Article

Entrepreneurial The Journal of Entrepreneurship

27(2) 151–179

Architecture: © 2018 Entrepreneurship

Development Institute of India

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Promote Innovation DOI: 10.1177/0971355718781245

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in Large Firms

Tahseen Arshi1
Paul Burns2

Abstract
In spite of the recognition that entrepreneurship and innovation are inter-
linked, very few studies have attempted to articulate this relationship.
The aim of this article is to explain the nature of the relationship between
entrepreneurship and innovation in large firms, arguing that entrepreneur-
ship is an antecedent to innovation.The study employs a multidimensional
entrepreneurial architecture (EA) framework for the first time and tests
the effect of a battery of entrepreneurship measures on innovation out-
put, which is reflected as degree and frequency of incremental and radi-
cal innovations.  Adopting a quantitative approach, data were collected
from 400 corporate firms in Oman representing various sectors of the
economy. The EA dimensions reflected through entrepreneurial culture,
entrepreneurial structure, entrepreneurial strategies and entrepreneurial
leadership were tested through measurement and structural modelling.
The results confirmed that entrepreneurship is a precursor to innovation.
The EA framework, through its four dimensions, creates a collabora-
tive and complimentary intensity that promotes innovation outputs,
which may not be possible from the isolated effects of individual factors.

1
Assistant Professor and Director of Studies, Faculty of Business Management,
Majan University College, Muscat, Oman.
2
Professor Emeritus, University of Bedfordshire, Park Square, Luton, United Kingdom.

Corresponding author:
Tahseen Arshi, Assistant Professor and Director of Studies, Faculty of Business
Management, Majan University College, P.C. 112 Ruwi, Muscat, Oman.
E-mail: tahseen.arshi@majancollege.edu.om
152 The Journal of Entrepreneurship 27(2)

The present study extends the extant literature, explaining how these
entrepreneurship measures synergistically impact varying levels of inno-
vation output. It has practical implications for managers in large firms
involved in promoting innovation. They can transform the existing organ-
isational architecture into an EA, by transplanting these entrepreneurship
measures and creating a framework that promotes innovation.

Keywords
Entrepreneurial architecture, entrepreneurial culture, entrepreneurial
structure, entrepreneurial strategies, entrepreneurial leadership, innovation

The role of entrepreneurship in promoting innovation in large firms

has received considerable empirical attention. There is a widely held
view in the literature that entrepreneurship and innovation are tightly
intertwined (Fagerberg, Fossas, & Sappprasert, 2012). However, the rela-
tionship between entrepreneurship and innovation is not well articulated
(Landström, Åström, & Harirchi, 2013; Maritz & Donovan, 2013).
One view, led by researchers such as Crossan and Apaydin (2010), postu-
lated that entrepreneurship is a tool of innovators, while the other most
commonly held view in the literature led by researchers such as Lewrick,
Omar, Raeside and Sailer (2010) and Zhaou (2005) posited that innova-
tion is a tool of entrepreneurs, arguing that innovation is a result of entre-
preneurship. They observed that there are economic consequences of
entrepreneurship, which are mostly manifested as innovation outcomes
(Block, Thurik, & Zhou, 2013). Mcfadzean, O’Loughlin and Shaw (2005)
acknowledged that without the presence of entrepreneurship within
organisations, innovation only remains aspirational, rather than a possi-
bility. Antonic (2006), Ireland, Kuratko and Morris (2006), Robert and
Amit (2003) and Yildiz (2014) have all supported the central role of
entrepreneurship in promoting innovation. In the context of large firms,
entrepreneurship leverages innovation as a tool for strategic renewal and
business venturing (Yildiz, 2014).
Taking a distinct view, Mittelstadt and Cerri (2009) stated that the
relationship between entrepreneurship and innovation is co-dependent.
Supporting them, Kuratko, Morris and Schindehutte (2015) explained
the reciprocal nature of this relationship. They argued that by underpin-
ning firm creation and firm expansion, entrepreneurship tends to promote
innovation. On other hand, fostering policies for innovation supports
Arshi and Burns153

entrepreneurship, characterised through spin-offs and strategic renewal.

