Institutional entrepreneurship : the paradox between regulation and exploration

(1)

Master Thesis

University of Amsterdam

Institutional entrepreneurship:

The paradox between regulation and exploration

M S c E x e c u t i v e P r o g r a m i n B u s i n e s s S t u d i e s – S t r a t e g y t r a c k N a m e : J e r o e n A l d e r l i e s t e S t u d e n t n o : 1 0 9 0 1 7 4 4 S u p e r v i s o r : M a r t e n S t i e n s t r a V e r s i o n : F i n a l 1 . 0 D a t e o f s u b m i s s i o n : 3 0 - 0 1 - 2 0 1 7

(2)

Statement of Originality

T h i s d o c u m e n t i s w r i t t e n b y S t u d e n t J e r o e n A l d e r l i e s t e w h o d e c l a r e s t o t a k e f u l l r e s p o n s i b i l i t y f o r t h e c o n t e n t s o f t h i s d o c u m e n t . I d e c l a r e t h a t t h e t e x t a n d t h e w o r k p r e s e n t e d i n t h i s d o c u m e n t i s o r i g i n a l a n d t h a t n o s o u r c e s o t h e r t h a n t h o s e m e n t i o n e d i n t h e t e x t a n d i t s r e f e r e n c e s h a v e b e e n u s e d i n c r e a t i n g i t . T h e F a c u l t y o f E c o n o m i c s a n d B u s i n e s s i s r e s p o n s i b l e s o l e l y f o r t h e s u p e r v i s i o n o f c o m p l e t i o n o f t h e w o r k , n o t f o r t h e c o n t e n t s . S i g n a t u r e : _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

(3)

Abstract

This thesis aims to contribute to institutional entrepreneurship literature by examining the moderating influence of perceived internal regulatory pressures on the relation between three institutional entrepreneurial behavioral intentions and exploration activities of individual employees. Capturing institutional entrepreneurial behavior as: (1) acquiring knowledge, (2) learning & development and (3) lobbying, hypotheses are formulated and constructs are operationalized. For lobbying, a new survey scale has been developed, signaling a methodological contribution of this study. Survey data was collected from 69 employees working in a utility firm. In this firm, employees are exposed to varying degrees of internal regulations, and show different levels of institutional entrepreneurship and exploration activities. Results show a significant positive relationship between acquiring knowledge and exploration activities. Furthermore, the results show a significant positive relationship between learning & development and exploration activities. No statistical evidence was found for a negative moderating impact of perceived internal regulatory pressures on these two relationships, which suggests that individual employees, at least to some degree, explore new opportunities that may deviate from the current internal regulatory environment. Although this study did not find any statistical influence for lobbying, further research will be necessary to examine if, and to what extent, this institutional entrepreneurial behavioral intention lead to real organizational change, e.g. a change in the degree of internal regulations or degree of formalization.

Key words: institutional entrepreneurship; exploration activities; perceived internal

(4)

1. Introduction

Firms acting in institutional environments are challenged to explore new possibilities to be prepared for future changes in the business environment instead of reacting to the change after it occurs. Institutional environments, with all their rules and regulations, favor stability but negatively affect exploration (Battilana et al., 2009; Garud et al., 2007). This is why the issue regarding how to participate within existing institutional environments has triggered greater urgency. Nevertheless, organizations must deal with institutionalized environments that exert pressure on organizations in the shape of mimetic, normative and coercive processes (DiMaggio & Powel, 1983). Combining institutional theory with the concept of agency, regarding how new institutions are formed or existing ones are transformed, leads to the concept of institutional entrepreneurship (DiMaggio, 1988; Maguire et al., 2004). Institutional entrepreneurs are change agents within an institutionalized environment. They have a paradoxical embeddedness (Holm, 1995; Garud et al., 2007), which refers to the tension between institutional determinism and voluntaristic agency (Burgelman, 1983). Efforts to change them face institutions’ norms, processes and collective beliefs with a strong power of inertia (Battilana et al., 2009). Institutional entrepreneurs must deal with employees who can be influenced by institutional regulatory pressures. This affects employees’ behavior and their need for increased exploration activities. Past research has found that institutional regulatory pressures negatively influence exploration (Battilana et al., 2009).

This paper aims to contribute in several ways. First, it intends to determine the characteristics of an institutional entrepreneur by investigating the behavioral intention of the individual institutional entrepreneur. Second, it furthers research regarding exploration on an individual level. Much research has been done concerning exploration on an organizational or business unit level (e.g., Benner & Tushman, 2002; Gibson & Birkinshaw, 2004; He & Wong, 2004;

(6)

Introduction 6

Jansen et al., 2005). However, there is a lack of empirical research about exploration on an individual level of analysis. An exception is Mom et al. (2007), which developed a scale for measuring managers’ exploration activities on an individual level. This scale has been adapted in this research to measure the exploration activities of the individual institutional entrepreneur. Third, a new scale has been developed to measure the degree to which an individual employee lobbies. This scale is one of the constructs that has been used in this research to determine the institutional entrepreneurial behavioral intentions.

Yet little research has investigated the effect of the behavioral intentions for acquiring knowledge, learning & development and lobbying on exploration within an institutional environment. Investigating this gap results in the research question regarding how perceived internal regulatory pressures influence the relation between institutional entrepreneurial behavioral intentions and exploration activities. To examine this research question, three sub-questions have been recognized. First, how do perceived internal regulatory pressures influence the relation between acquiring new knowledge and exploration activities? Second, how do perceived internal regulatory pressures influence the relation between learning & development and exploration activities? Finally, how do perceived internal regulatory pressures influence the relation between lobbying and exploration activities?

In order to reach a comprehensive conclusion, this thesis is structured as follows. The next chapter describes the current state of the literature review with respect to institutional theory, institutional entrepreneurship, the characteristics of the institutional entrepreneur and exploration. Subsequently, chapter three describes the data collection procedure and research method. The collected data and its results are outlined in chapter four. Finally, the conclusions and implications of the results related to the hypotheses based on the literature review are discussed in chapter five, including the most important limitations and suggestions for further research.

