the field where the company operates, it is
possible to provide a various range of additional services (such as video, cleaning cars etc.);
therefore, over the past 2 years they provided quite a lot new services, around 10. There were
not a lot of improvements of the services, around 5. Compare the amount of new services with
competitors is more or less the same, depending of the segment of the housing and communal
services company. The improvements are not new for the market.
No risk taking existed there. In this industry there is almost no risk, for example, even
the crisis on the market do not affect them. They spend money exactly on the things that were
ordered by end-users.
In order to understand the general trend, it is important to identify the differences and
similarities of the analyzed cases.
The table (Table 3. Cases overview) below, present the overall information of the cases.
Table 3. Cases overview.
The chosen companies operate in totally different industries, such as: real estate, retail,
IT-tourism, housing maintains, Internet mass media. All of these companies were established in
different time, but it is possible to divide them into two groups: the ones that were established in
90th (real estate and retail) and the ones that were established in 2010th (the others). It can be
explained by the technology development that have been risen significant since 2009, while the
businesses in real estate and retail are a kind of traditional business areas. The similarities of
these companies can be found that all of these companies’ head office located in Russia, St.Petersburg, also there are relatively the same amount of employees and the fact that all of the
companies operates on the market for at least 5 years. All the companies have simple three levels
of management organizational structure. Four out of five had approximately 5 renovations of
existing products/services and three out of five had approximately 7 new products/services over
the past two years. It terms of other organizational design elements and corporate
entrepreneurship elements, the companies’ results are different.
Generally speaking, the cases that were chosen for this research have a wide
diversification: the industry, age, amount of employees, and specifics of OD. These differences
give a possibility to see the broader image of the interconnection of OD and CE within the
Russian SMEs. That also allows us to use the results not just for a particular business, but
figure out the tendency. The similarities that were found and emphasized are that the companies
that were chosen are Russian based small and medium sized enterprises. An interesting fact,
that all of the respondents believe that their companies are quite successful in their fields.
2.5. Cross-case analysis
According to the theoretical model that was already discussed, in this part there will be
made an analysis of the groups of factors of organizational design and of corporate
entrepreneurship, compare the results from the cases and it will understood the interconnection
between them. Therefore, here it will be discussed the following dimensions: symbols, stories,
power structures, organizational structures, control systems, routines & rituals, and corporate
entrepreneurship with its determinants: innovativeness and risk taking.
Corporate entrepreneurship elements
As it was discussed, corporate entrepreneurship provides a company possibility to
improve its organizational performance, identify opportunities and create new competitive
advantages. The degree of corporate entrepreneurship can be analyzed through extend of
company’s innovativeness, reactiveness, risk-taking (Irland, Kuratko, Morris, 2006). In this part
it will be analyzed the each of the investigated factors, compared them between each of the
The level of innovativeness was identified by the special questions in the interviews, as
well as by the document analysis and in some cases by the observation. In two out of five cases
the level of innovativeness was characterized as “High”, in TJournal and Sletat.ru. The
respondent of TJournal said: “All our products are relatively new on the markets…. We are
trying to be a step ahead, and create something that will be more useful for our users”. While
the respondent of Sletat.ru told us: “we are operating in IT-industry, we need to be proactive…
all the time we are trying to implement any kind of new products, however, some of them not
very new for market”. In order to explain, it should be looked into the industry where these
company operates, it is Internet mass media and IT tourism, both respondents supposed that
their companies are at the start-up stage. All businesses that operate in Internet or IT, need to
develop their products as fast as the technology developing it-self. The high level of
innovativeness was also proved by the observation, when in TJournal they faced a small
problem with the source of one article, the observed employees showed a high level of
creativity for solving the problem. At the same time, in Sletat.ru the innovativeness can be also
proved by the result of the document analysis, at the moment when they realized that the things
are going very well, and they need to expend in other Russian cities; they started to sell
franchises, rather than enter by them self each particular market. It is quite unusual practice for
travel operators companies.
Two out of five companies, the company “A” and “B”, have “low” level of
innovativeness. As respondent of company “A” said: “ Due to specific of our business field, for
us the main rule is: ”the healthy conservatism”, any kind of innovative approaches we do not
reject, but it takes time to start to consider it as useful for us”. When it was asked to define the
“specifics of the business field”, the respondent answered: “The rental business haven’t
changed much since 19 th century, this is a very traditional business domain. There isn’t place
for high technologies. For example, we use Internet mostly as a type of connection. In order to
find new costumers we provide our offers to the agencies and to the real estate agents.” The
respondent of company “B” said: “Between us (employees) there is non-written rules: “ no
good deed goes unpunished”... Still we implement around 10 new services over the past 2
years.” These findings can be also explained by the industry specifics, real estate and housing
maintain. But, also it can be explained by the corporate culture. For example, the respondent of
the company “A” emphasized several times, that the company saved “soviet principles”
(Respondent of company “A”) by this he mend the social orientation for employees (“ we
support friendly atmosphere in our working process… the corporate celebration of Birthdays
are very welcome… we also provide a wide range of social benefits for our employees such as:
free lunch, free season tickets for those who use the public transport and oil compensation for
those who use cars”), the honestly in working process, the conservatism in decision-making
process (“ the director is the main decision maker… In decision-making, the last word is
always after the director.”, and the main rule for them is: “the healthy conservatism”.
Conservatism can be found also in the document analysis, they haven’t implement any new
products over the past two years, and the renovation that were done, mostly was necessary due
to the changed environment. For example, over the past two years they did 4 renovations of
their office places because it was old (by the law the capital repairing must be done by the
owner). Speaking about the company “B”, the industry of housing maintain itself does not
require a lot of innovation, as respondent told us, “no creativity exist, the work is just needed to
be done… It must be transparent for the end-users…. We are working for the low cost
segment…the people just interested in the results for low amount of money”. All the new
services that they added over the past two years are not innovative in the market and existed
already for a long time. Also due to the fact that the company are working with the low cost
segment, the services that they provide are very depend on the customers, that normally do not
ready to pay more.
Estet & Jeterini is the only company where the level of innovativeness is “medium”. As
respondent told us: “In terms of new products, we are always trying to be the first one who gets
the latest models, in this term we are the first among the competitors… every season we fulfill
our product range…”. The evidence of it can be found in answers of the respondent, who
always emphasized that the company always fulfills the products’ range by new models, they
are following the fashion trends, and try to be the first one who gets the new models. Also the
employees in this company always follow the fashion news, and try to find some new ideas for
the product line. However, the way that they are finding new products cannot be called
innovative. Generally, new brands just find them by Internet, and the company accepts nearly
everyone, who accepts their conditions of selling and commission. By the observation, it was
also found that mostly the working processes are quite debugged and traditional.
