The Effect of Entrepreneurial
Competencies of Employees on Small
Firm Performance: The Case of
Salonized
MSc Entrepreneurship (joint degree VU and UvA)
Name: Valeria Zanella
Student number: 11616407
E-mail: valeria.zanella@student.uva.nl
Thesis Supervisor: Dr. Tsvi Vinig
PREFACE
I hereby present my master’s Thesis of the Master of Science in Entrepreneurship. This basis for this research stemmed my passion for the field of Entrepreneurship, principally the study of employee entrepreneurial competencies which are developed to contribute the development and growth of a business by creating a setting of endless opportunities. It is my passion to study how the impact of entrepreneurial competencies on performance plays a role in business practices in daily basis.
The current study would not be possible without a strong support group. First of all, to my parents and siblings, who are my rock and supported me with unconditional love through the whole process and always had faith in me. To my thesis supervisor Professor Dr. Tsvi Vining whose feedback and guidance helped me achieve my goals in this research. To my internship supervisor Professor Dr. Enno Masurel who provided me with guidance and feedback to make the most out of my internship. To Danny Hiemstra for opening the doors of Salonized and giving me the opportunity of having a learning experience and to work closely with a great team, his support and trust during my internship and data collection were the key for my research. To the interviewees and respondents for the cooperation in the field work and helping obtain the results for this study. To both, University of Amsterdam and VU Amsterdam University for making my academic experience so rewarding.
The copyright rests with me, I am solely responsible for the content of the thesis, including mistakes. The university cannot be held liable for the content of the present work.
ABSTRACT
Entrepreneurial competencies have been studied for many years now. It is not new that researchers strive for analyzing the competencies that make entrepreneurs so successful in
the workplace in this day of age. The impact of entrepreneurial competencies has been widely tested and yet the answer is expected to always be positive, yet it is not sufficient. This research studies how the employee entrepreneurial competencies impact on business performance for the success of SME by using data from an Amsterdam based scale-up
company named Salonized.
By developing a conceptual model, the employee entrepreneurial competencies influence firm performance in a significantly positive way. In order to contribute to the analysis, a two-stage study was performed. The first stage included in-person open-question interviews
to the CEO, co-founder and employees. In addition, the second stage included an online survey questionnaire to 51 outsourced employees.
Furthermore, the results were tested using a multiple-linear regression analysis and indicate that some employee entrepreneurial competencies variables impact on firm performance.
The present work emphasizes the need to study entrepreneurial competencies across business performance to enhance academics and practitioner’s knowledge about entrepreneurial competencies, behavior, skills, knowledge and experience of employees for
Table of contents
Section I: Literature Review...4
1.1 Entrepreneurship as the nexus of individual and opportunity ... 4
1.2 Entrepreneurial culture in SMEs ... 4
1.3 An insight for bringing Silicon Valley inside ... 5
1.4 Entrepreneurial competencies ... 5
1.5 Lack of Entrepreneurial competencies ... 7
1.6 The importance for measuring performance in Entrepreneurship ... 8
1.7 The importance of entrepreneurial competencies on SME performance ... 8
Section II: Conceptual Framework ... 10
Section III: Method ... 12
3.1 Research design ... 12
3.2 Research context ... 12
3.3 Number of respondents ... 12
3.4 Data collection ... 13
3.4.1 In-person open-question interview ... 13
3.4.2 Survey questionnaire ... 14
3.5 Measures and definitions ... 15
3.5.1 Independent variables ... 15
3.5.2 Mediating variable ... 16
3.5.3 Dependent variable ... 16
3.5.4 Control variables... 16
3.6 Data Analysis ... 16
Section IV Analysis and Results ... 18
4.1 Results from Surveys ... 18
4.1.1 Survey characteristics ... 18
4.1.2 Respondents characteristics ... 18
4.1.3 Cronbach’s Alpha ... 20
4.1.4 Descriptive Statistics and Distributions of the scale variables ... 22
4.1.5 Correlation between variables ... 30
4.1.6 Multiple-Linear Regression Analysis... 33
4.2 Results of in-person-open-question interviews: Entrepreneurial Competencies Variables ... 35
4.3 Results of in-person-open-question interviews: Firm Performance Variables ... 37
Section V Discussion ... 53
5.2 Limitations and Future Research ... 57
Section VI References ... 60
Section VII Appendices ... 64
Appendix A: Direct notes from the Interviews of CEO and Co-founder ... 64
Appendix B: Direct notes from the Interviews of employees ... 71
Appendix C: Salonized Software Updates ... 90
Appendix D: Frequencies for Demographics ... 101
Appendix E: Frequencies for Age ... 105
Appendix F: Boxplot of variables ... 106
Appendix G: Scatterplots of the Data ... 107
Appendix H: Interview questions ... 111
Appendix I: Employee Competencies and Engagement Survey ... 114
Introduction
In this day of age, entrepreneurship has become a strong topic around the study of the behavioral, psychological, and demographic characteristics that encourage entrepreneurs. It also has been a matter of study how entrepreneurial competencies can impact firm performance. In fact, there are several studies which analyze the different factors which influence firm performance (Cooper & Gascon, 1992). In addition, Bird (1995) suggests since competency refers to the quality of action taken by entrepreneurs, it is directly related to venture outcomes. The concept of entrepreneurial competencies has been investigated and analyzed extensively through the years. Within the competency literature, there are close links with new constructs on the topic, this study looks for contributing to a more integrated understanding of entrepreneurial competencies on SMEs performance.
Other studies englobe the entrepreneurial capabilities as important to business growth and success and has come to the conclusion that competencies make an impact on the way individuals perform tasks and practices in daily basis (Chaston, Badger & Sadler-Smith, 1999). Because of the limited information and lack of statistical significance found in previous studies for explaining the relationship between the entrepreneurial competencies and firm performance, most authors have claimed to address this gap by using practical cases. Man, Lau and Snape (2002), have studied the entrepreneurs’ characteristics using the concept of competitiveness for SMEs by developing a theoretical framework. This framework enhances the entrepreneur’s role in determining firm performance as can be applied to firms, its development and growth.
Taking on this framework, I designed a new one including entrepreneurial culture as moderator variable of entrepreneurial competencies and firm performance, since both are influenced by cultural, ethical, knowledge and experience aspects. Based on a real SME as part of my research to analyze the relationship between entrepreneurs’ competencies and the firm performance, the gaps found in the literature, are aimed to be supported. This work attempts to find answers to the following question:
How does the development of entrepreneurs’ competencies by employees make an
impact on the business performance for the success of an SME?
