Daniel UCT Technical Report

Intrapreneurship in an Information
Systems Service Organisation
- The Perception of Staff
a Technical Report presented to
THE DEPARTMENT OF INFORMATION SYSTEMS
UNIVERSITY OF CAPE TOWN
in partial fulfilment of the requirements for the
BACHELOR OF COMMERCE HONOURS DEGREE
IN
INFORMATION SYSTEMS
by
D. S. Ackermann
September, 2007

Intrapreneurship in an Information Systems Service Organisation -
The Perception of Staff
Page ii
Synopsis
Entrepreneurs are characterised by their ability to be innovative and are the
aggressive agents for change. New and innovative ideas must be applied to
the business to gain advantage, not only in the competitive marketplace, but
also in finding new solutions for applying information technology to
business problems. Entrepreneurs could be the facilitators of change
required to improve business and to facilitate competitive solutions to client
information problems. However, entrepreneurship cannot operate in a
vacuum and the desired results cannot be obtained if the organisation is not
geared to providing its fullest support for the intrapreneurial spirit of the
employees to thrive.
This technical report presents a theoretical overview of entrepreneurship and
then this theory is considered in exploring the concept of intrapreneurship
and information entrepreneurship. A questionnaire was sent to the
employees of an information systems service organisation to obtain their
perceptions of the degree to which the organisation is willing to support
their identification and exploitation of new opportunities.
It was found that, although the surveyed company does seem to be
supportive of entrepreneurial behaviour in some areas, the overall
perception of the employees is that the company is not supportive of such
behaviour.
Discouragement of innovative ideas could result in the development of less
than optimal solutions to business information systems on behalf of clients.
It is therefore essential to improve the entrepreneurial profile of the
company, for which purpose recommendations are made on the basis of the
responses from the sample of employees surveyed.

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Declaration
The information in this report is not confidential.
The name of the company surveyed is not mentioned due to the
competitive nature of the industry and possible advantage competitive
companies may obtain through the findings in this report.
For research purposes, details related to the company can be obtained
from the author through the University of Cape Town Department of
Information Systems.
I certify that except as noted in the acknowledgements, this report is
my own work and all references are accurately reported.
___________________________
D. S. Ackermann

Page iv
Acknowledgements
My sincere appreciation is extended to:
• Dilshaad Brey of University of Cape Town Information Systems
Library who assisted me in obtaining literature.
• Professor T.J. de Coning of University of Stellenbosch Business
School for giving permission to use the survey tool.
• Academic staff at University of Cape Town Department of
Information Systems for their assistance prior and during writing of
this report.
• Colleagues for answering the survey, without which this report
would not have been possible.
• Managing Director of the surveyed company who gave his
permission to use the company as a basis for study.
• Ms. Shirley Churns of the University of Cape Town Writing Centre
for assisting with report writing techniques.

Page v
Table of Contents
1. INTRODUCTION ........................................................................................................................ 1
1.1 BACKGROUND........................................................................................................................... 1
1.1.1 Entrepreneurship in context.............................................................................................. 5
1.1.1.1 Entrepreneurial formation factors............................................................................................. 5
1.1.1.2 Schools of thought approach .................................................................................................... 6
1.1.1.3 Business approach................................................................................................................... 8
1.1.2 Discussion of entrepreneurship definitions........................................................................ 9
1.1.3 Intrapreneurship and infopreneurship............................................................................. 12
1.2 PROBLEM STATEMENT ............................................................................................................. 17
1.3 RESEARCH OBJECTIVES ............................................................................................................ 18
2. METHODOLOGY..................................................................................................................... 19
2.1 SAMPLING DESIGN ................................................................................................................... 19
2.2 RESEARCH DESIGN................................................................................................................... 19
2.3 DATA COLLECTION.................................................................................................................. 21
2.4 DATA ANALYSIS ...................................................................................................................... 22
2.5 LIMITATIONS........................................................................................................................... 23
3. DISCUSSION OF FINDINGS.................................................................................................... 24
3.1 INTRODUCTION ....................................................................................................................... 24
3.2 KEY BUSINESS DIMENSIONS...................................................................................................... 24
3.2.1 Change in perceptions with years service in company..................................................... 27
3.3 CRITICAL SUCCESS AREAS FOR ESTABLISHING INTRAPRENEURSHIP.............................................. 28
3.3.1 Change in perceptions of critical success factors with years service in company.............. 31
3.4 FREEDOM FACTORS IN THE ORGANISATION................................................................................ 33
3.4.1 Change in perception of freedom factors with years service in company.......................... 36
4. CONCLUSIONS......................................................................................................................... 38
4.1 SUMMARY AND CONCLUSIONS.................................................................................................. 38
4.2 RECOMMENDATIONS................................................................................................................ 40
4.2.1 Resource control............................................................................................................. 40
4.2.2 Procedures and regulations ............................................................................................. 41
4.2.3 Internal politics and competition..................................................................................... 41
4.2.4 Time and financial support............................................................................................. 41
4.2.5 Nurture intrapreneurial behaviour of employees.............................................................. 42

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5. REFERENCES ........................................................................................................................... 43
6. APPENDIXES............................................................................................................................. 47
6.1 APPENDIX A - EXAMPLE OF QUESTIONNAIRE ............................................................................. 48
6.2 APPENDIX B - COPY OF LETTER FROM UNIVERSITY OF STELLENBOSCH ....................................... 49
6.3 APPENDIX C - TABLES AND GRAPHS.......................................................................................... 50
6.4 APPENDIX D - FORMULAE USED................................................................................................ 51

Page vii
Table of Figures
FIGURE 1: WORLD-WIDE GROWTH OF THE IS SERVICE INDUSTRY............................................................ 3
FIGURE 2: DATAMATION TOP 10 COMPANIES SHOWING SERVICE REVENUE CONTRIBUTION. ................. 3
FIGURE 3: QUALITIES THAT MAKE AN ENTREPRENEUR. FROM LENKO (1995)........................................ 12
FIGURE 4: RESPONDENTS’ PERCEPTION OF THE KEY BUSINESS DIMENSIONS. .......................................... 25
FIGURE 5: CHANGE IN THE PERCEPTIONS OF EMPLOYEES BY PERIOD EMPLOYED..................................... 28
FIGURE 6: SUMMARISED RESPONSES TO CRITICAL SUCCESS FACTORS................................................... 29
FIGURE 7: PERCEPTION OF EMPLOYEES GROUPED INTO PERIODS OF EMPLOYMENT AS A PERCENTAGE OF
TOTAL RESPONSES FOR EACH EMPLOYEE PERIOD......................................................................... 31
FIGURE 8: TREND OF CHANGE IN PERCEPTION OVER ALL PERIODS. ........................................................ 32
FIGURE 9: EMPLOYEES’ PERCEPTION OF FREEDOM FACTORS................................................................. 33
FIGURE 10: MULTI-FUNCTIONAL TEAM PARAMETER BY BUSINESS UNIT................................................. 35
FIGURE 11: PERCEPTION OF EMPLOYEES GROUPED INTO PERIODS OF EMPLOYMENT AS A PERCENTAGE OF
TOTAL RESPONSES FOR EACH EMPLOYEE PERIOD......................................................................... 36
FIGURE 12: TREND IN CHANGE OF PERCEPTION OF FREEDOM FACTORS OVER ALL PERIODS...................... 37

Page 1
1. Introduction
1.1 Background
Entrepreneurship is the act of being an entrepreneur and there is consensus that
the word entrepreneur originates from the French term entreprendre, which
loosely translated means “to undertake; to pursue opportunities; to fulfil needs
and wants through innovation and starting businesses” (Kurato & Hodges,
1992; Burch, 1986).
The entrepreneur is an innovator or developer who recognises and seizes
opportunities; converts these opportunities into workable or marketable ideas;
adds value through time, effort, money or skills; assumes the risks of the
competitive marketplace and realises the rewards from these efforts (Ronstadt,
1984; Stevenson & Gumpert, 1985). The entrepreneur is the aggressive agent
for change in the world of business and is an independent thinker who dares to
be different in a background of common events.
Information technology is attracting more and more attention as companies
strive to become more competitive and attempt to harness the power of their
information resources (Porter, 1990). It is suggested that a general inability to
master information technology has reinforced the importance of planning
information technology and has kept it as a key issue for information systems
executives to address (Brancheau & Whetherbe, 1987). However the impact of
information technology on business planning can vary widely between
companies (Parsons, 1983; McFarlan, 1983).
Weiner (1990) asked the question whether rigid planning guarantees any
degree of success with Information Technology. He went on to say that most
companies resist the notion of applying solutions from fresh perspectives and
continue to perform strategic planning with their old perceptions and methods
intact.

