Description
Thailand, even after the financial crisis of 1997, was facing the problem of long run competitiveness.
Corporate Entrepreneurship Characteristics and Organizational
Innovativeness of Large Enterprises in Thailand
Piyaporn Aeimtitiwat
Sang M. Lee *
ABSTRACT
Thailand, even after the financial crisis of 1997,
was facing the problem of long run competitiveness.
Therefore, to succeed in the global marketplace, Thai
enterprises must learn how to innovate and develop
new businesses to be better and faster than their
competitors. Corporate entrepreneurship (CE) is re-
cognized as a potentially viable means for promoting
and sustaining corporate competitiveness in the
long-term. However, since limited research exists
concerning CE in developing countries, this paper
represents an initial effort in this area. Thus, the pur-
pose of this study is to investigate the significance
that CE has on the organizational innovativeness of
large enterprises in Thailand. This research operated
under the theoretical framework established by Quinn’s
landmark article, “Managing innovation: Controlled
chaos” published in the Harvard Business Review in
1985, that there are six major characteristics present
in a large corporation that are successful contributors
for developing organizational innovativeness. Those
characteristics are atmosphere and vision, orienta-
tion to the market, small flat organizations, multiple
approaches, interactive learning, and skunk works.
Relatedness to current business and firms’ nationality
whether they are MNCs or Thai firms were set as
moderating variables. The study also seeks to know
whether there is any difference in CE characteristics
associated with organizational innovativeness be-
tween large enterprises in developed and developing
countries. Our sample was drawn from 110 large
enterprises of listed companies in the stock exchange
of Thailand within eight major industries. The result
signifies that there are four characteristics of CE
which significantly correlate to organizational inno-
vativeness of large enterprises in Thailand, -- atmos-
phere & vision, orientation to the market, interactive
learning and skunk works. Moreover, organizational
innovativeness of large enterprises in developed
countries significantly differs from those in
developing countries. Lastly, relatedness to current
*Prof. Dr. Sang M. Lee
University Eminent Scholar, Regents Distinguished Pro-
fessor, Chairman of Department of Management, College
of Businees Administration, University of Nebraska–
Lincoln, Lincoln, U.S.A.
Advisor
business relates to organization innovativeness.
Thus, developing a concept of CE in Thailand may
be one solution to build up growth based on efficien-
cy, which would be competitive in the long run.
????????
??? ?? ?????????? ???? ??? ????????????????? ?????
2540 ??????????? ????? ?????? ??? ??? ????? ??????
???????????????????????????? ??????????????????????
?????? ???? ?????????? ?? ????? ?????? ??? ????? ????? ??? ??
??????????????????????????????????????????????????????
??????? ???????????????? “??????????????????????????
?? (CE)” ?????????????????? ????????????????????????
?? ???????????? ???? ???? ??????? ????? ??????????????
???????????????????????????? ???????????????????????
????????????? CE ?????????????????????????????????? ???
????????????????????????????????????????????????????????
??? ???? ????????????????? (CE) ??? ?? ?? ??????? ??????-
???????????????????????????????? ????????????
????? ????????? ???????? ?????? James Brian Quinn
????????????????????????????? Harvard Business Review
???? 1985 ???????????????????????????? 6 ?????? ??????
????????????????????????????????????????????????????
??? ??????????????????????? ???? ? ??????????? ??
1) ????????????? ???????? 2) ????????????? ???????
3) ????????? ??? ?????????????????? 4) ???????? ???? ?
????????????? 5) ??????????????????????????????????
??? ??? 6) ??????????????????????????????????????????
??????????????????????????????????????????????????????
??????????????????????????????????????????????????
???????????????????????????????????????? ????????????
????????????????????????????????????????????????????
????????????????????????? ????????????????????
?????? ???????? ?????????????????????????????? ???????
???????????????????????????????????????? ????????????
???? ??? ??????? ??????????? ???? ??? ??? ??????????
?? ???? 110 ?? ???? ??? 8 ?? ???????????? ????????????
????????? ? ?? ????????? 4 ?? ??????????????? ?????????
???????? ??? ???? ???? ??????????? ???????????????????
???????? ??????????? ??? ??? 1) ????????????? ???-
????? 2) ???????????????????? 3) ??????????? ????? ?????
???????????????? ??? 4) ??????????????????? (?????????????
??????) ?????????? ?????????????????????????? ?????????
???????????????????????????????????????????????-
?? ????????? ??????????? ?? ?????? ???????????? ??? ?
????? ???????????? ?????????????????????? ??????????????
???????????????? ????????????????????????????????????
????????? ???????????????????? ????“??????? ???????-
??????????????” ??????????????? ????????????????
???? ????????? ?????????? ???? ?????????????????????
??????????? ????????????????????????????????????
INTRODUCTION
Today, the macroeconomic environment has
started to recover to various degrees but many firms
are still struggling to turn their performance around.
How can managers of these firms as well as their
international investors and lenders encourage these
turnarounds? According to Morris & Kuratko (2002),
the answer is and always will be sustainable com-
petitive advantage. The challenge for organizations
in today's marketplace is to build competitive
advantage.
Much discussion on the East Asian crisis has
focused on financial problems, however the financial
problem might be only symptomatic of the real
(Kittiprapas, 2000). Actually, there are deep-rooted
problems of the structure of the Thai economy
such as the problem of weak competitiveness and
inefficiency as Krugman (1994) has pointed out. The
problem of competitiveness tends to support
Krugman’s (1994) argument that Asia’s sustainable
growth had arisen from the more intensive use of
inputs (i.e., cheap labor and raw materials) and
mobilization of resources rather than from increases
in efficiency. Increased efficiency of labor would
come from improved management or technological
knowledge, which would underline sustainable and
dynamic growth. Krugman (1994) argues that rapidly
growing East Asian economies show little evidence
of improvement in efficiency and technological pro-
gress, but instead rapid of inputs.
Thailand, even before the crisis, was facing the
problem of long run competitiveness (Kittiprapas,
2000). If it is true that the Asian economic growth
has built up on higher use of inputs from resource
mobilization rather than technical progress and
efficiency, then it is already time to address this
weakness. This can only be accomplished through
continuous innovation and the creation of new ideas.
Building a country’s long run competitiveness and
increasing efficiency would lead to a more sustain-
able growth of the Asian region (Kittiprapas, 2000).
Chalamwong (1998) pointed out that in order to
maintain the strength and dynamism of the Thai
economy, aside from the gradual reform of the
political system, the non-political sectors, especially
business sectors must play a key role in finding
effective solutions to the bottlenecks faced by the
country. The strengths of the non-political sectors
must be put to work in a hurry to build up public
confidence since the Thai economy has begun to
slow down for the first time in so many years.
Therefore, to succeed in the global marketplace
for new goods and services, Thai firms must learn
how to innovate and develop new businesses better
and faster than their competition. To do this they
require a special entrepreneurial strategy-one that is
much different from the traditional strategy of Thai
business-to achieve the maximum advantage in glo-
bal competition. According to previous studies, CE
should be recognized as a key factor in today's
increasingly competitive, global economy. CE is also
important to a firms' long-termcompetitiveness (Hitt et
al., 1999). Developing a concept of CE in Thailand
will be one solution to build up growth based on
efficiency instead of utilizing inputs and mobilizing
resources spatially, which would not be sustainable
in the long run. However, since limited research
exists concerning CE in developing countries, this
paper represents an initial effort in this area.
In general, CE can be a significant emerging area
in both strategic and entrepreneurial management.
