Entrepreneurial behavior : the influence of “training and development’’ and ‘’staff selection’’ on entrepreneurial behavior within Rabobank

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Entrepreneurial behavior:

The influence of “Training & Development’’ and ‘’Staff Selection’’ on

entrepreneurial behavior within Rabobank

Author: Kyra Habermehl (10667342)

MSc. in Business Administration – Entrepreneurship & Innovation Track

University of Amsterdam

Supervisor: Dhr. dr. W. van der Aa

Second supervisor: Dhr. Drs. A.C.C. Gruijters

Final version

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Statement of originality

This document is written by student Kyra Habermehl who declares to take full

responsibility for the contents of this document.

I declare that the text and the work presented in this document is 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 content.

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Abstract

This article analyses the relationship between entrepreneurial behavior and two Human Resource Management (HRM) practices, “Training & Development” and “Staff Selection”. Core dimensions of the concept of entrepreneurial behavior are identified. Extending literature states that HRM practices stimulate entrepreneurial behavior. More specific, ‘‘Training & Development’‘ is strongly related to entrepreneurial behavior. So far, this relationship has rarely been analyzed in a qualitative manner in large corporate organizations. Based on current literature of HRM practices, a qualitative approach is used that stimulates rather than limits entrepreneurial behavior among managers and employees. Findings are based on semi-structured, face-to-face interviews in a large corporate organization. To get in-depth information, different levels of managers (high-level managers, medium-level managers, and employees) were approached. The results provide evidence that entrepreneurial behavior can be stimulated in the organization when making entrepreneurial behavior skills (innovativeness, proactiveness, and risk-taking) part of the ‘‘Staff Selection’’ procedure. A different perspective was found for ‘‘Training & Development’‘. A training is perceived more as a ‘’trigger’’ and ´´eye-opener’’ than as a main driver for stimulating entrepreneurial behavior. In order to answer our research question, ‘’Can “Training & Development’’ and “Staff Selection’’ stimulate entrepreneurial behavior in a large corporate organization?’’, a climate of trust between managers and employees is important. In this climate role models are important to activate entrepreneurial behavior among managers and employees.

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1. Introduction

In today’s increasing complex environments, competitiveness among firms have forced organizations to capitalize on the benefits of entrepreneurship and the entrepreneurial spirit in order to succeed and stay ahead of competition (Montoro-Sanchez and Soriano, 2011). Within this context, corporate organizations must orientate in an entrepreneurial way to grow and survive in the business environment. To control innovative good ideas and expertise, organizations partner with other external organizations. Some researches state that entrepreneurship is the most effective means for responding towards these complex environments (Burgelman, 1985; Miller and Friesen, 1983; Murray, 1981; Zeithaml and Zeithaml, 1984). For example, Miller and Friesen (1983) argue that there is a positive relationship between entrepreneurial behavior and company performance. As cited by Schuler (1986): ‘’the question to corporations is not whether they should or should not engage in

entrepreneurial activity, but rather what can be done to encourage establishment of entrepreneurship’’

(Morris and Jones, 1993).

Today, organizations appreciate entrepreneurship; some even have the right tools to stimulate it. But firms still need to be more proactive towards fostering entrepreneurial behavior as a core competency within the organization. Morris and Don Trotter (1990) discusses some keys to success in stimulating entrepreneurial behavior in large organizations. First, a trial-and-error approach, reward programs, and new value systems have been implemented. Second, the top should supports innovativeness, proactiveness, and risk-taking. Also, initiatives from employees are stimulated due to a cultural climate that addresses barriers of entrepreneurial behavior. Third, ‘’experimentation at local levels allows

development of novel solutions for addressing the entrepreneurial barriers’’. Fourth, ‘’senior management must take the lead in setting innovation goals, open communication, accepting failure, empowering middle management, and creating an environment in which new ideas can be developed’’.

Fifth, ‘’middle managers must directly attack entrepreneurial barriers with new structures, systems,

training and incentive programs’’ (Morris and Don Trotter, 1990).

These keys can be positively influenced by HRM practices (Schuler, 1986). HRM practices and entrepreneurship have rarely been studied together. A few studies on the subject conclude that HRM practices are essential for stimulating entrepreneurial behavior among managers and employees (Schuler, 1986; Montoro-Sanchez and Soriano, 2011).

Since the need to develop better HRM practices is becoming increasingly important, organizations are rethinking their HRM systems (Kaya, 2007). In an organization, HRM practices must support relations among organizational departments. This means that structural, cultural and systematic alignment of practices support organizational objectives, goals, and strategies. Furthermore, it should have positive

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7 influence on the creation of value by employees which facilitates commitment to their job and the organization.

The HRM practices “Training & Development’’ and “Staff Selection’’ have been studied by some researchers. Training can be experienced as a practice that is strongly related to entrepreneurial behavior according to Morris and Jones, (1993); Schuler, (1986); and Schmelter, Mauer, Borsch, and Brettel, (2010). Thus, training should help in stimulating entrepreneurial behavior among managers and employees within an organization.

During selection processes, talented and potentially skillful employees will be tested on behavior and attitudes, depending on the selection criteria of the organization. According to Kaya (2007), entrepreneurial insights, the capability to react towards unexpected changes and opportunities will be enhanced by these new coming talented and skilled employees. Hence, integrating entrepreneurial behavior skills (i.e. innovative, proactive, and risk-taking behavior) within a selection procedure, rather than a strong focus on job specific requirements, can stimulate entrepreneurial behavior among managers and employees within an organization.

A learning landscape for this research linked to Rabobank can be defined as a landscape in which learning opportunities and processes (e.g. training, courses, and internships) are available in an organization (Ruijters and Simons, 2006). These learning opportunities and processes can be covered by HRM practices.

Rabobank places more and more emphasis on stimulating entrepreneurial behavior among their employees. However, being a large corporate organization that works in structured frameworks for years, especially in an industry where risk-taking is not on the agenda, this transformation has not been easy.

Based on theoretical foundations regarding corporate entrepreneurship and HRM practices, which will be described in the next section, we present our research model. The objective of this research is to explore and get in-depth rich information about the role of HRM practices “Training & Development’’ and “Staff Selection’’ on stimulating entrepreneurial behavior in a large corporate organization. The challenge is how to stimulate the entrepreneurial spirit of professionals within their career. Also, what is the opinion of managers and employees about the concepts of “Training & Development’’ and “Staff Selection” in stimulating entrepreneurial behavior? And how do these opinions differentiate from existing literature findings. To fill these gaps, our research thesis covers the following research question:

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Can “Training & Development’’ and “Staff Selection’’ stimulate entrepreneurial behavior within a large corporate organization?

