THE NEXUS BETWEEN HUMAN RESOURCES PRACTICES, INTRAPRENEURSHIP AND
ORGANIZATIONAL INNOVATION
Bahman Peyravi
Vilnius Gediminas Technical
University, Lithuania
E-mail: bahman.peyravi@vilniustech.lt
Arturas Jakubavicius
Vilnius Gediminas Technical University, Lithuania
E-mail: arturas.jakubavicius@vgtu.lt
Rytis Bickauskas
Mykolas Romeris University, Lithuania
E-mail: ryciomail@gmail.com
Kateryna Mazur
Vinnytsia National Agrarian
University, Ukraine
E-mail: kv_mazur@ukr.net
Alyona Piven
Kharkiv Petro Vasilenko National
Technical University of Agriculture, Ukraine
E-mail: alenapiven2017@gmail.com
Submission: 8/24/2021
Accept: 9/26/2021
ABSTRACT
In
today’s world, the impact of strategic human resources management on innovation
activities plays key role in organizational development and change management.
The aim of this research is to determine the impact of human resource
management on intrapreneurship and organizational innovation. It is emphasized
by many significant authors in last decades that the entrepreneurial activity
is at the heart of competitiveness, productivity growth, innovation, economic
growth and job creation. The research based on literature review and personal
interpretation on the topic. Theoretical analysis on relevant researches on
nexus between human resources management, organizational innovation and
intrapreneurship, presentation of conceptual framework, presentation of the
research findings are the objectives of the research. This study has potential
limitations such as data collection process and access to the relevant
literature. Research results emphasize on the impact of job selection process,
training
process,
reward and motivational techniques on organizational innovation and
intrapreneurship.
Keywords: innovation, entrepreneurship,
intrapreneurship, Human resources, organizational innovation
1.
INTRODUCTION
Strategic human resources department plays key role in organizational
performance. Innovation and entrepreneurship performance of the employees are
two factors which has significant impact on sustainable competitive advantage
of organizations and its adaptation to the competitive business environment.
Based on mentioned approaches above, the relationship between human resources
management and mentioned factors cannot be neglected. Hence, the research aims
to determine the impact of human resource management on intrapreneurship and
organizational innovation.
Atar (2016) mentioned that, the efficient utilization of human resources is the
driving force of innovation activities, technological compliance, competitive
advantage and value creation in existing market. The research based on
literature review and personal interpretation on the topic. Due to increasing
importance of human resources and its strategic planning process,
intrapreneurship and innovation researchers pays specific attention in last
decades. Hence, various significant studies carried out in literature. However,
there are few studies which addressing human resources management,
organizational innovation and intrapreneurship all together. Thus, this study
designed to contribute to the literature from mentioned perspective.
Research results emphasize on the impact of job selection process, training
process, reward and motivational techniques on organizational innovation and
intrapreneurship. Theoretical analysis on relevant researches on nexus between
human resources management, organizational innovation and intrapreneurship,
presentation of conceptual framework, presentation of the research findings are
the objectives of the research. This study has potential limitations such as
data collection process and access to the relevant literature.
2.
THEORETICAL
FRAMEWORK AND RELATED LITERATURE
2.1.
Innovation,
Entrepreneurship and Intrapreneurship
Historically, many researchers have touched on the conceptual relationship
between entrepreneurship and innovation (Schumpeter, 1934; Drucker, 1994; Legge
& Hindle, 1997; Sundbo, 1998; Kanungo, 1999) While others have focused the
nexus between entrepreneurship and innovation departing from process to structure,
and strategy (Casson, 1982; Caird, 1988; Cornwall & Perlman, 1990;
Littunen, 2000). Over the last decades, entrepreneurship has become established
as a legitimate field of research and managerial practice (Hoskisson et al.,
2011).
OECD, (2007) defines entrepreneurship as “the result of any human action
undertaken in order to generate value through the creation or expansion of
economic activity”. According to Nelson (1993), innovation encompasses “the
processes by which firms master and get into practice product designs and
manufacturing processes that are new to them.”
Innovation and Entrepreneurship are considered as a significant basis for
competitive advantage in dynamic and changing business environment, enhancing
capabilities for sustainable business growth, economic activity and the wealth
of nations (O’Connor, 2013). Entrepreneurship refers to the exploration,
evaluation and exploitation of opportunities in the process of business
start-up, creation and growth; entrepreneurial dynamism is the key to economic
renewal and growth (Shane, 2012; Lewrick et al., 2010).
Innovation relates to the development, adoption and exploitation of value-added
activities in economic and social areas; a key factor for competitiveness and
growth (Crossan & Apaydin, 2010; Lewrick et al., 2010), while some authors
see innovation and entrepreneurship as the line between life and death (Tidd
& Bassant, 2015).
