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This chapter provides a review of the existing literature encompassing corporate entrepreneurship. It also discusses in depth variables to be studied in the research, referring and extracting pertinent arguments and findings from extant literature with regard to hotel performance, corporate entrepreneurship and external environment. Predicating on the work of Covin and Slevin (1989) as well as Lumpkin and Dess (1996), the chapter looks at the contributing factors contributing to hotel performance in the form of dependent and independent variables. Moderating variable of the CE-performance relationship is also introduced leading to the formal development and statement of hypotheses in subsequent chapter.
2.1 Hotel performance
For most establishments in the hotel industry a principal marketing objective is the achievement of high and stable room and bed occupancy rates (Jeffrey & Hubbard, 1994). The occupancy rate is a common performance measure of sales revenue in the hotel industry (Chen, 2010). Jeffrey and Hubbard (1994) further argued that occupancy performance remains a critical determinant of success for a hotel operation, a view confirmed by the significant positive correlation between occupancy rates and hotel profitability. In a study documenting innovation process of hotel activity, findings suggest that the occupancy rate is large for innovators (81%) than for non-innovators (75%), while the average size of the innovators is larger, with 3 and 4-5 star hotels being more innovative (Orfila-Sintes et al., 2005). This surely suggests the significance of innovative activities in the hotel is duly reflected in higher occupancy rate.
Additionally, average occupancy rate is the more favoured form of non-financial indicator as it is readily available and hotel managers are not keen to share details of their hotel income and expenditure (Orfila-Sintes & Mattson, 2009; Tseng, Kuo, & Chou, 2008). They also argued that competition in the hotel industry is based on offering "value" in the service product, and it is necessary to assess the various dimensions of hotel performance and this non-financial indicator reflect qualitative improvement efforts that cannot be quantified in dollar terms (Tseng et al., 2008). Various studies have utilised occupancy rate as one of the measures to gauge hotel performance, as an evidence of financial gain linked to profitability and sales growth (Table 2.1).
Hotel Performance Measures
Jeffrey & Hubbard (1994)
In a sample of hotels in the North of England and West Midlands, the authors argued that the achievement of high and stable occupancy rates remains the principal marketing objective of most hotels and occupancy performance is closely linked with hotel profitability.
Daily bed occupancy rates were computed by expressing the total number of guests as a percentage of the total number of bed spaces available.
Jeffrey, Barden, Buckley, & Hubbard (2002)
Discussed the findings of hotel occupancy performance in different samples of hotels in England over a 15-year period. The purpose of analysing performance at the individual hotel level is to ascertain the 'secrets of success', however defined or perceived, and to identify good and bad management practice.
Daily bed occupancy rates were computed by expressing the total number of guests as a percentage of the total number of bed spaces available.
Sun & Lu (2005)
Evaluated the performance of Taiwanese hotel industry, measuring the managerial efficiency of hotel operations (managerial performance model) and the operational efficiency of room departments (occupancy performance model). Innovative hotels have higher average occupancy rate than the less innovative ones.
The common measure used for both models is average occupancy rate.
Khairil, Khomar, Salleh, & Azni (2008)
Identified the relationships between external environment volatility and industry performance of Malaysia's hotel industry over a six-year period between 1998 and 2003. The average occupancy rate (AOR) is calculated to represent hotel total sales. AOR for 3,4,5 star hotels during this period is about 50%; with a worst drop of 7.2% in 2001.
Calculation for Average Occupancy Rate was not specified.
Tseng, Kuo, & Chou (2008)
Examined the importance of innovation among various hotel types in Taiwan, as well as analysed the type of innovation configurations that can create better performance. Hotel performance can be measured using average occupancy rate as hotel managers are not keen to share details of hotel financial performance.
Calculation for Average Occupancy Rate as Expected was not specified.
Examined the impact of economy and tourism growth on the corporate performance of tourist hotels in Taiwan. The results implied that tourist hotels can enjoy a better occupancy rate when the economy is expanding and the foreign tourist market is growing.
Occupancy Rate (OPR) is the percentage of occupancy and calculated as the number of rooms occupied divided by the number available.
2.1.2 The importance of hotel performance
Measuring organisational performance is a solid indicator to assess the well-being of an organisation as well as to charter the organisation's future growth. This can be done by way of realising CE as the crucial element to elevate organisational performance further.
A group of researchers opined that the adoption of entrepreneurship in organisations, in a hotel setting specifically, enables organisations to identify the latent needs of customers and innovative ways to address their existing needs (Nasution, Mavondo, Matanda, & Ndubisi, 2011). Indeed, scholars have found evidence of entrepreneurship in the hotel industry as hoteliers are increasingly recognising the importance of entrepreneurship orientation (innovation, risk taking, and proactiveness) for opportunity as primary drivers of growth and value creation (Jogaratnam & Tse, 2006).
Moreover, Khairil et al. (2008) said that the hospitality industry needs to innovate as the industry is exposed to various externalities such as price volatility charged by suppliers, competitors' pricing, the influence of new technology, and the degree of activity created by new competitors entering the market (Khairil et al., 2008). Additionally, the significance of innovation activities in the hotel industry should be given due attention as researchers argue that the need for innovation in service firms is crucial for their survival as their products are difficult to protect through patents and copyrights (Agarwal, Erramilli, & Dev, 2003); else, researchers feared that the services firms that fail to innovate may be left behind as competitors devise more advanced services (Tseng, Kuo, & Chou, 2008). Another concern raised is the sustainability of entrepreneurial initiatives and innovation activities in large hospitality firms as there is an inclination to impede innovation as the bigger these firms are, the higher the tendency to develop bureaucratic and control system (Li, 2008).
The contribution of business tourism also bears a favourable impact on hotel occupancy rate, as more than 70% of business travellers had stayed for 2 to 5 nights in hotels (Chu & Choi, 2000). In a similar vein, Wootton and Steve's (1995) study of business tourism in Wales' tourism showed that business tourism accounts for at least two-thirds of most leading hotels' occupancy, 80-90% of the market of three- and four-star hotels.
2.1.3 The measurement of hotel performance
Existing studies thus far, though not exhaustive, have shown the favourable impact of corporate entrepreneurship on the hotel's financial performance (Jogratnam & Tse, 2004, 2006; Tajeddini, 2010); but none has yet linked CE with increasing hotel occupancy rate objectively. There are studies which analyse hotel's physical performance perceptually such as hotel revenue (Asree, M. Zain, & M. Rizal, 2009) or average occupancy rate (Tseng et al., 2008; Chen, 2010). Having argued for the merit to measure hotel performance by way of occupancy rate, the success in improving occupancy rates can be shown to be a result of good management practice and not a variable which is outside management control (Jeffrey et al., 2002).