Thus, the debate on the nature of the relationship between entrepreneur-
ship and innovation has driven researchers and scholars to search for
empirical evidence, but a universal agreement on the issue has remained
somewhat elusive (Shane & Venkataraman, 2000; Wiklund & Shepherd,
2008). Although entrepreneurial orientation studies (Covin & Wales, 2012;
Dess, Pinkham, & Yang, 2011) have identified what constitutes entrepre-
neurship measures, it is still not clear how these can be implemented
through an organisational framework in large organisations. Chesbrough
(2003), Mcfadzean et al. (2005) and Morris, Kuratko and Covin (2011)
have called for better understanding of entrepreneurial measures that
influence innovation.
This study aims to fill this research gap by developing and testing a
research framework, which clearly articulates that entrepreneurship is
essential for innovation. Further, this study emphasises the need for an
entrepreneurship framework that is instrumental in the implementation
of measures that support innovation. It builds on previous studies affirm-
ing that during uncertain times and disruptive competition, innovation
is a key tool to achieve competitive strength and strategic renewal
(Kuratko et al., 2015). The study for the first time uses a multidimen-
sional entrepreneurial architecture (EA) framework, developed by Burns
(2008, 2013), and tests its effect on innovation output, reflected as degree
and frequency of innovation (Bessant & Tidd, 2011). Further, this study
explains how organisational dimensions, namely, entrepreneurial culture,
entrepreneurial structure, entrepreneurial strategies and entrepreneurial
leadership (CSSL), the four dimensions of EA, influence varying levels
of innovation output in firms. The study argues that the four CSSL
dimensions can be designed entrepreneurially by transplanting the EA
measures into a large firm. It therefore not only sheds more light on
the nature of relationship between entrepreneurship and innovation, but
also validates entrepreneurship measures that can be instrumental in
promoting innovation in large firms.
The entrepreneurship measures identified and empirically validated
in this study are informed by a comprehensive 100-item EA measurement
scale, called CEA audit, developed by Burns (2013). Further, the study
was informed by an exhaustive literature search on entrepreneurship
measures promoting innovation. This study suggests that the aggregated
effect of multidimensional EA factors and associated measures creates
an orchestrated and collaborative force that enhances innovation in
large firms. A combined action of multiple entrepreneurship factors, as
compared to isolated efforts, is needed to spur innovation because
154 The Journal of Entrepreneurship 27(2)

innovation is a broad, complex and multistage process and needs

enabling organisational conditions (Bessant & Tidd, 2011). This is in
line with the arguments put forward by Dalohoun, Hall and Van Mele
(2009), who stated that the combined effort of multiple entrepreneurship
factors not only creates an innovation-enabling environment, but also
enhances innovation. Considering the fact that EA is a multidimensional
construct, aggregates of heterogeneous measures statistically, can provide
a complete understanding of entrepreneurial behaviour in organisations,
as compared to only specific dimensions studied in isolation (Edwards,
2001; Frieman, Saucier, & Miller, 2017).
This is especially relevant for large firms, which tend to undervalue
entrepreneurship under pressures of growth and efficiency and create
bureaucratic obstacles to change and innovation (Badal, 2013). As a
result, large firms struggle to find a universal solution for promoting
innovation (Hansen & Birkinshaw, 2007). They recommended an end-
to-end view of the organisation and proposed an entrepreneurship frame-
work that supports innovation. Hosseini, Hossein and Brege (2012) also
called for creating an entrepreneurship framework, where coordinated
and collaborative entrepreneurship efforts are undertaken to promote
innovation.

Entrepreneurial Architecture Framework

The EA was conceptualised by Burns (2008, 2013), as an entrepreneurship
framework for large firms. The EA was largely informed by organisa-
tional architecture literature, which has seen more than 50 years of
academic development, since it was first proposed by Sayles (1964).
It was later developed by Kay (1998), Grant (2010) and Tushman, et al.
(2006). Brizek (2014), Nelles and Vorley (2011) and Tahseen Arshi (2012)
found EA to be a useful amalgamation of entrepreneurial measures.
Organisational architecture factors usually comprise of organisational
culture, structure, strategies and leadership factors (CSSL). The fact that
entrepreneurship can be infused into CSSL factors has found support in
the literature. A substantial amount of research was found that investi-
gated the effect of individual CSSL factors on innovation. The studies on
the effect of organisational culture on innovation gave insight into meas-
ures of an entrepreneurial culture that promotes innovation. Büschgens,
Bausch and Balkin (2013) included measures related to norms and
values focused on valuing people and ideas. Cameron and Quinn (2011),
Arshi and Burns155

Glisson (2015) and Nham, Pham and Ngyuen (2015) called for embedding
effective human resources practice into organisational culture. Primary
among them were reward and retention strategies and team develop-
ment. Hofstede, Hofstede and Minkov (2010) and Yildiz (2014) reported
that collectivist culture and low power distance promotes innovation.
A number of organisational climate studies, including those by Amabile
(1997) and Isaksen and Evkall (2010), used extensive measures related
to idea generation, rewards and recognition, resource allocation and
organisational support (Balker, 2015). Bastic and Leskovar-Spacapan
(2006), Gürkan and Tükeltürk (2017) and Youngblood (2007) opined
that a quantum culture, characterised through speed, responsiveness,
creativity, tolerance for risk and failure are important measures of an
organisational culture that can promote innovation.
The studies on the effect of organisational structure on innovation
were mapped with Burn’s (2013) EA measures and were found to be
similar. Prominent among them were from Nagji and Tuff (2012) and
Dlugoborskyte, Petraite and Buse (2015), who recommended removal of
bureaucratic controls, and Ahmed and Shepherd (2010) and Demrici
(2013), who called for independence of operating divisions. On similar
lines, Gürkan and Tükeltürk (2017) believed that organic structures are
better suited for innovation compared to mechanistic structures. These
are characterised through flatness, low specialisation and decentralised
decision-making. Finally, Allen and Henn (2007) and Knott (2012) called
for creation of formal and informal networks to promote innovation.
The studies on the effect of organisational strategies on innovation
were useful to analyse the measures of entrepreneurial strategies that
promote innovation. Kuratko et al. (2015) and Teece (2012) concurred
that strategies to promote innovation involve developing dynamic
capabilities and resources. Strategic focus on creating intellectual, social
and relational assets was found to be influencing innovation (Bogers,
2011; Dobni, Klassen, & Nelson, 2015; Lavie, 2006; Subramaniam &
Youndt, 2005). An open innovation strategy and crowdsourcing were
supported by Afuah and Tucci (2013). Finally, market entry strategies
were linked to innovation by Ahmed and Shepherd (2010), Lerner (2010)
and Kim and Mauborgne (2005).
The studies on the effect of organisational leadership on innovation
gave insight into the measures of entrepreneurial leadership that promotes
innovation, many of which were part of Burn’s (2013) EA measures.
Sarros, Cooper and Santora (2011) found leadership dimension to be
positively influencing innovation. Specific leadership style that was
linked to innovation was transformation leadership style, which included
156 The Journal of Entrepreneurship 27(2)

