Entrepreneurs and Business Development in Japan and Britain D. Hugh Whittaker Professor Doshisha Business School Director Institute for Technology, Enterprise and Competitiveness (ITEC) CBR Summit: 29-30 March 2006 Innovation and Governance
Who is an entrepreneur? (is the wrong question) • Entrepreneur as an organization creator (e.g. Gartner and Cater, 2005) • Organizations cannot be grown single handed. One of the most important tasks the entrepreneur faces is to recruit, allocate work to, motivate and retain employees who will help the business to grow. • This is no easy task… CBR Summit: 29-30 March 2006 Innovation and Governance
Entrepreneurs and HRM • Kets de Vries view of entrepreneur as ‘an individual who refuses to delegate, is impulsive, lacks any interest in conscious, analytical forms of planning’ must ‘be regarded as approximating the most “typical” pattern.’ (Stanworth and Curran, 1989: 161) • Standardization, formalization, systematization, decentralization associated with growth in size. (Aston School studies, replicated recently) • BUT e.g. Hornsby and Kuratko (1990: 16-17): ‘the personnel practices of smaller firms are much more sophisticated than the literature leads one to believe’ and ‘The highest ranked issues in all three size categories focus on the need to obtain and retain a quality workforce.’ CBR Summit: 29-30 March 2006 Innovation and Governance
HRM orientations: best fit and best practice • How do/should they go about doing this? • ‘Best fit’ versus ‘best practice’ schools of HRM • Does ‘best fit’ lead to significantly different orientations in Japan and the UK? (Fit with what?) Are there similarities - e.g. ‘high commitment’ practices - especially between ‘high performers’ in Japan and the UK? CBR Summit: 29-30 March 2006 Innovation and Governance
HRM orientations in Japan and the UK: 3 hypotheses • Hypothesis 1 The HRM orientations of UK entrepreneurs are systematically different from those of Japanese entrepreneurs • Hypothesis 2 These differences are in part attributable to differences in the environments in which the entrepreneurs operate (need for ‘fit’) . • Hypothesis 3 HRM orientations in ‘high performing’ businesses in both countries retain many of these differences CBR Summit: 29-30 March 2006 Innovation and Governance
Research design and data set 1st J Quest. 2nd J Quest. July-Aug. 1996 Feb.-March. 2002 ‘ Venture ’ 308 ‘ Venture ’ 349 valid resp. (13.3%) valid resp. (9.4%) UK., Japan cases Selection of 25 UK, 25 Japanese cases ( ‘ theoretical sampling ’ ), K interviews 2001, J. interviews 2004-05 1st UK Quest. 2nd UK Quest. Jan. 1998 Dec. 2000-Jan.2001 ‘ High tech ’ 510 ‘ High tech ’ 349 valid resp. (26.9%) valid resp. (9.4%) Integrated Comparative entrepreneur data set (quantitative-qualitative) ‘ High tech ’ manufacturing, 1-199 employees, data founded 1945 ~, Total n = 336; UK n = 113; Japan n = 223 CBR Summit: 29-30 March 2006 Innovation and Governance
Characteristics of respondent CEOs and their businesses Businesses CEOs UK (%) J. (%) Size 1-19 employees 26.5 20.2 20-49 45.1 30.5 UK Japan 50-199 28.3 49.3 Founder % 82.3 49.8 Average age 52.8 57.0 Sector Instruments 45.1 52.0 Comp.s, electr.s 25.7 39.0 Other manufac. 29.2 8.9 Founding 1945-79 43.4 65.9 1980-89 28.3 21.5 1990 - 28.3 12.6 CBR Summit: 29-30 March 2006 Innovation and Governance
HRM orientations ‘Some personnel policies are more important than others in recruiting and keeping good personnel. How important are the following for you?’ (5 point Likert scale: 1= not at all, 5 = crucial) UK JAPAN Paying top rates Giving challenging job assignments Providing/facilitating training and education Providing a stable and supportive work environment Offering flexible/family friendly work arrangements Providing incentives for individual excellence Providing a good welfare and fringe benefit package Providing an attractive physical working environment Giving employees a financial stake in the company Encouraging autonomy in decision making CBR Summit: 29-30 March 2006 Innovation and Governance
