Learning alliances, corporate entrepreneurship and business performance: is there really a linkage

Int. J. Business Environment, Vol. 3, No. 1, 2010 57

Copyright © 2010 Inderscience Enterprises Ltd.

Learning alliances, corporate entrepreneurship and business performance: is there really a linkage?

Heiko Haase* Faculty of Management and Economics, Worms University of Applied Sciences, Erenburgerstrasse 19 – 67549 Worms – Germany Fax: +49 6241 509 224 E-mail: [email protected] *Corresponding author

Mário Franco Department of Management and Economics, University of Beira Interior, Estrada do Sineiro – 6200 Covilhã – Portugal Fax: +351 275 319 601 E-mail: [email protected]

Abstract: In this study, we investigate how learning alliances affect corporate entrepreneurship. Then, we also analyse the influence of both learning alliances and corporate entrepreneurship on business performance. In order to achieve this objective, we adopt a quantitative research approach in a cross-sectional study of 80 Portuguese small and medium-sized enterprises. For the influence of learning alliances on business performance, the impact of knowledge acquisition and absorptive capacity is mixed. When including corporate entrepreneurship, proactiveness is the decisive variable in all performance measures. Taken together, we must question that strategic learning alliances per se create value in corporate entrepreneurship and performance. In addition, we conclude that the regional economic environment matters. Several implications are presented.

Keywords: corporate entrepreneurship; learning alliances; business performance; small and medium-sized enterprises; knowledge acquisition; absorptive capacity; Portugal.

Reference to this paper should be made as follows: Haase, H. and Franco, M. (2010) ‘Learning alliances, corporate entrepreneurship and business performance: is there really a linkage?’, Int. J. Business Environment, Vol. 3, No. 1, pp.57–73.

Biographical notes: Heiko Haase is a Full Professor of Innovation Management and Intellectual Property at the Faculty of Management and Economics, Worms University of Applied Sciences, Germany. He studied industrial engineering and received his PhD in Economic Sciences from Ilmenau University of Technology in 2003. His research fields comprise entrepreneurship, small and medium-sized enterprises, innovation management and intellectual property. He has had experience in several national and international academic cooperation projects in entrepreneurship and small business.

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Mário Franco is an Assistant Professor of Entrepreneurship and SME Administration at the Department of Management and Economics, Beira Interior University, Portugal. He received his PhD in Management from Beira Interior University in 2002. In 1997, he was a Doctoral candidate and participated in the European Doctoral Programme in Entrepreneurship and Small Business Management in Spain and Sweden. His research focuses on strategic alliances, innovation and business creation. He is also a member of a Research Unit (NECE) and currently involved in several research projects on SME.

1 Introduction

Over the past years, corporate entrepreneurship has widely been conceptualised by executives and researchers alike as an effective means for revitalising companies and improving their performance (Zahra and Covin, 1995; Antoncic and Prodan, 2008; Dess et al., 2008). This concept spans from developing new products or markets (Schollhammer, 1982; Miller, 1983; Janney and Dess, 2006) over company’s commitment to innovation (Zahra and Covin, 1995) to the creation of new ventures by established companies (Kuratko et al., 1990; Lumpkin and Dess, 1996). In this study, we will use the term ‘corporate entrepreneurship’ to refer to the multidimensional behaviour of identifying and realising new opportunities at the organisational level.

In this context, our paper deals with the conjunction of corporate entrepreneurship and strategic alliances. Alliances enable firms to complement their core competencies and to obtain additional resources (Aldrich and Zimmer, 1986; Glaister and Buckley, 1996; Brush and Chaganti, 1996; Zacharakis, 1998) they have grown in popularity over the last years (Dyer et al., 2001; Franco, 2001, 2003; Augustine and Cooper, 2009). As noted by Almeida et al. (2003), alliances are formed for a number of reasons including strategic, transactional and learning motivations. The latter will be discussed in this paper: learning alliances.

More precisely, the objective of our paper is to provide an explanation of how learning alliances can affect corporate entrepreneurship and to show how this phenomenon is positively correlated with business performance. We also pretend to demonstrate that both learning alliances and corporate entrepreneurship are related to each other and that both affect business performance. Given the changing nature of world business and the heterogenic regional settings, we think that research on entrepreneurship cannot ignore this subject. As recently noted by Antoncic and Prodan (2008), inter-organisational relationships in terms of networks and alliances have received inadequate research attention in the context of corporate entrepreneurship. Thus, our paper fills a gap by examining corporate entrepreneurship in light of the learning alliances phenomenon.