Existing research mainly focuses on small and medium sized organizations and approaches the subject in a quantitative manner. Our research is qualitative and analyzed through face-to-face interviews with different levels of managers and employees working for Rabobank. Nine interviews were collected. The applied methodology is described in the third section. Finally, we present the analyses and discuss these by going back and forth between our model and our findings. In the end, we provide conclusions and managerial implications.

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2. Literature review

This literature review focuses on the concept of entrepreneurship and HRM practices “Training & Development” and “Staff Selection’’. The concept of the learning landscape is not part of this research but will be explained in chapter 4. First the concept of entrepreneurship is explained. Second the role of HRM practices is elaborated.

2.1. Defining entrepreneurship

Many scholars did research on entrepreneurship and its role in organizations. Corporate entrepreneurship has been examined by several researchers on empirical (Covin, Slevin, 1986; Miller, 1983) and theoretical basis (Hill & Hlavacek, 1972; Peterson & Berger, 1971). Most research focuses on small and medium sized organizations. Facilitating entrepreneurship in large firms requires a move away from the traditional conceptualization of the entrepreneur (Morris and Don Trotter, 1990). This traditional concept is cited by Morris and Don Trotter (1990) as ‘’a trait of the individual who goes

against the odds in translating a vision into a successful business enterprise. As a trait, entrepreneurs tend to be aggressive, independent, hard-working, dedicated, well-organized, nurturing of their vision, optimistic, and have a strong internal locus of control’’.

A more common approach of entrepreneurship is the perspective of entrepreneurship as a process or activity within firms. This is in line with the thoughts of Stevenson and Gumpert (1989). They define entrepreneurship as ‘’the process of creating value by bringing together a unique package of resources

to exploit an opportunity’’. This process includes activities necessary to identify an opportunity, have

access to resources, develop a business concept, implement the concept and create the venture (Morris and Jones, 1993). Therefore, corporate entrepreneurship is built over years, and organizations in increasingly dynamic environments can attain industry leadership through development of corporate entrepreneurship (Stopford and Baden-Fuller, 1994).

There are differences between organization environments that are well-established and those of a start-up (Morris and Jones, 1993). Large organizations have more resources available for development, tests and implementation, whereas in a start-up the individual entrepreneur risks his/her own resources. In large organizations the individual does not ‘’own’’ the entrepreneurial concept and must be aware of sharing success with others. Finally, both teams and individuals play a role in the concept of corporate entrepreneurship. For example, when an individual faces obstacles he/she must be able to continue, not afraid of taking risks, and bear responsibility for failure. As cited by Chambeau and Shays (1984) in the article of Morris and Jones (1993): ‘’corporate entrepreneurs cannot be assigned or

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10 in large organizations pioneers who behave entrepreneurial can be important and valuable for stimulating entrepreneurial behavior among managers and employees.

2.1.1. Drivers of entrepreneurship

The drivers of entrepreneurship which characterize entrepreneurial behavior is a common discussed topic in the literature. Different studies stresses different dimensions such as personality factors, social cultural background (Miller, 1983), team-orientation, capability to resolve dilemma’s, learning capability (Stopford and Baden-Fuller, 1994), new-business venturing, self-renewal (Antoncic and Hisrich 2001), pro-activeness, innovativeness, risk-taking (Miller, 1983; Kaya, 2007; Morris and Jones, 1993; Morris and Don Trotter, 1990).

The concept of entrepreneurship can be characterized in three dimensions: innovativeness,

proactiveness, and risk-taking (Morris Don Trotter, 1990; Morris and Jones, 1993; and Schuler, 1986).

The three dimensions of entrepreneurial behavior in more detail

The first dimensions is innovativeness which refers to the willingness of seeking creative, novel or unusual solutions to problems and needs. These solutions can be transformed into new processes or technologies, as well as new products and services. With this dimension creativeness in organizations can be established (Morris and Don Trotter, 1990; Morris and Jones, 1993).

The second dimension is proactiveness which focuses on the implementation of an entrepreneurial concept. In successful entrepreneurship, bending rules and doing something different is common instead of continuously asking for permission. Furthermore, the proactiveness dimension expresses a ‘’hands-on’’ style of management, where obstacles can be overcome when executives work with customers, suppliers and employees (Morris and Don Trotter, 1990). Both Miller (1983) and Stopford and Baden-Fuller (1994) are congruent with this dimension.

The final dimension is risk-taking which involves the willingness to engage in and be aware (Morris and Don Trotter, 1990) of risky projects. These risks are calculated and manageable. According to Zahra (1993) employees’ risk taking behavior is a very relevant aspect of corporate entrepreneurship. The corporate individual does not take risks on account of their own resources, but on account of resources belonging to the organization. Personal risk is involved but this risk is more career-related. The individual does not really own the entrepreneurial concept and should be aware of the possibility to give others credits of this concept within the organization hierarchy. Hence, corporate entrepreneurship is dependent upon both individuals and teams (Morris and Jones, 1993).

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11 Considering other dimensions of entrepreneurial behavior

In the article of Schmelter, et al. (2010) the authors added two dimensions besides the common ones. This consideration was based on the article of Antoncic and Hisrich (2001). The first dimension which was added was corporate venturing. Corporate venturing can be defined as: ‘’all activities that lead to

creating new business, either internally in separate business units or externally in corporate spin-offs’’.

The second dimension which was added was self-renewal. Self-renewal is characterized by innovation on individual and strategic level of a firm and person (Schmelter, et al., 2010).

Whereas Schmelter, et al. (2010) characterizes entrepreneurial behavior with five dimensions, our research focuses on the three most common dimensions of entrepreneurial behavior: innovativeness, proactiveness, and risk-taking because these dimensions are most commonly discussed by researchers as the prior behavior characteristics and therefor match with our conceptual model and research question.

We use the research of Miller (1983) as a basis for this research for two reasons. First, other scholars explained the three dimensions of entrepreneurial behavior. However, most refer to the work of Miler (1983). Second, Miller’s (1983) research states that all three dimensions are needed in all three types of firms to create entrepreneurial behavior. To support this judgement, we explain now Miller’s (1983) approach more in detail.