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To maintain competitive advantage the old perceptions and methods must be
changed and replaced with innovative thoughts that will rejuvenate the
organisation. This requires change that involves the design and construction of
new patterns or the reconceptualisation of old ones to make possible new and
more productive actions. This definition of change is close to the definition of
innovation by Kanter (1983): “Innovation refers to the process of bringing any
new, problem-solving ideas into use”. These ideas refer not only to
technological ideas, but also to ideas for reorganising, cutting costs, improving
communication or new improved business processes.
There is a world wide trend for organisations to concentrate on their core
business activities and outsource their support services, such as their
information systems requirements, to external service providers, who often
shows an entrepreneurial inclination. The IT services industry consists of
companies providing outsourcing, facilities management, systems integration,
IT/IS consulting, contract programming and disaster recovery services. This
outsourcing trend has shown an exponential growth in the information services
industry world wide (Eyeions, 1994; Mead, 1990; Mead, 1991; Brousell, 1992;
Brousell, 1993; Strehlo, 1994). The annual Datamation 100 Survey has shown
the world-wide IS services industry to have the largest growth compared to
other product offerings in the IS industry with an increase in revenue from
US$19.4 billion in 1988 to US$184.8 billion in 1995 (an increase of 952.6%).
In 1994 the total IT spending on services was estimated at 35% of total IT
expenditure (Strehlo, 1995). Semich (1996) further predicts that the service
industry growth up to the year 2000 will be on average 9.6% per annum.
Extrapolation of the current data shows the size of the service industry to be
US$292.3 billion by the year 2000. Figure 1 presents the growth of the industry
in graphical format.

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Figure 2 shows an analysis of the top 10 performing companies world-wide as
surveyed by Semich (1996). The traditional hardware and software suppliers
such as IBM, Fujitsu and Hewlett-Packard have added services to their product
offerings and a considerable contribution is made to the total revenue of the
companies. It is notable that in five of the top 10 performing companies, the
services contribution is more than 20% of the total revenue.
19.4
49.6
110.6
171.6
184.8
202.5
222.0
243.3
266.7
292.3
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
1988
1992
1993
1994
1995
1996
1997
1998
1999
2000
Year
Revenue Expon. (Revenue)
Figure 1: World-wide growth of the IS service industry.
Datamation 100
Ranking Company
Total revenue
(US$ billion)
Services and
support
revenue as %
of total IT
revenue
Revenue from
services (US$
billion)
1 IBM 71.94 28% 20.14
2 Fujitsu 26.80 14% 3.75
3 Hewlett-Packard 26.07 24% 6.26
4 NEC 19.35 13% 2.52
5 Hitachi 16.21 18% 2.92
6 Compaq 14.80 7% 1.04
7 Digital Equipment 14.44 45% 6.50
8 Electronic Data Systems 12.42 100% 12.42
9 AT&T 11.38 27% 3.07
10 Toshiba 11.38 0% 0.00
Source: DATAMATION
Figure 2: DATAMATION top 10 companies showing service
revenue contribution.

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This increase in size of the industry is further supported by an increase in the
number of consulting staff with service organisations. Strehlo (1995) reported
an increase of 1,200 consultants (from 300 to 1,500) during 1994 at EDS and
an additional 1,000 consultants over the three years ending 1994 with Unisys.
There is also an expansion of the services up the value chain and Semich (1996)
reported an increase in the number of vendor organisations that have added
consulting, systems integration and business process services to their product
offerings. This is all an indication that the face of the service industry is
changing from the traditional bureau and facilities outsource product offerings
to a totally integrated business offering.
If the people working in the service industry are not productive, the
organisation will have difficulty in operating profitably, with possible negative
impact on the organisations for whom the service is provided and for the
shareholders of the service provider. New and innovative ideas must be found
to reduce the cost of the operation and increase efficiency. Service providers
normally perform work for a number of different clients, and it is therefore
especially necessary for the employees of service organisations to be able to
devise new ways of creating information solutions to a variety of business
problems.
The natural characteristics of entrepreneurs, such as innovativeness and lateral
thinking ability, can be used to overcome business problems by creating
computerised solutions that are not steeped in old traditions and ways of doing
things. The same abilities can be applied to the internal structures of the service
organisation and can be used to supply optimal solutions to clients’ information
system problems.

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1.1.1 Entrepreneurship in context
1.1.1.1 Entrepreneurial formation factors
Bateman and Zeithaml (1990) describe an entrepreneur as a person driven by
psychological, sociological and environmental factors.
The psychological factor involves issues such as upbringing, locus of control,
need for achievement and self actualisation. The classic profile of an
entrepreneur was based on the belief that negative childhood experiences
explained adult entrepreneurial behaviour (Kets de Vries, 1977). Rotter (1971)
developed the theory of internal and external locus of control where he argued
that some people are in control of their own destiny (internal locus of control)
and some people are controlled by environmental factors (external locus of
control). Entrepreneurs are more likely to have an internal locus of control than
non-entrepreneurs and they are normally masters of their own destinies. To
start and run one’s own business can satisfy one’s need for achievement.
McClelland (1961) theorised that a person with a high need for personal
achievement sets his or her own goals and achieving these goals can be very
satisfying. Maslow (1943) developed the concept of self-actualisation which,
when applied to entrepreneurs, signifies that the person is self-motivated and
creates his or her own rewards.
Bateman and Zeithaml (1990) have further investigated sociological factors and
have found that issues such as social status, reference groups, family experience
and even place in family have an impact on the formation of an entrepreneur.
Groups such as disadvantaged, disenfranchised or immigrant people show a
larger tendency than those with a higher social status to be entrepreneurial.
Two interesting patterns have emerged from studies done by Mancuso (1987)
on entrepreneurial tendencies and family status. Sixty-six percent of
entrepreneurs surveyed reported at least one parent with his or her own
business and sixty percent of entrepreneurs were first-born children.