Research in CE will make a stronger contribution to
scholars and practitioners in both fields of strategic
management and entrepreneurship in developing
their knowledge and managerial practices. Results
of this study will significantly contribute better un-
derstanding about characteristics of organization,
specifically in a developing country like Thailand in
developing organizational innovativeness, which will
lead to long-termcompetitive advantages in the glo-
bal market. Thus, developing a better understanding
of how organizational innovativeness is critically
important, not only to those starting new innovations,
but also to society as a whole.
LITERATURE REVIEW, CONCEPTUAL FRAME-
WORK AND HYPOTHESES
This research project was designed to investigate
the significance that corporate entrepreneurship
has on the organizational innovativeness of large
enterprises in Thailand. This study operated under
theoretical framework established by Quinn (1985).
Throughout the paper, we make the assumption
which is supported by the evidence provided by
Quinn’s landmark article, “Managing innovation:
Controlled chaos” published in the Harvard Business
Review in 1985, that there are six major charac-
teristics present in a large corporation that are suc-
cessful contributors for developing organizational
innovativeness. Those characteristics are atmos-
phere and vision, orientation to the market, small
flat organizations, multiple approaches, interactive
learning, and skunk works. Proper control variables
were industry size, age and sector. Moreover, related-
ness and un-relatedness to current businesses were
set as moderating variables as well as MNCs and
Thai firms. Conceptual framework of this paper is
presented as follow:
Figure 1.1: A Model of Corporate Entrepreneurship Characteristics and Organizational Innovativeness of Large
Enterprises in Thailand
Corporate Entrepreneurship
(CE) Characteristics
• Atmosphere & Vision
• Orientation to the Market
• Small & Flat Organizations
• Multiple Approaches
• Interactive Learning
• Skunk Works
Atmosphere & Vision
The first characteristic of CE in developing a
successful internal venture is corporate ‘atmosphere
and vision’. According to Quinn (1985), they mean
that innovative companies have a clear-cut vision of
an innovative company and the support necessary to
sustain it. The entrepreneur’s vision must be per-
meated throughout the organization in order for
employees to understand the company’s direction
and share in the responsibility for its growth
(Kuratko & Hodgetts, 2004). Continuous innovation
occurs largely because a few key executives have a
broad vision of what their organizations can
accomplish for the world and lead their enterprises
toward it (Quinn, 1988; Hurley & Hult, 1998). These
arguments suggest:
Hypothesis 1a: Organizational innovativeness is
positively related to the presence of a (clear) vision
to create innovation in the organization.
Strong support from companies is required to
sustain their vision. Scholars have recognized that the
top management has a significant role in creating an
atmosphere wherein employees are encouraged to
experiment (Seshadri & Tripatht, 2006). According
to them, even if the top management wants to create
an innovative and intrapreneurial organization, there
is a need for intrapreneurs within the system who
could execute the process of intrapreneurial inno-
vation. These evidences suggest:
Hypothesis 1b: Organizational innovativeness is
positively related to organizational atmosphere.
Organizational
Innovativeness
• External new venture
• Internal new venture
• New products/ services
• Technological processes/
administrative procedures
development
• Submission of new project
proposals
Relatedness vs.
Un-relatedness to
Current Business
H1-H6
Thai Firms
vs. MNCs
H7
H8
Orientation to the market
The second characteristic of innovative com-
panies based on Quinn (1985) is to tie their visions to
the realities of the marketplace. Parsons (1992)
indicated that innovative companies show an im-
portant characteristic of focusing on customer value
rather than technological advance or clever mar-
keting. Market knowledge is an important driver of
innovativeness (Drucker, 2002; Hurley & Hult,
1998). A clear understanding of the customers’ need
can yield a wealth of ideas for new ventures (Mac-
Millan, 1987). Pelham (2000) found that small firms
with a strong market orientation can better leverage
their advantages of simpler organizational structure,
flexibility, adaptability, capacity for speed, and pro-
pensity for innovation in these environments. There-
fore, we hypothesize:
Hypothesis 2: Organizational innovativeness is
positively related to the organization’s degree of
market orientation.
Small & Flat Organization
From Quinn’s perspective, small flat organiza-
tions are represented by the way innovative com-
panies keep the total organization flat and project
teams small. Initiation is primarily the domain of
autonomous individuals or very small groups in the
entrepreneurial firm (Burgelman, 1984). Previous
studies indicate that corporations must keep venture
business groups small (Alterowitz & Zonderman,
1988). Because it is difficult for people to focus
simultaneously on too many goals, many larger firms
create “multiple companies within the companies”
(Quinn, Baruch & Zien, 1997). Successful innova-
tors establish cross-functional project teams which
consist from 5 to 500 people, depending on the
challenge (Parsons, 1992). According to Du Pont
Review (1988), companies can build a first com-
mercial plant that is small and flexible, then, put
together a lean dedicated entrepreneurial team with a
single clear leader. These evidences suggest:
Hypothesis 3a: Organizational innovativeness is
negatively related to the size of project teams.
Most innovative companies keep the total
organization flat. The hierarchical distance from top
to bottom must be shortened (Brandt, 1986) in order
to promote speed and flexibility in organizational
communication. Oden (1997) indicated that if
hierarchy was central to traditional organizations, the
lack of hierarchy is central to the future innovative
organization. The innovative organization is much
flatter, with fewer levels of managers. The advan-
tage of the flat organization is supposed to be, in a
nutshell, that channels of communication are opened
up and information flows more easily to all parts of
the organization. In fast changing environments, say
where technology is advancing rapidly, flat structures
can often process new information more effectively
and help organizations respond more quickly to it
(Case & Singer, 1997). These arguments suggest:
Hypothesis 3b: Organizational innovativeness
is negatively related to the number of levels of the
organizational structure.
Multiple Approaches
Multiple approaches are indicated by the
paralleled development of several projects encou-
raged by innovative managers (Quinn, 1985).
According to Quinn (1979), for every success there
are hundreds of failures. In his later research, Quinn
(1985) supports that one cannot be sure at first which
of several technical approaches will dominate a field.
Almost every entrepreneur has experienced at least
one failure before establishing a successful venture
(Hisrich, 1986). Du Pont Review (1988) also indicates
that successful ventures manage uncertainty with
flexible planning. Thus, innovative managers of
almost all large scale innovative companies con-
ciously encourage the pararelled development of
several projects within the companies. The old ideas
can be a primary source of multiple approaches as
well. Old ideas can become powerful solutions to
new problems if innovative companies are skilled at
seeing analogies (Hargadon & Sutton, 2000). There-
fore, we hypothesize:
Hypothesis 4: Organizational innovativeness is
positively related to the number of parallel projects
that an organization is pursuing.
Interactive Learning
From Quinn’s perspective, interactive learning
means that learning and investigation of ideas cuts
across traditional functional lines in the organization
within an innovative environment. Parsons (1992)
indicated that innovative companies show a key
characteristic of innovating across all their functions
and innovate up and down the business system
with their suppliers and distributors. Rothwell et al.
(1974) and Freeman (1982), among others, have
shown that innovative firms co-operate with outside
scientific and technical establishments and make
deliberate efforts to survey externally generated
ideas. Study by Avlonitis et al. (1994) stipulates the
benefits to be gained from the co-operation of a firm
with research institutes and universities and from the
prompt consideration of innovative ideas. Therefore,
we hypothesize:
Hypothesis 5: Organizational innovativeness is
positively related to the existence of inter-functional
teams and inter-functional processes in the organi-
zation.
