IMPACT OF CORPORATE ENTREPRENEURSHIP

STRATEGY ON GROWTH OF BUSINESS

ORGANISATIONS: A CASE OF SAFARICOM LIMITED

BY

JANET K. MUTUKU

UNITED STATES INTERNATIONAL UNIVERSITY-

AFRICA

SUMMER 2017

IMPACT OF CORPORATE ENTREPRENEURSHIP

STRATEGY ON GROWTH OF BUSINESS

ORGANISATIONS: A CASE OF SAFARICOM LIMITED

BY

JANET K. MUTUKU

A Research Project Proposal Submitted to the Chandaria

School of Business in Partial Fulfillment of the Requirement

for the Degree of Masters in Business Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY -

AFRICA

SUMMER 2017

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iii

STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to

any other college, institution or university other than the United States International

University in Nairobi for academic credit.

Signed: ________________________ Date: ____________________________

Janet K. Mutuku (ID: 644591)

This project has been presented for examination with my approval as the appointed

supervisor.

Signed: ________________________ Date: ____________________________

Prof. Paul Katuse

Signed: _______________________ Date: ____________________________

Dean, School of Business

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COPYRIGHT

All rights reserved; No part of this work may be reproduced, stored in a retrieval

system or transmitted in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise without the express written authorization from

the writer.

Janet K. Mutuku © 2017

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DEDICATION

I dedicate this project to my husband, parents and siblings, for their love and support

during the course of this study.

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ACKNOWLEDGMENT

I would like to express my gratitude to my supervisor Prof. Paul Katuse for his

invaluable advice. His immense support and guidance has given me continuous

inspiration which without, this project could not have been completed. I also wish to

appreciate Safaricom (K) Limited staff for participating in the study and to my

classmates for challenging me every step of the way.

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ABSTRACT

The aim of the study was to examine impact of corporate entrepreneurship strategy on

growth of business organisations focusing on Safaricom (K) Limited. The study

aimed at answering the following research questions: what is the effect of innovation

on business organizations? What is the effect of risk taking on business organizations?

What is the effect of proactiveness on business organizations?

The research methodology adopted was the descriptive research method. It focused on

three groups namely middle and upper level management and operatives for

Safaricom (K) Limited departments. Research used stratified random sampling

technique and sample size of the study was 143 staff. Data collection was done by

structured questionnaires. This data was analyzed through the descriptive statistics,

correlation and regression analysis using SPSS Version 21. The findings were

presented in tables and figures and researcher‟s own interpretation.

The correlation results showed that there was a positive and significant relationship

between innovation (r = 0.298; p < 0.000), risk taking (r = 0.199; p < 0.017) and

proactiveness (r = 0.119; p < 0.025) and business growth at Safaricom (K) Limited.

The regression analysis showed that innovation (β = 0.378, p < 0.005) had the greatest

effect followed by proactiveness (β = 0.212, p < 0.005) and risk taking (β = 0.378, p <

0.005) on business growth at Safaricom (K) Limited.

This study therefore concludes that innovation has the greatest effect on business

growth, followed by proactiveness and risk taking had the least impact on business

growth at Safaricom (K) Limited.

The study therefore recommends that Safaricom (K) Limited should endeavor to

enhance their process innovations to improve the organization‟s forms and

knowledge, policies and procedures in distribution applications, products, channels

and consumers‟ needs, preferences and expectations; that Safaricom (K) Limited

should encourage risk taking among its staff, project teams and managers to enable

the organisation capture new markets in the telecommunication sector in Kenya and

that Safaricom (K) Limited should enhance its proactive tendency in searching for

emerging technologies, markets and opportunities in the growing telecommunications

sector in Kenya.

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TABLE OF CONTENTS

STUDENT’S DECLARATION ...................................................................................... iii

COPYRIGHT ................................................................................................................... iv

DEDICATION................................................................................................................... v

ACKNOWLEDGMENTS ............................................................................................... vi

ABSTRACT ..................................................................................................................... vii

LIST OF TABLES ........................................................................................................... xi

LIST OF FIGURES ........................................................................................................ xii

CHAPTER ONE ............................................................................................................... 1

1.0 INTRODUCTION....................................................................................................... 1

1.1 Background of the Problem .......................................................................................... 1

1.2 Statement of the problem .............................................................................................. 2

1.3 Purpose of the Study ..................................................................................................... 4

1.4 Research Questions ....................................................................................................... 4

1.5 Significance of the Study .............................................................................................. 4

1.6 Scope of the Study ........................................................................................................ 5

1.7 Definition of Terms....................................................................................................... 5

1.8 Chapter Summary ......................................................................................................... 6

CHAPTER TWO .............................................................................................................. 7

2.0 LITERATURE REVIEW .......................................................................................... 7

2.1 Introduction ................................................................................................................... 7

2.2 Effect of Innovation on Business Organization Growth ............................................... 7

2.3 Effect of Risk Taking on Business Organization Growth .......................................... 12

2.4 Effect of Proactiveness on Business Organization Growth ........................................ 16

2.5 Chapter Summary ....................................................................................................... 20

CHAPTER THREE ........................................................................................................ 21

3.0 RESEARCH METHODOLOGY ............................................................................ 21

3.1 Introduction ................................................................................................................. 21

3.2 Research Design.......................................................................................................... 21

3.3 Population and Sampling Design ................................................................................ 21

3.4 Data Collection Method .............................................................................................. 24

3.5 Research Procedures ................................................................................................... 24

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3.6 Data Analysis and Presentation .................................................................................. 25

3.7 Chapter Summary ....................................................................................................... 25

CHAPTER FOUR ........................................................................................................... 26

4.0 RESULTS AND FINDINGS .................................................................................... 26

4.1 Introduction ................................................................................................................. 26

4.2 Background Information ............................................................................................. 26

4.3 Descriptive Statistics ................................................................................................... 28

4.4 Inferential Statistics .................................................................................................... 32

4.5 Chapter Summary ....................................................................................................... 34

CHAPTER FIVE ............................................................................................................ 35

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ....................... 35

5.1 Introduction ................................................................................................................. 35

5.2 Summary ..................................................................................................................... 35

5.3 Discussion ................................................................................................................... 37

5.4 Conclusion .................................................................................................................. 40

5.5 Recommendations ....................................................................................................... 41

REFERENCES ................................................................................................................ 42

APPENDICES ................................................................................................................. 53

APPENDIX 1: LETTER OF INTRODUCTION ......................................................... 53

APPENDIX II: QUESTIONNAIRE FOR STAFF ...................................................... 54

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LIST OF TABLES

Table 3.1: Sampling Frame ............................................................................................... 22

Table 3.2: Sample Size ..................................................................................................... 23

Table 4.1: Effect of Innovation on Business Organisation Growth .................................. 29

Table 4.2: Effect of Risk Taking on Business Organization Growth ............................... 30

Table 4.3: Effect of Proactiveness on Business Organization Growth ............................. 31

Table 4.4: Innovation, risk taking, proactiveness and business growth correlation ........ 32

Table 4.5: Model Summary .............................................................................................. 33

Table 4.6: ANOVA ........................................................................................................... 33

Table 4.7: Coefficients ...................................................................................................... 34

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LIST OF FIGURES

Figure 4.1: Gender of Respondents .................................................................................. 26

Figure 4.2: Age Categories of Respondents ..................................................................... 27

Figure 4.3: Education Levels of Respondents .................................................................. 27

Figure 4.4: Work Experience of Respondents .................................................................. 28

1

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Problem

Corporate Entrepreneurship (CE) has emerged as a significant subject in management

research. CE was designed as a strategic approach to be able to address the challenges

facing organisations in dealing with the external environment to achieve a sustainable

competitive advantage in the global business sector in the past three decades. CE has also

been defined as an orientation of entrepreneurial activities in an established firm as a

significant economic development and wealth creation dimension. Practitioners and

scholars have shown interest in CE from the early 1980s due to its effect of profitability

and effect on organization‟s performance (Zahra & Garvis, 2000).

Over the past decade, there has been a growing awareness that governance and ownership

systems can significantly impact corporate entrepreneurship. Porter (1980) called for

studies documenting the association of governance and ownership systems with

entrepreneurial worldwide, business environment has evolved to become unpredictable,

competitive and highly dynamic (Kuratko, Ireland, & Hornsby, 2004).

The development of CE in business has been fueled by trade liberalization, technological

advancements in ICT and globalization. These occurrences have made the globe to

become a worldwide market where firms and businesses are competing beyond

geographical and national boundaries. The scope of competition between organisations

today has become widely expanded and this is creating several challenges for managers

and business forms (Kuratko et al., 2004).

In consideration of these scenarios, it therefore becomes important for business

companies to adopt entrepreneurial behaviour and also develop support for organisational

culture for their survival to gain a competitive advantage and thereby achieve better

performance. This is due to those entrepreneurial activities in business companies become

a source of competitive advantage and vitality which leads to better and improved

performance (Antoncic & Hisrich, 2004).

According to Ramayah, & Puspowarsito (2011), innovative and entrepreneurial activities

provide a refreshing feeling for business organisations that have been existing despite

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their nature and sizes. These organisations have realized that in order to improve their

performance (profitability and growth) there is need to adopt CE as an effective strategy

and this has led to corporate managers taking efforts to make their firms and employees

more entrepreneurial.

The concept of entrepreneurship has often been considered as a phenomenon observed at

the individual level where firm formation and innovation distinguishes entrepreneurship

from the managing of current activities. The term entrepreneurship is viewed as a process

of creating a new business venture bringing together or acquiring need resources while in

pursuit of opportunities. The concept is also seen as conducting profit-seeking activities,

taking risks and as a process of creating novel or innovating combination of resources

with the aim of creating value (Ramayah, & Puspowarsito, 2011).