(7)

Literature review 7

2. Literature review

This chapter discusses the most relevant findings from the current literature regarding institutional theory, institutional entrepreneurship, the behavioral characteristics of the institutional entrepreneur and the concept of exploration. It also presents the conceptual model, including the hypotheses of the thesis. First, in an attempt to answer the stated research question, the overarching theories have to be closely examined. The context of the paper is institutional entrepreneurship (Battilana et al., 2009; DiMaggio, 1988; Garud et al., 2007), which consists of institutional theory (DiMaggio & Powell, 1983; Scott, 1995) and entrepreneurship (Kurato, 2010; Lumpkin & Dess, 1996). The literature review highlights the paradoxical nature of institutional entrepreneurship and the differences in entrepreneurship, including entrepreneurship within an institutionalized environment. The key concepts of institutional entrepreneurship are discussed. Subsequently, the chapter continues with a description of the independent variables that acquire knowledge, learning & development, and lobbying and the effect on dependent variable exploration activities. Finally, this chapter outlines how the moderator variable internal regulatory pressures influences the relationship between the different behavioral characteristics of the institutional entrepreneur and the institutional entrepreneur’s exploration activities. The chapter ends with a research model which graphically illustrates the stated hypotheses.

2.1. Institutional entrepreneurship

Institutional entrepreneurship consists of two major concepts: institutional theory (DiMaggio & Powell, 1983; Scott, 1995) and entrepreneurship (Kurato, 2010; Lumpkin & Dess, 1996). First, institutional theory will be outlined; next, entrepreneurship will be explained, and finally, the paradox of the two concepts will be discussed in more detail.

(8)

Literature review 8

2.1.1. Institutional theory

Institutional theory is a widely accepted framework that emphasizes different aspects of social structure. It emphasizes how social choices are shaped, mediated and formed by the institutional environment and how structures like rules, norms, routines and beliefs that explain what is accepted and what is not are put into place (Hoffman, 1999). Institutions create boundaries for organizations through pressures and limitations that become prescriptive guidelines for social behavior (Pfeffer & Salancik, 2003; Scott, 2004). According to Hoffman (1999), institutional theory deals with how organizations are affected by external and internal forces instead of considering rationality. Further, it helps to look beyond market pressures and analyze institutional pressures as a dimension of behavioral analysis (Greenwood & Hinings, 1996). Scott (2001) argues that institutions, with their formal and informal structures, provide stability, decrease ambiguity and foster empowerment.

According to Scott (1995), institutions can be divided into three pillars: regulative, normative and cognitive. The regulative pillar represents the legal system of institutions and deals with the legal environment within the organizational field where the organizations act. The organization must act conforming to all regulations to avoid penalty of non-compliance (Hoffman, 1999). Its legitimacy is explained through imposing regulations that control and limit behavior either by inducing or forcing organizations towards compliance. Inducements are based on motivations, while force is practiced by the use of fear (Scott, 2001). The normative pillar is analyzed from a social perspective and deals with social patterns. Values and norms are social pressures that induce organizations to behave in a certain way. Norms can influence the institutional environment in both the entire environmental level as well as the individual level, where norms only apply to some people in appointed roles (Scott, 2001). According to Scott (2001), norms give specific responsibilities that enable actors to make decisions without waiting for a direct mandate or other organizational actors, because the

(9)

Literature review 9

mandate is built in their social position. Normative believers and theorists opine that common values, norms and beliefs create the basis for social “order” (Scott, 2001). The third pillar is cognitive. Hoffman (1999) describes it as a cultural aspect of institutions for which words, signs and gestures as well as cultural rules and systems that define our understanding of the nature of reality through which the meaning is developed. Cognition influences how people think and how they reduce uncertainty. It focuses on subjective thoughts that confirm the existence of social reality, which results in common beliefs that give meaning to action and lead to “sense-making” (Scott, 2001).

Organizations in institutional environments have the tendency to become more homogenous in both structure and process. Institutional innovations may primarily arise for performance reasons and competitive advantage (Barney, 1991; Dierickx & Cool, 1989; Peteraf, 1993), but regulations were set for legitimacy and reducing uncertainty rather than fostering actual performance (Davidsson et al., 2006). The tendency toward homogeneity is called “isomorphism” (DiMaggio & Powell, 1983). Meyer and Rowan (1977) describe isomorphism as being present in organizations that are driven to adapt practices and procedures defined by leading rationalized concepts of organizational work and institutionalized society to increase their legitimacy and survival opportunities, independent of the efficiency of the acquired practices and procedures. DiMaggio & Powell (1983) identified three main mechanisms of institutional isomorphism which exert pressure on organizations in the shape of mimetic, normative and coercive processes. Institutional pressures determine how institutions are built and introduce the mechanism by which the pillars pursue their impact (Scott, 2001). Mimetic pressures have emerged to reduce uncertainty (Davidsson et al., 2006). These pressures cause isomorphic behavior in the organization to adjust to the institutional environment and reduce the possibilities of radical change together with reducing uncertainty (DiMaggio & Powell, 1983; Greenwood & Hinings, 1996). Second, normative pressures emerge from

(10)

Literature review 10

professionalization, which socializes personnel within the organization to legitimize certain kinds of structure and process (DiMaggio & Powell, 1983) Last, coercive pressures represent the formal or official institutions of laws, rules and regulations. Coercive pressures also includes informal demands or expectations about organizations which are known as informal coercive pressures. Drivers to adapt behavior caused by coercive pressures are political power and institutional legitimacy instead of competition (DiMaggio & Powell, 1983).

Legitimacy is a state of the environment where an organization acts within and references the use of the different institutional pillars (Scott, 2001). It is the acceptance of the process, ideology, norms and values within a given environment that determines how organizations should behave. Legitimate power exists to the extent where a superior organization’s position or status could exercise control over others by authority. It is not just an input or output which is acquisitioned and converted by the organization (Scott, 2001). Legitimacy penetrates the organization persistently and has an immaterial nature that is subjectively understood by externals (Suchman, 1995). According to Scott (2001), legitimacy provides validity to the value of the institutional existence. Building and maintaining institutions through regulations also provides legitimacy for other organizations. Legitimacy can not only be approached from a regulative point of view but has to be considered from cognitive and normative aspects as well to win legitimacy from community. So, each of the elements of the pillars outlined by Scott (1995) offers a different rationale for institutional legitimacy, either by virtue of being legally sanctioned, morally authorized, or culturally supported.

2.1.2. Entrepreneurship

Entrepreneurship has a critical role in the functioning of the modern economy. It is an engine of economic growth with the introduction of new technologies and is about why, when, and how some people and not others discover and exploit opportunities. Entrepreneurial opportunities are external environmental factors that suggest the opportunity to introduce and

(11)

sell new products, services, or organize methods to exceed production costs (Schumpeter, 1942; Shane & Venkataraman, 2000). Different schools of entrepreneurship that are closely related to institutional entrepreneurship are corporate entrepreneurship (Sharma & Chrisman, 2007; Duncan et al., 1988), intrapreneurship (Pinchot, 1985) and entrepreneurial orientation (Lumpkin & Dess, 1996).

