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APPROACHING A DEEPER UNDERSTANDING OF CORPORATE ENTREPRENEURSHIP Focusing on co-evolutionary processes

Jarna Heinonen D.Sc. (Econ. & Bus. Adm.), Adjunct Professor TSE Entre, Turku School of Economics Rehtorinpellonkatu 3, FIN-20500 Turku, Finland Tel. +358-2-481 481 Fax +358-2-4814 393 e-mail: [email protected] and Jouko Toivonen D.Sc. (Econ. & Bus. Adm.), Acting Professor Department of Management, Turku School of Economics Rehtorinpellonkatu 3, FIN-20500 Turku, Finland Tel. +358-2-481 481 Fax +358-2-4814 285 e-mail [email protected] ABSTRACT Previous studies on CE behaviour and processes have neglected the role of employees, as the focus has been on one-way relationships (top-down) and the interaction between them. We question the straightforward model of CE implementation and suggest causality between different elements. This conceptual study discusses the different organisational and individual pre-requisites in order to promote understanding of how they confront in the CE context. We propose that topdown and bottom-up influences are parallel terms describing the co-evolution of managerial and employee behaviour and organisational structures. We conclude by introducing the concept of implementation and influencing modalities and conversational space, which enables the ‘voices’of managers and subordinates to meet and negotiate. Finally, we argue that CE is a two-way interactive and recursive process in which structures and managerial initiatives affect individual behaviour, and

individual behaviour affects structures and management behaviour. The paper discusses the implications and gives direction for further research endeavours.

Keywords: corporate entrepreneurship, intrapreneurship, entrepreneurial leadership, co-evolution, implementation

APPROACHING A DEEPER UNDERSTANDING OF CORPORATE ENTREPRENEURSHIP Focusing on co-evolutionary processes

INTRODUCTION Global competitive pressure has made all established organisations –large and small, public and private –struggle to find an entrepreneurial orientation at all levels in order to improve performance (Zahra, 1991; 1993; Zahra and Covin, 1995; Wiklund, 1999). Corporate entrepreneurship (CE) is being embraced in order to promote organisational and economic development and wealth creation (Antoncic and Hisrich, 2004), be it as a result of organisational transformation through strategic renewal or the birth of new businesses and ventures within existing organisations (Guth and Ginsberg, 1990; Covin and Slevin, 1991). CE is broadly defined here as entrepreneurship within an existing organisation –regardless of its size –referring to emergent intentions and behaviours that deviate from the customary way of doing business (Antoncic and Hisrich, 1 2001; 2003; 2004). This definition is in line with the one put forward by Sharma and Chrisman (1999, 18) proposing that CE is “the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization”, thereby emphasising the dynamic elements of the phenomenon. Our focus in this article is on the dynamic interplay between organisational- and individual-level processes in relation to CE. Previous studies on CE have concentrated on the phenomenon as it occurs in a certain type of (business) environment and on its organisational antecedents and outcomes. It has typically followed a temporal causal path from antecedents to consequences (Antoncic and Hisrich, 2001; 2004). The main actor, however, is an individual, a corporate entrepreneur or intrapreneur (Pinchot, 1985), as CE is rooted

in the phenomenon of entrepreneurship. Existing models focus very little on the extent to which individuals, especially employees, exercise autonomy or deviance from prevailing practices (Whittington, 1992). CE models have described and empirically analysed the crucial role of middle managers in promoting this organisational-level phenomenon (Hornsby et al., 2002; Kuratko et al., 2004; Kuratko et al., 2005), but almost totally neglect the question of how the individual attitudes and action of any members of staff affect directly or indirectly its structural antecedents (organisational and managerial). The literature on CE recognises only to some extent the employee’s role, as it has concentrated on one-way relationships (topdown) and the interaction between them, when an individual in association with an existing organisation instigates renewal or innovation (Sharma and Chrisman, 1999; Dess et al., 2003). CE studies thus tend to focus on the role of management and managerial behaviour, rather than on individual employees without any managerial responsibilities and duties. We suggest that there is a research gap, and that there is still much to be learned about the substance and process of CE (Hornsby et al., 2002). Furthermore, this implies that, in practice, a great amount of entrepreneurial potential in creative and passionate employees may remain unexploited. Would it be possible to release this potential within the organisation and thereby to promote CE upwards? Like Whittington (1992), we question the straightforward model of CE implementation and move in the direction of causality between different elements: we doubt that employees wholly succumb to prevailing structural rules and resources. We assume that, from the CE perspective, it is relevant not only to understand how employees perceive organisational antecedents (Kuratko et al., 2005), but also how their perceptions and behaviour may affect them in the CE context. The aim of this conceptual study is thus to discuss the different organisational and individual

