Hossein Takroosta; Yaghoub Maharati; Mostafa Kazemi; Mohammad Hossein Mahdavi Adeli
Abstract
Introduction Faced with fierce competition, market pressure, and the need to adapt to environmental changes, organizations cannot limit domains of their activities to specific sectors, and they are needed to make transformative decisions, including setting up new businesses, acquisition of other ...
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Introduction Faced with fierce competition, market pressure, and the need to adapt to environmental changes, organizations cannot limit domains of their activities to specific sectors, and they are needed to make transformative decisions, including setting up new businesses, acquisition of other companies, and diversifying their activities. Increasing changes and changes in the scientific, economic and social spheres are one of the main features of the present era. Entrepreneurship and innovation is a must and need for many companies today in a competitive environment that seeks to survive and be effective. Therefore, many companies are desperately looking for innovative and entrepreneurial approaches to improve their results and performance in the areas of products, services and processes. Corporate entrepreneurial approach is the development of new ideas, methods, processes and opportunities within pre-established organizations (Hodge,2008). Considering the components of corporate entrepreneurship in running a business increases the competitiveness of companies and gains market success and ultimately enhances the financial performance of companies. The purpose of this study is to identify the effective factors on corporate entrepreneurship in the international literature and finally to use the knowledge of indigenous components of corporate entrepreneurship and extract them after extraction. Components, examines the impact of native components on the financial performance of selected companies. Theoretical Framework One of the effective measures can be taken by companies to stabilize markets and create competitive edge is to employ corporate entrepreneurship tools. Using this approach, companies are creating and utilizing entrepreneurial traits in order to transform. Studies show that utilizing such methods improves corporate performance and makes value for shareholders and other stakeholders. Since the 1980s, as emerging economies have made remarkable advances in industrial production and export, manufacturers and industrialists have faced emerging and powerful competitors in the marketplace. This confrontation has led many large corporations to risk losing their traditional markets and customers. Knowledge products and competitive pricing on the one hand, and the rapid pace of technology change on the other hand, increased the pressure for businesses to compete. Corporate Entrepreneurship Entrepreneurship is a mechanism for economists that provides optimal allocation of resources using the opportunities at stake (Caliendo & Kritikos, 2012). Calisto & Sarkar (2017) have considered corporate entrepreneurship components including innovation and risk-taking to achieve different degrees of entrepreneurial behavior and thus different levels of organizational innovation and performance. In analyzing the impact of corporate entrepreneurship on the financial performance of manufacturing firms, Octan and Bulut (2008) have considered the impact of corporate entrepreneurship components including innovation, risk-taking, pioneering and aggressive competition on the financial performance. Zahra (1993) studied the relationship between firm environment and corporate entrepreneurship including: innovation, organizational restructuring, and new business creation with financial performance. The study also showed that corporate entrepreneurship has a positive and significant effect on financial performance. Miller (1983, 2011) examines the important determinants of corporate entrepreneurship. According to the results, the impact of different factors on corporate entrepreneurship depends on the type of firm. Financial performance A wide range of indicators are used to evaluate corporate financial performance. In for-profit businesses, maximizing equity dividends is the primary goal of companies. To evaluate the success of this objective, the asset return index is used as the primary indicator. Methodology To achieve this goal, reviewing current literature in corporate entrepreneurship, we, first, try to identify the components of corporate entrepreneurship. Then, the identified components were reviewed by elites to screen exotic components out. In the third step, juxtaposing performance of the selected companies, we compare the entrepreneurial rank and financial performance of the companies. Results and Discussion Our findings highlight that, in line with international research papers, there is a significant relationship between the entrepreneurship rank of companies and their financial performance. Creativity and innovation In order for these features to flourish, managers must devote considerable resources to this area. Another notable case in this section is the importance of selecting managers based on their creativity and innovation characteristics. Risk-taking Companies and managers must carefully study the characteristics of their risk-taking in recruiting individuals, and look at their family, environmental, social, and professional backgrounds using human resources. Competition Companies must adopt groundbreaking behaviors in order to improve their competitive position compared to other companies, and this approach is due to formulating a strategic competitive plan and targeting all corporate actions to achieve this goal. Conclusion and suggestions According to the results, some suggestions are put forward to make more use of the research results in the business environment of the companies under study. The need for self-renewal and adaptation requires that the capabilities and resources of the company change from time to time, so the strategic plan of the corporation should include specific objectives in order to adapt to the environment. In the case of strategic restructuring, corporate executives should be committed to providing favorable conditions to create strategic restructuring and to encourage employees to take this path. Given the competitive economic environment, proper planning to achieve competitive advantage and seek new opportunities is one of the most important tasks for corporate executives. Strategic variables Having a proper roadmap is definitely one of the key factors in the success of companies. In the face of ever-increasing economic competition, a comprehensive and dynamic strategic plan is crucial, taking into account market and competitor aspects and the type of product and service provided by companies. Therefore, corporate boards should formulate, review, and approve strategic plans that are appropriate to corporate goals and seek to control CEOs to fully implement these plans. Studies show that organizational structure is the most appropriate tool for creating entrepreneurship in organizations. An overview of the evolution of organizational structure shows that traditional organizational structures are not capable of nurturing creative and innovative individuals. Given the very high importance of corporate culture in corporate entrepreneurship implementation, boards of directors and CEOs need to spend time and money on reforming corporate culture patterns and gradually reforming and implementing entrepreneurial culture in the company.
