Effect of the intrapreneurial coping mechanisms with interpersonal conflict on the corporate innovation process

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2018

EFFECT OF THE INTRAPRENEURIAL COPING

MECHANISMS WITH INTERPERSONAL

CONFLICT ON THE CORPORATE

INNOVATION PROCESS

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A Master’s Thesis

Presented to the Department of Economics and Business at University of Amsterdam & Vrije Universiteit

In Fulfilment of the Requirement for the Degree of Master of Science, Entrepreneurship

June | 2018

By Elena Tozzi UvA: 11628693 VU: 2630412

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Declaration of Work

This document is written by Elena Tozzi, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Acknowledgements

I would like to acknowledge the privilege I had in completing a four-months internship at Mobgen | Accenture Interactive. The company gave me an opportunity to experience and learn about the technology industry, which had a substantial impact on my career. The company’s community was very encouraging and assistive, which were critical factors during the conduction of my master’s thesis research.

I would like to thank the participants, who agreed to be interviewed in this research study. These individuals provided valuable insights on their opinions and experiences relevant to the research topic, and the information they shared during interviews served as the foundation of this study.

I would also like to express my appreciation to my professor and thesis supervisor, Rein Denekamp, for his continuous professional guidance. Taking his Corporate Entrepreneurship course sparked my interest in intrapreneurship and how critical it is for the survival of corporations. I am grateful for the time he dedicated to teaching and sharing his professional experiences with me in this process. Also, I would like to thank University of Amsterdam and Vrije Universiteit for their assistance during the program.

I am also thankful to my parents, loved ones, and friends for their on-going support while conducting this research project. They reminded me of the importance to stay optimistic and believe in the work I do.

Thank you, Elena Tozzi June, 2018

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Abstract

Corporations that have been perceived as the powerhouses for a number of decades have been in decline due to their incompetence in adopting industry changes introduced by entrepreneurship (Conceição et al., 2002, p. 25). To remain their competitive positions in the marketplace, corporations began to integrate corporate entrepreneurship as the process whereby an individual or a group of individuals instigate renewal or innovation within that organization (Sharma and Chrisman, 1999). This process is also referred to as intrapreneurship and heavily depends on intrapreneurs, individuals with entrepreneurial characteristics, who aim to create profitable innovations in order to sustain a stable innovation process at corporations (Pinchot III, 1985).

However, integration of corporate entrepreneurship and thus a reliable corporate innovation process is challenged by the occurrence of interpersonal conflict on the innovation issues between intrapreneurs and management for a variety of different reasons. To have an effect on the corporate innovation process, it is necessary not only for corporate managers, but also for intrapreneurs to acquire conflict-handling mechanisms in order to cope with these emerged interpersonal conflicts. To answer the primary research question, qualitative data was collected through semi-structured face-to-face interviews with eight participants, such as intrapreneurs, senior-level coaches, and corporate leaders, who engaged in the development process of a bottom-up initiative for a global consultancy company in Amsterdam, the Netherlands. The data analysis predominately focused on the key concepts relating to the corporate innovation process, reasons for emerged interpersonal conflicts between intrapreneurs and management, and intrapreneurial coping mechanisms with such conflicts at corporations.

The findings demonstrate six intrapreneurial coping mechanisms, which are categorized into two newly formed conflict-handling modes. The results also suggest that all interviewees find such intrapreneurial coping mechanisms to have significant impact on the corporate innovation process. Thus, the implications of this research is that corporate employees have a shared understanding of the factors that are required for a successful innovation process, but management needs to integrate clearer communication and collaborative procedures in the development processes of internal initiatives. Therefore, it is encouraged to further explore these issues in the future research.

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1 Introduction

This chapter discusses the identified research problem, problem objective, and research framework for a specific target group that has a key role in the corporate innovation process. This section introduces the primary research question, supporting questions, and outline of this research study.

Radical and continuous innovation is a key driver of corporations’ long-term success since it can contribute to organizational renewal and help corporations to maintain competitive positions in the markets (O’Connor and Ayers, 2005; Menzel, 2007). Even if corporations are considered to have a stable history and innovative achievements, many large organizations are trapped in “organizational mechanisms that hamper innovation” due to their inability to respond to introduced industry changes through entrepreneurship (Conceição et al., 2002, p. 25).

Threatened by start-ups, corporations began to adapt the multidivisional structure, known as the M-form, as a solution to the loss of industry control and allocation of resources. Organizations were re-structured on the basis of divisions where each semi-autonomous operating unit was responsible for a distinct business; responsible for day-to-day operating decisions; and had its own functional hierarchy (Ghoshal and Bartlett, 1995; Hoskisson et al., 1993). Since M-formed organizations are dependent on high earnings, corporate managers are required to make risky investments. Although, scholars argue that many managers are risk averse, which is one of the factors that causes decline in entrepreneurial risk taking and thus an unstable long-run position for corporations (Hoskisson et al., 1993). In addition, Ghoshal and Bartlett (1995) state that adopted operational processes formed routines and mechanisms, which placed barriers on employees’ ability to think out of the box, explore opportunities, and internally share opinions within corporate division units.

Because of these challenges, corporations are in need of developing entrepreneurial behaviors in order to address “the lack of innovation, stagnated top-line growth, and the inertia that often overtakes the large, mature companies of the world” (Thornberry, 2001, p. 526). Hamel (1999) states that “big companies are turning towards corporate entrepreneurship because they are not getting the continual innovation, growth, and value creation that they once had” (p. 527). To improve the innovative performance of corporations, scholars recognize the importance of

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adapting the New Management Approach and Innovation Value Chain model, which aid managers and intrapreneurs with recognition and exploitation of business opportunities as well as with taking specific actions for business survival and growth (Hansen and Birkinshaw, 2007; Frese and Gielnik, 2014).