Hereby, we pay special attention to small and medium-sized enterprises (SME). Surely, researchers have studied how SME make use of alliances (Zacharakis, 1998; Steensma et al., 2000; Franco, 2001; Marino et al., 2002). However, empirical research in the field is almost absent from literature, exceptions are the works of Deeds and Hill (1996), Sarkar et al. (2001), Cooper (2002) and Antoncic and Prodan (2008). There is, in our perception, a clear need of statistically robust insights on the effects of

Learning alliances, corporate entrepreneurship and business performance 59

learning alliances within the SME context and on their consequences for corporate entrepreneurship.

Furthermore, we would like to draw attention to another void in entrepreneurship research. Although studies looking at the mere effect of corporate entrepreneurship on business performance do not constitute a novelty (cf. for the most recent: Luo et al., 2005; Zhao, 2005; Wiklund and Shepherd, 2005; Heidemann Lassen, 2007), little has been done to examine the impact of the conjunction of strategic alliances and corporate entrepreneurship on performance. Nor has the focus been on SME in particular. Thus, in the research presented here, we want to see the alliance literature being applied to SME, contributing to this growing body of empirical literature. Hereby, our central focus lies on an empirical, cross-sectional study among Portuguese SME in which we show the link among learning alliances, corporate entrepreneurship and business performance.

The remainder of the paper is structured as follows: Next section reflects about the relationships between learning alliances, corporate entrepreneurship and business performance. It also develops the hypotheses to be empirically tested. Section 3 describes the methodology, i.e., measurement, data and the applied analyses methods. Afterwards, in Section 4 we present the results and discuss our findings. The last section highlights contributions, implications and limitations of our study.

2 Literature review and hypotheses

2.1 Learning alliances and corporate entrepreneurship

Strategic alliances are inter-firm cooperative arrangements between two or more independent firms for mutual economic (Tsang, 1998) and strategic (Parkhe, 1993; Gulati, 1995; Franco, 2001) benefits. According to Zhao (2005), they are dyadic, dynamic and complex relationships based implicitly in mutual profits and interests. Strategic management literature (e.g., Eisenhardt and Schoonhoven, 1996; Baum et al., 2000; Kale et al., 2000; Rothaermel and Deeds, 2006) has emphasised alliance arrangements, which are seen as a means to extend the operational or knowledge boundaries of firms. Because strategic alliances help access resources, resource-based theory (Wernerfelt, 1984) appears to be an appropriate theoretical perspective for understanding alliances. Herein, Das and Teng (2000) and Franco (2001) developed a resource-based theory of alliances, suggesting that the access to complementary and additional resources is the main reason for entering into alliances.

Among the various alliance types, learning alliances bring in new knowledge that is essential for strategic renewal and positioning. In fact, Hamel et al. (1989) propose that alliances should be seen as learning opportunities, and several studies afterwards have confirmed this point of view (e.g., Gulati, 1995; Eisenhardt and Schoonhoven, 1996). Learning alliances are formed above all by partner organisations to learn from each other’s knowledge base (Khanna et al., 1998). This type of alliances serves as the basis through which firms intensively interact and gradually absorb knowledge from their partners (Doz, 1996). As opposed to opportunistically stealing knowledge, learning alliances allow a specified and encouraged knowledge acquisition.

To exploit this outside knowledge, Cohen and Levinthal (1990) highlighted a firm’s absorptive capacity that allows it to recognise, absorb and utilise outside sources of knowledge. Hereby, absorptive capacity refers to “the ability of a firm to recognise the

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value of new, external information, assimilate it and apply it to commercial ends” [Cohen and Levinthal, (1990), p.128]. For its occurrence, a prior related knowledge base is necessary. Absorptive capacity is an essential ability to overcome knowledge transfer barriers such as embeddedness, tacitness and organisational distance (Cummings and Teng, 2003). It is based on past experiences and can be developed and enhanced over time. Consequently, experience in alliances may foster absorptive capacity. Almeida et al. (2003) suggest that the firm’s ability to exploit knowledge generated by others is a function of its access to this knowledge. In accordance with Teng’s (2007) propositions, we think that knowledge acquisition and absorptive capacity are chief components and fundamental dimensions to capture the concept of learning alliances.