The level of risk-taking in a most part of the investigated companies is “Low”. Only the
TJournal has it as “high”, in interview it was mentioned: “Recently we implement the new
subscription… We were not sure about the results, and there was a high chance that we will
lose our main part of readers, however the results were more than satisfying”. And Estet &
Jeterini has it as “medium”, as it was said: “ We are ready to work with new unknown brands,
even if we are not sure that their production will be successful on the market. However, we are
not investing a lot in the future big uncertain products or projects, mostly due to the specifics of
the market”. The risk-taking of TJournal (Internet mass media) was analyzed mostly by the
interview results and website and application observation. Indeed the company acts quite risky
in implementing new products. For example, when there were implemented new rules for users,
(that only those users who subscribed for money can comment and add new information,) they
weren’t sure whether it would work or not, there was a high probability that they would lose a
lot of users. However, the idea was successful and accepted by users. What is more, they
significantly increase their profit and improved the quality of the content. Also as it was found,
the director highly supports all new and extraordinaire ideas financially.
The level of the risk taking of Estet & Jeterini (retail) was characterized as “medium”.
As respondent explained: “We are ready to work with new unknown brands, even if we are not
sure that their production will be successful on the market. However, we are not investing a lot
in the future big uncertain products or projects, mostly due to the specifics of the market”.
However, in such as situations, they insure them self by the commission conditions. Generally
speaking, for the unknown brands they provide them a place to sell, and take the commission
from the sold items. At the same time, they opened several shops in other region of Russia, and
they weren’t sure about the results, but theses shops started to generate profit very quickly and
now consider as successful ones. Also respondent mentioned that due to the unstable situation
on the market, and decreasing purchasing ability of the costumers, they do not invest a lot in
any uncertain projects.
The other companies “A”, Sletat.ru, “B” have “low” level of risk taking. This level was
considered mostly by the results of the interviews. For example, the respondent of the company
“A” said: " Every step of our company’s operations is thought deeply by the general director
and the deputy director… we are not likely to follow any kind of risky investments, we need to
be sure in results”. While the respondent of Sletat.ru said: “Due to the present instability on the
travel market, we are trying to avoid any uncertain investment, and we try to not to take any
extra risks”. And in the company “B”, the respondent told us: “We are operating in the field
where everything is stable, even the crises that is going on at the moment, does not bother us,
so we almost never take any kind of risk… Basically saying the specific of our work is: we take
some money from the people for a particular work to be done, so we are not interested to risk
not ours money.” All respondents told that their companies avoid any kind of risk. The
company “A” told that they do not make any step without deep understanding of the situation
and results, for them it is crucial to lose anything that they have already, so they mostly try to
save what they have: “ The 90th was a difficult period of time, we saved only a small part of
what we had had before. These days, the purpose of our company is rather to save what we
have, than to find something new”. Sletat.ru even though, the respondent considers them self as
a start-up and as an innovative company, but when it comes to risks, they try to avoid it: “The
Travel industry is very instable these days as well. In the autumn 2015 the big airline was
announced as a bankrupt, as well as five big Russian travel agencies…we are trying to balance
in an existing market situation.” Of course, these conditions have a negative influence on the
travel market. Also, we can say that the market suffers due to the difficult political relationship
the most popular vacation direction, Turkey, was closed as well. This situation is also effected
on the ability and desire to risk within existed travel agencies. Sletat.ru, as a platform where
different offers are aggregated, is not an exception. As respondent told, “ if it was 2008, I guess
our company would invest more in new projects and in development”. Speaking about the
company “B”, the respondent said: ”the industry where we operate are not risky, and we always
have a stable profit, and stable amount of costumers…. Even the crisis does not affect us
significantly.” Also the respondent emphasized that the system of their working process build
up on the end-users money and their needs, so they cannot jeopardize the trust of their users.
The level of corporate entrepreneurship was analyzed mostly by the interviews that
consist the related questions and by the analysis of the results of previous dimensions (risk51
taking and innovativeness). According to the analysis that was made, only two out of five
companies have “high” level of corporate entrepreneurship: TJournal (internet mass media) and
Sletat.ru (IT-tourism). As respondent of TJournal said: “Over the past two years we
implemented around 10 new products and 5 renewal…. all these products are new for the
market” .The TJournal has shown “high” level of risk taking and “high” level of
innovativeness, these dimensions show the entrepreneurial orientation that can be characterized
as “high”. Even though the respondent mentioned, the company implemented around 10 new
products over the past two years, the amount of new products is relatively similar to their
competitors. However, these products are new for the market. The main explanation of the
“high” level of CE may be the industry specifics and the stage of organizational lifecycle. In
order to gain the market, the company actively tries to be proactive and innovative. The
respondent of t Sletat.ru told us: “over the past 2 years we implement from 5 to 7 completely
new products and dimensions of the business, and made around 5-6 renovation of existing
products”. This company is also operating in Internet industry, even though this company less
risky these days, however, it still implements innovative services and products to its customers.
The one company out of five (Estet & Jeterini ) has “medium” level of corporate
entrepreneurship. As respondent of company Estet & Jeterini said: “It is difficult to say
precisely the amount of new products over the past 2 years, because we fulfill every season
each of our product line by new models, ... The models usually relatively new for the market”
The “medium” level of CE of Estet & Jeterini can be explained by the big amount of new
products that they were implemented over the past two years. However, these products were
not completely new for the market. Also this company has a “medium” level of risk taking.
That might mean that the company has entrepreneurial behavior, but do not complete rely on it
in ordinary work activity. Also as it was mentioned by the respondent during the interview, that
the company would do more risky investments if they were sure about the market conditions.
The other two companies “A” and “B” have “low” level of CE. The respondent of
company “A” said: “Due to the specific of our operating area, we didn’t implement any new
product, however, we had a few renovations of our old ones”. While the representative of the
company “B” said: “We implement around 10 new services and had around 5 renovations, but
these metrics are the same among the competitors, or a bit better.” These companies also have
“low” level of each of entrepreneurial orientation elements, which are the determinants of the
level of corporate entrepreneurship. This situation can be explained by the operating industries
of these companies that are quite traditional and stable. Also the company “A” has not
implemented any new products over the past two years, and the company “B” had some
implementation, but it was mostly required by market, not the company intention.
