IMPACT OF CORPORATE ENTREPRENEURSHIP STRATEGY ON …
Transcript of IMPACT OF CORPORATE ENTREPRENEURSHIP STRATEGY ON …
IMPACT OF CORPORATE ENTREPRENEURSHIP
STRATEGY ON GROWTH OF BUSINESS
ORGANISATIONS: A CASE OF SAFARICOM LIMITED
BY
JANET K. MUTUKU
UNITED STATES INTERNATIONAL UNIVERSITY-
AFRICA
SUMMER 2017
IMPACT OF CORPORATE ENTREPRENEURSHIP
STRATEGY ON GROWTH OF BUSINESS
ORGANISATIONS: A CASE OF SAFARICOM LIMITED
BY
JANET K. MUTUKU
A Research Project Proposal Submitted to the Chandaria
School of Business in Partial Fulfillment of the Requirement
for the Degree of Masters in Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY -
AFRICA
SUMMER 2017
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STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to
any other college, institution or university other than the United States International
University in Nairobi for academic credit.
Signed: ________________________ Date: ____________________________
Janet K. Mutuku (ID: 644591)
This project has been presented for examination with my approval as the appointed
supervisor.
Signed: ________________________ Date: ____________________________
Prof. Paul Katuse
Signed: _______________________ Date: ____________________________
Dean, School of Business
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COPYRIGHT
All rights reserved; No part of this work may be reproduced, stored in a retrieval
system or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise without the express written authorization from
the writer.
Janet K. Mutuku © 2017
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DEDICATION
I dedicate this project to my husband, parents and siblings, for their love and support
during the course of this study.
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ACKNOWLEDGMENT
I would like to express my gratitude to my supervisor Prof. Paul Katuse for his
invaluable advice. His immense support and guidance has given me continuous
inspiration which without, this project could not have been completed. I also wish to
appreciate Safaricom (K) Limited staff for participating in the study and to my
classmates for challenging me every step of the way.
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ABSTRACT
The aim of the study was to examine impact of corporate entrepreneurship strategy on
growth of business organisations focusing on Safaricom (K) Limited. The study
aimed at answering the following research questions: what is the effect of innovation
on business organizations? What is the effect of risk taking on business organizations?
What is the effect of proactiveness on business organizations?
The research methodology adopted was the descriptive research method. It focused on
three groups namely middle and upper level management and operatives for
Safaricom (K) Limited departments. Research used stratified random sampling
technique and sample size of the study was 143 staff. Data collection was done by
structured questionnaires. This data was analyzed through the descriptive statistics,
correlation and regression analysis using SPSS Version 21. The findings were
presented in tables and figures and researcher‟s own interpretation.
The correlation results showed that there was a positive and significant relationship
between innovation (r = 0.298; p < 0.000), risk taking (r = 0.199; p < 0.017) and
proactiveness (r = 0.119; p < 0.025) and business growth at Safaricom (K) Limited.
The regression analysis showed that innovation (β = 0.378, p < 0.005) had the greatest
effect followed by proactiveness (β = 0.212, p < 0.005) and risk taking (β = 0.378, p <
0.005) on business growth at Safaricom (K) Limited.
This study therefore concludes that innovation has the greatest effect on business
growth, followed by proactiveness and risk taking had the least impact on business
growth at Safaricom (K) Limited.
The study therefore recommends that Safaricom (K) Limited should endeavor to
enhance their process innovations to improve the organization‟s forms and
knowledge, policies and procedures in distribution applications, products, channels
and consumers‟ needs, preferences and expectations; that Safaricom (K) Limited
should encourage risk taking among its staff, project teams and managers to enable
the organisation capture new markets in the telecommunication sector in Kenya and
that Safaricom (K) Limited should enhance its proactive tendency in searching for
emerging technologies, markets and opportunities in the growing telecommunications
sector in Kenya.
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TABLE OF CONTENTS
STUDENT’S DECLARATION ...................................................................................... iii
COPYRIGHT ................................................................................................................... iv
DEDICATION................................................................................................................... v
ACKNOWLEDGMENTS ............................................................................................... vi
ABSTRACT ..................................................................................................................... vii
LIST OF TABLES ........................................................................................................... xi
LIST OF FIGURES ........................................................................................................ xii
CHAPTER ONE ............................................................................................................... 1
1.0 INTRODUCTION....................................................................................................... 1
1.1 Background of the Problem .......................................................................................... 1
1.2 Statement of the problem .............................................................................................. 2
1.3 Purpose of the Study ..................................................................................................... 4
1.4 Research Questions ....................................................................................................... 4
1.5 Significance of the Study .............................................................................................. 4
1.6 Scope of the Study ........................................................................................................ 5
1.7 Definition of Terms....................................................................................................... 5
1.8 Chapter Summary ......................................................................................................... 6
CHAPTER TWO .............................................................................................................. 7
2.0 LITERATURE REVIEW .......................................................................................... 7
2.1 Introduction ................................................................................................................... 7
2.2 Effect of Innovation on Business Organization Growth ............................................... 7
2.3 Effect of Risk Taking on Business Organization Growth .......................................... 12
2.4 Effect of Proactiveness on Business Organization Growth ........................................ 16
2.5 Chapter Summary ....................................................................................................... 20
CHAPTER THREE ........................................................................................................ 21
3.0 RESEARCH METHODOLOGY ............................................................................ 21
3.1 Introduction ................................................................................................................. 21
3.2 Research Design.......................................................................................................... 21
3.3 Population and Sampling Design ................................................................................ 21
3.4 Data Collection Method .............................................................................................. 24
3.5 Research Procedures ................................................................................................... 24
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3.6 Data Analysis and Presentation .................................................................................. 25
3.7 Chapter Summary ....................................................................................................... 25
CHAPTER FOUR ........................................................................................................... 26
4.0 RESULTS AND FINDINGS .................................................................................... 26
4.1 Introduction ................................................................................................................. 26
4.2 Background Information ............................................................................................. 26
4.3 Descriptive Statistics ................................................................................................... 28
4.4 Inferential Statistics .................................................................................................... 32
4.5 Chapter Summary ....................................................................................................... 34
CHAPTER FIVE ............................................................................................................ 35
5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ....................... 35
5.1 Introduction ................................................................................................................. 35
5.2 Summary ..................................................................................................................... 35
5.3 Discussion ................................................................................................................... 37
5.4 Conclusion .................................................................................................................. 40
5.5 Recommendations ....................................................................................................... 41
REFERENCES ................................................................................................................ 42
APPENDICES ................................................................................................................. 53
APPENDIX 1: LETTER OF INTRODUCTION ......................................................... 53
APPENDIX II: QUESTIONNAIRE FOR STAFF ...................................................... 54
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LIST OF TABLES
Table 3.1: Sampling Frame ............................................................................................... 22
Table 3.2: Sample Size ..................................................................................................... 23
Table 4.1: Effect of Innovation on Business Organisation Growth .................................. 29
Table 4.2: Effect of Risk Taking on Business Organization Growth ............................... 30
Table 4.3: Effect of Proactiveness on Business Organization Growth ............................. 31
Table 4.4: Innovation, risk taking, proactiveness and business growth correlation ........ 32
Table 4.5: Model Summary .............................................................................................. 33
Table 4.6: ANOVA ........................................................................................................... 33
Table 4.7: Coefficients ...................................................................................................... 34
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LIST OF FIGURES
Figure 4.1: Gender of Respondents .................................................................................. 26
Figure 4.2: Age Categories of Respondents ..................................................................... 27
Figure 4.3: Education Levels of Respondents .................................................................. 27
Figure 4.4: Work Experience of Respondents .................................................................. 28
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CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Problem
Corporate Entrepreneurship (CE) has emerged as a significant subject in management
research. CE was designed as a strategic approach to be able to address the challenges
facing organisations in dealing with the external environment to achieve a sustainable
competitive advantage in the global business sector in the past three decades. CE has also
been defined as an orientation of entrepreneurial activities in an established firm as a
significant economic development and wealth creation dimension. Practitioners and
scholars have shown interest in CE from the early 1980s due to its effect of profitability
and effect on organization‟s performance (Zahra & Garvis, 2000).
Over the past decade, there has been a growing awareness that governance and ownership
systems can significantly impact corporate entrepreneurship. Porter (1980) called for
studies documenting the association of governance and ownership systems with
entrepreneurial worldwide, business environment has evolved to become unpredictable,
competitive and highly dynamic (Kuratko, Ireland, & Hornsby, 2004).
The development of CE in business has been fueled by trade liberalization, technological
advancements in ICT and globalization. These occurrences have made the globe to
become a worldwide market where firms and businesses are competing beyond
geographical and national boundaries. The scope of competition between organisations
today has become widely expanded and this is creating several challenges for managers
and business forms (Kuratko et al., 2004).
In consideration of these scenarios, it therefore becomes important for business
companies to adopt entrepreneurial behaviour and also develop support for organisational
culture for their survival to gain a competitive advantage and thereby achieve better
performance. This is due to those entrepreneurial activities in business companies become
a source of competitive advantage and vitality which leads to better and improved
performance (Antoncic & Hisrich, 2004).
According to Ramayah, & Puspowarsito (2011), innovative and entrepreneurial activities
provide a refreshing feeling for business organisations that have been existing despite
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their nature and sizes. These organisations have realized that in order to improve their
performance (profitability and growth) there is need to adopt CE as an effective strategy
and this has led to corporate managers taking efforts to make their firms and employees
more entrepreneurial.
The concept of entrepreneurship has often been considered as a phenomenon observed at
the individual level where firm formation and innovation distinguishes entrepreneurship
from the managing of current activities. The term entrepreneurship is viewed as a process
of creating a new business venture bringing together or acquiring need resources while in
pursuit of opportunities. The concept is also seen as conducting profit-seeking activities,
taking risks and as a process of creating novel or innovating combination of resources
with the aim of creating value (Ramayah, & Puspowarsito, 2011).
