Study into the Adoption of Innovation in Organizations Essay Example

success and survival of a franchise system heavily relies on individual-level invention and adaptation (Kalvins and Lafontaine, 1997; Fulop and Forward, 1997). In this particular case, Seri Malaysia Hotel has built its business model around a franchise system, where individuals meeting specific requirements are appointed as franchisees by the franchisor, Rangkaian Hotel Seri Malaysia Sdn Bhd. This research will analyze the role of intrapreneurial behavior within Seri Malaysia Hotels' Franchise System and its impact on the competitiveness of Seri Malaysia Hotel. Intrapreneurship refers to the application of entrepreneurial principles within existing organizations and is highly regarded for its significance in developing innovative marketing strategies at the firm level (Stanworth ; Curran, 1999; Timmons and Spinelli, 2004).

Aims And Objectives Of The Study

The primary purpose of this survey is to analyze the degree of intra-corporate entrepreneurship (intrapreneurship) within Seri Malaysia Hotels and the strength of it being inculcated in the Seri Malaysia concatenation of hotels. By infusing and cultivating entrepreneurial culture in the organizations through being innovative, this would lead to the creation of more values to the stakeholders. This will allow the company to focus on its people and empower them accordingly. The environment created is more conducive, and with such opportunities and exposure, franchisees and/or staff's level of commitment would also be enhanced. Based on the above research statement, this study aims to review strategies which are being used and to recommend other strategies in order to enhance the commitment of Seri Malaysia's franchisees and/or staff and also Rangkaian Hotel Seri Malaysia Sdn Bhd in her capacity as the franchisor of the Seri Malaysia Hotel's Franchise System to maintain its competitiveness in this dynamic

market.

The purpose of the survey is to determine whether Seri Malaysia Hotel's franchisees and/or staff possess the necessary intrapreneurial skills and have been given the opportunity to utilize them. This will be accomplished by: measuring the level of intrapreneurial skills within Seri Malaysia Hotels, assessing the level of support for intrapreneurship within the company, evaluating the opportunity for franchisees and/or staff to apply these skills, and determining the reasons for the low quality of intrapreneurship.

The significance of this study is that in order for the organization to successfully compete, the management must have a thorough understanding of what influences their intrapreneurial culture. As the company expands its market presence through new hotel developments, it is essential to have appropriate systems and culture in place. Without promoting and implementing the proper culture, it may suppress entrepreneurship, which is contrary to the objective of developing more skilled entrepreneurs in the hotel industry. The findings of this survey could provide recommendations on how Rangkaian Hotel Seri Malaysia Sdn Bhd can encourage pro-activeness among its franchisees and staff, promote innovation, improve processes, and ultimately increase productivity and market presence.

Chapter 2 Introduction

The concept of intrapreneurship is closely related to the entrepreneurial orientation of a company. Although originally associated with entrepreneurship literature, intrapreneurship has now been placed alongside direction literature. Intrapreneurship plays a crucial role in the survival, growth, profitability, and revitalization of organizations, especially larger ones. Various types of organizations are actively promoting entrepreneurial activities within their staff and management teams. Previous research has identified different forms of intrapreneurship.

Innovation, in the context of intrapreneurship, is the central theme that encompasses various aspects. Specifically, the

use of invention to redefine or revitalize the organization, its position in markets and industries, or its competitive environment appears to be the core element of intrapreneurship (Covin - Miles 1999). Intrapreneurship encompasses multiple areas of research, including: 1) individual intrapreneurs and their unique characteristics, 2) the creation of new ventures within existing organizations and how they align with the organizational context, and 3) entrepreneurial administration and its defining features (Antoncic - Hisrich 2003).

The Model Of Intrapreneurship

The study is theoretically rooted in entrepreneurship research, specifically focusing on the Intrapreneurship School (Cunningham - Lischeron, 1991).