In Miller’s (1983) research he links the dimensions of entrepreneurship, as a dependent variable, to three types of firms. The first type is a simple firm which is small, has imperative leadership, little planning, no formal strategy, and is highly centralized. The second type is the planning firm that tries to “buffer themselves from their rather stable and predictable environments and to function with a

machine-like harmony, reflected by the structure of the organization using control and planning systems’’. The third firm is an organic firm which operates in dynamic environments where the

authority is representative to lower level personnel. The findings of Miller’s (1983) research stresses that there is a strong correlation between entrepreneurship and its dimensions innovation, pro-activeness, and risk-taking for all three types of firms.

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2.2. Entrepreneurial behavior and HRM practices

2.2.1. Defining HRM practices in general

Every organization uses its own approach in human resource programs to secure that employees perform effective and hold the required characteristics. They have their own strategies requiring employees with different characteristics and behaviors. Hence, each HRM practice can trigger employee behavior. An example which the article of Morris and Jones (1993) describes is that of Olian and Rynes (1984): ‘’the appropriate mix of recruitment and selection practices is dependent upon

whether organizations were pursuing entrepreneurial-based strategies or more efficiency-based strategies’’. Considering the firm size, Golhar, Damodar, Deshpnde and Satish (1997) conclude on the

basis of that there is no difference in HRM practices between firms of varying sizes. However, the way practices are implemented within a firm can depend on their size.

Schmelter, et al. (2010) characterize HRM in three ways. First, ‘’HRM can be seen as managing human

capital by selecting among relevant sets of knowledge, skills, abilities, and other characteristics (KSAOs) with regard to corporate entrepreneurship’’. According to Schuler (1986), some of these KSAOs were

related to successful entrepreneurial behavior efforts, such as innovativeness, risk-taking, flexibility, result orientation and independence. Second, ‘’HRM practices can reflect a company’s culture’’ (Schuler, 1986). Third, ‘’HRM as a system of management activities can target changes in the employee

base toward corporate entrepreneurship’’.

In the articles of Morris and Jones (1993), Schuler and Jackson (1987) structure Human Resource Practices into six areas: ‘‘Training & Development’‘, ‘‘Staff Selection’‘, ‘’Labour-Management’’, ‘’Planning’’, ‘’Compensating’’ and ‘’Staffing’’. Our research only focuses on “‘‘Training & Development’’” and “Staff Selection’’ as part of the HRM practices. These two practices will be discussed further in the next paragraphs.

2.2.2. Link between HRM practices and entrepreneurial Behavior

The importance of entrepreneurship in a corporate organization is related to the complex external environment. The external environment of corporate organizations can be characterized by complex dynamic and often international environments. Then, structures, systems, and policies are handles that control people (Schuler, 1986). According to Stevenson and Gumpert (1985), within corporate organizations the pressure for better entrepreneurship is external to the organization, while constraints on entrepreneurship can be found inside the organization. However, instead of creating a culture characterized through structures, policies, and systems, the key for successful entrepreneurial behavior among employees is to figure out what the employees’ needs are (Schuler, 1986). In addition,

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13 a centralized decision taking hierarchy, structures, policies and procedures block action and entrepreneurial pro-active behavior (Morris and Jones, 1993).

To stimulate entrepreneurial behavior through HRM practices, employees of a firm need to express several characteristics, such as ‘’attitudes and behaviors, ways of doing and thinking about things’’ (Schuler, 1986). In addition, employees who are used to behave entrepreneurial act differently than employees with non-entrepreneurial behavior such in hierarchic bureaucratic firms (e.g. risk-averse behavior).

Based on this view, Schuler (1986) associates innovativeness, risk-taking, proactiveness, but also flexibility in change, independent behavior, and long-term orientation as successful characteristics of entrepreneurial behavior. To stimulate and foster entrepreneurial behavior in an organization, firms need to reinforce these characteristics via HRM practices. Support for Schuler’s (1986) findings were contributed by the NYU Center of Entrepreneurial Studies and the Human Resource Planning Society. Helpful comments came from Ian MacMillian and Susan Jackson.

Finally, when organizations have effective HRM practices, employees and managers are eager to help, collaborate and volunteer so that they can be proactive, innovative and risk-taking (Kaya, 2006).

2.2.3. Link between ‘‘Training & Development’‘ and entrepreneurial Behavior

We first focus on the practice ‘‘Training & Development’‘ in relation to entrepreneurial behavior. Next in order is ‘‘Staff Selection’’.

The amount of money an organization spends on ‘‘Training & Development’‘ relates to the development of their people. In addition, according to Schuler (1986): “while stating a culture of

concern for employees is important to foster and facilitate entrepreneurship, there must be support for HRM practices consistent with that particular culture and consistent with what is needed from the employees’’. Once this is provided, these HRM practices can be represented and the employee

behavior attitudes can be expressed successfully, according to Schuler (1986).

An assessment was made of practices which stimulate entrepreneurial behavior. According to Schuler (1986) “the practice ‘‘Training & Development’‘ is characterized by broad application, emphasize

quality of work life, encourage high employee participation, and relies upon minimal organizational structure. This practice should stimulate responsibility, be innovative, and promote a willingness to work with others’’. These findings conclude that HRM practices have positive influence on the

entrepreneurial behavior. Based on earlier work of Schuler (1986), table 1 gives an overview which practices stimulate entrepreneurial behavior.

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Table 1. Summary of HRM practices consistent with entrepreneurial behavior

General area (practices) Practices encouraging entrepreneurship

Planning/overall job design Reliance on formal planning

Long-term orientation in planning and job design Implicit job analyzes

Jobs that are broad in scope Jobs with significant discretion Jobs that are less structured Integrative job design Results-oriented job design High employee involvement

Recruitment and selection Reliance on external sources for candidates Broad career paths

Multiple career ladders

General implicit, less formalized selection criteria Extensive job socialization

Open recruitment and selective procedures Training and development Long-term, career orientation

Training with broad application Individual training

High employee participation Unsystematic training

Emphasis on managerial skills Continuous/ongoing training

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Performance appraisal High employee involvement

Balanced individual-group orientation Emphasis on effectiveness over efficiency Results oriented (vs process)

Based on subjective criteria

Emphasis on long-term performance Includes innovation and risk criteria Reflects tolerance of failure

Appraisals done based on project life cycle Compensation/rewards Emphasis long-term performance

Decentralized customized at division or departmental levels

Tailored to individuals

Emphasized individual performance with incentives for group effort

Merit and incentive-based Significant financial rewards Based on external equity

These findings are consistent with the propositions identified through factor analyses. This study approached 250 firms listened in Florida (USA) with at least seventy-five employees. Two surveys were send to middle level management. One possibility of this research is that it doesn’t show how entrepreneurial behavior varies on different levels of an organization. To close the gap of this limitation, our research will cover high-level managers, middle-level managers and employees.