In the midst of the entrepreneurial process there is an entrepreneur, an individual who is
creating value where there was not any earlier and whose features are an affinity towards
risk taking, proactiveness and innovativeness. Therefore, entrepreneurship can be
explained as a representation of abilities to realize new opportunities in the external
environment, prioritize and evaluate these opportunities to become business concepts that
are viable (Kolakovic, 2006).
CE as entrepreneurial activities in firms that are established is a significant feature of
economic and organisation development and wealth creation. CE is important for large
firms that are often risk averse to innovative, driving teams and leaders to achieve an
increased rate of corporate enterprising. Moreover, the merits achieved from innovation
through CE also give the firm benefits of setting the foundation for continuity leadership.
CE is also seen as an approach for renewing an organisation because along with the
innovation, there is an existing drive toward venturing (Karacaoglu, Bayrakdaroglu &
San, 2013).
1.2 Statement of the Problem
Corporate Entrepreneurship (CE) is associated with the different ideas of corporate
development on the one hand and individual initiative on the other. Through a corporate
strategy lens, this association is dangerous as it supports the risks of misalignment in the
strategy plan of the organisation and also a risk of eroding the competitive advantage of
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the firm. Basically, corporations are unable to rely on individual initiative minus
increasing the autonomy of the individual and the risk of personal initiatives might come
from the main strategic alignments.
In efforts to implement CE successfully, organisations have to mitigate and face the risks
that come with CE. There are studies that have been done on CE in Africa, for example,
Nyanjom (2007) conducted a research in Botswana on how firms can enhance and
develop entrepreneurial innovations and also encourage entrepreneurial activities in firms.
However, this research was unable to address the characteristics of innovativeness that
impacts the financial performance of organisations.
In Kenya, studies conducted on CE have focused on selected CE dimensions affected
performance of organisations and have not examined the effect of individual dimensions
on business growth in the telecommunication sector. For instance, Lwamba, Bwisa and
Sakwa (2014a) explored the innovation dimension of CE on financial performance of
manufacturing firms in Kenya and found that product and organizational innovativeness
had positive and significant effects on financial performance of the organisations.
However, this study was limited to innovativeness dimension of CE and the
manufacturing sector.
Moige, Mukulu and Orwa (2016) studies the effect of CE on performance of food
fortification companies in Kenya and which revealed that corporate entrepreneurial
management and Corporate entrepreneurial incentives increase performance in food
fortification companies in Kenya, this study was however limited to food fortification
firms.
There is paucity on the amount of research that has been done on CE and business growth
in Kenya, specifically in the telecommunication firms which are characterized to
emerging technological advancements and a dynamic external environment. This study
intends to fill this gap by undertaking an examination of CE dimensions (risk taking,
proactiveness and innovation) on business growth among telecommunication firms taking
Safaricom (K) Limited as a case of this research.
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1.3 Purpose of the Study
This study examined the impact of corporate entrepreneurship strategy on the growth of
business organizations in Kenya: a case of Safaricom (K) Limited.
1.4 Research Questions
The study aimed at answering the following research questions;
1.4.1 What is the effect of innovation on business organizations?
1.4.2 What is the effect of risk taking on business organizations?
1.4.3 What is the effect of proactiveness on business organizations?
1.5 Significance of the Study
The study seeks to uncover how Safaricom Limited has been able to practice corporate
entrepreneurship and draw profitable benefits and the sustenance of the same. The
information will therefore be useful to the following stakeholders:
1.5.1 Industry Players
As the leading mobile network operator in Kenya and the most profitable company in
East and Central Africa, the study on Safaricom‟ s practice will be a point of learning for
the other industry players who may want to perform as well. Given that the organizations
work in the same environment, the players may be able to establish areas of improvement
and uncover opportunity areas they had not deemed as such.
1.5.2 Management and Shareholders
The information in this study will inform the management and the owners of Safaricom to
gain knowledge of the benefits that the company has gained and where the company can
improve in its practice of corporate entrepreneurship. The recommendations from this
study if adopted and implemented by top management of Safaricom (K) Limited will
enhance the business growth of the firm.
1.5.3 Academicians and Researchers
The research will contribute to the body of knowledge to academicians and researchers
who would want to further their studies in understanding the competitive advantage
arising from Corporate Entrepreneurship. The research will help other academicians and
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researchers to have a source of reference on CE and business growth and also suggest
areas for further studies on CE.
1.6 Scope of the Study
This research was limited to the organization of study, which is Safaricom (K) Limited,
and the subject of study was limited to the employees located at the Head offices in
Westlands, Nairobi. The study was also limited to risk taking, proactiveness and
innovation as the dimensions of CE. The study was conducted from January 2017 to June
2017.
1.7 Definition of Terms
1.7.1 Corporate Entrepreneurship
This refers to the entrepreneurship that exists in a firm which includes the emerging
behaviours or behavioural intention of a firm associated with departing from the norm
(Antoncic & Hisrich, 2003).
1.7.2 Innovation
This refers to implementing a significantly improved or new service, product, process
marketing approach or organisational approach to business practices, external relations
and workplace organisation (OECD/ Eurostat, 2005).
1.7.3 Risk Taking
This refers to the way in which an innovation is rooted in the firm, community and
society and is also associated with the people‟s willingness to commit important resources
to opportunities that are assumed may succeed (Akehurst, Comeche & Galindo, 2009).
1.7.4 Proactiveness
Proactiveness is the forward-looking, opportunity-seeking view which involves
introduction of new services and products before the firm‟s competitors and also to act in
anticipating future demand to shape the business environment or create change (Lumpkin
& Dess, 2001).
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1.7.5 Strategy
Strategy is the set of blueprints and plans that are developed by top management in an
organisation to attain the organization‟s objectives, vision and mission and are consistent
with the strategic plans of the organisation (Mainardes, Ferreira & Raposo, 2014).
1.7.6 Competitive Advantage
This refers to the differential or asymmetry in an organisation factor or characteristic that
enables an organisation to serve its customers better than other firms and thereby create
improved customer value and attain better performance (Njoki, 2013).
1.8 Chapter Summary
The chapter looked into the introduction to the corporate entrepreneurship and outlines
the statement of the problem that will guide the study. The research objectives selected
for this study include the innovation, pro-activeness and risk taking which form the
variables of the research. The second chapter of the study presented the literature review
of the study, the research methods and techniques adopted for this research were
presented and discussed in chapter three. Chapter four of the research presented the
results and findings and chapter five presented the conclusion, discussion and
recommendations of the study.
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CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter analyses and elaborates past reviews relevant to the research study. In this
case, the literature is presented in terms of the three research objectives from a global,
regional and local impact of CE dimensions on organisation growth. Each section is
presented in terms of the definition of the concepts and empirical literature on the
relationship between variables.
2.2 Effect of Innovation on Business Organization Growth
According to Porter (Schumpeter, 1934; Porter, 1980) the concept of innovation is
associated with the economic aim of creating differentiation (to enhance the monopolistic
control of an organisation in lieu to its customers). The concept of innovation has
received much attention in terms or research in different disciplines and can be described
along different dimensions such as newness or novelty (Tidd & Bessant, 2009), and is
also classified on the direction it focuses such as the product, market, process and/or
business system (Jenssen & Randøy, 2006; Jenssen & Nybakk, 2009).
A large part of the research on this relationship of innovation and firm performance has
shown evidence that innovation is a significant part for organisation long-term success.
Moreover, several researchers have argued that businesses that are innovative enjoy more
success over others (Nybakk & Jenssen, 2012). Earlier studies have laid emphasis on the
significance of differentiating between several forms of innovation because it assists to
identify the determinants of innovation (Jenssen & Nybakk, 2009; Jenssen & Åsheim,
2010).
Bartolacci, Castellano & Cerqueti (2015) study on the impact of innovation on
companies‟ performance found that several types of innovation played a key role in
determining company performance. These types of innovation included process, product
and market innovation. These types of innovation are discussed in this section.
2.2.1 Process Innovation
The process innovation refers to the new organisational forms and knowledge, policies
and procedures that are embodied in the distribution applications, products, channels and
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consumers‟ needs, preferences and expectations. Process innovation is associated with the
implementation of a significantly improved or new delivery method or production
(Garcia, 2014).
This include drastic changes in equipment and/or software and techniques and its benefit
includes an increase to quality, a decrease in unit costs of delivery or production and to
deliver or produce significantly improved or new products. Fagerberg and Verspagen
(2009) opined that whereas the introduction of new products is mostly assumed to have a
positive, clear effect on the growth of employment and income, process innovation owing
to its cost-cutting distinction has a more cloudy impact on performance.
According to Eiriz, Faria and Barbosa (2013), the motivation to adopt the process
innovation strategy is influenced by process innovation is more driven by market
pressures. Several studies have found that process innovation contributes more to
productivity increase than product innovation (Hall, Lotti & Mairesse, 2009; Parisi,
Schiantarelli & Sembenelli, 2006).
To Oke (2007), process innovation involves creating or improving in techniques and the
development in system or process. In production activities, process innovation can be
viwed as improved or new devices, tools, techniques and knowledge in product making
(Oke, 2007; Langley et al., 2013). Important to the manufacturing sector, process
innovation should be adopted by an organisation as its main characteristic ability for
competitive advantage. This explicitly means that such an innovation is positively
associated with firm growth (Morone & Testa, 2008).
Mosey (2005) suggests that product innovation is the foundation of better-performed
firms seeking future aggressive growth. Demirel and Mazzucato (2012) found that
relatively smaller organisations are more explorative to new technologies and are more
involved in product innovations whereas large organisations in different sectors during
the “mature” stage of the life cycle industry excel in incremental changes and process
innovations to established technologies.