Skunk Works
Finally, Quinn indicates that skunk works are
required in every highly innovative enterprise by
using groups that function outside traditional lines of
authority. This eliminates bureaucracy, permits rapid
turnaround, and instills a high level of group identity
and loyalty. Dess & Lumpkin (2005) stated that one
method that companies can use to effectively foster
CE via autonomy includes using “skunkworks” to
encourage independent thought and action. To help
managers and other employees set aside their usual
routines and practices, companies often develop
independent work units called “skunkworks.” The
term is used to represent a work environment that
is often physically separate from corporate head-
quarters and free of the normal job requirements and
pressures. Skunkworks are often used to encourage
creative thinking and brainstorming about new
venture ideas. Drucker (1985) supports that the new
entrepreneurial has to be organized separately from
the old and existing. The best, and perhaps the only,
way to avoid killing off the new by sheer neglect is to
set up the innovative project from the start as a
separate business. The reason why a new, innovative
effort is best set up separately is to keep away from
the burden it cannot yet carry. The Du Pont Review
of 1988 also suggests companies to keep the venture
separate from the established business. According to
Block & MacMillian (1993), if focus of attention is
important for the venture’s success, a high degree of
separation will be needed. Top management can give
a small group of highly committed and ask them
to create a new business for the corporation- but
outside the corporation (Farrell, 2001). Therefore, we
hypothesize:
Hypothesis 6: Organizational innovativeness is
positively related to the existence of groups that
function outside traditional lines of authority in the
organization.
Relatedness vs. Un-relatedness to Current Business
Relatedness refers to ‘the degree to which
business units support or complement each other’s
business activities, particularly marketing and
production’ (Davis, Robinson J R, Pearce II, & Park;
1992). According to Davis and others, relatedness
is the mechanism by which businesses capture
synergies that can enhance their competitive advan-
tage relative to competitors. Related diversification
presumably allows the corporate center to exploit the
interrelationships that exist among its different
businesses (SBUs) and so achieve cost and/or dif-
ferentiation competitive advantages over its rivals
(Markides & Williamson, 1994). Moreover, the
strategy of related diversification enables firms to
exploit economies of scope (Porter, 1987; Teece,
1982). This means that the corporate center of a firm
operating in two strategic business units (SBUs) can
exploit any synergies between the two (for example,
in manufacturing or distribution) to achieve cost
or differentiation advantages or both over an un-
diversified rival. As Hill and colleagues articulated,
“resource sharing and skill transfers enable the
diversified firm either to reduce overall operating
costs in one or more of its divisions, and/or to better
differentiate the products of one or more of its
divisions, thus, enabling a higher price to be
charged” (Hill et al., 1992). Thus, we hypothesize:
Hypothesis 7a: Under low relatedness of CE
activities to current business, organizational inno-
vativeness will be negatively related to the charac-
teristics of corporate entrepreneurship.
Hypothesis 7b: Under high relatedness of CE
activities to current business, organizational inno-
vativeness will be positively related to the charac-
teristics of corporate entrepreneurship.
Thai Firms (DCs) vs. MNCs
The U.S. Bureau of Economic Analysis (BEA),
part of the Department of Commerce, defines the
MNC as being a firm based in one country (the
“parent”) with at least a 10 percent equity interest in
a firm located in a second country (the “affiliate”)
(Hipple, 1990). In addition, Birkinshaw (1995) defines
a MNC as a corporation operating in multiple
countries. According to Egelhoff (1991), MNCs are
probably the most complex form of organization in
widespread existence today. Operating across pro-
ducts and markets, nations and cultures, they face
problems and situations far more diverse than even
the largest domestic firms. With the increasing glo-
balization of business, a rapidly growing level of
economic activity now depends upon this form of
organization. The key determinant of successful ex-
pansion is the extent to which a firm optimally
matches its resources with the environmental con-
tingencies (Lambkin & Day, 1989). In general, the
size of MNCs is greater than that of purely domestic
corporations (DCs). MNCs have also a higher pro-
portion of future growth opportunities than that of
DCs (J awon, 1997). In addition, corporate inter-
national diversification theory posits that multi-
national corporations (MNCs) should have lower risk
and higher financial leverage than purely domestic
corporations (DCs). Another important stream of
research in foreign direct investment (FDI) sees the
MNC as an efficient transfer agent of resources
(Hennart, 1982).
In the middle and late 1980s, foreign direct
investment in Thailand increased more than seven
times over the period. Low wages, progressive re-
ductions in trade barriers, and years of conservative
macroeconomic management resulting in low inflation
and a stable exchange rate made the Thai economy
an ideal host for a flood of foreign investment in
the late 1980s. This situation led to increasing the
number of MNCs operating businesses in Thailand.
However, Hodgetts & Luthans (1994) indicate that a
major challenge of doing business internationally
is to adapt effectively to different cultures. Cultures
can affect the way companies do business, perhaps
most important, cultures affects how people think and
behave. More over, a study by Lee & Peterson (2000)
identified the major cultural factors behind the suc-
cess or failure of entrepreneurship, suggesting that
cultures with a strong entrepreneurial orientation
will experience more entrepreneurship and assist their
global competitiveness. Thus, we hypothesize:
Hypothesis 8a: Atmosphere & vision will be
significantly different between MNCs and Thai
firms.
Hypothesis 8b: Orientation to the market will be
significantly different between MNCs and Thai firms.
Hypothesis 8c: Small & Flat organization will
be significantly different between MNCs and Thai
firms.
Hypothesis 8d: Multiple approaches will be
significantly different between MNCs and Thai firms.
Hypothesis 8e: Interactive learning will be
significantly different between MNCs and Thai firms.
Hypothesis 8f: Skunk Works will be significantly
different between MNCs and Thai firms.
Hypothesis 8g: Organizational innovativeness
will be significantly different for MNCs than Thai
firms.
Organizational Innovativeness
As suggested by Schumpeter (1961), innovative-
ness is the focal point of entrepreneurship and an
essential entrepreneurial characteristic. According to
Rogers & Shoemaker (1971), innovativeness is “the
degree to which an individual is relatively earlier in
adoption of an innovation than other members of his
social system.” Midgley & Dowling (1978) has ad-
vanced definition of innovativeness as “the degree to
which an individual is receptive to new ideas and
makes innovation decisions independently of the
communicated experience of others.” Parson (1992)
explained that innovativeness is “the power to capture
ideas and commercialize value to the customer time
and again, continually for years.” Accordingly, inno-
vativeness can be simply described as a propensity to
innovate (Wolfe, 1994). Innovation is described by
Roger (1995) as “an idea practice, or object that is
perceived as new to an individual or another unit of
adoption” while innovativeness is “the degree to
which an individual or another unit of adoption is
relatively earlier in adopting new ideas than other
members of a system.” Pitt, Bertgon & Morriss
(1997) define innovativeness as “a need for business
concept to be designed around a unique or novel
product, service, or process”. Moreover, innovative-
ness refers to “….the notion of openness to new
ideas as an aspect of a firm's culture” (Hurley & Hult,
1998). Innovativeness is present when the imple-
mentation of new ideas, products, or processes is
encouraged and present when continuous improve-
ment through creativity and ingenuity is encouraged
(Hult et al., 2002).
