corporate entrepreneurship and organizational learning: a review of the literature and the...

Corporate entrepreneurship andorganizational learning: a review ofthe literature and the development ofa conceptual frameworkSally Sambrook* and Clair RobertsUniversity of Wales, Bangor, UK

� This paper is the outcome of an extensive review of the literature concerning the broadfields of corporate entrepreneurship (CE) and organizational learning (OL). First, the CEand OL literature is examined, exploring the intra-relationships and processes withineach field. Second, the literature that explores the overlapping processes and inter-relationships that link these two fields of research is critiqued. Third, a conceptual framework is presented which underpins future empirical research that explores the possible interactions and synergies between CE and OL.

� Interest in CE and OL has escalated over the past two decades as, individually, theyprovide possible ways of addressing contemporary organizational problems, such as theneed to constantly encourage and manage strategic change.More recently, there has beeninterest in the potential links between the two concepts to enhance the effectiveness ofeach.

� Definitions, theories and models within CE and OL literature are numerous and diverse.Some of the key contributions are presented, followed by an exploration of how thesetheories and models relate to each other and how they differ.The complexities and con-tradictions within both the CE and OL literature are clarified, and it is noted that muchtheorizing lacks empirical evidence.

� The paper concludes by presenting a conceptual framework with two related models ofthe CE/OL relationship. Specific research questions are identified which, if empiricallyresearched, could contribute to a more informed understanding of the complex anddynamic relationship between CE and OL and their impact on strategic change.

Copyright © 2005 John Wiley & Sons, Ltd.

Copyright © 2005 John Wiley & Sons, Ltd. Strategic Change, May 2005

(CE) and organizational learning (OL) litera-tures. The objectives are threefold. First, weexamine the CE and OL literature, exploringthe intra-relationships and processes withineach field. Second, we critique the literatureexploring the overlapping processes and inter-relationships between these two fields. Finally,we introduce a conceptual framework and

Strat. Change 14: 141–155 (2005)Published online in Wiley InterScience(www.interscience.wiley.com). DOI: 10.1002/jsc.716 Strategic Change

* Correspondence to: Sally Sambrook, School of Nursingand Midwifery, Fron Heulog, University of Wales, Bangor,UK. E-mail: [email protected]

Introduction

This paper draws upon an initial criticalreview of the corporate entrepreneurship

142 Sally Sambrook and Clair Roberts

two working models which will underpinfurther research that explores the possibleinteractions and synergies between CE andOL. This paper summarizes the key findingsfrom the review, focusing only on the litera-ture that informed the development of thesemodels.

Interest in CE and OL has increased over thepast two decades. Many practitioners andresearchers see the gains of developing CE andOL as potential solutions to the many prob-lems associated with the current organiza-tional context, such as the need to constantlyencourage and manage strategic change toachieve competitive advantage and ensure sur-vival. More recently, researchers have pro-posed that the more successful CE activitiesmay be linked with the broader OL processes.These increase an organization’s ability toassess its environment and respond by creat-ing and commercializing new knowledge-intensive products, processes and services(Burgelman, 1983; Kanter, 1985; Zahra, 1995;Zahra et al., 1999). Our intention is to explorethe possible inter-relationships between thetwo concepts, but first we examine corporateentrepreneurship and then organizationallearning individually.

Corporate entrepreneurship

Corporate entrepreneurship can be defined as start-up entrepreneurship turned inward(Pinchot, 1985; Thornberry, 2001). It is seenas an antidote to the staleness associated withlarge organizations. Whilst small businessesmay lack resources and investment support,they are able to act and react quickly, innovateand take risks (Beaver, 2002). In large organi-zations these characteristics sometimes erode

Corporateentrepreneurship can be

defined as start-upentrepreneurship turned

inward

under the weight of size, bureaucracy, complexprocesses and hierarchy (Thornberry, 2001).

The CE literature contains at least six key classification typologies. These typologiesattempt to describe CE, by first breaking itdown into its constituent parts or types. Theword ‘type’ is used to mean the label attributedto CE activities within the literature. Figure 1presents, in chronological order, the authorsthat have developed classification typologiesand the labels attributed within. We have triedto ‘match’ the various components/labelswithin each classification to highlight the similarities and differences.

To briefly summarize, Vesper (1984), in hisinvestigation into the ‘faces’ of CE, initiallyidentified eight types of CE. His typologyincorporates labels that are familiar and fre-quently used in management research andpractice. Both Ginsberg and Hay (1994) andStopford and Baden-Fuller (1994) approach CEas a strategic approach to management andalso perhaps managing change. Covin’s (1999)approach appears more academically robust inits methodology, although it has not yet beenempirically tested. Thornberry’s (2001) typol-ogy seems more of a summary of ideas takenfrom key management texts, such as Pinchot’s(1985) ‘Intrapreneuring’ and Baden-Fuller andStopford’s (1994) ‘Industry Rule-Bending’.