Embracing and stimulating entrepreneurship and innovation education and
training provides nations with more entrepreneurs and innovators (Maritz &
Brown, 2013; Donovan et al., 2013). Entrepreneurship education programs are defined
pedagogical programs or education that aims to develop entrepreneurial
attitudes, skills and personal qualities; which is designed to empower
individuals with the necessary tools to initiate a new business (Fayolle,
2010).
A comprehensive panorama of entrepreneurship and transition to intrapreneurship
covers the actions of entrepreneurs within the organizations. Intrapreneurship
is vital in today’s highly competitive and fast-changing environment for a
legitimate route towards increased levels of organizational performance (Hayton
et al., 2013).
An extensive view of entrepreneurship and transition to
intrapreneurship covers the actions of entrepreneurial behavior of the
employees within the organizations. Intrapreneurship is a significant for
innovation activities of the organizations and vital in today’s highly
competitive and fast-changing business environment (Hayton et al., 2013). The
term intrapreneur was coined in 1978 by Gifford and Libba Pinchot (Hadad &
Cantaragiu, 2017).
Pinchot used “intrapreneurship” to define individual intra-corporate
entrepreneurship. In the literature, however, intrapreneurship is usually
studied as behaviors (Rigtering & Weitzel, 2013). As a result,
intrapreneurship has been developed through individual components (Skarmeas et
al., 2016). In addition, Table 1 below shows the similarities such as
innovation, creation of value and undertaking risk whereas differences
including type of activity, encountered obstacles and sources of funding.
Table1: Entrepreneurship versus Intrapreneurship
|
|
Similarities |
|
Differences |
|
Innovation |
●The entrepreneurs and
the intrapreneurs are innovative individuals. ●Innovation represents
a brand-new product or service, a new technological process or an improved
management method. |
Type of Activity |
●The activity of
intrapreneur includes a restoring trait. ●The activity
entrepreneur involves a originative trait. |
|
Creation of value |
●Adding further value
to the products and services is the fundamental objective for both of them. ●Alteration must be
truly new and must come up with a different proposal. |
Encountered Obstacles |
●For the intrapreneur,
the organizations’ culture may be the crucial obstruction. ●The entrepreneur has a
powerful obstruction which is the market. |
|
Undertaking Risk |
●The intrapreneurial
and entrepreneurial activities contain a higher degree of potential risks as
in comparison to the usual risks. ●The intrapreneur
undertakes the risk of organization’s capital and focuses on new products. ●The entrepreneur
undertakes the risks of his/her own money and time. |
Sourcing of Funding |
●The intrapreneur
benefits from the organization’s resources. ●The entrepreneur
individually search for funding sources, at the risk of losing his/her own
assets/fortune. |
Source: Sasu 2003 (in Ozbozkurt, 2019)
When researchers describe the intrapreneurship in organizational context, they
are representing the intrapreneurship concept as “spontaneous trait
transference”. This concept is not associated to the person who enacts the
behavior but with another person who describes that behavior by someone else
but does not perform it (a communicator or informant) (Uleman, 2015). From this
perspective, the intrapreneurship is related to the “Role Theory” which
concerns “organizational social life and behavior patterns or roles” presented
by B. J. Biddle, 1986. The role theory has created significant base for
understanding intrapreneurship within organizations. This phenomenon will be
discussed in detail while presenting intrapreneuship and the organization.
Intrapreneurship is a
significant term at the individual and organizational levels. intrapreneurship,
which reveals the integration of entrepreneurship and strategy activities
within an organization, leads employees to understand that the role of
individuals within an organization are vital and indispensable for the
organization. Intrapreneurship can be considered as guiding signs of success by
contributing to the development of employees and hence organizational
development. Intrapreneurship has a positive influence on the productivity,
effort and satisfaction of its employees which leads to the success in innovation
activities.
2.2.
Intrapreneurship
and the Organization
Many organizations are redesigning their activities in radical and meaningful
ways in response to these vital and rapid changes against external and internal
business environment. The survival of today’s businesses is related to constant
demand for new opportunities and possibilities and force a new understanding of
essential skills and concepts. Rapid changes in environmental factors are as
same as business growth and product sells on international markets while the
diversification of customer demands has increased the importance of
intrapreneurship and organizational innovation.
Intrapreneurship satisfies to the demands by shaping the future direction of
organizations and intrapreneurship as the new subject increases its importance
every day. Intrapreneurship is entrepreneurial activities pursued within the
organization to support organizational strategy (Gaertner, 2014) and social
intrapreneurship which demands flexibility to accept employees ideas (Nery,
2021) based on how employees could be inspired to behave entrepreneurially in
organizational framework (Gundogdu, 2012).
This approach is highly depends on the personality and characteristics of the
employees and also the organization level distinction between units and
subunits, at team level role specialization in department and individual-level
role specialization for the employee (Yukl, 2013).
Various reseaches mentions two essential scales in Intrapreneurship literature.