In the context of this study addressing the growth problem in Malaysia's hotel occupancy, hotel performance measured as average occupancy rate (Table 2.1) will be operationalised as the objective outcome of hotel's involvement due to CE activities.
In general, the method used by the hotel industry to calculate the average occupancy rate (Ave. OCC) is calculated by dividing the number of rooms sold by the number of rooms available and multiplying by 100 (Enz, Canina, & Walsh, 2001). Its mathematical expression is as follows:
Ave. OCC = (Number of Rooms Sold / Number of Available Rooms) x 100
Being a proxy for financial performance, occupancy data provide the one widely available, consistent and temporally disaggregated means of monitoring hotel performance at the individual hotel level across the industry (Jeffrey et al., 2002). OCC is a sensitive indicator of the fluctuating fortunes of individual hotels, such that a high OCC reflects a high number of rooms available are sold. OCC also enables the identification of trends and fluctuations within the hotel industry (Jeffrey et al., 2002).
2.2 Corporate Entrepreneurship:
The major thrust behind corporate entrepreneurship is a revitalization of innovation, creativity, and leadership in today's organizations (Kuratko, 2010) as innovation is the single common theme underlying all forms of corporate entrepreneurship (Covin & Miles, 1999). Retrospectively, the concept of modern entrepreneurship can be traced back to the 18th century when Cantillon viewed an entrepreneur as someone who is innovative; the ability to take charge (Burns, 2008), as well as someone who assumes the risk and may legitimately appropriate any profits (Bruyat & Julien, 2000). Relatively, Schumpeter's theory of entrepreneurship also embodied similar behaviour that consists of five innovative strategic postures: (l) introduction of new goods, (2) introduction of new methods of production, (3) opening of new markets (4) opening of new sources of supply, and (5) industrial organization (Gartner, 1988). These strategic postures also represent key elements of corporate entrepreneurship endeavour (Hisrich & Kearney, 2012).
Extending the case for corporate entrepreneurship further, Johnson (2001) said that CE is about organisations surviving and prospering; where it involves capturing ideas, converting them into products, and/or services and then building a venture to take the product to market. Burns (2008) also believed that CE involves being creative and innovative, embedding the instinct to do these things in the culture and processes of the organisation, but always linked to entrepreneurship. Essentially scholars encapsulate the element of innovation as the basis for organisations to embark on CE.
2.2.2 Corporate Entrepreneurship Defined
Scholars have based their understanding of corporate entrepreneurship (CE) on Guth and Ginsberg's (1990) definition where "CE refers to corporate entrepreneurship as the birth of new businesses within existing organisations, i.e. internal innovation or venturing". Other scholars viewed CE as an extension of innovation activities in the form of product, process and market innovations to create new business (Zahra, 1991); while Sharma and Chrisman (1999) suggested that both strategic renewal and corporate venturing suggest changes in either the strategy or structure of an existing organisation, which may involve innovation. CE is also a manifestation of entrepreneurial orientation where it involves the firm's behaviour engaging in innovativeness, proactiveness, and risk-taking (Miller, 1983; Covin & Slevin, 1989), as well as autonomy and competitive aggressiveness (Lumpkin & Dess, 1996).
In a similar vein, the essence of corporate entrepreneurship acumen at the organisational level is the drive to innovate continually with the aim of improving organisational performance and innovativeness (Covin & Slevin, 1989; Saleh & Wang, 1993; Oke, Burke, & Myers, 2007) as Schumpeter envisioned that entrepreneurs proactively 'create' opportunity using 'innovative combinations' which often included creative destruction' of passive lethargic economic markets (cited in Burns, 2008). Accordingly, Drucker (2008) had succinctly put that for an organisation that wants to be able to innovate, it has to adopt policies that create, throughout the entire organisation, the desire to innovate and the habits of entrepreneurship and innovation (Drucker, 2008).
Retrospectively, corporate entrepreneurship is characterised by organisation focusing on opportunities where growth is the dominant goal, while problems are secondary (Mintzberg, 1973). Scholars also believed that while entrepreneurship concerns creating change by developing something new (Kanter, 1985); corporate entrepreneurship is the means to enhance organizational profitability, survival, growth, and competitiveness (Schuler, 1986). Within this context of pursuing entrepreneurship to focus on creating new organisational opportunities as well as effecting organisational performance growth, it can be the basis to argue for the merits of corporate entrepreneurship as an essential ingredient for organisations to enhance their performance.
As highlighted earlier, scholars have agreed that corporate entrepreneurship is very much to do with innovation (Saleh & Wang, 1993). This concurs well with engaging entrepreneurial mindset as entrepreneurial behaviour would be the quest for growth through innovation and would involve pursuing opportunity at individuals and corporate level (Stevenson & Jarillo, 1990); enabling capability building at various organisational levels, involve widely differing combinations of resources and have a wide range of outcomes (Stopford & Badenfuller, 1994). On the same note, Sharma and Chrisman (1999) suggested treating innovation as a corporate entrepreneurial act rather than as the only act that makes the occurrence of corporate entrepreneurship possible.
Relatively scholars have also attributed corporate entrepreneurship to individuals' entrepreneurial behaviour. Gartner (1988) believed that the contributions of individuals to CE activities are of primary concern instead of stressing on the traits and characteristics of these individuals. This focus would place the perspective of CE accordingly as an important path to competitive advantage and improved performance in organisations of all types and sizes (Kuratko, Ireland, Covin, & Hornsby, 2005b), as well as the quest for growth through innovation (Stevenson & Jarillo, 1990). The assessment of managers' entrepreneurial behaviour leads to viewing them as corporate entrepreneurs in order to manage others to advance the corporate entrepreneurship agenda at the organisational level (Pearce, Kramer, & Robbins, 1997). Based on the discovery and creation theory, corporate entrepreneurs are essentially individuals who discover, evaluate, and exploit opportunities (Shane & Venkataraman, 2000) while Burgers and Van De Vrande (2011) delineated them further between those who discover opportunities and those who conduct creative work at the expense of organisations (Table 2.2).
The Discovery and Creation Theory
Alvarez & Busenitz (2007)
Opportunities are created exogenously, from changes in technology, consumer preferences, political and regulatory changes, and social and demographic changes.