Entrepreneurial employees are among the major enablers of SME innovation. They are critical to the capacity of SMEs to provoke and adapt to change, alongside entrepreneurs themselves, who fulfil a three-fold role as creators, organizers and market-makers (Schoonhoven and Romanelli, 2001). Therefore, the importance for developing entrepreneurial competencies by employees at an SME can contribute the desire for them to identify, build and act upon opportunities in order to create value, face obstacles and demonstrate self-efficacy. Next to this, the development of entrepreneurial competencies can cause an important influence on the business performance variables including level of innovation, market growth, financial performance and value of the enterprise.
The present work is organized in the following way: in the upcoming section previous literature will be cover as well as an exploratory analysis into the entrepreneurial culture in SMEs using an insight for bringing Silicon Valley, and how some individuals create entrepreneurial culture into the workplace allowing employees to take the lead and have free flow of ideas and so on. The model of Silicon Valley is a great example for understanding how brilliant visionaries create business models that attempt to be great business ideas in a competitive world with entrepreneurial energy. Next to this, an introductory analysis to the concept of entrepreneurial competencies and how are these impacting the way businesses are performing. Previous literate on this topic will be cover as I defined the importance this topic, as these are important for business’ practices and success. In addition, the importance for measuring performance in Entrepreneurship will be discuss and it is critical to understand the challenges faced by individuals.
Section 2 will cover the conceptual framework involving research design of the present work, including methodological fit, research context, data collection. For this last, the present study is based on interviews and online surveys distributed to some SME employees located in Amsterdam. The focus of this chapter is the design of the study, which consisted as a fit
established constructs. This chapter discusses the setting of the study and the subjects involved. It describes the instruments used and the data collection, and analysis procedures. Subsequently, the next chapter includes the results of the present work as provides an insight for entrepreneurial employees and its role and significance for business performance for the success of an SME. It is important to mention that in order to find information to support the research question, a two-stage study was performed during the two-month period internship at Salonized, an SME located in Amsterdam. The first stage included in-person open-question interviews to the CEO, co-founder and employees. Furthermore, the second stage included an online survey questionnaire to outsourced employees created through Google Forms. Next to this, a clear summary including tables, graphs and statistic information about the data used for the present study will be presented as well as an analysis and interpretation of results will have also be undertaken in the chapter.
The last chapter will summarize the concluding remarks to discussion, limitations and suggestions for future research.
Section I: Literature Review
Existing research on entrepreneurial competencies argues that they play an important role for understanding entrepreneurial behavior, practices, and expertise. In this section, I review these studies in order to develop a conceptual model that links entrepreneurial competencies and firm performance.
1.1 Entrepreneurship as the nexus of individual and opportunity
Until this point in time, the concept of entrepreneurship involves many meanings and can be seen from different perspectives. Therefore, there is a growing consensus that entrepreneurship is the process through which youthful organizations and contemporary economic activities start making an appearance in diverse scenarios Davidsson, 2003; Gartner, 1988; McMullen and Dimov, 2013; Shane and Venkataraman, 2000; Wiklund et al., 2011 stated that “opportunities” are the main aspect for understanding entrepreneurship and introduced the concept of the individual-opportunity nexus.
According to Shane and Venkataraman (2001) a crucial activity for entrepreneurship research is to develop and test theory about how characteristics of “opportunities”, directly related to actor characteristics, providing enough explanation to entrepreneurial processes. There is a perception about the existence of opportunity, which has become the central mater in studying entrepreneurship as the nexus of individual and opportunity. McMullen and Shepherd (2006) argued that it is individual’ subjective perception of (first-person) opportunity that makes actors take entrepreneurial action.
1.2 Entrepreneurial culture in SMEs
Nowadays various explanations have been offered to overcome the difference between creating and sustaining entrepreneurial activity. Literature posits that cultural attributes are one of the primary determinants of entrepreneurial development (House, Javidan, Hanges, & Dorfman, 2002; McGrath, Macmillan, Yang, & Tsai, 1992). In the upcoming subsections the importance of entrepreneurial culture as a pre-requisite for stimulating entrepreneurship within an SME will be explained.
1.3 An insight for bringing Silicon Valley inside
As mentioned by Hamel (1999) the valley is the distilled essence of entrepreneurial energy. The focus of this study it is to stand out the ultimate goal about having an entrepreneurial culture, as the example of Silicon Valley has become the role model for many SMEs since it is filled with brilliant visionaries, people who strive for success, and that is what usually is missing in most of the companies.
It is true that having entrepreneurial set of minds would depend on different competencies that actors develop time after time. As it will be seen in the upcoming subsection, the entrepreneurial competencies developed by individuals can contribute to the performance of the firm as new ideas are been created and goals are set.
1.4 Entrepreneurial competencies
Over the past few decades, the concept of entrepreneurial competency has been developed not only in the general competency literature, but also in the literature on entrepreneurship. According to Kyndt & Baert (2015), competencies have been defined as combined and integrated components of knowledge, skills, and attitudes. Bird 1995 defined a successful entrepreneur as an individual with traits, such as specific knowledge, motives, features, self-images, social roles and abilities, which result in venture’s success. Taking this definition into consideration, we can assume that an entrepreneur is a person whose traits, knowledge and skills, which all in all are defined as competencies, are unique.
Research related to entrepreneurial competence is typically driven by aspirations to achieve superior performance, and the potential for, in turn, economic gain or business success (Spencer and Spencer, 1993). Competence is seen as a description of something which a person who works in a given occupational area should be able to achieve, it is a description of an action, behavior or outcome which a person should be able to demonstrate (Cheng &. Dainty, 2003). Moreover, interest in entrepreneurial competence derives from the supposed link between competencies and the birth, survival and growth of a venture (Bird, 1995; Baum, 1994). Understand the way entrepreneurs, interact in a business environment
has become a matter of importance to many researchers and managers. Iandoli (2007) described entrepreneurial competency as a capability of entrepreneurs to face effectively a critical situation by making sense of environmental constraints by activating relational and internal, specific resources’ (p. 17). Consequently, entrepreneurial competencies have been found to play an important role in business performance.
According to Bird (1995), entrepreneurial competencies are carried by individuals, the entrepreneurs who begin or transform organizations and who add value through their organizing of resources and opportunities. In their work, Michelmore & Rowley (2010), explained that entrepreneurship and SME research needs the use of more solid theoretical framework, as well as more appropriate dependent variables which highlights different mechanisms through which competencies can affect performance. They came out with three mechanisms which explain the importance of entrepreneurial competences. First, the more competent entrepreneurs choose to seize better venture opportunities. Second, management competencies are related to venture strategy, in order to obtain outstanding results, management competencies are used to excel the performance to a greater level. Last but not least, entrepreneurs and their competencies are a critical and valuable resource of the firms as employees could develop skills seen in their bosses.