a vision for innovation, inspirational motivation and team or collective

leadership (Denti, 2011; Zacher & Rosing, 2015). Another leadership
style that was linked to innovation was self-leadership and distributive
leadership characterised through autonomy and trust (Neck & Houghton,
2006; Spillane, 2006). Considering the fact that entrepreneurship can be
infused into CSSL factors, the following hypothesis was developed:

Hypothesis 1: Entrepreneurial culture (H1a), entrepreneurial structure

(H1b), entrepreneurial strategies (H1c) and entrepreneurial
leadership (H1d ) reflect entrepreneurial measures and hence are
appropriate first-order factors of EA.

A sizeable amount of literature was found to have investigated the effect

of a combination of CSSL factors on innovation in large firms. Primary
among them were Beheshtifar and Shariatifar (2013), who studied the
relationship between organisational structure and culture on innovation.
Similarly, Apekey, Mc Sorley and Tilling (2011) and Melnyk and
Davidson (2009) examined the role of organisational culture and leader-
ship in promoting innovation. Further, Muller, Malikangas and Merlyn
(2005) and Rainey (2006) studied the effect of organisational strategy and
leadership on innovation. Although these studies were useful in providing
insights into the effect of individual or a combination of factors on inno-
vation, they were not able to shed much light on the combined effect of all
CSSL factors on innovation output (Rutherford & Holt, 2007). It is argued
that in quantitative studies like these, where measurement and validity
are key goals, the aggregate effect of multidimensional measures has the
potential to create valid scales (Edwards, 2001). Individual factors may
provide useful insights into measures related to a single dimension, but
they can be dependent on other dimensions and their measures. These
measures may therefore complement or support each other. An EA, as a
result, can be more effective in promoting innovation output. Therefore,
the following hypothesis was developed.

Hypothesis 2: EA framework positively and significantly impacts

innovation output.

Since this study supported the proposition that innovation is a result of

entrepreneurship, only output measures of innovation, as conceptualised
by Rosenbusch, Brinckmann and Bausch (2010), were considered in this
study. Output measures of innovation usually reflect in markets in the
form of products and services. Output factors of innovation are largely
represented as degree or scale of innovation, often termed as incremental
Arshi and Burns157

and radical innovations. Degree of innovation is applicable to most

categories of innovation outputs (Bessant & Tidd, 2011; Morris & Kuratko,
2002). The frequency of innovation was also found to be valid measure
of innovation output by Tahseen Arshi (2017). He found it to be associ-
ated more with incremental innovation, rather than radical innovation.
Incremental innovation is explained by Conway and Stewards (2009) as
learning by doing and incremental improvements over time with higher
frequency, while radical innovation was explained as major advance-
ment in a particular field. Bessant and Tidd (2011) pointed out that
radical innovation disrupts the markets and competition, however with
lower frequency, compared to incremental innovation. Based on the
proposition that innovation output is reflected through innovation degree,
the following hypothesis was developed.

Hypothesis 3: Radical innovation degree (H3a) and incremental

innovation degree (H3b) are appropriate first-order factors of
innovation output.

Research Framework
The research framework in Figure 1 shows that the first-order CSSL
factors of the second-order EA construct are reflective of entrepreneur-
ship measures. Similarly, the first-order radical and incremental innovation
degree factors of the second-order innovation output construct are reflec-
tive of innovation measures. The research framework was developed to
test the validity of the reflective measures and the hypothesised relationship
between EA and innovation output.

Methodology
Epistemological positioning for this research was an important considera-
tion because it influenced how the research objectives were framed,
hypotheses developed and research approaches aligned (Saunders, Lewis,
& Thornhill, 2010). This study adopted a positivist and realist approach
and followed a deductive approach with most of the variables identified
from the theoretical frameworks (Fisher, 2004). Quantitative research
strategies were helpful to reduce the data, test relationship between
variables, test hypothesis, validate existing scale and arrive at findings.
Measurement, causality and validity therefore assumed importance in
this research. Qualitative strategy was limited to confirming the results
Figure 1. Research Framework
Source: Authors’ own.
Arshi and Burns159

and refining measures. Once the quantitative study was completed, the
measures were reconfirmed by corporate managers through qualitative
interviews.

Sample
A total of 580 large firms based on Institutional Standards Classification
by Oman Chamber of Commerce and Industry were selected for the
study. After receiving a prior consent from these firms, a structured ques-
tionnaire was sent to the senior managers (one from each firm) represent-
ing different sectors of the economy. Out of 405 firms that responded,
400 responses were considered fit for analysis and were found adequate
based on Yamane’s formula.