Corporate entrepreneurship is the process by which an individual or group of individuals, in association with an existing organization, create a new organization or encourage renewal or innovation within that organization (Sharma & Chrisman, 1999). Similarities between corporate entrepreneurship and institutional theory exist in that they both must deal with a given environment to which they must adapt or change. Duncan et al. (1988) argues that it is difficult for entrepreneurs to act within bureaucratic organizational structures.

Intrapreneurship takes the responsibility for creating innovation within the organization. Intrapreneurs prefer action to extensive planning whereby the objectives of the intrapreneur are aligned with the needs of the company (Pinchot, 1985). The intrapreneurial process is similar to the entrepreneurial process; however, the difference is that intrapreneurs may be more easily provided with investment capital, but must align their vision with internal stakeholders. They face changes in organizational structure such as flattening hierarchies and delegating authority to operating units. To foster autonomy, the process of organizational autonomy requires more than a design change—it involves champions who promote entrepreneurial activity by protecting the new venture’s innovators from organizational norms or resource constraints that might cause the new enterprise to be rejected (Lumpkin & Dess, 1996). So, related to institutional entrepreneurship, both intrapreneurs and institutional entrepreneurs have to deal with the existing environment with its processes, norms, rules and regulations.

(12)

2.1.3. Institutional entrepreneurship

Institutional entrepreneurship literature consists of the concept of institutional theory, including the concept of entrepreneurship and investigating how new institutions are formed or existing ones are transformed (Maguire et al., 2004). The term “institutional entrepreneurship” refers to the activities that create new institutions or transform existing ones (Maguire et al., 2004). Institutional change is a complex process involving different types of forces and agents. It does not only explain how institutions influence actors’ behavior, but also how these actors might influence, and possibly change, institutions (Battilana et al., 2009). Actors who initiate changes that contribute to transforming existing institutions or creating new ones have been termed “institutional entrepreneurs” by DiMaggio (1988). Institutional entrepreneurs create an entirely new system of meaning that ties the functioning of disparate sets of institutions together (Garud et al., 2002). The concept of institutional entrepreneurship reintroduces agency and power into institutional analyses of organizations. Based on DiMaggio’s (1988) definition of institutional entrepreneurship, Battilana et al. (2009) argues that institutional entrepreneurs are change agents, but not all change agents are institutional entrepreneurs. Institutional entrepreneurs face specific challenges relative to other change agents or entrepreneurs in the field of developing and mobilizing support for a vision of change. First, agents who change institutions’ norms, processes and collective beliefs must deal with a strong power of inertia (Battilana et al., 2009). Second, they initiate divergent changes and participate in the implementation of these changes. Divergent change breaks with the institutionalized framework when organizing within a given institutional context, while non-divergent change is aligned with the institutions in a given environment (DiMaggio, 1988; Garud et al., 2007; Maguire et al., 2004). Only change agents who implement divergent change within an institutional environment can qualify as institutional entrepreneurs. Divergent change can be initiated within the boundaries of an existing

(13)

organization and/or within the broader institutional environment in which an actor is embedded. The other characteristic of institutional entrepreneurs is active participation in change efforts such as actively mobilizing resources to implement change.

Institutional entrepreneurship has a paradoxical nature. Institutional theory emphasizes, from a deterministic approach, how organizational processes are shaped by institutional forces that provide contingency, punish divergency and reward conformity. In contrast, the literature on entrepreneurship tends to emphasize how organizational processes and institutions themselves are shaped, with a voluntaristic intent, by creative entrepreneurial forces that bring about change. (Burgelman, 1983; Battilana et al., 2009; Garud et al., 2007). Within institutional theory, this broader structure–agency debate is often referred to as the paradox of embedded agency (DiMaggio & Powell, 1983; Garud et al., 2007; Holm, 1995). Dominant actors in a given environment might have the power to force change but often lack motivation, while peripheral players might have the incentive to create new practices but often lack the power to change institutions (Maguire et al., 2004). Institutional entrepreneurship does not only involve the capacity to recognize alternative possibilities; it also requires the ability to change past habits within the boundaries of existing institutions (Emirbayer & Mische, 1998). Individuals must break with existing rules and practices related to the dominant institutional logic and institutionalize the alternative rules, practices or logic they champion (Battilana, 2006; Garud et al., 2007).

2.2. Exploration

Increasing entrepreneurship within institutional environments is a complex challenge that firm executives face today. To best explain entrepreneurship, it can be divided into two processes: (1) exploration for future sources of competitive advantage and (2) exploitation of current sources of competitive advantage. The process of transition between exploration and exploitation within organizations as a vital part of entrepreneurship involves various types of

(14)

internal firm challenges (Ireland & Webb, 2009). Employees may find exploratory actions difficult and probably not conformable because exploration expects employees to use novel routines to complete their work instead of continuing to use patterns of organizational action with which they are familiar. This results in the situation in which exploitation, which takes place through existing organizational routines, is preferred above exploration, which takes place by discovering unfamiliar routines (March, 1991). Within an institutionalized environment, regulatory forces exert even more pressure, which makes it harder to deviate from existing routines (Jansen et al., 2005; Weick, 1979). Firms in a dynamic environment are challenged to both explore new opportunities in order to deal with future changes in the (business) environment and to exploit existing certainties to meet today’s business demands (March, 1991).

The concept of ambidexterity was introduced by March (1991) and requires alignment between competencies, structures and cultures to engage with exploration in consultation with exploitation and a senior governance with the cognitive and behavioral flexibility to establish and retain both (O’Reilly & Tushman, 2008). Firms face difficulties concerning how to balance exploration and exploitation (cf. Gibson & Birkinshaw, 2004; Levinthal & March, 1993; Tushman & O’Reilly, 1996) and need increased understanding about how firms could manage this dynamic capability (Eisenhardt & Martin, 2000; O’Reilly & Tushman, 2008; Teece, 2007). The two approaches, exploration and exploitation, have a fundamentally different process (He & Wong 2004). Exploration activities are characterized by discovery, experimentation, exploring, risk-taking, innovation and loosely coupled systems, while exploitative activities are characterized by efficiency, refinement, routinization, incremental innovation and tightly coupled systems (He & Wong, 2004; Gibson & Birkinshaw, 2004; March, 1991). Furthermore, exploitation implies the routines and processes regarding how

(15)

organizations mobilize, coordinate and integrate exploratory and exploitative activities and (re)allocate and (re)combine resources and assets across different units (Jansen et al., 2005).