In the midst of the entrepreneurial process there is an entrepreneur, an individual who is

creating value where there was not any earlier and whose features are an affinity towards

risk taking, proactiveness and innovativeness. Therefore, entrepreneurship can be

explained as a representation of abilities to realize new opportunities in the external

environment, prioritize and evaluate these opportunities to become business concepts that

are viable (Kolakovic, 2006).

CE as entrepreneurial activities in firms that are established is a significant feature of

economic and organisation development and wealth creation. CE is important for large

firms that are often risk averse to innovative, driving teams and leaders to achieve an

increased rate of corporate enterprising. Moreover, the merits achieved from innovation

through CE also give the firm benefits of setting the foundation for continuity leadership.

CE is also seen as an approach for renewing an organisation because along with the

innovation, there is an existing drive toward venturing (Karacaoglu, Bayrakdaroglu &

San, 2013).

1.2 Statement of the Problem

Corporate Entrepreneurship (CE) is associated with the different ideas of corporate

development on the one hand and individual initiative on the other. Through a corporate

strategy lens, this association is dangerous as it supports the risks of misalignment in the

strategy plan of the organisation and also a risk of eroding the competitive advantage of

3

the firm. Basically, corporations are unable to rely on individual initiative minus

increasing the autonomy of the individual and the risk of personal initiatives might come

from the main strategic alignments.

In efforts to implement CE successfully, organisations have to mitigate and face the risks

that come with CE. There are studies that have been done on CE in Africa, for example,

Nyanjom (2007) conducted a research in Botswana on how firms can enhance and

develop entrepreneurial innovations and also encourage entrepreneurial activities in firms.

However, this research was unable to address the characteristics of innovativeness that

impacts the financial performance of organisations.

In Kenya, studies conducted on CE have focused on selected CE dimensions affected

performance of organisations and have not examined the effect of individual dimensions

on business growth in the telecommunication sector. For instance, Lwamba, Bwisa and

Sakwa (2014a) explored the innovation dimension of CE on financial performance of

manufacturing firms in Kenya and found that product and organizational innovativeness

had positive and significant effects on financial performance of the organisations.

However, this study was limited to innovativeness dimension of CE and the

manufacturing sector.

Moige, Mukulu and Orwa (2016) studies the effect of CE on performance of food

fortification companies in Kenya and which revealed that corporate entrepreneurial

management and Corporate entrepreneurial incentives increase performance in food

fortification companies in Kenya, this study was however limited to food fortification

firms.

There is paucity on the amount of research that has been done on CE and business growth

in Kenya, specifically in the telecommunication firms which are characterized to

emerging technological advancements and a dynamic external environment. This study

intends to fill this gap by undertaking an examination of CE dimensions (risk taking,

proactiveness and innovation) on business growth among telecommunication firms taking

Safaricom (K) Limited as a case of this research.

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1.3 Purpose of the Study

This study examined the impact of corporate entrepreneurship strategy on the growth of

business organizations in Kenya: a case of Safaricom (K) Limited.

1.4 Research Questions

The study aimed at answering the following research questions;

1.4.1 What is the effect of innovation on business organizations?

1.4.2 What is the effect of risk taking on business organizations?

1.4.3 What is the effect of proactiveness on business organizations?

1.5 Significance of the Study

The study seeks to uncover how Safaricom Limited has been able to practice corporate

entrepreneurship and draw profitable benefits and the sustenance of the same. The

information will therefore be useful to the following stakeholders:

1.5.1 Industry Players

As the leading mobile network operator in Kenya and the most profitable company in

East and Central Africa, the study on Safaricom‟ s practice will be a point of learning for

the other industry players who may want to perform as well. Given that the organizations

work in the same environment, the players may be able to establish areas of improvement

and uncover opportunity areas they had not deemed as such.

1.5.2 Management and Shareholders

The information in this study will inform the management and the owners of Safaricom to

gain knowledge of the benefits that the company has gained and where the company can

improve in its practice of corporate entrepreneurship. The recommendations from this

study if adopted and implemented by top management of Safaricom (K) Limited will

enhance the business growth of the firm.

1.5.3 Academicians and Researchers

The research will contribute to the body of knowledge to academicians and researchers

who would want to further their studies in understanding the competitive advantage

arising from Corporate Entrepreneurship. The research will help other academicians and

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researchers to have a source of reference on CE and business growth and also suggest

areas for further studies on CE.

1.6 Scope of the Study

This research was limited to the organization of study, which is Safaricom (K) Limited,

and the subject of study was limited to the employees located at the Head offices in

Westlands, Nairobi. The study was also limited to risk taking, proactiveness and

innovation as the dimensions of CE. The study was conducted from January 2017 to June

2017.

1.7 Definition of Terms

1.7.1 Corporate Entrepreneurship

This refers to the entrepreneurship that exists in a firm which includes the emerging

behaviours or behavioural intention of a firm associated with departing from the norm

(Antoncic & Hisrich, 2003).

1.7.2 Innovation

This refers to implementing a significantly improved or new service, product, process

marketing approach or organisational approach to business practices, external relations

and workplace organisation (OECD/ Eurostat, 2005).

1.7.3 Risk Taking

This refers to the way in which an innovation is rooted in the firm, community and

society and is also associated with the people‟s willingness to commit important resources

to opportunities that are assumed may succeed (Akehurst, Comeche & Galindo, 2009).

1.7.4 Proactiveness

Proactiveness is the forward-looking, opportunity-seeking view which involves

introduction of new services and products before the firm‟s competitors and also to act in

anticipating future demand to shape the business environment or create change (Lumpkin

& Dess, 2001).

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1.7.5 Strategy

Strategy is the set of blueprints and plans that are developed by top management in an

organisation to attain the organization‟s objectives, vision and mission and are consistent

with the strategic plans of the organisation (Mainardes, Ferreira & Raposo, 2014).

1.7.6 Competitive Advantage

This refers to the differential or asymmetry in an organisation factor or characteristic that

enables an organisation to serve its customers better than other firms and thereby create

improved customer value and attain better performance (Njoki, 2013).

1.8 Chapter Summary

The chapter looked into the introduction to the corporate entrepreneurship and outlines

the statement of the problem that will guide the study. The research objectives selected

for this study include the innovation, pro-activeness and risk taking which form the

variables of the research. The second chapter of the study presented the literature review

of the study, the research methods and techniques adopted for this research were

presented and discussed in chapter three. Chapter four of the research presented the

results and findings and chapter five presented the conclusion, discussion and

recommendations of the study.

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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter analyses and elaborates past reviews relevant to the research study. In this

case, the literature is presented in terms of the three research objectives from a global,

regional and local impact of CE dimensions on organisation growth. Each section is

presented in terms of the definition of the concepts and empirical literature on the

relationship between variables.

2.2 Effect of Innovation on Business Organization Growth

According to Porter (Schumpeter, 1934; Porter, 1980) the concept of innovation is

associated with the economic aim of creating differentiation (to enhance the monopolistic

control of an organisation in lieu to its customers). The concept of innovation has

received much attention in terms or research in different disciplines and can be described

along different dimensions such as newness or novelty (Tidd & Bessant, 2009), and is

also classified on the direction it focuses such as the product, market, process and/or

business system (Jenssen & Randøy, 2006; Jenssen & Nybakk, 2009).

A large part of the research on this relationship of innovation and firm performance has

shown evidence that innovation is a significant part for organisation long-term success.

Moreover, several researchers have argued that businesses that are innovative enjoy more

success over others (Nybakk & Jenssen, 2012). Earlier studies have laid emphasis on the

significance of differentiating between several forms of innovation because it assists to

identify the determinants of innovation (Jenssen & Nybakk, 2009; Jenssen & Åsheim,

2010).

Bartolacci, Castellano & Cerqueti (2015) study on the impact of innovation on

companies‟ performance found that several types of innovation played a key role in

determining company performance. These types of innovation included process, product

and market innovation. These types of innovation are discussed in this section.

2.2.1 Process Innovation

The process innovation refers to the new organisational forms and knowledge, policies

and procedures that are embodied in the distribution applications, products, channels and

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consumers‟ needs, preferences and expectations. Process innovation is associated with the

implementation of a significantly improved or new delivery method or production

(Garcia, 2014).

This include drastic changes in equipment and/or software and techniques and its benefit

includes an increase to quality, a decrease in unit costs of delivery or production and to

deliver or produce significantly improved or new products. Fagerberg and Verspagen

(2009) opined that whereas the introduction of new products is mostly assumed to have a

positive, clear effect on the growth of employment and income, process innovation owing

to its cost-cutting distinction has a more cloudy impact on performance.

According to Eiriz, Faria and Barbosa (2013), the motivation to adopt the process

innovation strategy is influenced by process innovation is more driven by market

pressures. Several studies have found that process innovation contributes more to

productivity increase than product innovation (Hall, Lotti & Mairesse, 2009; Parisi,

Schiantarelli & Sembenelli, 2006).

To Oke (2007), process innovation involves creating or improving in techniques and the

development in system or process. In production activities, process innovation can be

viwed as improved or new devices, tools, techniques and knowledge in product making

(Oke, 2007; Langley et al., 2013). Important to the manufacturing sector, process

innovation should be adopted by an organisation as its main characteristic ability for

competitive advantage. This explicitly means that such an innovation is positively

associated with firm growth (Morone & Testa, 2008).

Mosey (2005) suggests that product innovation is the foundation of better-performed

firms seeking future aggressive growth. Demirel and Mazzucato (2012) found that

relatively smaller organisations are more explorative to new technologies and are more

involved in product innovations whereas large organisations in different sectors during

the “mature” stage of the life cycle industry excel in incremental changes and process

innovations to established technologies.

Eiriz et al. (2013) argued that firms get more concerned with efficiency aspects, therefore

process innovation tends to be the focus of firms‟ innovation strategies. Goedhuysa and

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Veugelers (2008) study on product and process innovations and growth of organisation-

level study from Brazil found that innovative performance is a significant factors for

organisation growth. The study revealed that the combination of process and product

innovations have a huge effect on the growth of the firm.