However, adaptation of the new organizational system leads to fast-paced changes to internal processes, employee responsibilities, and opinions, which frequently emerge conflicts between intrapreneurs and managers (Barki and Hartwick, 2001). It is crucial to understand that Western cultures favor individualism due to valuing privacy, personal space, achievement, and self-direction (Oetzel and Tin-Toomey, 2003). Employees feel responsible for their own successes and failures, which thus result in the implementation of competing or dominating conflict management styles, such as “engagement in accusatory behavior or unfair blaming colleagues (Leung, 2008, p. 166). This type of conflict is known as the interpersonal conflict and defined as “a disagreement between two interdependent people who perceive that they have incompatible goals” (Oetzel and Tin-Toomey, 2003). Because interpersonal conflict negatively impacts employees, team performance, and development of innovative projects, there is a critical need for managers and intrapreneurs to resolve occurrence of such conflict by understanding antecedents of interpersonal conflict that are presented in the General Framework of an Interpersonal Conflict (Robey et al., 1993; Barki and Hartwick, 2001; Camelo-ordaz et al., 2014). To cope with an interpersonal conflict in organizations, corporate managers are advised to apply the Thomas-Kilmann conflict resolution framework as a conflict resolution strategy.

However, although scholars present a substantial volume of information and research on the importance of tackling team conflicts in order to enhance the innovation process in corporations, current knowledge on how intrapreneurs cope with interpersonal conflict remains limited. Therefore, this research study aims to bridge the research gap and provide new insights to the current body of knowledge by exploring which conflict resolution strategies a group of intrapreneurs applies to overcome interpersonal conflict with managers and what is the effect of these coping mechanisms on the innovative initiatives at corporations. Hence, the primary research question of this study is:

“How can intrapreneurs cope with interpersonal conflict to enhance the innovation process at corporations?”

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In addition, the key research question is followed by the following supporting research questions: 1. How does the innovation process work in corporations?

2. What is the role of intrapreneurs in the innovation process in corporations? 3. What is an interpersonal conflict in corporations?

4. What is the effect of interpersonal conflict on the innovation process in corporations? 5. How do intrapreneurs deal with interpersonal conflict?

Subsequently, this research study consists of six chapters: Chapter 2 reviews previous theories and identifies the research gap. Chapter 3 outlines the method of research that was used to answer the key research question and supporting research questions. Chapter 4 presents key results depicted from the semi-structured interviews. Chapter 5 discusses discovered findings according to a framework of the relevant literature and suggests areas for future research. Finally, Chapter

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2 Theoretical Background

This research paper aims to bridge the research gap by researching the corporate structure, corporate challenges, entrepreneurship and corporate entrepreneurship, corporate innovation process, reasons for corporate conflicts, and existing conflict resolution theories. This chapter is divided into four sections: structure of the new corporate system, innovation process, interpersonal conflicts, and conflict resolution theories. This study is significant due to the following contributions it will make. First, it elaborates on the occurrence of interpersonal conflict and its impact on the innovation process in corporations. Second, it contributes to the research by thoroughly investigating existing conflict resolution theories and the critical need to develop further research on how intrapreneurs cope with interpersonal conflict as a contribution to improvement of the innovation process at corporations.

2.1 New Corporate System

2.1.1 Defining Entrepreneurship

Corporations are challenged by rapid venture creations and notion of entrepreneurship, which encompasses acts of organizational creation, renewal, or innovation and exploits changes in environment, technology, and markets (Sharma and Chrisman, 2007; Freeman & Engel, 2007). To provide clarity in terminology and elaborate on characteristics of entrepreneurial individuals working in large organizations, this research study incorporates the following definitions of entrepreneurship and entrepreneurs:

Entrepreneurship is “a process by which individuals – either on their own or inside organization – pursue opportunities without regard to the resources they currently control” (Stevenson, 1990, p. 23).

Entrepreneurs are “individuals or groups of individuals, acting independently or as part of a corporate system, who pursue opportunities to introduce new products, services, and markets to the chosen industry, create new organizations, or instigate renewal or innovation within an existing organization” (Sharma and Chrisman, 2007, p. 17).

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Entrepreneurial individuals tend to be pro-active, unique, and innovative fanatics, who accept chaos, take risks, and apply multiple competing approaches toward problem solving (Quinn, 1979; Gartner, 1990). Entrepreneurs engage in three phases of business creation and development: identification of business opportunities, exploitation of opportunities, and taking of actions for business survival and growth (Frese and Gielnik, 2014). Entrepreneurial success also depends on the organizational relationship building, because it has the greatest impact on the organizational performance (i.e., increased trust, fine-grained information transfer, and joint problem-solving arrangements) (Uzzi, 1997).

2.1.2 Defining Corporate Entrepreneurship

To improve the corporate innovation process, profitability and competitive position, corporate managers are refining the traditional corporate system by integrating corporate entrepreneurship (Zahra, 1991). This study is centralized on the phenomenon’s definition by Sharma and Chrisman (1999):

Corporate entrepreneurship 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” (p. 18).

Scholars agree that corporate entrepreneurship takes place at the corporate, division, or project levels in a company with a goal to introduce new technologies, product categories, business models as well as to enhance an organization’s ability to innovate, take risk, and identify market opportunities (Kelly, 2011; Zahra 1991). The study by Thornberry (2001) distinguishes between four categories of corporate entrepreneurship (see Appendix A), however this research focuses on intrapreneurship and intrapreneurs as the most applicable form of corporate entrepreneurship to this study’s case study:

Intrapreneurship is “an attempt to take the mindset and behaviors that external entrepreneurs use to create and build businesses and bring these characteristics to bear inside an existing and usually large corporation setting” (Thornberry, 2001 p. 528).

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Intrapreneurs are “individuals, who take responsibility for creating innovation of any kind within an organization. They may be the creators or inventors but are always the dreamers who figure out how to turn an idea into a profitable reality” (Pinchot III, 1985, p. ix).

2.1.3 New Management Approach

Because of the rapid changes in the business environment, organizations have realized the need to change internal environments in order to maintain their competitive edge in the market. Along these lines, managers are responsible for providing clearer strategic guidelines and interpretations, in order for intrapreneurs to have a coherent understanding on how to align their efforts (Kelly, 2011). In their paper, Bartlett and Goshal (1995) develop and propose an additional view and theory in the field of corporate entrepreneurship and intrapreneurship. The New Management Approach theory aims to eliminate the multi-layered management structure and create a flat and fluid organization.