In line with Schuler (1986), Morris and Jones (1993) argue that HRM practices can stimulate entrepreneurial behavior. The study of Morris and Jones (1993) identifies the relationship between

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16 corporate entrepreneurship and HRM practices. Multivariate analyses of variance (MANOVA) was used. “The overall f-value was significant (f = 3.94, p = .001), indicating entrepreneurship is affected by

HRM practices”, as cited by Morris and Jones (1993). The f statistic here suggests heterogeneity in approaches to HRM, whereas p value defines probability.

In total, eight factors were generated (open/flexible staffing, customized training, encouragement of innovation/risk, long-term orientation, broad jobs, merit-based pay, individualism, and results orientation). Customized and career-oriented training was one of four factors which was associated with higher significant entrepreneurship scores (table 1). Furthermore, ‘’training and development

programs in more entrepreneurial firms were more likely to include high employee participation and activate trainee involvement, be group oriented, be systematic and planned’’ (Morris and Jones, 1993).

On top of that, ‘‘Training & Development’‘ and ‘’Performance Appraisal’’ had a stronger relation with entrepreneurial behavior comparing to the other practices which were tested. ‘‘Staff Selection’‘ and ‘’Compensation’’ were next in order.

Table 1. MANOVA results for significant differences in HRM factors based on the firms entrepreneurial orientation

Low entrepreneurial orientation High entrepreneurial orientation f Significance of f Factor 2: Customized training X = 9.03 s.d. = 3.03 6.82 2.93 12.54 .001

The purpose of Smelter’s study (Schmelter, et al. 2010) was to determine which HRM practices stimulate corporate entrepreneurship in Small and Medium sized Enterprises (SMEs). The interrelationship between four HRM practices (‘‘Training & Development’‘, ‘‘Staff Selection’‘, ‘’Staff Rewards’’, and ‘’Specialist Assignment’’) and the dimensions of entrepreneurship (innovativeness, proactiveness, and risk-taking) were analyzed. The findings of this study conclude that the HRM practice ‘‘Training & Development’‘ has the highest scores, which result in the strongest significant relation with entrepreneurial behavior (0.281 at a significant level of p = 0.01). In other words, ‘‘Training & Development’‘ can stimulate entrepreneurial behavior among employees. Entrepreneurial behavior is also defined with the dimensions innovativeness, proactiveness, and risk-taking in the work of Schmelter, et al. (2010); and Morris and Jones, (1993). The definition behind these dimensions are in line with the drivers of entrepreneurship which we discussed in a previous paragraph.

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17 Furthermore, training can be offered in different forms (job training, personal development training, feedback training, etc.) and is important for the firm performance as well. A training is effective and stimulates entrepreneurial behavior when it includes “activities that enforce interpersonal skills such

as the ability to work in a team, creativity that supports and strengthen innovativeness, self-renewal and new business development. Also training that helps transfer new ideas into businesses will lead to intensity for risk propensity and proactiveness’’ (Schmelter, et al. 2010). In other words, the ‘‘Training

& Development’‘ practice should be presented creative programs in which managers and employees can learn how to obtain the right resources for innovative ideas.

In sum, the HRM practice ‘‘Training & Development’‘ has a strong positive effect on stimulating entrepreneurial behavior. In order to close the gap of the first article our research is based upon high-level managers, middle-high-level managers and employees.

2.2.4. Link between ‘‘Staff Selection’’ and entrepreneurial behavior

‘‘Staff Selection’‘ is the second HRM practice we use in our conceptual model. Unpredictable internal and external environments influence entrepreneurial behavior. In addition, fast changing environments and pressure of continuously innovative products and services require variable job demands. In an entrepreneurial organization, a selection process is a more open procedure with less formalized selection criteria. This enhances the fit between the organization needs such as more entrepreneurial behavior skills, and individual needs (Morris and Jones, 1993). On top of that the article of Montoro-Sanchez and Soriano (2011) agrees to Morris and Jones (1993) with the statement that ‘’the creation of personal relationships and the development of open communication between

owner-managers and employees, and among employees themselves can help to explain the dynamics of entrepreneurial behaviors within small firms’’.

What does ‘‘Staff Selection’’ actually mean? For our research it means the selection of (potential)

employees for an organization, on the basis of entrepreneurial behavior skills. With the ‘’right’’ selection we refer to the selecting of employees who are different than others, behaving entrepreneurial in terms of innovativeness, proactiveness, and risk-taking. When hiring those people, an organization builds a resource base of human capital to stimulate entrepreneurial behavior and is able to quickly act in response towards rapid abrupt possibilities and changes (Schmelter, et al. 2010). In addition, in the article of Morris and Jones (1993), Olian and Rynes (1984) argue that “the

appropriate mix of recruitment and selection practices is dependent upon whether organizations were pursuing entrepreneurial-based strategies or more efficiency-based strategies”. During selection

processes managers can find out which entrepreneurial behavior skills and attitude a potential employee has.

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18 ‘‘Staff Selection’‘ encourages entrepreneurial behavior (Morris and Jones, 1993) when it implies i.e. ‘’general implicit, less formalized selection criteria’’ and ‘’open recruitment and selective procedures’’ (Schuler, 1986). According to Schmelter, et al. (2010), ‘‘Staff Selection’‘ has a strong effect on entrepreneurial behavior (0.187 with a significant level of p = 0.01). Furthermore, the purpose of ‘‘Staff Selection’‘ is to add up to suitable human capital for the resource base of an organization in order to stimulate entrepreneurial behavior in advanced small- and medium sized firms (Schmelter, et al. 2010).