Nowadays, entrepreneurial competencies have become a hot topic to study, especially when linking them to firm performance. As mentioned above, competencies are important for business practices and success. They demonstrate different variables to study behavior, practices and experience in a business. Therefore, the main advantage of studying such topic is that it offers a way to investigate entrepreneurial competencies which are link to firm performance causing long-term effects on business success.
As such competencies are changeable, learnable and attainable through experience, training or coaching (Man et al., 2002; Volery et al., 2015; Wagener et al., 2010). Which abilities an entrepreneur needs to possess to run a successful business has been conceptualized in a holistic as well as specific manner. According to Mulder et al. (2007), the holistic notion of competency focuses on ‘the ability to successfully meet complex
demands in a particular context’ (p. 34). Entrepreneurial competencies are necessary to analyze firm’s specific behavior on employees and entrepreneurs.
I propose a conceptual model which comprises four variables including achievement, leadership, coaching and communication skills spotted as a result of interviews in a SME. The ultimate goal for the conceptual model is to identify how does the development of entrepreneurs’ competencies by employees make an impact on the business performance for the success of an SME. This relationship is addressed by the following proposition:
Proposition 1: The development of entrepreneurial competencies by employees across the business practice impact SME business performance.
As the focus of the model is the central role of how the variables for competencies are developed by employees of an SME, impact on firm performance, it implies that developing entrepreneurial competencies are the based to understand the practices and individual behavior in a company as it grows. This research aims to fill the gap upon the evidence in existing literature in qualitatively and statistically assess how the relation between entrepreneurial competencies and business performance make an impact on the success of a SME.
1.5 Lack of Entrepreneurial competencies
Nowadays, there is considerable evidence that entrepreneurial ventures that lack the relevant entrepreneurial competencies tend to fail (Morrison et al., 2000).
One of the major challenges for a new venture is that both the problems faced, and the necessary skills change as the firm moves from one stage of development to another (Churchill and Lewis, 1983). Therefore, understanding the changes required as a consequence of growth is vital, as approaches thought desirable for one stage might be inappropriate for another.
1.6 The importance for measuring performance in Entrepreneurship
Accurate performance measurement is critical to understand the challenges faced by small business in their way to success and growth. The importance of analyzing firm performance offers a number of advantages for evaluating customers’ acceptance, employee´s motivation and business environment. The variables for evaluating the firm performance should be measured and facilitate the interpretation of actions based on the firm´s business development.
Measuring performance in Entrepreneurship represents a big part in the study of business. In any field of business, researchers and entrepreneurs would find interesting the way many new ventures have found an incredible potential in employees whose entrepreneurial competencies have helped to achieve personal as well as firm’s goals. Moreover, one of the main characteristics in the process of growing and achieving business success for a company, is the impact which the CEO causes to not only the employees but also to business processes. According to Hillary (2017) the idea of why the concentration of decision-making power in the owner/manager in a SME environment, depends on his role is based as the major determinant of SME competitiveness and of the firm’s overall strategy. Recently, it has been also found that the CEO characteristics affect the firms’ entrepreneurial orientation (Simsek, Heavey and Veiga, 2010).
1.7 The importance of entrepreneurial competencies on SME performance
In order to analyze the importance of studying entrepreneurial competencies and its impact of business performance. It is important to distinguish the dimensions for this study. An SME is a small firm which differs from larger firms in terms of organizational structures, financial and economic terms, managerial procedures, size, etc. For example, the number of employees and its characteristics will not fit for larger companies’ studies, also the competitiveness studies for SME has increased in recent years due to the limitations on this topic and become a matter of attention for researchers and entrepreneurs. Furthermore, the studies on SME have result in various factors of competitiveness to identify the key aspects
leading to an SME’s competitiveness, including entrepreneurial competencies, influence of the entrepreneurs, employee motivation, etc. As a result, these factors affect the performance of the firm.
In their work, Michelmore & Rowley (2010), focused on how difficult can result to measure entrepreneurial competencies. The issue of measurement of competencies is central to both research and practice. The development of frameworks of entrepreneurial competencies, based on the competencies that entrepreneurs exhibit (as opposed to theoretical notions of the competencies that they should exhibit) depends critically on the way in which competencies are measured.
Section II: Conceptual Framework
A framework (refer to figure 1) has been proposed to understand better this topic as variables for entrepreneurial competencies and firm performance would be further explained. Thus, the following is the relationship between the variables of entrepreneurial competencies of employees and firm performance of an SME.
This model distinguishes between two major constructs as we study the entrepreneurial culture. First, entrepreneurial competencies of employees, which would be studied using four variables that measure competencies such as achievement, leadership skills, coaching skills and communication skills. Second, firm performance, which also would be studied follow four variables that measure performance, including level of innovation, market growth, financial performance, and value of the company. The link between entrepreneurial competencies of employees and firm performance would be evaluated using data collected form an SME located in Amsterdam.
Yet, the question remains unanswered as to whether certain individual characteristics, traits and abilities among entrepreneurs developed by employees are the key to influence on business performance. Hence, this research aims to fill the gap upon the evidence in existing literature in qualitatively and statically assess the relation between entrepreneurial competencies and business performance.
Figure 1
Conceptual Model for Analyzing the Effect of Entrepreneurial Competencies of Employees on Small Firm Performance: The Case of Salonized
Source: A new model version based on Kyndt & Baert, 2015; Michelmore & Rowley, 2010; Baron and Markman, 2003; Bird, 1995.
Entrepreneurial Competencies of Employees
Variables that measure
Entrepreneurial Competencies Achievement
Leadership skills Coaching skills Communication skills
Variables that measure performance Level of innovation
Market growth Financial performance Value of the company Firm Performance Entrepreneurial Culture
Section III: Method
This section provides an insight for entrepreneurial employees and its role and significance for business performance for the success of an SME. This empirical study is based on data collected using the survey methods soon to be reported. Next to this, this study is reported in the following order: data collection, measurement and data analysis including tables, graphs and statistic information about the data used for the present study will have also be undertaken in the chapter.
3.1 Research design
The independent variables and their influence upon the dependent was chosen to perform a qualitative research. Figure 1 explains the conceptual model used for the present work. The entrepreneurial variables were identified by Kyndt & Baert, 2015; Michelmore & Rowley, 2010; Baron and Markman, 2003; Bird, 1995, thus Figure 1 presents an improved model which will test the influence of the mediator’s variables upon prior connections.
For the survey questionnaire, the respondents were chosen from an SME where an internship took place at one point in time. The research is cross sectional of nature and includes non-probability sampling.