Mwangi and Namusonge (2014) study on influence of innovation on SMEs growth

among garment manufacturing industries in Nakuru County and found that indicated that

process innovation was crucial to coming up with quality designs of products that help

meet user wants and needs. Majority of respondents agreed that process innovation was

crucial in coming up with quality designs of products that will help meet user wants and

needs. The study concludes that process innovations are most important for garment

making firms and are also most difficult to achieve due to accessibility and costs.

2.2.2 Product Innovation

The concept of product innovation refers to the action of creating a new product from

new materials (totally new product) or changing the existing products to meet consumer

satisfaction (improved version of existing products) (Langley et al., 2013). Product

innovation also means the action of introducing new services or products in an attempt to

creating new customers or markets (Wang & Wei, 2005; Wan, Ong & Lee, 2005). Eiriz et

al. (2013) opined product innovation is associated with strategic determinants and is most

important in the early phase of the life cycle. Product innovation is less likely when

organisations are expanding their existing business operations due to the managers‟ focus

are on satisfying the high market demand.

Rouse (2013) contends that product innovation refers to the firm‟s process to introduce

new technology, mew manufacturing methods, new commodities/products, new ideas,

new delivery and distribution and workflows. The literature argues that product

innovation is the most significant source of change in the structure of an economy as it

alerts the mix of jobs, industry and products which comprise the economy.

Researchers have concluded that product innovation remains as the most significant

sources of an organization‟s competitive advantage (Camison & Lopez, 2010). In Spain,

Espallardo and Ballester (2009) revealed that product innovation had a positive impact on

business performance among 744 firms. Alegre et al. (2006) study also confirmed that

10

both dimensions of product innovation (efficiency and efficacy) had a strong positive

relationship to business performance. This was also affirmed by Varis and Littunen

(2010) study which revealed that new products introduction is positively related with

business performance.

2.2.3 Market Innovation

A market innovation is defined as implementing a new marketing approach that involves

major changes in design, product or packaging, pricing strategy or product placement.

The aim of market innovation is to improve meeting consumer needs, to provide an

organisation a new position in the market in efforts to increase the income from sales and

to open up new markets. Market innovation is associated with product offers, promotion

activities, product placements, design properties and pricing strategies (Tavassoli &

Karlsson, 2015).

Cano, Carrillat and Jaramillo, (2004) affirmed that market innovation has a significant

role in meeting market needs and response to market opportunities. The significance of

market innovation to organisation performance, although limited, is presented in the

literature also. Sandvik and Sandvik (2003) revealed that market innovation had a

positive impact on the sales growth of organisations.

Otero-Neira, Lindman and Fernández (2009) also established a strong link between

innovation and firm performance. Varis and Littunen (2010) adopted a regression model

to analyse the relation between business performance and market innovation finding a

significant relationship on business performance. Auka and Keraro (2014) study on

strategic marketing and firm growth and technological innovations in the retail banking

sector in Kenya affirmed an insignificant link between marketing innovation and firm

growth.

2.2.4 Organizational Innovation

The concept of organisational innovation refers to implementing new organisational

approaches in an organisations business practices, external relations and corporate

organisation (Trott, 2010). Organisational innovations are meant to increase the

organization‟s performance by reducing transaction costs, administrative costs, improve

workplace satisfaction, improve workplace satisfaction costs, gain access to non-tradeable

11

assets or reduce supply costs. Several studies have affirmed a positive relationship

between organisational innovativeness and financial performance (Atayal, Anafarta &

Sarvan, 2013).

Organisational innovativeness occurs as a result of management‟s strategic decision-

making that comes from implementing organisational methods that have never been

adopted in the organisation (OECD/Eurostat, 2005). Lam (2005) proposed two definitions

of organisational innovation as variations in types of organisational forms (organizational

innovation stricto sensu) and in managerial practices and the adoption or creation of a

notion that is new to the firm (organizational innovation lato sensu) (Haned, Mothe &

Nguyen-Thi, 2014). Lin and Chen (2007) found a link between organisational innovation

and an increase in sales of a business and argued that organisational innovation over

technological innovations as an important factor for sales growth.

Gunday, Ulusoy, Kilic and Alpkano (2011) studied the impact of types of innovation on

organisation performance and found that organisational innovation was a strong driver of

innovative performance. Innovative organisations more so those with a high

innovativeness score for process, product and organisation innovation have higher total

exports and sales.

Gunday et al. (2011) concluded that organizational innovations do not only prepare a

suitable 29 milieu for the other innovation types, but also have a strong and direct impact

on innovative performance. Haned et al. (2014) study evidence indicated a positive

influence of organisation innovation on technological innovation influenced by different

measures of organisational innovation.

In the organizational innovation framework, it is imperative to indicate the effect of this

form of innovation in the performance of organisations (Camisón & Villar-López, 2014;

Sapprasert & Clausen, 2012). Morone and Testa (2008) found that organisational change

was one of the more dominant innovative strategy for small and medium enterprises

growth in Italy

Masso and Vahter (2012) argued that organizational innovation is very important in the

productivity improvements in the services sector of intensive knowledge. In this regard,

organizational innovation is more likely to lead to a reduction of administrative

12

transaction costs, as well as enhance satisfaction in the work environment (Simao,

Rodrigues & Madeira, 2016).

2.3 Effect of Risk Taking on Business Organization Growth

The concept of risk taking is that it is a major feature of entrepreneurship whereby a high

risk taking orientation thus leads to a high organisation growth and profitability Zhou and

de Wit (2009) view risk taking as a propensity to take brave actions such as to venture to

new markets, and a using a large size of resources to venturing with unclear outcomes and

borrowing huge amounts to make business investments.

Risk taking involves engagement in manageable and calculated risks in an attempt to

achieve benefits rather than having daring risks which can negatively affect organisation

performance (Dess & Lumpkin, 2005; Morris, Kuratko & Covin, 2008). Empirical studies

done in developed and transition economies suggest that risk taking as a firm - level

strategic posture has constitutes a potential source of competitive advantage and has

positive, long-term impact on financial performance and growth of SMEs (Wang &

Poutziouris, 2010).

The propensity to move from a known situation to a place where it can capture

opportunities and commit huge amount of resources with little knowledge about the new

situation comprise of risk taking tendencies (Wiklund & Shepherd, 2005). Gibb and Haar

(2010) conducted an empirical research among 167 New Zealand organisations and

confirmed that a profile of an organisation risk taking often leads to a high financial

performance. In Taiwan, Wang and Yen (2012) found that risk taking has a positive

impact with organisation performance among SMEs in China.

2.3.1 Risk Taking and CEO Gender

The effect of entrepreneur gender and the entrepreneurial orientation is found in the

literature. Runyan et al. (2006) research found that females compared to their male

counterparts were more innovative and were less risk averse but there were no significant

differences in regard to proactiveness. Diaz-Garcia and Jimenez-Moreno (2010), Lim and

Envick (2011) and Ayub, Razzaq, Aslam and Iftekhar (2013) showed evidence that

women as compared to men were more risk-averse. Diaz-Garcia and Jimenez-Moreno

13

(2010) unlike Goktan and Gupta (2015) affirmed that men were less innovative than

women.

Faccio, Marchica and Mura (2012) study on the gender of Chief Executive Officer

(CEO), capital efficiency and corporate risk taking revealed that CEOs of a male gender

were willing to take more organisation-level risks than female CEOs. Salleh and Ibrahim

(2011) conducted a study examined the differences between background characteristics

and risk taking propensity among SMEs in Malaysia and concluded that there were

significant variation between SMEs owner gender and risk taking propensity.

Anderson et al. (2013) conducted surveys to establish the gender-related variation in risk-

aversion and concluded that female is less competitive as compared to male. They found

that women were less overconfident than their male counterparts. Therefore, female avoid

challenging and risky situations. These variations in perceptions of risks are explained

mostly by the partners and the environment that females face. Nevertheless, the study

noticed that these variations do not appear among professionals and manager populations.

Skala and Weill (2015) conducted a study on gender of CEOs on banks‟ risk and revealed

that banks‟ headed by women CEOs were less risky and reported high capital adequacy

and equity to assets ratio. The evidence supported the argument that females are more

risk-averse then male CEOs in the banking sector. Ključnikov, Belás and Smrčka (2016)

study on the role of competitive aggressiveness and risk-taking in SME management

found that gender influences motivations for realizing of riskier projects. The research

confirmed that men realized riskier projects mostly than women in an efforts to enhance

the financial performance of the business.

Elsaid and Ursel (2011) research risk taking, gender and CEO succession found that a

greater percentage of women on the board lead to a higher likelihood of a woman

successor whether inside or outside the firm. Moreover, a change in CEO from men to

women is linked with a decrease in several indicators of organisation risk taking.

2.3.2 Risk Taking and Firm size

Risk taking has also been found to be dependent upon the size of the firm. Balabanis and

Katiskea (2003) argued that the size of the organisation influences risk taking propensity.

14

This is because access to a large pool of resources among larger organisations gives them

an opportunity to make risky decisions and spread them among several markets and

products. This also allows larger firms to stand for losses from failed entrepreneurial

efforts. Thus it is expected that large firms can have a high level of risk taking propensity.

In Malaysia, Ambad and Wahad (2013) researched on Entrepreneurial Orientation among

Large Firms. The findings showed that risk taking affected firm performance positively.

Shamsuddin, Othman, Shahadan and Zakaria (2012) researched examined the dimensions

of CE and the performance of established firms in Malaysia found that and risk taking

had a positive and significant impact on financial performance of JCorp intrapreneur

companies. The study concluded that risk taking is a major determinant of CE and

financial performance in large businesses.

In Kenya, Muthee-Mwangi and Ngugi (2014) studies the influence of entrepreneurial

orientation on the growth of SMEs and the descriptive results indicated that most of the

SME managers agreed that risk taking influences growth of micro and small enterprises.