This paper focusses on investigating employees’ exploration activities such as searching for, discovering, creating, and experimenting with new opportunities (cf. March, 1991; Mom et al. 2007). Previous literature about organizational learning suggests that the essence of exploration activities is creating variety in experience which is associated with broadening employees’ existing knowledge base (Levinthal & March, 1993; Mom et al., 2007). Exploration is related to several employee activities. The first set of activities are related to the regulative pillar of Scott (1995), which includes searching for new organizational processes, routines, structures and systems. Second, acquiring new knowledge and beliefs and experimenting with new approaches towards markets, business processes or technologies are related to the cognitive pillar of Scott (1995). Last, innovating and adopting long-term orientations and reconsidering existing norms and values (cf. March, 1991; Mom et al., 2007, Tushman & O’Reilly, 1996) are also related to the normative pillar of Scott (1995).

2.3. Characteristics of the institutional entrepreneur

Behavioral characteristics of the institutional entrepreneur determines how an employee acts. The constructs that have been used are acquiring knowledge within the overarching concept of absorptive capacity (Cohen & Levinthal, 1990; Jansen et al., 2005; Zahra & George, 2002), learning & development related to the concept organizational learning (Barney, 1991; Egan et al., 2004; Garvin, 1993; Hurley & Hult, 1998) and lobbying (Pacheco et al, 2010; Spiller and Liao, 2006).

2.3.1. Acquiring knowledge

Organizations increasingly acquire external knowledge to stimulate their internal knowledge and to enlarge their innovative output. Therefore, acquiring external knowledge can be critical

(16)

to the organizations’ innovation capabilities (Chesbrough, 2003). The ability to explore and exploit external knowledge is called absorptive capacity and can be described as the ability to recognize the value of new, external information, assimilate it and apply it to one’s own processes. The term was defined and introduced in 1990 by Cohen and Levinthal. They argue about the precondition that absorptive capacity is needed on organizational level and can be seen as the cumulative effect of the function of prior knowledge of the individuals who work in an organization. This is a set of basic skills, an understanding of culture, and the knowledge of technology or specific markets one needs to explore new opportunities. The premise of the concept of absorptive capacity is that an organization needs existing knowledge to assimilate and use new related knowledge. The ability to explore external knowledge is thus a critical component of the organization’s innovative capabilities, such as exploration (Cohen & Levinthal, 1990). Transformed to the individual level within the organization, this results in a positive relationship between acquiring knowledge and exploration.

Hypothesis 1a. Acquiring knowledge is positive related to exploration activities

In the reconceptualization of absorptive capacity by Zahra & George (2002), the concept was divided between potential and realized absorptive capacity. Potential absorptive capacity includes knowledge acquisition and assimilation, captures efforts expended in identifying and acquiring new external knowledge and assimilating knowledge received from external sources (Zahra & George, 2002). Realized absorptive capacity includes knowledge transformation and exploitation, adopting new insights and consequences from the existing and newly acquired knowledge and incorporating the transformed knowledge into operations (Zahra & George, 2002). The embedded knowledge is part of the organizational systems’ capabilities, including formalization and routinization (March & Simon, 1958; Van Den Bosch et al., 1999). Formalization is the degree to which rules, procedures, processes and communications are formalized or written (Khandwalla, 1977) and limits the intensity and scope of the efforts

(17)

expended in knowledge acquisition (Jansen et al., 2005). It acts as a frame of reference that restricts exploration and reduces attention to other aspects of an external environment (Weick, 1979). Formalizations can be explained as regulatory pressures from the regulative pillar of Scott (1995). So, the probability that individuals will diverge from established behavior is reduced by these perceived internal regulatory pressures (Weick, 1979).

Hypothesis 1b. The positive relationship between acquiring knowledge and

exploration activities is moderated by perceived internal regulatory pressures, so that

this relationship is weaker for high perceived internal regulatory pressures than for

low perceived internal regulatory pressures

2.3.2. Learning & development

Levitt & March (1988) introduced organizational learning as the process for organizations to develop conceptual frameworks to interpret experience and about how organizations could absorb inferences from history into routines that guide behavior. The goal of organizational learning, including knowledge management, is to create an environment that helps employees in the creation, transformation, adaption and application of organizational knowledge (Yang & Chen, 2007). Organizational learning is strongly related to organizational learning culture, which is what an organization learns over a period of time and refers to its norms, values, beliefs (Barney, 1991). Having an organizational learning culture can be a source for organizational success (Egan et al., 2004).

To survive in rapidly changing environments, organizational learning is an important tool for organizations and creates a high need for employee development and learning (Garvin, 1993). Furthermore, knowledge will also be become more important for organizational success because of the increasing speed of innovation and technological development (Egan et al., 2004). Hurley & Hult (1998) argued that learning & development remain a strong predictor of

(18)

innovativeness in which exploration is the basis to explore new opportunities to foster more radical innovation (Andriopoulos, 2009).

Hypothesis 2a. Learning & development is positive related to exploration activities

Organizational learning is perceived as routines that guide behavior based on experience and inferences from history (Levitt and March, 1988). It is the way organizations build, supplement and organize routines and knowledge around their activities and within their cultures and how they adapt and develop organizational efficiency (Dodgson, 1993). However, organizational learning also has an important role in explaining innovative behavior. Organizational learning supports creativity, inspires the acquisition of knowledge and increases the ability for understanding and applying both creativity and knowledge (Aragón-Correa et al., 2007). So, the presence of a learning organization can have a positive influence on the innovation of an organization. But in order to enlarge their knowledge, organizations must incorporate activities that stimulate an outward focus (Dodgson, 1993). This conflicts with the institutional environment, which emphasizes how social choices are shaped, mediated and formed by institutions and how structures like rules, norms, routines and beliefs explain what is accepted and what is not (Hoffman, 1999).

Hypothesis 2b. The positive relationship between learning & development and

exploration activities is moderated by perceived internal regulatory pressures, so that

this relationship is weaker for high perceived internal regulatory pressures than for

low perceived internal regulatory pressures

2.3.3. Lobbying

The literature normally relates to lobbying whereby it refers to activities of interest groups such as transferring resources to policy makers or transferring information (Spiller & Liao, 2006). This thesis takes another perspective of lobbying. Spiller & Liao (2006) describe three

(19)

main avenues of lobbying, by which interest groups may adjust policy outcomes in their preferred way: suing, buying influence and lobbying for influence. Suing is making use of the judicial process to pursue interests against a particular policy or its implementation. Buying influence reflects the actions, legal but sometimes illegal, by which interest groups may undertake action to get decision makers to listen to their needs and try to push them to act accordingly. Lobbying for influence consists of the various actions by which interest groups try to transfer information to their stakeholders about issues that may affect generally political decisions. Suing, buying and lobbying can be direct or indirect. Interest groups pursue a direct action when the target intends to act immediately on the matter, whereas interest groups utilize direct approaches and try to steer without the interference of third parties. Indirect approaches influence matters through intermediary parties. Both direct and indirect lobbying requires an exploration of the environment to decide which lobbying tactic best influences the environment and moves interest groups to a certain direction that may deviate from the current path of activities (Pacheco et al, 2010).