prerequisites of CE in order to gain a deeper understanding of how they confront one another. According to the prevailing dualistic thinking in the CE literature, ultimately management is a subject and employees are objects. Leaders are thus viewed as change agents, and followers as silent followers (Collinson, 2005). We take a closer look at employee behaviour and rethink the relationship between leaders and subordinates in the CE setting (see Åmo and Kolvereid, 2005 for a related approach). This paper is structured as follows. We begin with a discussion of top-down influence, or organisational antecedents of CE, of which previous literature with empirical evidence provides a plentiful picture, and then focus on bottom-up influence, i.e. the role of corporate entrepreneurs in CE. Having considered these two parallel but divergent influences, we aim to illustrate the two-way avenue, on which management and the organisational structure have an affect on employees and employees have an affect on management and the organisational structure. We propose that upward (bottom-up) and downward (top-down) influence are parallel terms that describe the co-evolution of managerial behaviour, organisational structures and individual (employee) behaviour. Because both sides are reflexive agents they respond to these influences in one way or another, thereby leading to coevolutionary processes. Next we introduce the concept of implementation and influencing modalities and conversational space, which makes it possible for the ‘voices’of managers and subordinates to meet and negotiate. Finally, we argue that CE is a two-way interactive and recursive process in which structures and managerial initiatives affect individual behaviour and individual behaviour, i.e. innovation, affects structures and management behaviour by intuiting, interpreting and integrating, and institutionalising new practices (Dutta and Crossan, 2005).

ORGANISATIONAL ANTECEDENTS OF CE - TOP-DOWN INFLUENCES Previous research (Miller, 1983; Kuratko et al., 1990; Guth and Ginsberg, 1990) has identified and tested a set of pre-requisites for CE related to the environment (threats and opportunities), top- and middle-management behaviour (vision, commitment, support and style), the organisation (culture, strategy, structure and working modes), and performance (Heinonen, 1999). Internal organisational factors have also been recognised as important in promoting CE (e.g., Guth and Ginsberg, 1990; Covin and Slevin, 1991; Zahra, 1991; Hornsby et al., 1993; 1999; 2002; Antoncic and Hisrich, 2001; Kuratko et al., 2004; 2005), and in particular, the vital role of middle managers in creating an environment that encourages innovation and entrepreneurship has been acknowledged (Hornsby et al., 2002; Kuratko et al., 2005). In the following we focus on the management behaviour and organisational structures and procedures influencing CE, which we call top-down influences or processes of CE. We have excluded the effects of the external environment and organisational performance from our discussion as our aim is to promote understanding of the dynamic interplay between organisation- and individual-level processes in the CE context. Employees in this study refer to members of staff without any managerial responsibilities or duties. We acknowledge that middle managers are also subordinates of higher-level managers, but we do not treat them as employees here. Top management refers to the managers on the highest level of the organisation. They typically have more of an influential role in grafting the corporate vision and strategy, whereas middle management implements these guidelines. (see Floyd and Lane, 2000)