A learning alliance is valuable because corporate entrepreneurship aims at promoting “organisational learning that leads to the creation of new knowledge” [Zahra et al., (1999), p.173]. Thus, Zhao (2005) suggest an influence of learning alliances on corporate entrepreneurship. A firm may learn from its partners about a new way of doing business and thus realise entrepreneurial activities at the firm level. A desirable partner would be a firm with significant experience in renewing itself or in employing the new approach that the firm wants to learn from. Therefore, we believe that learning alliances may facilitate corporate entrepreneurship. Our first hypothesis would thus be:

H1 Learning alliances (consisting of knowledge acquisition and absorptive capacity) are positively related with corporate entrepreneurship.

2.2 Corporate entrepreneurship and business performance

According to Antoncic and Prodan (2008), corporate entrepreneurship can be viewed as important for organisational performance. The shortening of product and business model lifecycles makes future profit stream from existing operations uncertain and businesses need to constantly seek out new opportunities (Hamel, 2000). Corporate entrepreneurship can assist firms in such a process. For example, there is a belief that “entrepreneurship is an essential feature of high-performing firms” [Lumpkin and Dess, (1996), p.135]. Much empirical work has been realised to investigate the relationship between corporate entrepreneurship and the indicators measuring business performance, such as survival, profitability, growth and renewal. Generally, even if some writers pose some qualifications, predominant evidence indicates that corporate entrepreneurship is positively related to business performance, as constantly reiterated by many scholars (e.g., Covin and Slevin, 1991; Zahra, 1996; Wiklund, 1999; Kazanjian et al., 2001; Miles and Covin, 2002; Wiklund and Shepherd, 2003, 2005; Luo et al., 2005; Zhao, 2005; Heidemann Lassen, 2007). More concretely, corporate entrepreneurship was discovered to be promoting the growth of small firms (Davidsson, 1989; Covin, 1991; Greene and Brown, 1997) and large enterprises (Zahra, 1991; Zahra and Covin, 1995; Morris and Sexton, 1996).

In their quest to conceptualise key aspects of corporate entrepreneurship, several scholars have developed measures to capture this phenomenon. Already Miller (1983) speaks from the essential dimensions of entrepreneurship consisting of three related components:

1 innovation: refers to new ideas, experimentation and creativity, which results in the ability to create new products, services or processes (cf. also Miller and Friesen, 1982), or modify existing ones to meet the demands of current or future markets

Learning alliances, corporate entrepreneurship and business performance 61

2 proactiveness: refers to first mover and other actions destined at securing the market share, together with a forward looking perspective that anticipates future demand (cf. also Covin and Slevin, 1989; Lumpkin and Dess, 1996)

3 risk taking: refers to the willingness to engage in business ventures or strategies in which the outcome may be highly uncertain (cf. also Lumpkin and Dess, 1996).

In the same vein, Guth and Ginsberg (1990), Covin and Slevin (1991), Zahra and Covin (1995) and Wiklund (1999) – some of them also speaking from an ‘entrepreneurial posture’ – define the concept as the overall strategic orientation of a firm that is risk taking, innovative and proactive. Similarly, Lumpkin and Dess (1996) and Antoncic and Prodan (2008) suggest that an entrepreneurial firm has characteristics such as autonomy, innovativeness, risk taking, proactiveness and competitive aggressiveness. More specifically, corporate entrepreneurship is reflected in the management’s risk taking with regard to investment decisions and strategic actions in the face of uncertainty, the extensiveness and frequency of product innovation and the related tendency towards technological leadership and the pioneering nature of the firm as evident in the propensity to aggressively and proactively compete with industry rivals (Zahra, 1991).

