Fostering corporate entrepreneurship (CE): an examination of the relationship between CE and firm performance in auto parts manufacturing firms in Thailand

There is very little research in the field of corporate entrepreneurship in developing countries, particularly Thailand. In addition, it seems that existing corporate entrepreneurship literature lacks an integrative framework that conceptualizes and operationalizes the multidimensional construct of corporate entrepreneurship. Further, the relationship between corporate entrepreneurship and firm performance, including both financial and non-financial measures, has not been explicitly examined. This research, therefore, aims to fill these gaps in the literature. Environmental conditions including dynamism, hostility and, heterogeneity and organizational elements in terms of strategy and culture are explored in this research as determinants of corporate entrepreneurship. The relationship between corporate entrepreneurship and firm performance comprising both financial and non-financial aspects is also examined. The model of corporate entrepreneurship antecedents and effects is examined using a mixed-method approach. Specifically, the impact of environmental and organizational factors on corporate entrepreneurship as well as the relationship between corporate entrepreneurship and firm performance, based on self-report measures of environmental conditions, organizational strategy and culture, firm-level entrepreneurship and firm performance, are examined in 207 auto parts manufacturing companies in Thailand. Qualitative interviews explored the antecedents and the effects of corporate entrepreneurship in depth. Structural Equation Modeling (SEM) was employed to test a theorized model of corporate entrepreneurship antecedents and effects. Environmental and organizational factors were found to predict corporate entrepreneurship which, in turn, influenced firm performance in terms of both financial and non-financial aspects. Importantly, nonfinancial performance was found to influence financial outcomes. Furthermore, large companies were found to have a higher level of corporate entrepreneurship, particularly a self-renewal construct and financial performance, than small-sized and medium-sized enterprises (SMEs) did. The qualitative findings supported the results from the quantitative phase and provided rich information about the entrepreneurship activities of the auto parts manufacturing sector and their impacts on performance. Thai auto parts manufacturing firms stimulate entrepreneurial activities in their organizations through new business venturing, selfrenewal, innovativeness, and proactiveness by responding to changes and diversity in dynamic and heterogeneous environments while developing adaptive organizational strategy as well as innovative organizational culture. Through their entrepreneurial activities, Thai auto parts manufacturing firms have not only been able to earn higher profit and increase sales growth but also to achieve effective operations regarding new product development, product quality and employee satisfaction. This research contributes to the literature related to corporate entrepreneurship antecedents and effects. It contributes to understandings of entrepreneurial activity in the auto parts manufacturing firms in Thailand, and provides a foundation for future research. Recommendations for practice and policy makers are provided to assist Thai auto parts manufacturing companies, business enterprises in other industries, and new foreign investors and those who already have their operations in Thailand to successfully cultivate entrepreneurship in their organizations, with the primary goal of enhancing competitiveness.