Inferential statistics indicated that the correlation between the growth of micro and small

enterprises and risk taking was strongly positive and significant. Regression results

indicated that an increase in the effectiveness of risk taking by one unit leads to an

increase in growth of MSEs.

Olaniran, Namusonge and Muturi (2016) conducted a study on the role of risk-taking on

organisation performance in the Nigerian Stock Exchange among 60 firms of the listed

176 firms‟ financial statements. The indicators for risk taking included in the research

model were monetary risk, social risk and psychological risk. The study revealed that

risk-taking had an inverse relationship with ROE and ROA.

Ključnikov et al. (2016) examined the influence of competitive aggressiveness and risk

taking in SME management and revealed that young firms had a greater willingness to

invest in risky projects. Laforet (2013) affirmed that young firms are more proactive in

the market in an aim of being ahead of the competitors more often in contrary to the firm

operating in the market for more than a decade.

Lwamba, Bwisa and Sakwa (2014b) explored the impact of CE on financial performance

of manufacturing firms from 186organisations in Nairobi County through simple random

15

sampling. The results showed that risk taking had a positive impact on financial

performance. Anderson and Eshima (2013) study on the influence of firm age and

intangible resources on link between entrepreneurial orientation and firm growth among

Japanese SMEs found that young organisations are able to take the opportunity of risks in

the market. This is because younger firms are able to be more flexible in terms of taking

risks as compared to older firms which have strategic direction.

2.3.3 Risk Taking and Firm Characteristics

Leko-Šimic´ and Horvat (2006) made a distinction between traditional, that is, non-

traditional and more labour intensive, that ism knowledge and technology intensive

businesses. The non-traditional businesses are expected to possess higher levels of risk

taking propensity, since knowledge and especially technology is more likely to enhance

learning skills for successful growth and adaptation in new environments that firms that

re dependent on tangible resources (Autio, Sapienza & Almeida, 2000). The study

concluded that firms that are older are usually bound by routines and traditions in market

and product choices and are therefore expected to be less willing to make additional risk.

In Korea, Kim (2014) investigated the influence of foreign ownership of firms on the risk

taking behaviour. The findings revealed that organisation with higher foreign ownership

are not likely to avoid risk-taking and that firm growth was directly associated with risk

taking, indicating that foreign investors play a monitoring role in encouraging value-

enhancing risk taking.

In Malaysia, Entebang, Mansor and Puah (2006) conducted a research on CE (innovation,

risk taking, proactiveness and aggressive competitiveness) in state owned enterprises and

the aim of the study was to establish the level of entrepreneurship orientation among

Government Linked Companies (GLCs). The findings showed that there was a positive

entrepreneurial tendency in proactiveness, innovation and competitive aggressiveness, but

low risk taking.

Peng (2015) study on risk taking and firm growth found that risk taking has an economic

and statistical significant impact on firm growth and earnings. Risk taking was also found

to have a positive link with firm earnings and therefore an organisation with a higher

level of risk taking have a small cash flow shortfall.

16

Rauch et al. (2004) found that although risk-taking had a smaller significant impact on

organisational performance in comparison with other EO dimensions, it had a positive

effect (Rauch et al., 2004). Naldi, Nordqvist, Sjöberg and Wiklund (2007) study on

entrepreneurial orientation, risk taking, and performance in family firms among Swedish

firms found that family firms do take risks while engaged in entrepreneurial activities,

they take risk to a lesser extent than nonfamily firms. The results further indicated that

that risk taking in family firms is negatively related to performance.

In Kenya, Linyiru, Karanja and Gichira (2015) researched on the influence of competitive

aggressiveness and risk taking on firm performance of commercial state corporations

which found that most of the study participants agreed that risk taking was a major

determinant of organisation performance. The correlation results indicated a positive and

significant association between business performance and risk taking. Che and

Liebenberg (2016) examined the effects of business diversification on asset risk-taking

found that big insurance firms retain in-house expertise of investment analysts and credit

specialists. Investing in risky assets requires that insurers monitor and assess risks. The

internal professionals of big insurance firms provide an advantage to implement risk-

taking strategies.

2.4 Effect of Proactiveness on Business Organization Growth

Proactiveness is the capacity to acting before others in product introduction or capturing

new markets or resources tapping are vital ingredient of entrepreneurship in which an

entrepreneur seeks new opportunities which are new to the current operations of the

business (Narver et al., 2004; Olson, Slatter & Hult, 2005). Organisations that adopt

proactiveness in its strategies is able to achieve, maintain and gain competitive advantage

in an emerging market environment. Proactiveness in a flooded market needs a firm to be

the first in establishing new needs or introducing new commodities often to be able to

have new approaches to achieve sustainable competitive advantage (Porter, 1980).

According to Harun and Veysel (2009), proactiveness is defined as a forward-looking,

opportunity seeking perspective featured by introduction of new services and products

before the competitors and act in anticipation of future demand. The concept of

proactiveness is defined by Lumpkin and Dess (2001) “of a business or individual to act

in anticipation of future changes, needs or problems” (p. 136).

17

Thus, being the first person or business to move in pursuit of new opportunities and

participate in developing markets is closely associated with organisation level

entrepreneurship activities. Proactiveness is an organisations strategic orientation that

holds specific entrepreneurial aspects of practices, methods and decision-making styles

(Frank, Kessler & Fink, 2010). The act of proactiveness aims to prepare for the future by

looking for new opportunities which may not or may be associated to the current lines of

operations which allow introduction of new brands and products before the competitors

(Okpara, 2009).

2.4.2 Proactiveness and Firm performance

In other words, proactive behavior implies dynamic experimentation and realization of

research and development policy aiming at maintaining a constant flow of new products

or services introduced on the market (Perez-Luno et al., 2011). It should be expected that

proactive organizations will scan the environment in order to find new trends and keep up

with the competition. That is why proactiveness means also the forward-looking

perspective feature for an industry leader that has the capacity to seize and opportunity to

predict future demands (Dess & Lumpkin, 2005).

Tang, Kacmar and Busenitz (2009), study proved that there exists a hierarchical relation

between the components of EO, and he concluded that proactiveness was at the top which

creates such an environment in an organization that the companies is more likely to be

more innovative by such initiatives which can create differentiated value for the products

and services of the organization, and also more risk taking by undertaking into unreliable

activities to exploit external opportunities.

The tendency of proactiveness is oriented in achievement, anticipation, emphasis on

taking initiatives, predicting changes towards a significant situation, creating change and

early preparation to the happening of an impending uncertain risk (Boohene, Marfo-

Yiadom & Yeboah, 2012). As an entrepreneurial orientation dimension, proactiveness is a

forward-looking and seeking opportunity perspective that means that the firm acts in

anticipation of future trends and demands with a motive of capitalizing on the

opportunities for profit gain (Kropp, Lindsay & Shoham, 2008). A SME that adopts

18

proactiveness in its business is able to anticipate the demands and needs of the market and

is therefore capable to anticipate the needs of consumers (Laraway & Snycerski, 2013).

Karacaoglu et al. (2013) using a sample of 140 industrial manufacturing firms listed on

Istanbul Stock Exchange (ISE) found that the original dimensions of entrepreneurship

orientation (risk taking innovation and proactiveness) had direct interaction with

organisation financial performance. In a similar study in Netherlands, Kraus, Rigtering,

Hughes and Hosman (2012) survey among 164 SMEs found that proactive SMEs

behaviour had a direct influence on SME performance during the economic crisis. In Sri

Lanka, Kumarpeli and Semasinghe (2015) research on the impact of entrepreneurial

orientation on the growth of SMEs in Sri Lanka found that the relationship between

proactiveness and firm growth was not significant.

2.4.3 Proactiveness and Firm size

In the Czech Republic, Rahman, Civelek, M., & Kozubíková (2016) conducted a

comparative study of MSE and SMEs on their proactiveness, competitive aggressiveness

and autonomy. The study empirical results showed important differences among SMEs

and Micro SMEs in regard to autonomy and proactiveness. In Russia, Shirokova,

Bogatyreva and Beliaeva (2015) did research on Entrepreneurial Orientation of Russian

Firms and found direct relation between the entrepreneurial dimensions of proactiveness

and innovativeness on business performance was in hostile external or dynamic

environments.

According to Ferreira and Azevedo (2008), proactiveness implies an organization‟s

efforts to seize new opportunities. (Ibid.) organisation can use two approaches to act in a

proactive manner: one, an organisation can continuously seeks out new service or product

offerings. Two, organisation can introduce new technological capabilities and new

products before competitors

In Poland, Ejdys (2016) conducted a study on innovativeness and entrepreneurial

orientation of SMEs. A questionnaire survey was conducted among 137 firms in the

Podlaskie Region. Three hypotheses related to entrepreneurial orientation and

innovativeness level were examined by Structural Equation Modeling (SEM).The relation

19

between two constructs of entrepreneurial orientation and innovativeness, that is

proactiveness and risk taking were analyzed.

(Ibid.) research results show that proactiveness has a significant positive total effect on

improving innovativeness. The study concluded that proactiveness was positively and

significantly related to organisation innovativeness. In Malaysia, Arshada, Raslib, Arshad

and Zain (2014) research found that among the five dimensions of EO, proactiveness had

the highest correlation with business performance and proactiveness had an effect on

business performance.

There is evidence of several studies that have focused on the relationship between

proactiveness and firm growth. These studies however have been predominantly been

focused on the SME sector. Fatoki (2014) study on entrepreneurial orientation of MSMEs

in South Africa‟s retail sector found that Micro enterprises were less proactive and

preferred to be followers rather than leaders. In Ghana, Anlesinya, Eshun and Bonuedi

(2015) entrepreneurial proactiveness relates positively and significantly to profitability.