Measures
The items for the EA construct were derived mainly from EA scale
developed by Burns (2008, 2013) and mapped against related scales and
the literature. The measures for innovation output were derived from the
models from Rosenbusch et al. (2010), Morris and Kuratko (2002) and
Bessant and Tidd (2011). The initial research instrument was piloted and
the items were pretested qualitatively by experts and practitioners. A total
of 44 items were refined, psychologically dissociated and selected.

Results
Homogeneity of variances indicted that the sample across different
sectors was homogeneous (indicated by Levene’s statistic >0.05 and
single column Tukey’s honest significant difference [HSD] test) on all
demographic factors such as experience in the company and industry.
The results showed a high level of reliability with Cronbach’s alpha
score of 0.893. The Kolmogorov–Smirnov and Shapiro–Wilk test values
(>0.000) indicated that the data were derived from a normally distributed
sample. No presence of multicollinearity was detected as the VIF values
were <0.2. Ideally, the presence of multicollinearity is detected when the
VIF values are >2 (Tabachnik & Fidell, 2013). All items were subjected
to exploratory factor analysis involving principal components analysis
with promax rotation and Kaiser normalisation as suggested by Kline
(2010). The results of exploratory factor analysis through pattern matrix
showed that the measures satisfactorily loaded on to their respective
factors (>0.40, p < 0.05). The factor matrix comprising of 44 items identi-
160 The Journal of Entrepreneurship 27(2)

fied 10 measures each in four groups for EA and 4 measures in two groups
for innovation, which had eigenvalues >1 and keeping a minimum factor
loading cut-off value >0.40. The Kaiser–Meyer–Olkin (KMO) test showed
a score of 0.882 indicating the usefulness of factor analysis data fit for
structural equation modelling (SEM) tests.

Structural Equation Modelling Tests

and Hypothesis Testing
The SEM tests were conducted to test the validity of the EA factors and
measures in this study. The SEM allowed testing of a set of relationships
between one of more independent variables and one or more dependent
variables. Westland (2015) considers SEM to be an appropriate tool as
it tests modelling interactions, non-linearity, correlated independents,
correlated errors and error terms. This is the reason that SEM is also
referred as measurement model and causal model terms which will be
used in this study. The measurement model (Figure 2) was estimated
based on MLM using AMOS (version 22). The tests confirmed validity
of 22 of the 40 measures of the EA scale. All the four measures of inno-
vation were found to be valid in the structural model (Figure 3). Figure 2
shows the measurement model for EA and factor loadings, which were
above the recommended range (>0.40, p < 0.001), as suggested by
Tabachnik and Fidell (2013). The model fit indices met the required
standards recommended by of Tabachnik and Fidell (2013).
Based on the cut-off criteria (>0.40), 18 items were removed from
the measurement model leaving 22 valid items. All the measures
loaded satisfactorily on to their measure showing convergent validity,
while discriminant validity was shown through low covariance scores
(Figure 2). Based on the findings, H1(a–d) is well supported positively
and significantly (path coefficient values: 0.77; 0.59; 0.61; 0.74,
p < 0.001) (Figure 3). Therefore, H1(a–d) is accepted proving that entre-
preneurial culture (H1a), entrepreneurial structure (H1b), entrepreneurial
strategies (H1c) and entrepreneurial leadership (H1d) reflect entrepre-
neurial measures and hence are appropriate first-order factors of EA.
Further, to analyse the impact of EA on innovation, the causal relation-
ship was tested as the complete SEM model and the results are shown
in Figure 3.
Based on the cut-off criteria (>0.40), all items were validated in the
measurement model and retained in the SEM model. H2 is also well
supported positively and significantly as the complete SEM model showed
that EA framework positively and significantly impacts innovation
Arshi and Burns161

CMINDF 1.642 GFI .981 AGFI .912 CFI.958 RMSEA .042

Figure 2. Path Diagram Showing Valid Measures of EA
Source: Authors’ own.
Disclaimer: 
This image is for representational purposes only. It may not
appear well in print.

output (path coefficient value: 0.79, p < 0.05). All the fit indices were
satisfactory with recommended ranges as suggested by Gaskin (2012).
All the paths were significant ( p < 0.001). Based on the findings,
H3(a and b) is also supported positively and significantly as radical
innovation degree (H3a) (path coefficient value 0.51, p < 0.001) and incre-
mental innovation degree (H3b) (path coefficient value 0.67, p < 0.001)
are appropriate first-order factors of innovation output.