The New Management Model integrates three core processes: entrepreneurial, integration, and renewal processes. The entrepreneurial process focuses on the opportunity seeking, creation of new businesses, reduction of the hierarchy system, adoption of new corporate divisions of employees (i.e., intrapreneurs, coaches, and corporate leaders), and allocation of guidance to intrapreneurs (see Figure 2.1.3). The integration process requires corporations to become transparent with their employees, which is achieved by leveraging in-house assets and resources as well as linking them to corporate competencies and embed values. The renewal process makes corporations challenge own beliefs and practices by renewing ways of thinking and working.

Scholars state that intrapreneurs revitalize corporations, support risk taking, and maintain innovative and proactive competitor behavior (McFadzean et al., 2005), although intrapreneurs are not supplied with the same aiding tools as managers. That is the reason why the New Management Approach theory is of importance for this research since it refines management roles as well as introduces entrepreneurial roles in corporations. This theory advises corporate managers to “take the mindset and behaviors that entrepreneurs have and inculcate these characteristics into their employees” during the intrapreneurial system integration process (Thornberry, 2001, p. 528). However, there is still scope for further development on the intrapreneurial roles and tasks in the

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Figure 2.1.3: The New Management Approach: management roles and tasks

(Bartlett and Goshal, 1995)

2.2 Innovation Process

Winner et al. (2015) state that innovation is the solution for corporations to move forward in today’s rapid changing environment, which is why this research study focuses on the bottom-up innovation process in corporations. In the bottom-bottom-up innovation process, bottom or middle employees engage in this process by developing numerous proposals, presentations and revisions in order to persuade superiors (i.e., corporate leaders) to support with the development of innovative projects (Freeman and Engel, 2007). However, Freeman and Engel (2007) state that corporations have trouble pushing the innovation process, because “innovators, higher-level managers, and owners of equity benefit from the innovation process in different ways and take different risks” (p. 113).

According to Parsons (2010) and Teece (2007), corporations must have key innovative characteristics and dynamic capabilities in pursuance of the innovation process to take place and thrive (see Table 2.2.a & 2.2.b). Teece (2007) states that “dynamic capabilities relate to the firm’s ability to proactively adapt in order to generate and exploit internal and external firm specific competences and to address the firm’s changing environment” (p. 73).

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Table 2.2.a: Three key characteristics of an innovative company (Parsons, 1991)

Characteristic Definition

Customer value To focus on customer value in contrast to marketing and technological advancement.

Innovative To innovate across all functions and divisional units as well as to innovate up and down the business system collaboratively with distributors and suppliers.

Higher output To do more, more frequently, and faster.

Table 2.2.b: Dynamic capabilities (Teece, 2007, pg. 24)

Ability Definition

Sense Adaptation of analytical systems and individual capacities to learn, sense, filter, and shape new opportunities.

Seize Adaptation of enterprise structures, procedures, designs, and incentives to seize opportunities.

Maintain Maintaining of competitiveness through enhancing, combining, protecting, and re-structuring an organization’s both tangible and intangible assets.

Burgelman (1985) argues that for corporations to facilitate corporate entrepreneurship and innovation processes, the New Venture Division (NVD) must be integrated in order to “force changes in the corporate concept of strategy” (p. 50). According to the study, NVD provides “an internal environment in which new business opportunities could be explored, incubated, turned into projects” as well as demonstrate an organization’s economic viability demonstrated (Burgelman, 1985, p. 42). The challenge of integrating NVD is the tendency for corporate leaders to use it as a tool for control rather than a tactic for management of internal innovative performance. Similar to the Bartlett and Goshal’s (1995) New Management Approach, Burgelman (1985) proposes establishment of both middle level managers and corporate leaders as a solution to identify new business fields and articulate specific strategies for integration of intrapreneurial capabilities and skills, which are crucial factors for the development of innovation process.

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Another group of scholars suggests dividing the innovation process into stages, such as an initiation and implementation stages (Duncan, 1976). Correspondingly, Hansen and Birkinshaw (2007) introduce the Innovation Value Chain Model as a more thorough elaboration on the innovation process. They develop and propose an additional view of the entrepreneurial process on an organizational level. Their theory divides the innovation process into three stages: idea generation, conversion, and diffusion, which are the stages that new innovative ideas go through. Thus, the model serves as an aiding tool for managers to identify a company’s weaknesses as well as to determine which innovation tools and approaches to implement in order to integrate identified business opportunities by intrapreneurs and thus to maintain the continuous innovative performance of corporations (see Figure 2.2.c). As the most relevant framework for the enhancement of innovation process in corporations, the Innovation Value Chain Model contributes to this study by establishing an additional foundation for this research.

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2.3 Interpersonal Conflict

2.3.1 Defining Interpersonal Conflict

According to studies by Camelo-Ordaz et al. (2014) and Priem et al. (1999), an organizational conflict consists of two dimensions: task-oriented conflict (TC) and relationship conflict (RC). TC is defined as disagreements and debates about information and reasoning caused by difference in task-related viewpoints, ideas, and opinions within a team (De Wit et al., 2013; Jehn, 1995). On the other hand, RC emerges due to person-related disagreements based on interpersonal incompatibilities (i.e., suspicion, trust, hostility, tension, friction, and animosity) (Simons and Peterson, 2000; Parayitam and Dooley, 2009). To further understand the emergence of corporate conflicts that are triggered by innovation, scholars identify most common reasons for their occurrence (see Table 2.3.1.a).

Table 2.3.1: Reasons for occurrence of corporate conflict

Reason Source

Interpersonal hostility and jealousy Smith and McKeen (1992)

Poor communication Franz and Robey (1984); Cai et al., (2013)

Generation of technical rules, norms, and regulations

Franz and Robey (1984)

Frustration and low morale Glasser (1981)

Limited resources Cai et al., (2013)

Interdependency of jobs Cai et al., (2013)

Job responsibility; ambiguity of rights and responsibilities

Cai et al., (2013)

Changes in working environment Cai et al., (2013)

Interpersonal incompatibilities Pelled et al., (1999); Mitchell et al., (2008); De Dreu and Weingart (2003); Cai et al., (2013); Simons and Peterson (2000); Parayitam and Dooley (2009)

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Since corporations experience different types of conflicts, this research study focuses in particular on factors that cause interpersonal conflict between managers and intrapreneurs. Kelly (2011) states that interpersonal conflict often emerges due to the clash of entrepreneurship with corporate processes, strategies, and structures, as well as differences in characteristics among individuals, groups, and organizations. Other scholars state that interpersonal conflict slows down the innovation process due to disruption of organizational structures, operating processes, and information sharing between innovators and general managers (Barki and Hartwick, 2001; Freeman and Engel, 2007).