The first scale related to the innovative and proactive disposition of
management (Taneja, 2010) and the second scale includes innovation venturing
and self-improvement activities of employees (Antoncic & Hisrich, 2001).
However, the “Role Theory” forms a new intersection between two scales which
based on expectations, and the interaction between expectations and
organizational values.
Thus, it can be emphasized that, role relationship is based on shared
expectations and organizational culture (Parsons, 2014) and intrapreneurship
role depending on the transformation of the behavior by transfer of the
knowledge domain of the role senders. Transfer of knowledge and knowhow or
domain of the intrapreneurship behavior can endure over time (Redding, 1993).
Moreover, the significant role of organizational communication for voluntary
intrapreneurs (Park et al., 2014) and environmental effects on intrapreneurship
should not be neglected (Felicio et al., 2012). It might be difficult to find
entrepreneurs in organizations which are essential for intrapreneurship.
According to role theory, organizations should lead employees to learn
intrapreneurship as a role which departs with media depictions and interaction
with others before and moves to personal stage. That means, organizations must
be leaded with the leader intrapreneurs to be a sample figure and promote
intrapreneurship to others within the organization as figureheads, because
roles are transferable.
2.3.
Strategic
Human Resources Management, Organizational Innovation and Strategic
Intrapreneurship
To begin with, it must be mentioned that There is lack of studies in literature
on strategic human resources management together with organizational innovation
and strategic intrapreneurship. Taking into consideration existing studies,
strategic human resources management can be seen as major factor with
significant on innovation performance of the organizations (Demirtas, 2013) and
strategic intrapreneurship has been paid attention as a rising field of
up-to-date studies for achieving organizational objectives and goals (Bozkurt,
2019).
Intrapreneurship, as a new trend, stands for corporate
entrepreneurship within an existing organization, behavioral intentions, and
behaviors of an organization that are correlated with departures from the
customary. Hence, this approach illustrates the strong nexus between strategic
human resources management and strategic intrapreneurship which directed to the
innovation activities and its achievements.
Moreover, this nexus is supported by various studies such as Antoncic (2007)
which mentioned that intrapreneurship involves four main dimensions including
new business venturing, innovativeness, orgaizational self-renewal, and
proactiveness, Enslin (2010), emphasizes on additional three
dimensions that are risk-taking, autonomy,
and competitive aggressiveness. On the other hand, Morris, Kuratko
and Covin, (2010) describes strategic intrapreneurship as self-driven, with
self-imposed timelines and performance benchmarks.
Harmonic movement of strategic human resources functions is the main support of
employee’s entrepreneurial spirit. In another word, organizational learning and
knowledge transfer can be seen as driving force entrepreneurial activities of
employees. Application of human resources practices (recruitment and hiring
process, training process, job development etc.) supports intrapreneurial
activities and success in innovation activities.
Departing from this approach, it can be emphasized that entrepreneurship and
innovation are an inseparable (Tidd & Bassant, 2015) and it is an important
factor for competitive advantage by increasing their impact with appropriate
strategic human resources practices (Atar, 2016).
Avci and Ulu, (2014) emphasized on the impact of employee’s empowerment which
is significant part of strategic human resources management on organizational
creativity and innovation. Moreover, some studies emphasized on positive impact
of performance appraisals and rewarding on efficiency and innovative behavior
of organization (Yu et al., 2013; Kim & Choi, 2014).
Also, the significant role of recruitment and training process on innovation
infrastructure cannot be neglected (Fernando, 2013). Adaptation of strategic
human resources management application is not only prominent for innovation
performance, but also is a driving force for intrapreneurship orientation
(Messermith & Wales, 2013) which leads employee creativity and innovation
potential to be volunteer to take responsibility in organizational goal (Eze et
al., 2018).
3.
CONCLUSIONS
Effective human resources strategies create employees empowerment at work
environment which leads employees creativity and innovation potential to be
volunteer to take responsibility in organizational goal and hence, it drives
intrapreneurship in organization, increased success in innovation activities
and creates cohesion between employee and organization.
Due to increasing importance of human resources and its strategic planning
process, intrapreneurship and innovation researchers pays specific attention in
last decades. Hence, various significant studies carried out in literature.
Research findings shows us there are linear relationship between
intrapreneurship, innovation and human resources management however no relation
determined between hiring process which is significant part of human resources
management application and innovation.
Moreover, significant practices of human resources management such as job
selection, training and reward and motivational techniques have direct impact
on intrapreneurship and innovation. Based on mentioned findings, it might be
appropriate to interpret the results as the job selection and hiring process
are significant and comprehensive process which leads organization to match
appropriate job with best candidate.
It is considered that there should be internal entrepreneurship and innovation
competence in every individual who will work within the enterprise which has to
be filtered through the human resources practices. Taking into consideration
the strong cohesion between organizational innovation, intrapreneurship and
human resources management, it is recommended to extend similar studies in
literature and contributing to the literature by comparing the studies with
each other and adding new approaches on this subject.
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