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The third group of factors which Bateman and Zeithaml (1990) deem important
are the environmental factors. During economic upturn and with a large supply
of money the environment lends itself to new business formation due to
improved prospects and greater availability of money. However in times of
economic downturn and job losses new ventures will be started due to
necessity.
1.1.1.2 Schools of thought approach
Kurato and Hodgetts (1992) have defined a “schools of thought approach” to
entrepreneurship. These schools can be of a macro view, which relates to
external processes that are beyond the control of the individual and represent
an external locus of control, or of a micro view, which relates to internal
processes and is part of the internal locus of control. Within each view there are
three schools of thought.
The three schools of thought in the macro view are the environmental, the
financial and the displacement schools.
The environment in which a person lives has an impact on his or her behaviour.
The values, norms and institutions grouped together form a socio-political
framework that can have a positive or negative influence on the development of
entrepreneurs.
The financial school of thought concentrates exclusively on the financial
aspects of entrepreneurship. Entrepreneurship is thought to be completely
driven by money and nothing else is considered to have an influence on
entrepreneurial potential.
Ronstadt(1984) has noted that individuals will not pursue a venture unless
prevented or displaced from doing other things. The major displacements were

Page 7
defined as political, cultural and economic, and any one of these is thought to
influence the development of entrepreneurship.
The micro view considers that the entrepreneur has control over his or her own
destiny to steer the outcome of entrepreneurial ventures. This view is
represented by the entrepreneurial trait, venture opportunity and strategic
formulation schools of thought.
The school of thought that focuses on the entrepreneurial trait relates
entrepreneurship to the nature of the person. The idea is that the manifestation
of similar entrepreneurial traits in people will increase their chances of
developing successful entrepreneurial skills. Characteristics such as striving for
achievement, creativity and determination are usually exhibited by
entrepreneurs. These traits are shaped during a person’s early life and, as Kets
de Vries (1977) theorised, may result from negative childhood experiences. The
presence of these traits will eventually lead to entrepreneurial inclination and
success.
The venture opportunity school of thought focuses on the opportunity aspect
of venture development. The right idea must be developed at the right time for
the right market to achieve success. Proper preparation and market knowledge
will enhance the ability to recognise opportunities.
The strategic formulation school of thought concentrates on the strategic
planning of the venture. Ronstadt (1984) views strategic formulation as a
“leveraging of unique elements”. All the elements that have an impact on the
venture must be taken into account when formulating the strategies for the
venture.
The schools of thought approach to defining an entrepreneur and
entrepreneurship confirms the definitions of Bateman and Zeithaml (1990) and

Page 8
supports the main issue that a person requires certain natural skills to display
entrepreneurial traits.
1.1.1.3 Business approach
Burch (1986) asks questions such as, “Where do entrepreneurial talent,
knowledge, and dedication come from?”, “Are people born with
entrepreneurial skills?” and “Can entrepreneurs be taught?”. Burch (1986)
continues by stating that entrepreneurs cannot, however, be standardised and
reduced to a mechanical model and it is therefore very difficult to find answers
to these questions.
Entrepreneurs are a product of the political, social and economic environment
and must have an internal control, be self-motivated and be able to operate in
an environment that supports entrepreneurship.
In an attempt to create a profile of an entrepreneur, Burch (1986) lists nine
characteristics of individuals with a high propensity for entrepreneurial
behaviour.
1. A desire to achieve. Entrepreneurs have the push to conquer problems and
give birth to successful ventures.
2. Excellence-oriented. Often entrepreneurs desire to achieve something that is
outstanding and that they can be proud of.
3. Hard workers. Entrepreneurs must be workaholics to achieve their goals.
4. Nurturing quality. The entrepreneur takes charge of the venture until it can
stand alone.
5. Accept responsibility. Entrepreneurs are morally, legally and mentally
accountable for their ventures.
6. Organiser. Most entrepreneurs are take-charge people.
7. Reward-oriented. Entrepreneurs require rewards for their efforts and these
rewards do not have to be money.

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8. Money-oriented. Profit is more a gauge of an entrepreneur’s achievement
and performance than business achievement.
9. Optimistic.
These are tendencies and not an exact definition of the characteristics an
entrepreneur must have.
Burch (1986) further says that with any product or service “the entrepreneur
must develop a business plan, develop a prototype, raise capital, put together
an organisation to manufacture and market the product, deliver it and provide
post-sale support.” The entrepreneur is a business person with specific inherent
traits that allow him or her to be innovative. The business skills such as
marketing, financial management and the other business disciplines can be
acquired, but innovativeness cannot be created within a person.
1.1.2 Discussion of entrepreneurship definitions
By summarising the definitions of entrepreneurship from Bateman and Zeithaml
(1990), Kurato and Hodgetts (1992) and Burch (1986) certain commonalties
can be extracted to give a good understanding of what entrepreneurship is and
what the characteristics of an entrepreneur are. The definitions support one
another in the issues such as the ability to have an internal locus of control,
creativity, need for achievement and self-actualisation, which are particularly
indicative of entrepreneurship. The environmental factors, such as the
circumstances in which the person was raised and the socio-political milieu in
which operations take place, are also strongly supported by the three
definitions. It is not possible to change the environment in which a person was
raised, train a person in self-actualisation or make a person creative. These are
intrinsic characteristics that cannot be changed by any means once adulthood
has been reached.

Page 10
Both Kurato and Hodgetts (1992) and Burch (1990) mention factors such as
venture opportunities and strategic formulation as requirements of
entrepreneurial ventures. Venture opportunities are defined as exploitation of
marketing information and strategic formulation is the technique required to
develop a business plan. These are business skills that can and should be
acquired to support a successful entrepreneurial venture.
The entrepreneurial venture will be initiated through a person’s innovative
thinking and the intrinsic entrepreneurial characteristics. To sustain the original
thoughts of the entrepreneur and to bring the idea to fruition for a return on
any investments made, the acquisition of marketing and other general business
skills are needed.
Morris et al (1994) have proposed a summary of contemporary thought and
defined entrepreneurship as a process activity:
“It generally involves the following inputs: an opportunity; one or
more proactive individuals; an organisational context; risk;
innovation; and resources. It can produce the following outcomes: a
venture or enterprise; value; new products or processes; profit or
personal benefit; and growth.”
(Morris et al,1994, p26).
This Integrative Model of Entrepreneurial Input and Outcomes resembles the
model proposed by Bateman and Zeithaml (1990, p313), where they suggest
that new ventures are created through a combination of entrepreneurs and
environmental factors. These new ventures will further be tested through
external environmental factors that will influence the success or failure of the
venture. A major difference between the thinking in the two models is that
Morris et al (1994) do not recognise a distinction between natural traits that
are inherent to an entrepreneur and acquired business and managerial skills,
whereas Bateman and Zeithaml (1990) recognise the distinction.

Page 11
The definition of entrepreneurship suggested by Morris et al (1994) assumes
that an opportunity will present itself. The entrepreneur will, through
innovative thought or spatial intelligence (lateral thinking), recognise an
opportunity, but may not be able to convert the opportunity into a business
venture due to a lack of business skills or acumen. To change the opportunity
into a business venture, business skills are required and the entrepreneur will
need individuals to assist in changing the opportunity into the desired outcome;
normally to create the product or service and to make a profit. The manager or
business person will not see the opportunity unless (s)he is also an
entrepreneur. There is a symbiotic relationship between the entrepreneur and
the business person.
Morris et al (1994) do acknowledge this by combining entrepreneurial and
business skills as inputs to their Integrative Model of Entrepreneurial Input and
Outcomes. There is, however, no recognition of the difference between natural,
inborn characteristics that define an entrepreneur and business skills that can be
acquired. Timmons et al (1990) on the other hand consider that the assumption
that entrepreneurs are born and not made is a myth, stating that the inborn
characteristics of an entrepreneur, such as native intelligence and a flair for
creating, cannot by themselves create an entrepreneur. Hisrich and Peters
(1992) say that these inborn characteristics can be developed through formal
education, but cannot be taught if they are not natural characteristics of a
person.
Bateman and Zeithaml (1990, p319) summarise the situation as follows:
“Though many entrepreneurs form businesses, few succeed over the
long term. Fewer still build their businesses into organisations that
outlive their creators. To be successful, entrepreneurs must develop the
basic management skills described throughout this book. They can be
developed, regardless of background or environment.“