Furthermore, Barki and Hartwick (2001) develop and propose the General Framework of Interpersonal Conflict, which introduces a comprehensive overview on interpersonal conflicts in corporations (see Figure 2.3.1.b). This research study integrates the following definition of the interpersonal conflict by Barki and Hartwick (2001):

Interpersonal conflict is “a phenomenon that occurs between interdependent parties as they experience negative emotional reactions to perceived disagreements and interference with the attainment of their goals. It is seen as a process whereby interpersonal conflict and management style affect one another” (p. 196-198).

Their article states that interpersonal conflict is influenced by individual, team, project, and organizational characteristics, which are the antecedents that define the level of interpersonal conflict and conflict management styles utilized by team members. The importance of this contribution is the fact that Barki and Hartwick (2001) introduce interpersonal conflict types and conflict management styles, which serve as a foundation for this research study.

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Figure 2.3.1: General Framework of an Interpersonal Conflict (Barki and Hartwick, 2001)

2.3.2 Impact on the Innovation Process

Although O’Reilly et al. (1993) and Bantel and Jackson (1989) state that team homogeneity increases team cohesion as well as emergence of new ideas and the number of innovations, other scholars state that high level of separation amongst employees negatively impacts innovation and team-related performance (Ancona and Caldwell, 1992). Simons et al. (1999) present data on how conflicts introduce diverse knowledge sources, but occurrence of disagreement does not provide access to deeper understanding of proposed ideas, challenges, and issues. Wiersema and Bantel (1992) state that “team members of the same age and similar experience find it easier to communicate effectively with each other than those of different ages” (p. 95). Thus, Cai et al. (2013) propose a theory that managers better understand individuals with alike characteristics (i.e., other managers) and have more complex relationships with employees of different age, work

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Scholars state that reasons for interpersonal conflict have a negative effect on projects’ success, because of the observed low-quality work delivery, efficiency of operations, and effectiveness of communication with external teams (Robey et al., 1993). In addition, existence of personal conflicts causes employees “to form a negative impression of members with whom they are in conflict, and to disagree with or reject their opinions,” which is defined as a negative halo effect bias (Camelo-Ordaz et al., 2014, p. 961). De Dreu (2006) states that interpersonal conflict prevents employees from focusing on the problem, generating new ideas and achieving a shared vision (Knight et al., 1999), which is a vital obstacle for the innovation process.

2.4 Conflict Resolution Theories

2.4.1 Behavioral Integration Theory

Hambrick’s (1994) research proposes the behavioral integration (BI) theory as the solution to resolving team conflict. BI is “the degree to which the group engages in mutual and collective interaction,” which consists of three group process elements that are divided into two: the social dimension (collaborative behavior) and the task dimension (quantity and quality of information exchange and joint decision making) (Hambrick, 1994, p. 188; Lubatkin et al., 2006). BI has the potential to increase organization’s innovativeness, but both managers and intrapreneurs are required to take advantage and utilize others’ set of competences (i.e., personalities, skills, experience, and knowledge). However, there is no developed guidance on which resolution strategies to apply to solve emerged conflicts.

2.4.2 The Social Learning Theory

Bandura (1973) developed the Social Learning theory, which argues that “most human behavior is learned observationally through modeling: from observing others, one forms an idea of how new behaviors are performed, and on later occasions this coded information serves as a guide for action” (p. 6). The theory states that individuals develop personalities by engaging in a continuous reciprocal interaction between cognitive processes (i.e., rational problem-solving strategies, self-control procedures) as well as behavioral and environmental influences (Leung, 2008). The theory argues that if a team member shows hostile intention towards other colleagues (i.e., frustration and aggression), views things negatively, and lacks self-monitoring then such

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factors will produce an emotional arousal and impact frequency and intensity of conflict.

To integrate this theory, individuals are encouraged to apply either cooperative or competitive strategy as a response to interpersonal conflict (Deutsch, 1990). The cooperative strategy advises to develop precautionary efforts to avoid the problem or to adapt problem-solving actions to overcome the conflict. On the other hand, the competitive strategy can potentially make the conflict more complex, because of the “counter-productive behavior and revenge-motivated aggression” (Leung, 2008, p. 167). However, the two proposed strategies do not provide a comprehensive guideline of actions for intrapreneurs to take in order to overcome an emerged interpersonal conflict with managers.

2.4.3 Thomas-Kilmann MODE Instrument

Kenneth Thomas and Ralph Kilmann introduced the conflict management model, known as the TKI MODE instrument, which aims to measure “an individual’s relative use of five conflict-handling modes in situations where his or her wishes differ from those of another person” (Jones, 1976, p. 249-250). This model widely used as a conflict management guiding tool in organizational management training, because it makes individuals assess conflict based on assertiveness and cooperativeness, which are the two dimensions that refer to satisfaction of one’s own concerns as well as concerns of others (Womack, 1988). The model is divided into five modes, which are different approaches to how conflicts can be managed (see Figure 2.4.3a). Kenneth Thomas and Ralph Kilmann elaborated and provided examples of these modes, which aid with obtainment of comprehensive understanding on the actions individuals take in conflict situations (see Table 2.4.3b). The TKI MODE instrument overlaps with the components demonstrated in the General Framework of interpersonal conflict model by Barki and Hartwick (2001) (see Figure 2.3.1.b), however it differs by integrating the ‘competing’ approach of conflict resolution.

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Figure 2.4.3a: TKI MODE Instrument (Thomas and Kilmann, 1974)

Table 2.4.3a: TKI MODE Instrument (Jones, 1976, p. 250)

Mode Definition Example

Competing “Pursuing one’s own concerns at the

other’s expense.”

“I am firm in pursuing my goals.”

Accommodating “Neglecting one’s own concerns to

satisfy the concerns of the other person.”

“If it makes the other person happy, I might let him maintain his views.”

Avoiding “Neglecting both one’s own and

another’s concerns by not addressing the issue.”