With regard to the variables innovativeness, risk taking and proactiveness that we identified to be crucial for corporate entrepreneurship, some specific research on their effects on business performance has been carried out. First, consistent with arguments made by Miller and Friesen (1982) and Chiaromonte (2004), innovativeness can be a source of competitive advantage for a firm. In fact, innovative companies, creating and introducing new products and technologies, can generate extraordinary economic performance and have even been described as the engines of economic growth (Brown and Eisenhardt, 1995). Furthermore, innovative companies frequently develop strong, positive market reputations that ensure customer loyalty. Second, proactive firms create first-mover advantages, target premium market segments and ‘skim’ the market ahead of competitors (Zahra and Covin, 1995). They can control the market by dominating distribution channels and establishing brand recognition. Third, risky strategies lead to higher performance, above all in the long run, as McGrath (2001) found. Therefore, we hypothesise:

H2 Corporate entrepreneurship (consisting of innovativeness, risk taking and proactiveness) is positively related to business performance.

2.3 Corporate entrepreneurship, moderated by learning alliances and business performance

Similarly, the moderating effects of learning alliances on corporate entrepreneurship also appear to follow a contingent pattern. Generally, entrepreneurship literature shows that the correlation between strategic alliances resp. networks, corporate entrepreneurship and business success is statistically significant (Aldrich and Zimmer, 1986; Dubini and Aldrich, 1991; Lee et al., 2001; Anderson et al., 2005). Also, Antoncic and Prodan’s (2008) study shows the value of engagement in strategic alliances for the development of corporate entrepreneurship and consequential performance improvements. Sarkar et al. (2001) find that there are positive effects of alliance proactiveness, i.e., the extent to which an organisation seeks and responds to partnering opportunities, on market-based

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performance, and those effects have proved to have a stronger impact on small firms as well as under unstable market environments.

The importance of knowledge on performance is stressed by McEvily and Chakravarthy (2002), who speak from a knowledge-based competitive advantage. Garnsey et al. (2006) state that growth is linked with organisational learning and the latter is a pre-condition for effective knowledge acquisition. Deeds (2001) provides strong evidence of a positive relationship between absorptive capacity and the amount of entrepreneurial wealth. Zahra and Hayton (2008) also address this issue providing support for the positive influence of absorptive capacity on firms’ profitability and revenue growth. In fact, we think that corporate entrepreneurship can be considered an important predictor of business performance and several strategic alliance dimensions can be relevant to the development of corporate entrepreneurship. Thus, we suppose that learning alliances may act as a moderator between corporate entrepreneurship and performance, being the basis of the following hypothesis:

H3 Corporate entrepreneurship, when moderated by learning alliances, influences positively business performance.

3 Methodology

3.1 Measurement

In this research, the dimensions of corporate entrepreneurship, learning alliances and business performance were mostly measured through scales previously tested and employed by other researchers. Perceptual measures were selected based on their congruence with the concepts under examination. For data gathering, we applied five-point Likert-type scales, where the minimum level of one corresponded to ‘strongly disagree’ and the maximum level of five was related to ‘strongly agree’, to keep the questionnaire as simple as possible. Prior research indicated that an ordinal classification of perception is a more realistic task for respondents than the use of interval or ratio measures (Geringer and Hebert, 1991). We also expected that the respondents would only have a limited amount of time to devote to the questionnaire; hence, an easily understood Likert scale appeared to be more feasible than a potentially more precise but more complex scaling method.

Corporate entrepreneurship, although being a multifaceted phenomenon, relies on the measurement variables for empirical research developed by Miller (1983), including the three dimensions before-mentioned: innovativeness, risk taking and proactiveness. Hereby, innovativeness was measured by the capacity to develop new products and services as well as top management’s commitment to innovation. Risk taking was captured through the engagement in and handling of risky opportunities and proactiveness by the existence of a leader or follower strategy and strategic cooperations. These dimensions were constructs of three statements each (cf. Appendix). The decision for applying innovativeness, risk taking and proactiveness lies in their operationality and is also due to the fact that other scholars had previously employed and tested them for reliability (e.g., Miller, 1983; Covin and Slevin, 1986; Lumpkin and Dess, 1996).