Overall information about the corporate entrepreneurship elements can be seen in the
table below (Table 5. Overall results of corporate entrepreneurship elements analysis):
Table 5. Overall results of corporate entrepreneurship elements analysis (Created by
It can be concluded that TJournal has “high” level of corporate entrepreneurship
elements, mostly due to the specific of the industry, stage of organizational design. It can be
also due to the fact that the employees feel comfortable to work with each other, the director
support, i.e. financially, the innovativeness in general. This support can also motivate the risk
taking among employees. The results of company “A” might be influenced by the corporate
culture, in the organization mostly exists the conservative understanding of working process.
Also the other factor is the industry – real estate. The industry it-self is a quite conservative,
does not require any innovative approach in working processes. Sletat.ru (IT–tourism) has
interesting results. It is not risk taking, however, in terms of innovativeness and general level of
CE has “high” results. Such metrics can be explained by the uncertain situation on the market
of operating. This instability forced to be careful and exclude any kind of risky investments.
However, they still are innovative in terms of the product/service line. The explanation of the
results of Estet & Jeterini can be found in active and entrepreneurial perception of the key
employees in the direction of the company. However, the industries specifics do not allow
provide completely new productions; and forcing the company to keep less risky approaches in
terms of investments. The results of the company “B” (housing maintain) can be explained by
the industry specifics, that has quite stable and debugged rules and working processes of
organizations. Also the fact that they operates in the low cost segment, that the customers are
not ready to pay extra money for innovative cleaning services etc. That may influence on the
company’s entrepreneurial intention.
Organizational Design elements
It is important to look not just through each of the elements, but check the whole picture
as it is. For this reason, it will be compared the results of each dimension, as well as a
combination of investigated factors of organizational design.
As for the symbols and stories, it was found a strong company-dependence of it only in
a one case in company “A”. As the respondent explained it, the company officially exists for
more than 60 years. The general director and deputy director always remind every new
employees the whole history of the organization, and every employee knows the main events
that were happened over this time. The company celebrates every holiday and provides it with a
kind of souvenirs or even more valuable gifts (extra money compensation, a travel etc.). The
employees have a tradition to celebrate their birthdays on the work place as well, and it is
highly supported by the director. At the beginning the company was as milk-made products
distributor in Saint - Petersburg and since that time the symbol of the company is a cow. There
is no requirement for wearing a special clothes, however, it is highly recommended to be in
business style. TJournal as a symbol uses the first big letters of its name (TJ). The company
does not have a lot of stories that are used as legends or that would create the core beliefs inside
the company. They have a tradition to meet all together several times a year (the geography of
the team members are distributed over Russia). Sletat.ru that proposed the travel services has as
a symbol a plane, as respondent said “ the corporate culture started to widely spread recently
over the company, and it is a mandatory condition for those who buy our franchise to use the
same symbols and the same cultural elements as we do”. The company has a tradition to have a
New Year’s celebration and the company’s birthday celebration together. Estet & Jeterini even
though operates on the market for a quite long time still does not strongly support the corporate
culture, corporate stories and believes. As respondent said: “Everyone knows that we need to be
responsible for what we are doing and perform well, however, we don’t have a specifics
attributes, or none is telling us any kind of stories of our company success etc.”. The company’s
logo is two big letters of the two words name of the company in a triangle. They do not
celebrate any holidays together, however, the employees from the headquarter usually during
the summer are going in a countryside house of the director for weekends. The company “B” is
a part of the big building holding, for these reason they do not have a particular their-own
corporate culture or corporate symbol. The main firm establishes all these corporate elements.
There is also no tradition to celebrate any holidays together. The dress code as a business style
Speaking about the organizational structure, as it was already mentioned, it may refer to
both: better performance of the organization, due to the freedom that employees may got, as
well as anarchy in organizational structure and as a result, decrease of performances.
TJournal has a relatively decent organizational structure. It has three general management
levels; the main decision maker doesn’t have direct responsibility to control every level of
management. Describing the relationship among the colleagues and departments, there is mostly
non-formal relationship, friendly and inspiring atmosphere. In the company “A” was found that
the organizational structure is centralized. The main decision maker is the general director and
his deputy; they directly control all their employees. Relationship among the subordinates is
mostly amiable and formal. All employees work there for at least 7 years and they deeply respect
each other, and relationship between them close to friendship. Overall the atmosphere is mostly
friendly. While based on the analysis of the investigation in Sletat.ru in terms of organizational
structure inside the company has three general levels and is divided into departments according
to the products’ directions. The relationship between the employees and subordinates mostly
depends on the departments. Really different, however, overall, he can say that half formal, but
more friendly. Recently the relationship becomes more and more formal. The communication
these days is organized mostly via e-mails. Estet & Jeterini’s organizational structure is not very
diverse, has three levels and most part of employees are sellers at the sales points. The key
employees (4 managers, CEO and two directors) have friendly, mostly non-formal. But the
relationship among sellers and key employees, are formal and distant. The relationships among
sellers are also friendly and non-formal. The atmosphere inside the company is friendly and
human oriented. The company “B” the organizational structure has three levels; the departments
are not clearly divided. The relationship is mostly formal and the atmosphere is neutral.
Describing precisely about level of decentralization/centralization as a part of
organizational structure dimension, the company “A” can be characterized as centralized one,
as respondent mentioned: “we have a straight and simple management structure with three
general levels, … the director and deputy director directly can control everyone”. As well as
Estet & Jeterini: “Even though we have the general director, due to the fact that we are working
together for at least 7 years, we became like a big family, everyone knows what to do without
additional mentions.” And Estet & Jeterini: “Our company has the straight three management
levels structure”. The most investigated companies can be called as centralized one, only
TJournal has the opposite results, as representative said: “Everyone works as he/she thinks is
better, we consult with the director, only in case of new products”. The results of Sletat.ru is in
the middle, it as both the elements of centralized and decentralized company: “ We have a quite
straight management system, everyone knows who is the main in the department, however the
relationship between us are mostly friendly, so the subordination not so strict”. Therefore, the
three out of five companies are centralized, those companies are the ones that operate in real
estate, retail, and housing maintains. The explanation of such as result may be the industry
where these companies operates, those industries existed on the market for a long time and the
whole working process already have been worked through for a long time. At the same time,
the level of decentralization/centralization may also depend on the amount of employees within
the organization. However, in the cases, it is supposed that there is not the strong dependency
between the level of decentralization/centralization and amount of employees. The company
with a lowest amount of employees are centralization, while the company with the highest
amount of employees is somewhere between centralized and decentralized company. The
companies that are decentralized in some extend are those that operates mostly through
Internet. The reason why these companies not that centralized, may be that both of respondents
believed, that their companies are at the stage of start-up, though every person that work there
mostly perceived them self as partners, rather than hired employees. Representative of the
company A said: “we don’t need to write any kind of official paper … I believe we are at the
stage of start-up…Between the employees the relationship is mostly friendly, we all like
partners…”; the representative of Sletat.ru: “at the moment, we are still at the start-up stage, but
I guess in the near future we will step up…..People that are working here since the beginner are
more close to each other, they are more than just simple employees”. Also the tendency to
centralize the organizational structure may be explained through the Hofstede’s studies.