“I feel that differences are not always worth worrying about.”

Compromising “Attempting to partially satisfy both

oneself and the other by finding a middle-ground position.”

“I try to find a fair combination of gains and losses for both of us.”

Collaborating “Digging into an issue to find a

solution that completely satisfies the concerns of both parties.”

“I tell him my idea and ask him for his.”

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This tool is beneficial since employees can use all five modes instead of a single style of dealing with conflict. However, scholars criticize the model for its assumption that “conflict styles are stable, while conflict modes are more variable” as well as the assumption that an individual’s preferred mode depends on an organization’s values, personal values, situation, personality, and chance (Womack, 1988). The model may serve as an additional obstacle during corporate conflict management since “managers prefer their dominant styles, while individuals resort to backup styles when under stress or when the dominant style appears ineffective” (Womack, 1988). This instrument can be valuable, but managers and intrapreneurs must consider conflict behavior modes, which are influenced by both personality and situational factors, which also have the power to shift styles across situations and generate instability during the conflict management process (Thomas and Kilmann, 1974).

2.4.4 Conceptual Model

This chapter discussed and identified four applicable theories to the key research subjects: New Management Approach (Bartlett and Goshal, 1995), Innovation Value Chain Model (Hansen and Birkinshaw, 2007), General Framework of an Interpersonal Conflict (Barki and Hartwick, 2001), and TKI MODE instrument (Thomas and Kilmann, 1974). By combining and integrating four existing theories, this research study develops a framework as a foundation for the development of new insights into the chosen subject (see Figure 2.4.4a). This framework presents a chain of emerging events during development of the corporate innovation process, which together identify the research gap and the need for adaptation of intrapreneurial coping mechanisms with interpersonal conflict in order to expand the volume of internal innovative projects.

In addition, the conceptual model of this study helps to develop the mechanism that links and establishes a causal relationship between key concepts in this research (see Figure 2.4.4b). It will investigate how variations in concept A, coping mechanisms of intrapreneurs with interpersonal conflict, affect concept B, the innovation process in corporations. This research aims to bridge the research gap by providing a schematic overview of the conflict resolution framework developed by intrapreneurs as an aiding tool to overcome interpersonal conflict with managers and enhance the innovation process in corporations. To present accurate findings, the conceptual model establishes research boundaries in order to specify the study’s context and environment.

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Figure 2.4.4a: Framework (Elena Tozzi, 2018)

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3 Methods

This chapter presents methods and approaches used for the development of this research study. This part contains detailed information on the research design, data collection, analysis process, and limitations of the research, in order to answer the research question as well as to allow other researchers to reproduce and develop additional findings.

3.1 Research Design

To answer the research question how can intrapreneurs cope with interpersonal conflict to enhance the innovation process at corporations, this study combines a qualitative research approach with an empirical study of intrapreneurs overcoming interpersonal conflict at an established consultancy firm. The empirical study grants a deeper insight in the process of corporate entrepreneurship while employment of the qualitative approach will aid with development and integration of knowledge to guide intrapreneurs with conflict strategies.

This research leans towards the interpretivist research paradigm due to its aim to understand experience of individuals and “present a rich description of how people think, react and feel under certain contextually specific situations” (ibid, p. 9). The research integrates the Gioia method as a framework for the grounded theory building since it focuses on the informants’ understanding of organizational events and aims to produce a process model or new concepts by basing research on a single case, real-time interviews and observations, building of data-structures, and trustworthiness (see Figure 3.1).

Thus, the qualitative research approach is applicable to this study since it “provides an in-depth insight; it is flexible, small scale and exploratory; the results obtained are concrete, real-life and full of ideas” (Ruyter and Scholl, 1998, p. 8). This approach gives an opportunity to ask questions with the goal to understand individuals’ sensemaking of specific key research subjects. In addition, it allows for basing data collection on the small number of interviews since the quality of results is determined by what and how responses are said in contrasts to the number of interviews conducted.

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Table 3.1: The Gioia Method (Gioia et al., 2013) Key methodological reference Gioia (2013) Central methodological inspirations

Glaser and Strauss (1967); Strauss and Corbin (1990) on grounded theory

Epistemological foundations and purposes

• Purpose: capturing and modeling of informant meanings • Search for informants’ understandings of organizational events • Product: process model/ novel concept

Logic of the method • Single case chosen for its revelatory potential and richness of data

• Real-time interviews and observation

• Build “data structure” by progressive abstraction starting with informant first- order codes and building to second-order themes and aggregate dimensions

• Trustworthiness from insider- outsider roles, member checks, triangulation

Rhetoric of the writing

• Distilling the essence: present the data structure emphasizing second-order themes and overarching dimensions

• Elaborating the story: elaborate the model in two ways: (a) present the narrative; (b) additional quotes in tables

• Reaffirm contribution: return to opening gap to show novel insight

3.2 Data Collection

3.2.1 Literature Review

The literature review chapter looked at a large number of peer reviewed academic journals with the purpose to grasp a comprehensive understanding on the topics of intrapreneurship, innovation process, and interpersonal conflict in corporations. However, the Theoretical Background chapter identifies that there is a lack in the development and provision of guidelines for intrapreneurs in order for them to strategically and successfully overcome emerging challenges and conflicts as an enhancement tactic of the innovation process in corporations. In order to further develop the study and provide insights on intrapreneurial coping mechanisms with interpersonal

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conflict on the innovation issues, an empirical study was conducted with a focus on the case company.

3.2.2 Semi-Structured Interviews

The data collection of this research used semi-structured interviews in order to obtain both retrospective and real-time accounts by individuals experiencing the phenomenon (Gioia et al., 2013). The researcher prepared for the interview process by completing the following tasks:

1. Analyzed the research problem;

2. Identified needed information from the respondents in order to apply gathered information to the research question;

3. Selected the company’s employees who would be able to provide required information. By completing outlined tasks above, the interviewer was able to successfully develop a standard layout semi-structured interviews, which both allowed to gather necessary information and provide respondents with freedom to answer questions. In addition, the interviewer used the organization’s internal employee website to get familiarized with the population sample prior to conduction of interviews in order to eliminate the need to ask primitive questions and focus on the subject of this research study (see Appendix B).