Learning alliance characteristics were assessed across the two dimensions before-exposed: knowledge acquisition and absorptive capacity. Herein, knowledge

Learning alliances, corporate entrepreneurship and business performance 63

acquisition was gauged by the capacity of integrating relevant external information and the existence of cooperative agreements in order to obtain new knowledge. According to Cohen and Levinthal (1990), absorptive capacity was measured by the ability to assimilate and apply intangible resources for commercial purposes. The utilisation of knowledge acquisition and absorptive capacity was also proposed by Teng (2007) and, in our study, measured through constructs of two resp. three statements (cf. Appendix).

Business performance was assessed using two objective (net profit and sales) and one subjective measure (satisfaction), as suggested by Geringer and Hebert (1991), Bucklin and Sengupta (1993) and Franco (2001). These three dimensions were gathered by constructs evaluating the growth of the firm’s profit and sales as well as costumers’ satisfaction during the last three years (cf. Appendix). Thus, taking into consideration the literature review and the proposed conceptual model, economic and non-economic measures were utilised. For summarising, Figure 1 visualises the variables, the hypotheses and the respective linkages.

Figure 1 Model with variables and arrows representing the hypotheses

3.2 Dataset

Since our research targets SME, the Portuguese reality is an adequate laboratory for testing the hypotheses, due to the fact that the economic structure is mainly composed of SME1, i.e., 99.0% of the firms are small and medium sized. They employ over 74.0% of the work force and are responsible for more than 58.0% of the total sales of Portuguese industry (IAPMEI, 2004). As the objective of sampling was to contact SME business owners, we employed several data sources:

1 databases of firms published in Portuguese journals

2 a database created in a previous survey based on precedent empirical study (Franco, 2001)

3 the identification of some cases in the Portuguese business journal EXAME.

From there, we constructed a dataset of Portuguese SME, which were engaged in formal or informal alliances. Pre-tests for getting feedback on clarity of the survey items were conducted with some firms varying in sizes and sectors. Then, we administrated a questionnaire to a random sample of 300 firms, during the period from March to June 2006. The answer rate was 26.7%, which corresponds to 80 Portuguese SME.

64 H. Haase and M. Franco

The sample is mainly composed of firms with some diversity in the industry. However, manufacturing, whole sale commerce and services are the more representatives (23.8% each). Among other sectors, tourism (10%), civil engineering (7.5%) and logistics (5%) were the ones to stick up. We registered more male (85.0%) than female (15.0%) business owners. Most of the respondents were between 36 and 45 years old (38.8%) and about 17.5% were aged 25 to 35. In terms of education, about 67.7% possessed a senior high school or technical resp. vocational training. However, about 45% of the business owners interviewed were new entrants (founded the firm during the previous three years) and 26.4% owners of established businesses (the firm is over five years old).

3.3 Data analysis

The model was analysed by using multiple regression analysis. It includes the hypothesised relationships and correlations among the different dimension items. To achieve this purpose, we estimated three multiple linear regression models with all the variables. On the other hand, coefficient Alpha was employed to determine the reliability of the scale we used and the Pearson correlation was conducted to test the correlation between the variables of the model. In accordance with what has previously been defined, the dependent variable is a discrete variable which presents absolute values ranging between 1 and 5. Additionally, the independent ones are also discrete variables that are classified according to the same numerical range deriving from a five-point Likert scale. In this context, we carried out a multiple regression, by making use of all the discrete variables available in the dataset. The estimation process is based on ordinary least squares (OLS), and a stepwise procedure is applied for guaranteeing the detection and inclusion of the significant parameters.

4 Results and discussion

4.1 Empirical results

Table 1 reports the correlations and descriptive statistics for the multi-item scales. It is important to note that learning alliances and the corporate entrepreneurship dimensions are not correlated, contrary to what would be expected. Table 1 Descriptive statistics and correlations

Learning alliances, corporate entrepreneurship and business performance 65

Regarding the influence of learning alliances on corporate entrepreneurship, the results in Table 1 also illustrate that knowledge acquisition and absorptive capacity do not have a consistent positive association with risk taking (ρ = 0.16, ρ = 0.07), innovativeness (ρ = 0.01, ρ = 0.09) and proactiveness (ρ = 0.09, ρ = 0.12). Concerning the relationship between corporate entrepreneurship and business performance, Pearson correlation coefficient (cf. Table 1) indicates that risk taking only has a significant positive relationship with satisfaction measure (ρ = 0.22, p < 0.05). However, risk taking positively relates with sales growth, but not significantly. Innovativeness has a non-significant and proactiveness a significant positive relationship with all performance measures.