3.2 Research context
The research project took place at Salonized in Amsterdam during the spring semester of 2018. The respondents were full and part time employees. The survey was answered online, and the respondents could access to it by using a link. Since the survey included different set of questions related to the variables in the model (figure 1), the respondents were self-selected within the company.
3.3 Number of respondents
As mentioned before, the present study present outcome from the online survey was given to part time as well as full time employees of an SME located in Amsterdam. Thus, the
number of respondents were 51 employees which is the current number for the total of employees. Therefore, the sample size for the test is 51.
3.4 Data collection
In order to explain how the development of entrepreneurs’ competencies by employees make an impact on the business performance for the success of an SME, two-stage study was performed during the two-month period internship at Salonized, an SME located in Amsterdam. The first stage included in-person open-question interviews (refer to Appendix H) to the CEO, co-founder and employees. In addition, the second stage included an online survey questionnaire to outsourced employees created through Google Forms.
3.4.1 In-person open-question interview
First, to further explain how the answers in the first stage interviews helped this research, I coded the interviews to better organize the data by following a personal filling system as coding can be done in any number of ways. However, normally it involves assigning a word, phrase, number or symbol to each coding category (Gioia, Corley & Hamilton, 2013). I organized the ideas and concepts to fit the categories following the direct notes from the interviews with the CEO, co-founder and employees (please refer to Appendix A and B) from the interviews.
Each category includes the variables for measuring entrepreneurial competencies of employees which are as follows achievement, leadership skills, coaching skills and communication skills. The best way to code data is to ask myself the following questions as I am reading the direct notes:
1. What is this saying? What does it represent? 2. What is this an example of?
3. What do I see is going on here? 4. What is happening?
5. What kind of events are at issue here? 6. What is trying to be conveyed?
As it is well explained by Taylor & Bogdan (1998), the word, number or symbol that are assigned to the item of data in answering the questions mentioned above is considered a code. Which all in all represents items of information classified by labels.
Now, to facilitate the coding process of the interviews, (Gioia, Corley & Hamilton, 2013) methodology will be used since it is a systematic and rigor approach for qualitative and inductive research, has an overcoming traditional way of measuring everything, formulates categories for later deriving new concepts and uses a Grounded Theory as a framework. According to (Gioia, Corley & Hamilton, 2013) the resulting grounded theory model shows the dynamic relationships among the emergent concepts that describe or explain the phenomenon of interest and one that makes clear all relevant data-to-theory connections. Next to this, writing everything up helps to make structure clearer also extracting transferable concepts and principles allows to address a larger audience.
(Gioia, Corley & Hamilton, 2013) methodology includes the following steps:
1. 1st-order analysis also called observation step which adhere faithfully to informant terms, where the analyst makes little attempt to distill categories, thus the number of categories tends to explode on the front end of a study.
2. 2nd-order analysis also called secondary order concepts where the analysist is seeking similarities and differences among the many categories; as result we are now firmly in the theoretical realm, asking whether the emerging themes suggest concepts that might help the study describe and explain the phenomena observed.
3. Called third order dimensions where we investigate whether it is possible to distill the emergent 2nd-order themes even further into 2nd-order “aggregate dimensions”. 3.4.2 Survey questionnaire
Next to the coding and the analysis of the interviews, as mentioned before, the second stage included an online survey questionnaire (refer to Appendix I) to outsourced employees created through Google Forms which is an online source and form-making tool. This tool allowed me to choose how to distribute and start collecting responses.
Furthermore, the first step was to select the employees as some are part time and other full time. The second step was providing them an explanation for the research question and proposition of the study. The final step was to share the link for filling the survey questionnaire with all the employees through online direct messaging system used inside the company.
3.5 Measures and definitions
The current research aims to identify how the development of entrepreneurial competencies by employees make an impact on the business performance for the success of an SME. To test the variables in the model, a survey instrument was developed and administrated to the employees of an SME.
This section contains how the variables in the conceptual model were measured by providing examples. The current study was rated on a five-point Likert scales, which ranged from strongly disagree to strongly agree.
3.5.1 Independent variables
The three independent variables used for the current research are: Leadership skills 1, leadership skills (the reason we have two independent variables under the same name is because the respondents rated leadership skills 1 negatively impacting on performance, thus it was not sufficient enough to the rest of variables and I had to take it as separate group since it is not reliable enough), Coaching skills, Communication skills. Examples of items rating Leadership skills were ‘As an employee I follow through on commitments made to team members’, ‘As an employee I provide appropriate direction to keep a project on track’ and ‘As an employee I show resourcefulness in offering alternative ways of getting things done’. Examples for Coaching skills were ‘As an employee I provide appropriate feedback to team members’, ‘As an employee I provide training resources as required to meet individual goals’, and ‘As an employee I act as a mentor to developing employees’. Examples for Communication skills were ‘As an employee I interact well with others regardless of level’, ‘As an employee I keep team members and clients informed of any schedule or budget issues’ and ‘As an employee I listen and understand customers’ needs’.
3.5.2 Mediating variable
The one mediating variable used for the current study is achievement. Examples for achievement were ‘The vision and goals of the company are important to me personally’, ‘The company provides attractive opportunities for training and development’, ‘I would recommend the company as a great place to work’ and ‘There are opportunities for my own advancement in the company’.
3.5.3 Dependent variable
The one dependent variable used for this research is Performance. As seen in figure 1, performance might or might not change due to the cause of the independent variables. Examples of items for Performance were ‘As an employee I feel stimulated and inspired by my boss to achieve extraordinary outcomes and develop my own leadership capacity’, ‘Is there sense of ownership and responsibility among employees’, ‘Is there employee empowerment and decentralized decision-making’, ‘The flow of ideas is well distributed as I perform my work’, and ‘As an employee I have freedom to contribute for improving product and market development’.
3.5.4 Control variables
For the current research, the survey questionnaire asked the respondents to provide demographic information such as: Gender, Age, Level of education, Years of work experience and Job Position.
3.6 Data Analysis
As it has been presented in the conceptual framework (refer to figure 1) I used entrepreneurial competencies developed in previous work as components factors to facilitate the interpretation of results. I have constructed a framework using variables for measuring entrepreneurial competencies and firm performance. I attempted to analyze the impact of entrepreneurial competencies variables developed by employees on business performance. I
used the entrepreneurial competencies to establish a typology of entrepreneur’s traits, according to performance analysis.
Section IV Analysis and Results
This section contains the analysis of the collected data including graphs, charts and tables as output to test the model. In order to start developing this chapter, I will first present the survey characteristics as well as the respondents characteristics, then report the results and finally evaluate the model.
4.1 Results from Surveys 4.1.1 Survey characteristics
To generate the following results, a multiple linear regression analysis using SPSS was performed to identify the impact of employee entrepreneurial competencies on firm performance of an SME. Table 1 presents a summary of the survey characteristics. A total of 51 respondents, with a 95% confidence interval for mean.
