Meeting the Challenge of Corporate Entrepreneurship:

The Entrepreneurial Employee Activities among Micro, Small, and Medium

Enterprises in the PhilippinesDr. Emilina Sarreal

De La Salle University – Manila

Background of the Study

• The Philippines conducted a study on entrepreneurship using the Global Entrepreneurship Monitor (GEM) framework in 2013.

• The study surveyed 2,500 adults, aged 18–64, representing the 17 regions in the country. The survey described the entrepreneurship indicators in the country in terms of the entrepreneurial attitude, activity, and aspiration of Filipinos.

Background of the Study

• In 2013, approximately 18.5 million Filipinos were starting or running a new business while close to 6.6 million Filipinos were engaged in a business for at least 3 1/2 years.

• The Philippines exhibits the highest rate of business start-up in the Asia-Pacific and South Asia region.

• On the other hand, the country has the highest business discontinuance rate.

• Majority of the entrepreneurs in the Philippines are driven by necessity given the high unemployment rate and few job opportunities in the country.

Background of the Study

• The average Filipino entrepreneur is young, 18–34 years old, and married with at least secondary schooling.

• Filipinos see their country as having an environment conducive to entrepreneurship.– Close to 48% of Filipinos see good

opportunities to start a business in their environment.

Background of the Study

• Filipinos see entrepreneurship only as income generation opportunities for the owners but not as a job generation activity for the country. – Only 0.33% of those engaged in a

new business expect to generate more than 19 jobs in the next five years while 1.7% in an established business expect to generate more than 10 jobs in the next five years.

Background of the Study

• Majority of Philippine businesses, approximately 80%, are engaged in consumer services while approximately 10% are into manufacturing, construction, and other transformative business activities.

• Most of the products sold are considered new in the country, but many businesses are selling the same products.

Background of the Study• Filipino women have more positive attitudes toward

entrepreneurship than men. – Fifty one percent (51%) of women see good

opportunities for starting a business compared to 44.51% of men.

– More women than men also believe that they have the capability to start a business.

– More men than women have a higher fear of failure from starting a new business.

– There are more men in the start-up stage of the business while more women are present in an established business

– Filipino women entrepreneurs are more satisfied with their work as entrepreneurs than men.

Background of the Study

• The capacity of Filipinos to start a business, the high regard of Philippine society for successful entrepreneurs, and the large domestic market are main drivers of entrepreneurship in the country.

• On the other hand, barriers to entrepreneurship are low and difficult access to financial support, unclear and inconsistent implementation of government policies, and the lack of capability of entrepreneurs to grow and sustain the business.

Entrepreneurial Employee Activity (EEA)

• The 2013 Global Entrepreneurship Monitor (GEM) gathered data using Entrepreneurial Employee Activity (EEA) comprised of three sources: – Potential entrepreneurial employees are those who

take supporting roles in the development and implementation of new ideas and activities for their employers

– Entrepreneurial employees who are involved as leaders in idea development or new entrepreneurial activity for their employers

– Entrepreneurial employees who are involved as leaders in the preparation and implementation of these new ideas and activities

MOD. BCopyright © 2003 John Wiley & Sons, Inc. Sekaran/RESEARCH 4E

Corporate Entrepreneurship

• Corporate entrepreneurship” is a term used to describe entrepreneurial behavior inside established mid-sized and large organizations. Other popular or related terms include “organizational entrepreneurship,” “intrapreneurship,” and “corporate venturing.”

Corporate Entrepreneurship and EEA

• The broad definition included all the employees who in the past three years were actively involved in leading roles developing ideas as well as those employees taking leadership roles in the preparation and implementation of these ideas. The narrow definition refers only to the employees who are currently developing and entrepreneurial activity within his organization

GEM CONCEPTUAL FRAMEWORK

Findings

Regional EEA from highest to lowest indicates that:• Region 5 or the Bicol region full time and part time employee respondents consistently claimed greater leadership roles in both idea development and implementation of these ideas in their organizations in the past three years.

Findings

• Region 12 also known as the SOCCSKSARGEN followed by consistently having higher EEA rates in terms of leadership roles in both idea development and implementation of new activities in the past three years.

Findings

•  ARMM or the Autonomous Region in Muslim Mindanao respondents consistently claimed leadership roles only in idea development but not in the implementation of new ideas and activities in the past three years.

Findings• Aside from regions

5 and 12, region 4B also known as MIMAROPA, consistently had the highest EEA rates for current involvement in new idea development in the past 12 months.

Findings

• Majority or 63.8% of the respondents are employed in private and for profit organizations. Region 1 has the highest share of its respondents working in private, for profit organizations at 92.3% of the regional total; followed by Region 4A at 74.7% of the regional total.

Findings

• Majority (32.3%) of the respondents belong to micro enterprises while about 21.9% of the total respondents belong to small enterprises

Findings

• 32.7% and 31.6% of male and female respondents are employed in micro enterprises, respectively. More female respondents are employed in small enterprises than males at 24.9% and 21.2% of the total.

Findings

• Majority or 43% of the respondents who are 55-64 years old are employed by micro enterprises while small enterprises employ majority or 27.7% of the total respondents aged 18-24 years old

Findings• more respondents in

small enterprises have higher educational attainment than micro enterprises

• Vocational, high school and elementary graduate respondents dominate micro enterprises while those with post graduate and college degrees dominate medium and large enterprises.

Findings• Potential entrepreneurial employees

–  Employees who are performing supporting roles in both the development of new idea or activity as well as in its preparation and implementation can be considered as potential entrepreneurial employees.

