An assessment of the determinants of corporate entrepreneurship in agricultural businesses : an integrated framework

Abstract

The role of entrepreneurship and innovation are becoming increasingly important for businesses to maintain and enhance their competitiveness. This also holds true for agribusinesses in the agricultural sector as an important contributor to the South African economy and its vital role in the food security of any country. Agribusinesses play a vital role in the agricultural sector as the suppliers of farming requisites, marketers of agricultural commodities, and providing services such as storage and transport. Agribusinesses in South Africa however face a number of challenges that have a negative effect on their ability to compete internationally. Agricultural sector related challenges include the deregulation and liberalisation of the agricultural sector, capacity constraints in terms of arable land and water and a lack of funds in agricultural research and development. The international competitiveness of agribusinesses has also shown a decline over the past number of years. More specific challenges include "unfair competition" in the form of government subsidies paid to South Africa's main agricultural trading partners. The primary objective of this study is twofold: Firstly, to investigate the determinants of corporate entrepreneurship in agribusinesses in South Africa and secondly to propose an integrated framework that can facilitate the process of establishing and maintaining an entrepreneurial climate within agribusinesses in South Africa. The study included a literature review on corporate entrepreneurship and the determinants required to foster an entrepreneurial climate within businesses. Structured questionnaires were administered to all managers in the five largest agribusinesses in South Africa. Three smaller agribusinesses also indicated their willingness to participate in this study and were included and 533 usable questionnaires were returned. Construct validity of the measuring instrument was assessed by means of a principle component exploratory factor analysis and by calculating Cronbach alpha coefficients. Regarding the entrepreneurial orientation survey, five factors describing the theoretical dimensions of proactiveness, autonomy, risk-taking, innovativeness and competitive aggressiveness were extracted. The relationship between the five extracted factors was examined by means of Pearson's correlation coefficients (r). The results indicated that there are statistical significant correlations between all the variable combinations. Furthermore, practical significant correlations were calculated between the variable proactiveness and two other variables innovativeness and competitive aggressiveness. The differences in mean values between the demographic variables and the entrepreneurial orientation variables were examined by independent t-test (p-values) and effect sizes (d-values). The results indicated no practical significant difference for any of the variables. Regarding the entrepreneurial climate survey, seven factors describing the theoretical dimensions of management support/encouragement, customer orientation, rewards/incentives, strategic intent, idea generation, discretionary time and organisational learning were extracted. The relationship between the seven extracted factors was examined by means of Pearson's correlation coefficients (r). The results showed that practical significant correlations were calculated between the variable management support/encouragement and four other variables customer orientation, rewards/incentives, strategic intent and idea generation, between the variable combinations of rewards/incentives and strategic intent and idea generation and finally between the variable combination of strategic intent and idea generation. The differences in mean values between the demographic variables and the entrepreneurial climate variables were examined by independent t-test (p-values) and effect sizes (d-values). The results indicated no practical significant difference for any of the variables. As far as the perceived success survey is concerned, two factors describing the theoretical dimensions of business development and improvement and business growth were extracted. The relationship between the two extracted factors was examined by means of Pearson's correlation coefficients (r). The results showed that practical significant correlations were calculated between the two variables. The differences in mean values between the demographic variables and the entrepreneurial climate variables were examined by independent t-test (p-values) and effect sizes (d-values). The results indicated no practical significant difference for any of the variables. Section B of the questionnaire was to determine the extent to which managers at agribusinesses were inclined towards an entrepreneurial mindset and consisted of a self assessment and superior assessment of the entrepreneurial characteristics. The results indicated that in general respondents viewed themselves as well as their superiors as having the ability to behave in an entrepreneurial way. There was however a number of important characteristics that poses some concern for entrepreneurial behaviour to manifest itself within the agribusinesses. In order to determine how respondents' perceptions of their relative entrepreneurial characteristics compare to those of their superiors, the mean scores are compared by means of a dependent or paired t-test (p-values) and effect sizes (d-values) in terms of the entrepreneurial characteristics measured. The results indicated that more than half of the entrepreneurial characteristics showed a statistical significant difference, however none were of practical significance. Finally, recommendations were proposed by means of an integrated framework that could assist agribusinesses to establish and maintain corporate entrepreneurship within these businesses.

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