Table 1
Survey characteristics
Target population: SME (scale-up >1 year)
Population size: 1 SME (Salonized)
Geographical survey: Amsterdam (Netherlands)
Sample size: 51 questionnaires
Sampling Unit: Enterprise
Confidence level 95%
Respondents: Founders and employees
Source: own development 4.1.2 Respondents characteristics
Table 2 presents the respondents’ demographics for the survey, as it shows who are they, and how they represent the population. According to Table 2 (see also Appendix D for more detail information about demographics), the gender variable presents a higher percentage for Male in the sample (52.9%). Bachelor’s degree has the highest percentage on the level of education variable, (60.8%). The respondents work experience variable with the highest
highest percentage is programmers (21.6%). Appendix E, presents the frequencies Statistics where the mean age for respondents were 33.5 years.
Table 2
Summary of respondents
Variable Frequency Percent
Gender 0 Male 27 52.9
1 Female 24 47.1
Level of education 0 Bachelor Degree 31 60.8
1 Masters Degree 20 39.2
Work experience
1 0 - 1 YEAR 4 7.8
2 1 - 5 YEARS 11 21.6
3 6 - 10 YEARS 19 37.3
4 MORE THAN 10 YEARS 17 33.3
Job Position
1 Administrative Assistant 1 2.0
2 Category assistant 1 2.0
3 Co-founder - Head of Growth 1 2.0
4 Co-founder - Head of Marketing 1 2.0 5 Customer Support Coordinator 2 3.9 6 Developer 3 5.9 7 Development Coordinator 1 2.0
8 Growth & Business development
1 2.0
9 Human Resources Specialist 4 7.8
10 IT Manager 1 2.0
11 Marketing and sales 4 7.8
12 Marketing and support 3 5.9
13 Marketing/product 1 2.0
14 Product manager 2 3.9
16 Sales Coordinator 1 2.0
17 Sales manager 3 5.9
18 Sales Manager 1 2.0
19 Software architect 9 17.6
Source: own development
4.1.3 Cronbach’s Alpha
Cronbach’s Alpha is used by me to identify the reliability of a single variable as well as if the items show enough internal consistency to represent the scale variables (see table 3).
After calculating Cronbach’s Alpha on Table 3, the variable of performance has been created by taking the mean of these five items; for example, Communications Skills has been created by taking the mean of 3 items. Therefore, the scale variables are created by taking the mean of the items that had a high Cronbach’s Alpha.
It is important to mention that, I have tested the items separately for LSKILLS 1 and LSKILLS since all 3 items do not go well when combined; however, this does not mean that it is less important, it is just that for the analysis this variable has been calculated separately by the items number 1, 2 and 3. To further explain, the only variable which shows to have less internal consistency is leadership skills (0.492) which means the variable is unreliable since the Cronbach’s Alpha is below 0.7, which is low. Moreover, I will not be using the variable Leadership Skills with items 1, 2 and 3 together. By looking at Chart 1, Item-total Statistics, it is shown by 3 items for Leadership Skills variables where the Cronbach’s alpha will be lower if item deleted for item 2 meaning unreliable, and even less reliable when deleted item 3; however, it will be higher, meaning above 0.6 when item 1 is deleted. Thus, the Cronbach’s Alpha if item deleted increases 2.62. The leadership skills will be created by only taking two items, number 2 and number 3 and leave out Cronbach’s Alpha for Leadership Skills item number 1.
Table 3
The Cronbach’s Alpha per variable
Variable Cronbach's Alpha items Number of
Performance 0.854 5 Achievement 0.823 4 Leadership skills* 0.492 3 Coaching skills 0.832 3 Communication skills 0.785 3 Leadership skills 1* 0.616 2
*Not Applicable: Leadership skills with 2 items, meaning questions number 2 and 3, is insufficient, by leaving out number 1 becomes reliable enough to work with.
Source: own development Chart 1
Item- Total Statistics
Sc ale Mean if Item Delete d S cale Varian ce if Item Delete d Corr ected Item-Total Correlati on Squ ared Multiple Correlati on Cronb ach's Alpha if Item Deleted LEADERSHIPSKILLSAsanemployeeIfollowthrough oncommitmentsmadetotea 49 7. 895 4. 0.179 0.044 0.616 LEADERSHIPSKILLSAsanemployeeIprovideapprop iatedirectiontokeepapr 61 7. 683 4. 0.341 0.201 0.348 LEADERSHIPSKILLSAsanemployeeIshowresource fulnessinoferringaltern 65 7. 793 3. 0.434 0.230 0.160 Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on
Standardized Items N of Items
Source: own development
4.1.4 Descriptive Statistics and Distributions of the scale variables
In describing the variables, the current study was rated on a five-point Likert scales, which ranged from strongly disagree to strongly agree. According to table 4, it can be seen that the mean represents the level of the scale variables.
The variable Communication skills (COMSKILLS) is perceived with a mean (4.2353) above 4 which means that in a scale of 1 to 5 is the highest. In relation to the rest of the variables which have a mean above 3 can be interpreted as neutral, since all of them fall in the middle indicating not high neither low.
Table 4
Summary of Normality test
Variable Mean
Std.
Deviation Skewness Kurtosis
Sig (Kolmogorov-Smirnova) Sig (Shapiro-Wilk) PERF 3.7529 0.80134 -1.484 3.874 0.000 0.000 LSKILLS1 3.8824 1.40921 -1.211 0.191 0.000 0.000 LSKILLS 3.7451 1.10622 -1.174 0.568 0.000 0.000 CSKILLS 3.7190 1.00083 -1.034 1.055 0.002 0.001 COMSKILLS 4.2353 0.84930 -2.232 6.729 0.000 0.000 ACHIEVEMENT 3.9461 0.84160 -1.518 3.291 0.004 0.000
* p < 0.05 Thus showing a significant difference with the normal distribution. Source: own development
Reporting the results from Skewness and Kurtosis in table 4, it shows that Communication Skills has Skewness of -2.232 meaning that there are two cases that showed no Communication Skills whatsoever. To further explain, having a Skewness that high or negative, have to do with two cases from the sample of 51 that have no communication skills reflected on questions such ‘As an employee I interact well with others regardless of level’,
‘As an employee I keep team members and clients informed of any schedule or budget issues’ and ‘As an employee I listen and understand customers’ needs’. The two cases strongly disagree on these 3 questions, they do not interact well with others, they do not keep team members and clients informed and they do not listen and understand customer’s needs. These people score to 1 and are still part of the analysis because even though they do not communicate well, and might show low performance, they provide a good insight for the present work as in the Case of Salonized people shows different personalities. Thus, it becomes interesting to study those people competencies and see how much of a difference make on the analyzes.