According to his research that was made in Russia, Russian culture has high level of power
distance. That means that Russians accept inequality among people and wide salary range,
subordinated expect to be told what to do, hierarchy in organization reflects to the existential
inequality. Based on these studies can be explained the mental preference toward more
Refer to the dimension of the controlling system. Overall it can be seen as medium level
and stable. In case of TJournal the control is lower than in other investigated companies. There
is no paper reporting. They control them-selves by ASANA, and Editors-in-chief stay in
contact with their subordinates all the day or most part of the day. “…We don’t need to write
any kind of official paper, in order to explain our work process”. These results might be
received because the company operates in the field of Internet mass media. Indeed in this
company none is required any kind of paper reports, because all of the employees are mostly
whether programmer of journalist, so the results of their work can be seen directly in the recent
articles, or in the quality of website/application work. The low level was proved through direct
observation, that were made during three hours, that was spend with respondent while the
working process. Also when he was asked to show any kind of report documents, that he had to
write, he simply said: “I don’t have them, Everyone can see that my job is done by the articles
that I posted during the day”. Also in this company is decentralized which may support the
results of controlling system as well.
The company “B” has a bit over controlled system. The general director tries to
automatize everything and tries to control everything. However, the effectiveness of it is low,
because everyone needs to write their tasks by them self, but none controls whether it is done
by the time, or even whether it is truly existed task or not. There are the labor contracts and the
job regalements. However, none is checking the speed of time for the accomplishment of the
job, it is just need to be done in a kind of period of time. The freedom of employees of task
complement is relatively high. The managers control their employees by results, and they have
a lot of feedback from end users, so it is also taking into account. As representative said: “Our
director tends to gave us unnecessary paper work, and he even does not check it, but still we
need to fulfill some kind of reporting forms and register our self in a kind of register.” During
the interview, he was also asked why does the respondent think the director did it, the
respondent explained it through specific personal characteristics of their director, however the
industry does not require all these extra reports.
The other company showed relatively balanced controlling system. Analyzing the
results from the company “A”, it can be seen that they do not have any extra paper
work/reports, however still have the necessary amount of it. The representative of the company
“A” said: “ the director requires only the necessary reporting documents, however, sometimes
when it requires by law, we ask to prepare quite a lot”. The work discipline is strict and support
by the general director. The employees need to follow the prescription undisputable. Each of
the employees clearly knows what he/she should do, there are instructions for each department.
Even though the relation among employees from the first sight seems formal, the overall
atmosphere is very friendly and supportive. Estet & Jeterini can be seen as well as only
necessary paper work exists. Over the last 10 years the working process is stabilized. It is
important to strictly follow the job and tasks. Everyone just knows what he/she needs to do in
order the company works successfully and this is what motivated them. The respondent of Estet
& Jeterini said: “Over the past 10 years we complete standardized the working process, the
reporting part takes part of it, be do only necessary paper work”. The explanation of such as
result in these companies can be followed, the company “A” and Estet & Jeterini, these
companies quite centralized companies and both respondents mentioned, that the working
processes have been standardized over the past 10 years, and their director requires only
necessary paper reporting. In fact, when there was made a document analysis, it was found that
in these companies all prescriptions that were made by general directors referred mostly to
financial or tax assessments. The employees provided written documents that referred to the
labor control. For example, the directors in both companies asked to write a paper for any case
of absence for more than one day, also in company “A” it is required to sign is a special paper
book that you got your salary each month.
Sletat.ru had also can be seen as balanced in terms of controlling system. However, the
situation has been changed over the past year. Most part of the employees don’t have the
regalement of their job. Managers control their subordinates via computer program, KPIs and
by the amount and quality of completed tasks. “Before we didn’t ask anyone for any kind of
reports, but recently the company has ben starting to formalize every process, still it is not a lot
to write, but it seems that it is going to be more and more, with each next year” . Even though
the respondent believes that the company is at the level of start-up, but as respondent
mentioned: “The company is growing fast, over the past two years we implement from 5 to 7
new products”, also he explained that for some products, they even created a separate
departments. Therefore, it is becoming more difficult for the director to control everything, but
he needs to be sure that the work is done, therefore the paper circulation increased. By the
observation, it was found that the employees work with a special computer program
(“ASANA”) where they write down the things that they did during the day.
According to the existing studies, formalization, as a part of controlling systems, may
have whether positive or negative effect on the organization’s performance. Formalization may
provide an opportunity to monitor employees’ work; increase internal predictability; enforce
the internal agreements among departments (Cohen, Levinthal, 1990; Zander, Kogut, 1995).
But, at the same time, formalization may limit the opportunity realization and experimentation
within the organization (Foss, 2001). The effect depends on the way the formalization has been
seen by the employees: enable or constrain (Adler, Borys, 1996). Also the tendency in Russian
firms to more or less formalize the process may be explain by the Hofstede’s dimension of
uncertainty avoidance, Russia has a high level of it. That basically means, that Russian people
tend to avoid any kind of ambiguous situation. Formalization in this sense may help to
standardize the process.
The results of the dimension of the routine and rituals are different. The rituals were
discussed in the beginning. Generally speaking, the rituals can be seen that not a lot of
companies have a kind of rituals or tradition, these elements of organizational design were seen
only in companies that were operated on the market for the last 20 year, such as company “A”
and Estet & Jeterini. As for routine, in this research it was mostly analyzed by the existing
employees’ autonomy within the companies. The employee autonomy refers to the level of
persons’ freedom while he/she accomplishes the work. The analysis of the level of employees’
autonomy within the companies was made by the direct observation and the interviews. Mostly it
is balanced. In TJournal that operates in the field of Internet mass media, in a perspective of job
performance, the employees have a lot of autonomy. The innovative approaches for improving
the products or job process are encouraged, financially supported. There is no financial penalty
for the mistakes. As respondent mentioned: “I don’t have any control from the director, and
normally do not control strictly my subordinates, I’m sure about the quality of their work”. As
the respondent explained, none controlled them in terms of what they need to write about, it is
possible to work out of the office, none follow what the journalists are doing during the day, the
only thing that is important is the quality of the content and everybody understands that. The
result of observation proved it, during the hours that were spend with TJournal , it had seen that
employees were leaved on their own, sometimes it seemed that they just chatting or having fun
by watching videos. It can be explained by the company specifics; they need to find the fresh and
interesting information faster than the other competitors do.