Page 12
According to Lenko (1995) the making of an entrepreneur involves the
development of firstly,
attitudes and values,
secondly, various skills
and thirdly, business
knowledge. The
qualities are ranked in
order of importance
(see Figure 1) with
attitudes and values
being more important
than knowledge. Values
and attitudes cannot be transplanted, but certain of the skills the entrepreneur
requires can be supplemented by partnerships or by employing people to supply
these skills. Knowledge can be gained and should not pose a problem to a
dedicated entrepreneurial person.
1.1.3 Intrapreneurship and infopreneurship
The entrepreneurial characteristics of people can manifest themselves through
the manner in which the entrepreneur implements ideas. On this basis some
distinction is made in the naming of the different types of entrepreneurship.
Entrepreneurship is normally associated with the act of forming new
organisations. The independent entrepreneur can be defined as one who
starts a new business without the benefit of corporate experience. The
independent entrepreneur will create the new venture with few resources or
will form a partnership with an organisation to obtain venture capital for the
initial phases of the organisation.
Qualities that make an
Entrepreneur
Knowledge
Making
of an
entrepreneur
Attitudes
and
values
Skills
Attitudes and Values
•Opportunity recognition
•Self confidence
•Challenging conventional wisdom
Skills
•Human relations
•Communications
•Critical/Creative thinking
•Decision making
•Problem solving
•Management skills
•Venture education
Knowledge
•Marketing
•Production
•Finance
•Economics
•Legal aspects
•Busines world
Lenko(1995)
Figure 3: Qualities that make an entrepreneur. From Lenko (1995)

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Corporate spin-offs are firms or organisations formed by innovators who
could be frustrated by the lack of support within the corporate organisation.
Another source of spin-offs is new ventures that are created with the
knowledge and support of an organisation. This type of spin-off normally
occurs when new, potentially profitable ideas are found through the
entrepreneurial spirit of employees, but the organisation does not want to
directly involve itself with the new business venture. A separate organisation is
then created to specialise in the new venture, with the full knowledge and
support of the parent organisation.
The innovator or entrepreneur who operates in an organisation that supports
entrepreneurial behaviour within the framework of the business goals is a
corporate entrepreneur or intrapreneur. Intrapreneurs are the corporate new
venture creators who use their abilities to find innovative, profitable ideas to
rejuvenate and transform the organisation into something new or different and
thereby increase the efficiency of the organisation or obtain advantage over
competitors. These ideas may not necessarily be new products. They could be
ideas for reorganisation, cutting costs or improved business processes.
According to Bateman and Zeithaml (1990), intrapreneurship should manifest
itself on at least two dimensions:
• The establishment of new business ventures within the framework of
the core organisation;
• Strategic renewal of the established business by transforming the key
ideas on which the core business is built (Guth & Ginsberg, 1990)
Bateman and Zeithaml (1990) further said that there are three forces that have
changed the corporate world’s attitude to intrapreneurship:
• Change in demographics have slowed the rate of organisational
growth.
• International competition is becoming more aggressive.
• The nature of production is changing.

Page 14
This new environment demands flexibility and quick response and a different
approach to environmental scanning is required to be able to remain abreast of
changes in the internal and external environment (Cornwall & Perlman, 1990).
Flexibility and quick response are characteristics of intrapreneurs and they are
uniquely qualified to act as change masters in the organisation.
When looking at the characteristics of entrepreneurs discussed previously, it
can be seen that entrepreneurs are not conservative and possess a large
capability for lateral thinking. Entrepreneurs have vision and would find
innovative solutions to problems. These natural entrepreneurial abilities could
be applied to finding solutions to the ineffective usage of IT.
These information entrepreneurs or infopreneurs are a special type of
entrepreneur that exist in organisations in the information industry. Every
organisation has a group of individuals who are agents of change and facilitate
the transformation, taking full advantage of information and the technology
surrounding the information. They are recognised primarily by certain attributes
of their behaviour and mindset (Dance, 1994, p121). Dance (1994, p123) said
that the infopreneur is not recognised in what they are, but in the manner in
which they undertake their work. The following list shows typical behavioural
patterns for the recognition of an infopreneur:
• Infopreneurs learn - and teach - by example.
• Infopreneurs find new uses for current systems.
• Infopreneurs train differently.
• Infopreneurs have different measures of performance.
• Infopreneurs devour information.
• Infopreneurs enlarge their jobs: they see their careers
developing horizontally rather than vertically.
Dance (1994, p123)

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There are similarities between the characteristics of infopreneurs and the
characteristics of entrepreneurs as defined by Bateman (1990), Kurato (1992)
and Burch (1986). These characteristics are inborn and are natural traits that
were not acquired. By recognising these infopreneurs, an organisation can
benefit from them and apply these unique skills effectively.
Luchsinger and Bagby (1987) made a comparison between entrepreneurs and
intrapreneurs and found that although the behaviour of entrepreneurs and
intrapreneurs are similar, some differences do exist. Each depends heavily on
innovative processes, but the setting in which they operate differs. Similarly
infopreneurs require the innovative processes, but the setting is different and
very specific to the environment in which the infopreneurs operate.
As with entrepreneurs, infopreneurs may also have an inability to convert their
ideas or innovations into strategies and business plans that will benefit the
whole organisation and facilitate the change to successful implementation of the
innovative thoughts of the infopreneur. To rectify the situation one of two
routes can be taken. The infopreneurs can develop basic management skills or
they can be supported by people who have the business acumen to convert the
new ideas into practical solutions to achieve a more imaginative and effective
usage of information technology.
Entrepreneurs by their nature require a suitable environment in which to thrive.
Guth and Ginsberg (1990) indicated that entrepreneurial behaviour of middle
managers is directly influenced by organisational conduct and form. The
conduct and form of an organisation consists of its strategic approach and core
values (Cornwall & Perlman, 1990) and the structure (Sathe, 1985) of the
organisation. Top managers influence the organisation through their
management style. Without a positive managerial influence on the
intrapreneurial behaviour of the organisation intrapreneurial and infopreneurial
actions will be inhibited. Infopreneurs as a type of entrepreneur also require an
environment which is conducive to innovative thinking in order to thrive.

Page 16
In a survey done by De Coning and Hill (1993), where middle managers’
perceptions of a number of organisational stimuli that affect their functioning
as intrapreneurs were explored, certain critical areas that warrant further
research were identified and three issues were deemed to be of significant
importance to justify urgent attention. These issues are in brief:
• South African organisations in general are perceived to be bureaucratic and
this factor inhibits innovation.
• An appropriate organisational ethos, which eliminates the historical mistrust
between managers and employees will enhance innovation by employees.
• South African organisations operate within the framework of a rather
narrow vision. This is probably due to the short-term perspective of
organisations as a result of the apartheid era.
The survey by De Coning and Hill (1993) involved a sample of middle
managers and no distinction was made between managers in the various sectors
of industry. There is no evidence to substantiate the view that managers in the
IT industry behave differently to managers in the other industry sectors, as the
basic management processes of finance, human resources, marketing and
production remain the same. The results from the survey of De Coning and Hill
(1993) should thus apply to IT-specific managers. It can be deduced that the
current environments in which information technologists operate are not
optimal and attention must be given to instilling a culture of infopreneurship in
information processing organisations.