Opportunities are created endogenously, by the actions, reactions, and enactment of entrepreneurs exploring ways to produce new products or services.
Burgers & Van De Vrande (2011)
Employees who discover opportunities while making use of corporate knowledge.
Employees who conduct at least part of their creation activities at work using corporate resources, people, and/ or time.
Having argued corporate entrepreneurship in terms of innovativeness and entrepreneurial opportunities, this study will adopt the term "corporate entrepreneurship" to represent organisational-level entrepreneurship (Davis, 2007; Awang, Asghar, & Subari, 2010b). As such, CE is defined as "an entrepreneurial organisation with bold risk-taking and high levels of innovation (Miller & Friesen, 1982), which pursues opportunity, regardless of resources currently controlled (Stevenson & Jarillo, 1990)".
2.2.3 Corporate Entrepreneurship as Determinants for Performance
Various factors have been identified and linked to organisational performance; part of which some scholars have attributed to corporate entrepreneurship (Miller & Friesen, 1982; Zahra, 1991; Hornsby et al., 2002, 2009; Kuratko et al., 2005b) and innovativeness (Damanpour & Evan, 1984; Damanpour, Szabat, & Evan, 1989; Damanpour, Walker, & Avellaneda, 2009). Schumpeter's (1934) entrepreneurial behaviour that comprises five types of innovation (product, process, market, input, and organisational) and Drucker's (1985) stance that innovation is the tool of an entrepreneur, have embraced the core of CE as essentially innovativeness (Schuler, 1986; Stevenson & Jarillo, 1990; Saleh & Wang, 1993; Stopford & Baden-Fuller, 1994; Lumpkin & Dess, 1996; Sharma & Chrisman, 1999; Ramachandran, Devarajan, & Ray, 2006; Kuratko, 2010).
Covin and Slevin (1989, 1991) have argued consistently for organisations to become entrepreneurial as the interrelationships between the business practices and corporate entrepreneurship tactics themselves would arguably have an impact on performance; as well as the associated behaviours originating from corporate entrepreneurship endeavours will help to create or sustain a high level of performance.
22.214.171.124 Corporate Entrepreneurship and Organisational Performance
Supporting in favour of corporate entrepreneurship to increase performance, Zahra (1991) showed that CE was associated positively with measures of financial performance; contributed to superior financial performance; while cautioned that CE should not be viewed as a short-term "fix", but as a long-term strategy for achieving superior financial performance (Zahra & Covin, 1995). Wiklund and Shepherd's (2005) study of Swedish small business organisations is also suggesting a similar results where CE in the form of entrepreneurial orientation (i.e. proactiveness, innovativeness, and risk-taking) positively influences small business performance. Similarly, Davis' (2007) findings further strengthened the favourable impact of CE on organisational financial performance. He concluded that his measure of entrepreneurial orientation also showed a significant, and positive, correlation with organisational performance; whereas the correlation between innovativeness and organisational performance was found to be significantly stronger.
Existing CE research concerning Malaysia that has been carried out thus far is largely among the small and medium organisations (Awang et al., 2009; Awang, Ariffin, Asghar, and Subari, 2010a; Awang, Asghar, and Subari, 2010b). Awang et al., (2009) identified innovativeness, proactiveness, risk-taking, and autonomy as the factors to describe CE; while Awang et al.'s (2010) CE dimensions are proactiveness and autonomy; and Awang et al. (2010b) examined innovativeness, proactiveness, risk-taking, aggressiveness, and autonomy as measures of CE.
Awang et al.'s (2009) study involved 210 respondents from the Bumiputera small and medium enterprises (BSMEs) of various industry types, located in the northern region of Malaysia. This study aimed to verify direct relationship between CE and performance and the interaction of the perceived environment, comprising munificence, turbulence, competition, market dynamism, and restrictiveness, as third variable on CE-performance relation among the BSMEs. The findings showed that each CE dimension contributes independently in explaining the performance, innovativeness positively related to performance but risk-taking showed curvilinear relationship (Awang et al., 2009).
The next study was based on 615 observations of the Bumiputera small and medium agro-based enterprises (BSMAEs) in three regional growth corridors (RGCs) throughout Peninsular Malaysia, namely the northern corridor of economic region (NCER), the Iskandar development region (IDR) and the eastern corridor of economic region (ECER) (Awang, Ariffin, Asghar, and Subari, 2010a). The said research was designed to investigate the impact of CE in BSMAEs in the three RGCs. The findings showed that the BSMAEs in Malaysia are regionally dependent in executing their entrepreneurial practices, processes and decision making with regard to CE and each RGC displays its unique regional strength and resources as far as CE is concern (Awang et al., 2010a).
The third study on Malaysian organisations also involved the SMEs, specifically 125 sample firms that operate in agricultural sectors, the small and medium agro-based enterprises (SMAEs) located in Kedah (Awang, Asghar, and Subari, 2010b). The study aimed to establish pertinent factors in the form of CE capabilities (i.e. innovativeness, proactiveness, risk-taking, autonomy, and competitive aggressiveness) that directly related to performance in Malaysian small and medium agro-based enterprises (SMAEs). The result yields further support for previous research on the favourable impact of CE on performance. CE explains performance significantly, albeit, two EO dimensions explain performance in different direction. Innovativeness proved positive relationship to performance, whereas competitive aggressiveness explained performance negatively (Awang et al., 2010b).
Utilising five dimensions in the form of innovativeness, proactiveness, risk-taking, autonomy, and competitive aggressiveness to represent CE, these studies not only highlight the dominant role of all five CE dimensions in enhancing performance of the said SMEs, but also underline the significance of innovativeness, as one of CE dimensions, in effecting the desired performance. Notwithstanding the need to investigate further the curvilinear impact of risk-taking and the negative impact of competitive aggressiveness on the CE-performance link within the context of this study. Table 2.3 presents the summary of the three studies highlighted above.
Corporate Entrepreneurship in Malaysian SMEs context
Impact of Corporate Entrepreneurship
Awang et al. (2009)
This study sought to verify direct relationship between CE and performance and the interaction of the perceived environment as third variable on CE-performance relation among the Bumiputera small and medium enterprises (BSMEs).
The study reconfirmed that independent effect of each CE dimension on performance contributes more in-depth knowledge in the differential relationship of innovativeness, proactiveness and risk-taking with objective performance.