Sletat.ru the routine process is seen in the way the general director or the heads of the
departments may interact with subordinates – which is mostly directly. In terms of working
process, the employees can do they job freely, but all their activities should be in a frame of the
job-regalement. In case of any kind of mistakes in a working process, the mistakes are analyzed
individually, but if the mistakes were unintentional, they do not judge and try to solve it. As for
employees’ autonomy it is balanced here. The respondent of Sletat.ru said: “ The company is
growing every year, recently the direction start to implement the controlling system, but still we
are free to do whatever we think it is better for the organization, only if it does not require any
In this company, it is seen over the past year that the prescription for employees, it is
becoming more strictly to carry out it. The crucial importance to follow the prescription is for
the programmers, less for the rest of the departments. Mostly, the employees are free to decide
what kind of methods they are going to use in order to complete the task, as long as it does not
need any extra financial support. The employees not always are welcome to show the initiative
in a working process. As for mistakes, they have a practice, when the employees were punished
for the mistakes financially or even fire. But for small mistakes, they don’t have any serious
punishments. The representative of Sletat.ru said: “Generally, employees are free in the way to
accomplish their tasks”, however, there is a certain framework of this freedom. The limitation
of freedom is the financial support. This limitation might be challenging in some situation. It
can be explained by the industry where the company operates. Travel industry is very unstable
area nowadays. Recently there were several bankruptcies of travel and fly operators.
The company: Estet & Jeterini it was seen that the key employees are free in a way to
fulfill the task. But there are some deadlines, and they need to end their job by that time, no
matter how. As for sellers, they need to sell more, this is the key regulator for their day-to-day
activities. The initiative is appreciated, and financially supported. The punishment for mistakes
is usually used, just orally announced. The respondent of Estet & Jeterini said: ” Even though
we work as a family, we are free to do our work as we want, but in the time and our
responsibilities framework”. In a the responsibility’s framework, the employees are free in their
actions, but in case of serious problems/cases/situations they mandatory need to discuss it with
the general director or deputy director”. The framework of the responsibilities limits the
employees of the companies “A” and Estet & Jeterini. But in company “A” there is also official
job descriptions that employees should follow in their day-to-day work. In these two companies
as it was mentioned by the respondents and seen during the observation, in case of more or less
important questions or solutions, the employees always consults with the directors or deputy
directors. These limitations in those companies might be explained by the fact that these
companies operates on the market for a quite long time and the whole process within the
company are debugged, and there are some kind of stabilized ways of operation, that includes
some part of employees freedom.
As for the company “B”, there is no any kind of support of the initiative inside the
organization. The specifics of the field can be characterized as more conservative ones. It is
important that everything is functional stable. The general director is very infantile, and there is
no punishment for the mistakes, it is important that everything should works, does not matter
how. Never existed any kind of punishment. There is a low level of employees’ autonomy in a
day-to-day work. The respondent him self mentioned: “we need to do only the things that are
prescribed according to our competence, none is supported any new methods of making our
job”. The employees have the prescriptions and everyone follows them, none tries to show the
initiative in the working process, as the respondent explained the mechanic following of
prescriptions exist not because everyone is afraid of punishments, but because there is no sense
to change anything, the director won’t support it anyway, and as the responded said: “there is a
spirit of laziness”. It may be explained by the personal characteristics of the general director:
“Our director is a quite infantile person, even though he always try to implement some kind of
monitoring or controlling system, but almost always it failed, because he never though deeply
about the way it should be implemented or the utility of it for our company”. These personal
characteristics influence significantly on the atmosphere and motivation of the employees.
Refers to the power structure in the companies in can be seen that overall it isn’t very
strict and mostly balanced. An interesting result was received from TJournal, the one that
operates in Internet media – the power structure is quite distributed among the heads of
departments and the director. The director is the final decision-maker only when it comes to the
new product that requires big investments, all the other decision are making by the editors –inchiefs. “ We are (the editors-in-chiefs) making most part of decision by ourselves, because we
need to react fast and making decision fast…The director is the final instance only in terms of
new products that may need serious financial support”. What is more important in this sense
that the director is completely confident in the editors-on-chiefs. Sletat.ru is stricter power
structure. The director make the last decision, however, he is very influenced by the opinions of
those with whom he started the company, basically it is a small group of people who is now
deputies of director, or heads of departments. As respondent told: “The idea of our company
came to the director firstly, but the company was created by the group of people. The director is
very depended on the opinions of these people”. The companies “A”, Estet & Jeterini and “B”
have quite common result. All of these companies have 2-4 management levels however, the
real power and the last decision maker is always the director with a consultancy of deputy
directors. All these companies are operating in the different industries, and have different
amount of employees, but all of them can be seen as quite authoritarian companies.
The last element of the organizational design elements analysis is the paradigm.
According to Johnson, the paradigm presents the basic assumptions about the company. This
element is also partly built by the each investigated previously elements: stories, symbols,
power structure, organizational structure, routines & rituals, control system (Johnson, 1987).
The interviews with respondent showed, that two out of five companies (Sletat.ru and Estet &
Jeterini) in their work oriented on the growth of the company. However, these companies have
slightly different focus. The respondent from Sletat.ru said: “For us it is important to expend
our operation system as well as to save our leading position in our segment”. While the
respondent from Estet & Jeterini said: “We took a direction to growth and what to further
extend in other Russian regions… We are open for new suppliers and actively seeking for new
models all the time”. The other two companies, the company “B” and TJournal in their day-to
–day operation have the end users orientation. The respondent from the company “B” said:
“For us the primary goal is to satisfy our end-users needs, we are actually paid for this”. While
the respondent of TJournal said: “In our work we are of course oriented on our readers, on their
interests. However, we position our self as an innovative company, that has focus on IT
industry and technology”. The company “A” has a strong orientation on the employees that
work there. As respondent explained it is a result of their soviet past. They try to save the social
responsibility’s principles that were commonly used in USSR. “We have two primarily goals
which are to save our position and wellbeing of our employees”.
The result of conducted analysis of the cases can be seen in the table below (Table 4.
The cases analysis results.)