Hypothesis 3a. Lobbying is positive related to exploration activities

Lobbying has its origins in politics, which are strongly regulated environments where political strategies and power can be used as an important tool to promote the vision and interest of the collective or single institutional entrepreneur (Fligstein, 1997; Levy & Scully, 2007). The extent to which power can be employed depends on the social resources and social position of the institutional entrepreneur and his capacity to mobilize actors and resources (Battilana et al., 2009; DiMaggio, 1988; Pacheco et al., 2010). Strongly regulated environments make it harder to change and mobilize actors and resources, which increases the need to deviate from the current path and requires an exploration of the environment (Pacheco et al, 2010).

(20)

Literature review 20 Hypothesis 3b. The positive relationship between lobbying and exploration activities is

moderated by perceived internal regulatory pressures, so that this relationship is

stronger for high perceived internal regulatory pressures than for low perceived

internal regulatory pressures

2.4. Research model

In previous sections, three sets of hypotheses were established. The first hypothesis represents the relation between acquiring knowledge and exploration activities. Hypothesis H1a represents the direct effect of the independent variable acquiring knowledge on the dependent variable exploration activities. Hypothesis H1b represents the moderating effect of perceived internal regulatory pressures in addition on the direct relationship of hypothesis H1a. The second set of hypotheses assumes the relationship between learning & development, according to the same approach as hypothesis 1. The third hypothesis is regarding the expected influence of lobbying on exploration activities, also with the same approach as the first two sets of hypotheses.

All direct relationships and moderating effects including expected influences are graphically illustrated in figure 1.

(21)

Method 21

3. Method

The empirical research was conducted at Alliander, a large Dutch multi-unit utility services organization. Alliander has the role of a grid operator and is responsible for the transport of electricity and gas for approximately 5.7 million customer connections. It has more than 7,000 employees with a revenue over 1.7 billion euro. Several business units of Alliander acts in a free market, but the core business acts within the regulated utility industry. Due to major transformations in this industry, organizations must adapt to this changing environment and need strategic renewal. This research captures the relation between the characteristics of an institutional entrepreneur on exploration activates regarding the influence of the perceived internal regulatory pressures of the institutional environment. The research will be executed cross-sectional with an online survey to collect data, which is used to test these hypotheses will be quantitative. The survey determines how employees react in their environment and how their actions are influenced by social norms, which is related to the positivists’ philosophy.

3.1. Sample

The online survey collected primary data via a questionnaire for employees from two IT business unit departments of Alliander. These departments support the business unit Customer and Market. The population of these departments are appropriate for this research because of the explorative nature of the business unit Customer and Market. Furthermore, employees of these departments are exposed to varying degrees of internal regulations, and show different levels of institutional entrepreneurship and exploration activities. The survey was provided to all 102 employees of the departments. Both management and employees received an invitation. Tests showed that 84 respondents submitted the questionnaire out of 102 requests, a response rate of 82.4%. Next, 15 respondents were removed after a visual check because of invalid data or missing values. The remaining 69 responses were sufficient to perform the

(22)

Method 22

analysis. The survey makes use of a Likert scale to reduce the time a respondent needs to complete the survey, which should increase the response rate (Jamieson, 2004). The respondents are highly educated (89.9% holds a bachelor or master degree) and in general men (85.5%).

3.2. Data collection

This analysis draws on data gathered in the online survey “Institutional entrepreneurship” executed with Qualtrics. The survey administration began on December 5, 2016, and ended three weeks later on December 23, 2016. On December 12, 2016, a reminder was sent to the whole population. To ensure confidentiality, the survey was anonymous. General and demographical information was determined by control variables. The use of a Likert scale provided ordinal data but will be treated as interval variable. As this paper tries to investigate a causal effect between acquiring knowledge, learning & development, lobbying and exploration activities, an analysis with a hierarchical regression analyses is the most suitable. Interval data is desirable for this analysis.

3.3. Measures

This study mainly used existing scales that have been validated and proven reliable in previous research. Only one independent variable has been created new: lobbying. This variable has been used for hypotheses 3a and 3b. Because not all scales were on the right level of analysis and the respondents’ primary language was not the language of the existing scales, measures had to be adapted and translated. First, relevant literature has been reviewed to determine the applicability of the construct in the model. Second, the existing scales were adapted to the individual level of analysis. Finally, the measures used in the questionnaire derived from English were translated to Dutch because all respondents of the survey are native Dutch speakers. To make sure that the content of the measures remains unchanged, the

(23)

Method 23

translated Dutch measures were back-translated into English. The differences between the back-translated and the original measures were corrected in the final version of the Dutch questionnaire. All items were measured with a 7 point Likert-scale ranging from 1 “strongly disagree” to 7 “strongly agree.” Appendix A presents an overview of the survey scales of these variables.

Perceived internal regulatory pressures: The scale of intra-organizational regulative forces

(Stienstra, 2008) (Cronbach’s alpha = 0.80) was used to measure the perceived internal regulatory pressures of employees. This construct is related to the regulative pillar of Scott (1995). The measure consists of five items and assesses an employee’s perception of internal regulatory pressures.

Acquiring knowledge: The scale of acquisition of new knowledge (Jansen et al., 2005)

(Cronbach’s alpha = 0.79) was used to measure the employee’s behavioral intention for acquiring knowledge. The measure consists of five items. One item is reverse coded, meaning that a relatively low score indicates a relatively high level of behavioral intention of acquiring new knowledge. The items were adapted from business unit level to individual level to measure the same level of analysis as the other constructs in the model.

Learning & development: The scale of learning & development by Hurley & Hult (1998)

(Cronbach’s alpha = 0.72) was used to measure the employee’s behavioral intention for learning & development. The measure consists of four items and does not need any adaptions.

Lobbying: No appropriate scale for lobbying was available. A new scale was composed to

measure the employee’s behavioral intention to lobby. First, the goal of the construct was determined by measuring the extent to which an employee who acts in an institutional environment has the intention to lobby. Second, relevant literature review was examined to collect arguments that tap into the domain of the construct. Then, each argument was

(24)

Method 24

transformed to a unique item (see Appendix B). This resulted in four items that measure the extent to which employees have the behavioral intention to lobby: (1) I use support of people outside the formal reporting lines to get things done (adapted from Ibarra, 1993); (2) I think that informal relations reflects the way work happens in an organization better than the formal structure (adapted from Cross et al., 2002); (3) I often think about how to get things done by avoiding procedures (adapted from Aghion & Tirole, 1997); and (4) I acquire additional information through informal contact moments (adapted from Uzzi, 1997).