Awang, Ariffin, Asghar, and Subari (2010a)
This study suggested that CE factors are critical in formulating organisation-level entrepreneurial culture reformation in the Bumiputera small and medium agro-based enterprises (BSMAEs).
The findings showed that the BSMAEs in Malaysia are regionally dependence in executing their entrepreneurial practices, processes and decision making with regard to CE and that each RGC displays its unique regional strength and resources as far as CE is concern.
Awang, Asghar, and Subari (2010b)
The study sought to establish pertinent factors in the form of CE capabilities (i.e. innovativeness, proactiveness, risk-taking, autonomy, and competitive aggressiveness) that directly related to performance in Malaysian small and medium agro-based enterprises (SMAEs).
The finding emphasised that CE is part of the entrepreneurial capabilities identified, contributes critically as performance determinants.
Despite the favourable impact of CE on performance being established, there is a precedence of less convincing CE-performance relationship. Measuring CE in terms of innovativeness, risk-taking, proactiveness and competitive aggressiveness, Lumpkin and Dess (2001) suggested that entrepreneurial processes involve complex phenomena that may not always be associated with strong performance when there are opportunities and threats at stake. They implied that the dimensions of CE, often considered to be positively related to performance under all conditions, may not always be associated with successful outcomes. In their study, using a sample of 321 organisations of mix industries, in spite of the proactiveness and competitive aggressiveness make unique contributions to firm performance, the dimensions each portray opposite impact on financial performance and that their effect on performance is subject to external environment. Proactiveness, a response to opportunities, shows a strong positive relationship to sales growth, profitability, and return on sales. The authors contended that this result is expected for organisations in dynamic environments or in growth stage industries where conditions are rapidly changing and opportunities for advancement are numerous (Lumpkin & Dess, 2001). However, competitive aggressiveness, a response to threats, was negatively related to sales growth and only weakly related to profitability and return on sales, though none are at a statistically significant level. This is due to the hostile environments in which the organisations are in or in mature industries where competition for customers and resources is intense (Lumpkin & Dess, 2001).
In another study, Rauch, Lumpkin, Wiklund, and Frese (2009) conducted a meta-analysis review of 51 studies on the relationship between CE and business performance, from the 1980s until 2006, encompassing the United States, Europe, Asia, and Australia. From this exercise, they reported lower correlations between CE and performance; or were even unable to find a significant relationship between CE and performance. Despite the conceptual arguments suggesting that CE leads to higher performance, they argued that the magnitude of the relationship seems to vary across studies (Rauch et al., 2009). Interestingly enough, they further found that the relationship should be higher for CE and financial performance than for CE and non-financial performance. This would surely set the right tone for the direction of this study to link CE with non-financial performance in the form of hotel occupancy rate.
126.96.36.199 Corporate Entrepreneurship and Hotel Performance
The purpose of analysing performance at the individual hotel level is to ascertain the 'secrets of success', however defined or perceived, and to identify good and bad management practices as these set the strong occupancy performers apart (Jeffrey, Barden, Buckley, & Hubbard, 2002). Among the entrepreneurial initiatives used are diverse marketing tools, the development of niche markets and/or product specialisations. Subscribing to Porter's idea of fragmented industry, it might be expected that organisations in the lodging industry that are able to successfully implement a competitive strategy that combined an efficiency/cost leadership and a differentiation approach are likely to be well run organizations and are likely to achieve high levels of performance (Schaffer, 1987).
Effective performance depends to a great extent on the success of the innovative activities within the organisation and particularly on the way they are managed (Saleh & Wang, 1993). Damanpour, Walker, and Avellaneda (2009) argued that despite the riskiness of innovation, innovation still affects organisational performance positively as organisations innovate to gain first or early mover advantage that would deliver superior performance. Additionally, performance gap that exist creates a need for change in the organisation which would in turn provide motivation to adopt innovations in order to reduce the perceived gap.
Various factors can be attributed to triggering events for corporate entrepreneurship, either internally- or externally induced (Kuratko, 2010). Internal triggers such as declining market share, profits and sales of hotel rooms are reflected in lower occupancy rate as well as lessened tourist spending for accommodation. Previous scholars have found the significance of corporate entrepreneurship impacting organisational performance in the tourism industry at large and in the hotel industry in particular, albeit the lack of coverage in the service companies at large (Zahra et al., 1999). In empirical studies involving hotels in the Asia Pacific region, Jogaratnam and Tse (2004) argued that as hotels operate in an environment of change and uncertainty, hoteliers need to foster entrepreneurship behaviour as competitors can easily copy innovative ideas. Their results showed that entrepreneurial hotels tend to favour a strategic orientation, which emphasise a proactive approach toward the market, innovation, and risk-taking, and consequently associated with higher levels of hotel performance (Jogaratnam & Tse, 2004).
Other scholars were also concern with the entrepreneurship endeavour to overcome the substitutability of hotel services by way of offering new and innovative features for customers (Victorino, Plaschka, Chikitan, & Dev, 2005). They also argued for another reason to innovate as travellers today do not exhibit a truly brand loyal behaviour, instead choosing to patronise hotels that offer the best value proposition under existing budgetary constraints; thus, hoteliers must meet the challenge of determining which services are preferred by hotel guests (cited in Victorino et al., 2005).
As the core of entrepreneurship is innovativeness of individuals that transcend throughout the organisations, numerous studies have established the role of innovativeness in influencing organisational performance. Deshpande, Farley, and Webster (1993), Hult et al. (2004) and Calantone, Cavusgil, and Zao (2002) suggested that innovativeness is one of the key determinants to organisational performance while Cho and Pucik (2005) offered that innovativeness mediates the relationships between quality and growth. Calantone et. al. (2002) went further to confirm the positive relationship between organisational innovativeness and organisational performance, suggesting that this competitive advantage is built on a full understanding of customer needs, competitors' actions, and technological development among others.
Additionally, researchers also shared the same opinion in that innovativeness is very important for increasing hotel value where company organisation culture, among others, influences innovation activity favourably (Tseng, Kuo, & Chou, 2008), while Victorino et al. (2005) concluded that service innovation does matter when guests are selecting a hotel, with type of lodging having the largest impact on a customer's hotel choice. On the same note, Ramachandran, Devarajan, and Ray (2006) believed in the benefits of CE in creating a company's ability to compete, improving competitive positioning, and transforming corporations, their markets, and industries when opportunities for value-creating innovations are developed and exploited. Another study pointed to the significant relationship among performance, innovativeness and entrepreneurship in improving performance, entrepreneurial orientation and innovativeness in addition to customer orientation, should be encouraged by managers and owners in the hotel industry (Tajeddini, 2010).