Management as a change agent Managers at all organisational levels are believed to be the dynamos in CE processes as they start, implement and champion CE behaviour (Hornsby et al., 2002; Thornberry, 2003; Kuratko et al., 2005). Corporate entrepreneurs are not totally selfselected, but managers expect, or at least encourage, them to behave entrepreneurially (Davis, 1999). Entrepreneurial behaviour among middle-level managers may be most critical to the effective implementation of CE because they endorse, refine and shepherd entrepreneurial opportunities and identify, acquire and deploy the resources needed to pursue them. Middle managers are also in a position to influence their subordinates´ commitment to these activities once they have been initiated. (Kuratko et al., 2005) From the top-down perspective, CE behaviour is a result of topmanagement initiative because facilitating and supportive measures are taken at the upper levels of the organisation. Top managers establish an entrepreneurial strategic vision and guide the emergence of a ‘pro-entrepreneurship organisational architecture’(Ireland et al., 2003, see also Dess et al., 1999). The middle- and firstlevel managers, and finally the employees, then conform to these instructions (see Floyd and Lane, 2000). Management involvement (Merrifield, 1993) as well as top-management encouragement (Hisrich and Peters, 1984) and the rewarding of venture activities (MacMillan, 1986) are acknowledged to foster CE (Antoncic and Hisrich, 2004). CE models assume that managers can change employees’behaviour if they only acquire the necessary information and understanding related to antecedents and facilitators (e.g., Hornsby et al., 2002; Kuratko et al., 2005). An indicator of management success is the degree to which the employees change their behaviour and start to act entrepreneurially (Kuratko et al., 2001).

Exceptionally, Dess et al. (2003) focus on individual behaviour by identifying the critical roles and social exchanges that comprise the CE process. Implementation depends not only on the skills and abilities of individuals, but also on the quality of interactions within the management hierarchy. In particular, it depends on the extent of shared understanding. They introduce the concept of entrepreneurial leadership, and define it as the establishment of conditions conducive to role performance and social exchange. These conditions include organisational trust, consensus on the dominant logic, and appropriate organisational controls. (Dess et al., 2003, see also Gupta et al., 2004) Interestingly, the literature on change management is referred to here, and this approach indeed resonates with other leadership theories focused on transforming the intra-organisational social context in order to facilitate change (see also e.g., Hayton, 2005). Thus, we could say that CE leadership facilitates organisational culture committed to both continuous individual improvement and collective innovation.

Organisational support Most studies on CE define its causal relationship with organisational structures in a simple way (Ireland et al., 2003). The existing organisation presents an opportunity structure for entrepreneurship (Burgelman, 1983) in that organisational support and formal controls can be strongly conducive to CE (Antoncic and Hisrich, 2004). Previous research with empirical evidence indicates that organisational support, such as work discretion and autonomy, reward and reinforcement, time availability and defined boundaries, are critical organisational antecedents of CE (Zahra, 1991; Hornsby et al., 1993; Antoncic and Hisrich, 2001; Kuratko et al., 2005). The CE literature and expressions such as the creation of a ‘pro-entrepreneurship architecture’

(see Ireland et al., 2003) by implication apply to passive employees who adapt to or resist structures, and do not create them. Managers and entrepreneurs can change antecedents and organisational structures so that they operate in a certain way, in this case entrepreneurially in the corporate setting, when CE is something to be ‘implemented’. The literature focusing on organisational and managerial support clearly illustrates the top-down approach (see Lähteenmäki et al., 2001). Managers reshape structures in the way they consider most suitable for that situation and environment, and employees (individuals) passively adapt to the new structures.

THE ROLE OF THE CORPORATE ENTREPRENEUR IN CE - BOTTOM-UP INFLUENCES Different research perspectives have highlighted the potential of bottom-up processes in an organisational context (Wang et al., 2005; Mumby, 2005; Dutta and Crossan, 2005; Howell and Shamir, 2005), but the approach has not been adjusted to CE processes. As discussed earlier, traditional managerial and structural elements have been given precedence over individual elements in CE models. While managers are involved at all levels, employees seem to remain passive adaptors and mere objects of managerial actions. Many authors have pointed out that leadership theories have been unidirectional models of what a leader does to subordinates (Yukl, 1999; Howell and Shamir, 2005). Autonomous strategic behaviour among middle managers, according to which product champions pursue new ideas, is a kind of bottom-up process (Burgelman, 1983). This does mainly refer to middle managers, however, and not to any employees who might have the potential to become corporate entrepreneurs.