Exploration activities: The scale of Mom et al (2007) (Cronbach’s alpha = 0.86) was used to measure the exploration activities of the employee. The measure consists of five items and assesses the employee’s exploration activities. The last item of the scale was removed because of the direct relationship with an item of the independent variable acquiring knowledge.

Control variables: Finally, five control variables were included to control the results of the

study: gender, age, level of education, organizational tenure and department.

3.4. Reliability and validity

The survey was pre-tested to improve the reliability and validity for both the individual items and the scales of the questionnaire. First, a scholar tested the consistency of the items between the scales. Second, three colleagues tested the comprehensibility of the scales.

The existing scales that have been used for the constructs exploitation activities, acquiring knowledge, learning & development and perceived internal regulatory pressures were validated and proven reliable in previous research. All these constructs in previous literature review have a Cronbach’s alpha above the 0.70, which assures reliability (e.g.. Nunnally, 1978). The Cronbach’s alpha for the new, developed scale for lobbying will be determined by performing an exploratory factor analysis.

(25)

Method 25

After the data collection, a Principal Components Analysis (PCA) was conducted on all scales. The Kaiser–Meyer–Olkin (KMO) measure verified the sampling adequacy for the analysis at 0.586, and KMO values less than 0.6 indicate the sampling is miserable, so remedial action must be taken. Analysis shows that three items have an unexpected score. These items were removed from the scales acquiring knowledge, learning & development and lobbying, one item on each scale. All the removed items had a corrected item total correlation lower than 0.3. The exploratory factor analysis was conducted again. Acquiring knowledge increased from 0.674 to 0.750, learning & development from 0.623 to 0.702 and lobbying from 0.584 to 0.637. The Cronbach’s alpha for lobbying is below 0.7, which is not a reliable score for a scale. Nevertheless, this construct was not exclude for further data analysis. By removing the last item of the exploration activities scale, the Cronbach’s alpha did increase from 0.790 to 0.855. Because the Cronbach’s alpha is very strong, this item was not deleted. The KMO increased from 0.586 to 0.639, which is still mediocre. Bartlett’s test of sphericity χ² (171) was 491,047 with p < 0.001 indicated that there were sufficient correlations between items. The PCA includes an initial analysis for Eigenvalues for each component in the data. Six components had Eigenvalues with Kaiser’s criterion above 1 and in combination explained 69,64% of the variance. In agreement with Kaiser's criterion, investigation of the scree plot shows a leveling off after the sixth factor. The six factors were kept and rotated with a Varimax with Kaiser normalization rotation. Table 1 shows the rotated component matrix. Component 3 and 4 represent the scale for perceived internal regulatory pressures. This scale is based on intra-organizational regulative forces (Stienstra, 2008) which is validated and proven, so both components will be kept together to one construct. The last item of exploration activities does not have a very strong preferred component (0.41 for component 1 and 0.52 for component 5). Therefore, this item will be clustered to component 1 to which it belongs according to Mom et al. (2007).

(26)

Method 26

Compared to the values of the Cronbach’s alpha of the existing scales in previous literature, the reliability computed based on this survey is lower for all constructs than the original Cronbach’s alpha. This could be explained by the number of responses (size of the data set), which is quite small in this research.

Comp. 1 Comp. 2 Comp. 3 Comp. 4 Comp. 5 Comp. 6

I think that employees of our unit conform to formal rules 0.11 0.07 0.09 0.84 -0.09 0.17

I think that my manager is charged with protocols to improve

the efficiency of organisational members 0.11 0.13 0.70 0.32 -0.19 0.04

I think that rules and procedures are followed in our unit -0.04 -0.01 0.09 0.89 -0.05 0.15

I think that rules, laws and sanctions occupy a central place in

our unit -0.03 0.03 0.79 0.16 -0.07 0.05

I think that in our unit punishment is administered in case of

rule violations 0.06 0.19 0.72 -0.20 -0.08 0.01

I have frequent interactions with corporate headquarters to

acquire new knowledge 0.50 0.64 0.05 0.04 0.12 0.03

I regularly visit other branches 0.21 0.66 0.31 0.17 0.11 -0.10

I collect industry information through informal means (e.g.

lunch with industry friends, talks with trade partners) -0.03 0.80 0.05 -0.10 0.17 0.02

I (or my colleagues) periodically organizes special meetings

with customers or third parties to acquire new knowledge. 0.02 0.73 0.07 0.06 -0.26 -0.05

Alliander provides me opportunities for individual develeopment other than formal training (e.g., work

assignments and job rotation) 0.04 -0.04 -0.01 0.07 0.03 0.81

Alliander encourages me to attend formal developmental activities such as traning, professional seminiars, symposia,

etc. 0.30 0.20 -0.13 0.13 -0.17 0.71

There are people at Alliander who provide guidance and

counsel regarding my carreer 0.02 -0.19 0.21 0.16 0.06 0.77

I think that informal relations reflects the way work happens in

an organization better than the formal structure -0.13 0.00 -0.18 -0.26 0.72 0.11

I often think about how getting things done by avoiding

procedures -0.07 0.02 -0.04 0.06 0.80 -0.11

I acquire additional information through informal contact

moments 0.21 0.43 -0.27 -0.11 0.58 0.01

I have searched for new possibilities with respect to

products/services, processes or markets 0.84 0.14 -0.10 0.01 -0.06 0.15

I have evaluated diverse options with respect to

products/services, processes or markets 0.84 0.24 -0.04 -0.11 -0.08 0.12

I have focused on strong renewal of products/services or

processes 0.78 0.08 0.17 0.22 0.04 0.00

I have carried out activities that required quite some

adaptability of me 0.41 -0.23 0.37 0.27 0.52 -0.07

Table 1: Exploratory Factor Analysis; rotated component matrix

Questionnaire item

Acquiring knowledge

Lob b ying:

Exploration activities: Learning & development

Note: N = 69. Extraction Method: Principal Component Analysis with number of factors based on Eigenvalue > 1. Rotation Method: Variance-maximizing (varimax) with Kaiser Normalization.

(27)

Method 27

3.5. Statistical procedure

To perform the statistical analyses, the Statistical software Package for Social Sciences (SPSS) was used. First, all data was uploaded in SPSS and some data descriptive statics were outlined. The frequency test was performed to explore and prepare the data for further analysis. Then, the reversed coded items were recoded and scale reliabilities, skewness, kurtosis and normality tests were computed. Then the construct variables acquiring knowledge, learning & development, lobbying, perceived internal regulatory pressures and exploration activities were checked for reliability by performing factor analyses of the individual constructs.