Oni (2012) investigated the importance of entrepreneurial proactiveness on firm

performance and the findings revealed that enterprises that acted on high entrepreneurial

proactiveness had a direct effect on the performance metrics which are consistent with

employment of competent and qualified personnel and size. In Kenya, Wambugu et al.

(2015) concluded that, proactiveness was a major predictor of firm performance of agro

processing SMEs in Kenya in terms of employee growth and profitability.

2.4.4 Proactiveness and Firm growth

According to Hakkert and Kemp (2006), firm growth refers to the increase in the

organisation attributes including profit, employment, and sales of an organisation between

two periods in time. Firm growth is often determined by the capacity of the organization‟s

capability and effectiveness with the organisation-specific resources which include

knowledge, capital and labour are organized, acquired and transformed into services and

products that can be sold through organisational structures, routines and practices.

The literature shows that there has been mixed results in relation to effect of corporate

entrepreneurship and firm growth. For instance Ambad and Wahad (2016) found that

20

corporate entrepreneurship has a significant effect on firm‟s profitability but has no

significant relationship with firm‟s growth. Other studies (Antoncic & Hisrich, 2004;

Steffens, Davidsson & Fitzsimmons, 2009) found direct influence of CE orientation and

activities on both profitability and growth.

In their study, Ferreira and Azevedo (2008) on EO on firm growth included two objective

metrics of growth were (1) employment growth and (2) sales growth. Employment

growth was calculated as the change in the number of employees from 2002-2003. This

growth variables was based on four metrics of (i) the growth of the sales compared to that

of competitors; (ii) the growth of the market value compared to that of the competitors;

(iii) the change of the number of employees from year 2002 to 2003; (iv) the change in

the amount of business from year 2002 to 2003.

Antoncic and Hisrich (2004) conducted a study on corporate entrepreneurship dimensions

and organizational wealth creation. In the study, performance was measured in terms of

the profitability and growth and also wealth creation where profitability and growth were

measured in terms of relative and absolute terms (Antoncic & Hisrich, 2001). Absolute

growth metrics were the average annual growth in sales in the last three years and the

second assessed the average annual growth in number of employees in the last three

years. Market share in the last three years was used to measure relative growth.

2.5 Chapter Summary

This chapter presented the literature review of the study. The chapter was presented in

line with the study objectives. The literature showed that there was mixed evidence on the

effect of corporate entrepreneurship on firm growth. The next chapter of the study

presents the research design and research methodology.

21

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

This section presents the methodology of the study. It comprises of the research design,

the population and sampling design that is intended for use in the study. It also highlights

in a description of the population to be studied, the sampling design containing the

sample frame, sampling technique and sample size selection. The data collection methods

and tools are also shown together with the intended research procedures to be taken and

data analysis methods proposed for the study.

3.2 Research Design

The study used the descriptive research design. Hackman & Oldham (2004) view

descriptive design is appropriate in clarification of concepts, collecting information on

practical issues and formulating a study phenomenon for further research (Berrett, 2010).

The dependent variable was the impact of corporate entrepreneurship in the growth of

organizations. The independent variables are going to be risk taking, pro-activeness and

innovation.

3.3 Population and Sampling Design

3.3.1 Population

The population is the collection of total elements that we wish to study and make

inferences (Cooper & Schindler, 2014). In this study the population was made up of the

employees of Safaricom (K) Limited. These comprised of six hundred and twenty two

employees. These are employees who are directly involved in strategy formulation and

implementation.

3.3.2 Sampling Design

This is the procedure that guides the researcher towards selecting the appropriate sample.

It guides the process of grouping units to the frame, to establish the sample size and

allocate the sample to the categories in the sampling frame and final section of the sample

(Shields & Rangarajan, 2013).

22

3.3.2.1 Sampling Frame

The sampling frame refers to an exhaustive list of elements from which potential

respondents will be drawn (Cooper & Schindler, 2006). The sampling frame in this study

comprises all employees of Safaricom Limited who are involved in strategy formulation

and implementation. These are employees who are in the middle and upper level

management. The list of these employees was provided by the human resources

department of Safaricom (K) Limited as shown in Table 3.1.

Table 3.1: Sampling Frame

Department Number of staff

Internal Audit 7

Marketing 21

Financial Services 27

Finance 48

Resources 34

Corporate Affairs 31

Customer Care 132

Enterprise Business Unit 76

Risk 26

Technology 91

Strategy and Innovation 9

Consumer Business Unit 120

Total 622

Source: Muchaba (2015)

3.3.2.2 Sampling Technique

Stratified random sampling technique was used in the study. The technique involves

dividing a heterogeneous population into smaller units referred to as strata which are

based on the population member‟s category or position i.e. senior managers, line

managers and operatives. Simple random sampling was used to select a number which

was proportion to the sample size of each strata (Gobo, Gubrium & Silverman, 2003).

Simple random sampling was then used to select the individual staff member to be

included in the sample.

3.3.2.3 Sample Size

The study used the Yamane (1967) sampling formula, Where; e = tolerance at the

preferred level of confidence, N = study population, n = sample size, take α = 0.05 at 95%

23

confidence level. The sample size for the study was established as 234 respondents.

According to Yamane (1976) the formula can determine the sample size:

n= N

1+N (e2)

Thus, the sample of Safaricom (K) Limited employees was;

n = 622 / 1 + 622 (0.05)2

= 622 / 2.555

= 234

The probability proportion to sampling size (PPS) was applied. This is a sampling

technique where the probability of a strata to be selected is proportionate to the size of the

ultimate unit which involves selecting larger sample sizes from larger population units or

clusters and vice versa (Abdulla et al., 2014) the formula to achieve a sample size in each

department.

Population of Department × 234

Total Target Population

Table 3.2: Sample Size

Department Target Population Sample Size

Consumer Business Unit 120 45

Enterprise Business Unit 76 29

Financial Services 27 11

Customer Care 132 49

Technology 91 34

Finance 48 18

Resources 34 13

Corporate Affairs 31 12

Marketing 21 8

Risk 26 9

Internal Audit 7 3

Strategy and Innovation 9 3

Total 622 234

24

3.4 Data Collection Method

The study used both primary and secondary sources of data. The questionnaire was a

useful tool for collecting data from respondents because it provided a means of gathering

data in an open, clear, objective and cost effective way. The survey is also a relatively

faster means of gathering information and from a large size of the population or group

(Koehler, 2009). The questionnaire was used as the tool for primary data collection. The

questionnaire to be used was structured to elicit specific responses for quantitative

analysis respectively. The questionnaire was divided into section one, two, three and four

comprising of questions on innovation, risk taking (10 items), and pro-activeness (10

items). The study used items from past literature to design the questionnaire. Studies

(Covin & Miles, 1999; Piirala, 2012) items on proactiveness and risk taking were adopted

for this research. Atalay, Anafarta and Sarvan (2013) scale was used for innovation

dimensions.

The researcher used likert scale questions to design the questionnaire. A 5-point likert

scale was used for respondents to indicate to what extent their firm adopted corporate

entrepreneurship in their operations. This study borrowed from Delmar‟s (1997) approach

of measuring firm growth which included annual growth rates of assets, number of

employees and sales. This research specifically adopted the sales growth as the dimension

of firm growth. Sales growth can be calculated as Sales growth = (This year‟s sale - last

year‟s sales)/ Last years sales. This information on firm growth was from secondary

sources and was retreived from Safricom (K) Limited annual reports.

3.5 Research Procedures

The questionnaire was pretested to ensure reliability and validity of the research tool in a

group of respondents who were not included in the study. Necessary modifications were

made. Data was checked for accuracy before entry into the computer. To ensure

instrument reliability and content validity of the study, a pilot study was done. According

to Barbara, (2008) reliability refers to the extent to which an instrument (measurement) if

administered several times will remain the same and the stability of a measurement over a

period of time and the likeness of measurements within a period of time. The researcher

had a letter of introduction (Appendix I) which was attached to the questionnaire for staff.

This letter introduced the objective of the study and to confirm the confidentiality of the

25

information provided and also include researcher‟s contact information for any queries.

The researcher further sought a letter of authorization from the United States International

University – Kenya to collect data.

3.6 Data Analysis and Presentation

The nature of the data to be collected was quantitative due to the structured and

unstructured questions. The Statistical Package for Social Sciences (SPSS) Version 21

was used to analyse the data. The study conducted descriptive statistics which included

the mean, standard deviation, frequencies and percentages which were presented in table

and charts. The study also adopted inferential statistics to measure the relationship

between the independent and dependent variables. Correlation and regression analysis

were performed to ascertain the existence of relationship between the variables.

Regression analysis is used to show the influence of independent variables on the

dependent variable. The proposed regression model for the study is:

Y = β0 + β1X1 + β2X2 + β3X3 +ɛ

Where:

Y = Firm growth (independent variable)

β0 = Regression constant,

β1, β2 and β3 = Coefficients of independent variables

X1 = Innovation

X2 = Risk Taking

X3 = Proactiveness

ɛ = Error term

3.7 Chapter Summary

The chapter has described the research methodology that will be used to carry out the

research. The study is descriptive and focused on middle and upper level management

staff of Safaricom (K) Limited. Data collection as carried out via questionnaires and

analyzed through the descriptive statistics while using Microsoft Excel and SPSSS as the

analysis tools. The next chapter presents the results and findings of this study.

26

CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

This chapter presents the results and findings of the study. The findings are presented in

subsections of background information, descriptive and inferential statistics and further in

line with the research questions of the study. The results are presented in charts and tables

and the researcher‟s interpretation.

4.2 Background Information

The researcher was able to administer 234 questionnaires. Out of the 234 questionnaires

administered, the researcher was able to receive and pick 161 questionnaires. However,

18 questionnaires had incomplete responses and thus 143 questionnaires were used for

analysis and represent a response rate of 61.1%.

4.2.1 Gender

In terms of their gender, the findings showed that majority of the respondents accounted

for 56.0 % compared to the female representation of 44.0 % as indicated in Figure 4.1.

