An assessment of corporate entrepreneurship in the personal protective equipment industry

Abstract

The objective of this study has been to investigate the influence of an entrepreneurial orientation on the perceived success of personal protective equipment organisations in South Africa. For the purpose of this study, business success has been measured by means of two dependent variables, namely Business development and improvement and Business growth. Structured questionnaires have been administered to managers in one company that is perceived to be the current market leader in the personal protective equipment industry in South Africa. Construct validity of the measuring instrument has been assessed by means of a principal component exploratory factor analysis and by calculating Cronbach alpha coefficients. A literature study on the field of Entrepreneurship has been conducted. The term entrepreneurial orientation consisting of five constructs, namely autonomy, innovation, pro-activeness, risk-taking and competitive aggressiveness, is defined. Perceived success of the industry is defined in terms of growth and development. Both ratings of the constructs and their evaluation of the perceived success of the industry, have been measured, analysed and reported. The results obtained from the questionnaire in conjunction with the literature review, are used to draw conclusions and make recommendations. The study is based on perceived corporate entrepreneurship within the line, middle and senior management levels of SPPE, a division of SAMSAC Africa (Pty) Ltd. The year 2009, has marked a series of economic events that placed the personal protective equipment market under immense pressure to maintain its bottom line growth. The environment within the organisation is constantly changing. SPPE customers, which are mainly the mining industry, have pressurised SPPE to filter cost savings through to them to ensure that they, in turn, alleviate the pressure to cut costs. Costs have been identified as one of the key challenges facing the entire mining sector. In turn, the suppliers of SPPE have also been applying pressure to the company to increase their purchase price, due to increased labour, production and overhead costs. The strengthening of entrepreneurship is an important objective for any organisation that is building its responsiveness to a globalised and changing environment. For SPPE to face the pressures brought to bear upon them by their customers and suppliers respectively, and, coupled with fierce competition in the personal protective equipment industry, it is necessary to review its processes and actively search for new ways to increase its capacity for innovation and competitiveness. The results show that the managers in the participating personal protective equipment business have perceived that the entrepreneurial orientation factors of Pro-activeness, Risk-taking and Autonomy have a positive influence on their business’s development and improvement. A significant relationship within the dependent variable Business development and improvement has also been found to exist within the independent variable Competitive aggressiveness. Corporate entrepreneurship is seen as a critical component to organisational success, especially in organisations that operate in rapidly changing industries. Corporate entrepreneurship can be a solution to large organisations’ lack of innovation, stagnated top-line growth and the inaction that often overtakes the large, mature organisations of the world. Organisations need to consistently search for new opportunities and therefore may benefit from adopting an entrepreneurial orientation. Established organisations may in essence be forced to behave entrepreneurially within the organisation, in order to defend their positions in the market. Competitive successes for organisations require managers to make strategic choices. Strategy is about relating the organisation with its environment and entrepreneurship is about exploiting opportunities in the same environment. To enhance the entrepreneurial orientation in personal protective equipment businesses, it is recommended that the word “entrepreneurship” should specifically be included in the vision statement of the businesses, setting goals and developing strategies for entrepreneurship. The focus of the business then becomes opportunity identification, discovery of new sources of value, and product and process innovation that could lead to greater success.