Intrapreneurship is a concept closely associated with entrepreneurship, highlighting the entrepreneurial process (where entrepreneurs implement new combinations) and innovativeness (Guth - Ginsberg, 1990). However, intrapreneurship occurs within the organization, in this study within small companies. The intrapreneur behaves like an entrepreneur in that they realize their own ideas without being the owner of the venture (Cunningham - Lischeron, 1991). Intrapreneurship is defined here as an entrepreneurial approach within an existing organization, specifically in a small company. This is perhaps the most inclusive definition of intrapreneurship. This broad definition suggests an early stage of development in this field.

(Antoncic - Hisrich 2003) The foundation of intrapreneurship is the identification and pursuit of an opportunity, while embracing the belief that approaching the opportunity in a new way that diverges from past practices will lead to success and support the achievement of the organization's goals. (Heinonen, 1999) There has been significant growth in research exploring the characteristics, requirements, and impacts of entrepreneurial activities within organizations over the past 25 years. The groundbreaking study by Peterson and Berger (1972) aimed to identify organizational and environmental factors

that influence a company's entrepreneurial endeavors. Miller's study in 1983 marked a pivotal moment in firm-level entrepreneurship research.

After conducting their research, scholars have used Miller's theory and research instruments to analyze the connections between environmental, strategic, and organizational variables and a company's entrepreneurial activities (Zahra - Jennings et al. 1999). In this study, the researcher has examined both the requirements and outcomes of intrapreneurship, as well as the phenomenon of intrapreneurship.

The Phenomenon Of Intrapreneurship

This study begins with Miller's (1983) contribution as a starting point to understand the phenomenon of intrapreneurship.

Miller emphasizes the company's dedication to innovation, which includes three key elements: product innovation, proactiveness, and risk-taking. Product innovation involves the company's ability to develop new products or modify existing ones to meet current or future market demands. Proactiveness refers to the company's capability to compete in the markets by introducing new products, services, or technologies.

Intrapreneurship has two dimensions: hazard taking and strategic reclamation of the existing business. Hazard taking refers to the company's willingness to engage in uncertain ventures or schemes, potentially leading to innovative inventions and ventures, as well as conducting R activities to enhance the organization's competitive position and performance (Zahra - Covin 1995). The second dimension involves the strategic reclamation of the current business, which entails areas such as mission reformation, reorganization, and system-wide changes within the organization.

(Zahra 1991, 1993, 1996) indicates that reclamation activities pertain to a house's approach to competition in the markets and its concern. To achieve renewal, a house must redefine its mission and creatively rearrange its resources (Guth - Ginsberg 1990). This entails developing or adopting new organizational structures that facilitate innovation and experimentation. Additionally, renewal encompasses

system-wide changes that enhance creative organizational learning and problem-solving.

These changes typically redirect a company's core principles. (Zahra 1993)

The Requirements Of Intrapreneurship

As mentioned previously, numerous researchers have tried to comprehend the elements that encourage or hinder intrapreneurship. Factors such as the external environment, management, its strategy, and leadership actions have been identified as factors influencing intrapreneurship (Guth - Ginsberg 1990, Miller 1983, Kuratko et Al. 1990, Heinonen 1999).

Intrapreneurship, as described by van de Ven (1993), is a process that occurs in interaction with the environment. The environment has a significant impact on intrapreneurship, where a more dynamic, hostile, and heterogeneous environment emphasizes the company's focus on intrapreneurial activities (Zahra 1991, 1993). The intrapreneurship literature emphasizes the importance of organizational factors in pursuing intrapreneurship (Slevin-Covin 1989, Zahra 1991, Antoncic-Hisrich 2001, Heinonen 1999, Heinonen-Vento-Vierikko 2002). Management activities refer to the role of management in facilitating and promoting intrapreneurship (Thompson 1999). These activities also influence the organizational culture and the extent to which the fundamental principles of intrapreneurship (such as risk-taking, innovation and creativity, learning, and change) are present within the organization.

