Abstract
Schumpeter's idea of creative destruction (CD) explains innovation functions in organisations. This paper investigates the CD concept in engineering firms by explaining how technical opportunity (TO) transforms into corporate entrepreneurship (CE) actions once opportunities have a market orientation (MO). A survey was conducted using a structured questionnaire with 132 managers of engineering firms in Pakistan. Structural Equation Modelling (SEM) using Partial Least Square (PLS) approach has been used to analyse the data. Results reveal that MO and TO exerts a positive influence on CE. MO is the reason for the emergence of TO, which corporate entrepreneurs in engineering firms exploit. CD intensifies the impact of MO on TO significantly. Opportunity recognition in engineering firms is distinguished and bounded by MO and technical viability. Engineering firms need to identify gaps in the market through naturally occurring obsolescence of products and services (CD) to create TO with appropriate MO. This study has revived a classical debate over opportunity recognition by incorporating external factors to propose the CE model. The Schumpeterian opportunity recognition process and CD have been examined for engineering firms.
Highlights
History has proved that businesses should be capable of rapid change, transformation, and innovation to fulfil the fast-changing marketplace’s expectations (Schoemaker et al, 2018)
This study offers a new approach for firms in the opportunity recognition process, which transforms from the inner organisational function of change to look for gradual obsolescence of products and services in the market through the natural process of creative destruction (CD) in the opportunity creation process
Results indicate that market orientation (MO) is positively associated with corporate entrepreneurship (CE) (β = 0.19, p < 0.05), supporting H1, technical opportunity (TO) is positively associated with CE (β = 0.202, p < 0.05), supporting H2 and MO is positively associated with TO (β = 0.289, p < 0.05), supporting H3
Summary
History has proved that businesses should be capable of rapid change, transformation, and innovation to fulfil the fast-changing marketplace’s expectations (Schoemaker et al, 2018). In this regard, corporations should improve their innovation capability (Kelley et al, 2009) through CE (Lee & Pati, 2017). "ENTR is the primary catalyst for innovation." This view is entirely concerned with entrepreneurial action as a crucial transformation mechanism. Schumpeter (1934) defined CD as a process of industrial transformation where new opportunities are introduced to the market at the cost of existing ones. CE is liable for promoting the gales of CD within an organisation through inspection of new opportunities, resource acquisition, implementation, commercialisation, exploitation, and development of new products and services (Guth & Ginsberg, 1990)
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