Eiriz et al. (2013) argued that firms get more concerned with efficiency aspects, therefore
process innovation tends to be the focus of firms‟ innovation strategies. Goedhuysa and
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Veugelers (2008) study on product and process innovations and growth of organisation-
level study from Brazil found that innovative performance is a significant factors for
organisation growth. The study revealed that the combination of process and product
innovations have a huge effect on the growth of the firm.
Mwangi and Namusonge (2014) study on influence of innovation on SMEs growth
among garment manufacturing industries in Nakuru County and found that indicated that
process innovation was crucial to coming up with quality designs of products that help
meet user wants and needs. Majority of respondents agreed that process innovation was
crucial in coming up with quality designs of products that will help meet user wants and
needs. The study concludes that process innovations are most important for garment
making firms and are also most difficult to achieve due to accessibility and costs.
2.2.2 Product Innovation
The concept of product innovation refers to the action of creating a new product from
new materials (totally new product) or changing the existing products to meet consumer
satisfaction (improved version of existing products) (Langley et al., 2013). Product
innovation also means the action of introducing new services or products in an attempt to
creating new customers or markets (Wang & Wei, 2005; Wan, Ong & Lee, 2005). Eiriz et
al. (2013) opined product innovation is associated with strategic determinants and is most
important in the early phase of the life cycle. Product innovation is less likely when
organisations are expanding their existing business operations due to the managers‟ focus
are on satisfying the high market demand.
Rouse (2013) contends that product innovation refers to the firm‟s process to introduce
new technology, mew manufacturing methods, new commodities/products, new ideas,
new delivery and distribution and workflows. The literature argues that product
innovation is the most significant source of change in the structure of an economy as it
alerts the mix of jobs, industry and products which comprise the economy.
Researchers have concluded that product innovation remains as the most significant
sources of an organization‟s competitive advantage (Camison & Lopez, 2010). In Spain,
Espallardo and Ballester (2009) revealed that product innovation had a positive impact on
business performance among 744 firms. Alegre et al. (2006) study also confirmed that
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both dimensions of product innovation (efficiency and efficacy) had a strong positive
relationship to business performance. This was also affirmed by Varis and Littunen
(2010) study which revealed that new products introduction is positively related with
business performance.
2.2.3 Market Innovation
A market innovation is defined as implementing a new marketing approach that involves
major changes in design, product or packaging, pricing strategy or product placement.
The aim of market innovation is to improve meeting consumer needs, to provide an
organisation a new position in the market in efforts to increase the income from sales and
to open up new markets. Market innovation is associated with product offers, promotion
activities, product placements, design properties and pricing strategies (Tavassoli &
Karlsson, 2015).
Cano, Carrillat and Jaramillo, (2004) affirmed that market innovation has a significant
role in meeting market needs and response to market opportunities. The significance of
market innovation to organisation performance, although limited, is presented in the
literature also. Sandvik and Sandvik (2003) revealed that market innovation had a
positive impact on the sales growth of organisations.
Otero-Neira, Lindman and Fernández (2009) also established a strong link between
innovation and firm performance. Varis and Littunen (2010) adopted a regression model
to analyse the relation between business performance and market innovation finding a
significant relationship on business performance. Auka and Keraro (2014) study on
strategic marketing and firm growth and technological innovations in the retail banking
sector in Kenya affirmed an insignificant link between marketing innovation and firm
growth.
2.2.4 Organizational Innovation
The concept of organisational innovation refers to implementing new organisational
approaches in an organisations business practices, external relations and corporate
organisation (Trott, 2010). Organisational innovations are meant to increase the
organization‟s performance by reducing transaction costs, administrative costs, improve
workplace satisfaction, improve workplace satisfaction costs, gain access to non-tradeable
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assets or reduce supply costs. Several studies have affirmed a positive relationship
between organisational innovativeness and financial performance (Atayal, Anafarta &
Sarvan, 2013).
Organisational innovativeness occurs as a result of management‟s strategic decision-
making that comes from implementing organisational methods that have never been
adopted in the organisation (OECD/Eurostat, 2005). Lam (2005) proposed two definitions
of organisational innovation as variations in types of organisational forms (organizational
innovation stricto sensu) and in managerial practices and the adoption or creation of a
notion that is new to the firm (organizational innovation lato sensu) (Haned, Mothe &
Nguyen-Thi, 2014). Lin and Chen (2007) found a link between organisational innovation
and an increase in sales of a business and argued that organisational innovation over
technological innovations as an important factor for sales growth.
Gunday, Ulusoy, Kilic and Alpkano (2011) studied the impact of types of innovation on
organisation performance and found that organisational innovation was a strong driver of
innovative performance. Innovative organisations more so those with a high
innovativeness score for process, product and organisation innovation have higher total
exports and sales.
Gunday et al. (2011) concluded that organizational innovations do not only prepare a
suitable 29 milieu for the other innovation types, but also have a strong and direct impact
on innovative performance. Haned et al. (2014) study evidence indicated a positive
influence of organisation innovation on technological innovation influenced by different
measures of organisational innovation.
In the organizational innovation framework, it is imperative to indicate the effect of this
form of innovation in the performance of organisations (Camisón & Villar-López, 2014;
Sapprasert & Clausen, 2012). Morone and Testa (2008) found that organisational change
was one of the more dominant innovative strategy for small and medium enterprises
growth in Italy
Masso and Vahter (2012) argued that organizational innovation is very important in the
productivity improvements in the services sector of intensive knowledge. In this regard,
organizational innovation is more likely to lead to a reduction of administrative
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transaction costs, as well as enhance satisfaction in the work environment (Simao,
Rodrigues & Madeira, 2016).
2.3 Effect of Risk Taking on Business Organization Growth
The concept of risk taking is that it is a major feature of entrepreneurship whereby a high
risk taking orientation thus leads to a high organisation growth and profitability Zhou and
de Wit (2009) view risk taking as a propensity to take brave actions such as to venture to
new markets, and a using a large size of resources to venturing with unclear outcomes and
borrowing huge amounts to make business investments.
Risk taking involves engagement in manageable and calculated risks in an attempt to
achieve benefits rather than having daring risks which can negatively affect organisation
performance (Dess & Lumpkin, 2005; Morris, Kuratko & Covin, 2008). Empirical studies
done in developed and transition economies suggest that risk taking as a firm - level
strategic posture has constitutes a potential source of competitive advantage and has
positive, long-term impact on financial performance and growth of SMEs (Wang &
Poutziouris, 2010).
The propensity to move from a known situation to a place where it can capture
opportunities and commit huge amount of resources with little knowledge about the new
situation comprise of risk taking tendencies (Wiklund & Shepherd, 2005). Gibb and Haar
(2010) conducted an empirical research among 167 New Zealand organisations and
confirmed that a profile of an organisation risk taking often leads to a high financial
performance. In Taiwan, Wang and Yen (2012) found that risk taking has a positive
impact with organisation performance among SMEs in China.
2.3.1 Risk Taking and CEO Gender
The effect of entrepreneur gender and the entrepreneurial orientation is found in the
literature. Runyan et al. (2006) research found that females compared to their male
counterparts were more innovative and were less risk averse but there were no significant
differences in regard to proactiveness. Diaz-Garcia and Jimenez-Moreno (2010), Lim and
Envick (2011) and Ayub, Razzaq, Aslam and Iftekhar (2013) showed evidence that
women as compared to men were more risk-averse. Diaz-Garcia and Jimenez-Moreno
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(2010) unlike Goktan and Gupta (2015) affirmed that men were less innovative than
women.
Faccio, Marchica and Mura (2012) study on the gender of Chief Executive Officer
(CEO), capital efficiency and corporate risk taking revealed that CEOs of a male gender
were willing to take more organisation-level risks than female CEOs. Salleh and Ibrahim
(2011) conducted a study examined the differences between background characteristics
and risk taking propensity among SMEs in Malaysia and concluded that there were
significant variation between SMEs owner gender and risk taking propensity.
Anderson et al. (2013) conducted surveys to establish the gender-related variation in risk-
aversion and concluded that female is less competitive as compared to male. They found
that women were less overconfident than their male counterparts. Therefore, female avoid
challenging and risky situations. These variations in perceptions of risks are explained
mostly by the partners and the environment that females face. Nevertheless, the study
noticed that these variations do not appear among professionals and manager populations.
Skala and Weill (2015) conducted a study on gender of CEOs on banks‟ risk and revealed
that banks‟ headed by women CEOs were less risky and reported high capital adequacy
and equity to assets ratio. The evidence supported the argument that females are more
risk-averse then male CEOs in the banking sector. Ključnikov, Belás and Smrčka (2016)
study on the role of competitive aggressiveness and risk-taking in SME management
found that gender influences motivations for realizing of riskier projects. The research
confirmed that men realized riskier projects mostly than women in an efforts to enhance
the financial performance of the business.
Elsaid and Ursel (2011) research risk taking, gender and CEO succession found that a
greater percentage of women on the board lead to a higher likelihood of a woman
successor whether inside or outside the firm. Moreover, a change in CEO from men to
women is linked with a decrease in several indicators of organisation risk taking.
2.3.2 Risk Taking and Firm size
Risk taking has also been found to be dependent upon the size of the firm. Balabanis and
Katiskea (2003) argued that the size of the organisation influences risk taking propensity.
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This is because access to a large pool of resources among larger organisations gives them
an opportunity to make risky decisions and spread them among several markets and
products. This also allows larger firms to stand for losses from failed entrepreneurial
efforts. Thus it is expected that large firms can have a high level of risk taking propensity.
In Malaysia, Ambad and Wahad (2013) researched on Entrepreneurial Orientation among
Large Firms. The findings showed that risk taking affected firm performance positively.
Shamsuddin, Othman, Shahadan and Zakaria (2012) researched examined the dimensions
of CE and the performance of established firms in Malaysia found that and risk taking
had a positive and significant impact on financial performance of JCorp intrapreneur
companies. The study concluded that risk taking is a major determinant of CE and
financial performance in large businesses.