Page 17
1.2 Problem statement
In the very competitive Information Systems service industry new and
innovative methods must be put in place to gain competitive advantage. This
applies not only to the normal business processes of the organisation, but also
to ideas for using information technology and systems. Innovation is a primary
characteristic of entrepreneurs and organisations must be geared towards
cultivating the entrepreneurial spirit in their employees to take advantage of
their innovative thinking. The organisational conduct and form directly
influence the level of entrepreneurship in the organisation. The strategic leaders
in the organisation have a direct influence on the willingness and ability of the
employees to act as entrepreneurs through their management style,
effectiveness at coalition building with both peers and higher-level managers
and the diversity of their functional experience (Bartel & Jackson, 1989).
Organisations may have started through the actions of entrepreneurs, but the
entrepreneurial spirit is not necessarily nurtured in the employees after the
initial business growth phase.
By suppressing the entrepreneurial spirit of the employees the company can
lose advantage in the market place by not searching for strategic alternatives in
renewing and transforming the organisation. In an information systems
organisation the information system solutions developed by the organisation on
behalf of clients may not be the optimal solutions and this could impact the
business processes of the clients.
This report explores such an organisation’s willingness to support the
employees as entrepreneurs so that they can identify and exploit new ideas. The
survey establishes the perceptions of staff in the organisation in terms of the
key business dimensions, policy, structure, objectives, culture, management
style, procedural aspects and the extent to which freedom is given to explore
and to innovate.

Page 18
1.3 Research objectives
The company that was surveyed had been in existence for a period of about
twenty-eight years and during this period the senior management had remained
the same. There were few changes in the management team and only a few new
management ideas were integrated into the organisation. The environment in
which the business operates had changed over the twenty-eight year period, but
the management style had remained the same. This has resulted in the
management styles and mechanisms not having kept abreast of the latest
management trends. In a similar vein the company supported a single
technology and there was little rejuvenation of the clients’ systems by the
introduction of later and possibly more effective technologies.
It was suggested that, although the company was established by entrepreneurs,
the entrepreneurial spirit of the employees was being suppressed, with a
resultant reduction in innovative and new ideas for creating solutions to client
information system problems. An objective of this research was to establish the
current entrepreneurial profile of the surveyed organisation as a baseline for
evaluating changes in the extent to which the organisation supports
entrepreneurial behaviour of the employees.
A further objective was to highlight those issues that need to be addressed to
instil organisational encouragement for entrepreneurial behaviour of the
employees. To this end the research results will be presented to the senior
management in an attempt to change the organisational culture and the
management styles.
After changes in management style and methods have been implemented in the
organisation, the survey can be repeated to test the effectiveness of the changes
made.

Page 19
2. Methodology
2.1 Sampling design
The company surveyed consists of 181 people, ranging from junior computer
operators and punch clerks to information systems professionals with twenty or
more years of experience in the information industry. The support personnel,
such as secretaries and administrative staff, were included in the sample as they
form an integral part of the day to day operations of the company.
The organisation consists of eight business units and an executive management
group. The business units are geographically situated in Cape Town, Port
Elizabeth and Durban, with the remaining five in the Gauteng area where the
head office with the executive group is also located. The size of the business
units ranges from four people in Port Elizabeth to sixty-one in Durban.
The primary business of the organisation consists of providing application
systems solutions to clients on a bespoke or outsource basis.
2.2 Research design
The survey used here is an adaptation of that devised by Prof. TJ de Coning
and Ms. Lorna Hill at the University of Stellenbosch Business School to
ascertain the perception of intrapreneurship by middle management in South
African organisations (De Coning & Hill, 1993). The original survey was done
on a random sample of 222 managers who participated in management
development programmes at the University of Stellenbosch Business School.
The sample represented middle managers of South African organisations in all
industry sectors.
The relatively simple instrument was designed to explore perceptions of
employees of a number of organisational stimuli which, according to the

Page 20
underlying theory presented in Chapter 1, affect their functioning as
intrapreneurs. The instrument consists of a number of forced-choice and
Lickert-type questions grouped into three parts:
1. In Part 1, five paired statements regarding the key business dimensions of an
organisation are posed and the respondent is requested to select the
statement which describes the organisation most accurately or is most
applicable. The design of the statements is based on the theory of
entrepreneurship and establishes the extent to which the organisation
supports entrepreneurial behaviour in the core business.
2. Part 2 focuses on the organisation’s behaviour in areas which are considered
critical to establishing or enhancing intrapreneurship. This part consists of
six Lickert-type statements on a five point scale where a selection of 1 is
strong disagreement and 5 is strong agreement with the posed statement.
3. The freedom factors (freedom to explore and innovate) which should be
evident in organisations wishing to enhance intrapreneurship are explored in
Part 3 of the survey. This contains ten statements which can be answered on
a five point Lickert-type scale where a selection of 1 is strong disagreement
and 5 is strong agreement with the posed statement. These factors give an
indication of the extent to which the organisation encourages a climate of
innovation and sustains intrapreneurship.
The survey done by De Coning and Hill (1993) was not specific to any
company or industry sector and for the purposes of the present research the
survey tool was adapted to cater for single organisation usage. The main body
of the questionnaire was retained exactly as designed and employed by De
Coning and Hill (1993). However the following changes were made to the
General Information section of the questionnaire:
Original De Coning and Hill question Replaced for this research paper
How many permanent employees does
your organisation have?
How long have you been employed by the
company?
What is the main business activity of your In which business unit are you employed?

Page 21
organisation?
What is your present position in your
organisation?
Please give a one line description of your
main job activities. Eg.: Secretarial,
Administrative, Development, Middle
Management, etc.
A copy of the questionnaire can be found in Appendix A.
2.3 Data collection
Secrecy of the details revealed in the raw data was guaranteed and the
respondents could remain anonymous. To ensure a large return of the
questionnaires, the infrastructure of the organisation was used to distribute the
questionnaires and collect the raw data. The survey was sent to the
departmental secretaries through the internal mail system with instructions to
distribute them to all the staff they serve. The secretaries were requested to
ensure that all the distributed questionnaires were collected and returned for
analysis. Regular follow up calls were made to the secretaries as a reminder.
Failure to retrieve questionnaires was due to staff members declining to
participate in the survey or absence due to leave or business commitments.
Each questionnaire was marked with an unique identifying mark to ensure that
only original questionnaires are returned and to ensure validity of the returned
questionnaires.
Despite these efforts the return rate was much lower than expected. Of the 181
questionnaires sent out only 42 or 23.2% were returned. Of those returned 5
(or 2.8% of the total) were discarded, one due to remarks written on the
questionnaires and four because the questionnaires were returned with the
demographic details completed, but with no responses. The total number of
questionnaires used for analysis of the data was thus 37 or 20.4% of the total
questionnaires sent out.

Page 22
The reasons for the poor responses to the internal questionnaire were not
analysed. During informal discussions with staff members, however, an
apathetic attitude was sensed, with suggestions that nothing will make a
difference and that the employees do not want to waste their time in pursuing
activities that have no immediate impact on their situation within the company.
There was a concern about the secrecy of the individual responses and the
consequences these may have on the employee’s job progress, despite the fact
that respondents’ names were not required on the questionnaires. This is a
reflection on the culture of the organisation and shows that the employees are
inhibited in their performance in the company.
2.4 Data analysis
The information on the questionnaires was captured using a personal computer
and a simple computerised system developed in Microsoft Excel for Windows
95 Version 7.0. The raw data was captured directly into the Microsoft Excel
workbook and extracted for the purposes of analysis into smaller worksheets.
These smaller worksheets grouped the information into Key Business
Dimensions, Critical Success Areas and Freedom Factors by the factors
pertaining to the groupings.
The data are represented as the actual number of responses for each parameter
and the percentage of each response to all responses. In Parts 2 and 3 the
information was further summarised in groupings of Agreement, Neither Agree
nor Disagree and Disagreement, from the original five point Lickert scale of
Strongly Agree, Agree, Neither Agree or Disagree, Disagree and Strongly
Disagree. This summary allows for a quick view of the information to ascertain
broad trends.
The data were then graphically represented using the graphing facilities of
Microsoft Excel. To reduce transcription errors the Excel spreadsheets were
linked with this Microsoft Word document using Online Linking and

Page 23
Embedding (OLE). Any changes in the results during data analysis would
automatically be reflected in this report.
2.5 Limitations
The respondents had no introduction to entrepreneurship theory and a full
understanding of intrapreneurship is not common. This may have had an
influence on the understanding of the options posed in the questionnaire and
may have an influence on the validity of the survey results. Junior members of
the organisation may not appreciate or know the issues related to the
organisational structure, resource utilisation or general company policy. This
report is, however, based on the perceptions of the staff members and not their
actual knowledge of the subject or the organisational intentions.
Employees with less than six months service with the organisation would not
have been inducted completely and would not know the company fully. This
could skew the results of the analysed data.