RESEARCH METHODOLOGY
To collect primary data, questionnaires were
initially designed for pilot study to contain at least 20
firms or equivalent to approximately 4.25 % of the
samples needed. Among these 20 samples, full
coverage of major industry sectors was allocated. After
that, the lists of self-administered questionnaires were
sent to 470 chief executives of large enterprises
which are all listed companies in the Stock Exchange
of Thailand (SET). The questionnaires asked for their
perceptions on CE characteristics and organizational
innovativeness in their enterprises. Respondents are
asked for their opinions about the previous years’ over-
all corporate innovativeness and their overall innova-
tiveness relative to leading competitors. That was a
one-time mailing without pre-notification or follow-up.
There was also no attempt to survey multiple respon-
dents within individual firms. Additionally, secondary
data fromboth public and private sources such as Thai
government agencies, Thai publications, and corporate
websites were collected in order to fulfill missing data
in returned questionnaires, together with the support of
literatures/reports.
General information about demographic data on
the characteristics of the respondents’ enterprise, in-
cluding size, age, and type of industry, were collected
by using open-ended questions. A five-point Likert
scale (5 =strongly agree to 1 =strongly disagree) is
designed to examine how strongly subjects agree or
disagree with statements on a 5-point scale, indicating
varying degrees of agreement, was used to obtain
information about CE characteristics and organizational
innovativeness.
The survey was conducted in May 2006 and
completed in July 2006. The data was analyzed by
using the SPSS program. This research uses factor
analysis and multiple regression techniques to analyze
the effect of six characteristics as independent varia-
bles on organizational innovativeness of large enter-
prises in Thailand. The relationship between the
organizational innovativeness and relatedness to
current business and the firm’s nationality as both
moderators were also investigated.
ANALYSIS AND RESULTS
Thirty-eight responses were received from the
initial mailing within first week. Three questionnaires
were returned due to wrong address. In order to
generate additional responses, a follow-up mailing was
sent in the second week to 432 non-responding
companies. Forty-three responses were obtained
additionally in the second week. More attempts were
made in the third week by telephone calling to the rest
of non-responding firms. After making an appoint-
ment, last thirty four questionnaires were collected by
hand and via e-mailing. As a result, a total of 115
responses were received. These numbers accounted
for a total response rate of 24.5 percent from selected
sample. However, five of these responses were ex-
cluded from the analysis, either as a result of missing
data (3 cases) or due to late arrival (2 cases), thus
reducing the effective sample to 110 cases or accounts
for 23.4 percent response rate. The majority of the res-
pondents in this research are Thai enterprises
(accounting for 80%) while MNCs are the minority
(accounting for 20%). Some blank information about
company profiles were fulfilled by secondary data
from company websites and annual reports.
DISCUSSION
Firm Size
Among all respondents, the largest company is
PTT Public Company Limited which has a total
revenue of THB 960,803 million or approximately
equivalent to US 24,000 million. The second largest
company is Thai Oil Public Company Limited with a
total revenue of THB 252,898 million or USD 6,322
million. The third largest company is the Siam
Cement Public Company Limited with a total re-
venue of THB 234,595 million or USD 5,865 mil-
lion. Then followed by Thai Airways International
Public Company Limited (THB 166,519 million or
USD 4,163 million), Advanced Info Service Public
Company Limited (THB 93,139 million or USD
2,328 million), Krung Thai Bank Public Company
Limited (THB 57,702 million or USD 1,443 million),
and Kasikornbank Public Company Limited (THB
50,367 million or USD 1,259 million).
Compared to large corporations in USA, the
largest one is Exxon Mobil with a total revenue of
USD 339,938 million. The second largest company is
WalMart Stores with a total revenue of USD 315,654
million. The third largest company is General Motors
with a total revenue of USD 192,604 million. So, US
companies such as Cisco Systems and Coca-Cola,
which have a total revenue of USD 24,000 million or
equivalent to top the largest Thai respondent in this
study, are ranked in the position range of 83-90.
According to Fortune, the top 500 companies
have a total revenue ranged from USD 3,960 million
to USD 339,938 million. However, Fortune top
1,000 companies have minimum revenues of USD
1,428 million. Therefore, in this study there are only
four Thai respondents whose total revenue can be
ranked within the top 500 largest US companies
while another three Thai firms can be additionally
ranked within the top 1,000 largest US companies.
CE Characteristics
The first purpose of this study is to investigate
what CE characteristics of large enterprises in Thai-
land are associated with developing successful or-
ganizational innovativeness. Appropriate charac-
teristics of CE that fit with large enterprises in Thai-
land are the expected findings in this study. The
result signifies that there are four characteristics
of CE which significantly correlate to organizational
innovativeness of large firms in Thailand. The four
mentioned aspects are ‘atmosphere & vision’,
‘orientation to the market’, ‘interactive learning’
and ‘skunk works’ (p-value =.012 .05).
Those two characteristics that are not found in large
enterprises in Thailand are discussed as follows:
Small & Flat organization The reason why large
firms in Thailand may not have small and flat
organizations could be explained by Hofstede's
empirical studies about multinational cultures in the
early 1980's. According to Hofstede (1980), organi-
zations in low power distance countries such as the
USA will generally be decentralized and have flatter
organizational structures, which support Quinn’s
findings about CE characteristics. These organi-
zations will also have a smaller proportion of super-
visory personnel, and the lower strata of the work
force will often consist of highly qualified people.
By contrast, organizations in high power distance
countries such as Thailand will tend to be centralized
and have tall organizational structures, which do
not support Quinn’s hypothesis. These organizations
will have a large proportion of supervisory personnel,
and the people at the lower levels of the structure
will often have low job qualifications. Kanter (1983)
and Russell & Russell (1992) note that formal,
bureaucratic methods of control associated with
organizational structure are ineffective in managing
entrepreneurial activities given the uncertainties
inherent in innovation. Moreover, Case & Singer
(1997) indicates that flat organizations cause pro-
blems too. People are competitive by nature, and
they need some way to keep score because that
motivates them to excel. Hierarchical organizations
provided clear career paths, which did just that. In a
flat organization, almost everybody is at the same
level, so what have the top performers got to aspire
to? The answer is not much and that gives them
little incentive except to perform at the level of the
average. In a hierarchy there are always fewer jobs
at the top of the pyramid than at the bottom, so there
was a weeding out, a natural selection if you will,
that sorted out the best people for the top positions.
Multiple approaches According to Hofstede
(1980), individuals in a high uncertainty avoidance
culture such as Thais are concerned with security in
life (as opposed to willingness to take risks) and
believe in experts and their knowledge (as opposed to
generalists and common sense). Countries with high
uncertainty avoidance cultures such as Thailand
have a great deal of structuring of organizational
activities, more written rules, less risk-taking by
managers, lower labor turnover, and less ambitious
employees. On the contrary, low uncertainty avoi-
dance societies such as USA have organization
settings with less structuring of activities, fewer
written rules, more risk-taking by managers, higher
labor turnover, and more ambitious employees. This
could be the reason why large firms in Thailand do
not support multiple approaches in their organiza-
tions. Top management in Thai firms may have no
willingness to take risks from too many solutions.
Multiple approaches which may lead to increasing
cost, manpower, and lead time are undesirable for
Thai firms. More over, failure of projects may be
considered as a mistake in Thai enterprises.
Thai Firms vs. MNCs
Since Quinn’s (1985) previous research was
conducted in the developed countries like the USA,
the second purpose of this study is to investigate
whether there are any similarities or differences in
CE characteristics associated with developing suc-
cessful organizational innovativeness between large
enterprises in developed countries and developing
countries. The result signifies that there is a signi-
ficant difference of CE characteristics in regard to
‘interactive learning’ between large enterprises of
developed and developing countries (p-value =.004
Thailand, even after the financial crisis of 1997, was facing the problem of long run competitiveness.