Validity
Validity theorists argue that construct validity is a primary concern and
is overarching on other types of validity (Hair, Black, Babin, & Anderson,
2010). Construct validity helps to measure a construct, which is opera-
tionally difficult to define. In such cases, inferences are made based on
the test scores (William & Wragg, 2004). In this study, construct validity
was determined primarily to assess whether the measure behaved in
accordance with the theory. Jeremy and Park (2009) pointed out that if
162 The Journal of Entrepreneurship 27(2)

CMINDF 1.952 GFI .962 AGFI .901 CFI.912 RMSEA .048

Figure 3. Complete SEM Model Showing the Causal Relationship between
EA and Innovation
Source: Authors’ own.
Disclaimer: 
This image is for representational purposes only. It may not appear well
in print.

all observed variables load satisfactorily on each factor (>0.40), then it

is an indication of convergent validity. Convergent validity was also
established through AVE scores >0.50, which indicated more indicator
variance than variance due to error. Since the shared variance between
the latent constructs’ indicators was higher than the variance shared with
other latent variables, it indicated the presence of discriminant validity
(Götz, Krafft, & Liehr-Gobbers, 2010).

Discussion
The results show that 22 measures across CSSL factors are significant
measures of EA and are precursor to innovation output. It establishes that
entrepreneurship is instrumental in promoting innovation in large firms.
The measures are summarised in Table 1.
These measures as shown in Table 1 provide an insight into an entre-
preneurial organisational design framework. They promote innovation
through a coordinated and collaborative effort that can act as enabling and
Arshi and Burns163

Table 1. Validated Measures of Entrepreneurial Architecture

Culture [ECUL] Structure [ESTU] Strategies [ESTR] Leadership [ELP]

Team working Risk management Customer Openness [ELP1]
[ECUL1] [ESTU1] feedback [ESTR1]
Valuing people Autonomous Crowdsourcing Environmental
[ECUL2] [ESTU2] [ESTR2] monitoring
[ELP2]
Time for learning Spin-offs [ESTU3] Risk taking Trust [ELP3]
[ECUL3] [ESTR3]
Experimentation Networks Spotting Vision [ELP4]
[ECUL4] [ESTU4] opportunities
[ESTR4]
Reward [ECLU5] Resources for Resource sharing Clarification
new ventures [ESTR5] of uncertainty
[ESTU5] [ELP5]
Delegated Influence rather
decision-making than direction
[ESTU6] [ELP6]
Source: Authors’ own.

Table 2. Validated Measures of Innovation

Radical Radical Incremental Incremental

Innovation [RI]— Innovation [RI]— Innovation [II]— Innovation [II]—
Degree Frequency Degree Frequency
Degree of impact Frequency Degree of Frequency of
through radical of radical impact through incremental
innovation[RI1] innovation (over incremental innovation (over
a base period of innovation [II1] a base period of
2 years) [RI2] 2 years) [II2]
Source: Authors’ own.

guiding factors for corporate firms. The magic pills of standalone initia-
tives to create an entrepreneurial organisations are abound, but however
well intentioned they may be, can be subject to failure in the absence of
a framework as proposed by EA. The entrepreneurship measures within
the EA framework act synergistically and create a collaborative force to
promote innovation. The discussion below explains how different entre-
preneurship measures influence varying levels of innovation output.
Table 2 shows the innovation output measures. The detailed measures of
entrepreneurial architecture and innovation are shown in tables 3 and 4.
164 The Journal of Entrepreneurship 27(2)

Table 3. Detailed Measures of Entrepreneurial Architecture

Culture
 1 ECUL1 Cross-functional teams usually work on new ideas
and projects
 2 ECUL2 People are valued in the organisation
 3 ECUL3 There is time for learning and innovation
 4 ECUL4 The organisation encourages experimentation
 5 ECUL5 Entrepreneurship and innovation are recognised
and rewarded
Structure
 6 ESTU1 There are structures to monitor and manage risk
 7 ESTU2 Operating divisions or subsidiaries are relatively
autonomous
 8 ESTU3 There have been spin-offs from new venture activities
 9 ESTU4 The organisation encourages building networks of
relationships with external people and organisations
10 ESTU5 There are structures to provide resources for new
venture activities
11 ESTU6 The organisation encourages and facilitates delegated
decision-making
Strategies
12 ESTR1 There are strategies and structures to get customer
feedback
13 ESTR2 Crowdsourcing and open innovation are encouraged and
facilitated
14 ESTR3 The organisation encourages entrepreneurial risk taking
15 ESTR4 Staff are encourage to spot commercial opportunities for
the organisation
16 ESTR5 Resources and capabilities are shared across the
organisation
Leadership
17 ELP1 Leaders are open to new ideas and new business models
18 ELP2 The leaders in my organisation regularly monitor the
environment and communicate to us the threat and
opportunities
19 ELP3 Senior managers trust with new responsibilities
20 ELP4 ELP4 senior leaders have clear vision for innovation—
they ‘walk the talk’
21 ELP5 Senior managers are good at clarifying uncertainties
going forward, focusing effort on important things
22 ELP6 Senior managers influence rather than direct
Source: Authors’ own.
Notes: Leadership—ELP; structure—ESTU; culture—ECUL; strategies—ESTR.
Arshi and Burns165

Table 4. Detailed Measures of Innovation

1 RI1 Radical innovation creates impact on competition and

customers through radical changes to products and services
2 RI2 A number of radical changes to products and services
have occurred over the last two years
3 II1 Incremental innovation creates impact on competition and
customers through improvements and modifications to
existing products and services
4 II2 A number of incremental changes to products and
services have occurred over the last two years
Source: Authors’ own.
Note: RI: Radical innovation degree; II: incremental innovation.