Similarly, induced strategic behaviour is basically a top-down process in which the firm’s current strategy and structure shape the entrepreneurial actions taken to develop product, process and administrative innovations (see Ireland et al., 2003). Our everyday observations and experiences of CE training and development have given us the impetus for examining the ‘voice’of followers in the CE context (Heinonen and Vento-Vierikko, 2002; Heinonen and Paasio, 2005; Heinonen and Toivonen, 2006). Silent subordinates just do not fit into the picture, as the main actor in the CE process is, by definition, the corporate entrepreneur her-/himself (Pinchot, 1985; Heinonen and Vento-Vierikko, 2002). Employee empowerment and teamwork have extended the leadership function to lower organisational levels, including many employees (Collinson, 2005; Quinn and Spreitzer, 1997), thereby eroding the usefulness of leader-centric approaches to organisational development. Underestimating followers’agency leads CE studies in the wrong direction by emphasising managerial entrepreneurship and forgetting the true meaning and intent of the word implying the involvement of creative and passionate actors (see Kuratko, 2005; Hjorth and Johannisson, 2006). Many studies have shown that employees may actively try to influence upwards (Olufowote et al., 2005, Farmer and Maslyn, 1999), and to get their ideas through in their attempts to develop their workplace. In this process they are under the control of their leaders, but the leaders are similarly affected by the employees’ behaviour, which includes mixtures of recalcitrance and compliance, activeness and passiveness, obedience and disobedience, and dissent and consent. We introduce four different but related elements of bottom-up influence in the following section.

Influence through recalcitrance Organisational theory and HRM literature indicate that employees respond to structures (Wagner and Hollenbeck, 1998). Rewarding and supportive structures attract positive reactions and unsupportive structures negative ones. Certain structures or managerial behaviour may cause cynical or recalcitrant behaviour, or even give rise to counter-cultures (Collinson, 2005). Employees exert influence by accepting or not accepting undesirable managerial behaviour and organisational structures. Management behaviour may even change as a consequence of negative employee attitudes. Consequently, organisational structures are shaped and reshaped. Followers are not passive ‘role recipients’, but might rather reject, embrace or renegotiate the roles imposed by the leaders. “There is a reciprocal process in the dyadic exchanges between leader and follower, wherein each party brings to the relationship different kinds or resources for exchanges”(Wang et al., 2005, 421). Critical studies (see Mumby, 2005; Collinson, 2005) have creditably emphasised the dialectics in the leader-follower relationship, e.g., followers’ resistance vs. leadership control. These so-called Foucaldian and post-structuralist authors focus somewhat narrowly on ‘resistant spaces’and various discursive tactics of recalcitrant employees. This approach, however, does not explicitly take into consideration the possibility that there may be active employees who use more or less recalcitrant language, but still try to influence the leaders.

Influence through new ideas (learning) Currently the most popular organisational learning (OL) models usually take an explicit or implicit bottom-up approach to changes (Brady and Davis, 2004), and bottom-up influence and the role of individuals and their attitudes are more deeply

emphasised. OL takes place when an individual perceives something new and the new knowledge transfers from the individual to the collective level by means of social interaction. It is basically individual learning taking place in a social context (Harrison and Leitch, 2005). Given the fact that OL is about changing organisational structures and routines, some researchers have recently attempted to integrate CE and OL models (Harrison and Leitch, 2005). There is reasonable evidence suggesting that organisational learning is relevant to CE (e.g., Floyd and Wooldridge, 1999; Zahra et al., 1999) as entrepreneurship is a process of learning (Minniti and Bygrave, 2001; Harrison and Leitch, 2005; Hjorth and Johannisson, 2006). We argue that it is through effective CE that organisations develop knowledge and use it as a continuous source of innovation to outperform competitors (Dess et al., 2003). Learning is an essential component of the strategic renewal process that enables the organisation to respond to changes in its environment (Dess et al., 2003). Upward influence is exerted as changes in individuals’cognitive maps are aggregated and translated into changes in the organisation’s cognitive schema (Lumpkin and Lichtenstein, 2005; Harrison and Leitch, 2005). Crossan, Lane and White (1999) define learning as a multi-level process in which individual-level learning (exploration or exploitation) moves to the group and the organisational level (Dutta and Crossan, 2005). Conceptually this upward transfer process involves basic social and psychological processes that form entire cycles of learning (intuition, interpretation, integration, institutionalisation). Intuition relies on employees’creative capacity to recognise gaps and to identify possibilities. Opportunity recognition is an iterative process through which insights are contemplated, new information collected and considered, and knowledge created (Lumpkin and Lichtenstein, 2005). Interpreting is closely related to social