Management activities ensure that the administration has a clear and understood vision and direction. The organizational landscape also includes how work is organized in terms of power and responsibility, division of labor, and regulation. All of these organizational factors both guide employees in their intrapreneurial efforts and ensure that employees are empowered and dedicated (Thompson 1999). Past studies suggest that managerial support, organizational structure, as well as rewards and resource availability, impact intrapreneurial activities within the organization (Hornsby et al. 1993, Antoncic - Hisrich 2001).

All of the potential elements of intrapreneurship discussed

earlier are factors that are believed to impact intrapreneurship at the organizational level. Just as in entrepreneurship, the individual is the main player, which is why the intrapreneur is also a focal point of intrapreneurship research (Carrier 1996). The individual skills and attitudes describe the capabilities and willingness of any potential intrapreneur to act entrepreneurially.

The Impact of Intrapreneurship

It is evident that intrapreneurship can provide evidence for competitive advantage within an existing organization. This competitive advantage may be seen through differentiation or cost leadership in the markets, the ability to respond quickly to changes, new strategic directions, or new ways of working or learning within the organization (Covin - Miles 1999).

Previous studies suggest that intrapreneurial processes are linked to a company's performance (see for example Zahra 1991, Zahra 1995, Zahra - Nielsen et al. 1999, Heinonen 1999, Antoncic - Hisrich 2001).

(1999) emphasizes the importance of organizational acquisition and cognitive creativity as results of intrapreneurial activities. This not only provides evidence for competitive advantage, but also serves as a foundation for superior performance of the administration. The study considers administration performance to include both financial and non-financial aspects, such as customer satisfaction and employee job satisfaction.

Chapter 3 Research Methodology Rationale For Methodolody

This research is exploratory in nature, and questionnaires will be used by the researcher to analyze both the independent and dependent variables. There are 19 Seri Malaysia Hotels operating across various locations in Malaysia.

It would have been preferable to assess the strength of intrapreneurship culture based on localities. Therefore, an extensive study and the development of appropriate questionnaires are necessary to obtain accurate responses. Quantitative research method will be used in this study as it provides

more specific objectives and independence in research (Borg and Gall, 1989). Sekaran (2001) suggests that a descriptive survey is conducted when the characteristics or phenomena to be investigated in a situation are known, and one aims to provide a comprehensive profile of these factors.

In summary, the descriptive survey used in this research allows the analysis of the level of intrapreneurial traits in Seri Malaysia Hotels and the perception of being considered innovative organizations. Bell (1993) states that hypothesis testing provides a better understanding of the relationship between variables. It also serves as a guide for the researcher, outlining the method to be followed in analyzing the problem. However, in this study, questionnaires will be utilized to examine both independent and dependent variables. By using questionnaires, the researcher believes that respondents will be properly guided to express their perception of intrapreneurial culture and whether Seri Malaysia Hotels promote intrapreneurship through their current practices.

The Beginnings of Data: Primary Data

This survey will be conducted on the franchisees themselves, their second-in-line, and the top management of Rangkaian Hotel Seri Malaysia Sdn Bhd, which includes the Managing Director, General Managers, Senior Managers, and Managers. Being leaders in their respective hotels and departments, this primary data is independent and may possess entrepreneurial qualities. The target respondents for this primary data are as follows:

1. Franchisees - 18
2. Franchisees' second-in-command - 20 (Executive Assistant Manager)
3. Franchisees' third-in-command - 150 (Head of Department such as F & B, Front Office, Sales)
4. Rangkaian Hotel Seri Malaysia's Top

Management - 10

To avoid bias and obtain accurate responses, multiple choice, dichotomous, and rating scales will be used in constructing the questionnaire.

Secondary Data

Secondary data will be obtained from internal and external resources, including journals, books, and articles gathered from the Internet and Emerald.