Page 24
3. Discussion of findings
3.1 Introduction
Details of findings and a summarisation of the responses to the questionnaire
are given in Appendix C in both tabular and graphical form.
The results from the three parts of the questionnaire are discussed separately to
highlight the findings of the individual parts and then a discussion of all the
parts combined follows.
Each part is dealt with using all responses and then trends in the change of
intrapreneurial perception over years of service with the organisation is
analysed to establish whether duration of service indicates any change in
intrapreneurial perception.
The overall results indicate that the staff have a negative perception of the level
to which the organisation assists with the intrapreneurial behaviour of the
employees.
3.2 Key business dimensions
The key business dimensions component of the questionnaire measures the
perception to what extent the organisational conduct and form is supportive of
the intrapreneurial behaviour of the organisation. The organisational conduct
and form is an indication of the organisation’s strategic approach, the core
values and beliefs and the structure of the organisation.
The overall results (See Figure 2) indicate that more than half of the
respondents have a negative perception of the extent to which the organisation

Page 25
is conducive to intrapreneurial behaviour. The De Coning and Hill (1993)
sample shows that in summary 60.1% of the respondents had the perception
that their organisations inhibit intrapreneurship.
The perception of all employees in the surveyed organisation showed a lower
proportion (54.6%) having the perception that the organisation inhibits
intrapreneurship. This indicates that the surveyed organisation is more
supportive of intrapreneurial behaviour than the larger sample of a number of
different organisations surveyed by De Coning and Hill (1993).
The most notable results are those of the dimension of Commitment to
Opportunity where 62.2% of respondents perceive the organisation to act
slowly to commit itself to a new opportunity and then to remain committed for
a long time. This, in conjunction with the perception that resources are
acquired rather than rented or leased (78.4%) makes for an organisation that is
slow in making use of opportunities. Stevenson and Jarillo (1990) suggested
that organisations should become opportunity-driven and not be driven by the
resources employed. This implies a wider organisational vision providing
17
13
24
8
21
20
23
12
29
16
0
5
10
15
20
25
30
Strategic
orientation
Commitment
to
opportunity
Commitment
of resource
Control of
resources
M anagement
structure
Business Dimension
Response
Conducive to
Intrapreneurship
Inhibits
Intrapreneurship
Figure 4: Respondents’ perception of the key business dimensions.

Page 26
freedom to be intrapreneurial. Flexibility and quick response are characteristics
inherent to entrepreneurial behaviour and, with the traditional notion of control
where resources are owned and usage of additional resources is restricted,
could place the organisation in a situation where an opportunity could be used,
but due to incorrect resources and skills within the organisation, competitors
could gain advantage.
One deviation from the De Coning and Hill (1993) report is in the management
structures. In the six propositions submitted by Stevenson and Jarillo (1990) it
is shown that organisations should assist staff to build suitable networks and
allow them relatively free access to organisational resources. A bureaucracy
does not lend itself to this freedom. The De Coning and Hill (1993) report
indicated a very strong bureaucratic inclination to management structures. The
opinion of the majority (56.8%) of the respondents in the surveyed organisation
however, indicated that the organisation is not bureaucratic. This indicates that
some business dimensions in the surveyed organisation are more conducive to
intrapreneurship than in the larger sample surveyed by De Coning and Hill
(1993).
The perception is that when opportunities are pursued, the minimum number of
resources are committed to the new opportunity. Two thirds of the respondents
had this perception (24 or 64.9% versus 12 or 32.4%). By using the minimum
number of resources when an opportunity is pursued, the risk of the
opportunity will be reduced and the activities in pursuit of the opportunity can
be more responsive.
The main inhibiting factor for support of intrapreneurship is the dimension of
resource control. If this dimension is excluded from the analysis it can be seen
that in summary the organisational conduct and form is marginally conducive to
intrapreneurship. The summary would then show that 51.4% of the responses
indicated an organisation that is supportive of intrapreneurship.

Page 27
In summary it can be seen that the organisation identifies opportunities
irrespective of the current resources, but due to the decision to employ or
acquire resources, rather than rent them, there is not sufficient leverage in the
resources to be able to make use of the opportunities.
3.2.1 Change in perceptions with years service in company
To establish whether the perceptions of employees change with years of service
with the company, the data were analysed in the following classes as filled in on
the questionnaire by the respondents:
Years Employed Responses
1. Less than six months 5
2. Seven to twelve months 4
3. Thirteen to twenty four months 6
4. Two to five years 4
5. Six to ten years 9
6. More than ten years 9
The data were first analysed for each service period for all five business
dimensions and then summarised to establish any trends. Details are available in
Appendix C. Figure 3 shows the perception of staff grouped into the periods of
employment as a percentage of total respondents for each employee period.
The information is available in tabular format in Appendix C. A linear
regression analysis was done to show trends in the data.
During the initial stages of an employees’ service with the company (less than
six months) the perception is on average slightly towards an organisation that is
conducive to entrepreneurship (54.2% conducive). This perception then
increases and in the seven to twelve month class the perception is 65% towards
the organisation being conducive to entrepreneurship. However this perception
changes with time so that most of the respondents in the employment period
classes two to five years and six to ten years indicated a perception that the
organisation inhibits entrepreneurship.

Page 28
If it is assumed that the people with longer service with the organisation are
also the people with the most experience in information technology and systems
then the summary of the key business dimensions shows that it is the more
experienced people who have a perception that they are inhibited in their
actions. These are the people who should take leadership in the organisation
and in supplying solutions to clients information systems. Due to the fact that
they are inhibited and not allowed to show innovation the quality of the
developed information solutions could suffer. This could have an impact not
only on the clients’ business, but potentially also on the profitability of the
organisation.
3.3 Critical success areas for establishing intrapreneurship
The critical success areas for establishing intrapreneurship are an indication of
the degree to which behaviour of the organisation enhances intrapreneurship.
Here the general trend is that the staff perceive the organisation not to be
supportive to the establishment of intrapreneurship.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
<6
Months
6 - 12
Months
13 - 24
Months
2 - 5
Years
6 - 10
Years
> 10
Years
Length of Service
Responses
Conducive to
Intrapreneurship
Inhibits
Intrapreneurship
Linear (Conducive to
Intrapreneurship)
Linear (Inhibits
Intrapreneurship)
Figure 5: Change in the perceptions of employees by period employed.

Page 29
The analysed results of the data are shown in Appendix C and represented in
tabular and graphical form. Figure 4 shows the summarised data.
The summary of all the data indicates that 55.7% disagree or strongly disagree,
with a third (32.4%) strongly disagreeing that the organisation enhances
intrapreneurship. Only 20.8% of the respondents agreed or strongly agreed that
the organisation is supportive (10.8% strongly agreed).
It is especially in the areas of procedures and regulations, the culture of the
organisation and the management style where the respondents perceive the
organisation to be non-supportive. In all three of these areas 32.4% of the
respondents strongly disagreed that the organisation is supportive in the
establishment of intrapreneurship.
Only seven of the total responses showed a strong agreement with any critical
success area. These seven responses were made by four people. Two responses
19
22
15
24
22
21
11
5
15
7
8
66
10
7
6
7
10
0
5
10
15
20
25
Critical Success Areas
Responses
Disagree Neither agree or disagree Agree
Figure 6: Summarised responses to Critical Success Factors.