The study of Schmelter, et al. (2010) focused on the following measurement items for ‘‘Staff Selection’’ in their analyses: ‘’management staff should have relevant KSAOs, new external employees are

important for new ideas, ways to advance in one’s new career path should be manifold, and skills such as the ability to work in a team are important for stimulating entrepreneurial behavior’’. In our study

we also focus on the importance of bringing external knowledge inside the firm. However, we also analyze the awareness of the manager for the importance of entrepreneurial behavior skills during a selection procedure.

In sum, ‘‘Staff Selection’‘ stimulates entrepreneurial behavior positively among managers and employees. A more open selection process, not based on structured formats and job related skills, helps. Entrepreneurial behavior skills such as innovativeness, proactiveness, and risk-taking are becoming an important aspect for selecting the right people for a successful business.

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2.3. The conceptual model

This section of the research describes the conceptual model we built on existing academic literature. We have explained the relationships between each variable and concept in order to make clear what the model means from a literature perspective. Moreover, we elucidate the origin of our research question.

Our conceptual model is built on existing theory to come up with new insights. Where many scholars did research in small and medium sized organizations, our research focuses on a large corporate organization to find out if HRM practices “Training & Development’’ and “Staff Selection’’ stimulate entrepreneurial behavior among managers and employees in large organizations. According to Golhar, et al., (1997), firm size does not make an enormous difference. Thus the literature we based our research on can be applicable for a large organization (Golhar, et al., 1997). On basis of our previous literature review, we use two significant results. The first significant result we based our research on is that entrepreneurial behavior consists of three dimensions (Miller, 1983; Morris and Don Trotter, 1990). The second significant result is that HRM practices “Training & Development’’ and ‘‘Staff Selection’’ have a strong positive effect on enhancing entrepreneurial behavior (Schuler, 1986; Morris and Jones, 1993; and Schmelter, et al. 2010).

We want to find out what a manager’s and employees’ vision is on the concept of entrepreneurial behavior and on the relationship between entrepreneurial behavior and “Training & Development’’ and “Staff Selection’’. Furthermore we want to know if there are differences according to the existing literature findings. The method we used for this qualitative research is discussed in the next section.

Every organization has a learning landscape in which different types of learning, such as training, internships, masterclasses, personal development, and other HRM practices are available. Thus, “Training & Development’’ and “Staff Selection’’ can be seen as practices that are part of the learning landscape. The concept of the learning landscape is not part of our conceptual model, it just covers HRM practices and is therefore shortly described in section four. Our research question is as follows:

Can “Training & Development’’ and “Staff Selection’’, as stimulate entrepreneurial behavior in a large corporate organization?

The focus is on if and how “Training & Development’’ and “Staff Selection’’ stimulate entrepreneurial behavior now and in the future among managers and employees. For ‘‘Training & Development’‘ we focus on training related to the concept of entrepreneurial behavior. Essentially, we focus on the reasons why managers and employees choose or did not choose for an entrepreneurial related

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20 training, how managers and employees see the link between training and entrepreneurial behavior. Also, if and how this training can stimulate entrepreneurial behavior skills.

For the HRM practice ‘‘Staff Selection’‘ we focus on the link between entrepreneurial behavior skills (i.e. innovativeness, proactiveness, and risk-taking) and the selection procedure within the organization, Rabobank. In other words, we want to find out if and how managers and employees see the importance of integrating entrepreneurial behavior skills within a selection procedure in order to stimulate entrepreneurial behavior among the organization. Also, what this mean for employees, managers and the organization.

When hiring those innovative, proactive, and risk-taking behavior people, an organization builds a resource base of human capital to stimulate entrepreneurial behavior and is able to quickly act in response towards rapid abrupt possibilities and changes (Schmelter, et al. 2010).

Both questions for the concepts “Training & Development’’ and “Staff Selection’’ are based on Schmelter, et al. (2010) and Morris and Jones (1993) work. For ‘‘Staff Selection’‘, for example, Morris and Jones (1993) mentioned the question ‘’to what extent ‘‘Staff Selection’’ is based on implicit and

explicit selection criteria’’. For ‘‘Training & Development’‘ Schmelter et al. (2010) mentioned questions

about training with focus on innovativeness, teamwork, and creativity. Based on these question, our list of more detailed questions was created (appendix 1).

Finally, as previously described, within entrepreneurial behavior we analyze proactiveness, innovativeness, and risk-taking. For all these three dimensions we focus on what it really means for the person. By ‘’the person’’ we mean managers and employees who will be interviewed. In order to get the right in-depth rich information we figured out what managers and employees experience in their professional life in entrepreneurial behavior attitudes for each of these dimensions, and come up with personal examples. These questions were based on the work of Morris and Jones (1993). They asked for instance questions regarding the number of new products or services an organization comes up with for the next twelve months, and regarding how many innovative ideas a senior manager comes up with. On the foundation of these questions, our list of more detailed questions was created (appendix 1).

In sum, the conceptual model (figure 1) describes the link between the influence of “Training & Development’’ and “Staff Selection’’ on stimulating entrepreneurial behavior in a large organization.

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Figure 1 Conceptual model

Entrepreneurial

behavior

-

Innovativeness -Proactiveness -Risk-taking

Human Resource

Management practices

- Training & Development

- Staff Selection

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3. Methodology

This section of the research describes the method and strategy used for our research.

In order to answer the research question, two types of research were considered: quantitative and qualitative. Different aspects were taken into consideration in order to choose between these two types of research. This research utilized a qualitative exploratory approach to gain a comprehensive understanding of the influences of the learning landscape of Rabobank on stimulating entrepreneurial behavior (Saunders, Lewis, and Thornhill, 2012). This research method was chosen in order to get an overview of the full range of activities and factors managers can use to stimulate entrepreneurial behavior and of the influence ‘’Training & Development’’ and “‘Staff Selection’” have on stimulating entrepreneurial behavior.