After discovering and preparing the data, further analysis will be performed. First, univariate analysis will be performed and the results about the description of the data will be outlined. Subsequently, the bivariate analysis will be performed, which includes the correlation matrix and reliability. Finally, the multivariate analyses will be executed.

In advance to improve the explained variance of the model, the influence of the control variables on the model have been tested. The control variable labor contract limited the explanatory power of the model. Labor contract determines whether an employee works dedicated for the organization or is hired temporarily. The number of years an employee is working for the organization is determined by organizational tenure, despite this employee is dedicated or temporarily hired. Therefore labor contract has been removed.

(28)

Results 28

4. Results

Before executing the regression analyses, descriptive statics were used to explore the data and determine whether the sample must be divided across two departments. Subsequently, we presented a correlation matrix of all variables in the regression analyses. In order to test hypotheses 1a, 2a and 3a, which represents the direct effect of dependent variables on the independent variable, a regression analyses was used. Last, regression analysis was executed to explain the moderating or interaction effect of perceived internal regulatory pressures on the dependent variables related to the independent variable to test hypothesis 1b, 2b and 3b. The conceptual model is used to help explain the regression results.

4.1. Descriptive statics

The sample used to test the hypotheses consists of 69 respondents. Figure 2 shows the categorized scores of exploration activities. The dependent variable shows a normal distribution except three outliers, which has a score below 3. The outliers were not deleted, because they did not contain any invalid values.

The respondents were divided over two departments, which will be referred to as department A and B. T-tests showed that there is no significant difference in the scores for perceived internal regulatory pressures, department A (M=4.30, SD=0.88) and department B (M=4.56,

(29)

Results 29

SD=0.79), conditions; t(69)= -1.159, p= 0.25. These results suggest that employees do not perceive any difference of the internal regulatory pressures regarding their department. To evaluate the respondents, other control variables were analyzed. The educational background among the respondents are as follows: 29.0% hold a master’s degree, 60.9% hold a bachelor’s degree and 10.1% have had an education below the bachelor level. A total of 85.5% are male respective to 14.5% female.

4.2. Correlation matrix

The results of the bivariate correlations and reliabilities are represented in table 2. The main observation regarding the dependent variable is that learning & development and acquiring knowledge are significant positives related to exploration activities. A remarkable observation is that lobbying is significantly negative related to perceived internal regulatory pressures. This means that depending on the employee’s perceived internal regulatory pressure, the degree of lobbying varies. Furthermore, the control variables organizational tenure is significantly positive related to perceived internal regulatory pressures. Lastly, the level of education and department are significant related to exploration activities. So, depending on the department an employee is working for or their educational background, the degree of executing exploration activities varies.

Table 2: Means, Standard Deviations, Correlations and Reliabilities

Mean SD. 1 2 3 4 5 6 7 8 9 10

01. Perceived internal regulatory

pressures 4.39 0.85 (0,69)

02. Learning & development 5.26 0.90 0.20 (0,70)

03. Acquiring knowledge 4.18 1.08 0.23 0.01 (0,75) 04. Lobbying 5.14 0.80 -,288* -0.07 0.11 (0,64) 05. Exploration activities 4.86 0.95 0.22 ,237* ,280* 0.02 (0,79) 06. Age 41.49 8.75 -0.16 0.10 0.08 0.15 -0.02 -- 07. Gender 0.14 0.35 -0.07 0.05 -,241* -0.06 -0.10 -0.10 -- 08. Organizational tenure 8.81 8.19 -,268* 0.13 -0.08 0.12 -0.11 ,601** -0.14 -- 09. Level of education 3.19 0.63 0.09 0.03 -0.07 0.07 ,259* -0.07 0.14 -,321** -- 10. Department 0.33 0.47 0.14 0.08 0.03 0.16 ,257* -0.22 0.06 -0.10 ,292* -- Variable

N = 69 ; * p < 0.05 ; ** p < 0.01 ; Cronb ach's Alpha is on diagonal. Main study variab le:

(30)

Results 30

4.3. Regression analysis

To investigate the conceptual model, a hierarchical moderated regression analysis was executed. Four models were constructed to explain the exploration activities of employees. The first model explains the effect of the different control variables on the dependent variable exploration activities. The second model explains the effect of the independent variables acquiring knowledge, learning & development and lobbying on exploration activities in addition to the variables in model 1. The third model includes the moderator perceived internal regulatory pressures in addition to the variables in model 2. The fourth model explains the moderating effect of perceived internal regulatory pressures on the relationship between each of the independent variables and exploitative activities in addition to the variables in model 3. The hierarchical regression analysis investigates whether added variables have a significant contribution in explaining the dependent variable (Significant F change). Adjusted R² indicates how much of the variance in the dependent variable is explained by all independent variables. The variance inflation factor (VIF) indicates the degree of multicollinearity in the model, which explains whether each independent variable is explained by all other independent variables (Hair et al., 1998). Multicollinearity could occur when two or more independent variables are correlated. To limit multicollinearity, perceived internal regulatory pressures, acquiring knowledge, learning & development and lobbying were mean centered before creating the interaction. Variables that exceeded a VIF score of 10 were assumed to correlate highly with one or more other independent variables (Hair et al., 1998). All of the variables entered in table 3 have a VIF score below 2.2, which suggests that multicollinearity is not a problem in the analyses.

(31)

Results 31

To explain and interpret the results of the regression model, table 3 is used. Model 1 shows the effect of the control variables on the exploration activities. The model explains 13.4% of the variance, with a non- significant change F(5, 61)=1.645, p=0.109. After adding the independent variables to model 2, the total variance explained increases with 12.7% F(8,58)=2.000, p=0.018, which is a significant. So, adding the dependent variables to the model increases the value of the model. The third model includes the moderator up to model 2. The R2 changed = 0.001 and the significant F change = 0.780, so adding the moderator to the model has no significant effect. The model as a whole still has a significant value F (9,57)=1.785, p=0.031. The fourth and final model does not increase the explained variance either R2 changed = 0.039 and significant F change = 0.395. But the complete model is still

Table 3: Linear regression results predicting exploration activities

B SE B B SE B B SE B B SE B Age 0.009 0.017 0.001 0.016 0.001 0.017 0.010 0.017 Organizational tenure -0.011 0.019 -0.004 0.018 -0.003 0.019 -0.008 0.019 Level of education 0.287 0.205 0.332 0.197* 0.331 0.198* 0.374 0.200* Department _0.466 _0.262* _0.416 _0.254 _0.402 _0.260 _0.396 _0.261 Gender -0.416 0.325 -0.277 0.319 -0.268 0.323 -0.391 0.336

Learning & development 0.253 0.123** 0.245 0.128* 0.267 0.136* Acquiring knowledge 0.253 0.109** 0.244 0.114** 0.218 0.117*

Lobbying -0.052 0.144 -0.037 0.155 -0.084 0.171

Perceived internal regulatory pressures _0.042 _0.151 _0.102 _0.163

Interaction learning & development x perceived internal regulatory pressures

-0.194 0.153 Acquiring knowledge x

perceived internal regulatory pressures

0.239 0.155 Interaction lobbying x

perceived internal regulatory pressures

0.153 0.176 R² Adjusted R² Sign. F Change Model 2 0.261 0.159 0,026* Interactions Model 3 Model 4 Explained variance 0.109 0.063 0.134 0.301 0.395 0.146 0.780 0.146 0.262 Variable

Control variab les and moderator

Independent variab les

Model 1

(32)

Results 32

significant: F(12,54)=1.539, p=0.049. Adding the interaction to the model does not lead to a more explained variance, but does bring more complexity to the model.