Page 30
were made to the extent to which the business objectives support
intrapreneurship. On closer inspection it was found that one response was made
by a junior computer operator, and in view of the scope of the job
responsibilities, the perception of the organisational objectives could not be
very clear. The other strong agreement that the objectives of the organisation
are supportive to intrapreneurship was made by a network controller in a client
support role. No reason can be found for this response.
Four respondents agreed strongly that the management style supports
intrapreneurship. On closer inspection no reason could be found for these four
responses. Two of these responses were from a single business unit and the
other two responses were from different business units where the respondents
in general had a negative perception of the organisation’s support for
entrepreneurship.
What is notable is that 15 respondents (40.5%) could not agree or disagree
with whether the objectives of the organisation are conducive to
intrapreneurship or not and 29.7% of the respondents could not agree or
disagree with whether the policies support the establishment of
intrapreneurship. These responses could be perceived as “do not know”. It is
possible that the staff has no idea what the objectives or the policies of the
organisation are or were unable to make the judgement.
The responses to the key business dimensions component of the questionnaire
indicate that 54.6% of staff members perceived the management structures to
be non-conducive to intrapreneurship. This correlates with the perception of
55.7% of respondents who disagree or strongly disagree that the organisation
supports the establishment of intrapreneurship.

Page 31
3.3.1 Change in perceptions of critical success factors with years
service in company
To establish whether the perceptions of employees change with years of service
with the company, the data were analysed according to length of service divided
into the same categories as were used in Section 3.2.1.
The data was first analysed for each service period for all six factors required for
establishing entrepreneurship and then summarised to establish any trends. Details
are available in Appendix C. Figure 5 shows the perception of staff grouped into
periods of employment as a percentage of total responses for each employee period.
The information is available in tabular format in Appendix C.
From the graph can be seen that there is an increase in the perception of the
extent to which the organisation supports intrapreneurship over the initial two
years of employee service. However, this perception changes and eighty-two
percent of the employees in the two to five year group disagree strongly that
the organisation supports intrapreneurship with a low proportion (4.3%)
perceiving that the organisational behaviour supports intrapreneurship. During
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
<6
Months
6 - 12
Months
13 - 24
Months
2 - 5
Years
6 - 10
Years
> 10
Years
Service Period
Responses
Figure 7: Perception of employees grouped into periods of employment as a
percentage of total responses for each employee period.

Page 32
the longer service periods of more than five years there is a slight reduction in
the perception of lack of organisational support for intrapreneurship (from
82.6% of respondents to 68.5%).
By calculating the arithmetic mean of the data grouped into the six employment
periods and plotting the calculated mean for each employment period it can be
seen that the initial perception of the organisation being supportive of
entrepreneurial behaviour changes strongly at the two to five year employment
period (See Figure 6). There is a slight increase after the five year employment
period and then a continued decline in perception of the way in which the
organisation is supportive of entrepreneurial behaviour.
The linear regression curve shows a reduced perception of the way in which the
organisation supports intrapreneurship as length of service increases.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
<6
Months
6 - 12
Months
13 - 24
Months
2 - 5
Years
6 - 10
Years
> 10
Years
Service Period
Perception(1=Disagree,5=Agree)
Perception / Period Total Perception Linear (Perception / Period)
Figure 8: Trend of change in perception over all periods.

Page 33
3.4 Freedom factors in the organisation
The freedom factors are an indication of how liberal the organisation is in
allowing staff to express their intrapreneurial spirit on behalf of the
organisation.
The results are shown in tabular and graphical format in Appendix C and
summarised in Figure 7.
Some of the staff perceive that they are free to make suggestions and that they
will be allowed to take ownership of these ideas or suggestions. This is,
however, not a very strong perception as 45.8% agree or strongly agree that
there is freedom to make suggestions and 41.7% disagree or strongly disagree.
Three respondents (12.5%) neither agreed or disagreed.
13
4
21
23
11
14
20
23
15
19
8
15
8
4
11
13
10
7
4
12
16
17
7
10
14
10
7 7
18
6
0
5
10
15
20
25
Freedom Factor
Response
Figure 9: Employees’ perception of freedom factors.

Page 34
A total of fifteen respondents (40.5%) did not agree or disagree whether they
will be allowed to take ownership of any ideas they put forward. This is an
indication that ideas may be put forward, but nothing happens with these ideas
and there is no certainty as to who takes ownership of the ideas, if anybody.
One respondent did not offer any response, which further supports the idea that
staff do not know whether they will be given ownership of ideas. There is,
however, some agreement (45.9%) that ownership is given to the creator of the
idea, but the perception is not very strong. Eleven (29.7%) respondents agreed
and six (16.2%) agreed strongly.
Experimentation with any ideas put forward is not tolerated. Staff perceive that
they will not be given time and financial support to pursue their ideas and that
failures will not be tolerated due to a lack of patience in the organisation. Of
the 21 respondents (56.8%) that disagree or strongly disagree that
experimentation with ideas is tolerated, twelve (32.4%) disagreed and nine
(24.3%) strongly disagreed.
There was strong disagreement that the organisation will give time and financial
support to creativity. More than a third (35.1%) strongly disagreed and 27%
disagreed that time and finances will be made available. This total of 62.2% of
all respondents that are in disagreement with the availability of time and
financial resources contrasts strongly with the total of 27.0% of respondents
that agree or strongly agree. It is notable that more respondents strongly
agreed (35.1%) than agreed (27.0%). Four respondents (10.8%) neither agreed
or disagreed. This polarisation of perceptions was further investigated, but no
explanation could be found with the limited data available.
Internal politics plays a large role in suppressing intrapreneurship. In the
surveyed company two thirds (62.2%) of the respondents agreed or strongly
agreed that internal politics and competition stifle intrapreneurship. Only seven

Page 35
respondents or 18.9% indicated that internal politics do not play a role in the
organisation. The data are insufficient to draw any further conclusions
The multi-functional team parameter shows an equal inclination towards
agreement and disagreement with very little uncertainty. Fifteen respondents
(20.5%) disagreed or strongly disagreed and eighteen (48.6%) respondents
agreed or strongly agreed.
This factor was analysed further and the information was grouped by business
unit and summarised in Figure 8. Only five of the eight business units returned
more than one response.
The analysis of the data for the various business units shows no general trends
and large differences in the results between the different business units. From
the results it seems that the various business units are not integrated at
management level. Owing to the geographical distribution of the units they
operate in isolation from one another and there is no evidence that resources
are utilised across teams. The management styles of the people managing the
0
4 4
3 4
0
0 0
2
2
4
2 2 3
6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Unit 1 Unit 2 Unit 3 Unit 4 Unit 5
Business Unit
Responses(%ofTotal)
Figure 10: Multi-functional team parameter by business unit.

Page 36
various business units are different and this will play a role in the perception of
the employees.
3.4.1 Change in perception of freedom factors with years service in
company
To establish whether the perception of employees change with years of service
with the company, the data were analysed according to the length of service, as
in Sections 3.2.1 and 3.3.1.
The data were first analysed for each service period for all ten factors which
encourage a climate of innovation in the organisation. and then summarised to
establish any trends. Details are available in Appendix C. Figure 9 shows the
perception of staff grouped into periods of employment as a percentage of total
respondents for each employee period. The information is available in tabular
format in Appendix C.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
<6
Months
6 - 12
Months
13 - 24
Months
2 - 5
Years
6 - 10
Years
> 10
Years
Service Period
Responses
Figure 11: Perception of employees grouped into periods of employment as
a percentage of total responses for each employee period.