– Respondents who are involved in supporting roles in the development of new idea or activity in their organizations are greater than those in leadership roles with 49.9% assuming the support role and only 27.1% doing the leadership roles.

– Respondents who are involved in supporting roles in the preparation and implementation of new idea or activity in their organizations are also greater than those in leadership roles with 61.6% assuming the support role and only 25.5% doing the leadership roles

Findings

Findings

Findings

• Out of the total respondents engaged in both full and part time employment, employers are still the major initiator of new activity in the past three years at 32.1% while only 14.8% of the total respondents themselves initiate new activity in the same period.

• Colleagues comprise 22% of those who initiate new activities in organizations

Findings

Findings

Findings

Findings

Findings

Correlation Analysis• There is significant correlation between full time, part time and self

employment status and involvement in new activities in the past 3 years;

• However, only the part time and self employed respondents are currently involved in developing new ideas.

• Full time employees and self employed respondents generated new ideas in the past 3 years

• Part time employees are involved in both phases 1 and 2 and occupy leading role in these new activities. The first phase consists of idea development for a new activity. This includes, for example, active information search, brainstorming on new activities and submitting your own ideas to management.

• The second phase concerns preparation and implementation of a new activity. This includes for example promoting your idea, preparing a business plan, marketing the new activity or finding financial sources and acquiring a team of workers.

• Self employed respondents are involved in phase 2 and take active leadership role in new activities.

Correlation ResultsChi Squre Test

Value Approx. Sig.

ipactive * occufull.124 .031

ipactive * occupart.581 .000

ipactive * occuself.586 .000

ipactivenow * occupart.591 .001

ipactivenow * occuself.577 .002

ipinit * occufull.527 .011

ipinit * ownmge.484 .034

iporgsize * occufull.354 .023

iporgtype * occufull.222 .000

iporgtype * occupart.240 .000

ipphase1 * occupart.708 .000

ipphase2 * occupart.590 .001

ipphase2 * occuself.587 .001

ipteamyes * occupart.742 .000

ipteamyes * occuself.708 .000

Analysis of Variance

self employed and employed Sig.

Full time and Part

time Sig.

Gender

Sig.

Age Sig.

ipactive .000 .116 .542 .440

ipactivenow .003 .327 .625 .226

ipphase1 .000 .949 .439 .351

ipphase1role

.115 .661 .624 .092

ipphase2 .003 .598 1.000 .436

ipphase2role

.893 .216 .697 .159

ipinit .180 .137 .470 .984

ipteamsize .249 .533 .779 .019

ipteamyes .000 .159 .193 .987

ipjob5yr .370 .407 .750 .602

• Significant differences exist across self employed and employed respondents in:– Involvement in the last 3 years in

the development of new activities for main employer, such as developing or launching new goods or services, or setting up a new business unit, a new establishment or subsidiary.

– Involvement in current development of new activities

– Leadership in phases 1 and 2– Active involvement in the

development of new activities• No significant difference exist across

full and part time status in all aspects of new activities for main employer

• No significant difference exist across gender in all aspects of new activities for main employer

• Significant difference exist across age brackets in the perception of how many people will be involved in developing new activities

Causal Analysis

RR

Square

Adjusted R

SquareP

value.860 .739 .462 .028

Coefficientsa

Model

Standardized

Coefficients

Sig.Beta1 Consta

nt   .101

Occupart

.843 .004

Suskill -.309 .107Equalinc

-.292 .121

Knowent

.215 .201

Opport -.276 .204nbstatus

.176 .333

Ownmge

.293 .384

Nbmedia

-.162 .403

fearfail)

.148 .460

Phreduc

-.117 .547

Bstart -.132 .609Nbgoodc

.078 .699

Gender -.064 .708Occuself

-.042 .848

Phhhinc

-.021 .891

Hhsize .012 .959bjobst -.010 .962

IPYES Leadership in developing new activities for employerOccupart Being part time employeesOccu self Being self employed

OWNMGEBeing currently the owner of a business you help manage, self-employed, or selling any goods or services to others

OPPORTPerception of good opportunities for starting a business in the area where you live

SUSKILLPossession of knowledge, skill and experience required to start a new business

FEARFAIL Absence of fear of failure from starting a business

EQUALINCPerception that most people would prefer that everyone had a similar standard of living

NBGOODCPerception that not most people consider starting a new business a desirable career choice

NBSTATUSPerception that those successful at starting a new business does not have a high level of status and respect

NBMEDIAPerception that the public media feature stories about successful new businesses

BSTARTcurrently trying to start a new business, including any self-employment or selling any goods or services to others with others

BJOBSTcurrently trying to start a new business or a new venture for your employer as part of your normal work with others

Gender Males lead new activities

Phhhinc Higher income take lead in developing new activities

HhsizeHigher household size does not take on leadership of new activities

Recommendations

• As a result of the existing shortage in the pipeline of employees taking on leadership role in entrepreneurial activities in their respective companies, micro-level strategy such as balancing old and new way doing things is recommended. – For companies that wish to succeed with corporate entrepreneurship, the

lesson is simple: Success is not an either-or proposition. New businesses should be nurtured through a series of balancing acts that combine entrepreneurship and disciplined management, short- and long term thinking, and established and new processes. Corporations must perform balancing acts in three areas: strategy, operations, and organization.(Garvin & Levesque, 2009)

•  As for needed government intervention, coordinated support creates the foundation for entrepreneurial success, which is a key driver for economic growth. – To achieve maximum effect, such coordination efforts should take place

among a range of stakeholders, such as governments, corporations, entrepreneurs and educational institutions.

Thank you!