Model 4 shows two significant findings regarding the direct effect of the independent variables on the dependent variable. First, the positive relation between learning & development and exploration activities (b=0.267). Second, the positive relation between acquiring knowledge and exploration activities (b=0.218). Furthermore, a positive significant effect between level of education and exploration activities (b=0.374) have been proven. Table 4 gives an overview, based on the results, regarding whether the hypotheses underlying the research question are supported or not.

Table 4: Hypothese testing

Hypotheses Supported

H1a. Acquiring knowledge is positive related to exploration activities Yes H1b. The positive relationship between acquiring knowledge and exploration activities

is moderated by perceived internal regulatory pressures, so that this relationship is weaker for high perceived internal regulatory pressures than for low perceived internal regulatory pressures

No

H2a. Learning & development is positive related to exploration activities Yes H2b. The positive relationship between learning & development and exploration

activities is moderated by perceived internal regulatory pressures, so that this relationship is weaker for high perceived internal regulatory pressures than for low perceived internal regulatory pressures

No

H3a. Lobbying is positive related to exploration activities No H3b. The positive relationship between lobbying and exploration activities is moderated

by perceived internal regulatory pressures, so that this relationship is stronger for high perceived internal regulatory pressures than for low perceived internal regulatory pressures

(33)

Discussion and conclusion 33

5. Discussion and conclusion

This final chapter is structured as follows. First, the most evident findings will be discussed. Second, the theoretical and methodological limitations of the research will be described. Based on these limitations, suggestions for future research will composed. Third, the scientific and managerial contributions of this study will be outlined. Regarding this, the conceptual framework presented in paragraph 2.4 will be applied to discuss implications for practitioners. Finally, conclusions will be made by addressing the main research problem in the context of institutional environments and to what extent perceived internal regulatory pressures effects the behavioral intentions related to exploration activities.

5.1. Discussion

At an individual level of analysis, a conceptual framework of institutional entrepreneurship was adopted and six hypotheses were specified that predict how the institutional entrepreneurial behavioral intentions are influenced by perceived internal regulative pressures related to exploration activities.

Starting with the characteristic acquiring knowledge, hypothesis 1a predicts that the higher the behavioral intention of the institutional entrepreneur for acquiring knowledge, the higher the exploration activities. Hypothesis 1b predicts that the higher the degree of perceived internal regulatory pressures on acquiring knowledge, the smaller the likelihood for exploration activities of institutional entrepreneurs. Hierarchical regression analysis indicates support for hypothesis 1a, so a significant effect of acquiring knowledge on exploration activities was found. However, no evidence was found for hypothesis 1b. Although institutional environments exert pressures, it also favors stability and continuity (Battilana et al., 2009; Garud et al., 2007). Factors regarding stability and continuity provide an equal knowledge

(34)

level within the environments, which minimize the interaction effect between acquiring knowledge and exploration activities.

Subsequently, the characteristic learning & development is examined. First, the direct effect of the institutional entrepreneurial behavioral intentions for learning & development on exploration activities is predicted in hypothesis 2a. Results show a positive relationship, which means the higher the degree of behavioral intention of the institutional entrepreneur for learning & development, the greater the exploration activities of the employee. This hypothesis has been proven by a significant effect through hierarchical regression analysis. No evidence was found for hypothesis 2b, the higher the perceived internal pressures on employees’ behavioral intentions for learning & development, the smaller the likelihood for employees’ exploration activities. Despite what the hypothesis predicts, based on previous literature reviews, there is no significant moderating influence for perceived internal regulatory pressures on the relationship between learning & development and exploration activities. Possible explanations can be found in other influences concerning exploration activities. Scott (2001) argues about the opposite of perceived internal regulatory pressures, inducements based on motivations. Motivations stimulates an institutional entrepreneur to perform exploration activities, which could have a neutralizing effect of the perceived internal regulatory pressures of the institutional entrepreneur.

Finally, the characteristic lobbying is discussed. No significant support was found between lobbying and exploration activities for neither the direct and indirect effect, so hypotheses 3a and 3b were both rejected. An explanation for this could be found in stakeholder management (Freeman, 2004; Elias et al., 2000). Stakeholder management overlaps with intra- organizational lobbying. Stakeholder management is focused on affecting the environment to get support, based on the achievement of the organization’s objectives (Freeman, 1970), while lobbying is related to influencing the environment by transferring resources or information

(35)

(Spiller & Liao, 2006). Exploration activities like discovering, experimenting, risk-taking and innovating (He & Wong, 2004), are performed to improve the organization’s objectives. So, to obtain support for the relationship between lobbying and exploration activities, the achievement of the organization’s objectives must be emphasized and processed in the characteristics of lobbying.

5.2. Contribution

This thesis contributes to the research on institutional entrepreneurship by examining the moderating influence of perceived internal regulatory pressures on the relation between the institutional entrepreneurial behavioral intentions and exploration activities of individual employees. The first objective of this empirical research was to explore the characteristics of an institutional entrepreneur by investigating the institutional entrepreneurial behavioral intentions by three dimension: (1) acquiring knowledge, (2) learning & development and (3) lobbying. Results show a significant positive relationship between acquiring knowledge and exploration activities. Furthermore, the results show a significant positive relationship between learning & development and exploration activities. No statistical evidence was found for a negative moderating impact of perceived internal regulatory pressures on these two relationships. This suggests that individual employees, at least to some degree, explore new opportunities that may deviate from the current internal regulatory environment. Second, this research contributes to research on exploration at individual level. Most research investigates exploration on a business unit or organizational level. Yet little research has been investigated on exploration on an individual level. This research adapted the scale of Mom et al. (2007), who measures managers’ exploration activities, to a scale for measuring exploration activities of individual employees. Third, a new survey scale has been developed for lobbying, signaling a methodological contribution of this study.