Some information from magazines, periodicals, and electronic diaries will also be used. The importance of secondary information is to provide a basis for comparison.

Data And Analysis

The purpose of this study is to discuss and analyze the potential elements and outcomes of intrapreneurship and measure them in a small business context. Although this study is quantitative in nature, it is still a work in progress, and therefore model testing cannot occur at this stage of the research process.

The research used two types of questionnaires: one for the administration's full forces and another for the administration's direction. The forces study included questions about direction activities, organizational culture, individual skills and attitudes, customer satisfaction, and job satisfaction. The direction study focused on the administration's venture activity and innovations, strategic reformation, and basic information about its background and industry. Each potential respondent received a personalized questionnaire. An email invitation was sent with a link to a webpage containing the questionnaire. These links were customized and unique.

The responses were saved in a database that only the researcher could access, which helped account for potential social desirability biases. In this paper, we will focus only on the findings of the employee survey and exclude the management survey due to limited data available currently. The smaller number of management-level employees at Rangkaian Hotel Seri Malaysia resulted in insufficient data for analysis

in the management survey at this time.

Based on these initial findings, more information will be collected in the future. The study provides information on the potential requirements and outcomes of intrapreneurship within an organization. The aspects examined in this research are as follows (refer to Figure 1, the darkened items represent the measured requirements and outcomes in the survey):

1. Direction activity and organizational culture (structured).
2. Organizational setting (structured).
3. Individual skills and attitudes (structured).
4. Perceived customer satisfaction (structured).
5. Job satisfaction (structured).

The above-mentioned categories were divided into two groups. The first three pertain to potential elements of intrapreneurship, while the latter two relate to company performance. To reduce the number of survey statements, we conducted a factor analysis for both groups of data. The factorability of the variables was assessed using the Kaiser-Meyer-Olkin (KMO) measure.

The KMO step provides the definition for factoring as follows: 0.90 = first-class premises; 0.80 = good premises; 0.70 = moderate premises; 0.60 = fringy premises; 0.50 = lame premises; 0.40 = non deserving factoring (Olkkonen ; Saastamoinen 2000). The correlation analysis method was used to study the relationship between potential elements of intrapreneurship and overall performance of the company. The acceptable correlation coefficient limit for the study was set at 0.4 based on the five-level interpretive model proposed by Guilford (Guilford, 1956). It is reasonable to use this average correlation coefficient as the amount of data used is sufficiently large.

Limitations

While the respondents targeted may not fully represent

the entire hotel industry in Malaysia, it should be noted that this study does not solely represent the franchise businesses in Malaysia. The information provided by the respondents accurately reflects Seri Malaysia Hotels' Franchise System, but may not be applicable to other types of franchise businesses. It is important to acknowledge that this research has limitations, including the fact that we are only dealing with a portion of our data and have excluded management due to the limited number of surveys conducted so far.

Thereby we focus on elements of intrapreneurship that are influenced by information from the force studies. It is also necessary to clarify the measurement of client satisfaction, as the information only includes employees' perceptions of clients' opinions. Therefore, the information does not include the clients' opinions on the analyzed issues.

Chapter 4 Research Findings Prerequisite: Potential Elements

A factor analysis on potential elements of intrapreneurship revealed 10 factors (a table on factor scores is in Appendix 1 at the end of the paper).

Further analysis was conducted using the first seven factors. The rest of the factors were excluded due to their low account grade and difficulty in interpretation. The remaining factors accounted for 54% of the phenomenon. These factors were labeled as:

1. encouragement by management and administration
2. individual motivation
3. transparency, openness, and community
4. individual competence
5. supportive working environment
6. encouragement of innovations
7. development

The first factor represents the actions of management, the culture of the working environment, and the administration's attitude towards intrapreneurial activities. The second factor reflects employees' skills and willingness to engage in meaningful work.