In Kenya, Muthee-Mwangi and Ngugi (2014) studies the influence of entrepreneurial
orientation on the growth of SMEs and the descriptive results indicated that most of the
SME managers agreed that risk taking influences growth of micro and small enterprises.
Inferential statistics indicated that the correlation between the growth of micro and small
enterprises and risk taking was strongly positive and significant. Regression results
indicated that an increase in the effectiveness of risk taking by one unit leads to an
increase in growth of MSEs.
Olaniran, Namusonge and Muturi (2016) conducted a study on the role of risk-taking on
organisation performance in the Nigerian Stock Exchange among 60 firms of the listed
176 firms‟ financial statements. The indicators for risk taking included in the research
model were monetary risk, social risk and psychological risk. The study revealed that
risk-taking had an inverse relationship with ROE and ROA.
Ključnikov et al. (2016) examined the influence of competitive aggressiveness and risk
taking in SME management and revealed that young firms had a greater willingness to
invest in risky projects. Laforet (2013) affirmed that young firms are more proactive in
the market in an aim of being ahead of the competitors more often in contrary to the firm
operating in the market for more than a decade.
Lwamba, Bwisa and Sakwa (2014b) explored the impact of CE on financial performance
of manufacturing firms from 186organisations in Nairobi County through simple random
15
sampling. The results showed that risk taking had a positive impact on financial
performance. Anderson and Eshima (2013) study on the influence of firm age and
intangible resources on link between entrepreneurial orientation and firm growth among
Japanese SMEs found that young organisations are able to take the opportunity of risks in
the market. This is because younger firms are able to be more flexible in terms of taking
risks as compared to older firms which have strategic direction.
2.3.3 Risk Taking and Firm Characteristics
Leko-Šimic´ and Horvat (2006) made a distinction between traditional, that is, non-
traditional and more labour intensive, that ism knowledge and technology intensive
businesses. The non-traditional businesses are expected to possess higher levels of risk
taking propensity, since knowledge and especially technology is more likely to enhance
learning skills for successful growth and adaptation in new environments that firms that
re dependent on tangible resources (Autio, Sapienza & Almeida, 2000). The study
concluded that firms that are older are usually bound by routines and traditions in market
and product choices and are therefore expected to be less willing to make additional risk.
In Korea, Kim (2014) investigated the influence of foreign ownership of firms on the risk
taking behaviour. The findings revealed that organisation with higher foreign ownership
are not likely to avoid risk-taking and that firm growth was directly associated with risk
taking, indicating that foreign investors play a monitoring role in encouraging value-
enhancing risk taking.
In Malaysia, Entebang, Mansor and Puah (2006) conducted a research on CE (innovation,
risk taking, proactiveness and aggressive competitiveness) in state owned enterprises and
the aim of the study was to establish the level of entrepreneurship orientation among
Government Linked Companies (GLCs). The findings showed that there was a positive
entrepreneurial tendency in proactiveness, innovation and competitive aggressiveness, but
low risk taking.
Peng (2015) study on risk taking and firm growth found that risk taking has an economic
and statistical significant impact on firm growth and earnings. Risk taking was also found
to have a positive link with firm earnings and therefore an organisation with a higher
level of risk taking have a small cash flow shortfall.
16
Rauch et al. (2004) found that although risk-taking had a smaller significant impact on
organisational performance in comparison with other EO dimensions, it had a positive
effect (Rauch et al., 2004). Naldi, Nordqvist, Sjöberg and Wiklund (2007) study on
entrepreneurial orientation, risk taking, and performance in family firms among Swedish
firms found that family firms do take risks while engaged in entrepreneurial activities,
they take risk to a lesser extent than nonfamily firms. The results further indicated that
that risk taking in family firms is negatively related to performance.
In Kenya, Linyiru, Karanja and Gichira (2015) researched on the influence of competitive
aggressiveness and risk taking on firm performance of commercial state corporations
which found that most of the study participants agreed that risk taking was a major
determinant of organisation performance. The correlation results indicated a positive and
significant association between business performance and risk taking. Che and
Liebenberg (2016) examined the effects of business diversification on asset risk-taking
found that big insurance firms retain in-house expertise of investment analysts and credit
specialists. Investing in risky assets requires that insurers monitor and assess risks. The
internal professionals of big insurance firms provide an advantage to implement risk-
taking strategies.
2.4 Effect of Proactiveness on Business Organization Growth
Proactiveness is the capacity to acting before others in product introduction or capturing
new markets or resources tapping are vital ingredient of entrepreneurship in which an
entrepreneur seeks new opportunities which are new to the current operations of the
business (Narver et al., 2004; Olson, Slatter & Hult, 2005). Organisations that adopt
proactiveness in its strategies is able to achieve, maintain and gain competitive advantage
in an emerging market environment. Proactiveness in a flooded market needs a firm to be
the first in establishing new needs or introducing new commodities often to be able to
have new approaches to achieve sustainable competitive advantage (Porter, 1980).
According to Harun and Veysel (2009), proactiveness is defined as a forward-looking,
opportunity seeking perspective featured by introduction of new services and products
before the competitors and act in anticipation of future demand. The concept of
proactiveness is defined by Lumpkin and Dess (2001) “of a business or individual to act
in anticipation of future changes, needs or problems” (p. 136).
17
Thus, being the first person or business to move in pursuit of new opportunities and
participate in developing markets is closely associated with organisation level
entrepreneurship activities. Proactiveness is an organisations strategic orientation that
holds specific entrepreneurial aspects of practices, methods and decision-making styles
(Frank, Kessler & Fink, 2010). The act of proactiveness aims to prepare for the future by
looking for new opportunities which may not or may be associated to the current lines of
operations which allow introduction of new brands and products before the competitors
(Okpara, 2009).
2.4.2 Proactiveness and Firm performance
In other words, proactive behavior implies dynamic experimentation and realization of
research and development policy aiming at maintaining a constant flow of new products
or services introduced on the market (Perez-Luno et al., 2011). It should be expected that
proactive organizations will scan the environment in order to find new trends and keep up
with the competition. That is why proactiveness means also the forward-looking
perspective feature for an industry leader that has the capacity to seize and opportunity to
predict future demands (Dess & Lumpkin, 2005).
Tang, Kacmar and Busenitz (2009), study proved that there exists a hierarchical relation
between the components of EO, and he concluded that proactiveness was at the top which
creates such an environment in an organization that the companies is more likely to be
more innovative by such initiatives which can create differentiated value for the products
and services of the organization, and also more risk taking by undertaking into unreliable
activities to exploit external opportunities.
The tendency of proactiveness is oriented in achievement, anticipation, emphasis on
taking initiatives, predicting changes towards a significant situation, creating change and
early preparation to the happening of an impending uncertain risk (Boohene, Marfo-
Yiadom & Yeboah, 2012). As an entrepreneurial orientation dimension, proactiveness is a
forward-looking and seeking opportunity perspective that means that the firm acts in
anticipation of future trends and demands with a motive of capitalizing on the
opportunities for profit gain (Kropp, Lindsay & Shoham, 2008). A SME that adopts
18
proactiveness in its business is able to anticipate the demands and needs of the market and
is therefore capable to anticipate the needs of consumers (Laraway & Snycerski, 2013).
Karacaoglu et al. (2013) using a sample of 140 industrial manufacturing firms listed on
Istanbul Stock Exchange (ISE) found that the original dimensions of entrepreneurship
orientation (risk taking innovation and proactiveness) had direct interaction with
organisation financial performance. In a similar study in Netherlands, Kraus, Rigtering,
Hughes and Hosman (2012) survey among 164 SMEs found that proactive SMEs
behaviour had a direct influence on SME performance during the economic crisis. In Sri
Lanka, Kumarpeli and Semasinghe (2015) research on the impact of entrepreneurial
orientation on the growth of SMEs in Sri Lanka found that the relationship between
proactiveness and firm growth was not significant.
2.4.3 Proactiveness and Firm size
In the Czech Republic, Rahman, Civelek, M., & Kozubíková (2016) conducted a
comparative study of MSE and SMEs on their proactiveness, competitive aggressiveness
and autonomy. The study empirical results showed important differences among SMEs
and Micro SMEs in regard to autonomy and proactiveness. In Russia, Shirokova,
Bogatyreva and Beliaeva (2015) did research on Entrepreneurial Orientation of Russian
Firms and found direct relation between the entrepreneurial dimensions of proactiveness
and innovativeness on business performance was in hostile external or dynamic
environments.
According to Ferreira and Azevedo (2008), proactiveness implies an organization‟s
efforts to seize new opportunities. (Ibid.) organisation can use two approaches to act in a
proactive manner: one, an organisation can continuously seeks out new service or product
offerings. Two, organisation can introduce new technological capabilities and new
products before competitors
In Poland, Ejdys (2016) conducted a study on innovativeness and entrepreneurial
orientation of SMEs. A questionnaire survey was conducted among 137 firms in the
Podlaskie Region. Three hypotheses related to entrepreneurial orientation and
innovativeness level were examined by Structural Equation Modeling (SEM).The relation
19
between two constructs of entrepreneurial orientation and innovativeness, that is
proactiveness and risk taking were analyzed.
(Ibid.) research results show that proactiveness has a significant positive total effect on
improving innovativeness. The study concluded that proactiveness was positively and
significantly related to organisation innovativeness. In Malaysia, Arshada, Raslib, Arshad
and Zain (2014) research found that among the five dimensions of EO, proactiveness had
the highest correlation with business performance and proactiveness had an effect on
business performance.
There is evidence of several studies that have focused on the relationship between
proactiveness and firm growth. These studies however have been predominantly been
focused on the SME sector. Fatoki (2014) study on entrepreneurial orientation of MSMEs
in South Africa‟s retail sector found that Micro enterprises were less proactive and
preferred to be followers rather than leaders. In Ghana, Anlesinya, Eshun and Bonuedi
(2015) entrepreneurial proactiveness relates positively and significantly to profitability.