Entrepreneurial Culture
Entrepreneurial culture was found to be a valid dimension of EA.
The entrepreneurial culture dimension was represented through the
five significant culture characteristics: team working [ECLU1], valuing
people [ECLU2], time for learning [ECLU3], experimentation [ECLU4]
and reward [ECLU5]. Items meaning entrepreneurial culture, structure,
strategies, leadership and innovation are provided in Table 3. The find-
ings of this study indicate that the measures of culture were similar to
organisational climate measures, suggested by Amabile (1997) and Isaksen
and Ekvall (2010). These studies also considered measures such as time
for learning, experimentation and reward for ideas and innovation.
Hashimoto and Nassif (2014) claimed that entrepreneurial culture
characteristics such as valuing employees, reward systems and time for
learning induce entrepreneurial behaviour among employees. Ideas and
innovation flourish within such an entrepreneurial culture. They recom-
mended that reward systems should be designed for new ideas, as well
as for results of implementation of those ideas.
Team work is also seen as valuable measure in an entrepreneurial
culture. Innovation is often a result of team work and cross-functional
teams; in particular, they are adept to deal with creative tensions associ-
ated with innovation (José, Pérez, & Molina, 2017). Brettel, Heinemann,
Engelen and Neubauer (2011) also reported a positive relationship between
cross-functional teams and innovation. The entrepreneurial leadership
measures like leadership trust [ELP3], vision [ELP4] and entrepreneurial
structure measure such as delegated decision-making [ESTU6] support
and complement these entrepreneurial culture measures. It is difficult
166 The Journal of Entrepreneurship 27(2)

to create an entrepreneurial culture in the absence of a clear vision for

innovation, a trusting relationship between employees and leaders and
delegated decision-making. Youngblood (2007) supported these entrepre-
neurial culture measures, where employees are treated as equal to or above
financial concerns and motivation comes from an inspiring vision and
empowerment. Such a culture promotes feelings of belongings, trust and
creativity.

Entrepreneurial Structure
Entrepreneurial structure was found to be an appropriate measure of EA
with six significant measures. The structure dimension emphasises loose
organisational control (e.g., decentralisation, autonomy) and structures
that monitor and manage risk and promote innovation (e.g., networking,
team working). These characteristics are represented in the six signifi-
cant structure characteristics: risk management [ESTU1], autonomous
[ESTU2], spin-offs [ESTU3], networks [ESTU4], resources for new
ventures [ESTU5] and delegated decision-making [ESTU6]. Some of the
entrepreneurial strategy measures complement entrepreneurial structure
characteristics related to customer feedback [ESTR1] and spotting
opportunities [ESTR4], both of which can be helpful in creating spin-offs
[ESTU3]. The entrepreneurial leadership measures also support spin-offs,
which requires monitoring of market trends [ELP2] and clarifies uncer-
tainties [ELP5]. The balance between risk taking and risk management
goes to the heart of entrepreneurship. An entrepreneurial firm must take
measured risks if it is to gain competitive advantage in a changing, uncer-
tain environment, but it must also manage those risks if it is to survive.
Large firms need to be consistent to value both risk taking [ESTR3] and
risk management [ESTU1].
Gürkan and Tükeltürk (2017) and Nagji and Tuff (2012) emphasised
that organisations that wish to nurture innovation must have structures
that facilitate it. The literature on innovation emphasises the importance
of formal and informal networks in providing information on new
opportunities (e.g., Allen & Henn, 2007). Marks and Lockyer (2004) and
Mulec and Roth (2005) also discussed how networking is crucial in
gaining market insights and new commercial opportunities [ESTR4].
Thornhill and Amit (2001) asserted that divisions should enjoy consider-
able autonomy and lose control, provided that there is a strategic fit within
the organisation. Autonomy and independence give the flexibility to
respond to changes in the environment and adjust innovation objectives
Arshi and Burns167

(Tsang, 2016). Firms can easily grow enamoured with the idea of trans-
formational change and innovation, but should be cautioned that the
transformation process cannot overcome fundamental structural disad-
vantages by it. A flawed organisational structure can jeopardise its effort
towards change and innovation. An entrepreneurial structure coupled
with an entrepreneurial strategy underpins any transformation effort that
leads to innovation.

Entrepreneurial Strategies
Entrepreneurial strategy factor was found to be a valid element of EA
with five significant measures. The entrepreneurial strategy dimension
tends to be broad in scope, focusing on the importance of knowledge,
information and learning. These characteristics are represented in the
five significant strategy characteristics: customer feedback [ESTR1],
crowdsourcing [ESTR2], risk taking [ESTR3], spotting opportunities
[ESTR4] and resource sharing [ESTR5]. Crowdsourcing in particular
is largely complemented by leaders’ openness to new business models
[ELP1], entrepreneurial structure measures such as spin-offs [ESTU3],
professional networks [ESTU4] and resource allocation [ESTU5].
For different forms of innovation, crowdsourcing is a relevant strategy
for business venturing, whereby resources and technical skills and know-
ledge can be shared globally through online communities (Penin, 2008).
Howe (2008) suggested that these collaborative partnerships can be cre-
ated with professional forums, venture capitalists, universities, hobbyists
and even customer groups. This has brought a paradigm shift in sourcing
and manufacturing. Open innovation has made manufacturing just
another cloud service. Common design file standards can be sent to web-
based on-demand commercial manufacturing services to be produced
in any number. Risk taking in this context revolves around chances of
losing on patenting and intellectual property.
The results emphasise a strategic focus with an awareness of customer-
focused opportunities. Debruyne (2015) and Martin (2011) opined that
customers also influence different forms of innovation, particularly incre-
mental innovation. Opportunity seeking, which is termed as proactiveness
in entrepreneurial orientation literature (Covin & Lumpkin, 2011), is a key
aspect of business venturing, without which innovation cannot be fully
exploited. Rhee and Mehra (2013), Tang and Hull (2012) and Wang,
Hermens, Huang and Chelliah (2015) suggested first mover strategies
for innovation. An interesting aspect of the strategies related to innovation
168 The Journal of Entrepreneurship 27(2)