2.2.4 Dimensions of Corporate Entrepreneurship
Despite variation of terminologies used to describe corporate entrepreneurship as highlighted earlier, collectively, scholars have been inclined to develop their CE dimensions in the form of innovativeness, proactiveness, and risk-taking, competitive aggressiveness, and autonomy (Davis, 2007; Rauch et al., 2009). Awang et al. (2010a) and Davis (2007) agreed that these five dimensions basically take their roots from the seminal works of Khandwalla (1977) (innovativeness, proactiveness, and risk-taking), Miller and Friesen (1982) (innovativeness), and Miller (1983) (pioneering, innovation, and risk-taking). Covin and Slevin (1989) then refined further the CE dimensions to consist primarily of innovativeness, proactiveness, and risk-taking; while Lumpkin and Dess (1996) later added competitive aggressiveness and autonomy as contingency variables to the CE framework.
Davis (2007) further found that "the majority of researchers using Miller and Friesen's (1982) measure (i.e. innovativeness, proactiveness, risk-taking), or a slight variation of this measure (Zahra et al., 1999)". Scholars at large have argued in favour of CE embodies the concept of innovativeness, proactiveness, and risk-taking permeating via all levels of employees in organisations. (Barringer & Bluedorn, 1999; Hult et al., 2004; Holt et al., 2007; Jogaratnam & Tse, 2004, 2006; Kreiser, 2004; Moreno & Casillas, 2008; Nasution et al., 2011; Saleh & Wang, 1993; Wang, 2008; Wiklund, 1999; Wiklund & Shepherd, 2005). Similarly, Rauch et al.'s (2009) meta-analysis study revealed that the most common dimensions used to measure corporate entrepreneurship are innovativeness, proactiveness, and risk-taking. In a later development of the CE framework, Lumpkin and Dess (1996) and Dess and Lumpkin (2005) added two additional measures of CE, competitive aggressiveness and autonomy. Nevertheless, scholars in general have yet to adopt these two additional measures in their studies of CE-performance relationship (Davis, 2007; Rauch et al., 2009).
In another approach to realising CE in organisations, Kuratko, Ireland, and Hornsby (2001) developed CE strategy on the premise of entrepreneurial actions in organisations. The key elements of the CE strategy consists of " the firm's ability to establish a vision and for top management to support the said vision; to organise people and tasks in ways that make it possible for entrepreneurial actions to flourish; to have sufficient resources to support entrepreneurial actions; to use rewards and compensation systems that reinforce individuals' and teams' entrepreneurial actions; and to encourage risk-taking as measured by individuals' willingness to accept risks and tolerate failure" (Kuratko et al., 2001).
From these elements, Hornsby, Kuratko, and Zahra (2002) and Ireland Kuratko, and Morris (2006a & b) formulated the following five dimensions to measure CE efforts, namely: top management support, work discretion/autonomy, rewards/reinforcement, time availability, and organisational boundaries. The instrument called the Corporate Entrepreneurship Assessment Instrument (CEAI) measures the impact of CE environment on successful company performance. The CEAI also contains the innovativeness element, which focuses CE on re-energising and enhancing the ability of a firm to acquire innovative skills and capabilities (Hornsby et al., 2002). Kuratko et al. (2005) contended that managers will engage in entrepreneurial actions only when the organizational antecedents to those actions exist and when managers are aware of their existence. Scholars who subscribed to these five factors view corporate environments supportive of CE must provide the appropriate reward systems, top management support, explicit goals, and appropriate organizational values, which signal to employees that CE is indeed desirable as a catalyst for higher performance (Brundin, Patzelt, & Shepherd, 2008).
The next CE construct is predicated upon the work of Stevenson and Jarillo's (1990) entrepreneurial management theory that gauged firm-level opportunity-based behaviour. Brown, Davidsson, and Wiklund (2001) have conceptualized Stevenson's theoretical reasoning into eight dimensions of: strategic orientation, resource orientation, management structure, reward philosophy, growth orientation and entrepreneurial culture. Accordingly, Stevenson's approach to CE embodies the pursuit and exploitation of opportunity regardless of resource accessibility. (Brown et al., 2001). They further emphasised that Stevenson's CE framework facilitates CE processes by making it possible for organisational members to take entrepreneurial initiatives and by rewarding such efforts (Brown et al., 2001).
Having presented various approaches to measuring CE, the current study will explore CE by engaging the five dimensions of Covin and Slevin's (1989) and Lumpkin and Dess' (1996) i.e. innovativeness, proactiveness, risk-taking, competitive aggressiveness, and autonomy. The basis for this selection is owing to the representative nature of these five dimensions as a multi-dimension for CE as shall be discussed in later sections. Additionally, this would enable the researcher to examine further the significant role of competitiveness aggressiveness as well as autonomy on CE-performance link that have yet to capture the attention of CE scholars at large (Davis, 2007; Dess & Lumpkin, 2005; Kreiser, Marino, & Weaver, 2002; Rauch et al., 2009)
Innovation permeates various facets of society, be it industry, organisation or even individual. According to Damanpour (1991), innovation can be as a response to changes in its internal or external environment or as a pre-emptive action taken to influence an environment. Innovation encompasses anything that is regarded as new, be it product or service, such as a new production process, or a new structure or administrative system (Hult et al. 2004; Hage 1999). Innovation also acts as a change agent, altering an organisation's status quo and may also be disruptive (Hyland & Beckett, 2005).
Innovativeness is an important component of entrepreneurship, because it reflects an important means by which firms pursue new opportunities (Lumpkin & Dess, 1996). The link between innovation and entrepreneurship stems up from Schumpeter's and Drucker's theory of entrepreneurship. Schumpeter explained entrepreneurship at firm-level involving five types of innovation: product innovation, process innovation, market innovation, input innovation, and organisational innovation (Drejer, 2004; Tzeng, 2009). Presumably, the act of entrepreneurship is concerned primarily with identifying opportunities and creating a set of resources through innovative means in the form of product, process, and market innovations respectively (Jogaratnam & Tse, 2006).
Drucker, on the other hand, attributed innovation to individual's entrepreneurial involvement, innovation as a composition of talent, ingenuity, knowledge, diligence, persistence, and commitment (1985, 2002). He suggested that innovation is work which requires knowledge and often great ingenuity and successful innovators look at opportunities to become entrepreneurial (Drucker, 1985).