The 3rd factor correlates to how open and supportive an administration is towards fostering a sense of community. The 4th factor distinguishes and addresses individual motives within

an administration. The 5th factor highlights the various opportunities that an administration's operational environment presents. The 6th factor is associated with the promotion and introduction of new initiatives.

The seventh factor represents overall development. Table 1 displays an array of aggregate variables obtained through factor analysis. There are a total of seven aggregate variables.Table 1 Potential requirements of intrapreneurship, scale 1 to 5 agree strongly or hold slightly

Aggregate variable 1: encouragement by direction and administration average = 3.3
- Management activity generates trust in employees 3.7 (n = 183)
- Management sees affairs besides from the employees ' point of position 3.4 (n = 181)
- Management is able to animate everyone to work for the good of the company 3.6 (n = 183)
- Management encourages the development of new ways of operating 3.4 (n = 183)
- At my workplace, single work methods are valued 3.2 (n = 180)
- Innovativeness and creativeness are thought of as of import at my workplace 3.3 (n = 181)
- Change is seen as an chance at my workplace 3.5 (n = 181)
- Adequate feedback is given at my workplace 2.8 (n = 183)
- The employees are encouraged to freely aerate their sentiments 3.1 (n = 182)
- Suggestions arising from the employees are carried out at my workplace 3.3 (n = 182)
- There is a clear division of labor in my workplace 3.7 (n = 183)
- My workplace offers good chances for preparation and instruction 3.2 (n = 181)
- My workplace has clear regulations of behavior 3.5 (n = 181)
- Thingss are carried out without hold at my workplace 3.0 (n = 181)
- The vision at my workplace ushers me at my work 3.3

(n = 181)
- Knowledge flows openly at my workplace 2.8 (n = 182)

Aggregation variable 2: single motive average = 4.0
- I have assurance in my abilities 4.3 (n = 183)
- I want to realize myself in my work 4.3 (n = 183)
- I want to set myself at interest in my work 4.0 (n = 182)
- I am ready and willing to do responsible determinations 4.0 (n = 182)
- I tolerate uncertainness well 3.2 (n = 181)

Aggregate variable 3: transparence, openness and communality average = 3.4
- Difficult determinations are discussed openly 3.0 (n = 182)
- Employees' productive activities are rewarded 2.9 (n = 181)
- Work is carried out in squads at my workplace 3.5 (n = 182)
- I know what is expected of me in my work 4.1 (n = 183)
- I can easy acquire aid in my work 3.7 (n = 182)

Aggregate variable 4: single competency average = 3.8
- I am familiar with the vision of my workplace, i.e...In the following text, the ratings for each variable are given in parentheses. The average rating for each variable is also mentioned.

The way pursued in the hereafter is 3.7 (n = 183). At my workplace, I am eager to show new thoughts, with a rating of 3.7 as well (n = 182). My knowhow is varied, rated at 4.1 (n = 183). In terms of active self-development at work, the rating is 3.6 (n = 183).

For the enabling working environment, the average rating is 4.2. The authorization to carry out responsibilities is considered sufficient, with a rating of 4.0 (n = 182). Taking duty for performing work to the best of one's ability is rated at

4.6 (n = 183). The ability to work spontaneously has a rating of 4.1 (n = 182).

In terms of encouragement for inventions, the average rating is 3.3. People are encouraged to take risks at my workplace with a low rating of 2.6 (n = 181). Mistakes are regarded as learning experiences, with a rating of 3.5 (n = 182). The ability to develop one's own work has a rating of 3.8 (n = 182).

In terms of development, the average rating is 4.0. Professional development is deemed important, with a rating of 4.1 (n =183). Seeking help in work is rated at 4.1 (n =183). Enjoying working in a team has a rating of 3.9 (n =183).

All aggregated variables were ranked on a scale from 1 to 5 for analysis purposes.