Corporate Entrepreneurship Characteristics and Organizational
Innovativeness of Large Enterprises in Thailand
Piyaporn Aeimtitiwat
Sang M. Lee *
ABSTRACT
Thailand, even after the financial crisis of 1997,
was facing the problem of long run competitiveness.
Therefore, to succeed in the global marketplace, Thai
enterprises must learn how to innovate and develop
new businesses to be better and faster than their
competitors. Corporate entrepreneurship (CE) is re-
cognized as a potentially viable means for promoting
and sustaining corporate competitiveness in the
long-term. However, since limited research exists
concerning CE in developing countries, this paper
represents an initial effort in this area. Thus, the pur-
pose of this study is to investigate the significance
that CE has on the organizational innovativeness of
large enterprises in Thailand. This research operated
under the theoretical framework established by Quinn’s
landmark article, “Managing innovation: Controlled
chaos” published in the Harvard Business Review in
1985, that there are six major characteristics present
in a large corporation that are successful contributors
for developing organizational innovativeness. Those
characteristics are atmosphere and vision, orienta-
tion to the market, small flat organizations, multiple
approaches, interactive learning, and skunk works.
Relatedness to current business and firms’ nationality
whether they are MNCs or Thai firms were set as
moderating variables. The study also seeks to know
whether there is any difference in CE characteristics
associated with organizational innovativeness be-
tween large enterprises in developed and developing
countries. Our sample was drawn from 110 large
enterprises of listed companies in the stock exchange
of Thailand within eight major industries. The result
signifies that there are four characteristics of CE
which significantly correlate to organizational inno-
vativeness of large enterprises in Thailand, -- atmos-
phere & vision, orientation to the market, interactive
learning and skunk works. Moreover, organizational
innovativeness of large enterprises in developed
countries significantly differs from those in
developing countries. Lastly, relatedness to current
*Prof. Dr. Sang M. Lee
University Eminent Scholar, Regents Distinguished Pro-
fessor, Chairman of Department of Management, College
of Businees Administration, University of Nebraska–
Lincoln, Lincoln, U.S.A.
Advisor
business relates to organization innovativeness.
Thus, developing a concept of CE in Thailand may
be one solution to build up growth based on efficien-
cy, which would be competitive in the long run.
????????
??? ?? ?????????? ???? ??? ????????????????? ?????
2540 ??????????? ????? ?????? ??? ??? ????? ??????
???????????????????????????? ??????????????????????
?????? ???? ?????????? ?? ????? ?????? ??? ????? ????? ??? ??
??????????????????????????????????????????????????????
??????? ???????????????? “??????????????????????????
?? (CE)” ?????????????????? ????????????????????????
?? ???????????? ???? ???? ??????? ????? ??????????????
???????????????????????????? ???????????????????????
????????????? CE ?????????????????????????????????? ???
????????????????????????????????????????????????????????
??? ???? ????????????????? (CE) ??? ?? ?? ??????? ??????-
???????????????????????????????? ????????????
????? ????????? ???????? ?????? James Brian Quinn
????????????????????????????? Harvard Business Review
???? 1985 ???????????????????????????? 6 ?????? ??????
????????????????????????????????????????????????????
??? ??????????????????????? ???? ? ??????????? ??
1) ????????????? ???????? 2) ????????????? ???????
3) ????????? ??? ?????????????????? 4) ???????? ???? ?
????????????? 5) ??????????????????????????????????
??? ??? 6) ??????????????????????????????????????????
??????????????????????????????????????????????????????
??????????????????????????????????????????????????
???????????????????????????????????????? ????????????
????????????????????????????????????????????????????
????????????????????????? ????????????????????
?????? ???????? ?????????????????????????????? ???????
???????????????????????????????????????? ????????????
???? ??? ??????? ??????????? ???? ??? ??? ??????????
?? ???? 110 ?? ???? ??? 8 ?? ???????????? ????????????
????????? ? ?? ????????? 4 ?? ??????????????? ?????????
???????? ??? ???? ???? ??????????? ???????????????????
???????? ??????????? ??? ??? 1) ????????????? ???-
????? 2) ???????????????????? 3) ??????????? ????? ?????
???????????????? ??? 4) ??????????????????? (?????????????
??????) ?????????? ?????????????????????????? ?????????
???????????????????????????????????????????????-
?? ????????? ??????????? ?? ?????? ???????????? ??? ?
????? ???????????? ?????????????????????? ??????????????
???????????????? ????????????????????????????????????
????????? ???????????????????? ????“??????? ???????-
??????????????” ??????????????? ????????????????
???? ????????? ?????????? ???? ?????????????????????
??????????? ????????????????????????????????????
INTRODUCTION
Today, the macroeconomic environment has
started to recover to various degrees but many firms
are still struggling to turn their performance around.
How can managers of these firms as well as their
international investors and lenders encourage these
turnarounds? According to Morris & Kuratko (2002),
the answer is and always will be sustainable com-
petitive advantage. The challenge for organizations
in today's marketplace is to build competitive
advantage.
Much discussion on the East Asian crisis has
focused on financial problems, however the financial
problem might be only symptomatic of the real
(Kittiprapas, 2000). Actually, there are deep-rooted
problems of the structure of the Thai economy
such as the problem of weak competitiveness and
inefficiency as Krugman (1994) has pointed out. The
problem of competitiveness tends to support
Krugman’s (1994) argument that Asia’s sustainable
growth had arisen from the more intensive use of
inputs (i.e., cheap labor and raw materials) and
mobilization of resources rather than from increases
in efficiency. Increased efficiency of labor would
come from improved management or technological
knowledge, which would underline sustainable and
dynamic growth. Krugman (1994) argues that rapidly
growing East Asian economies show little evidence
of improvement in efficiency and technological pro-
gress, but instead rapid of inputs.
Thailand, even before the crisis, was facing the
problem of long run competitiveness (Kittiprapas,
2000). If it is true that the Asian economic growth
has built up on higher use of inputs from resource
mobilization rather than technical progress and
efficiency, then it is already time to address this
weakness. This can only be accomplished through
continuous innovation and the creation of new ideas.
Building a country’s long run competitiveness and
increasing efficiency would lead to a more sustain-
able growth of the Asian region (Kittiprapas, 2000).
Chalamwong (1998) pointed out that in order to
maintain the strength and dynamism of the Thai
economy, aside from the gradual reform of the
political system, the non-political sectors, especially
business sectors must play a key role in finding
effective solutions to the bottlenecks faced by the
country. The strengths of the non-political sectors
must be put to work in a hurry to build up public
confidence since the Thai economy has begun to
slow down for the first time in so many years.
Therefore, to succeed in the global marketplace
for new goods and services, Thai firms must learn
how to innovate and develop new businesses better
and faster than their competition. To do this they
require a special entrepreneurial strategy-one that is
much different from the traditional strategy of Thai
business-to achieve the maximum advantage in glo-
bal competition. According to previous studies, CE
should be recognized as a key factor in today's
increasingly competitive, global economy. CE is also
important to a firms' long-termcompetitiveness (Hitt et
al., 1999). Developing a concept of CE in Thailand
will be one solution to build up growth based on
efficiency instead of utilizing inputs and mobilizing
resources spatially, which would not be sustainable
in the long run. However, since limited research
exists concerning CE in developing countries, this
paper represents an initial effort in this area.
In general, CE can be a significant emerging area
in both strategic and entrepreneurial management.