HRM orientations of Japanese and UK entrepreneurs (UK n=113; Japan n=223) UK JAPAN HRM Orientation Mean SD Rank Mean SD Rank SIG Paying top rates 3.17 .91 6 3.43 .85 6 .01 Giving challenging job assignments 3.58 .83 2 3.82 .85 2 .05 Providing/facilitating training and education 3.08 .88 8 3.58 .78 4 .01 Providing a stable and supportive work environment 4.06 .79 1 3.54 .77 5 .01 Offering flexible/family friendly work arrangements 3.54 1.11 3 3.17 .81 9 .01 Providing incentives for individual excellence 3.27 1.03 5 3.83 .71 1 .01 Providing a good welfare and fringe benefit package 2.97 1.03 9 2.89 .83 10 NS Providing an attractive physical working 3.15 1.01 7 3.28 .78 7 NS environment Giving employees a financial stake in the company 1.92 1.07 10 3.20 .95 8 .01 Encouraging autonomy in decision making 3.36 .96 4 3.76 .80 3 .01 CBR Summit: 29-30 March 2006 Innovation and Governance
Principal component analysis for the total sample HR Policies INDIVIDUAL ENVIRONMENT .661 -.077 Giving employees a financial stake in the company .656 .037 Encouraging autonomy in decision making .648 .097 Giving challenging job assignments .648 .137 Providing/facilitating training and education .646 .137 Providing incentives for individual excellence .396 -.005 Paying top rates -.052 .750 Providing a stable and supportive work environment -.100 .732 Offering flexible/family friendly work arrangements .158 .647 Providing a good welfare and fringe benefit package .236 .596 Providing an attractive physical working environment .68 .64 Cronbach alpha Eigenvalue 2.37 1.92 Variance Explained % 23.75 19.27 Cumulative Variance Explained % 23.75 43.02 KMO .723 Bartlett Chi-sq 456.82 df 45 Sig .000 CBR Summit: 29-30 March 2006 Innovation and Governance
Principal component analysis for the U.K. sample UK SAMPLE RECOG- HRM orientations (item rank) ORG CLIM OWNERSHIP NITION Offering flexible/family friendly work .746 .116 -.155 arrangements (3) Providing a stable and supportive work .673 -.069 .166 environment (1) Providing an attractive physical working .496 .130 .370 environment (7) Providing a good welfare and fringe benefit .448 .311 .310 package (9) Encouraging autonomy in decision making .139 .697 -.090 (4) Giving challenging job assignments (2) .398 .618 .171 Giving employees a financial stake in the -.323 .601 .140 company (10) Paying top rates (6) -.138 -.151 .752 Providing/facilitating training and education .248 .199 .641 (8) Providing incentives for individual .307 .306 .404 excellence (5) 1.91 1.52 1.48 Eigenvalue 19.12 15.18 14.80 Variance Explained% 19.12 34.31 49.11 Cumulative Variance % KMO .740 Bartlett Chi-sq 126.56 df 45 Sig .000 CBR Summit: 29-30 March 2006 Innovation and Governance
Principal component analysis for the Japanese sample JAPAN SAMPLE ORG ORG RECOG- HRM orientations (item rank) GROWTH CLIM 1 CLIM2 NITION Encouraging autonomy in decision .773 .074 -.052 .182 making (3) Providing incentives for individual .730 -.204 .276 .072 excellence (1) Providing/facilitating training and .691 .115 .059 -.052 education (4) Giving employees financial stake in the .533 .512 -.152 .189 company (8) Providing an attractive physical working .022 .796 .209 -.001 environment (7) Providing a good welfare and fringe -.014 .778 .211 -.022 benefit package (10) Offering flexible/family friendly work arrangements (9) -.046 .133 .843 .054 Providing a stable and supportive work .187 .248 .779 -.016 environment (5) Paying top rates (6) -.023 .052 .069 .913 Giving challenging job assignments (2) .459 -.050 -.040 .604 Eigenvalue 2.14 1.65 1.52 1.28 Variance Explained % 21.39 16.46 15.17 12.79 Cumulative variance % 21.39 35.86 53.02 65.82 KMO .678 Bartlett Chi-sq 386. df 45 Sig .000 CBR Summit: 29-30 March 2006 Innovation and Governance
Overview of HRM orientation factors in the UK and Japan UK Japan Organization/ ・ Organization ・ Background Environment climate ・ Foreground Individual ・ Ownership ・ Growth ・ Recognition ・ Recognition CBR Summit: 29-30 March 2006 Innovation and Governance
Interpretation through case interviews (UK n = 25, Japan N = 25) • Contrast in HRM discourse between the two groups: much more prominent in the UK; more entrepreneur and activity/product-centred in Japan • Both groups looking for similar people: ‘fit’ with organization/culture crucial, positive, not clock-watchers • But systematic differences… CBR Summit: 29-30 March 2006 Innovation and Governance
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