When the emphasis is placed on understanding and interpretation of different facts and phenomena (Erickson, 2012), rather than on classification or construction of statistical models as in a case of quantitative research methods (Neill, 2007), qualitative research is a good tool for the following reasons. First, due to the fact that the link between the HRM practices “Training & Development’’ and “Staff Selection’’ in stimulating entrepreneurial behavior has to be analyzed rather than tested, a qualitative research method is appropriate. Second, the richness and flexibility of qualitative methods are well appropriated to discover the underlying nature of the research question (Strauss and Corbin, 1990). Because the discussed studies on the subject were based on quantitative research methods in which the underlying vison of the respondents was missing, this reason is applicable to our research. Third, entrepreneurial behavior is a process that can be observed through personal interaction. In this case, the researcher is the primary instrument for the collection of the data which is a feature of the qualitative research method (Chreswell, 1994). Finally, the unit of analyses for our research is holistic, in which we focus on different levels of management (high-level management, medium-level management), and employees of IT department within Rabobank.

To sum up, qualitative research is an exploratory method, discovery oriented, with emphasis on understanding a real life case in which the researcher has the opportunity to compare existing literature with the experience and vision of directly involved people.

3.1. Selection sample of the respondents

The sample frame consists of the IT department of Rabobank. Because individuals are meeting certain criteria, different levels of job positions (i.e. high-level management, middle management, and employees who work for at least five years at Rabobank) were identified using purposive sampling. By purposive sampling the selection of the sample is based on the knowledge of the population and

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23 purpose of the study, namely different levels of managers within the IT department of Rabobank (Saunders, Lewis, and Thornhill, 2012). For the semi-structured interviews nine respondents were approached. The first reason for this approach is that a manager position deals with a moderate to high level of autonomy in their work situation who have the opportunity to execute their own activities and manage other people. For high level managers it may be difficult to deal with the available time they have and delegate work to their employees. At the same time, lower level employees can think they have too little autonomy to ask for resources (space) or could be afraid to come up with own ideas or interesting work. So, it is interesting to research the balance from both sides. With this we mean, figuring out if and how the gap between high level manager and lower level managers exists, in terms of transparency regarding stimulating entrepreneurial behavior among managers and employees. We would also like to know what the vision of these groups of respondents are about the relationship between “Training & Development’’ and “Staff Selection’’ in stimulating entrepreneurial behavior.

3.2. Data collection

Case studies, part of qualitative research, combine data collection methods such as archives, interviews, questionnaires and observations. The evidence is qualitative (e.g. words) (Eisenhardt, 1989). This research is designed to analyze the applicability of the above mentioned theories in a case study research. To collect the data, a multi-method is used with face-to-face interviews consisting of semi-structured open-ended questions and analyses of the academic literature. Respondents were sent an e-mail a couple of days before the interview took place. Information about the interview and subject of our research was included as well (appendix 1).

During the five-month internship at Rabobank we were able to get access to documents from Rabobank, participated in several meetings concerning innovation, and talked with different managers and employees about entrepreneurial behavior in the bank. Talking with these people and participating in those meetings resulted in an understandable and fundamental picture how the organizational processes and structures work, and how people behave and act towards each other. This basis helped in preparing the interview script. Nine semi-structured interviews were conducted with two members of the Management team of IT Rabobank, six middle-level managers, and one employee who works in the same pool as one of the interviewed middle-level managers. For more detailed information regarding the respondents, table 2 provides an overview. For the sake of anonymity, names and exact functions have been left out. In order to attain transferability (external validity), the setting of each interview was the same. This was set in a private room where interviewer and respondent sat opposite each other.

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Table 2. Data collection summary

Location Name Number of interviews Time of interview Role interviewer Years worked at Rabobank Type of interview Rabobank Headquarters Utrecht 1 57 minutes Middle-level manager ITN area More than 10 Face-to-face – one-to-one Rabobank Headquarters Utrecht 1 52 minutes Mobility Transition manager ITN area More than 15 Face-to-face – one-to-one Rabobank Headquarters Utrecht 1 50 minutes High-level Domain Manager ITN area More than 5 Face-to-face – one-to-one Rabobank Headquarters Utrecht 1 44 minutes High-level manager, learning and development area More than 10 Face-to-face – one-to-one Rabobank Headquarters Utrecht 1 1 hour and 2 minutes High-level Domain manager ITN area More than 10 Face-to-face – one-to-one Rabobank Headquarters Utrecht 1 1 hour and 6 minutes Program manager ITN area More than 10 Skype – one-to-one Rabobank Headquarters Utrecht 1 1 hour and 3 minutes Manager architecture ITN area More than 5 Face-to-face – one-to-one

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25 Rabobank Headquarters Utrecht 1 1 hour and 36 minutes Employee IT architect security ITN area More than 5 Face-to-face – one-to-two Rabobank Headquarters Utrecht 1 1 hour and 36 minutes Program manager security ITN area More than 9 Face-to-face – one-to-two Total number: 9

In order to obtain rich and in-depth information of the managers and employees, the interviews had an open character and allowed new dimensions which were not a part of the conceptual model. The interviews were recorded with a voice recorder. All interviews took place within Rabobank Utrecht, and lasted 60 minutes each. Eight out of nine interviews took place on a one-to-one basis (interviewer and respondent). One interview was within a group: the interviewer, a manager and an employee who works for this manager.

3.2.1. The process of data collection

The purpose of the interviews was to get in-depth information on the role of the HRM practices “Training & Development” and “Staff Selection” on stimulating entrepreneurial behavior in a large corporate organization. In order to explore the reasons behind entrepreneurial behavior, respondents were specifically asked how they experienced entrepreneurial behavior characteristics (innovativeness, pro-activeness, and risk-taking) in their work, and if so, what motivated them to do so. Then, entrepreneurial behavior was linked to ‘’Training & Development’’ and “Staff Selection”. We asked what different kind of entrepreneurial trainings Rabobank offer, and wanted to know the reason why a manager or employee chose or did not choose for an entrepreneurial training. We inquired how managers see the link between training and entrepreneurial behavior, and how training can stimulate entrepreneurial behavior skills. For ‘‘Staff Selection’‘ we analyzed what the requirements are in terms of entrepreneurial behavior skills, and if respondents think entrepreneurial behavior skills should be part of the selection criteria. In addition, what their opinion is on means ‘‘Staff Selection’‘ can use to stimulate entrepreneurial behavior.

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26 To get the right data, the semi-structured face-to-face interviews were adapted after each interview. Questions were added on the basis of the previous interview to get the information needed for our research. In addition, purposing questions were asked all the time to get in-depth information (why-questions, how-questions and examples were asked). In addition, some important questions were asked in the beginning of the interview and repeated at the end of the interview. These questions were aimed at identifying patterns of reasoning and based on the literature (Ruijters and Simons, 2006; Schmelter, et al., 2010).