The sentiment scale measures the degree of agreement or divergence from a statement. A value below three suggests a need for improvement in the countries' intrapreneurship. Conversely, values above three indicate positive dynamics from an intrapreneurial perspective. All the variables in this study had values above the critical value of 3.0.

The highest marks in creating a positive work environment (average rating of 4.2) were achieved by enabling employees to have both the authority and responsibility to perform their jobs to the best of their abilities, as well as the freedom to work independently. Additionally, individuals rated their motivation (average rating of 4.0) and opportunities for personal development (average rating of 4.0) as sources of satisfaction. Respondents feel confident in their abilities and are motivated to work in an entrepreneurial manner. They also value growth and recognize the importance of professional development, expressing comfort in seeking assistance

when needed. Furthermore, respondents rated their individual competency highly (average rating of 3.8), as they perceive themselves as skilled individuals and are eager to enhance their professional skills further.

Employees are aware of their company's vision and are interested in presenting new ideas. The importance of transparency, openness, and collaboration is rated at 3.4. Statements within the sum variable range from employees being well aware of the expectations they face in their work, but feeling less rewarded for productive work. The opinions of respondents are divided regarding encouragement from management and administration (average rating of 3.3), as well as encouragement for innovations (mean rating of 3.3).

Some elements such as assurance in direction, clear division of work, and direction's enthusiasm for promoting employees seem to be satisfactory. On the other hand, the flow of information and level of feedback are both only marginally satisfactory.

Result: Firm Performance

A factor analysis on company performance yielded four factors (a table with factor scores can be found in appendix 2 at the end of the paper). Subsequent analysis focused on the first three factors, which accounted for 55% of the explanation. The final factor was excluded from the analysis due to its components not being arranged in a logical manner.

Factors were named as follows:

• appriciation of work and occupation satisfaction
• perceived client satisfaction
• external satisfaction in work

The factors are categorized as the following: the first factor represents grasp of work and occupation satisfaction, the second factor represents various sources of client satisfaction, and the third factor represents external satisfaction of

work. The collected aggregate variables from factor analysis are stored in Table 2.

The final sum of combined variables is three. Similar to before, the sum variables were analyzed on a scale of 1-5 in relation to the requirements of intrapreneurship. Once again, a lower value indicates a differing opinion from the statement, while a higher value signifies agreement. The threshold value of the scale is set at three, indicating dissatisfaction with the respective statements when values are below this threshold. Conversely, values above three indicate positive experiences and outcomes related to intrapreneurship. Additionally, the combined variables were treated as means.

All three aggregate variables of the results of intrapreneurship sette in the graduated table remarkably well, all of them were above the critical value (3.0). Customer satisfaction (average 4.0) is perceived as exceptionally high, respondents believe that their client relationships are long lasting and clients are pleased with the provided services and/or merchandise. Respondents also estimated that the organizations they represent are well known and recognized, that they are well aware of the demands of their clients, and clients are satisfied with the price-quality relation. Appreciation of work and job satisfaction (average 3.9) is also viewed as a source of contentment.

Respondents express satisfaction with their work, and both they and others recognize the value of their work. Employees also find their work interesting, varied, and important for their organization. There is a moderate level of external satisfaction in work (average 3.8). Workload is manageable, and the overall work environment is positive among employees.

Correlation

A correlation analysis was conducted to examine the potential relationship between intrapreneurship requirements (such as management and organizational support, individual motivation, transparency, openness and

communal values, individual competence, encouragement of innovation and development) and the outcomes of intrapreneurship (job and career satisfaction, perceived customer satisfaction, external satisfaction in work).

Earlier, the formed aggregative variables were placed in a correlativity matrix (Table 3). The correlation analysis shows that nearly every sum variable has a significant correlation. However, the main focus was on the relationships between the requirements and outcomes of intrapreneurship, as mentioned previously. The expected strength of these correlation relationships also reduced the number of variables of interest. Overall, job satisfaction and the appreciation of work stood out from the rest.