Research in CE will make a stronger contribution to
scholars and practitioners in both fields of strategic
management and entrepreneurship in developing
their knowledge and managerial practices. Results
of this study will significantly contribute better un-
derstanding about characteristics of organization,
specifically in a developing country like Thailand in
developing organizational innovativeness, which will
lead to long-termcompetitive advantages in the glo-
bal market. Thus, developing a better understanding
of how organizational innovativeness is critically
important, not only to those starting new innovations,
but also to society as a whole.
LITERATURE REVIEW, CONCEPTUAL FRAME-
WORK AND HYPOTHESES
This research project was designed to investigate
the significance that corporate entrepreneurship
has on the organizational innovativeness of large
enterprises in Thailand. This study operated under
theoretical framework established by Quinn (1985).
Throughout the paper, we make the assumption
which is supported by the evidence provided by
Quinn’s landmark article, “Managing innovation:
Controlled chaos” published in the Harvard Business
Review in 1985, that there are six major charac-
teristics present in a large corporation that are suc-
cessful contributors for developing organizational
innovativeness. Those characteristics are atmos-
phere and vision, orientation to the market, small
flat organizations, multiple approaches, interactive
learning, and skunk works. Proper control variables
were industry size, age and sector. Moreover, related-
ness and un-relatedness to current businesses were
set as moderating variables as well as MNCs and
Thai firms. Conceptual framework of this paper is
presented as follow:
Figure 1.1: A Model of Corporate Entrepreneurship Characteristics and Organizational Innovativeness of Large
Enterprises in Thailand
Corporate Entrepreneurship
(CE) Characteristics
• Atmosphere & Vision
• Orientation to the Market
• Small & Flat Organizations
• Multiple Approaches
• Interactive Learning
• Skunk Works
Atmosphere & Vision
The first characteristic of CE in developing a
successful internal venture is corporate ‘atmosphere
and vision’. According to Quinn (1985), they mean
that innovative companies have a clear-cut vision of
an innovative company and the support necessary to
sustain it. The entrepreneur’s vision must be per-
meated throughout the organization in order for
employees to understand the company’s direction
and share in the responsibility for its growth
(Kuratko & Hodgetts, 2004). Continuous innovation
occurs largely because a few key executives have a
broad vision of what their organizations can
accomplish for the world and lead their enterprises
toward it (Quinn, 1988; Hurley & Hult, 1998). These
arguments suggest:
Hypothesis 1a: Organizational innovativeness is
positively related to the presence of a (clear) vision
to create innovation in the organization.
Strong support from companies is required to
sustain their vision. Scholars have recognized that the
top management has a significant role in creating an
atmosphere wherein employees are encouraged to
experiment (Seshadri & Tripatht, 2006). According
to them, even if the top management wants to create
an innovative and intrapreneurial organization, there
is a need for intrapreneurs within the system who
could execute the process of intrapreneurial inno-
vation. These evidences suggest:
Hypothesis 1b: Organizational innovativeness is
positively related to organizational atmosphere.
Organizational
Innovativeness
• External new venture
• Internal new venture
• New products/ services
• Technological processes/
administrative procedures
development
• Submission of new project
proposals
Relatedness vs.
Un-relatedness to
Current Business
H1-H6
Thai Firms
vs. MNCs
H7
H8
Orientation to the market
The second characteristic of innovative com-
panies based on Quinn (1985) is to tie their visions to
the realities of the marketplace. Parsons (1992)
indicated that innovative companies show an im-
portant characteristic of focusing on customer value
rather than technological advance or clever mar-
keting. Market knowledge is an important driver of
innovativeness (Drucker, 2002; Hurley & Hult,
1998). A clear understanding of the customers’ need
can yield a wealth of ideas for new ventures (Mac-
Millan, 1987). Pelham (2000) found that small firms
with a strong market orientation can better leverage
their advantages of simpler organizational structure,
flexibility, adaptability, capacity for speed, and pro-
pensity for innovation in these environments. There-
fore, we hypothesize:
Hypothesis 2: Organizational innovativeness is
positively related to the organization’s degree of
market orientation.
Small & Flat Organization
From Quinn’s perspective, small flat organiza-
tions are represented by the way innovative com-
panies keep the total organization flat and project
teams small. Initiation is primarily the domain of
autonomous individuals or very small groups in the
entrepreneurial firm (Burgelman, 1984). Previous
studies indicate that corporations must keep venture
business groups small (Alterowitz & Zonderman,
1988). Because it is difficult for people to focus
simultaneously on too many goals, many larger firms
create “multiple companies within the companies”
(Quinn, Baruch & Zien, 1997). Successful innova-
tors establish cross-functional project teams which
consist from 5 to 500 people, depending on the
challenge (Parsons, 1992). According to Du Pont
Review (1988), companies can build a first com-
mercial plant that is small and flexible, then, put
together a lean dedicated entrepreneurial team with a
single clear leader. These evidences suggest:
Hypothesis 3a: Organizational innovativeness is
negatively related to the size of project teams.
Most innovative companies keep the total
organization flat. The hierarchical distance from top
to bottom must be shortened (Brandt, 1986) in order
to promote speed and flexibility in organizational
communication. Oden (1997) indicated that if
hierarchy was central to traditional organizations, the
lack of hierarchy is central to the future innovative
organization. The innovative organization is much
flatter, with fewer levels of managers. The advan-
tage of the flat organization is supposed to be, in a
nutshell, that channels of communication are opened
up and information flows more easily to all parts of
the organization. In fast changing environments, say
where technology is advancing rapidly, flat structures
can often process new information more effectively
and help organizations respond more quickly to it
(Case & Singer, 1997). These arguments suggest:
Hypothesis 3b: Organizational innovativeness
is negatively related to the number of levels of the
organizational structure.
Multiple Approaches
Multiple approaches are indicated by the
paralleled development of several projects encou-
raged by innovative managers (Quinn, 1985).
According to Quinn (1979), for every success there
are hundreds of failures. In his later research, Quinn
(1985) supports that one cannot be sure at first which
of several technical approaches will dominate a field.
Almost every entrepreneur has experienced at least
one failure before establishing a successful venture
(Hisrich, 1986). Du Pont Review (1988) also indicates
that successful ventures manage uncertainty with
flexible planning. Thus, innovative managers of
almost all large scale innovative companies con-
ciously encourage the pararelled development of
several projects within the companies. The old ideas
can be a primary source of multiple approaches as
well. Old ideas can become powerful solutions to
new problems if innovative companies are skilled at
seeing analogies (Hargadon & Sutton, 2000). There-
fore, we hypothesize:
Hypothesis 4: Organizational innovativeness is
positively related to the number of parallel projects
that an organization is pursuing.
Interactive Learning
From Quinn’s perspective, interactive learning
means that learning and investigation of ideas cuts
across traditional functional lines in the organization
within an innovative environment. Parsons (1992)
indicated that innovative companies show a key
characteristic of innovating across all their functions
and innovate up and down the business system
with their suppliers and distributors. Rothwell et al.
(1974) and Freeman (1982), among others, have
shown that innovative firms co-operate with outside
scientific and technical establishments and make
deliberate efforts to survey externally generated
ideas. Study by Avlonitis et al. (1994) stipulates the
benefits to be gained from the co-operation of a firm
with research institutes and universities and from the
prompt consideration of innovative ideas. Therefore,
we hypothesize:
Hypothesis 5: Organizational innovativeness is
positively related to the existence of inter-functional
teams and inter-functional processes in the organi-
zation.