3.3. Data analyses

After conducting interviews, the data were analyzed using coding techniques in terms of categorizing, descriptive coding and initial coding to find patterns and relationships between categorized questions (Saunders, Lewis, and Thornhill, 2012). Descriptive coding was used to summarize the topic of the excerpt. The interview data were first transcribed literally (written down) in order to replace internal validity. Then, data were coded into categories wherein each category exists of several codes (labels) which are related to the conceptual model. Table 3 provides an overview of the coding scheme which we have established in advance. Additional codes were added to complete the coding scheme (appendix 2).

Table 3. Overview of the categories and codes established in advance of the interview

Category Code

Entrepreneurial behavior Innovative behavior Proactive behavior Risk-taking behavior Taking initiative Creativity Comfort zone New creative ideas ‘‘Training & Development’’ Training

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Link between ‘‘Training & Development’’ and entrepreneurial behavior

Participation entrepreneurial training ‘‘Staff Selection’’ Current selection procedure

Role of selection procedure for entrepreneurial behavior

Adding entrepreneurial behavior skills in selection procedure

Link between ‘‘Staff Selection’’ and entrepreneurial behavior

(Open) communication Space

Barriers of entrepreneurial behavior Barriers How to overcome barriers of entrepreneurial

behavior

Overcome barriers

Drivers of entrepreneurial behavior Main drivers

After this, we started analyzing and coding the interview data systematically to identify emerging patterns and themes (Strauss and Corbin, 1990). We specifically choose to categorize and analyze without any computer program such as In Vivo, for getting the purest and best analyses.

Finally, the analyses of the interviews and literature review were compared, going forth and back between literature and pure interview data in building new valuable conclusions.

To make the qualitative data visual, word was used in order to structure data into tables. Because of this qualitative research, diagrams and figures cannot be made in terms of calculating how many times a word is mentioned for example. Stories and experiences of the respondents are central to this research.

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28 The conducted research and findings can have inspiring insights for Rabobank. Even though the generalization of the conducted research is limited, due to the fact that the research is conducted at one company because of the time frame.

Note that all interview transcriptions are saved in a separate document because of anonymity, and can be obtained by the authors of this thesis. Only the most comparable and interesting quotes of the respondents are enclosed in this thesis.

3.3.1. Explanation code scheme

The first category is entrepreneurial behavior. The codes for this category are ‘’innovative behavior’’, ‘’proactive behavior’’, and ‘’risk-taking behavior’’, and other characteristics of these dimensions, such as ‘’creativity’’, ´´taking initiative´´, ´´comfort zone´´, and ´´new creative ideas´´ in order to understand how respondents experience and value entrepreneurial behavior in their work.

The second category is ‘‘Training & Development’‘. The codes for this category were ‘’training’’, ´´development´´, ‘’participation in entrepreneurial training’’, and ‘’link between ‘‘Training & Development’‘ and entrepreneurial behavior’’. This facilitated respondents to explore their opinion about entrepreneurial training offered within Rabobank, and understand how these activities help or do not help stimulating entrepreneurial behavior among managers and employees.

The third category is ‘‘Staff Selection’‘. The codes for this category were ‘’current selection procedure’’, ‘’role of selection procedure for entrepreneurial behavior’’, and ‘’adding entrepreneurial behavior skills in the selection procedure’’ allowing to understand how these activities help or do not help stimulating entrepreneurial behavior among managers and employees.

The fourth category is the relationship between managers and their employees. The codes for this category were ´´influence behavior´´, ´´open communication´´, and ´´space´´ in order to explore how the relation influences entrepreneurial behavior among managers and employees, and identify the gap between managers thoughts and employees’ thoughts. Whereas this category is not part of our conceptual model, it will add information which can be important for our conclusions.

The fifth category are barriers of entrepreneurial behavior. The code for this category was ´´barriers´´ in order to explore what kind of barriers respondents mentioned for entrepreneurial behavior. Whereas this category is not part of our conceptual model, it will add information which can be important for our conclusions.

The last category is how to overcome barriers in order to stimulate entrepreneurial behavior. The code for this category was ´´overcome barriers´´ in order to explore what factors respondents mentioned to

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29 stimulate entrepreneurial behavior. Whereas this category is not part of our conceptual model, it will add information which can be important for our conclusions.

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4. An introduction of the learning landscape

Learning processes within organizations are still offered by way of education in trainings. Learning processes can contribute more towards the organizational development when the function behind the learning question is clear (Ruijters and Simons, 2006). The learning landscape can be defined as a landscape in which learning opportunities and processes are available in an organization. For example training, courses, and internships. These learning orientations can be described as characteristics of learning practices. A learning landscape exists of several elements (figure 2): the islands, the connections and the ocean.

The islands refers to three professional orientations: creation (need of tools), research (need of knowledge), and practice (need to turn knowledge/tools into practice). The connections between these islands are made through a bridge and polders with the intention to create collaboration (Ruijters and Simons, 2006).

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4.1. Islands of the learning landscape

4.1.1. Island learning by practicing: On the job learning

The island ´´learn by practicing´´ is about the learning potential (Onstenk, 1997) and the extent to which an organization creates the opportunity and space for their employees to learn implicit. Routine work can limit the learning process. Examples of implicit learning are teams that change over time, new tasks, new projects, and learning by doing. An example of an employee who learns through implicit learning is a manager. He or she is always in contact with different people (e.g. employees from different departments) and coordinates different cases. A manager must be able to understand other people point of views and cases. Thus there are factors in the working environment of an organization that determines the way how employees learn. To enhance the effectiveness by individuals and in teams, feedback on performance is needed. Sharing feedback will advance communications between employees and supervisors and create organizational openness (Kaya, 2007).

4.1.2. Island investigation

For the island ‘’investigation’’, the concept knowledge is the most dominant characteristic. By this we mean taking knowledge from theories and analyses this knowledge by doing research for instance. It is about all activities focused on acquired skills, new insights, which can be offered through training. According to Ruijters and Simons (2006), classical education is not the right implementation to stimulate changes in practice.

4.1.3. Island learning by creating

The island learning by creating can be described in terms of development, designing, and producing of new products and services. Creation is about taking risks, creativity, and unexpected developments. Important is that an organization can give space for responsibility, autonomy and curiosity. In most cases, this island is outsourced to external organizations (Ruijters and Simons, 2006).