Semi-structured interviews integrated both theory-driven and phenomenon-driven research questions within the context of existing theories, as well as concentrated on the lack of existing theory, which therefore provided more flexibility to the interviewer and interviewees during the data collection process (Eisenhardt and Graebner, 2007). The interview guide questions were developed after the literature review on the key research subjects and the proposed research question. The interview questions were thematically categorized into five blocks, which resulted to a series of 13 semi-structured questions (see Appendix C). The interview questions were categorized according to the following themes:

1. Characteristics of the population sample; 2. Corporate innovation process;

3. Intrapreneurial coping mechanisms with an interpersonal conflict;

4. Impact of the ‘intrapreneurial coping mechanisms’ on the ‘innovation process’; 5. Additional information.

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Before using the interview guide during conduction of interviews, a pilot interview was completed with an individual known to the researcher. As a result, phrasing of certain questions was modified, and an additional question was added in order to improve clarity as well as increase quality and accuracy level of gathered information. For example, the phrasing of “Can you tell me what the balance is between managerial and intrapreneurial roles in the Enso Project?” was changed to “To what extent are upper managers involved in the Enso Project?” In addition, the researcher timed the pilot interview in order to make sure that each interview would not take more than 30 minutes.

Over a period of two weeks, semi-structured interviews were conducted with a total of eight participants: three front-line entrepreneurs; two senior level coaches; and three corporate leaders. Since the interviewer was an intern during the research period, interviews were conducted face-to-face onsite at the company. It provided flexibility in terms of being able to ask clarifying questions and aided with minimizing confusion about the intent of the study. Interviews consisted of both closed- and open-ended interview questions and each participant was asked an identical set of questions. Each interview averaged out to 20 minutes in length.

Before conduction of interviews, the interviewer provided respondents with explanation on the purpose of this research study and reassured their anonymity in line with confidentiality guidelines; the interviewees’ full names were not used and instead numbers were assigned in place of respondents’ names. In order to collect comprehensive information on the subject, each individual interview had to be audio-recorded, which is an important tactic for the capturing of accurate and complete information as well as prevention of mistakes and distractions during note taking. Thus, each respondent was asked if he or she would approve audio-recoding of the interview, and all eight respondents confirmed their agreement to be audio-recorded.

3.2.3 Research Context

The chosen primary research method was focused on a corporation, Accenture, in the form of a single embedded case study. Accenture is a global management and professional services consultancy firm, which has one of its largest headquarters located in Amsterdam, the Netherlands. The case study focuses on Accenture’s ‘Interactive’ department, known as Accenture Interactive, which offers services in design, marketing, content, and commerce. Accenture Interactive focuses on supporting and encouraging its employees to engage in internal initiatives and entrepreneurial

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activities, which are described in definitions of corporate entrepreneurship and intrapreneurship (see Section 2.1.2).

The case study research method is defined as “a qualitative form of inquiry that relies on multiple sources of information” (Anderson and Arsenault, 1998, pg. 249). Rowley (2003) states that the power of a case study lays in the investigation of a phenomenon in its context. Case research usually implements a qualitative approach and a field-based construction for the incremental theory building and advancing of knowledge on the identified issue by answering how questions (Ghauri and Gronhaug, 2010). It is of importance to note that if certain variables are forgotten or removed from their context then it can have a negative impact on an evaluation and comprehension of the investigated phenomenon. To accurately analyze concepts and variables of this study, the researcher investigates the phenomenon in its natural setting, which is the company’s environment.

3.2.4 Research Measures

The research sample is comprised of one intrapreneurial project, which will be referred to as Enso or Enso project in this study. Enso is a product service in the form of mobile application and portal. This product introduces an end-to-end service, which allows customers to get trained as well as integrate design methodologies to customization of own design sprint workshops. The Enso project began in September 2017 and consisted of one person – the intrapreneur (Respondent 1). As of June 2018, the Enso team consists of three intrapreneurs and 18 individuals (business analysts, designers, programmers, developers), who voluntarily work on the project either part-time or during off-line hours.

This research study integrates the New Management Approach concept, which states that intrapreneurs will be more equipped and have a bigger impact on the innovation process if managers will establish three core process and three sub-teams working on the innovative project (see Section 2.1.3). Therefore, the research sample population was composed of eight individuals, who represent each of the three sub-teams and are engaged in the development process of the Enso project. The researcher based this study on a small sample population size yet focused on interviewing the most relevant and committed individuals as opposed to interviewing fractional participants in the Enso project. The small sample population size did not place constraints on the

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discovered findings, because all interviewees provided necessary data on the outlined key concepts of the study.

The researcher chose the interviewees based on their commitment to completion of day-to-day tasks, decision making, facilitation of design sprints, and supporting of intrapreneurial actions in the Enso project. According to the New Management Approach theory, the researcher splited the study’s sample population into three groups: front-line entrepreneurs; senior-level coaches; and corporate leaders. Scholars state that employees at different levels of the organization should be empowered to take the role of an intrapreneur and be encouraged to act like an entrepreneur regardless of their entrepreneurial inclination (i.e., nature) or developed entrepreneurial behavior and mechanisms (i.e., nurture) (Thornberry, 2001; Morris and Kuratko, 2002; Menzel et al., 2007; Lindquist et al., 2015). This study focused on employees who fall into one of the two categories and are therefore defined as corporate entrepreneurs. Therefore, selected front-line entrepreneurs are intrapreneurs, who generate, pitch, converge, and disseminate innovative ideas of the Enso project to Accenture managers and targeted market. Selected Accenture managers (both senior level coaches and corporate leaders) are individuals, who are being pitched to by intrapreneurs and who are responsible to lead as well as support both the Enso team and Enso project from the start to finish.

3.3 Data analysis

The main objective of the research analysis was to extract findings from the collected data during semi-structured interviews. The data analysis was completed in order to identify which coping mechanisms intrapreneurs apply to overcome interpersonal conflict with managers in order to enhance the innovation process at Accenture.