Page 37
A notable trend is observed when the change in the respondents’ perception of
the freedom factors are compared with the responses of the critical success
factors discussed in Paragraph 3.3.1. The employees generally agree that the
organisation encourage a climate of innovation during the initial stages of
employment. This agreement, however, changes and it is also n the two to five
year employment period that the perception is one of disagreement with the
factor that the organisation encourages a climate of innovation.
By summarising the data and with further analysis the trend in change in
perceptions is one of reduction from an initial disagreement to almost strong
disagreement (See Figure 10). This regression compares with the reduction in
perception, as discussed in Paragraph 3.3.1, that the critical success factors
support intrapreneurial behaviour.
0.00
0.50
1.00
1.50
2.00
2.50
<6
Months
6 - 12
Months
13 - 24
Months
2 - 5
Years
6 - 10
Years
> 10
Years
Service Period
Perceptions(1=Disagree,5=Agree)
Perception / Period Employed Total Perception
Linear (Perception / Period Employed)
Figure 12: Trend in change of perception of freedom factors over all periods.

Page 38
4. Conclusions
4.1 Summary and conclusions
The research was of a qualitative nature and the objective was to make
suggestions on what changes should be implemented in the company to
encourage the entrepreneurial behaviour of the employees. This was achieved
by surveying the perceptions of the employees in the company in this respect,
based on the key business dimensions of the organisation, factors that are
deemed necessary to establish an entrepreneurial spirit in the organisation and
the extent to which the employees are given freedom to innovate. This survey
was augmented by some comparisons made with the results from the De
Coning and Hill (1993) survey. Based on the underlying theory and the findings
discussed in Chapter 3 a number of conclusions may be drawn and
recommendations made.
The survey instrument was an adaptation of that used by De Coning and Hill
(1993) to test the entrepreneurial behaviour of South African organisations.
The questionnaire was sent to 181 employees, but only thirty-seven could be
used in the analysis. The following conclusions were drawn.
Although the surveyed company does encourage entrepreneurial behaviour in
some respects, the general perception of the employees is that the organisation
inhibits entrepreneurial behaviour. This is especially evident in the group of
employees who have been in the employ of the company for two to five years.
There are certain trends visible and these point to the fact that the organisation
does not support the employees in identification and exploitation of
opportunities. The findings show that the employees perform the tasks
allocated to them within the framework of their jobs, but they do not
participate actively in rejuvenating the organisation or question the established
way of performing tasks. The responses have shown that the environment is not

Page 39
bureaucratic, but the general environment inhibits innovation and does not
make full use of the employees’ potential.
The most notable areas where the organisation is not conducive to
intrapreneurship are in the business dimension of resource control, the
perception that procedures and regulations inhibit the establishment of
intrapreneurship, the lack of time and financial support and the inhibiting effect
of internal politics. The organisation’s policies and objectives are unknown to a
large number of the respondents. This could be because the employees’
knowledge of the objectives is actively suppressed, so that they do not have an
active interest in making suggestions for improvement.
The information asset within an organisation is a non-tangible asset, but large
amounts of money are spent on managing the resource. Organisations are
becoming totally dependent on information that is controlled by technology,
and to obtain and retain business competitive advantage the financial resources
contributed to information technology and systems must be used optimally.
With more organisations utilising outside providers of information technology
to manage their information resources it is imperative that outsource
organisations not only stay in the forefront of technology, but also utilise the
technology in an innovative manner that will provide a larger return on
resources invested. The visionaries who will be able to utilise the available
technology differently and more effectively are the entrepreneurs in the
organisation. If the entrepreneurial spirit of the people in the organisation is
suppressed, the scarce IT human resources will not be utilised to their fullest
capability.

Page 40
The surveyed company shows a number of areas where entrepreneurial behaviour
is suppressed and the longer the employees remain with the company the more the
perception grows that the organisation inhibits entrepreneurial behaviour. The
overall picture is that the organisation has a low entrepreneurial profile that is not
supportive of the employees. The employees are inhibited to the extent that they
cannot use their natural innovative talents in order to, not only find new and more
profitable ways of running the business, but also to find innovative computerised
solutions to client business problems.
The recommendations that follow will summarise actions that should be taken to
improve the entrepreneurial profile of the company.
4.2 Recommendations
By comparing the factors that should be evident in an organisation that
supports entrepreneurial behaviour and the entrepreneurial profile of the
surveyed company, and taking into consideration the needs of the IT industry,
certain management recommendations can be made. Implementation of these
recommendations will contribute to improvement of the entrepreneurial profile
of the company with a resultant improvement of the service provided to the
clients.
The main areas that should be considered are the following:
• Resource control.
• Procedures and regulations.
• Internal politics and competition.
• Time and financial support.
• Nurture intrapreneurial behaviour of employees.
These recommendations are dealt with individually in the following sections.
4.2.1 Resource control
The business dimension of resource control deals with the notion that it is
easier for an organisation to react to opportunities or changes in the

Page 41
environment if resources are not owned. The surveyed company owns its
resources and will therefore not be able to change the resource pool sufficiently
rapidly to make use of opportunities.
It is recommended that human resources should not become permanent
employees of the company, but that resources for specific projects should be
acquired when needed.
4.2.2 Procedures and regulations
The procedures and regulations in an organisation can have a severe inhibiting
effect on the way employees operate and can restrict innovative behaviour.
Although formal procedures and regulations are required in an organisation,
these should be mainly of a guiding nature, rather than inhibiting the daily
activities of the employees.
4.2.3 Internal politics and competition
Politics and power in an organisation are very closely related, so that people
who play politics in an organisation successfully will obtain more power. It can
be seen from the discussions on entrepreneurial profiles that entrepreneurs are
not political players. They obtain their power through factors such as a desire
to achieve, hard work and being reward-orientated. If the nature of the
organisation is such that power is attained through playing politics and not
through the natural characteristics of entrepreneurs, the entrepreneurs will be
stifled.
4.2.4 Time and financial support
The indication from the survey is that a lack of time and financial support
curtails creativity. Creativity is a primary characteristic of entrepreneurs and if
it is not possible to be creative due to a lack of support innovative ideas for the
usage of information technology will be inhibited.

Page 42
It is recommended that more finance and time be made available to employees
to create new solutions to information system problems. These additional
resources, should, however be balanced by return on the money invested.
4.2.5 Nurture intrapreneurial behaviour of employees.
The analysis of the change in perception of employees with duration of employment
have highlighted that there is an initial perception that the organisation supports
intrapreneurial behaviour. This however changes with duration of employment and
it is especially in two to five year employment period that the perception is lowest.
The people with two to five years of service with the organisation have experience
of the way in which the company operates and have knowledge of the client base.
The initial perception of support in intrapreneurial behaviour must be sustained by
the organisation to enable the employees to be more innovative in their daily
operations.
In summary, by implementing the above recommendations to improve the
entrepreneurial profile of the surveyed company the organisation could be
rejuvenated and business efficiency improved to increase market share and
profits. By nurturing the entrepreneurial spirit of the employees better solutions
to business information problems can be developed for clients, with an
improved return on resources invested in technology.

Page 43
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6. Appendixes

Page 48
6.1 Appendix A - Example of questionnaire

Page 49
6.2 Appendix B - Copy of letter from University of
Stellenbosch

Page 50
6.3 Appendix C - Tables and graphs

Page 51
6.4 Appendix D - Formulae used
Arithmetic mean computed from grouped data
fu
N
∑




 cMean = A +
Where:
A = Class mark
f = Class frequency
u = Number of responses per class
N = Sum of frequencies
c = Class intervals

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