Figure 4.1: Gender of Respondents

56.0%

44.0%

Male Female

27

4.2.2 Age

Figure 4.2 shows the age categories of the study participants. The findings show that

majority of the respondents were 30-39 years were 64.0 %, 17.0 % were aged 20-29

years, 15.0 % were 40-49 years and 4.0 % were above 50 years of age.

Figure 4.2: Age Categories of Respondents

4.2.3 Education

In terms of their education level, 47.0 % had a bachelor‟s degree level of education, 31.0

% had postgraduate degree, 13.0 % certificate and 9.0 % had a diploma level of education

as shown in Figure 4.3.

Figure 4.3: Education Levels of Respondents

17.0%

64.0%

15.0%

4.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

20-29 30-39 40-49 Above 50

13.0%

9.0%

47.0%

31.0%

Certificate Diploma Bachelors' Degree Postgraduate Degree

28

4.2.4 Work Experience

The results show that 39.0 % had 5-10 years working experience, 34.0 % had more than

10 years and 27.0 % had 0-5 years‟ work experience at Safaricom (K) Limited as

indicated in Figure 4.4.

Figure 4.4: Work Experience of Respondents

4.3 Descriptive Statistics

This subsection of the chapter presents the descriptive statistics (mean, standard

deviation) of the study research questions.

4.3.1 Effect of Innovation on Business Organizations

The study sought to examine the effect of innovation on performance of Safaricom (K)

Limited. The study measured the perceptions of study participants on the adoption of

process, product, and market and organisational innovation. In terms of process

innovation, the findings show that the highest ranked score for process innovation was

that Safaricom (K) Limited adopted advanced real-time process control technology

(M=4.17; SD=1.124). In regard to product innovation, the findings showed that the

highest ranked statement was Safaricom (K) Limited extended numbers of product lines

(M=4.04; SD=1.220). The study results revealed that the highest ranked item was

Safaricom (K) Limited leads in innovative promoting methods to markets (M=3.50;

SD=1.210). In terms of the organisational innovation, the highest ranked item was that

Safaricom (K) Limited engaged in business process re-engineering (M=3.67; SD=1.286).

27.0%

39.0%

34.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

0-5 years 5-10 years More than 10 years

29

Table 4.1: Effect of Innovation on Business Organisation Growth

Innovation statements

Str

on

gly

Dis

ag

ree

Dis

ag

ree

Neu

tra

l

Ag

ree

Str

on

gly

Ag

ree

Mea

n

Std

. D

ev.

Our company adopts advanced real-

time process control technology

3.6% 5.8% 16.7% 18.1% 55.8% 4.17 1.124

Our company imports advanced

automatic quality restriction

equipment/software

13.0% 7.2% 16.7% 18.1% 44.9% 3.75 1.425

Our company imports advanced

programmable equipment

5.1% 4.3% 15.9% 18.1% 56.5% 4.17 1.156

Our company launches new products 7.2% 10.9% 23.2% 24.6% 34.1% 3.67 1.251

Our company extends numbers of

product lines

5.8% 8.0% 13.0% 22.5% 50.7% 4.04 1.220

Our company enlarges new markets

with new product development

10.1% 21.0% 31.9% 18.1% 18.8% 3.14 1.241

Our company launches customized

products according to market demands

8.7% 12.3% 24.6% 21.7% 32.6% 3.57 1.295

Our company leads innovative

distributing methods to markets

6.5% 19.6% 34.1% 22.5% 17.4% 3.25 1.151

Our company leads innovative

promoting methods to markets

8.0% 10.1% 31.9% 23.9% 26.1% 3.50 1.210

Our company continually enlarges

potential demand markets

7.2% 11.6% 34.1% 28.3% 18.8% 3.40 1.137

Our company engages in

organizational reconstruction for

pursuing operational efficiency

19.6% 12.3% 19.6% 24.6% 23.9% 3.21 1.442

Our company adopts innovative

reward systems

16.7% 14.5% 24.6% 22.5% 21.7% 3.18 1.374

Our company adopts innovative work

designs

15.9% 6.5% 16.7% 25.4% 35.5% 3.58 1.434

Our company engages in business

process re-engineering

9.4% 11.6% 13.0% 34.8% 31.2% 3.67 1.286

4.3.2 Effect of Risk Taking on Business Organizations

The study sought to examine whether risk taking was being used as a strategy at

Safaricom (K) Limited. Table 4.2 shows that the highest ranked item was Safaricom (K)

Limited employees are encouraged to take calculated risks with new ideas (M=3.86;

SD=1.175), this was followed by top managers of Safaricom (K) Limited believed that,

owing to the nature of the environment, it is best to explore the environment gradually via

careful, incremental behavior (M=3.75; SD=1.100) and The organisation has a

30

willingness to commit significant resources to opportunities to new business opportunities

(M=3.74; SD=1.216).

Table 4.2: Effect of Risk Taking on Business Organization Growth

Str

on

gly

Dis

ag

ree

Dis

ag

ree

Neu

tra

l

Ag

ree

Str

on

gly

Ag

ree

Mea

n

Std

. D

ev.

The top managers of my firm believe

that, owing to the nature of the

environment, it is best to explore the

environment gradually via careful,

incremental behavior

42.8% 15.2% 13.8% 14.5% 13.8% 3.75 1.100

When confronted with decision-

making situations involving

uncertainty, my firm typically adopts a

cautious, “wait-and-see” posture in

order to minimize the probability of

making costly

decisions

10.9% 10.1% 10.9% 35.5% 32.6% 3.23 1.180

The top managers of my firm have a

strong proclivity for low risk projects

9.4% 15.9% 13.8% 31.2% 29.7% 3.58 1.350

The organisation has a willingness to

commit significant resources to

opportunities to new business

opportunities

8.7% 11.6% 9.4% 40.6% 29.7% 3.74 1.216

Ideas that still have not been tested are

usually presented in the organisation

6.5% 13.8% 10.9% 40.6% 20.3% 3.49 1.368

Employees in the organisation receive

support and encouragement when

presenting new ideas.

5.8% 19.6% 13.8% 40.6% 20.3% 3.49 1.122

Management and staff in the

organisation often venture into

unknown territory

11.6% 21.0% 21.0% 29.7% 16.7% 3.70 0.948

Management and staff in the

organisation are encouraged to take

risks

4.3% 15.2% 18.1% 42.0% 20.3% 3.01 1.273

Initiative in the organisation from

employees often receives a favorable

response here, so people feel

encouraged to generate new ideas

8.7% 18.8% 21.7% 34.1% 16.7% 3.56 1.285

Employees in the organisation are

encouraged to take calculated risks

with new ideas

10.9% 25.4% 12.3% 31.9% 19.6% 3.86 1.175

4.3.3 Effect of Proactiveness on Business Organizations

The study sought to establish whether proactiveness was adopted at Safaricom (K)

Limited as a growth strategy of corporate entrepreneurship. The findings show that the

highest ranked item was Safaricom (K) Limited is consistently looking for new business

31

opportunities in the sector (M=3.71;SD=1.251) this was followed by Safaricom (K)

Limited marketing efforts try to lead customers rather than respond to the needs to

customers (M=3.70;SD=1.205) and In dealing with competition, Safaricom (K) Limited

is very seldom the first business to introduce new products/services, administrative

techniques and operating technologies (M=3.69;SD=1.317).

Table 4.3: Effect of Proactiveness on Business Organization Growth

Str

on

gly

Dis

ag

ree

Dis

ag

ree

Neu

tra

l

Ag

ree

Str

on

gly

Ag

ree

Mea

n

Std

. D

ev.

In general, the top managers of my

firm have a strong tendency to be

ahead of other competitors in

introducing novel ideas or products

4.3% 12.3% 12.3% 45.7% 25.4% 2.41 1.493

In dealing with competition, my firm

is very seldom the first business to

introduce new products/services,

administrative techniques and

operating technologies

9.4% 17.4% 28.3% 30.4% 14.5% 3.69 1.317

In dealing with competition, my firm

typically responds to action which

competitors initiate as compared with

initiating action which the competition

then responds to

8.7% 17.4% 15.9% 23.2% 34.8% 3.56 1.318

The organisation is consistently

looking for new business opportunities

in the sector

7.2% 10.9% 13.8% 37.0% 31.2% 3.71 1.251

The organisation marketing efforts try

to lead customers rather than respond

to the needs to customers

13.0% 13.0% 13.8% 31.9% 28.3% 3.70 1.205

The organisation works to find new

businesses or markets to target in the

sector

7.2% 10.9% 24.6% 39.9% 17.4% 3.50 1.185

The organisation incorporates

solutions to unarticulated customer

needs in our products and services

4.3% 5.8% 21.0% 53.6% 15.2% 3.19 1.270

The organisation continuously tries to

discover additional needs of our

customers of which they are unaware

15.9% 23.2% 13.0% 39.1% 8.7% 3.59 1.106

The organisation takes a bold and

aggressive approach when competing

with other players in the sector

5.8% 22.5% 11.6% 30.4% 29.7% 3.31 1.207

The organisation is always trying to

undo and out-maneuver the

competition as best as it can

5.1% 13.0% 7.2% 40.6% 34.1% 3.24 1.321

32

4.4 Inferential Statistics

This section of the study presents the inferential findings of the study. The study used

correlation analysis to measure the strength of association between the independent and

dependent variables and regression analysis to measure the direction of the relationship

between the independent and dependent variables.

4.4.1 Correlation Analysis

The correlation analysis showed that all the independent variables had a positive and

significant relationship with business growth. Table 4.4 shows that there was a positive

and significant relationship with innovation (r = 0.298; p < 0.000), risk taking (r = 0.199;

p < 0.017) and proactiveness (r = 0.119; p < 0.025).