After conduction of eight interviews, each audio-recorded interview was transcribed by this study’s researcher, which was essential for achieving validity and reliability of discovered findings. According to the Gioia method, the data analysis process required to complete reduction of collected data by comparing, integrating, and refuting gathered information through coding and categorization (Ghauri and Gronhaug, 2010). The coding process integrated the informal content analysis, which involved “text analysis with respect to its content, with the factors of interest most often relating to meaning, or how many times particular phrases and terms appear” (Page and Meyer, 2000, p. 129). To detect necessary data for answering of the supporting research questions

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and key research question, the researcher used the color coding approach. The coding approach consisted of five different colors in total, where each color was assigned to the specific topic of this research study. Once the interview transcripts were color coded, the researcher integrated empirical results into tables and determined the overarching concepts, which are interpreted in the next chapter. The color coding approach was completed in reference to five themes of this research study (see Appendix E and Appendix F):

1. Yellow: corporate innovation process;

a. Blue: success factors of the corporate innovation process;

2. Red: reasons why interpersonal conflict emerges between intrapreneurs and management; 3. Green: intrapreneurial coping mechanisms;

4. Purple: effect of intrapreneurial coping mechanisms on the corporate innovation process. This analysis aided with identification of the key concepts, which are crucial factors for answering the key research question. Therefore, it was critical to first build a foundation on the subjects by gathering data on the corporate innovation process and reasons of interpersonal conflict at organizations. Then, it was feasible to collect specific data on the key concepts: intrapreneurial coping mechanisms and their effect on the corporate innovation process.

The content analysis procedure was a practical tactic to use for this qualitative research and semi-structured interview questions, because it aided with adding depth and breadth to the research. However, the researcher chose first to present empirical results and discuss the findings, which are then followed with examination of this study’s data limitations in Section 5.3. In order to develop and present research findings, the data analysis procedure was completed in six steps according to the framework by Collis and Hussey (2003):

1. Identified the study’s themes as a unit of analysis;

2. Established categories for classification of collected data in accordance to the Theoretical Background chapter (see 2.4.3) and interview transcripts (see Appendix B);

3. Labeled categories with utterances; 4. Organized data in the form of a table;

5. Illustrated interview quotations and provided explanation to support the findings;

6. Analyzed and discussed the key themes within the frameworks outlined in the Theoretical Background chapter.

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4 Results

This chapter aims to contribute to the scholarly literature by expanding knowledge on the identified literature gap. This section summarizes the empirical results recorded while conducting semi-structured interviews that were described in the methods section. The identified concepts address questions stated in the introduction.

4.1 Corporate Innovation Process

4.1.1 Revised Corporate Innovation Process Model

The purpose of interview Question 3 and Question 4 was to understand Accenture’s innovation process and to assess if it differs from the traditional corporate innovation process. It was critical for the researcher to gather information on how the interviewees individually understood Accenture’s innovation process in order for them to further elaborate on the Enso project’s development process. All three groups of interviewees were asked to explain the Enso project’s evolution by referring to the corporate innovation process’s three traditional phases. However, one of the intrapreneurs noted that there was a shift from strategically following the traditional consultancy process to instead focus on the collaboration with all involved parties in the innovation process:

“The new way of innovation and selling at Accenture. The innovation before was – you get a consultant in, you describe the problem, and then the consultant comes back to you after a couple of weeks or months with a solution proposition. Whereas now there has been more shift into co-creating with a client in order for us to enter and understand their environment, such as their daily routines, challenges, pain points, user journey” (Respondent 3).

The senior-level coach’s answers also aligned with the intrapreneurs’ opinion that the corporation’s innovation process recently shifted towards a more defined internal innovation process:

“I think that what we see in practice is that the process is non-linear, which is good. So, we might start with an idea to be able to understand how we can execute that idea, do more research, and try to understand what is behind it. From that angle

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we then try to translate the idea into a concept, which you then validate with your internal or external peers” (Respondent 5).

Respondent 7, who was the corporate leader interviewee, further added on the company’s innovation process:

“The innovation process on a high level is based around the innovation architecture. That is the process where all the elements of our organization come together in terms of starting with research, scaling of innovations in our delivery centers.”

To further distinguish between the traditional corporate innovation process and Accenture’s innovation process, the interviewees were asked to discuss to what extent they touch upon three phases of the Innovation Value Chain Model during the Enso project’s development (Appendix F). In their responses, the interviewees outlined and described four versus three phases of the innovation process (see Table 4.1.1). However, three out of eight interviewees were challenged with describing the fourth and final innovation process by stating that “the project is not at the diffusion phase yet” (Respondent 4). Revised phases of the corporate innovation process are summarized per transition phase and illustrated with three quotes to present and verify shared understanding of the innovation process amongst all three involved parties in the Enso project.

Table 4.1.1: Revised Innovation Value Chain Model

Phase Description Quote Phase 1 Problem

Understanding

“You need to understand what you need to do before the idea generation phase…Coming up with a map of problems” (Respondent 2)

“Start with understanding and defining the problem” (Respondent 5)

“Go and work with people from the client’s side to understand what their lives are like, what type of digital tools they use, how they work” (Respondent 6)

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Phase 2 Idea Generation “Then generate many ideas during design sprints. We look at the gathered information, analyze every possible idea and solution, then we rank” (Respondent 3)

“Then intrapreneur collaborated with individuals from other departments to brainstorm ideas” (Respondent 4)

“Do design sprints, which involve brainstorming sessions with clients and Accenture Interactive people” (Respondent 6) Phase 3 Conversion “Then prioritize ideas by adopting the conversion or filtering

approach” (Respondent 3)

“Prioritization and filtering of ideas, prototyping” (Respondent 5)

“The prototype was created to see whether or not it could help to solve the identified opportunity” (Respondent 8)

Phase 4 Diffusion “Introduction of idea to the market and people” (Respondent 1) “Then pass along to the clients” (Respondent 5)

“Diffusing or infecting throughout the whole organization” (Respondent 8)

4.1.2 Success Factors

Section 2.2 outlined characteristics that corporations must have in place in pursuance of a successful innovation process. Since the interviewees revised the traditional corporate innovation process, it was critical to understand which factors interviewees considered as necessary to have for the development of intrapreneurial initiatives and thus the innovation process at Accenture.