Oni (2012) investigated the importance of entrepreneurial proactiveness on firm
performance and the findings revealed that enterprises that acted on high entrepreneurial
proactiveness had a direct effect on the performance metrics which are consistent with
employment of competent and qualified personnel and size. In Kenya, Wambugu et al.
(2015) concluded that, proactiveness was a major predictor of firm performance of agro
processing SMEs in Kenya in terms of employee growth and profitability.
2.4.4 Proactiveness and Firm growth
According to Hakkert and Kemp (2006), firm growth refers to the increase in the
organisation attributes including profit, employment, and sales of an organisation between
two periods in time. Firm growth is often determined by the capacity of the organization‟s
capability and effectiveness with the organisation-specific resources which include
knowledge, capital and labour are organized, acquired and transformed into services and
products that can be sold through organisational structures, routines and practices.
The literature shows that there has been mixed results in relation to effect of corporate
entrepreneurship and firm growth. For instance Ambad and Wahad (2016) found that
20
corporate entrepreneurship has a significant effect on firm‟s profitability but has no
significant relationship with firm‟s growth. Other studies (Antoncic & Hisrich, 2004;
Steffens, Davidsson & Fitzsimmons, 2009) found direct influence of CE orientation and
activities on both profitability and growth.
In their study, Ferreira and Azevedo (2008) on EO on firm growth included two objective
metrics of growth were (1) employment growth and (2) sales growth. Employment
growth was calculated as the change in the number of employees from 2002-2003. This
growth variables was based on four metrics of (i) the growth of the sales compared to that
of competitors; (ii) the growth of the market value compared to that of the competitors;
(iii) the change of the number of employees from year 2002 to 2003; (iv) the change in
the amount of business from year 2002 to 2003.
Antoncic and Hisrich (2004) conducted a study on corporate entrepreneurship dimensions
and organizational wealth creation. In the study, performance was measured in terms of
the profitability and growth and also wealth creation where profitability and growth were
measured in terms of relative and absolute terms (Antoncic & Hisrich, 2001). Absolute
growth metrics were the average annual growth in sales in the last three years and the
second assessed the average annual growth in number of employees in the last three
years. Market share in the last three years was used to measure relative growth.
2.5 Chapter Summary
This chapter presented the literature review of the study. The chapter was presented in
line with the study objectives. The literature showed that there was mixed evidence on the
effect of corporate entrepreneurship on firm growth. The next chapter of the study
presents the research design and research methodology.
21
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This section presents the methodology of the study. It comprises of the research design,
the population and sampling design that is intended for use in the study. It also highlights
in a description of the population to be studied, the sampling design containing the
sample frame, sampling technique and sample size selection. The data collection methods
and tools are also shown together with the intended research procedures to be taken and
data analysis methods proposed for the study.
3.2 Research Design
The study used the descriptive research design. Hackman & Oldham (2004) view
descriptive design is appropriate in clarification of concepts, collecting information on
practical issues and formulating a study phenomenon for further research (Berrett, 2010).
The dependent variable was the impact of corporate entrepreneurship in the growth of
organizations. The independent variables are going to be risk taking, pro-activeness and
innovation.
3.3 Population and Sampling Design
3.3.1 Population
The population is the collection of total elements that we wish to study and make
inferences (Cooper & Schindler, 2014). In this study the population was made up of the
employees of Safaricom (K) Limited. These comprised of six hundred and twenty two
employees. These are employees who are directly involved in strategy formulation and
implementation.
3.3.2 Sampling Design
This is the procedure that guides the researcher towards selecting the appropriate sample.
It guides the process of grouping units to the frame, to establish the sample size and
allocate the sample to the categories in the sampling frame and final section of the sample
(Shields & Rangarajan, 2013).
22
3.3.2.1 Sampling Frame
The sampling frame refers to an exhaustive list of elements from which potential
respondents will be drawn (Cooper & Schindler, 2006). The sampling frame in this study
comprises all employees of Safaricom Limited who are involved in strategy formulation
and implementation. These are employees who are in the middle and upper level
management. The list of these employees was provided by the human resources
department of Safaricom (K) Limited as shown in Table 3.1.
Table 3.1: Sampling Frame
Department Number of staff
Internal Audit 7
Marketing 21
Financial Services 27
Finance 48
Resources 34
Corporate Affairs 31
Customer Care 132
Enterprise Business Unit 76
Risk 26
Technology 91
Strategy and Innovation 9
Consumer Business Unit 120
Total 622
Source: Muchaba (2015)
3.3.2.2 Sampling Technique
Stratified random sampling technique was used in the study. The technique involves
dividing a heterogeneous population into smaller units referred to as strata which are
based on the population member‟s category or position i.e. senior managers, line
managers and operatives. Simple random sampling was used to select a number which
was proportion to the sample size of each strata (Gobo, Gubrium & Silverman, 2003).
Simple random sampling was then used to select the individual staff member to be
included in the sample.
3.3.2.3 Sample Size
The study used the Yamane (1967) sampling formula, Where; e = tolerance at the
preferred level of confidence, N = study population, n = sample size, take α = 0.05 at 95%
23
confidence level. The sample size for the study was established as 234 respondents.
According to Yamane (1976) the formula can determine the sample size:
n= N
1+N (e2)
Thus, the sample of Safaricom (K) Limited employees was;
n = 622 / 1 + 622 (0.05)2
= 622 / 2.555
= 234
The probability proportion to sampling size (PPS) was applied. This is a sampling
technique where the probability of a strata to be selected is proportionate to the size of the
ultimate unit which involves selecting larger sample sizes from larger population units or
clusters and vice versa (Abdulla et al., 2014) the formula to achieve a sample size in each
department.
Population of Department × 234
Total Target Population
Table 3.2: Sample Size
Department Target Population Sample Size
Consumer Business Unit 120 45
Enterprise Business Unit 76 29
Financial Services 27 11
Customer Care 132 49
Technology 91 34
Finance 48 18
Resources 34 13
Corporate Affairs 31 12
Marketing 21 8
Risk 26 9
Internal Audit 7 3
Strategy and Innovation 9 3
Total 622 234
24
3.4 Data Collection Method
The study used both primary and secondary sources of data. The questionnaire was a
useful tool for collecting data from respondents because it provided a means of gathering
data in an open, clear, objective and cost effective way. The survey is also a relatively
faster means of gathering information and from a large size of the population or group
(Koehler, 2009). The questionnaire was used as the tool for primary data collection. The
questionnaire to be used was structured to elicit specific responses for quantitative
analysis respectively. The questionnaire was divided into section one, two, three and four
comprising of questions on innovation, risk taking (10 items), and pro-activeness (10
items). The study used items from past literature to design the questionnaire. Studies
(Covin & Miles, 1999; Piirala, 2012) items on proactiveness and risk taking were adopted
for this research. Atalay, Anafarta and Sarvan (2013) scale was used for innovation
dimensions.
The researcher used likert scale questions to design the questionnaire. A 5-point likert
scale was used for respondents to indicate to what extent their firm adopted corporate
entrepreneurship in their operations. This study borrowed from Delmar‟s (1997) approach
of measuring firm growth which included annual growth rates of assets, number of
employees and sales. This research specifically adopted the sales growth as the dimension
of firm growth. Sales growth can be calculated as Sales growth = (This year‟s sale - last
year‟s sales)/ Last years sales. This information on firm growth was from secondary
sources and was retreived from Safricom (K) Limited annual reports.
3.5 Research Procedures
The questionnaire was pretested to ensure reliability and validity of the research tool in a
group of respondents who were not included in the study. Necessary modifications were
made. Data was checked for accuracy before entry into the computer. To ensure
instrument reliability and content validity of the study, a pilot study was done. According
to Barbara, (2008) reliability refers to the extent to which an instrument (measurement) if
administered several times will remain the same and the stability of a measurement over a
period of time and the likeness of measurements within a period of time. The researcher
had a letter of introduction (Appendix I) which was attached to the questionnaire for staff.
This letter introduced the objective of the study and to confirm the confidentiality of the
25
information provided and also include researcher‟s contact information for any queries.
The researcher further sought a letter of authorization from the United States International
University – Kenya to collect data.
3.6 Data Analysis and Presentation
The nature of the data to be collected was quantitative due to the structured and
unstructured questions. The Statistical Package for Social Sciences (SPSS) Version 21
was used to analyse the data. The study conducted descriptive statistics which included
the mean, standard deviation, frequencies and percentages which were presented in table
and charts. The study also adopted inferential statistics to measure the relationship
between the independent and dependent variables. Correlation and regression analysis
were performed to ascertain the existence of relationship between the variables.
Regression analysis is used to show the influence of independent variables on the
dependent variable. The proposed regression model for the study is:
Y = β0 + β1X1 + β2X2 + β3X3 +ɛ
Where:
Y = Firm growth (independent variable)
β0 = Regression constant,
β1, β2 and β3 = Coefficients of independent variables
X1 = Innovation
X2 = Risk Taking
X3 = Proactiveness
ɛ = Error term
3.7 Chapter Summary
The chapter has described the research methodology that will be used to carry out the
research. The study is descriptive and focused on middle and upper level management
staff of Safaricom (K) Limited. Data collection as carried out via questionnaires and
analyzed through the descriptive statistics while using Microsoft Excel and SPSSS as the
analysis tools. The next chapter presents the results and findings of this study.
26
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This chapter presents the results and findings of the study. The findings are presented in
subsections of background information, descriptive and inferential statistics and further in
line with the research questions of the study. The results are presented in charts and tables
and the researcher‟s interpretation.
4.2 Background Information
The researcher was able to administer 234 questionnaires. Out of the 234 questionnaires
administered, the researcher was able to receive and pick 161 questionnaires. However,
18 questionnaires had incomplete responses and thus 143 questionnaires were used for
analysis and represent a response rate of 61.1%.