Table 4. The cases analysis results (Created by author)
- Three levels of
- The stories
- Users oriented;
- No standard
- Informal &
employees are free
- The power
- Mostly organic
- The results
director and the
controlled by the
amount and quality
of the written
- Formal & friendly
- The director and
- Mostly mechanic
- The general
director is the
save the existing
- The general
- Quite formalized;
- Has the elements
- In a
- Exist a quite
belief: “To sell
- Becoming more
- The last
more, to save the
formal & friendly
of the costly
- In a process of
decisions is the
from organic to
- Decision can
be made by the
- Balanced control
- Two levels of
- The stories
- More likely
are quite free;
informal & friendly
- The last
belief: “ To sell
more, to find
- More mechanic
is the director;
For TJournal the organizational design investigated factors have interconnection, it can
be also explained by the specifics of the operation area, and also the important role-plays the
lifecycle stage of the company. Some characteristics will probably change in time, when they
will step up. For the company “A”, the key influence on the investigated organizational factors,
has the quite conservative management style and probably the key values that are referred a lot
to the soviet union social principles in some extend: the company cares for its employees, and
employees cares for the company. Also the existing working processes have been proved
themselves for a long time. So organizational design elements formed and fielded by the time
and practice. For Sletat.ru, at the moment the forming factors of OD elements are the growth
of the company, its fast development. Also the industry specifics that foster existing elements
change according to the environment. For Estet & Jeterini, the situation is quite similar to the
company “A”, this firm is also existing for almost 20 years, and over the time all process have
been proved themselves and the working processes are stabilized. For the company “B”, the big
influence on the OD elements has the personal qualities of the director.
Therefore, it can be concluded that the general trend among the investigated companies
is to have a centralized management structure. That can be explained through mentality of
Russian people. Russians, according to Hofstede’s studies, have the tendency to accept the
power distance, and to expect the submission by the subordinates. Only TJournal showed the
decentralization. As for formalization, overall most companies have it on the balanced level,
which may mean that the document circulation is quite established. However, there were found
two bias, TJournal almost doesn’t have any document circulation, where employees almost do
not have written reports, and the company “B”, where it has overlapped, due to the director
personal characteristics. Speaking of the employees’ autonomy, here it can be seen that in most
cases it is also balanced. That means that generally companies have quite structured established
system, however, once again there were two bias, once again it was TJournal, where the
employees are almost completely free in a way the work. And the company “B” where the
employees have strict prescription and initiatives almost excluded. These general results may
be also explained by the Hofstede’s study. According to him, Russians try to avoid ambiguous
situation, the lees freedom and more prescribed job, less uncertainty about the recent future.
It is interesting that two companies TJournal and “B” have completely opposite results
in organizational design elements analysis. It can be explained by the industry where they
operate. Thus, TJournal operates in a fast developing and high technological Internet industry,
while company “B” operates in predictable and stable housing maintain. Roughly saying, it can
be emphasized that these two company in some extend represent organic (TJournal) and
mechanic (“A”) organizational structure, the other companies have less shown structure, mostly
In this sense interesting, that the companies TJournal and Sletat.ru operates in similar
high technological industries. But, Sletat.ru has more a kind of middle or balanced results of the
investigated characteristics; it can be explained by fact that these company, growing faster than
the other. Therefore, even though the respondents believe that their companies are at the level
of start-up, Sletat.ru is developing faster and probably soon will enter the next stage of
organizational life cycle.
The other companies “A” and Estet & Jeterini have the same results for the investigated
elements. These two companies operate on the market for more than 20 years, or around it. The
organizational structure and the working processes were already established and proved
themselves, so the organizational designed already balanced according to the company’s needs.
The other interesting result refers to the paradigm that investigated companies have. The
companies that have “high” or “medium” level of CE have whether the orientation on growth
or user orientation with a perception as an innovative companies. While the company with a
“low” level of CE have more social or employees orientation with a perception to save a
position, or the end users orientation with a perception of fulfilling the job that they are paid of.
Basically it can be seen, that the companies that do not have any perception on the growth, or
on innovation, do not develop corporate entrepreneurship.
2.6. Findings and discussion
The main purpose of this master thesis was to find out the best interaction of
investigated organizational design elements and the corporate entrepreneurship; also it was
important to understand the extend of the influence of the OD elements on the CE in the
Russian small and medium sized enterprises. According to the existed research gap, it was
conducted the case study analysis. For this case study there were chosen five small and medium
sized companies that operated on the market for at least five years. The data for this research
was collected by in-depth interviews, document analysis and direct observation.
According to the purpose of the study, the following objectives were made:
To examine the organizational design elements and corporate entrepreneurship
elements in each company, and find the specifics of them;
To describe interaction between chosen OD elements and CE elements;
To investigate what are the extend of OD influence on CE in SMEs;
To figure out how the results of the study can be applied to the Russian SME’s.
Based on the existing theories and conducted analysis of organizational design and CE
in Russian SMEs, there can be identified the following results.
It can be seen that two out of five companies have overall “High” level of corporate
entrepreneurship. Both of these companies operate in the Internet field. From the organizational
design perspective, these companies have friendly atmosphere, and while TJournal has organic
organizational structure, more informal style, the company “A” is in a transitional period and
becoming more mechanic and formal. However, at the moment both of them still are trying to
be innovative and it is their main goal. The two companies out of five got “low” level of CE
these companies have some similarities in their organizational design as well. These companies
operate in a more stable and traditional business such as real-estate (“A”) and house maintain
(“B”). Both these companies have quite formal, mechanic and centralized organizational
structure. At the same time the level of formalization is slightly different (balanced and high).
Controlling system is also a bit different in one case it isn’t strict at all, and in another it is quite
diverse, but inefficient. The CE entrepreneurship determinants in both of these cases are also in
a “low” level, therefore, both of these companies are risk averse and non-innovative. The one
company got the “medium” level of CE, this company operate in a quite established field –
retail, but at the same time Estet & Jeterini tries to stay more or less innovative and risk-taking.
The organizational design of this company is balanced: it has balanced control system and level
of formalization. However, still the company is centralized, but the overall atmosphere is
friendly and informal.
It is also important to mention that the study was made based on the example of five
SMEs. Small and medium sized enterprises have some specifics. As Bouchard and Basso,
described in their study, SMEs are generally can be characterized by a simple structure, clear
strategic orientations, well informed and concerned the manager owners. However, even
though the SMEs have common characteristics, oversimplification of SMEs should not be
appeared while doing a research (Bouchard, Basso, 2011).