Although a number of answers and examples were provided by the respondents, the researcher identified six success factors that either reoccurred in the interviewees’ answers or were of relevance to this research study (see Appendix F). The discovered empirical findings are presented in the descending order to show the importance level of each factor. The researcher chose to demonstrate quotations per each interviewee group in order to reflect and compare opinions on the subject based on the responses of all three interviewed hierarchical levels of employees, which consisted of a total of eight participants in this case study (see Table 4.1.2). The table outlines the number of interviewees, who disclosed information on the identified success factors.

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Table 4.1.2: Coding Results on Success Factors

Success Factor Number of References

1. Management’s support 8/8

2. Encouraging environment 5/8

3. Dedicated team 5/8

4. Collaboration amongst involved parties 3/8

5. Shared understanding of project objectives and goals 2/8

6. Access to necessary information 2/8

4.1.2.1 Management’s Support

It is critical to highlight that all eight interviewees identified the importance of having management’s support during the innovative project’s development process. Respondent 8 stated that “sometimes it requires an executive sponsor or someone in management to be the person or politician to help you get through.” This success factor was identified as one factor, however results showed that it consisted of two sub-categories: thought leadership within the intrapreneurial team and upper-managers’ support (see Table 4.1.2.1).

Table 4.1.2.1: Success Factor: Management’s Support

M

an

age

m

en

t’

s

S

u

p

or

t

Sub-category Quote Thought leadership within the intrapreneurial team

“For team leaders to encourage and drive teammates” (Respondent 4).

“To make sure that the required quality for success is there” (Respondent 6).

“You have encouragement as an intrapreneur. Fully chargeable as an individual” (Respondent 8).

Upper-managers’ support

“For senior management to believe in the project’s potential. To be able to count on the senior management's support” (Respondent 3).

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“I see myself doing more of encouragement, provision of advises, and linking them to the right people or facilitation of network” (Respondent 6).

“To be a real supporter and sponsor of the project as a manager” (Respondent 7).

“Sponsors need to believe in this process. Management's weight to support and open doors. Reward the team that worked on it and for the credit to go to those who actually deserve it” (Respondent 8).

4.1.2.2 Encouraging Environment

Five out of eight interviewees mentioned the importance of having an encouraging environment at the organization. Respondent 5 stated that to sustain the corporate innovation process, “you need to be in a space where you are able to explore the innovation process.” To have a more comprehensive understanding of this success factor, additional elements are summarized and illustrated with quotes in Table 4.1.2.2.

Table 4.1.2.2: Success Factor: Encouraging Environment

E

n

cou

ragi

n

g E

n

vi

ron

m

en

t

Element Quote

Transparency “Clear innovation process” (Respondent 1).

“To understand when to step back” (Respondent 6).

Welcoming “You need to be in a space where you are able to explore the innovation process. No one is telling you what you should do. To receive praise over the fact you are doing that. To be applauded for accepting failure and moving on. To not be punished for negative outcomes or deliverables” (Respondent 5).

“Management to build and provide conditions for the project to be successful” (Respondent 7).

“Management to encourage initiatives like this” (Respondent 8). Shared

understanding of the need

“Management is completely clear that innovation is crucial for their survival or for their future success. Importance of giving a certain percentage of free time so that our employees could get inspired about other things It is crucial to give them the freedom

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to do that, because interfering with their dream is not good” (Respondent 6).

“We can invest in it as a company by saying that it is a priority” (Respondent 8).

4.1.2.3 Dedicated Team

The third discussed success factor was to have a dedicated team. Individuals from each of the three interviewed groups agree on the critical need of having “passionate and committed people, because it is very hard to achieve innovation due to numerous challenges along the way” (Respondent 3). To further elaborate on the intrapreneurial team’s characteristics that must be in place, five respondents stated that the intrapreneurial team must be driven and diverse (see Table 4.1.2.3).

Table 4.1.2.3: Success Factor: Dedicated Team

D

ed

ic

at

ed

T

eam

Element Quote

Driven team “You need to have a motivated and skilled team behind you. If there is no team interest, then the project won't survive” (Respondent 3). “You need people who want to drive the project, who are very passionate to keep doing and pushing the project. The team needs to have at least a few people, who will drive the rest of the team with their encouragement and passion” (Respondent 4).

“How the project is being driven from within - makes Enso visible” (Respondent 8).

Diverse team “To have people with different knowledge” (Respondent 2).

“What is important for me is the right team, which is a mix of people with talent and very different backgrounds” (Respondent 6).

4.1.2.4 Collaboration Amongst Involved Parties

Three out of eight interviewees found that having collaboration amongst involved parties was important for the innovation process to remain successful. Respondents believe that there has to be a clear and straightforward communication in working with both internal and external parties. Respondent 2 emphasized on the communication element:

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“There must be a clear communication amongst involved individuals in the innovation process.”

Two other respondents also highlighted the critical need for teamwork by stating that “Co-creation is also very important” (Respondent 6); and “It is important to have stakeholders from the client’s side and clients during design sprints” (Respondent 3).

4.1.2.5 Shared understanding of project objectives and goals

Shared understanding of project objectives and goals amongst involved parties was another essential factor to be present at corporations. Two interviewees also mentioned that all involved parties must have similar objectives, comprehension of the project, and clearly outlined tasks for an innovative project to succeed:

“To have people who understand the problem and for upper managers to have the same vision at intrapreneurs” (Respondent 2).

“Team needs to have a clear goal and strategy” (Respondent 4). 4.1.2.6 Access to Information

Another success factor of the corporate innovation process was for intrapreneurs to have access to necessary information. Two participants, intrapreneur and senior-level coach, defined this success factor as a prerequisite for “understanding of the problem” and “targeted audience” (Respondent 4). Respondent 2 stated that “it is critical to have all required information before you get started as well as to have access to helpful people and resources.”

4.2 Interpersonal Conflict

Section 2.3 discussed reasons for emerged interpersonal conflict and outlined the General Framework of an Interpersonal Conflict by Barki and Hartwick (2001), yet it was critical to gather more relevant data on factors that led to interpersonal conflict in the Enso project. Based on responses of all three groups of interviewees, the researcher identified six overarching reasons that led to the evolution of interpersonal conflict and thus weakening of the project’s development (see Table 4.2 and Appendix F).

Effect of the intrapreneurial coping mechanisms with interpersonal conflict on the corporate innovation process