interactions. In interpreting an insight an employee explains an idea to him or herself and to his or her fellow workers, and they develop a common understanding through mutual adjustment. Integrating creates a coherent collective basis for action and crystallises the links between the new idea and its successful implementation. Institutionalising means ensuring that learnt actions occur. (Dutta and Crossan, 2005) A deep locus of planning2 facilitates the entrepreneurial process by maximising the diversity of viewpoints that a firm considers in formulating its strategic plan (Barringer and Bluedorn, 1999). A positive relationship between the locus of planning (employee involvement) and the intensity of CE has been found, which supports the general notion that employee participation is an essential element in the entrepreneurial process (e.g., Burgelman, 1984; Barringer and Bluedorn, 1999). If there is a high level of employee involvement in the planning, good ideas are not overlooked simply because managers on these levels are not involved in the planning process.

Influence through relationship building The literature on leadership has traditionally focused on the leader’s behaviour in organisational development. There have been attempts to correct this bias in recent work, however (Wang et al., 2005), and to show the importance of leader-employee relationships in successful leadership. This has happened as a logical consequence of increasing employee empowerment. The leader-member (LMX) theory provides a connection between constructs such as managerial actions and employee empowerment (Gomez and Rosen, 2001) by emphasising the importance of three domains with equal weight: the leader domain, the follower domain and the relationship domain (Graen and Uhl-Bien, 1995). The leadership-centric view is thus

broadened not only to consider the characteristics of followers as potential moderators of the impact of the leader’s behaviour, but also to propose that “followers play a more active role in constructing the leadership relationship, empowering the leader and influencing his or her behaviour” (Howell and Shamir, 2005, 97). It is assumed in LMX theory that upward influence is based on modestly expanding role responsibilities. A follower fulfils the role responsibilities offered by the leader. Empirical research has elaborated on the relationship concept, and has found certain mediator elements in relationship building: the importance of the selfconcept (Howell and Shamir, 2005), employee goal orientations (Janssen and Van Yperen, 2004), organisational citizenship behaviour (Wang et al., 2005), and mutual trust. Social exchange is of great importance as mutual trust, respect and obligation nourish high-quality relationships. There is a psychological contract according to which effective leaders are sensitive to their followers’self-worth and self-concept (Wang et al., 2005). Likewise, the leader’s task is to link achievement goals to self-development goals. Mutual persuasion and joint decision-making (Fairhurst, 1993), employee use of open tactics and diminished hard-line strategies (Farmer et al., 1997) are associated with a high level of LMX (Olufowote et al., 2005). This notion is often captured in the CE literature with reference to open communication (Stevenson and Jarillo, 1990; Zahra, 1991) and organisational culture (MacMillan, 1986; Stopford and Baden-Fuller, 1994; Christensen, 2005) as facilitators of CE. Ultimately, good subordinates make good managers, not vice versa. As managers are responsible for formal structures and resources, we consider managerial behaviour per se a top-down influence, as is organisational support.

Influence through issue selling Porter et al. (1981) suggested four upward-influence tactics: ingratiation, exchange of benefits, rationality and coalition. Ingratiation and exchange of benefits could be considered political, and rationality and coalition non-political tactics. Upward influence is at its best when employees are encouraged, or given a forum, to communicate their needs to their co-workers and supervisors. (Olufowote et al., 2005) The employee’s (in)ability to communicate personal intentions and motivations reflect both personal fit and organisational functioning. “Issue selling is the process by which individuals affect others’attention to and understanding of the events, development, and trends that have implications for organizational performance” (Dutton et al., 2001, 716). Issue sellers are players who use a repertoire of moves to sell issues and affect top-level decision makers’attention. Issue selling is usually connected in the literature with middle management and its behaviour in change situations (Dutton et al., 2001). Dutton et al. argue that it is a perspective that allows recognition of the inherent intersection of micro-and macroforces, while highlighting social-psychological processes at the same time. Studies have revealed the role of context in shaping how claims are made about what issues are important. Identity-related issues have been recognised, and four types of issueselling moves identified: 1) packing (content framing), 2) presentation (in emotional or novel terms), 3) appeal and the 4) bundling of the issue with others. Issue-selling activities provide evidence of the entrepreneurial resources used by individuals in order to activate and direct change (Dutton et al., 2001), and issue selling therefore directs attention to change agents other than managers. We see issue sellers as intentional upward influencers (see Dutton et al., 2001). This kind of upward