Skunk Works
Finally, Quinn indicates that skunk works are
required in every highly innovative enterprise by
using groups that function outside traditional lines of
authority. This eliminates bureaucracy, permits rapid
turnaround, and instills a high level of group identity
and loyalty. Dess & Lumpkin (2005) stated that one
method that companies can use to effectively foster
CE via autonomy includes using “skunkworks” to
encourage independent thought and action. To help
managers and other employees set aside their usual
routines and practices, companies often develop
independent work units called “skunkworks.” The
term is used to represent a work environment that
is often physically separate from corporate head-
quarters and free of the normal job requirements and
pressures. Skunkworks are often used to encourage
creative thinking and brainstorming about new
venture ideas. Drucker (1985) supports that the new
entrepreneurial has to be organized separately from
the old and existing. The best, and perhaps the only,
way to avoid killing off the new by sheer neglect is to
set up the innovative project from the start as a
separate business. The reason why a new, innovative
effort is best set up separately is to keep away from
the burden it cannot yet carry. The Du Pont Review
of 1988 also suggests companies to keep the venture
separate from the established business. According to
Block & MacMillian (1993), if focus of attention is
important for the venture’s success, a high degree of
separation will be needed. Top management can give
a small group of highly committed and ask them
to create a new business for the corporation- but
outside the corporation (Farrell, 2001). Therefore, we
hypothesize:
Hypothesis 6: Organizational innovativeness is
positively related to the existence of groups that
function outside traditional lines of authority in the
organization.
Relatedness vs. Un-relatedness to Current Business
Relatedness refers to ‘the degree to which
business units support or complement each other’s
business activities, particularly marketing and
production’ (Davis, Robinson J R, Pearce II, & Park;
1992). According to Davis and others, relatedness
is the mechanism by which businesses capture
synergies that can enhance their competitive advan-
tage relative to competitors. Related diversification
presumably allows the corporate center to exploit the
interrelationships that exist among its different
businesses (SBUs) and so achieve cost and/or dif-
ferentiation competitive advantages over its rivals
(Markides & Williamson, 1994). Moreover, the
strategy of related diversification enables firms to
exploit economies of scope (Porter, 1987; Teece,
1982). This means that the corporate center of a firm
operating in two strategic business units (SBUs) can
exploit any synergies between the two (for example,
in manufacturing or distribution) to achieve cost
or differentiation advantages or both over an un-
diversified rival. As Hill and colleagues articulated,
“resource sharing and skill transfers enable the
diversified firm either to reduce overall operating
costs in one or more of its divisions, and/or to better
differentiate the products of one or more of its
divisions, thus, enabling a higher price to be
charged” (Hill et al., 1992). Thus, we hypothesize:
Hypothesis 7a: Under low relatedness of CE
activities to current business, organizational inno-
vativeness will be negatively related to the charac-
teristics of corporate entrepreneurship.
Hypothesis 7b: Under high relatedness of CE
activities to current business, organizational inno-
vativeness will be positively related to the charac-
teristics of corporate entrepreneurship.
Thai Firms (DCs) vs. MNCs
The U.S. Bureau of Economic Analysis (BEA),
part of the Department of Commerce, defines the
MNC as being a firm based in one country (the
“parent”) with at least a 10 percent equity interest in
a firm located in a second country (the “affiliate”)
(Hipple, 1990). In addition, Birkinshaw (1995) defines
a MNC as a corporation operating in multiple
countries. According to Egelhoff (1991), MNCs are
probably the most complex form of organization in
widespread existence today. Operating across pro-
ducts and markets, nations and cultures, they face
problems and situations far more diverse than even
the largest domestic firms. With the increasing glo-
balization of business, a rapidly growing level of
economic activity now depends upon this form of
organization. The key determinant of successful ex-
pansion is the extent to which a firm optimally
matches its resources with the environmental con-
tingencies (Lambkin & Day, 1989). In general, the
size of MNCs is greater than that of purely domestic
corporations (DCs). MNCs have also a higher pro-
portion of future growth opportunities than that of
DCs (J awon, 1997). In addition, corporate inter-
national diversification theory posits that multi-
national corporations (MNCs) should have lower risk
and higher financial leverage than purely domestic
corporations (DCs). Another important stream of
research in foreign direct investment (FDI) sees the
MNC as an efficient transfer agent of resources
(Hennart, 1982).
In the middle and late 1980s, foreign direct
investment in Thailand increased more than seven
times over the period. Low wages, progressive re-
ductions in trade barriers, and years of conservative
macroeconomic management resulting in low inflation
and a stable exchange rate made the Thai economy
an ideal host for a flood of foreign investment in
the late 1980s. This situation led to increasing the
number of MNCs operating businesses in Thailand.
However, Hodgetts & Luthans (1994) indicate that a
major challenge of doing business internationally
is to adapt effectively to different cultures. Cultures
can affect the way companies do business, perhaps
most important, cultures affects how people think and
behave. More over, a study by Lee & Peterson (2000)
identified the major cultural factors behind the suc-
cess or failure of entrepreneurship, suggesting that
cultures with a strong entrepreneurial orientation
will experience more entrepreneurship and assist their
global competitiveness. Thus, we hypothesize:
Hypothesis 8a: Atmosphere & vision will be
significantly different between MNCs and Thai
firms.
Hypothesis 8b: Orientation to the market will be
significantly different between MNCs and Thai firms.
Hypothesis 8c: Small & Flat organization will
be significantly different between MNCs and Thai
firms.
Hypothesis 8d: Multiple approaches will be
significantly different between MNCs and Thai firms.
Hypothesis 8e: Interactive learning will be
significantly different between MNCs and Thai firms.
Hypothesis 8f: Skunk Works will be significantly
different between MNCs and Thai firms.
Hypothesis 8g: Organizational innovativeness
will be significantly different for MNCs than Thai
firms.
Organizational Innovativeness
As suggested by Schumpeter (1961), innovative-
ness is the focal point of entrepreneurship and an
essential entrepreneurial characteristic. According to
Rogers & Shoemaker (1971), innovativeness is “the
degree to which an individual is relatively earlier in
adoption of an innovation than other members of his
social system.” Midgley & Dowling (1978) has ad-
vanced definition of innovativeness as “the degree to
which an individual is receptive to new ideas and
makes innovation decisions independently of the
communicated experience of others.” Parson (1992)
explained that innovativeness is “the power to capture
ideas and commercialize value to the customer time
and again, continually for years.” Accordingly, inno-
vativeness can be simply described as a propensity to
innovate (Wolfe, 1994). Innovation is described by
Roger (1995) as “an idea practice, or object that is
perceived as new to an individual or another unit of
adoption” while innovativeness is “the degree to
which an individual or another unit of adoption is
relatively earlier in adopting new ideas than other
members of a system.” Pitt, Bertgon & Morriss
(1997) define innovativeness as “a need for business
concept to be designed around a unique or novel
product, service, or process”. Moreover, innovative-
ness refers to “….the notion of openness to new
ideas as an aspect of a firm's culture” (Hurley & Hult,
1998). Innovativeness is present when the imple-
mentation of new ideas, products, or processes is
encouraged and present when continuous improve-
ment through creativity and ingenuity is encouraged
(Hult et al., 2002).