Indeed, the following theoretical research of the investigated concepts showed, that
there is an ambiguous understanding of the level of decentralization and formalization on the
CE in SMEs. It was revealed that decentralization exists mostly where there is a rapid
information flow, and organizational hierarchy would slow down the operations of company
(Aoki, 1998). However, at the same time, the centralization showed its positive effect on the
employees’ coordination (Athey, 1994). The right coordination may have an important role on
CE implementing inside the company. Also speaking about formalization, as it was found in
previous studies, it can have both a positive and a negative effect on corporate entrepreneurship
in a company. For example, Jansen (2006) stated that formalization provides organization some
abilities to transform and exploit external knowledge; the individuals within organization easier
understand resource allocation and increase internal predictability. But, there were and another
studies, that the high degree of formalization may reduce the amount of experimentation and
reduce the level of employees’ creativity, which will negatively effect the level of CE within
the company (Foss, 2001).
When it comes to employees’ autonomy, in literature, in most
studies the researchers agree that the high level of it stimulate the employees’ creativity, and
has a positive effect on corporate entrepreneurship within a company.
Also there was a study conducted by Leavitt, that showed that the groups that work on
the relatively easy and precise tasks tend to show better results when the group is more
structured (Leavitt, 1958). At the same time, the groups that have relatively difficult tasks, they
accomplish it better and faster in case if the groups have less structured organization. In other
studies were found that the organizations that operate in uncertain environment generate more
profit if they have more organic structure. While companies with mechanistic structure
generates more profit in more certain environment (Burns, Stalker, 1969). Covin and Slevin in
their study, that was made based on the small manufacturing firms, confirmed that the firms’
performance in the hostile environments has a positive correlation to an organic structure
(Covin, Slevin, 1989).
Also the findings can be compared with the results of M. Morris, J.Allen, M.
Shindehutte, R. Aviala , who found that that the “high” level of control and formalization tend
to have organization with “low” level of CE (Morris, Allen, Shindehutte, Aviala, 2006). Also
the results can be supported by the findings of J.S. Hornsby, D. F. Kuratko, S. A. Zahra who
showed that employees’ autonomy also support the CE within an organization.
The findings of this research can be also explained form the other perspective. The
study of Carrier (1994,1996) emphasized that there is a significant difference between small
and big companies, which is in the role of the top-managers. The role of manager owners in
SMEs is crucial, in can be either a helping role or a process stagnated role. The way it can be
determine the personal characteristics of these manager owners effects on the whole system of
organizational design. In deed the conducted study showed that some respondent explained
some corporate entrepreneurial or organizational particularities through their directors personal
characteristics. Reveal the personal impact of the manager owner, it is important to mention
that the study of Brouchar and Basso, who made an assumption that an organization, which is
quite centralized, corporate structure still can be entrepreneurial oriented inside. The centralized
structure can be explained that the manager owner finds it difficult or unreliable to delegate the
responsibilities or to provide some freedom to employees; however, the manager owner has
his/her own high innovative and risk taking abilities (Brouchar, Basso, 2011).
The research showed that indeed the effect of organizational design elements couldn’t
be well defined. According to the conducted analysis of interviews, documentation and direct
observation, in can be defined the factors that has significant influence on the level of CE are
inside the company. These factors are related to the control system (formalization), power
structure (the managers in power), the paradigm (common beliefs and assumption) and
organizational structure (decentralization/centralization). Explaining both the organizational
design elements and the elements of corporate entrepreneurship, some respondent emphasized
that on a certain dimensions may has a strong influence the director personality (manager in
power) or the principles or key values inside an organization (the paradigm). An interesting
issue that was found that some of the companies are quite successful (according to the
respondents) and they have balanced level of investigated organizational design elements and a
“low” level of corporate entrepreneurship elements. Those companies usually operate in the
quite traditional, not very sophisticated business domains. Those companies that work in the
Internet business fields can be characterized like more organic structured companies and have
“high” level of corporate entrepreneurship. Therefore, the findings relate to the Leavitt and
Burns and Stalker findings.
Therefore the theoretical model of this study is slightly changed. (Picture 2. New
Picture 2. New theoretical model.
As it is shown in the graph, the following elements of the theoretical model have
especially emphasized influence on the corporate entrepreneurship within small and medium
enterprises in Russia: organizational structures (in companies with “high” level of CE were
found decentralization and informal and friendly atmosphere, while the results were vise versa
in the companies with “low” level of CE), power structures (In companies with “high” level of
CE the power usually more or less distributed, while in companies with “low” level of CE, it is
focused in the hands of director), control systems (in companies with “high” level of CE, there
is whether efficient, whether easy to check system control) and the paradigm (the companies
with “high” level of CE, have a growth orientation or an innovation orientation, while the
companies with “low” level of CE are ore social oriented or focus exclusively on the end
users). While elements such as symbols, stories and routine and rituals do not play significant
roles in organizational design interaction with corporate entrepreneurship.
CONCLUSIONS AND IMPLICATIONS
The main purpose of this study was to find and show the relation between organizational
design elements and corporate entrepreneurship within Russian small and medium enterprises. In
order to conduct the study, there were identified several objectives. The main objective was to
explore the interaction between these two concepts.
Based in the literature analysis, the elements that were taken for this study were found.
From the organizational design the main focus was made on: formalization, decentralization,
employees’ autonomy; as for corporate entrepreneurship: innovativeness, risk-taking and general
level of corporate entrepreneurship. During the research process, it was defined different
theoretical approaches of understanding the relation between corporate entrepreneurship and
It has been studied five cases of Russian small and medium enterprises from completely
different industries. Thus, it is possible to get more profound insights.
Based on the conducted analysis, the maid conclusion can be identified: the investigated
elements of organizational design have influence on corporate entrepreneurship, but the strength
of it can be different and mostly depends on the external factors and internal. Speaking about the
results more detailed, the configuration between the elements of organization design and
corporate entrepreneurship in Russian SMEs can be significantly depended from the industry or
business specifics. The reason for this assumption came up after conducted interviews and the
following literature analysis. The respondent explained links between different elements of both
corporate entrepreneurship and organizational design concepts, through external factors, that
according to their opinions have significant influences. Indeed the confirmation of it, was found
in previous researches.
Also, it was revealed, that the level of organizational design and corporate
entrepreneurship elements strongly depend on the personal characteristics on the manager
owners in SMEs. The respondents referred a lot on the personal abilities, or personal
characteristics of the manager in power, when tried to explain the present level of investigated
elements. According to the previous studies, due to the specifics of SMEs (size, simplicity in
operating process etc.), the personal characteristics of the manager-owners have very significant
influence on the organizational design elements and on the level of corporate entrepreneurship.
