Determinants of intrapreneurial performance within the banking industry in South Africa
Date
2022
Authors
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Journal ISSN
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Publisher
University of the Witwatersrand, Johannesburg
Abstract
The ability for large corporates to remain competitive and grow ahead of the market in an era that has been defined by globalisation, the fourth industrial
revolution, and more recently the COVID-19 pandemic has become increasingly difficult. Therefore, it is a critical imperative for organisations to develop a new
capability that equips them to navigate the turbulent global macro-economic environment and complex business markets successfully.
Globally, banks have experienced severe pressure to transform their business models from capital intense businesses into revenue diversification drivers through new fee-based services. Investors are leaning towards new generation banking models that serve customers holistically, intuitively, and better by employing “new age” technology solutions, as profitability levels within global banks have slipped below the cost of shareholder equity.
Coupled with the reality on the ground pre-2020, COVID-19 has become awatershed transformation moment for banks. It has accelerated many long-term banking trends that have resulted in customer shifts in relation to their needs, behaviours and expectations and has subsequently impacted their recovery performance. As such, African banks need to pivot their focus towards growth and relevance by ensuring the establishment of a fundamentally different business model that provides integrated digital ecosystem solutions that go beyond traditional banking, and offer to ensure market competitiveness. Corporate entrepreneurship is a strategic capability that enables organisations to embed innovation as a core competency and simultaneously engage in explorative and exploitative activities, which are essential thrusts in the strategic renewal of a company.
This research study enriched the domain of corporate entrepreneurship by deepening the understanding of the mechanisms that underpin the corporate entrepreneurial embedment process, within a dynamic complex organisational setting. This was through the development of a core embedment capability model of corporate entrepreneurship that predicts the value drivers of corporate entrepreneurial performance and explores the contextual corporate entrepreneurship nuances attributed to banking corporations domiciled in Africa. This study importantly furthered contextual setting theory development and shed light over the heterogeneity of corporate entrepreneurship, which arose due to an idiosyncratic corporate entrepreneurship embedment process. This process consists of institutional path dependencies that resulted from gradations in the macro, meso, and micro layers.
The model and theories emanating from this study not only aimed to bridge the research gap by exploring the dynamic complexity of corporate entrepreneurship, but also assessed the knowledge transfer of market intelligence into corporate entrepreneurial performance, and the significance of network ties in developing countries as an influencer of corporate entrepreneurial activity. In this research study, the levels of corporate entrepreneurship within the financial services sector of companies domiciled in South Africa were analysed to determine the quantum of influence that organisational, individual, and environmental antecedent factors have as predictors of corporate entrepreneurial performance. This was a precursor to crafting an embedment capability model that would enable financial services organisations to embed a corporate entrepreneurial ecosystem systematically, and enable effective and agile corporate entrepreneurial transformation.
The research purpose was achieved by employing a three-prong approach. First, a configurational method was applied to existing literature to consolidate prevailing theories and to integrate existing models and frameworks as a basis of the proposed theoretical model. Second, the theoretical model was empirically tested using partial least squares structured equation modelling (PLS-SEM) to validate the model and to establish causal relational influence among the three different sets of antecedent variables. This would determine their quantum of impact on corporate entrepreneurial performance. Finally, an optimal configuration was proposed as a premise to describe and predict corporate entrepreneurial performance as a function of system thinking.
The empirical evidence from this study validated that the most significant transformational driver of corporate entrepreneurial activity within incumbents remained organisational antecedents and entrepreneurial corporate strategy as the bedrock of a corporate entrepreneurial embedment ecosystem. Its singular effect on corporate entrepreneurial activity was circa five times larger than any other predictor within the corporate entrepreneurial embedment ecosystem. This was flanked equally by employee enablement of the corporate entrepreneurial strategy and the execution of the corporate entrepreneurial strategy. Employee enablement consisted of two supporting predictors, namely, the decisions and behaviours of transformation leaders, and the entrepreneurial cognitive horsepower of employees to develop initiatives and formulate strategic plans that enable the delivery of the corporate entrepreneurial strategy. Strategy execution encompassed two underpinning predictors, namely, the implementation of an organic organisational structure and the deployment of novel resource recipes to build new capabilities and adjacent capabilities to a firm’s core offering. Considering the nuances in the African operating environment, both macro level
antecedents and network ties were deemed non-significant direct value drivers of corporate entrepreneurial performance within African banks.
Description
A research report submitted to the Faculty of Commerce, Law and Management, University of Witwatersrand, in fulfillment of the requirements for the degree,
Doctor of Philosophy,Johannesburg 2022
Keywords
Intrapreneurial, Performance, Banking, South Africa, UCTD
Citation
Govender, Thanusha. (2022). Determinants of intrapreneurial performance within the banking industry in South Africa [PhD thesis, University of the Witwatersrand, Johannesburg]. WireDSpace.https://hdl.handle.net/10539/40753