The following tables present the results of three multiple linear regression models to test our hypotheses. Each model includes the value of the coefficients of the independent variables and an indication of their significance level. Concerning Hypothesis 1, where we supposed that relationships established with learning alliances (knowledge acquisition and absorptive capacity) would influence corporate entrepreneurship (innovativeness, risk taking and proactiveness), Table 2 shows the results of a regression analysis that models knowledge acquisition and absorptive capacity’s relationship to corporate entrepreneurship. The results indicate that there is no statistically significant support for this hypothesis. In fact, knowledge acquisition and absorptive capacity have non-significant relationship to risk taking, innovativeness and proactiveness. Table 2 Results of regression analysis: relationship between learning alliances and corporate

entrepreneurship

Risk taking Innovativeness Proactiveness Variables

B R2 b R2 b R2

Knowledge acquisition 0.17 –0.05 0.05 Absorptive capacity –0.01 0.03 0.11 0.01 0.10 0.02

Notes: N = 80, *p < 0.05, **p < 0.01 Regression weights shown are standardised coefficients obtained at final step. Stepwise method was used to select variables to include in the equation.

Table 3 Results of regression analysis: relationship between corporate entrepreneurship and performance

Profit Sales growth Satisfaction Variables

b R2 b R2 b R2 Risk taking –0.11 0.12 0.17 Innovativeness –0.07 –0.05 –0.10 Proactiveness 0.22* 0.05 0.28** 0.08 0.27* 0.07

Notes: N = 80, *p < 0.05, **p < 0.01 Regression weights shown are standardised coefficients. Stepwise method was used to select variables to include in the equation.

To validate the Hypothesis 2, Table 3 reports the results of a regression analysis that displays the relationship between corporate entrepreneurship and business performance. The results point out that only proactiveness has a consistent relationship to profit, sales growth and satisfaction. Risk taking and innovativeness have a non-significant

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relationship to the performance measures. Thus, except for the positive influence of proactiveness, there is no support for our second hypothesis.

Hypothesis 3 assumed that the learning alliances would positively moderate the relationship between corporate entrepreneurship and business performance. Table 4 indicates some support for this hypothesis. However, only sales growth is positively and significantly correlated to corporate entrepreneurship (proactiveness) and learning alliances (knowledge acquisition) variables. When we consider the combined influence among all variables, the results show that absorptive capacity has a strong significant positive relationship to profit, and proactiveness has significant positive relationship to satisfaction measure. Consequently, Hypothesis 3 was only partially supported. Table 4 Results of moderated regression analysis: learning alliances

Profit Sales growth Satisfaction Variables

b R2 b R2 b R2 Risk taking –0.07 0.09 0.16

Innovativeness –0.06 –0.05 –0.10

Proactiveness 0.19 0.26* 0.06 0.27* 0.07

Knowledge acquisition –0,02 0.22* 0.10 0.07

Absorptive capacity 0.31** 0.10 0.10 0.18

Notes: N = 80, *p < 0.05, **p < 0.01 Regression weights shown are standardised coefficients. Stepwise method was used to select variables to include in the equation.

4.2 Discussion

The supporting literature as cited in the hypotheses section illustrates that learning alliances are expected to positively impact corporate entrepreneurship and subsequently business performance. However, on the evidence of our results, for the sample of Portuguese SME we studied, these effects were diverging. Thus, the opportunity to make a significant contribution to alliance and entrepreneurship literature actually came in the form of the negative results contradicting the findings of previous researchers – at least partially.

In our study, the outcome of Hypothesis 1, which explored the influence of learning alliance to corporate entrepreneurship, revealed that knowledge acquisition and absorptive capacity are not relevant when an individual or organisation undertake entrepreneurial actions. Contrary to previous research (Zhao, 2005) our findings indicate that learning alliances do not significantly influence corporate entrepreneurship. Of course, this result is not consistent with Ulhøi’s (2005) view of idea generation, support, knowledge and complementary resources that can be acquired through strategic alliances, which in fact lead to social and business competition between key players in the market.