influence has been recognised as a vehicle for employee participation in work and decision-making (Farmer and Maslyn, 1999; Olufowote et al., 2005).

CONVERSATIONAL SPACE AND MODALITIES We have identified and discussed top-down and bottom-up influences (see the summary in Table 1 below). This raises the question of how they clash. Identifying such influences in the CE setting has provided important insights, but this is not enough: we need to know which influences are likely to be sustained. Our reasoning follows that of Skivington and Daft (1991), who argue that intended strategy does not automatically transfer to action. Similarly, it is not realistic to assume that bottom-up influences affect managerial behaviour or organisational structure directly without the presence of mediating structures. Employees do not automatically accept and commit to every managerial command, and it could thus be stated that fostering CE is not merely a straightforward managerial issue. Only in some cases do bottom-up influences or certain combinations of forces have their impact on managerial behaviour and organisational structures. Skivington and Daft (1991) use the concept implementation modalities to illustrate top-down influencing tactics and mediating structures. They refer to framework modalities (structure, systems) and process modalities (interaction, sanctions) as avenues through which decisions are implemented. These two modalities exist through the intentions that are implemented, i.e. changing the actual organisational structures and ‘explaining’the change to create shared meanings and to build up consensus. This makes it easier to understand the diversity of CE mechanisms: only some managerial intentions and actions are perceived positively. In our previous studies we found a shared vision and employee empowerment to be the

most influential top-down (framework) modalities in the implementation of CE behaviour (Heinonen and Paasio, 2005; Heinonen and Toivonen, 2006). For example, neither rewards nor supported problem solving lead automatically to increased CE behaviour if employees are not empowered. Thus, empowerment connects CE implementation intentions to the employee’s actions. There seem to be certain interaction channels that create connections between the organisational and the individual level, and through which implementation efforts are realised. We call these top-down interaction channels implementation modalities. The other side of the avenue also needs to be explored. Process or influence modality refers to human interaction, especially with regard to the informal structure of the organisation, and we call these bottom-up interaction channels influencing modalities. Processes include conversations, but they also refer to slogans and other symbolic mechanisms, and even sanctions. Table 1. Top-down and bottom-up influences of CE • Management as a change agent − Facilitating change − Supporting problem solving − Entrepreneurial leadership • Organisational support − ‘Pro-entrepreneurship architecture’ − Work discretion, autonomy − Rewards, reinforcement − Time availability − Organisational boundaries Implementation modalities Influencing modalities • Influence through recalcitrance • Influence through new ideas (learning) • Influence through relationship building • Influence through issue selling

Top-down influences

Bottom-up influences

Followers expect reciprocity, personal development and equity (value identification, self-development goals), whereas leaders expect goal achievement. Managers try to