is that it also needs to be internally directed. Teece (2012) suggested

the importance of internally directed strategies particularly those asso-
ciated with resource sharing [ESTU6] and developing capabilities for
innovation.

Entrepreneurial Leadership
The entrepreneurial leadership factor was found to be a key element of
EA with six significant measures. The findings therefore support entre-
preneurial leadership as a significant dimension affecting innovation,
which is also supported by Sarros et al. (2011). The leaders’ ability to
spark and sustain innovation in their organisations was highly regarded
[ELP1], supported by a reward culture [ECUL5]. The leadership dimen-
sion reflects all the established characteristics of strategic leaders (strate-
gic thinkers, learners and reflectors) and authentic leaders (emotional
intelligence, self-awareness and self-management). While it also reflects
elements of a number of leadership paradigms, it draws particularly on
the transformational and delegated leadership literatures. These charac-
teristics are therefore well represented in the six significant leadership
characteristics: openness [ELP1], environmental monitoring [ELP2], trust
[ELP3], vision [ELP4], clarification of uncertainty [ELP5] and influence
rather than direction [ELP6]. However, they also need to be complemented
by entrepreneurial structure measures such as autonomous structures
[ESTU2] and delegated decision-making [ESTU6].
Leader’s vision was found to be a key measure that supports many
other entrepreneurial measures across four dimensions. Sarros et al.
(2011) highlighted the role of vision that challenges the status quo and
promotes change, a characteristic represented in these results [ELP4].
Antonakis, Avolio and Sivasubramaniam (2003) maintained that leader’s
ability to communicate the vision and inspire others to commit to
their vision is critical. This motivates followers to achieve the vision
(Waite, 2014), at the same time reassuring them that it can be achieved
despite uncertainties (Ahmed & Shepherd, 2010). Transformational
leadership is about vision, interpersonal skills, participation and empow-
erment [ELP1, 3, 4 and 6]. It inspires and prompts employees to emulate
the behaviours of their leaders. Transformational leaders have the capacity
to motivate and engage their employees beyond their excepted levels of
performance and make them feel rewarded and engaged (Sarros et al.,
2011). It is characterised by lower order factors such as idealised influence
(related to leaders’ charisma), inspirational motivation and intellectual
stimulation. Jung, Chow and Wu (2003) believed that transformational
Arshi and Burns169

leaders enhance innovation by engaging and trusting employees, empow-

ering them to take on new responsibilities.
Dispersed or distributive leadership is about trust, openness and
delegation. It is characterised by influence rather than direction [LP1, 3].
It encourages leadership at all levels in the organisation. Spillane (2006)
pointed out that distributive leadership is primarily characterised by
strong interactions between leaders and followers. Deschamps (2005)
supported the leadership role in bottom-up innovation, where the ideas
are employee-driven, in a culture where people are not afraid to learn
from their failures, experiment and take risks [ECUL3 and 4]. Similarly,
Krause, Gebert and Kearney (2007) reported strong and positive relation-
ship between delegative-participative leadership and process innovation
[ESTU6]. Kuratko and Hodgetts (2007) pointed out that entrepreneurial
leadership develop self-directing, self-managing and high performing
teams that can initiate and handle transformational change.
The study highlighted the leaders’ ability to monitor threats and
opportunities [LP2] and act strategically to encourage entrepreneurship.
Environmental scanning is a critical characteristic of strategic leader-
ship. Deschamps (2005) argued that leaders focused on innovation, think
and act strategically by building teams to spot opportunities [ESTR4].
The literature also discussed strategic focus in the context of innovation
and risk management. Borgelt and Falk (2007) pointed out that organi-
sations will not be ready to take up risky projects until the leadership
of the organisation supports risk-taking initiatives as part of organi-
sational strategy [ESTR3]. De-Bertani (2001) observed that entrepre-
neurial leaders manage the resources for risky projects by interacting with
multiple stakeholders including those outside the organisation [ESTU4].

Innovation Output
All four measures of innovation output, namely, degree and frequency of
radical innovation [RI1 and RI2], and degree and frequency of incremental
innovation [II1 and II2], were found to be significant in this study.
Incremental innovation is an output measure that relates to improve-
ments and modifications of products and services which have moderate
effects on competitors and markets [II1]. The frequency of these incre-
mental changes may vary, although higher levels of frequency may be
evident [II2]. Radical innovation is also an output measure and relates to
radical changes to products and services that have a significant impact
on competitors as well as markets [RI1]. The frequency of these radical
170 The Journal of Entrepreneurship 27(2)

changes may vary, usually resulting in lower levels of frequency [RI2].

