Corporate entrepreneurship and innovation performance: the moderating role of endogenous risk management in the South African telecommunications sector

Abstract

Innovation and risk are indivisible. The mismanagement of risk can carry an enormous penalty. In recent history, the corporate community has observed a number of risk calamities that have resulted in substantial loss. Harmoniously, mounting evidence advocates for effective risk management as an archetypal characteristic of successful firms. At an academic level, literature discusses the importance of an organisational culture in enterprise risk management as a means of improving firm and innovation performance. However, there is scant empirical evidence to support this connection, an evident research gap within the South African context. At industry level, the South African telecommunications sector has experienced adverse consequences due to the mismanagement of risk that ascended from a lack of control-related structures, policies, systems, and knowledge management systems pertaining to innovation performance. Within this ambit, there lies the need to gain insight on the role of endogenous risk management within the corporate entrepreneurship context and its effect on innovation performance in the aforementioned sector. Consequently, the purpose of this research is to investigate how organisational antecedents of corporate entrepreneurship may influence innovation performance while identifying the potential moderating effect of endogenous risk management on this relationship, within the telecommunications sector in South Africa. This study follows a positivist paradigm, founded on a quantitative research approach utilising a cross-sectional viewpoint. Primary data, with a sample size of 187 participants, was collected by means of an online survey that was self-administered. Two stage probability sampling was adopted for this research. The sampling techniques used were stratified sampling, which was used to sample all the identified telecommunication firms in South Africa with primary focus on the significant market shareholders, and simple random sampling which was applied to employees within the telecommunication firms. Data analysis comprised of correlational analysis, backward elimination method, multiple regression and moderation analysis. The antecedents of corporate entrepreneurship; management support, rewards/reinforcement and time availability were found to be significant predictors of innovation performance at a 99 percent confidence level, whilst organisational boundaries were found to be an insignificant predictor of innovation performance. A significant but indirectly proportional relationship was found between work/discretion/autonomy and innovation performance within this study context. It is noteworthy that the regression analysis revealed time availability, management support and rewards/reinforcement, as the most influential predictors of innovation performance, listed in descending order of strength. Firms with appropriate time availed, rewards/reinforcement and management support for employee entrepreneurial activity, are expected to yield prodigious results in innovation performance. Furthermore, the results indicated that endogenous risk management has a moderating effect on the relationship between corporate entrepreneurship and innovation performance. However, this was discovered to be statistically insignificant for each dimension of corporate entrepreneurship in relation to innovation performance. The findings were precisely the reverse of those found in developed economy context research. The findings of this study have substantial implications for industry, academia and policy makers alike. This study succours telecommunication firms in the establishment and maintenance of internal corporate environments that are conducive to innovation. For longevity and competitive advantage purposes, it is within firms’ best interest to invest in human capital as primary agents of knowledge creation, corporate entrepreneurship and innovation activities. Strategic policy formulation targeted at enhancing innovation outcomes and all the opportunities that come with it – could benefit the country at a micro, meso and macro level. The originality of the study lies its nature within this particular emerging market context and the theoretical contribution made through a construct proposed for inclusion in the antecedents of corporate entrepreneurship framework