Table 4.4: Innovation, Risk Taking, Proactiveness and Business Growth Correlation

Innovation Risk

taking

Proactiveness Business

growth

Innovation Pearson

Correlation

1

Sig. (2-tailed)

N 143

Risk taking Pearson

Correlation

.316(**) 1

Sig. (2-tailed) .000

N 143 143

Proactiveness Pearson

Correlation

-.040 .154 1

Sig. (2-tailed) .633 .066

N 143 143 143

Business

growth

Pearson

Correlation

.298(**) .199(*) .119 1

Sig. (2-tailed) .000 .017 .025

N 143 143 143 143

** Correlation is significant at the 0.01 level (2-tailed).

* Correlation is significant at the 0.05 level (2-tailed).

4.4.2 Regression Analysis

The study conducted a regression analysis to establish the direction of the relationship

between the independent and dependent variable. Table 4.5 shows the model summary

33

which shows that the R2

is 0.634 which means that 63.4 % of variation in business growth

is due to the three independent study variables.

Table 4.5: Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .796(a) .634 .620 3.15259

a Predictors: (Constant), Innovation, Risk taking, Proactiveness

Table 4.6 shows the ANOVA results of the multiple regression analysis. The findings

show that the significance level is < 0.005 (p = 0.002). This findings imply that the

regression model is significant in explaining change in the study dependent variable.

Table 4.6: ANOVA

Model Sum of

Squares

df Mean

Square

F Sig.

1 Regression 1840.966 4 460.242 46.307 .002(a)

Residual 1063.453 107 9.939

Total 2904.420 111

a Predictors: (Constant), Innovation, Risk taking, Proactiveness

b Dependent Variable: Business growth

The regression coefficients show the size of the effect of the independent variables on the

dependent variable. Table 4.7 shows that an increase in innovation, risk taking and

proactiveness lead to an increase in business growth of Safaricom (K) Limited. The

findings further revealed that innovation (β = 0.639, p < 0.005) had the greatest effect on

business growth followed by risk taking (β = 0.378, p < 0.005) and proactiveness (β =

0.212, p < 0.005) at Safaricom (K) Limited. The proposed regression model thus

becomes:

Y = 13.179 + 0.212 X1 + 0.378 X2 + 0.639 X3 +ɛ

34

Table 4.7: Coefficients

Model Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

B Std.

Error

Beta B Std.

Error

1 (Constant) 13.179 1.377 2.548 .125

Innovation .639 .106 .102 2.147 .001

Risk taking .378 .098 .062 .794 .002

Proactiveness .212 .106 .467 5.065 .000

b Dependent Variable: Business growth

4.5 Chapter Summary

This chapter presented the results and findings of the study. The chapter is presented in

subsections of the background information, descriptive and inferential statistics. The

descriptive statistics was presented in line with the study research questions and the

correlation and regression analysis was done between the independent and dependent

variables.

35

CHAPTER FIVE

5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter presents the discussion, conclusion and recommendations of the research.

The summary comprises the background of the study and the research methodology used

in the study. The discussion and conclusion are presented in line with the study research

questions. The recommendations are presented in regard of implications and areas for

further research.

5.2 Summary of findings

The aim of the study was to examine impact of corporate entrepreneurship strategy on

growth of business organisations focusing on Safaricom (K) Limited. The study aimed at

answering the following research questions: what is the effect of innovation on business

organizations? What is the effect of risk taking on business organizations? And what is

the effect of proactiveness on business organizations?

The research methodology adopted was the descriptive research method. It focused on

three groups namely middle and upper level management and operatives for Safaricom

(K) Limited departments. The sample size of the study was 143 staff. Data collection was

done by a structured questionnaires. This data was analyzed through the descriptive

statistics, correlation and regression analysis using SPSS Version 21. The findings were

presented in tables and figures and researcher‟s own interpretation.

The background information showed that male study participants represented 56.0 %

compared to the female representation of 44.0 %; 30-39 years were 64.0 %, 17.0 % were

aged 20-29 years, 15.0 % were 40-49 years and 4.0 % were above 50 years of age; 47.0 %

had a bachelor‟s degree level of education, 31.0 % had postgraduate degree, 13.0 %

certificate and 9.0 % had a diploma level of education and in regard to working

experience, 39.0 % had 5-10 years working experience, 34.0 % had more than 10 years

and 27.0 % had 0-5 years‟ work experience at Safaricom (K) Limited.

In terms of process innovation, the findings show that the highest ranked score for

process innovation was that Safaricom (K) Limited adopted advanced real-time process

control technology (M=4.17; SD=1.124). In regard to product innovation, the findings

36

showed that the highest ranked statement was Safaricom (K) Limited extended numbers

of product lines (M=4.04; SD=1.220). The study results revealed that the highest ranked

item was Safaricom (K) Limited leads in innovative promoting methods to markets

(M=3.50; SD=1.210). In terms of the organisational innovation, the highest ranked item

was that Safaricom (K) Limited engaged in business process re-engineering (M=3.67;

SD=1.286). The correlation results showed that there was a positive and significant

relationship with innovation (r = 0.298; p < 0.000) and the regression analysis showed

that innovation (β = 0.639, p < 0.005) had the greatest effect on business growth in

Safaricom (K) Limited.

In terms of risk taking, the highest ranked item was Safaricom (K) Limited employees are

encouraged to take calculated risks with new ideas (M=3.86; SD=1.175), this was

followed by top managers of Safaricom (K) Limited believed that, owing to the nature of

the environment, it is best to explore the environment gradually via careful, incremental

behavior (M=3.75; SD=1.100) and The organisation has a willingness to commit

significant resources to opportunities to new business opportunities (M=3.74; SD=1.216).

The correlation results revealed that risk taking (r = 0.199; p < 0.017) had a positive and

significant relationship with business growth. The regression analysis showed that risk

taking (β = 0.378, p < 0.005) had an effect on business growth on Safaricom (K) Limited.

The findings show that the highest ranked item was Safaricom (K) Limited is consistently

looking for new business opportunities in the sector (M=3.71;SD=1.251) this was

followed by Safaricom (K) Limited marketing efforts try to lead customers rather than

respond to the needs to customers (M=3.70;SD=1.205) and In dealing with competition,

Safaricom (K) Limited is very seldom the first business to introduce new

products/services, administrative techniques and operating technologies (M=3.69;

SD=1.317). The correlation results also showed a positive and significant relationship

between proactiveness (r = 0.119; p < 0.025) and business growth. The regression

analysis indicated that proactiveness (β = 0.212, p < 0.005) had an effect on business

growth at Safaricom (K) Limited.

37

5.3 Discussion

5.3.1 Effect of Innovation on Business Organizations

The descriptive results showed that process innovation was the most ranked innovation

strategy that was adopted at Safaricom (K) Limited. The study results showed that there

was a positive and significant relationship between innovation and growth of business

organisation and the regression analysis showed that innovation had the greatest effect on

business growth among the three study variables.

According to Porter (Schumpeter, 1934; Porter, 1980) the concept of innovation is

associated with the economic aim of creating differentiation (to enhance the monopolistic

control of an organisation in lieu to its customers). The concept of innovation has

received much attention in terms or research in different disciplines and can be described

along different dimensions such as newness or novelty (Tidd & Bessant, 2009), and is

also classified on the direction it focuses such as the product, market, process and/or

business system (Jenssen & Randøy, 2006; Jenssen & Nybakk, 2009).

Garcia (2014) agrees that process innovation refers to the new organisational forms and

knowledge, policies and procedures that are embodied in the distribution applications,

products, channels and consumers‟ needs, preferences and expectations. Process

innovation is associated with the implementation of a significantly improved or new

delivery method or production.

This study findings agree with earlier studies (Parisi et al., 2006; Hall et al., 2009).that

process innovation contributes more to productivity increase than product innovation.

This finding also supports Eiriz et al. (2013) arguments that firms get more concerned

with efficiency aspects, therefore process innovation tends to be the focus of firms‟

innovation strategies. This study finding is also supported by Mwangi and Namusonge

(2014) study on influence of innovation on SMEs in Nakuru County and found that

indicated that process innovation was crucial to coming up with quality designs of

products that help meet user wants and needs. Majority of respondents agreed that process

innovation was crucial in coming up with quality designs of products that will help meet

user wants and needs.

38

5.3.2 Effect of Risk Taking on Business Organizations

The descriptive results revealed that employees at Safaricom (K) Limited were

encouraged to take calculated risks with new ideas. The correlation results revealed that

risk taking had a positive and significant relationship with business growth. The

regression analysis showed that risk taking had an effect on business growth on

Safaricom (K) Limited.

This study findings therefore suggest that risk taking is a favourable means of an

organisation to achieve growth. This finding implies that employees and managers at

Safaricom (K) Limited are encouraged to take risks in their work. This form of risks are

associated with improved performance through coming up with innovative ideas which

have such impacts as reduced costs and creating new markets and meeting customer

needs in the telecommunication sector.

This finding agrees with earlier studies such as Wang and Poutziouris (2010) empirical

studies done in developed and transition economies which suggested that risk taking as a

firm-level strategic posture has constitutes a potential source of competitive advantage

and has positive, long-term impact on financial performance and growth of SMEs.

Moreover, this finding corroborates past study (ies) of Gibb and Haar (2010) conducted

an empirical research among 167 New Zealand organisations and confirmed that a profile

of an organisation risk taking often leads to a high financial performance. In Taiwan,

Wang and Yen (2012) found that risk taking has a positive impact with organisation

performance among SMEs in China.

The concept of risk taking is that it is a major feature of entrepreneurship whereby a high

risk taking orientation thus leads to a high organisation growth and profitability Zhou and

de Wit (2009) view risk taking as a propensity to take brave actions such as to venture to

new markets, and a using a large size of resources to venturing with unclear outcomes and

borrowing huge amounts to make business investments.