4.2.1 Gender
In terms of their gender, the findings showed that majority of the respondents accounted
for 56.0 % compared to the female representation of 44.0 % as indicated in Figure 4.1.
Figure 4.1: Gender of Respondents
56.0%
44.0%
Male Female
27
4.2.2 Age
Figure 4.2 shows the age categories of the study participants. The findings show that
majority of the respondents were 30-39 years were 64.0 %, 17.0 % were aged 20-29
years, 15.0 % were 40-49 years and 4.0 % were above 50 years of age.
Figure 4.2: Age Categories of Respondents
4.2.3 Education
In terms of their education level, 47.0 % had a bachelor‟s degree level of education, 31.0
% had postgraduate degree, 13.0 % certificate and 9.0 % had a diploma level of education
as shown in Figure 4.3.
Figure 4.3: Education Levels of Respondents
17.0%
64.0%
15.0%
4.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
20-29 30-39 40-49 Above 50
13.0%
9.0%
47.0%
31.0%
Certificate Diploma Bachelors' Degree Postgraduate Degree
28
4.2.4 Work Experience
The results show that 39.0 % had 5-10 years working experience, 34.0 % had more than
10 years and 27.0 % had 0-5 years‟ work experience at Safaricom (K) Limited as
indicated in Figure 4.4.
Figure 4.4: Work Experience of Respondents
4.3 Descriptive Statistics
This subsection of the chapter presents the descriptive statistics (mean, standard
deviation) of the study research questions.
4.3.1 Effect of Innovation on Business Organizations
The study sought to examine the effect of innovation on performance of Safaricom (K)
Limited. The study measured the perceptions of study participants on the adoption of
process, product, and market and organisational innovation. In terms of process
innovation, the findings show that the highest ranked score for process innovation was
that Safaricom (K) Limited adopted advanced real-time process control technology
(M=4.17; SD=1.124). In regard to product innovation, the findings showed that the
highest ranked statement was Safaricom (K) Limited extended numbers of product lines
(M=4.04; SD=1.220). The study results revealed that the highest ranked item was
Safaricom (K) Limited leads in innovative promoting methods to markets (M=3.50;
SD=1.210). In terms of the organisational innovation, the highest ranked item was that
Safaricom (K) Limited engaged in business process re-engineering (M=3.67; SD=1.286).
27.0%
39.0%
34.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
0-5 years 5-10 years More than 10 years
29
Table 4.1: Effect of Innovation on Business Organisation Growth
Innovation statements
Str
on
gly
Dis
ag
ree
Dis
ag
ree
Neu
tra
l
Ag
ree
Str
on
gly
Ag
ree
Mea
n
Std
. D
ev.
Our company adopts advanced real-
time process control technology
3.6% 5.8% 16.7% 18.1% 55.8% 4.17 1.124
Our company imports advanced
automatic quality restriction
equipment/software
13.0% 7.2% 16.7% 18.1% 44.9% 3.75 1.425
Our company imports advanced
programmable equipment
5.1% 4.3% 15.9% 18.1% 56.5% 4.17 1.156
Our company launches new products 7.2% 10.9% 23.2% 24.6% 34.1% 3.67 1.251
Our company extends numbers of
product lines
5.8% 8.0% 13.0% 22.5% 50.7% 4.04 1.220
Our company enlarges new markets
with new product development
10.1% 21.0% 31.9% 18.1% 18.8% 3.14 1.241
Our company launches customized
products according to market demands
8.7% 12.3% 24.6% 21.7% 32.6% 3.57 1.295
Our company leads innovative
distributing methods to markets
6.5% 19.6% 34.1% 22.5% 17.4% 3.25 1.151
Our company leads innovative
promoting methods to markets
8.0% 10.1% 31.9% 23.9% 26.1% 3.50 1.210
Our company continually enlarges
potential demand markets
7.2% 11.6% 34.1% 28.3% 18.8% 3.40 1.137
Our company engages in
organizational reconstruction for
pursuing operational efficiency
19.6% 12.3% 19.6% 24.6% 23.9% 3.21 1.442
Our company adopts innovative
reward systems
16.7% 14.5% 24.6% 22.5% 21.7% 3.18 1.374
Our company adopts innovative work
designs
15.9% 6.5% 16.7% 25.4% 35.5% 3.58 1.434
Our company engages in business
process re-engineering
9.4% 11.6% 13.0% 34.8% 31.2% 3.67 1.286
4.3.2 Effect of Risk Taking on Business Organizations
The study sought to examine whether risk taking was being used as a strategy at
Safaricom (K) Limited. Table 4.2 shows that the highest ranked item was Safaricom (K)
Limited employees are encouraged to take calculated risks with new ideas (M=3.86;
SD=1.175), this was followed by top managers of Safaricom (K) Limited believed that,
owing to the nature of the environment, it is best to explore the environment gradually via
careful, incremental behavior (M=3.75; SD=1.100) and The organisation has a
30
willingness to commit significant resources to opportunities to new business opportunities
(M=3.74; SD=1.216).
Table 4.2: Effect of Risk Taking on Business Organization Growth
Str
on
gly
Dis
ag
ree
Dis
ag
ree
Neu
tra
l
Ag
ree
Str
on
gly
Ag
ree
Mea
n
Std
. D
ev.
The top managers of my firm believe
that, owing to the nature of the
environment, it is best to explore the
environment gradually via careful,
incremental behavior
42.8% 15.2% 13.8% 14.5% 13.8% 3.75 1.100
When confronted with decision-
making situations involving
uncertainty, my firm typically adopts a
cautious, “wait-and-see” posture in
order to minimize the probability of
making costly
decisions
10.9% 10.1% 10.9% 35.5% 32.6% 3.23 1.180
The top managers of my firm have a
strong proclivity for low risk projects
9.4% 15.9% 13.8% 31.2% 29.7% 3.58 1.350
The organisation has a willingness to
commit significant resources to
opportunities to new business
opportunities
8.7% 11.6% 9.4% 40.6% 29.7% 3.74 1.216
Ideas that still have not been tested are
usually presented in the organisation
6.5% 13.8% 10.9% 40.6% 20.3% 3.49 1.368
Employees in the organisation receive
support and encouragement when
presenting new ideas.
5.8% 19.6% 13.8% 40.6% 20.3% 3.49 1.122
Management and staff in the
organisation often venture into
unknown territory
11.6% 21.0% 21.0% 29.7% 16.7% 3.70 0.948
Management and staff in the
organisation are encouraged to take
risks
4.3% 15.2% 18.1% 42.0% 20.3% 3.01 1.273
Initiative in the organisation from
employees often receives a favorable
response here, so people feel
encouraged to generate new ideas
8.7% 18.8% 21.7% 34.1% 16.7% 3.56 1.285
Employees in the organisation are
encouraged to take calculated risks
with new ideas
10.9% 25.4% 12.3% 31.9% 19.6% 3.86 1.175
4.3.3 Effect of Proactiveness on Business Organizations
The study sought to establish whether proactiveness was adopted at Safaricom (K)
Limited as a growth strategy of corporate entrepreneurship. The findings show that the
highest ranked item was Safaricom (K) Limited is consistently looking for new business
31
opportunities in the sector (M=3.71;SD=1.251) this was followed by Safaricom (K)
Limited marketing efforts try to lead customers rather than respond to the needs to
customers (M=3.70;SD=1.205) and In dealing with competition, Safaricom (K) Limited
is very seldom the first business to introduce new products/services, administrative
techniques and operating technologies (M=3.69;SD=1.317).
Table 4.3: Effect of Proactiveness on Business Organization Growth
Str
on
gly
Dis
ag
ree
Dis
ag
ree
Neu
tra
l
Ag
ree
Str
on
gly
Ag
ree
Mea
n
Std
. D
ev.
In general, the top managers of my
firm have a strong tendency to be
ahead of other competitors in
introducing novel ideas or products
4.3% 12.3% 12.3% 45.7% 25.4% 2.41 1.493
In dealing with competition, my firm
is very seldom the first business to
introduce new products/services,
administrative techniques and
operating technologies
9.4% 17.4% 28.3% 30.4% 14.5% 3.69 1.317
In dealing with competition, my firm
typically responds to action which
competitors initiate as compared with
initiating action which the competition
then responds to
8.7% 17.4% 15.9% 23.2% 34.8% 3.56 1.318
The organisation is consistently
looking for new business opportunities
in the sector
7.2% 10.9% 13.8% 37.0% 31.2% 3.71 1.251
The organisation marketing efforts try
to lead customers rather than respond
to the needs to customers
13.0% 13.0% 13.8% 31.9% 28.3% 3.70 1.205
The organisation works to find new
businesses or markets to target in the
sector
7.2% 10.9% 24.6% 39.9% 17.4% 3.50 1.185
The organisation incorporates
solutions to unarticulated customer
needs in our products and services
4.3% 5.8% 21.0% 53.6% 15.2% 3.19 1.270
The organisation continuously tries to
discover additional needs of our
customers of which they are unaware
15.9% 23.2% 13.0% 39.1% 8.7% 3.59 1.106
The organisation takes a bold and
aggressive approach when competing
with other players in the sector
5.8% 22.5% 11.6% 30.4% 29.7% 3.31 1.207
The organisation is always trying to
undo and out-maneuver the
competition as best as it can
5.1% 13.0% 7.2% 40.6% 34.1% 3.24 1.321
32
4.4 Inferential Statistics
This section of the study presents the inferential findings of the study. The study used
correlation analysis to measure the strength of association between the independent and
dependent variables and regression analysis to measure the direction of the relationship
between the independent and dependent variables.
4.4.1 Correlation Analysis
The correlation analysis showed that all the independent variables had a positive and
significant relationship with business growth. Table 4.4 shows that there was a positive
and significant relationship with innovation (r = 0.298; p < 0.000), risk taking (r = 0.199;
p < 0.017) and proactiveness (r = 0.119; p < 0.025).