create shared meaning by explaining the processes, and employees try to sell new ideas and issues, and to build relationships to achieve their own goals. It is a challenge to describe the two-way avenue in which these negotiations take place. Verbal interaction is a vital information-transmission mode as it offers the means to exert both upward and downward influence (Ford and Ford, 1995): for example, new ideas have to be communicated by knowledgeable actors (Lumpkin and Lichtenstein, 2005). As changes take place in conversations, conversations form the basis of the ‘conversational learning’theoretical framework through which individuals construct new meanings and transform the collective experience into knowledge (Baker et al., 2005). It is about “speaking without listening and listening without speaking”(Baker et al., 2005, 424). Conversational interaction is shaped by conversational space in which negotiation takes place, and by internal processes and norms that determine what can and cannot be said, and are restructured in every conversation. Conversation is an ongoing process in which the individual tries to be open to other points of view and to reconsider his or her own standpoint. (Baker et al., 2005) It is all about interpretation, and influencing agents’interpretations through dialogue or communication is a crucial part of it. Similarly a shift in mental models is an antecedent of any organisational change. Dialogue, defined as reflective conversations enabling inquiry into existing mental models and shaping their emergence, has a key role in innovation, which is a core feature of CE. (Jacobs and Heracleous, 2005; Vähämäki, 2005) We propose that simultaneous and parallel top-down and bottom-up processes and the interplay between reflexive structures and individual actions create the dynamic co-evolution taking place in conversational space, as illustrated in Figure 1 below.

Figure 1. A dynamic model of co-evolutionary CE processes

Structure –management t 0

t1

t2

Top-down influence Conversational space Bottom-up influence Action –employees t0

t1

t2

There are thus no one-way relationships, as they do not fit the very meaning and intent of CE. We wish to emphasise the potential of two-way interaction between managerial structures and employee actions. Our co-evolutionary CE process model broadens the space in which CE is simultaneously emerging upward and being implemented downward. We also propose that organisational antecedents are necessary but not sufficient conditions for CE to take place. According to most authors, CE comprises managerial and organisational support, enabling structures and processes, and individual motivation and competence, especially of managers. Relationships between these elements are said to be recursive (Barley and Tolbert, 1997; Hung, 2004). Barley and Tolbert (1997, 100-101) state, “To fully understand the processes by which institutions and actions are reciprocally related requires diachronic analysis.” It is difficult to specify causal relationships between the elements a priori. What is the dependent variable, and how should recursive relationships be analysed? So far we

know surprisingly little about these co-evolutionary CE processes. The empirical evidence is scarce and is largely restricted to top-down considerations. Investigating upward influence (the emergence of a new structure) and linking individual actions and structures require “an enormous amount of luck”(Barley and Tolbert, 1997, 100). By introducing conversational space and modalities into the CE setting we shift the focus onto the dynamic processes by which existing structures are modified.

IMPLICATIONS AND FUTHER RESEARCH DIRECTIONS This study opens up new and interesting avenues for the empirical study of CE. Based on our conceptual thinking CE is employee- and action-oriented by its very nature, and it is therefore justified in further empirical research to focus on bottom-up influences as well as on influencing modalities through which some influences finally pass and affect the organisational structure and management. Even though we stress the importance of these seriously underexploited bottom-up forces (influences and modalities), future studies should also explore the respective top-down implementation modalities. In the following we present some ideas for further empirical inquiry. First, research on CE should continue to integrate individual-level and organisational-level factors. Is it possible to find empirical links between top-down and bottom-up influences (see Table 1)? For example, is an innovative workforce positively related to a high level of entrepreneurial leadership and organisational support. In addition, does recalcitrance or other ‘negative’employee behaviour influence negatively entrepreneurial management behaviour? Is the influence opposite with a high level of employee involvement (i.e., a deep locus of planning)? Secondly,

the mediating role of empowerment and leader-member exchange should also be tested (see Heinonen and Toivonen 2006; Wang et al., 2005). This focuses attention on the implementation and influencing modalities. Future studies should aim to identify these different modalities and then to measure their mediating or catalysing effects in the CE process. We have put forward the idea of dynamic co-evolution between the structural and the individual CE elements, which makes it less relevant to study the unidirectional causal relationships between them. Alternatively we could ask whether there are complementarities among the elements on the structural and individual levels. As far as complementary theory is concerned, it is just as relevant to study whether ‘entrepreneurial individuals cause entrepreneurial leadership’as whether ‘entrepreneurial leadership causes entrepreneurial individuals’. Both causal directions are worth investigating depending on the context. (see Bresnahan et al., 2002) Organisations capable of successfully combining the structural and the individual elements would be predicted to produce more innovations than others, and thus to be more entrepreneurial. E.g., do the incompatible corporate achievement goals and individual self-development goals hamper entrepreneurial behaviour within the organisation? On the basis of our conceptual thinking we suggest that CE emerges as an outcome of mutually reinforcing pairs or bundles of factors. The different viewpoints are not in competition, but are rather complementary. Future research should also explicitly measure the different consequences of CE (e.g., product or process innovations) and combinations of organisational- and individual-level variables: it would be interesting to know whether different bundles of factors cause different consequences. It would also be worth exploring whether it is possible to identify ideal combinations of entrepreneurial leadership, organisational