Risk taking involves engagement in manageable and calculated risks in an attempt to

achieve benefits rather than having daring risks which can negatively affect organisation

performance (Dess & Lumpkin, 2005; Morris, Kuratko & Covin, 2008). Empirical studies

done in developed and transition economies suggest that risk taking as a firm - level

39

strategic posture has constitutes a potential source of competitive advantage and has

positive, long-term impact on financial performance and growth of SMEs (Wang &

Poutziouris, 2010).

5.3.3 Effect of Proactiveness on Business Organizations

The descriptive statistics indicated that Safaricom (K) Limited is consistently looking for

new business opportunities in the sector. The correlation results also showed a positive

and significant relationship between proactiveness and business growth. The regression

analysis indicated that proactiveness had an effect on business growth at Safaricom (K)

Limited. This findings suggests that proactiveness was a CE approach that was adopted at

Safaricom (K) Limited to achieve and sustain competitive advantage in the

telecommunication sector.

This finding corroborates past results of studies on the relationship between proactiveness

and business performance and growth. Karacaoglu et al. (2013) using a sample of 140

industrial manufacturing firms listed on Istanbul Stock Exchange (ISE) found that the

original dimensions of entrepreneurship orientation (risk taking innovation and

proactiveness) had direct interaction with organisation financial performance.

In a similar study in Netherlands, Kraus, Rigtering, Hughes and Hosman (2012) survey

among 164 SMEs found that proactive SMEs behaviour had a direct influence on SME

performance during the economic crisis. In Sri Lanka, Kumarpeli and Semasinghe (2015)

research on the impact of entrepreneurial orientation on the growth of SMEs in Sri Lanka

found that the relationship between proactiveness and firm growth was not significant.

Ejdys (2016) conducted a study on innovativeness and entrepreneurial orientation of

SMEs. The research results show that proactiveness has a significant positive total effect

on improving innovativeness. The study concluded that proactiveness was positively and

significantly related to organisation innovativeness. In Malaysia, Arshada, Raslib, Arshad

and Zain (2014) research found that among the five dimensions of EO, proactiveness had

the highest correlation with business performance and proactiveness had an effect on

business performance.

40

Oni (2012) investigated the importance of entrepreneurial proactiveness on firm

performance and the findings revealed that enterprises that acted on high entrepreneurial

proactiveness had a direct effect on the performance metrics which are consistent with

employment of competent and qualified personnel and size. In Kenya, Wambugu et al.

(2015) concluded that, proactiveness was a major predictor of firm performance of agro

processing SMEs in Kenya in terms of employee growth and profitability.

5.4 Conclusion

5.4.1 Effect of Innovation on Business Organizations

The study sought to establish effect of innovation on business growth at Safaricom (K)

Limited. The study results confirmed that innovation had the greatest influence on

business growth among the three dimensions of corporate entrepreneurship. Therefore,

this study concludes that innovation has the greatest effect on business growth at

Safaricom (K) Limited.

5.4.2 Effect of Risk Taking on Business Organizations

The study sought to establish effect of risk taking on business growth at Safaricom (K)

Limited. The study results indicated that there was a positive relationship between risk

taking and business growth. The results confirmed that risk taking had the least effect on

business growth of Safaricom (K) Limited. Therefore, this study concludes that risk

taking has the least effect on business growth of Safaricom (K) Limited.

5.4.3 Effect of Proactiveness on Business Organizations

The study sought to establish effect of proactiveness on business growth at Safaricom (K)

Limited. The study results affirmed a positive relationship between proactiveness on

business growth. The findings further confirmed that proactiveness had the second largest

effect on business growth at Safaricom (K) Limited among the three corporate

entrepreneurship dimensions measured. Therefore, this study concludes that proactiveness

had the second highest effect on business growth at Safaricom (K) Limited.

41

5.5 Recommendations

5.5.1 Recommendations for Implications

5.5.1.1 Effect of Innovation on Business Organizations

The study findings showed that process innovation had the greatest effect on business

growth. The study therefore recommends that Safaricom (K) Limited should endeavor to

enhance their process innovations to improve the organization‟s forms and knowledge,

policies and procedures that are embodied in the distribution applications, products,

channels and consumers‟ needs, preferences and expectations.

5.5.1.2 Effect of Risk Taking on Business Organizations

The study findings revealed that risk taking had the least effect on business growth. The

study therefore recommends that Safaricom (K) Limited should encourage risk taking

among its staff, project teams and managers to enable the organisation capture new

markets in the telecommunication sector in Kenya.

5.5.1.3 Effect of Proactiveness on Business Organizations

The study findings revealed that proactiveness had the second greatest effect on business

growth. The study therefore recommends that Safaricom (K) Limited should enhance its

proactive tendency in searching for emerging technologies, markets and opportunities in

the growing telecommunications sector in Kenya.

5.5.2 Recommendations for Further Study

The aim of the study was to examine impact of corporate entrepreneurship (CE) strategy

on growth of business organisations focusing on Safaricom (K) Limited. The study

recommends for further research on the impact of CE on business growth in other

industries and sectors. Second, the study was scope was limited to the CE dimensions of

(1) pro-activeness, (2) risk-taking, (3) innovations. The study recommends for inclusion

self-renewal as the fourth dimension of CE in future studies of corporate

entrepreneurship.

42

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53

APPENDICES

APPENDIX 1: LETTER OF INTRODUCTION

Dear Respondent

RE: COLLECTION OF DATA

My name is Janet Katule Mutuku. I am currently a final year MBA student at USIU

University. As part of my course requirements, I am expected to conduct a research and

present it as a thesis. My topic is on IMPACT OF CORPORATE

ENTREPRENEURSHIP STRATEGY ON GROWTH OF BUSINESS

ORGANIZATIONS IN KENYA: A CASE OF SAFARICOM LIMITED. You are asked

to provide answers on questions about corporate entrepreneurship strategy. Any

information you provide will be treated with uttermost confidentiality. All the information

provided will be used for academic exercise only. Please contact the researcher on the

contact information provided.

Your cooperation will be highly appreciated. Thank you.

Yours faithfully,

JANET K. MUTUKU

USIU MBA Student

Phone: 0723 211 078

Email: janetkatule@gmail.com

54

APPENDIX II: QUESTIONNAIRE FOR STAFF

Instructions:

Please Tick (√) the appropriate category in the spaces provided

The questionnaire will take approximately 20 minutes to complete

Part A: Demographic Characteristics

1. What is your Gender?

a. Male ( )

b. Female ( )

2. What is your Age?

a. 20 -29 ( )

b. 30 – 39 ( )

c. 40 – 49 ( )

d. Over 50 years ( )

3. What is your highest level of education?

a. Certificate ( )

b. Diploma ( )

c. Bachelor‟s degree ( )

d. Postgraduate degree ( )

4. Number of years worked in the company?

a. 0-5 years ( )

b. 5-10 years ( )

c. Over 10 years ( )

55

Part B: Effect of Innovation on Business Growth

5. The following statements are related to the effect of innovation on business

growth. Please indicate to what extents do you agree or disagree with the

following statements. Where (1 Strongly Disagree - 5 Strongly Agree)

Innovation statements 1 2 3 4 5

Process Innovation

Our company adopts advanced real-time process control technology

Our company imports advanced automatic quality restriction

equipment/software

Our company imports advanced programmable equipment

Product Innovation

Our company launches new products

Our company extends numbers of product lines

Our company enlarges new markets with new product development

Our company launches customized products according to market

demands

Market Innovation

Our company leads innovative distributing methods to markets

Our company leads innovative promoting methods to markets

Our company continually enlarges potential demand markets

Organisational Innovation

Our company engages in organizational reconstruction for pursuing

operational efficiency

Our company adopts innovative reward systems

Our company adopts innovative work designs

Our company engages in business process re-engineering

56

Part C: Risk Taking and Firm Growth

6. The following statements are related to the effect of risk taking on business

growth. Please indicate to what extents do you agree or disagree with the

following statements. Where (1 Strongly Disagree - 5 Strongly Agree)

Risk taking Statements 1 2 3 4 5

a

The top managers of my firm believe that, owing to the nature of

the environment, it is best to explore the environment gradually via

careful, incremental behavior

b

When confronted with decision-making situations involving

uncertainty, my firm typically adopts a cautious, “wait-and-see”

posture in order to minimize the probability of making costly

decisions

c

The top managers of my firm have a strong proclivity for low risk

projects

d The organisation has a willingness to commit significant resources

to opportunities to new business opportunities

e Ideas that still have not been tested are usually presented in the

organisation

f Employees in the organisation receive support and encouragement

when presenting new ideas.

g Management and staff in the organisation often venture into

unknown territory

h Management and staff in the organisation are encouraged to take

risks

i Initiative in the organisation from employees often receives a

favorable response here, so people feel encouraged to generate new

ideas

j Employees in the organisation are encouraged to take calculated

risks with new ideas

57

Part D: Effect of Proactiveness on Firm Growth

7. The following statements are related to the effect of proactiveness on business

growth. Please indicate to what extents do you agree or disagree with the

following statements. Where (1 Strongly Disagree - 5 Strongly Agree)

Proactiveness Statements 1 2 3 4 5

a

In general, the top managers of my firm have a strong tendency to

be ahead of other competitors in introducing novel ideas or products

b In dealing with competition, my firm is very seldom the first

business to introduce new products/services, administrative

techniques and operating technologies

c In dealing with competition, my firm typically responds to action

which competitors initiate as compared with initiating action which

the competition then responds to

d The organisation is consistently looking for new business

opportunities in the sector

e The organisation marketing efforts try to lead customers rather than

respond to the needs to customers

f The organisation works to find new businesses or markets to target

in the sector

g The organisation incorporates solutions to unarticulated customer

needs in our products and services

h The organisation continuously tries to discover additional needs of

our customers of which they are unaware

i The organisation takes a bold and aggressive approach when

competing with other players in the sector

j The organisation is always trying to undo and out-maneuver the

competition as best as it can