4.2. Relation between islands

To stimulate the individual development as well as the development of knowledge and expertise of the organization, all three islands are needed. The optimal balance between these islands depends on the organizational needs, work space and the extent of willingness to develop, and need to acquire new knowledge inside the organization. Moreover, to gain new insights and skills throughout the whole organization, a connection is necessary between the islands. The article of Ruijters and Simons (2006) states that there are three types of connections: innovation, entrepreneurship and explication.

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4.2.1. Innovation – connection between the islands creation and practice

The bridge from creation towards learning by practicing is built through innovation. In more detail, ‘’how can a creation or idea be actually translated into an innovation implementation’’. The connection is a two way process and can be translated into what kind of tools an organization needs to improve services and products in order to enhance consumer needs. Furthermore, a polder of co-creation between these two islands help an organization develop new products and services through team work. The basic question for co-creation is: ‘’Can we develop something new by working together with

people from different expertise backgrounds?’’

4.2.2. Entrepreneurship – connection between investigation and creation

The bridge from investigation towards creation is about entrepreneurship. According to Ruijters, and Simons (2006), ‘’entrepreneurship is about making the right distinction of useful and less useful ideas,

making shared decisions, choices and the evolution towards new procedures and products’’. The basic

question here is: ‘’Do we know what we want to achieve with the new insights, and for who?’’

4.2.3. Explicate – connection between practice and investigation

The bridge between practice and investigation is about explication. This means that acquired knowledge, skills and insights must implicitly be transformed into work. Therefore, employees must hold knowledge and be able to share this with others.

Altogether, there are various types of learning opportunities given in the three islands described above (e.g. ‘‘Training & Development’‘, courses). ‘‘Training & Development’‘ and ‘‘Staff Selection’‘ for instance can be related to the island ‘’investigation’’. As the island ‘’investigation’’ is related to activities focused on acquired skills, new insights, which can be offered through training (Ruijters and Simon, 2006), therefore, ‘‘Training & Development’‘ and ‘‘Staff Selection’‘ match with this island.

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5. Analyses

In this section, the findings of the collected interviews are analysed. As the focus was on the purpose of these analyses, we first shortly describe the process of the analyses which we have coded. The interview questions were based on the dimensions of entrepreneurial behaviour and HRM practices ‘‘Training & Development’‘ and ‘‘Staff Selection’‘ (Miller, 1983; Schmelter, et al. 2010). The data collected from the interviews were first coded back to the dimensions of entrepreneurial behaviour and HRM practices. Then we have selected categories within each variable under which the codes fit to illustrate our findings with. Thereafter we analysed how they relate to each other compared to the literature (table 3). First, the category entrepreneurial behaviour is discussed. Second, the categories ‘‘Training & Development’‘ and ‘‘Staff Selection’‘ are discussed. Third, the categories ‘’Barriers’’, and ‘’how to remove barriers of entrepreneurial behavior’’ are discussed. Finally, ‘’drivers of entrepreneurial behavior’’ are discussed. The additional questions regarding relationships between managers and employees, covered in our interview script (appendix 1), are eliminated, except one (see next paragraph) as they merely result in additional background information with no added value.

5.1. Topics discussed differently than the conceptual model during data collection

During the interviews, interesting topics were discussed which were not part of the conceptual model. The first topic covers barriers of entrepreneurial behaviour which are present within Rabobank. The second topic covers respondents meaning of how these barriers of entrepreneurial behaviour can be removed in order to stimulate entrepreneurial behaviour among managers and employees. Interesting is that this data matches with the data regarding alternatives for training in order to stimulate entrepreneurial behaviour. The last topic covers the relationship between managers and employees in order to stimulate entrepreneurial behaviour. The main result of this last topic is the following: ‘’A

more open relationship of trust and being able to make mistakes stimulates a person in behaving more innovative, proactive, and risk-taking than when there is a less trustful and more closer relationship between managers and employee’’.

5.2. Main findings

The analyses of the interview data resulted in four main findings. One, innovative and proactive behavior is experienced by some managers and employees within the organization. Two, risk-taking behavior, however, is less present comparing to innovative and proactive behavior. Three, the HRM practice ‘‘Training & Development’‘ is not the most important practice or manner to stimulate entrepreneurial behavior among managers and employees (e.g. Training can be used as a trigger for stimulating entrepreneurial behavior). Lastly, including entrepreneurial behavior skills in a selection

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34 procedure is important. However, there is fear to break through the standards of selecting a person who normally would not be selected.

Now the results will be described regarding each category. Note that the respondents who quoted are numbered randomly because of anonymity.

5.3. Entrepreneurial behaviour

5.3.1. Innovativeness

The first variable is innovativeness, which refers to the willingness of seeking creative, novel or unusual solutions to problems and needs. These solutions can be transformed into new processes or technologies, as well as new products and services (Kaya, 2007; Morris Don Trotter, 1990). The node to help explain this variable was ‘’creative unusual ideas that employees came up with in their work,

and the ability to behave innovative in their work’’. Within this node, respondents describe examples

of themselves, and among other employees, that they experience as innovative or not.

Overall, respondents shared comparable opinions mentioning some events (e.g. Hackathon and Attack your Bank) that were organized to boost innovativeness. Considering the following comments:

In addition, ‘’innovativeness (9) is seen by people’’. They come up with new techniques or ways of delivering new services ‘’on their own initiative’’. Furthermore, during the interviews respondents show enthusiasm when talking about their own creative innovative moments during work. Respondents described various creative approaches of making complicated material ‘’visual’’ for their employees to understand better. According to respondent 3: ‘’I had to describe something, with several

complicated IT terms. I devised a text and made a drawing like an air traffic control system to make it visual. That was a creative moment for me’’. Hence, there is some innovative behavior among

employees, however these are some examples in the direct environment. But if you ask respondents to come up with more than three examples, they need to think. For instance, according to respondent

1: ‘’No, it is just really limited. And what innovative things did we really create? That is disappointing’’. ‘’The Hackathon, yes that was brilliant! That kind of

energy is brilliant. How these guys shine, that was brilliant!’’ (3)

‘’This Hackathon which lasted 24 hours. All night long, they were creating things they really like’’. (1)