The upcoming graphs are showing the histograms of the descriptive statistics for each variable. This shows how high or low are performance, leaderships skills, coaching skills, communication skills and achievement on average.
All scale variables have values between 1 and 5 (see Graphics 1,2,3,4,5, and 6). And have been calculated by taking the mean of the items that were reliable (see table 3). And now we have the descriptive statistics of all the scale variables.
Graphic 1
Histogram for Performance
Source: own development
From Graphic 1, it can be observed that the mean is 3.75 of a scale from 1 to 5, which means that above 3 people agree. Therefore, for every person, there are 51 respondents, there is a score on performance which is the mean of the 5 questions on performance. Then we can calculate the mean of 51 respondents and that is 3.75 which is the overall mean for performance of all 5 questions of all survey respondents. And 3.75 is neutral, but closer to agree on the 5 questions related to ‘As an employee I feel stimulated and inspired by my boss to achieve extraordinary outcomes and develop my own leadership capacity’, ‘Is there sense of ownership and responsibility among employees’, ‘Is there employee empowerment and decentralized decision-making’, ‘The flow of ideas is well distributed as I perform my work’, and ‘As an employee I have freedom to contribute for improving product and market development’.
Reporting the results for the standard deviation of performance tell us about the variation in the sample, and there is not much variation because items are between 3 and 5, except for 3 other people who score lower, but 90% of the respondents score between 3 and 4.5 on this variable. Therefore, the standard deviation for this variable is low 0.801. The variable it is not normally distributed but skewed to the left due to the 2 cases with low performance. All different 51 people have different values; however, for this variable there is not much variation.
Graphic 2
Histogram for Leadership Skills (LSKILLS1)
Source: own development
From Graphic 2, it can be observed that the mean is 3.88 of a scale from 1 to 5, which means that above 3 people agree. Therefore, for every person, there are 51 respondents, there is a score on leadership skills which is the mean of the 3 questions on this variable. Then we can calculate the mean of 51 respondents and that is 3.88 which is the overall mean for performance of all 3 questions of all survey respondents. And 3.88 is neutral, but closer to agree on the 3 questions related to ‘As an employee I follow through on commitments made to team members’, ‘As an employee I provide appropriate direction to keep a project on track’
and ‘As an employee I show resourcefulness in offering alternative ways of getting things done’.
Reporting the results for the standard deviation of performance tell us about the variation in the sample, and there is much variation because items are between 4 and 5, except for 2 other people who score lower. The variable it is not normally distributed but skewed to the left due to the 2 cases with low leadership skills. Therefore, the standard deviation for this variable is high 1.409. All different 51 people have different values; however, for this variable there is high variation in the sample.
Graphic 3
Histogram for Leadership Skills (LSKILLS)
Source: own development
From Graphic 3, it can be observed that the mean is 3.75 of a scale from 1 to 5, which means that above 3 people agree. Therefore, for every person, there are 51 respondents, there is a score on leadership skills which is the mean of the 3 questions on this variable. Then we can calculate the mean of 51 respondents and that is 3.75 which is the overall mean for performance of all 3 questions of all survey respondents. And 3.75 is neutral, but closer to agree on the 3 questions related to ‘As an employee I follow through on commitments made
to team members’, ‘As an employee I provide appropriate direction to keep a project on track’ and ‘As an employee I show resourcefulness in offering alternative ways of getting things done’.
Reporting the results for the standard deviation of performance tell us about the variation in the sample, and there is much variation because items are between 4 and 5, except for 2 other people who score lower. The variable it is not normally distributed but skewed to the left due to the 2 cases with low leadership skills. Therefore, the standard deviation for this variable is high 1.106. All different 51 people have different values; however, for this variable there is high variation in the sample.
Graphic 4
Histogram for Coaching Skills
Source: own development
From Graphic 4, it can be observed that the mean is 3.72 of a scale from 1 to 5, which means that above 3 people agree. Therefore, for every person, there are 51 respondents, there is a score on coaching skills which is the mean of the 3 questions on this variable. Then we
can calculate the mean of 51 respondents and that is 3.72 which is the overall mean for performance of all 3 questions of all survey respondents. And 3.72 is neutral, but closer to agree on the 3 questions related to ‘As an employee I provide appropriate feedback to team members’, ‘As an employee I provide training resources as required to meet individual goals’, and ‘As an employee I act as a mentor to developing employees’.
Reporting the results for the standard deviation of performance tell us about the variation in the sample, and there is much variation because items are between 3 and 5, except for 2 other people who score lower. The variable it is not normally distributed but skewed to the left due to the 2 cases with low coaching skills. Therefore, the standard deviation for this variable is high 1.001. All different 51 people have different values; however, for this variable there is high variation in the sample.
Graphic 5
Histogram for Communication Skills
Source: own development
From Graphic 5, it can be observed that the mean is 4.24 of a scale from 1 to 5, which means that above 4 people agree. Therefore, for every person, there are 51 respondents, there
is a score on communication skills which is the mean of the 3 questions on this variable. Then we can calculate the mean of 51 respondents and that is 4.24 which is the overall mean for performance of all 3 questions of all survey respondents. And 4.25 is high and greatly closer to agree on the 3 questions related to ‘As an employee I interact well with others regardless of level’, ‘As an employee I keep team members and clients informed of any schedule or budget issues’ and ‘As an employee I listen and understand customers’ needs’.
Reporting the results for the standard deviation of performance tell us about the variation in the sample, and there is much variation because items are between 3 and 5, except for 2 other people who score lower. Therefore, the standard deviation for this variable is low 0.849. The variable it is not normally distributed but skewed to the left due to the 2 cases with low communication skills. 90% of the respondents score between 3 and 4.5 on this variable. All different 51 people have different values; however, for this variable there is low variation in the sample.
Graphic 6
Histogram for Achievement
From Graphic 6, it can be observed that the mean is 3.95 of a scale from 1 to 5, which means that above 3 people agree. Therefore, for every person, there are 51 respondents, there is a score on achievement which is the mean of the 3 questions on this variable. Then we can calculate the mean of 51 respondents and that is 3.95 which is the overall mean for performance of all 3 questions of all survey respondents. And 3.95 is high and greatly closer to agree on the 3 questions related to ‘The vision and goals of the company are important to me personally’, ‘The company provides attractive opportunities for training and development’, ‘I would recommend the company as a great place to work’ and ‘There are opportunities for my own advancement in the company’.