The different level of decentralization, formalization and employees’ autonomy may
support the corporate entrepreneurship within SMEs with considering the industry and man in
power personal characteristics and abilities. During the analysis, it was found that in some
companies the level of the corporate entrepreneurship was “high” however, not all elements of
organizational design had organic characteristics. At the same time, some organizations more
mechanic configuration of organizational design elements, but the tendency of these companies
is to increase the level of corporate entrepreneurship. According to the existing literature and
respondents’ answers, these unusual results can be explained by the external (Industry/business
specifics) and internal factors (personal characteristics of a man in power).
Important particularity is also relate to the fact that some SMEs, like more traditional
ones, are not necessarily required the high innovativeness or high risk taking in order to be
successful on the market. However, it does not exclude the importance of corporate
entrepreneurship for them. During the interviews, when it was asked related questions to the
innovativeness and risk-taking levels, the respondent emphasized the needless of these factors.
However, when it comes to the general level of corporate entrepreneurship the respondents were
The contribution of this master thesis refers to the field of corporate entrepreneurship and
organizational design of Russian small and medium enterprises. The results of the study preset
how the investigated elements of organizational design may influence on the corporate
entrepreneurship and its investigated elements, and the relations that might have these
dimensions. Based on this study it is possible to extend the existing theories of the relation of
OD and CE. The results of this thesis suggest that the future development of OD and CE theories
in the field of Russian SMEs should be focused on factors that support the corporate
entrepreneurship in such organizations, with taking into account that the factors that trigger the
CE in SMEs are different from the big companies and internal elements have bigger impact in
The results of the made research can be rather useful. It can help for the companies from
different industries: traditional and new ones. Refer to managerial implication the research, the
following recommendation can be proposed. First of all, as it was discussed above it is important
to remember that the internal factors in SMEs have bigger effect than the same factors in big
organizations. It is suggested to build entrepreneurial oriented culture within an organization,
taking into account the fact that the corporate culture and personal characteristics of the
manager-owners influence all elements of organizational design elements and corporate
entrepreneurship elements. Therefore, in order to create a corporate entrepreneurial organization,
it is needed to have entrepreneurial oriented team, and especially entrepreneurial oriented
manager in power. Second, the organic organizational structure in SMEs support the CE
development, however, even in a structure with mechanic elements the CE still can be possible.
Thus, for Russian SMEs, even if the company takes a direction on the innovativeness and risk
taking, it is better to save centralized structure because this structure is mentally easy to
understand. Third, the atmosphere inside the SMEs may support the CE development; it should
be informal and friendly. Fourth, in order to take corporate entrepreneurship direction, it is not
necessarily need to be highly risk-taking, however, it is important to still accept it from time to
time in some extent. Fifth, the formalization in Russian SMEs should be excluded or balanced in
order to start the corporate entrepreneurship development. Sixth, for SMEs that operate in the
field related to internet or high technology, it may be crucial to be corporate entrepreneurship
oriented, while the SMEs that operate in a more established or traditional businesses it is less
important. Seventh, for Russian SMEs, to develop corporate entrepreneurship, it is needed to
have a support of it in the core beliefs of such SMEs, for example, to have a growth orientation,
or innovation perception.
The results of this study can be outdated in a short period of time due to the fact that the
study provides the contemporary views on the investigated factors. For the more profound
understanding of the investigated elements it is suggested to conduct a longitudinal studies.
The other limitation can be found that in this study there were participated only one
person from each company. However, all respondents are highly involved in the allorganizational processes and work in their companies for long time. Therefore, it cannot be seen
as a limitation for this study.
Additionally, for the future research it would be interesting to investigate the dependency
between the corporate entrepreneurship and the personality of the manager owners in Russian
small and medium enterprises. It is suggested that in the organization where the amount of
employees is relatively small the personal characteristics of the director may have a strong
influence on the corporate entrepreneurship development. Some of the respondents explained for
example “low” level of innovativeness, or high level of formalization through personal
characteristics of the director. What is important for such study, what kind of personal abilities
should a director of entrepreneurial organization have.
For the future research, it is also important to take into consideration other
entrepreneurial orientation elements as determinants of corporate entrepreneurship with linkage
to the organizational design elements. It may provide some more profound insights into relation
between organizational design and corporate entrepreneurship.
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Appendix 1. The Interviews’ Guideline.
Interview Plan. For empirical study on «The Impact of Organizational Design on
Corporate Entrepreneurship Development:
Russian firms case.”
I. General part
1. What is your position and how long do you have it?
2. When was your company established?
3. What is the industry where your company operates?
4. How many employees do you have at the moment?
5. How would you characterize the successfulness of your company on the market?
6. What are the key values of your company?
7. Further, we will talk about your products, how would you define the products of your
8. Are there any particular symbols which denote the organization?
II. Main part
9. How many new products (services) there have been implemented over the past two years?
10. How many renovations of existing products (services) were made in your company over the
past two years? And how these numbers correspond to the same characteristics of your direct
11. In what extend your new products are new for the market?
12. When you are taking marketing strategic decisions, is it that important for your company to
implement new products for the market?
13. In general, how are you looking for new opportunities?
14. What is the structure of your company? How many management levels do you have?
15. How would you characterize the relationship between the managers and subordinates?
16. How would you characterize the relationship between the employees in general?
17. How would you characterize the atmosphere inside the organization?
18. How interact the departments between each other?
19. How would you characterize the routine and paper work inside your company?
20. How strict it is required from the employees to follow their job- prescription?
21. How the employees’ day-to-day activities are regulated?
(Routine & rituals)
22. How do the managers control their subordinates?
23. In what extend the employees can be free in accomplishing their tasks?
24. How would you characterize the independency of the employees in they day-to-day
25. When it comes to a new idea implementation (new product), how many levels of decisionmaking it is needed to take in order to implement it?
26. How is power distributed in the organization?
27. What are the cores believes about leadership in your organization?
28. In your company, how would you define the attitude toward the initiative in the working
29. How you define the attitude toward the mistakes made by employees?
30. How the managers evaluate the employees?
31. In evaluating process is t any criteria that relates to the “innovativeness”?
32. How you characterize the attitude toward the innovativeness?
33.Do you have any kind of system that support the self-development of employees’ ideas)
34. In your strategic decisions, do you concentrate on the risky investments?
35. Does your company support bold ideas, even though the results of it are uncertain?
36. Does your company have any kind of reward system for taking risks?
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