As exposed in our second hypothesis, many scholars suggest that the association between corporate entrepreneurship and performance is positive. However, our results are inconsistent in relation to the different variables we used. This insight is in line with Lumpkin and Dess (1996), who state that the dimensions of corporate entrepreneurship tend, in fact, to vary independently from each other. Within our research context, the variable that positively determines business performance is merely proactiveness, with

Learning alliances, corporate entrepreneurship and business performance 67

significant impact on all measures such as profit, sales growth and satisfaction. Contrariwise, through regression analysis, we found that risk taking and innovativeness do not influence business performance. Solely proactiveness makes a unique contribution and seems to be a very important posture that leads Portuguese SME owners to business success.

The insights of Hypothesis 3 are also revealing. The findings prove that the moderator effect of learning alliances between corporate entrepreneurship and business performance is more perceptible in objective performance measures. In our analysis, knowledge acquisition capability seems to be important for sales growth as one objective indicator for performance, which is congruent to the idea of knowledge-based competitive advantage, presented by McEvily and Chakravarthy (2002). Also, in line with the arguments of Zahra and Hayton (2008), we find empirical evidence for absorptive capacity’s significance on profit, which is another objective indicator.

In light of these findings, there does hardly seem to be support for the theoretical arguments advanced in the hypotheses section to any significant degree. This raises the question why our study produced such contradictory results? On the one hand, nearly half of our sample consisted of relatively young firms, which perhaps have not had enough time to gain experience in alliances and in particular to improve their absorptive capacity. On the other hand and in our opinion the most important aspect, we believe that the regional economic conditions in Portugal definitively matter. Portuguese SME owners have had a very hostile and unstable business environment in the recent past, which is now bettering at a slow pace though.

The Observatory of European SME reports for Portuguese SME the lowest turnover growth rates of all EU member states and higher-than-average constraints (Gallup, 2007). More concretely, one third of all SME in Portugal seem to have difficulties in implementing innovations and the lack of knowledge of foreign markets impedes cross-border cooperation (Gallup, 2007). Thus, the basis for strategic alliances and corporate entrepreneurship in Portugal is weak. For the opposite, the difficult economic setting leads Portuguese SME owners to become self-confident, very offensive at overcoming barriers and to aggressively defend their market position. This is reflected by a strong proactive behaviour and explains the importance of proactiveness we identified in our study.

Nevertheless, in spite of the mostly negative results, we think that it is meaningful to highlight some particular outcomes of our study. Herein, proactiveness as one dimension of corporate entrepreneurship seems to have a significant impact on both objective and subjective performance measures, more concretely, on sales growth and satisfaction. Taken together and regarding the entirety of variables used in our model, we found that learning alliances do not automatically create value for corporate entrepreneurship and performance. In contrast to scholars like Aldrich and Zimmer (1986), Dubini and Aldrich (1991), Lee et al. (2001), Anderson et al. (2005) and Antoncic and Prodan (2008), who found statistically significant relationships between business success, corporate entrepreneurship and strategic alliances resp. networks in general, the moderator effect of learning alliances, at least in our study, is mixed and not unambiguous.

In Hypothesis 1, we found a statistically non significant relationship between learning alliances and corporate entrepreneurship. However, and based on the insights of Hypothesis 3, we think that a firm well endowed with tacit resources such as knowledge acquisition and absorptive capacity will perform even better if it is entrepreneurially

68 H. Haase and M. Franco

orientated, i.e., having the methods, practices and managers representing and living out a decision making style that promote the willingness to capitalise on its knowledge-based resources by engaging in entrepreneurial activities. Firms with considerable knowledge can assess the value of potential opportunities more accurately and have the ability to extract value from these opportunities (Cohen and Levinthal, 1990).

An important insight from our research is the overwhelming importance of proactiveness as one dimension of corporate entrepreneurship. This concept, mentioned by Miller (1983), Covin and Slevin (1989) and Lumpkin and Dess (1996), relates to first mover activities along with a forward looking perspective. As a result from our Hypotheses 2 and 3, proactiveness proved to have a significant impact on all performance measures such as profit, sales growth and satisfaction. Therefore, it extols to be an influential factor for entrepreneurship, worth of study in a more sophisticated manner.