Scholars have since then adopted and shared the merit of innovativeness in their works as an important component of entrepreneurship, as entrepreneurs and entrepreneurial organisations always operate at the edge of their competence, they direct their resources and attention on innovation (Kanter, 1984); innovation is the distinguished factor that separates entrepreneurial from non-entrepreneurial firms (Schuler, 1986); and in particular the entrepreneurial approach in managing the organisation is related to innovation (Saleh &Wang, 1993).
Essentially definitions of innovation have been consistent in the emphasis on the theme of newness or first use within an organisation setting. For example, Becker and Whisler (1967) and Rowe and Boise (1974) described innovation as the first or early use of an idea, as well as the successful utilisation of new processes, programs or products within the organisation. Then next generation of scholars also keep to similar theme of newness as illustrated by Van de Ven, (1986) and Damanpour (1996) as innovation encompasses the development and implementation of new ideas (products or services, process technologies, organisational structures or administrative systems, or plans or programs) by organisational members within an institutional. In a similar vein, Nasution and Mavondo (2008) insisted that the three types of innovation, in the form of product, process, and administrative innovation, eloquently capture the essence of innovativeness in the service sector.
Despite mixed results innovativeness and performance (Llorens-Montes et al., 2005; Mohd Faiz et. al., 2010; Mok, 2010), Jimenez-Jimenez et al. (2005) noted that both theory and empirical research suggest a positive relation between innovative activities and organisational performance. Of particular interest, administrative innovative is found to be significantly proven in influencing organisational performance (Damanpour & Evan, 1984; Damanpour, Szabat, & Evan, 1989; Yamin et al., 1997). Dobni (2008) then tied innovativeness to organisational performance as he defined innovativeness in an organisation as ranging from the intention to be innovative, to the capacity to introduce some new product, service or idea through to the introduction of processes and systems which can lead to enhanced organisational performance.
As such, this research would define innovativeness as "the effort to acquire opportunities and introduce novelty in developing new processes, products, or administrative for the first time within an organisation setting to influence organisational performance" (Awang et al., 2010a; Dobni, 2008; Nasution & Mavondo, 2008; Pierce & Delbecq, 1977).
188.8.131.52.1 Moderating Role of Environment on Innovativeness and Performance
Scholars argued for a compatible organisational strategy in response to environment such that the matching of strategy and environment can influence performance - a poor match can hurt performance (Miller, 1988). Pursuant to organisations adopting innovative strategy, entrepreneurial firms are operating in a more heterogeneous environment and become more differentiated (Miller & Friesen, 1982). Moreover, the influence of environmental uncertainty affects innovativeness positively among successful firms (Miller & Friesen,1983). Scholars also anticipated that innovativeness in the form of new product innovation and the use of R&D strategies will be more positively associated with firm performance in dynamic environments than in stable environments (Kreiser & Davis, 2010).
184.108.40.206.2 Innovativeness as an Independent Variable in this Research
Organisations adopting innovation culture when resources are available tend to implement more innovations and should have a positive impact on performance (Dobni 2006; Hall, 1992; Hurley & Hult, 1998). Their focus is on new product development and the creation of new technologies in pursuit of creating or maintaining competitive advantage (Davis, 2007). According to Miles and Snow typology of business strategies (1978), these innovation-driven organisations are classified as Prospectors. Davis (2007) further contended that Prospectors are innovators who seek industry and market change through the development of products and the depiction of the Prospector type aptly illustrate other descriptions of entrepreneurial organisations.
Predicating on the resource-based view (RBV) theory, innovativeness forms part of human capital resources such that it is derived from insight of individual managers and employees in a firm (Barney, 1991). Innovativeness that resides in an organisation is unique to that particular organisation, deemed as an organisation-specific capability since it is embedded in the organization and its processes, non-transferable and neither is it imitable (Barney, 1991; Makadok, 2001). As a sub-dimension of CE, innovativeness is expected to support the RBV theory whereby CE represents the strategic internal resources of the organisation crucial in enhancing performance.
Proactiveness is a much desirable trait as far as CE is concern where entrepreneurial organisations will always be on the lookout for new ventures. The basic argument for proactiveness is the importance to come up with new innovations in the form of product-strategy or level of technocratisation ahead of others in response to competitive threats in the environment (Miller & Friesen, 1982; Davis, 2007). Organisation that does exhibit proactiveness will gain the first-mover advantage as it takes initiative by anticipating and pursuing new opportunities and by participating in new markets (Lumpkin & Dess, 1996). The said organisation is considered to be proactive as it not only embraces a forward-looking perspective with the anticipation to seize market opportunities but also aims to be the leader in the market place (Lumpkin & Dess, 2001). Venkatraman (1989) further suggested that proactiveness is the quest for new opportunities that would be contrarian to the current mode of operation, as well as "introduction of new products and brands ahead of competition, strategically eliminating operations which are in the mature or declining stages of life cycle" (Venkatraman, 1989: 949).
The connection between first-mover advantage and environmental threats as part of proactiveness has been discussed to some extent. Miller's (1983) definition of entrepreneurial organisation, "An entrepreneurial firm is one that engages in product-market innovation, .... and is first to come up with "proactive" innovations, beating competitors to the punch", captures the essence and significance of first-mover advantage eloquently. Additionally, Subramanian (1996) also argued that organisations who adopted innovations early were more effective in gaining market share than those that were late adopters and thus inherently capture "first-mover" advantages.
A more recent approach in defining proactiveness requires organisations to monitor trends, to identify the future needs of existing customers, and to anticipate changes in demand or emerging problems that can lead to new venture opportunities (Dess & Lumpkin, 2005). Proactiveness acts not only as agent of change but also acts as the medium to create competitive advantages due to competitors' responsive nature to successful initiatives (Dess & Lumpkin, 2005). On the same note, Nasution et al. (2011), with Cronbach alpha above 0.7 for all the constructs, observed the role of proactiveness as promoting the identification and discovery of new market opportunities in a hotel setting. They argued in favour of proactiveness being a dimension of CE as it augurs well with service organisations that naturally involve personal contact between employees and customers in general. They contended that the more an organisation encourages proactiveness traits among managers and employees to initiate new value-adding activities, the more the organization is able to deliver superior customer value (Nasution et al., 2011).
From the arguments presented beforehand, the current study will adopt Rauch et al.'s (2009) definition of proactiveness which formally defines the variable as "an opportunity-seeking, forward-looking perspective characterised by the introduction of new products and services ahead of the competition and acting in anticipation of future demand" (Rauch et al., 2009: 763).