Table 4.4: Innovation, Risk Taking, Proactiveness and Business Growth Correlation
Innovation Risk
taking
Proactiveness Business
growth
Innovation Pearson
Correlation
1
Sig. (2-tailed)
N 143
Risk taking Pearson
Correlation
.316(**) 1
Sig. (2-tailed) .000
N 143 143
Proactiveness Pearson
Correlation
-.040 .154 1
Sig. (2-tailed) .633 .066
N 143 143 143
Business
growth
Pearson
Correlation
.298(**) .199(*) .119 1
Sig. (2-tailed) .000 .017 .025
N 143 143 143 143
** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
4.4.2 Regression Analysis
The study conducted a regression analysis to establish the direction of the relationship
between the independent and dependent variable. Table 4.5 shows the model summary
33
which shows that the R2
is 0.634 which means that 63.4 % of variation in business growth
is due to the three independent study variables.
Table 4.5: Model Summary
Model R R Square Adjusted R Square Std. Error of the
Estimate
1 .796(a) .634 .620 3.15259
a Predictors: (Constant), Innovation, Risk taking, Proactiveness
Table 4.6 shows the ANOVA results of the multiple regression analysis. The findings
show that the significance level is < 0.005 (p = 0.002). This findings imply that the
regression model is significant in explaining change in the study dependent variable.
Table 4.6: ANOVA
Model Sum of
Squares
df Mean
Square
F Sig.
1 Regression 1840.966 4 460.242 46.307 .002(a)
Residual 1063.453 107 9.939
Total 2904.420 111
a Predictors: (Constant), Innovation, Risk taking, Proactiveness
b Dependent Variable: Business growth
The regression coefficients show the size of the effect of the independent variables on the
dependent variable. Table 4.7 shows that an increase in innovation, risk taking and
proactiveness lead to an increase in business growth of Safaricom (K) Limited. The
findings further revealed that innovation (β = 0.639, p < 0.005) had the greatest effect on
business growth followed by risk taking (β = 0.378, p < 0.005) and proactiveness (β =
0.212, p < 0.005) at Safaricom (K) Limited. The proposed regression model thus
becomes:
Y = 13.179 + 0.212 X1 + 0.378 X2 + 0.639 X3 +ɛ
34
Table 4.7: Coefficients
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B Std.
Error
Beta B Std.
Error
1 (Constant) 13.179 1.377 2.548 .125
Innovation .639 .106 .102 2.147 .001
Risk taking .378 .098 .062 .794 .002
Proactiveness .212 .106 .467 5.065 .000
b Dependent Variable: Business growth
4.5 Chapter Summary
This chapter presented the results and findings of the study. The chapter is presented in
subsections of the background information, descriptive and inferential statistics. The
descriptive statistics was presented in line with the study research questions and the
correlation and regression analysis was done between the independent and dependent
variables.
35
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the discussion, conclusion and recommendations of the research.
The summary comprises the background of the study and the research methodology used
in the study. The discussion and conclusion are presented in line with the study research
questions. The recommendations are presented in regard of implications and areas for
further research.
5.2 Summary of findings
The aim of the study was to examine impact of corporate entrepreneurship strategy on
growth of business organisations focusing on Safaricom (K) Limited. The study aimed at
answering the following research questions: what is the effect of innovation on business
organizations? What is the effect of risk taking on business organizations? And what is
the effect of proactiveness on business organizations?
The research methodology adopted was the descriptive research method. It focused on
three groups namely middle and upper level management and operatives for Safaricom
(K) Limited departments. The sample size of the study was 143 staff. Data collection was
done by a structured questionnaires. This data was analyzed through the descriptive
statistics, correlation and regression analysis using SPSS Version 21. The findings were
presented in tables and figures and researcher‟s own interpretation.
The background information showed that male study participants represented 56.0 %
compared to the female representation of 44.0 %; 30-39 years were 64.0 %, 17.0 % were
aged 20-29 years, 15.0 % were 40-49 years and 4.0 % were above 50 years of age; 47.0 %
had a bachelor‟s degree level of education, 31.0 % had postgraduate degree, 13.0 %
certificate and 9.0 % had a diploma level of education and in regard to working
experience, 39.0 % had 5-10 years working experience, 34.0 % had more than 10 years
and 27.0 % had 0-5 years‟ work experience at Safaricom (K) Limited.
In terms of process innovation, the findings show that the highest ranked score for
process innovation was that Safaricom (K) Limited adopted advanced real-time process
control technology (M=4.17; SD=1.124). In regard to product innovation, the findings
36
showed that the highest ranked statement was Safaricom (K) Limited extended numbers
of product lines (M=4.04; SD=1.220). The study results revealed that the highest ranked
item was Safaricom (K) Limited leads in innovative promoting methods to markets
(M=3.50; SD=1.210). In terms of the organisational innovation, the highest ranked item
was that Safaricom (K) Limited engaged in business process re-engineering (M=3.67;
SD=1.286). The correlation results showed that there was a positive and significant
relationship with innovation (r = 0.298; p < 0.000) and the regression analysis showed
that innovation (β = 0.639, p < 0.005) had the greatest effect on business growth in
Safaricom (K) Limited.
In terms of risk taking, the highest ranked item was Safaricom (K) Limited employees are
encouraged to take calculated risks with new ideas (M=3.86; SD=1.175), this was
followed by top managers of Safaricom (K) Limited believed that, owing to the nature of
the environment, it is best to explore the environment gradually via careful, incremental
behavior (M=3.75; SD=1.100) and The organisation has a willingness to commit
significant resources to opportunities to new business opportunities (M=3.74; SD=1.216).
The correlation results revealed that risk taking (r = 0.199; p < 0.017) had a positive and
significant relationship with business growth. The regression analysis showed that risk
taking (β = 0.378, p < 0.005) had an effect on business growth on Safaricom (K) Limited.
The findings show that the highest ranked item was Safaricom (K) Limited is consistently
looking for new business opportunities in the sector (M=3.71;SD=1.251) this was
followed by Safaricom (K) Limited marketing efforts try to lead customers rather than
respond to the needs to customers (M=3.70;SD=1.205) and In dealing with competition,
Safaricom (K) Limited is very seldom the first business to introduce new
products/services, administrative techniques and operating technologies (M=3.69;
SD=1.317). The correlation results also showed a positive and significant relationship
between proactiveness (r = 0.119; p < 0.025) and business growth. The regression
analysis indicated that proactiveness (β = 0.212, p < 0.005) had an effect on business
growth at Safaricom (K) Limited.
37
5.3 Discussion
5.3.1 Effect of Innovation on Business Organizations
The descriptive results showed that process innovation was the most ranked innovation
strategy that was adopted at Safaricom (K) Limited. The study results showed that there
was a positive and significant relationship between innovation and growth of business
organisation and the regression analysis showed that innovation had the greatest effect on
business growth among the three study variables.
According to Porter (Schumpeter, 1934; Porter, 1980) the concept of innovation is
associated with the economic aim of creating differentiation (to enhance the monopolistic
control of an organisation in lieu to its customers). The concept of innovation has
received much attention in terms or research in different disciplines and can be described
along different dimensions such as newness or novelty (Tidd & Bessant, 2009), and is
also classified on the direction it focuses such as the product, market, process and/or
business system (Jenssen & Randøy, 2006; Jenssen & Nybakk, 2009).
Garcia (2014) agrees that process innovation refers to the new organisational forms and
knowledge, policies and procedures that are embodied in the distribution applications,
products, channels and consumers‟ needs, preferences and expectations. Process
innovation is associated with the implementation of a significantly improved or new
delivery method or production.
This study findings agree with earlier studies (Parisi et al., 2006; Hall et al., 2009).that
process innovation contributes more to productivity increase than product innovation.
This finding also supports Eiriz et al. (2013) arguments that firms get more concerned
with efficiency aspects, therefore process innovation tends to be the focus of firms‟
innovation strategies. This study finding is also supported by Mwangi and Namusonge
(2014) study on influence of innovation on SMEs in Nakuru County and found that
indicated that process innovation was crucial to coming up with quality designs of
products that help meet user wants and needs. Majority of respondents agreed that process
innovation was crucial in coming up with quality designs of products that will help meet
user wants and needs.
38
5.3.2 Effect of Risk Taking on Business Organizations
The descriptive results revealed that employees at Safaricom (K) Limited were
encouraged to take calculated risks with new ideas. The correlation results revealed that
risk taking had a positive and significant relationship with business growth. The
regression analysis showed that risk taking had an effect on business growth on
Safaricom (K) Limited.
This study findings therefore suggest that risk taking is a favourable means of an
organisation to achieve growth. This finding implies that employees and managers at
Safaricom (K) Limited are encouraged to take risks in their work. This form of risks are
associated with improved performance through coming up with innovative ideas which
have such impacts as reduced costs and creating new markets and meeting customer
needs in the telecommunication sector.
This finding agrees with earlier studies such as Wang and Poutziouris (2010) empirical
studies done in developed and transition economies which suggested that risk taking as a
firm-level strategic posture has constitutes a potential source of competitive advantage
and has positive, long-term impact on financial performance and growth of SMEs.
Moreover, this finding corroborates past study (ies) of Gibb and Haar (2010) conducted
an empirical research among 167 New Zealand organisations and confirmed that a profile
of an organisation risk taking often leads to a high financial performance. In Taiwan,
Wang and Yen (2012) found that risk taking has a positive impact with organisation
performance among SMEs in China.
The concept of risk taking is that it is a major feature of entrepreneurship whereby a high
risk taking orientation thus leads to a high organisation growth and profitability Zhou and
de Wit (2009) view risk taking as a propensity to take brave actions such as to venture to
new markets, and a using a large size of resources to venturing with unclear outcomes and
borrowing huge amounts to make business investments.