RESEARCH METHODOLOGY
To collect primary data, questionnaires were
initially designed for pilot study to contain at least 20
firms or equivalent to approximately 4.25 % of the
samples needed. Among these 20 samples, full
coverage of major industry sectors was allocated. After
that, the lists of self-administered questionnaires were
sent to 470 chief executives of large enterprises
which are all listed companies in the Stock Exchange
of Thailand (SET). The questionnaires asked for their
perceptions on CE characteristics and organizational
innovativeness in their enterprises. Respondents are
asked for their opinions about the previous years’ over-
all corporate innovativeness and their overall innova-
tiveness relative to leading competitors. That was a
one-time mailing without pre-notification or follow-up.
There was also no attempt to survey multiple respon-
dents within individual firms. Additionally, secondary
data fromboth public and private sources such as Thai
government agencies, Thai publications, and corporate
websites were collected in order to fulfill missing data
in returned questionnaires, together with the support of
literatures/reports.
General information about demographic data on
the characteristics of the respondents’ enterprise, in-
cluding size, age, and type of industry, were collected
by using open-ended questions. A five-point Likert
scale (5 =strongly agree to 1 =strongly disagree) is
designed to examine how strongly subjects agree or
disagree with statements on a 5-point scale, indicating
varying degrees of agreement, was used to obtain
information about CE characteristics and organizational
innovativeness.
The survey was conducted in May 2006 and
completed in July 2006. The data was analyzed by
using the SPSS program. This research uses factor
analysis and multiple regression techniques to analyze
the effect of six characteristics as independent varia-
bles on organizational innovativeness of large enter-
prises in Thailand. The relationship between the
organizational innovativeness and relatedness to
current business and the firm’s nationality as both
moderators were also investigated.
ANALYSIS AND RESULTS
Thirty-eight responses were received from the
initial mailing within first week. Three questionnaires
were returned due to wrong address. In order to
generate additional responses, a follow-up mailing was
sent in the second week to 432 non-responding
companies. Forty-three responses were obtained
additionally in the second week. More attempts were
made in the third week by telephone calling to the rest
of non-responding firms. After making an appoint-
ment, last thirty four questionnaires were collected by
hand and via e-mailing. As a result, a total of 115
responses were received. These numbers accounted
for a total response rate of 24.5 percent from selected
sample. However, five of these responses were ex-
cluded from the analysis, either as a result of missing
data (3 cases) or due to late arrival (2 cases), thus
reducing the effective sample to 110 cases or accounts
for 23.4 percent response rate. The majority of the res-
pondents in this research are Thai enterprises
(accounting for 80%) while MNCs are the minority
(accounting for 20%). Some blank information about
company profiles were fulfilled by secondary data
from company websites and annual reports.
DISCUSSION
Firm Size
Among all respondents, the largest company is
PTT Public Company Limited which has a total
revenue of THB 960,803 million or approximately
equivalent to US 24,000 million. The second largest
company is Thai Oil Public Company Limited with a
total revenue of THB 252,898 million or USD 6,322
million. The third largest company is the Siam
Cement Public Company Limited with a total re-
venue of THB 234,595 million or USD 5,865 mil-
lion. Then followed by Thai Airways International
Public Company Limited (THB 166,519 million or
USD 4,163 million), Advanced Info Service Public
Company Limited (THB 93,139 million or USD
2,328 million), Krung Thai Bank Public Company
Limited (THB 57,702 million or USD 1,443 million),
and Kasikornbank Public Company Limited (THB
50,367 million or USD 1,259 million).
Compared to large corporations in USA, the
largest one is Exxon Mobil with a total revenue of
USD 339,938 million. The second largest company is
WalMart Stores with a total revenue of USD 315,654
million. The third largest company is General Motors
with a total revenue of USD 192,604 million. So, US
companies such as Cisco Systems and Coca-Cola,
which have a total revenue of USD 24,000 million or
equivalent to top the largest Thai respondent in this
study, are ranked in the position range of 83-90.
According to Fortune, the top 500 companies
have a total revenue ranged from USD 3,960 million
to USD 339,938 million. However, Fortune top
1,000 companies have minimum revenues of USD
1,428 million. Therefore, in this study there are only
four Thai respondents whose total revenue can be
ranked within the top 500 largest US companies
while another three Thai firms can be additionally
ranked within the top 1,000 largest US companies.
CE Characteristics
The first purpose of this study is to investigate
what CE characteristics of large enterprises in Thai-
land are associated with developing successful or-
ganizational innovativeness. Appropriate charac-
teristics of CE that fit with large enterprises in Thai-
land are the expected findings in this study. The
result signifies that there are four characteristics
of CE which significantly correlate to organizational
innovativeness of large firms in Thailand. The four
mentioned aspects are ‘atmosphere & vision’,
‘orientation to the market’, ‘interactive learning’
and ‘skunk works’ (p-value =.012 .05).
Those two characteristics that are not found in large
enterprises in Thailand are discussed as follows:
Small & Flat organization The reason why large
firms in Thailand may not have small and flat
organizations could be explained by Hofstede's
empirical studies about multinational cultures in the
early 1980's. According to Hofstede (1980), organi-
zations in low power distance countries such as the
USA will generally be decentralized and have flatter
organizational structures, which support Quinn’s
findings about CE characteristics. These organi-
zations will also have a smaller proportion of super-
visory personnel, and the lower strata of the work
force will often consist of highly qualified people.
By contrast, organizations in high power distance
countries such as Thailand will tend to be centralized
and have tall organizational structures, which do
not support Quinn’s hypothesis. These organizations
will have a large proportion of supervisory personnel,
and the people at the lower levels of the structure
will often have low job qualifications. Kanter (1983)
and Russell & Russell (1992) note that formal,
bureaucratic methods of control associated with
organizational structure are ineffective in managing
entrepreneurial activities given the uncertainties
inherent in innovation. Moreover, Case & Singer
(1997) indicates that flat organizations cause pro-
blems too. People are competitive by nature, and
they need some way to keep score because that
motivates them to excel. Hierarchical organizations
provided clear career paths, which did just that. In a
flat organization, almost everybody is at the same
level, so what have the top performers got to aspire
to? The answer is not much and that gives them
little incentive except to perform at the level of the
average. In a hierarchy there are always fewer jobs
at the top of the pyramid than at the bottom, so there
was a weeding out, a natural selection if you will,
that sorted out the best people for the top positions.
Multiple approaches According to Hofstede
(1980), individuals in a high uncertainty avoidance
culture such as Thais are concerned with security in
life (as opposed to willingness to take risks) and
believe in experts and their knowledge (as opposed to
generalists and common sense). Countries with high
uncertainty avoidance cultures such as Thailand
have a great deal of structuring of organizational
activities, more written rules, less risk-taking by
managers, lower labor turnover, and less ambitious
employees. On the contrary, low uncertainty avoi-
dance societies such as USA have organization
settings with less structuring of activities, fewer
written rules, more risk-taking by managers, higher
labor turnover, and more ambitious employees. This
could be the reason why large firms in Thailand do
not support multiple approaches in their organiza-
tions. Top management in Thai firms may have no
willingness to take risks from too many solutions.
Multiple approaches which may lead to increasing
cost, manpower, and lead time are undesirable for
Thai firms. More over, failure of projects may be
considered as a mistake in Thai enterprises.
Thai Firms vs. MNCs
Since Quinn’s (1985) previous research was
conducted in the developed countries like the USA,
the second purpose of this study is to investigate
whether there are any similarities or differences in
CE characteristics associated with developing suc-
cessful organizational innovativeness between large
enterprises in developed countries and developing
countries. The result signifies that there is a signi-
ficant difference of CE characteristics in regard to
‘interactive learning’ between large enterprises of
developed and developing countries (p-value =.004