220.127.116.11.1 Moderating Role of Environment on Proactiveness and Performance
Organisations taking on a proactive strategy will build a strategic advantage in relation to their competition (Lieberman and Montgomery, 1988). Subramanian (1996) added that organisations in less stable environments, which faced competitive threats, were the ones proactively adopted innovations early if compared to those in more stable environments. Another study by Lumpkin and Dess (2001) showed that the effect of environmental hostility on the proactiveness-performance relationship is generally unfavourable as in a hostile environment, the intensity of competition exerts more pressure on the firm. Invariably, in a dynamic setting, organisations that are proactive and actively seek out opportunities will outperform firms that are unwilling to exploit market opportunities (Kreiser & Davis, 2010).
18.104.22.168.2 Proactiveness as an Independent Variable in this Research
Proactive organisations are concern with not only appreciating changes but also wanting to institute those changes favourable to their cause so as to be ahead of the competition. Proactiveness, a form of human capital competency, especially effective at creating competitive advantage since it allows organisations to place their competitors in the position of having to respond to their successful initiatives (Dess & Lumpkin, 2005).
In relation to the resource-based view (RBV) theory, proactiveness originates from the insight of individual managers and employees in a firm (Barney, 1991). Proactiveness that resides in an organisation is unique to that particular organisation, deemed as an organisation-specific capability since it is embedded in the organization and its processes, non-transferable and neither is it imitable (Barney, 1991; Makadok, 2001). As a sub-dimension of CE, proactiveness is expected to support the RBV theory whereby CE represents the strategic internal resources of the organisation crucial in enhancing performance.
Entrepreneurial organisations competing in dynamic and uncertain environments will undoubtedly engage in risk-taking behaviour as part of their strategy development. Risk-taking signifies a sense of uncertainty, taking chances with a degree of calculated risk, and venturing into an unknown territory. Miller and Friesen (1978) succinctly defined risk-taking as "the degree to which managers are willing to make large and risky resource commitments - i.e. those which have a reasonable chance of costly failure" (Miller and Friesen, 1978: 923).
In Saleh and Wang's (1993) study among innovative and less innovative organisations among Canadian industries, with a Cronbach Alpha of 0.82 for risk-taking element, they found that entrepreneurial organisations are expected to take a calculated risk that is characterised by quick manoeuvring with conscious efforts to avoid mistakes. This is done in the face of uncertainty and fast-changing business landscape so as to execute decisions in response to the dynamics that are presented upon organisations. Despite the possible boldness of these decisions that challenge the industry norms, it provides a safety net as decision yet implemented is withhold long enough through cautious planning for execution. Undeniably, this commitment to risk-taking can contribute significantly to promoting CE in an organisation (Saleh & Wang, 1993).
In the case of entrepreneurial organisations such as Rubbermaid, Raychem, Johnson& Johnson, and MCI, they are mindful of the negative impact of risk-taking as they "accept failure as a price of playing the game" (Gupta & Singhal, 1993). Senior management of these organisations encourage individual initiative and risk-taking and even include risk-taking as one of the criteria for their employees' performance appraisal. These organisations believe in risk-taking initiatives as a learning process, a display of intelligent effort, and a bold endeavour in making risky decisions (Gupta & Singhal, 1993).
As much as risk-taking connotes a negative and bad image, Dess and Lumpkin (2005) believed that for organisations to be successful via CE, they usually have to take on riskier alternatives, even if it means challenging the status quo by forgoing the methods or products that have worked in the past. Naturally risk-taking involves potential dangers and pitfalls, thus carefully managed risk is likely to lead to desired path of competitive advantages (Dess & Lumpkin, 2005).
Having argued risk-taking in favour of CE, this research shall adopt Dess and Lumpkin's (2005) view of risk-taking where it refers to "a firm's willingness to seize a venture opportunity even though it does not know whether the venture will be successful and to act boldly without knowing the consequences" (Dess & Lumpkin, 2005: 152).
22.214.171.124.1 Moderating Role of Environment on Risk-taking and Performance
In dynamic environments, a risk-taking organisation will have a strong influence on its performance (Khandwalla, 1977). Krieser and Davis (2010) further argued that organisations that do not take risks in dynamic environments will lose market share and will not be able to maintain a strong industry standing relative to more aggressive competitors. They also contended that risk-taking will also offer the possibility for high payoffs in munificent environments, due to heightened availability of resources in those environments.
126.96.36.199.2 Risk-taking as an Independent Variable in this Research
A risk-taking organisation is keen on engaging elements of opportunity capitalization, resource commitments, potential for returns, and uncertainty (Davis, 2007). This type of organisation is bold and prompt in actions to venture into the unknown and thus committing significant resources to ventures in uncertain environments (Awang et al., 2010a; Rauch et al., 2009).
Predicating on the resource-based view (RBV) theory, risk-taking forms part of human capital resources such that it is derived from insight of individual managers and employees in a firm (Barney, 1991). Risk-taking that resides in an organisation is unique to that particular organisation, deemed as an organisation-specific capability since it is embedded in the organization and its processes, non-transferable and neither is it imitable (Barney, 1991; Makadok, 2001). As a sub-dimension of CE, risk-taking is expected to support the RBV theory whereby CE represents the strategic internal resources of the organisation crucial in enhancing performance.
The psychological needs of employees to undertake CE activities are also of paramount importance. Autonomy is basically giving the employees the discretion to the extent that they are able to make decisions about performing their own work in the way that they believe is most effective (Hornsby, Naffziger, Kuratko, and Montagno, 1993). Nasution and Mavondo's (2008) study on the impact of Indonesian hotel's CE on customer value as a measure of performance, with Cronbach alpha above 0.7 for all the constructs, revealed that autonomy in the form of empowerment is an effective tool to respond to customers' needs appropriately and timely, being less restrictive with rules and procedures. Accordingly, entrepreneurial organisations should empower employees with the autonomy to make decisions about their work processes and avoid criticising employees for making mistakes when being innovative (Nasution et al., 2011).