5 Conclusions and implications

In terms of theoretical and practical implications, the paper offers several contributions. It extends strategic management theories to the study of corporate entrepreneurship. In the main, we recommend that the lack of support for the mainstream literature indicating a significant positive relationship between strategic alliances and corporate entrepreneurship should be examined in greater depth. More concretely, this relates to the reliance on external resources via alliances and its potential negative effect on firm’s ability to develop internal resources. Also, researchers should consider differences in specific regional contexts. In light of the outcomes of our research, it seems that the regional economic environment plays an important role in the effect of alliances.

Another contribution of this study is the linking of corporate entrepreneurship with strategic alliances, helping to understand their interaction. As alliances might fill in resource gaps that corporate entrepreneurship tends to create, a combination of the two could be a fruitful approach. Herein, we considered resource-based components and tested how learning alliances affect corporate entrepreneurship and performance. Although our outcomes do not indicate a consistent relationship, this detailed examination offers a better understanding of their interactions, including when and how different aspects of alliances benefit specific integral parts of corporate entrepreneurship and business performance.

In relation to the effect of corporate entrepreneurship on business performance, as exposed in our literature review, empirical studies do not constitute a novelty and generally point towards a positive correlation. However, we think that researchers should consider the general assumption and proceed in a more detailed manner. This is in line with Lumpkin and Dess (1996), who stress that the different dimensions of corporate entrepreneurship exert their influence independently from each other. Thus, the issue is to investigate what specific components of corporate entrepreneurship influence which aspects of business performance. Hereby and extending the approach of Wiklund and Shepherd (2005), human and financial capital, cultural and environmental factors would be very useful to integrate in future studies to help establish the extent to which the hypothesised relationship might be causal. We also recommend researchers to keep in mind the multidimensional character of corporate entrepreneurship, and that its impact on business performance may be contingent on moderating variables, in our study on knowledge acquisition and absorptive capacity for example.

Learning alliances, corporate entrepreneurship and business performance 69

Finally, it should be noted that our study has a number of limitations that sparks possibilities for future research. First, the findings are taken from the Portuguese context, with an idiosyncratic economic structure and climate. A generalisation should therefore be made cautiously. For this reason, we suggest further research to detect geographic differences. Second, our research is based on self-report responses from the business-owners to a questionnaire, which implies subjective components and may result in auto-evaluation bias. Third, to validly gauge the level of corporate entrepreneurship, the use of multiple informants would be more beneficial. Nevertheless, the combination of our and future studies will surely allow valuable comparisons and insights.

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Notes 1 For the purposes of this study, in order to classify the business units as SME, the number of

employees was used as the defining criteria, i.e., less than 250 employees.

Learning alliances, corporate entrepreneurship and business performance 73

Appendix Questionnaire items and variables

Objects of inquiry Dimensions and variablesKnowledge acquisition Var1 Our firm has processes for integrating different sources and

types of external information that could be relevant for our firm.

Var2 Our firm cooperates with other organisations in order to obtain new knowledge, intangibles and similar resources.

Absorptive capacity Var3 Our firm has processes for gathering knowledge from

individuals within the organisation. Var4 Our firm has processes for learning from mistakes or bad

experiences with other organisations.

Learning alliances

Var5 Our firm has processes for converting new knowledge into plans of action.

Innovativeness Var1 Our firm investigates new product or service launches as well

as changes in product lines or services by our competitors. Var2 Our firm frequently develops new and unique products and

services. Var3 The top management of our firm favours a long-term

commitment to invest in new technologies, R&D and continuous improvement of our products and services.

Risk Taking Var4 Our firm supports projects in which the expected returns will

certainly occur. Var5 Due to the nature of the economic environment, it is best

exploring it by a cautious and incremental acting. Var6 Our firm uses trial-and-error methods and techniques to

explore new opportunities. Proactiveness Var7 Our firm tends to follow our competitors in introducing new

product or service ideas. Var8 We have processes aiming at anticipating and acting on future

needs of our costumers.

Corporate entrepreneurship

Var9 Our firm has strategic cooperations with competitors. Profit Var1 In the past three years, our firm’s profit has grown

significantly. Sales growth Var2 In the past three years, our firm’s sales have grown

significantly. Satisfaction

Business performance

Var3 In the past three years, our costumers’ satisfaction has increased significantly.