FEATURE PAPER

Evaluating the Legitimacy of Entrepreneurship and Small Business as a Field of Study: An Exploratory Study

The following paper was written by Niels Bosma, Erik Stam and Sander Wennekers was presented at the 2011 International Council for Small Business conference in Sweden.

This paper presents the results of the first international comparative study of entrepreneurship within organizations (intrapreneurship) and independent entrepreneurship. Intrapreneurship is a more wide-spread phenomenon in high income countries than in low income countries. At the organizational level, intrapreneurs have relatively high job growth expectations for their new business activities, as compared with independent young businesses. At the individual level, intrapreneurs are much more likely to have the intention to start a new independent business than other employees. However, at the country level there is a negative correlation between intrapreneurship and early-stage entrepreneurial activity. An explanation for these contrasting outcomes is the diverging effect of per capita income on intrapreneurship (positive effect) and early-stage entrepreneurial activity (negative effect). Underlying mechanisms include the role of larger firm presence, of higher education and of the opportunity costs of independent entrepreneurship.

Introduction

Cross-country comparative studies on independent new businesses (Arenius & Minniti, 2005; Bowen & De Clercq, 2008; Koellinger, 2008; Stephan & Uhlaner, 2010; Wennekers et al. 2005) and studies on new business development within existing organizations (Pinchot, 1985; Kanter, 1988; Lumpkin & Dess, 1996; Kuratko, 2007) have developed along separate paths in business and management studies. Entrepreneurial behavior within existing firms (intrapreneurship) has remained outside the bounds of empirical research on national variations in entrepreneurship, because comparable data on intrapreneurship has not been available until now. This means that the study of the effects of the national environment on the individual level trade -off between new business development within existing organizations or with an independent venture has remained an unchartered academic territory. Empirical research is needed in order to gain insight into the relationships between intrapreneurship, independent entrepreneurship and economic development. This paper provides the first cross-national evidence on the prevalence of intrapreneurship and on this basis performs a multilevel analysis at country, organizational and individual levels.

This paper makes two distinct contributions to the literature. First, it provides international comparative research on intrapreneurship in high and low income countries, making it possible to trace the effect of the macro context (i.e. levels of economic development) on the prevalence and nature of intrapreneurship. Second, this paper provides insight into the relationship between (independent) entrepreneurship and intrapreneurship at both the national and individual level.

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TIP OF THE WEEK

Trends and Issues in HRM

As with each chapter, let's take a look now at some of the trends and issues in training and development. The first issues that we will discuss involve diversity and sustainability training programs. After that, we will identify potential new measures for development success and then evaluate the process of outsourcing training and development.

Does Diversity Training Work?

Competitive organizations always need to work to maximize the pool from which they can draw their recruits. If, in fact, the organization arbitrarily limits the number and types of recruits through artificial limits on organizational diversity, it restricts its ability to draw in the best talent available from the at-large workforce. However, most organizations today accept the fact thatunmanageddiversity can decrease employee commitment and engagement, lower job satisfaction, increase turnover, and increase conflict. Organizations must create acultural changein order for diversity training to be successful. But since cultural change is very difficult, many organizations try to shortcut the process and as a result end up with failed programs.

How can organizations create and deliver a diversity training process that has a chance of being successful? Common diversity initiatives include such things as diversity recruitment, diversity training, and formal mentoring programs. However, plugging these programs into organizational training without providing a process by which they can be integrated into the daily activities of the members of the organization will likely lead to minimal if any success. Let's take a quick look at the history of diversity training and its effectiveness.

Diversity training has been around in some form since the 1960s. In its earlier days, diversity training primarily focused on organizationalcompliancewith equal opportunity laws. Later on, diversity training moved through a sequence of options-from attempting toassimilatedifferent individuals into an organizational culture, through attempting to make employees sensitive to others and their differences, and more recently to an attempt to createinclusionof all individuals, from all background, into the organization.

In each of the phases of diversity training, there appeared to be significant pushback on the part of one or more groups involved in the training. Whether the pushback was from the White male majority, from feeling that they were being persecuted, or from females or minority individuals, feeling that they had to conform to the organization and its practices, each of the phases had significant hurdles to overcome in order to move the organization forward. Today, organizations are attempting to integrate diversity more directly into the business and its strategies. Companies that lead the diversity initiative are becoming much more involved at all levels of the organization, from the executive suite to the shop floor.

Throughout each phase of its existence, diversity training effectiveness has been questioned by many organizations and researchers. Evidence appears to be growing that diversity training in its present form does add value to the organization, both sociologically and economically. In addition, when diversity training focuses on thesimilaritiesbetween individuals rather than theirdifferences, trainees appear to become more capable of resolving conflict that may occur as a result of individual diversity. Finally, the bottom line is that most major corporations believe that diversity adds significant value to their organizations, both from the perspective of providing different viewpoints and solutions to problems and from the perspective of providing different viewpoints and solutions to problems and from the perspective of providing the organization with a larger talent pool in a period when qualified applicants are becoming less and less available in the at-large workforce.

ANNOUNCEMENTS

Lyles Center Franchising Workshop

Have you ever wondered what it would be like to own a Franchise? The Lyles Center for Innovation and Entrepreneurship will hold a Franchising Workshop on the California State University, Fresno campus on Saturday, March 10th from 9 a.m. to 12:30 p.m. The workshop is open to the general public, faculty, staff and students who have an interest in learning about opportunities in the industry. Admission to the workshop is $20 for the public. To register,click here.

Southern Management Association

It's time to start planning for the Southern Management Association's 2012 Annual Meeting. The SMA meeting will take place October 30-November 3, 2012 in Fort Lauderdale, Florida. The meeting will be held at the Westin Beach Resort and Spa. The hotel's waterfront location offers access to miles of beautiful white beaches, but is also close to shops, entertainment, and business centers. For more information,click here.

Flip the Switch Workshop

Are you frustrated with technology distractions in the classroom? On June 1st in Philadelphia, PA we'll show how to hijack these distracting mobile devices to engage with students at a deeper level and bring them back into the learning conversation. For more information,click here.

ICSB

International Council for Small Business will be holding its International World Conference during June 10-13, 2012 in Wellington, New Zealand. For more information,click here.

North American Research Symposium

You are invited to attend The 22nd Annual North American Research Symposium on Purchasing and Supply Chain Management March 15-16, 2012 in Hilton Phonix/Chandlery, Arizona. For more information,click here.

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