On the same note, Ahmed (1998) viewed autonomy as having control over means as well as the ends of one's work. He went on to suggest two types of autonomy; one being operational autonomy which is conducive to promote entrepreneurial environment. Operational autonomy is the freedom to attack a problem, once it has been set by the organisation, in ways that are determined by the individual self (Ahmed, 1998). This is exemplified in a case study of how a company has developed and prospered through CE strategy. One of the strategies is to decentralise its decision-making authority by empowering its employees to regulate their own behaviour and enable, rapid, creative responses to market opportunities as they surfaced (Kuratko, Ireland, & Hornsby, 2001). Kuratko et al. (2001) further claimed that this autonomous process at organisation and team level allows the provision of incentives that induced superior performances grounded in streams of individual and team entrepreneurial actions.
Dess and Lumpkin (2005) cautioned that despite the supportive nature of organisations toward innovation and new venture creation, organisations still have to encourage and stimulate entrepreneurial behaviour thinking by way of autonomy. Autonomy allows the employees the freedom to generate and implement new ideas without the need for approval though they have to break firm's rules or regulations (Dess & Lumpkin, 2005). As in 3M, autonomy is ingrained in its value system, regarded as the "eleventh commandment", such that "if you want to stop a project aimed at developing a new product, the burden of proof is on the one who wants to stop the project, not the one who proposes the project" (Peters & Waterman, 2006: 227).
With this in mind, this research would view autonomy as "an organisation's effort in encouraging employees to participate in firm's planning as well as empowering employees to make decisions about their work processes and withholding criticisms in the spirit of entrepreneurship" (Dess & Lumpkin, 2005; Nasution et al., 2011).
188.8.131.52.1 Moderating Role of Environment on Autonomy and Performance
Entrepreneurial organisations like 3M and the Virgin Group value autonomy in the face of external environment such that the top leaders of these organisations support programs and incentives that foster a climate of entrepreneurship (Dess & Lumpkin, 2005). In 3M, among its manifestation of autonomy practices are (Nonaka & Takeuchi, 1995):
absence of over-planning;
brevity of paperwork;
regular crossing of boundaries;
flow of ideas from below; and
minimum of interference from above.
184.108.40.206.2 Autonomy as an Independent Variable in this Research
As indicated earlier, autonomy is the ability and will to be self-directed in the pursuit of opportunities to enhance performance (Lumpkin & Dess, 1996, 2001). An entrepreneurial organisation essentially allows its employees to use their work discretion aimed at bringing forth a business concept or entrepreneurial experimentation and carrying it through to completion (Hornsby et al., 2009). Autonomy inculcates entrepreneurial mindset among employees by way of endorsing, refining, and steering entrepreneurial opportunities, as well as identifying, acquiring, and deploying resources needed to pursue those opportunities (Kuratko et al., 2005b).
In relation to the resource-based view (RBV) theory, autonomy originates from the insight of individual managers and employees in a firm (Barney, 1991). Autonomy that resides in an organisation is unique to that particular organisation, deemed as an organisation-specific capability since it is embedded in the organization and its processes, non-transferable and neither is it imitable (Barney, 1991; Makadok, 2001). As a sub-dimension of CE, autonomy is expected to support the RBV theory whereby CE represents the strategic internal resources of the organisation crucial in enhancing performance.
220.127.116.11 Competitive Aggressiveness
The dynamics of the marketplace requires entrepreneurial organisations to seek and identify the means to outdo their competitors. Invariably, a well-thought out strategy is imperative to ensure organisations are aggressive enough to draw in a battle with their competitors for market positioning.
According to Venkatraman (1989), aggressiveness refers to the posture adopted by a business in its allocation of resources for improving market positions at a relatively faster rate than the competitors in its chosen market. Covin and Covin (1990) then viewed aggressiveness as a more general managerial disposition reflected in an organisation's willingness to take on and desire to dominate competitors through a combination of proactive moves and innovative efforts. Firms are aggressive if they typically initiate actions to which competitors then respond; are often first to introduce new products, administrative techniques, operating technologies; and typically adopt a very competitive, "undo-the-competitors" posture (Covin & Covin, 1990). In their study measuring the degree of aggressiveness in response to technological sophistication and hostility, between older and younger small organisations, the result showed that younger firms generally performed better when they were not highly aggressive in technologically sophisticated environments. This indicates that competitive aggressiveness is generally an effective strategic posture among older small firms (Covin & Covin, 1990).
This is supported by Lumpkin and Dess (2001) findings that a competitively aggressive posture, by contrast, has the opposite effect on performance depending on the industry life cycle. They opined that "in more mature industries, where few opportunities remain and rivalry has become especially intense, competitive aggressiveness may enhance a firm's efforts to maintain a strong position relative to its competitors" (Lumpkin & Dess, 2001).
In an earlier study, Lumpkin and Dess (1996) also contended that competitive aggressiveness also reflects a willingness to be unconventional rather than rely on traditional methods of competing. This in tandem with Porter's recommendations for aggressive strategy: "doing things differently," that is, reconfiguration; changing the context, that is redefining the product or service and its market channels or scope; and outspending the industry leader (Lumpkin & Dess, 1996).
Despite the favourable impact competitive aggressiveness expected to have on performance, it may not always lead to competitive advantages. Dess and Lumpkin (2005) cautioned of the negative impact of going overdrive with adopting aggressive behaviour. The case of Microsoft best exemplified why organisations should not overdo with competitive aggressiveness posture. Having said that, scholars rooting for competitive aggressiveness, as an organisation's response directed toward achieving competitive advantage, as an important dimension of CE (Lumpkin & Dess, 1996). They believed that competitive aggressiveness may involve being very assertive in leveraging the results of other entrepreneurial activities such as innovativeness or proactiveness as the means for organisational development and growth (Dess & Lumpkin, 2005).
Based on the preceding arguments, this research will define competitive aggressiveness as "an organisation's propensity to directly and intensely challenge its competitors to achieve entry or improve position, that is, to outperform industry rivals in the marketplace" (Lumpkin & Dess, 1996: 148).
18.104.22.168.1 Moderating Role of Environment on Competitive Aggressiveness and Performance
Scholars studying competitive aggressiveness as one of CE dimensions believe that competitive aggressiveness may be positively related to environmental hostility among high-performing firms. An "entrepreneurial" top management style (which includes a propensity for aggressive competitive behaviour) is common among high-performing firms in hostile environments (Covin & Covin, 1990). Lumpkin and Dess (2001) lent further support to this notion. In hostile environments, where competition is intense and resources are constrained, competitively aggressive firms had stronger performance. Firms in hostile environments, or in mature industries where competition for customers and resources is intense, are more likely to benefit from competitive aggressiveness, as form of a response to threats (Lumpkin & Dess, 2001).