structure and individual action in different organisational contexts (i.e., private and public organisations of different sizes) and in different external environments (i.e., industrial sectors). The nature and functioning of conversational space are also open to further indepth study. How do the upward and downward influences meet and confront one another, and how do the negotiations between the ‘voices’of the managers and employees take place? Previous studies suggest that human resource management might have a role to play here (Hayton, 2005), indicating that our approach in integrating the literature on CE and strategic management and organisation theory is justified and worth developing further. This new area of conversational space requires a more qualitative research approach in order to promote a deeper understanding of the nature and functioning of the channels, i.e. the modalities, through which the topdown and bottom-up influences pass to the other organisational layers.

CONCLUSION Taking the true meaning and intent of the word entrepreneurship as our starting point, and acknowledging the crucial role of creative and enthusiastic actors (see Kuratko, 2005; Hjorth and Johannisson, 2006) we set out in this paper to question straightforward CE models of presenting a temporal causal path from antecedents to consequences (see Antoncic and Hisrich, 2001; 2004). Our study represents disengagement from the traditional dualistic thinking found in the literature on management and leadership (Barley and Tolbert, 1997; Hung, 2005), according to which management is the subject and employees are the objects. We wanted to conceptually explore and rethink the relationship between leaders and subordinates in a CE setting, and we developed our ideas by integrating the research fields of

leadership and (corporate) entrepreneurship, as suggested by Gupta et al. (2004), for example. Accordingly, we have discussed CE and the top-down and bottom-up influences related to it in this paper. We argue that both influences are relevant and necessary for understanding the true meaning of CE, which is not only implemented top-down but also emerges bottom-up. After proposing that the upward and downward influences are parallel terms describing the co-evolution of managerial behaviour, organisational structures and individual actions, we ended by introducing the concepts of conversational space in which the ‘voices’of managers and employees meet and negotiate, and implementation and influencing modalities, which refer to interaction channels. Our dynamic co-evolutionary CE process broadens the space in which CE is taking place by promoting understanding of the three different layers involved: management structure, employee action, and conversational space. The co-evolutionary CE process recognises the potential that stems from all the above-mentioned layers, and thus creates new arenas for promoting CE within organisations. The managers are not the only ones that count, and employees also have an important role to play in the reciprocal process. This needs to be acknowledged by the managers themselves and by educators, as well as by policy makers who tend to focus on managerial behaviour when attempting to foster entrepreneurial behaviour within an organisation. Finally, we outlined a number of areas for further qualitative or quantitative study. Future research should take into consideration the proposed non-traditional causal directions and the interaction between the role-playing elements. In particular, the dynamic interplay between the elements that takes place in the conversational space should be further explored in

order to gain a deeper understanding of the CE phenomenon. We warmly invite researchers to test our thinking on the one hand, and to extend it on the other.

1

Antoncic and Hisrich refer to the concept of intrapreneurship, not corporate entrepreneurship per se.

We acknowledge that (depending on the studies) corporate entrepreneurship and intrapreneurship may not be understood as exact synonyms but represent slightly different phenomena of organisational renewal or change (see e.g., Sharma and Chrisman, 1999; Åmo and Kolvereid, 2005).We treat the concepts interchangeably in this study and the slight definitional difference is not of crucial importance as the focus is on co-evolutionary processes of corporate entrepreneurship, not on its exact form or guise. 2

A deep locus of planning denotes a high level of employee involvement in the process, including

employees from virtually all hierarchical level within the firm. Conversely, a shallow focus denotes a fairly exclusive process, typically involving only the top managers (Barringer and Bluedorn, 1999).

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