This is due to greater degree of research and development associated
with radical innovation, which has implications on time and cost.
The valid measures of incremental and radical innovations in this
study are similar to those identified by Nieto, Santamaria and Fernandez
(2013), Tellis, Prabhu and Chandy (2009) and Wong (2014). Both forms
of innovation are essential for firms impacting with varying degrees and
frequency (Tahseen Arshi, 2017). Frequent radical innovation, although
difficult to witness, provides the firm a substantially superior competi-
tive position (Dunlop-Hinkler, Mudambi, & Kotabe, 2010). Avermaete,
Viaene, Morgan and Crawford (2003) and Salavou (2002) remarked
that frequent incremental innovation is a more commonly witnessed
phenomenon, which provides a firm with sustained competitive advan-
tage, an observation supported by Dong (2015) and Norman and Verganti
(2014). While radical innovation has substantial impact on competition,
customers and markets, incremental innovation involves improvements,
searching and adjusting products and services based on multiple feed-
backs (Alvarez & Barney, 2007; Bessant & Tidd, 2011). Dunlop-Hinkler
et al. (2010) argued that both radical and incremental innovation can be
combined at different stages of the business lifecycle to achieve sustained
competitive advantage. The nature and outcome of innovation are multi-
ple and complex and it is one of the reasons an appropriate entrepre-
neurship framework is essential, as it creates an entire framework of
entrepreneurship measures that is critical to innovation value chain
within and outside the organisations (Hansen & Birkinshaw, 2007).

Limitations
Although there may be other factors that promote innovation in organi-
sations, they were not included considering the scope of this study.
The robustness of the 22-item scale is generalisable in the present research
setting as the measures were validated through a rigorous data analytic
technique and a large sample size. However, the findings should be
applied with caution because the research was conducted only within
Omani corporate sector and its validity has not been checked in different
economic settings. Burns (2013) observed that the exact form of an
effective EA depends upon the environment, which can be different from
country to country and sector to sector and vary over time with different
competitive environments. He also observed that its influence might vary
across different degrees of innovative intensity (degree and frequency).
Arshi and Burns171

It therefore may be appropriate to include other qualitative inputs to

provide contextual as well as statistical validity to the measures used.

Implications and Future Research Directions

The findings have important managerial implications. Firms cannot expect
to be innovative unless their leadership, culture, structure and strategies
are mutually consistent and entrepreneurial. The measures validated in
this study are useful for managers to design entrepreneurial organisa-
tions. They cover a range of organisational dynamics and hence provide
an appropriate framework that can guide managerial decision-making.
Further, managers should not give preference to either forms of innova-
tion as both incremental and radical innovations improve firm perfor-
mance and operate at different levels of degree and frequency, all forms
having an impact on customers, markets and competition.
Further research is needed to validate the transferability of these
results and establish the EA framework as a more generalisable manage-
ment tool to measure entrepreneurship within an organisation and its
influence on different types of innovation. Further, the moderating and
mediating effects of different variables between entrepreneurship and
innovation should be analysed in future studies to bring more clarity in
understanding such relationships. Finally, other critical dimensions of
innovation such as frequency and speed have not been well investigated,
which need empirical attention in future studies. It may also be of interest
to researchers to investigate specific entrepreneurship measures focused
separately for incremental and radical innovations.

Conclusion
This research supports EA measures and also supports the proposition
that entrepreneurship precedes innovation. Large firms are susceptible to
neglecting entrepreneurship, under pressures of growth and productivity,
which can have a detrimental effect on innovation outputs. This study
shows that large firms can retain entrepreneurship or in its absence trans-
plant entrepreneurship into its organisational architecture. Therefore,
EA measures can be helpful in guiding theoretical development and pro-
fessional practice. Individually, the CSSL factors can promote innovation
but the aggregate measures of an EA can support and promote innova-
tion in large firms through a collaborative and complementary force.
172 The Journal of Entrepreneurship 27(2)

The EA measures weave a framework of supporting and collaborating

acts of entrepreneurial behaviour resulting in enhanced innovation
output. Such an entrepreneurial framework supports the implementation
of innovation efforts across the organisations. It can be also concluded
that there is a causal link between EA and incremental and radical inno-
vations undertaken on a frequent basis. It supports the proposition that
incremental innovation and radical innovation has varying levels of
impact on customers, market and competition, since both vary in degree
and frequency. The frequency of incremental and radical innovations
may vary but both types of innovation provide substantial level of
competitive advantage to large firms. Finally, it is concluded that both
forms of innovation are independent of each other and therefore
mutually exclusive.

Acknowledgements
We would like to thank Oman Chamber of Commerce and Industry for support-
ing this research. We would also like to extend our gratitude to all corporate firms
who participated in this study. Finally, we are indebted to our colleagues at
Majan University College and University of Bedfordshire, who provided insight
and expertise that greatly assisted this research.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research,
authorship and/or publication of this article.

Funding
The authors received no financial support for the research, authorship and/or
publication of this article.

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