Reporting the results for the standard deviation of performance tell us about the variation in the sample, and there is much variation because items are between 3 and 5, except for 2 other people who score lower. Therefore, the standard deviation for this variable is low 0.842. The variable it is not normally distributed but skewed to the left due to the 2 cases with low achievement. 90% of the respondents score between 3 and 4.5 on this variable. All different 51 people have different values; however, for this variable there is low variation in the sample.
4.1.5 Correlation between variables
Reporting the results from the correlation matrix, I have included the values not only for the variables but also for the demographics. Therefore, table 5 shows that Performance (PERF) does not differ by gender, nor education, nor age, nor work experience.
Next to this, the variables Coaching Skills (CSKILLS), Communication Skills (COMSKILLS) and Achievement are significantly related to performance at the 0.01 level (2-tailed). There is a positive relationship on: Performance with Coaching Skills (CSKILLS) with 0.540, Performance with Communication Skills (COMSKILLS) with 0.722 and Performance with Achievement with 0.693 showing that each variable impacts Performance; for example, if Achievement is higher then, Performance will also be higher. On the other hand, lower Coaching skills, lower Communication Skills and lower Achievement will result in lower Performance.
There is no relationship, not negative nor positive, for Leadership and Performance since values are 0.102 and 0.091. As well as for the demographics including Gender with -0.053, Age with -0.110, Level of Education with -0.094 and Work Experience with 0.008. Next to this, we can also see from Table 5, that the p-value is 0.000 for the leadership variables and coaching variables of which means that there is a weak relationship between those two variables. Which also means that changes in one variable (PERF) are not correlated with changes in the second variable (CSKILLS). In my model, if the (CSKILLS) variable increases there will be an increase in (PERF) variable.
Table 5
Source: own development
4.1.6 Multiple-Linear Regression Analysis
Reporting the results of the regression analysis, I have combined all the variables into one big model. My correlation looks at relationships between only two variables at the same time, meaning that for the analysis I chose one dependent variable and all the other variables that I have chosen as independent variables are combined into one model to see their joint effect or joint relationship. Moreover, a multiple-linear regression was calculated to predict the impact of entrepreneurial competencies variables on firm performance.
A significant regression equation was found (F (5,45) = 14.830, p< .000), with an R Square of .622. (see below tables for all the output values). From Table 6 Model Summary, the value for R Square is 0,622 which means that the model explains 62% of variance in performance. Meaning that 38% of variance in performance is unexplained.
Results on table 8 shows that communication skills (COMSKILLS) (.001) and Achievement (.022) were significant predictors of performance, in other words, both are significantly related to performance. For every 1-point increase in (COMSKILLS) there will be 0.408 increase in Performance. Next to this, if Achievement increases with 1 point of scale 1 to 5, there will be 0.303 increase in Performance.
Participant’s predicted performance is equal to 0.211 - 0.009 (LSKILLS) + .031 (LSKILLS1) + .143 (CSKILLS) + .408 (COMSKILLS) + .303(ACHIEVEMENT), where leadership skills is coded as traits, coaching skills as aptitudes, communication skills as talents and achievement as abilities. Performance increased .031 for leadership skills 1, performance decreased .009 for leadership skills, performance increase .143 for coaching skills, performance increase .408 for communication skills and performance increase by .303 for each achievement.
Table 6 Model Summary Model Summaryb Model R R Square Adjusted R Square Std. Error of the Estimate 1 .789a 0.622 0.580 0.51910
a. Predictors: (Constant), ACHIEVEMENT, LSKILLS, LSKILLS1, CSKILLS, COMSKILLS
b. Dependent Variable: PERF Source: own development Table 7 ANOVA ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 19.981 5 3.996 14.830 .000b Residual 12.126 45 0.269 Total 32.107 50
a. Dependent Variable: PERF
b. Predictors: (Constant), ACHIEVEMENT, LSKILLS, LSKILLS1, CSKILLS, COMSKILLS
Source: own development Table 8 Coefficients Coefficientsa Model Unstandard ized Coefficients Standard ized Coefficients t Sig . Collinearity Statistics B Std . Error Beta Tolera nce VI F 1 (Constant) 0.2 11 0.5 20 0.4 05 0.6 87 LSKILLS1 0.0 31 0.056 0.055 0.556 0.581 0.868 1.152 LSKILLS -0.009 0.068 -0.012 0.130 - 0.897 0.941 1.063 CSKILLS 0.1 43 0.091 0.178 1.565 0.125 0.649 1.542
COMSKIL LS 0.4 08 0.1 19 0.432 3.4 15 0.0 01 0.524 1.9 10 ACHIEVE MENT 0.3 03 0.1 28 0.319 2.3 70 0.0 22 0.465 2.1 53 a. Dependent Variable: PERF
Source: own development
4.2 Results of in-person-open-question interviews: Entrepreneurial Competencies Variables
The first stage included in-person open-question interviews (refer to figure 2) to the CEO, co-founder and employees.
Entrepreneurial competencies analysis
For the analysis of the proposition, the identification of the variables for competencies shows:
Step 1 - Observations – Co-founder interview questions
Competencies variables: Coding the information from the answers from the interview. 1. Risk-averse 2. Goal-achiever 3. Leadership 4. Reflective 5. Innovative 6. Perfectionist 7. Passionate 8. Visionary
Factors that measure business performance: Coding the information from the answers from the interview.
1. Positive attitude on employees’ performance 2. Good communication skills among employees 3. Positive environment in the organization
4. Tolerance between team members in the organization 5. Perform team work
Step 1 - Observations – Employees interview questions
Variables to measure Entrepreneurial Competencies: Coding the information from the answers from the interview.
Achievement • Education • Networking • Entrepreneurial parents • Working relationship Communication skills • Independent • Decisive
• Impact and influence Leadership
• Goal achiever
• Business direction skills • Performance • Culture • Innovation • Creativity • Ethical Mindset • Global Mindset • Respect and Equity
• Technology and social media savy Coaching skills
• Seeking new ways of working to improve productivity • Positive environment
STEP 2 - Coding using (Gioia, Corley & Hamilton, 2013) framework – Focus on the second order concepts, which are the most meaningful concepts.
Entrepreneurial Competencies Achievement • Risk-averse • Goal-achiever Leadership • Visionary Coaching • Passionate Communication • Reflective
STEP 3 - Gioia framework 3th order, theoretical dimensions – Focus on the third order concepts, this should be applicable to another competencies framework.
The Personal Traits Strategic Management
Organization change Relationship Management Value Management
4.3 Results of in-person-open-question interviews: Firm Performance Variables
In this section, I will discuss the variables that measure firm performance (refer to figure 1) by analyzing the results from the in-person-open-question interviews with regards to the entrepreneurial competencies.