Risk taking involves engagement in manageable and calculated risks in an attempt to
achieve benefits rather than having daring risks which can negatively affect organisation
performance (Dess & Lumpkin, 2005; Morris, Kuratko & Covin, 2008). Empirical studies
done in developed and transition economies suggest that risk taking as a firm - level
39
strategic posture has constitutes a potential source of competitive advantage and has
positive, long-term impact on financial performance and growth of SMEs (Wang &
Poutziouris, 2010).
5.3.3 Effect of Proactiveness on Business Organizations
The descriptive statistics indicated that Safaricom (K) Limited is consistently looking for
new business opportunities in the sector. The correlation results also showed a positive
and significant relationship between proactiveness and business growth. The regression
analysis indicated that proactiveness had an effect on business growth at Safaricom (K)
Limited. This findings suggests that proactiveness was a CE approach that was adopted at
Safaricom (K) Limited to achieve and sustain competitive advantage in the
telecommunication sector.
This finding corroborates past results of studies on the relationship between proactiveness
and business performance and growth. Karacaoglu et al. (2013) using a sample of 140
industrial manufacturing firms listed on Istanbul Stock Exchange (ISE) found that the
original dimensions of entrepreneurship orientation (risk taking innovation and
proactiveness) had direct interaction with organisation financial performance.
In a similar study in Netherlands, Kraus, Rigtering, Hughes and Hosman (2012) survey
among 164 SMEs found that proactive SMEs behaviour had a direct influence on SME
performance during the economic crisis. In Sri Lanka, Kumarpeli and Semasinghe (2015)
research on the impact of entrepreneurial orientation on the growth of SMEs in Sri Lanka
found that the relationship between proactiveness and firm growth was not significant.
Ejdys (2016) conducted a study on innovativeness and entrepreneurial orientation of
SMEs. The research results show that proactiveness has a significant positive total effect
on improving innovativeness. The study concluded that proactiveness was positively and
significantly related to organisation innovativeness. In Malaysia, Arshada, Raslib, Arshad
and Zain (2014) research found that among the five dimensions of EO, proactiveness had
the highest correlation with business performance and proactiveness had an effect on
business performance.
40
Oni (2012) investigated the importance of entrepreneurial proactiveness on firm
performance and the findings revealed that enterprises that acted on high entrepreneurial
proactiveness had a direct effect on the performance metrics which are consistent with
employment of competent and qualified personnel and size. In Kenya, Wambugu et al.
(2015) concluded that, proactiveness was a major predictor of firm performance of agro
processing SMEs in Kenya in terms of employee growth and profitability.
5.4 Conclusion
5.4.1 Effect of Innovation on Business Organizations
The study sought to establish effect of innovation on business growth at Safaricom (K)
Limited. The study results confirmed that innovation had the greatest influence on
business growth among the three dimensions of corporate entrepreneurship. Therefore,
this study concludes that innovation has the greatest effect on business growth at
Safaricom (K) Limited.
5.4.2 Effect of Risk Taking on Business Organizations
The study sought to establish effect of risk taking on business growth at Safaricom (K)
Limited. The study results indicated that there was a positive relationship between risk
taking and business growth. The results confirmed that risk taking had the least effect on
business growth of Safaricom (K) Limited. Therefore, this study concludes that risk
taking has the least effect on business growth of Safaricom (K) Limited.
5.4.3 Effect of Proactiveness on Business Organizations
The study sought to establish effect of proactiveness on business growth at Safaricom (K)
Limited. The study results affirmed a positive relationship between proactiveness on
business growth. The findings further confirmed that proactiveness had the second largest
effect on business growth at Safaricom (K) Limited among the three corporate
entrepreneurship dimensions measured. Therefore, this study concludes that proactiveness
had the second highest effect on business growth at Safaricom (K) Limited.
41
5.5 Recommendations
5.5.1 Recommendations for Implications
5.5.1.1 Effect of Innovation on Business Organizations
The study findings showed that process innovation had the greatest effect on business
growth. The study therefore recommends that Safaricom (K) Limited should endeavor to
enhance their process innovations to improve the organization‟s forms and knowledge,
policies and procedures that are embodied in the distribution applications, products,
channels and consumers‟ needs, preferences and expectations.
5.5.1.2 Effect of Risk Taking on Business Organizations
The study findings revealed that risk taking had the least effect on business growth. The
study therefore recommends that Safaricom (K) Limited should encourage risk taking
among its staff, project teams and managers to enable the organisation capture new
markets in the telecommunication sector in Kenya.
5.5.1.3 Effect of Proactiveness on Business Organizations
The study findings revealed that proactiveness had the second greatest effect on business
growth. The study therefore recommends that Safaricom (K) Limited should enhance its
proactive tendency in searching for emerging technologies, markets and opportunities in
the growing telecommunications sector in Kenya.
5.5.2 Recommendations for Further Study
The aim of the study was to examine impact of corporate entrepreneurship (CE) strategy
on growth of business organisations focusing on Safaricom (K) Limited. The study
recommends for further research on the impact of CE on business growth in other
industries and sectors. Second, the study was scope was limited to the CE dimensions of
(1) pro-activeness, (2) risk-taking, (3) innovations. The study recommends for inclusion
self-renewal as the fourth dimension of CE in future studies of corporate
entrepreneurship.
42
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APPENDICES
APPENDIX 1: LETTER OF INTRODUCTION
Dear Respondent
RE: COLLECTION OF DATA
My name is Janet Katule Mutuku. I am currently a final year MBA student at USIU
University. As part of my course requirements, I am expected to conduct a research and
present it as a thesis. My topic is on IMPACT OF CORPORATE
ENTREPRENEURSHIP STRATEGY ON GROWTH OF BUSINESS
ORGANIZATIONS IN KENYA: A CASE OF SAFARICOM LIMITED. You are asked
to provide answers on questions about corporate entrepreneurship strategy. Any
information you provide will be treated with uttermost confidentiality. All the information
provided will be used for academic exercise only. Please contact the researcher on the
contact information provided.
Your cooperation will be highly appreciated. Thank you.
Yours faithfully,
JANET K. MUTUKU
USIU MBA Student
Phone: 0723 211 078
Email: [email protected]
54
APPENDIX II: QUESTIONNAIRE FOR STAFF
Instructions:
Please Tick (√) the appropriate category in the spaces provided
The questionnaire will take approximately 20 minutes to complete
Part A: Demographic Characteristics
1. What is your Gender?
a. Male ( )
b. Female ( )
2. What is your Age?
a. 20 -29 ( )
b. 30 – 39 ( )
c. 40 – 49 ( )
d. Over 50 years ( )
3. What is your highest level of education?
a. Certificate ( )
b. Diploma ( )
c. Bachelor‟s degree ( )
d. Postgraduate degree ( )
4. Number of years worked in the company?
a. 0-5 years ( )
b. 5-10 years ( )
c. Over 10 years ( )
55
Part B: Effect of Innovation on Business Growth
5. The following statements are related to the effect of innovation on business
growth. Please indicate to what extents do you agree or disagree with the
following statements. Where (1 Strongly Disagree - 5 Strongly Agree)
Innovation statements 1 2 3 4 5
Process Innovation
Our company adopts advanced real-time process control technology
Our company imports advanced automatic quality restriction
equipment/software
Our company imports advanced programmable equipment
Product Innovation
Our company launches new products
Our company extends numbers of product lines
Our company enlarges new markets with new product development
Our company launches customized products according to market
demands
Market Innovation
Our company leads innovative distributing methods to markets
Our company leads innovative promoting methods to markets
Our company continually enlarges potential demand markets
Organisational Innovation
Our company engages in organizational reconstruction for pursuing
operational efficiency
Our company adopts innovative reward systems
Our company adopts innovative work designs
Our company engages in business process re-engineering
56
Part C: Risk Taking and Firm Growth
6. The following statements are related to the effect of risk taking on business
growth. Please indicate to what extents do you agree or disagree with the
following statements. Where (1 Strongly Disagree - 5 Strongly Agree)
Risk taking Statements 1 2 3 4 5
a
The top managers of my firm believe that, owing to the nature of
the environment, it is best to explore the environment gradually via
careful, incremental behavior
b
When confronted with decision-making situations involving
uncertainty, my firm typically adopts a cautious, “wait-and-see”
posture in order to minimize the probability of making costly
decisions
c
The top managers of my firm have a strong proclivity for low risk
projects
d The organisation has a willingness to commit significant resources
to opportunities to new business opportunities
e Ideas that still have not been tested are usually presented in the
organisation
f Employees in the organisation receive support and encouragement
when presenting new ideas.
g Management and staff in the organisation often venture into
unknown territory
h Management and staff in the organisation are encouraged to take
risks
i Initiative in the organisation from employees often receives a
favorable response here, so people feel encouraged to generate new
ideas
j Employees in the organisation are encouraged to take calculated
risks with new ideas
57
Part D: Effect of Proactiveness on Firm Growth
7. The following statements are related to the effect of proactiveness on business
growth. Please indicate to what extents do you agree or disagree with the
following statements. Where (1 Strongly Disagree - 5 Strongly Agree)
Proactiveness Statements 1 2 3 4 5
a
In general, the top managers of my firm have a strong tendency to
be ahead of other competitors in introducing novel ideas or products
b In dealing with competition, my firm is very seldom the first
business to introduce new products/services, administrative
techniques and operating technologies
c In dealing with competition, my firm typically responds to action
which competitors initiate as compared with initiating action which
the competition then responds to
d The organisation is consistently looking for new business
opportunities in the sector
e The organisation marketing efforts try to lead customers rather than
respond to the needs to customers
f The organisation works to find new businesses or markets to target
in the sector
g The organisation incorporates solutions to unarticulated customer
needs in our products and services
h The organisation continuously tries to discover additional needs of
our customers of which they are unaware
i The organisation takes a bold and aggressive approach when
competing with other players in the sector
j The organisation is always trying to undo and out-maneuver the
competition as best as it can