Level of Innovation
For this variable, the study focused on the growth, brand development, and value of Salonized. The data on Exhibit C shows the improvements that Salonized has implemented in its product alongside with the innovation strategies which well-explained how such company has increased the total number of paying customers throughout the years (refer to graphic 7). As it shows, since the data was collected by the company back in January 2016, one year after the software was launched for the first time, Salonized has gained a total of two thousand two hundred and seventy-four customers, showing in May 2018, a total number of paying customers of two thousand six hundred and ninety-nine.
Graphic 7
Total number of paying customer per period.
Source: own development
As can be seen in graphic 7, the total number of paying customers is influenced by the practices that employees do inside the company. The new and fresh way of doing business is one of the particular reasons why such company has grown rapidly in the past two years. To further explain this, all competitors in NL used an old way of doing business, locking people in long contracts and charge very high prices. Since the CEO and one of the founders Danny Hiemstra, worked in the startup scene for a long time and knew what kind of businesses made him feel valued and good as a customer, he used that as a way of doing business in Salonized as well.
In short, Salonized wants to make its customers happy in the long run and not lock them in long contracts which removes their need to keep these people happy. By not using long term contracts the bottleneck and step to use Salonized is much lower than if a customer has to sign a long-term commitment. As a company, they are willing to extend trials period as part of the innovation and growth strategies in the long run. This makes their customers feel they are not in it for the money but in it to help them reach their goals.
Moreover, another variable retrieve from the interviews, also explains how entrepreneurial competencies such communication skills, impact the business performance by having a team of people with reflective feeling. Salonized team wants to help the customers and go the extra mile to do this by having a good communication. Customers feel this very good that employees take the time for them, try to understand them and give them solutions (please refer to graphic 7). As it shows the fluctuation of the Amount of new subscriptions from accounts signed up. Next to this, the results from the online survey questionnaire (please refer to Appendix I), shows how employees develop leadership skills in order to achieve the companies’ goals as well as meet customers’ needs.
Graphic 8
Amount of new subscriptions from accounts signed up.
Table 9
Overall results based on the entrepreneurial competency variable, employees’ leadership skills.
Source: own development Market Growth
For the analysis of this variable the study focuses on the market size and sales growth rate based on the MRR (Monthly Recurring Revenue) and the number of subscriptions from accounts signed up in that period, which are the most representative data taken from the interviews.
As a subscription business, the most important metric for Salonized is the MMR (monthly recurring revenue). The main benefit is when the company acquire a new customer it obtains a recurring revenue, thus the firm does not have to worried about one-off sales every month. In graphic 3, we can see that the total number of paying customers times the
average amount of monthly paid customers is going up and down since January 2016 until May 2018. Which means that employees need to develop certain skills in order for the MRR and new subscription keep up.
From the online survey (please refer to Appendix I) employees have mostly high coaching skills. This variable shows how employees take responsibility on tasks and the way they apply certain skills such as coaching. At Salonized, employees work very active in the tech scene and that they combine knowledge and work experience, as an example, programming, turning it easy to find a strong and diverse team of people with different careers. By having a diverse group of people, the company has increase as shows in graphic 9 and 10, the MRR values as well as the amount of new subscription. It is important to mention that Salonized does not rely on external companies to develop the software features as part of their innovation strategy. The employees are the ones who develop it under the programming department, which combines skills and practices.
According to table 11, which includes the number of signups organized by periods, we can see that two hundred and eighty-six people who sign up for the service at Salonized, the 7.70% of them subscribed. Even though there is a fluctuation (please refer to graphic 11) over the past two years in the sign-up rate, we can say that the percentage of signups are a result of the employees’ performance over the product innovation such software updates. Also, an important factor regarding the success of the firm performance is that employees dedicated 1-hour phone demo explaining everything of the software and its features, increasing the number of signups and therefore the subscribers, allowing the growth of the company in the current market.
Graphic 9
MRR (Monthly Recurring Revenue)
Source: own development Graphic 10
Amount of new Subscriptions from accounts signed up.
Table 10
Overall results based on the entrepreneurial competency variable, coaching skills.
Source: own development Table 11
Number of signups organized by periods
Period Signups Period Signup rate
May,2018 286 May,2018 7.70% April,2018 579 April,2018 15.40% March,2018 494 March,2018 23.70% February,2018 400 February,2018 21.80% January,2018 499 January,2018 32.10% December,2017 370 December,2017 31.10% November,2017 366 November,2017 32.20% October,2017 480 October,2017 28.70% September, 2017 385 September, 2017 29.40% COACHING SKILLS
August,2017 342 August,2017 30.70% July,2017 338 July,2017 27.20% June,2017 317 June,2017 28.10% May,2017 347 May,2017 31.40% April,2017 299 April,2017 27.80% March,2017 324 March,2017 32.40% February,2017 314 February,2017 30.30% January,2017 399 January,2017 29.60% December,2016 312 December,2016 31.10% November,2016 333 November,2016 25.80% October,201 320 October,201 25.90% September, 2016 242 September, 2016 34.70% August,2016 188 August,2016 36.20% July,2016 155 July,2016 32.90% June,2016 158 June,2016 36.70% May,2016 201 May,2016 28.40% April,2016 215 April,2016 27.40% March,2016 199 March,2016 32.70% February,2016 171 February,2016 25.70% January,2016 222 January,2016 26.10%
Graphic 11
Amount of new Subscriptions from accounts signed up.
Source: own development Financial Performance
The current study is analyzing how entrepreneurial competencies of employees’ impact on firm performance, one of the main variables to measure any type of business performance is the financial aspect. Therefore, this section will include the main employees’ competencies which influence the financial activity in Salonized. Even though the financial performance does not necessarily depend only on employees but the market economy, income statements, number of sales, competence level, level of industry innovation, and so on. For the current study, it has been a great matter of importance to include this variable as part of the research because of the fast-growing situation that Salonized has experience in the past two years.
According to table 12, the cash flows from December 2016 until May of 2018 have increased tremendously and the company has grown rapidly fast in the past two years. As well as, the total number of MRR in May 2018 (please refer to graphic 12) 77,436.70 euros, which indicated that new customers are subscribing. As mentioned before, the entrepreneurial competencies do not necessarily are the only reason why Salonized has grown and obtained high values on revenue. Entrepreneurial competencies such as leadership
and communication work hand and hand in a workplace. This is very important to have in a company, employees who feel committed and free to perform their task, do an excellent job and that reflects on the company development. Therefore, these variables that measure entrepreneurial competencies impact firm performance by seeking new ways of working to improve decision-making and creativity by having encouraging environment.
Graphic 12
Monthly Recurring Revenue
Graphic 13
Monthly Recurring Revenue growth rate
Table 12
Salonized Cash Flows
Graphic 14
Salonized Cash Flows