Having reviewed the literature, 18 differentlabels or types were found to describe someform of CE activity. All of these types areincluded, either once or several times, in theclassification typologies illustrated in Figure 1.In addition, we found that these differenttypes of CE activity operate at three levelswithin an organization: the individual, theteam/group and the strategic level. Figure 2was constructed to organize these 18 types ofCE, showing the levels, or combinations oflevels, where these CE activities occur. Figure2 also identifies whether the CE is internallyor externally oriented.

There are several observations that can bemade about Figure 2.

� CE activity occurs at individual, team/groupand organizational levels, although as dis-


cussed below, most research focuses on theindividual and organizational levels.

� There are two streams of CE that stem fromthe strategic level; those that are internallyorientated and those that are externally ori-entated — i.e. those that occur within theorganization or externally to the organiza-tion in its environment.

� There is an interesting distribution of thetypes, with a higher proportion of typesrealized at the strategic level.

� Ordinary new product development, inter-nal corporate venturing, intrapreneuringand sustained regeneration have been usedwithin the literature to describe different CEactivity occurring at all levels of organiza-tional hierarchy, hence their positioning inthe middle of the diagram.

� Ambiguities in the literature have led tostrategic renewal being used to describeactivities that are both internally orientatedand externally orientated, hence its posi-tioning across these two categories.

� Skunkworks and venture groups only occurat the team level.

� Initiative from below can involve individualsand/or groups but does not occur at the strate-gic level and is always internally oriented.

� Independent spin-offs may occur at the indi-vidual level, when an individual leaves anorganization to set up his/her own organi-zation (typically informal) or may be aformal, intentional strategy, when an indi-vidual is supported in setting up a spin-off,as part of the parent organization’s strategicplans. Independent spin-offs are alwaysexternally orientated.

The overall observation from the statementsabove is that there are a number of ambigui-ties within the field of corporate entrepre-neurship. Covin (1999) argues that these havecreated a barrier to developing a deep under-standing or theory of why CE often createscompetitive advantage. In addition, such ambiguities could contribute to incorrect andmisleading theories and inhibit the attempt to further develop theories in a cumulativemanner due to misinterpretations of the orig-inal theories and concepts.

Corporate entrepreneurship and organizational learning 143


Author Mode of Corporate Entrepreneurship

Vesper

(1984)

New

strategic

direction

Initiative

from below

Autonomous

business

unit

operation

Ordinary

new

product

development

Acquisition Joint

venture

Ventur e

groups

or

divisions

Independent

spin-offs

or new

start-ups

Ginsberg

and Hay

(1994)

Intrapreneuring Internal corporate

venturing

Merger and acquisition Entrepreneurial

partnership

Stopford and

Baden-Fuller

(1994)

New business venturing Organizational renewal Frame-breaking change

Covin

(1999)

Sustained regeneration Organizational

rejuvenation

Strategic renewal Domain

redefinition

Thornberry

(2001)

Intrapreneuring Corporate venturing Organizational transformation Industry rule-bending

Figure 1. Different classifications of CE within research literature.


It can be noted that there are three broadlevels of research within the field of CE: indi-vidual, team and organizational. However,these areas are not separate and several con-tributions to the research literature explorecombinations between the three. At the indi-vidual level, the literature focuses on individ-ual CE characteristics (for example, who is the corporate entrepreneur and what are theirtypical personal attributes?). This drawsheavily from the start-up entrepreneurship literature and is largely based on US samples.This raises the question of the applicability of research on start-up entrepreneurs to thelarge-organization CE context. In addition,Delmar (1996) argues that individual charac-teristics are culturally dependent, which also

raises the question of the applicability of USresearch to European and UK contexts.

Jones-Evans (2000) proposes a comprehen-sive framework of individual CE characteristics(see Table 1). His adaptation of Pinchot’s(1985) work provides a comparison of theorganizational attributes, managerial attributesand personal attributes of traditional man-agers, traditional entrepreneurs and corporateentrepreneurs. However, this frameworkexposes itself to some criticisms. NeitherPinchot (1985) nor Jones-Evans (2000) offerany empirical evidence to support their clas-sifications Also, Pinchot (1985: 70) offers noindication of the methodology underpinningthe framework. Furthermore, it is not clearwhat types of organization were used to form


STRATEGIC

LEVEL

TEAM LEVEL

INDIVIDUALLEVEL

Independent Spin-Offs

Venture groups and divisions(formal) orskunkworks(informal)

Initiative from Below

New strategic direction

OrganizationalTransformation

Industry Rule Bending or frame-breaking change

Strategic Renewal

Autonomous Business Unit operation

Acquisition

Joint Venture

Organizational rejuvenation Mergers

Domain Redefinition

Entrepreneurial Partnership

Internally orientated

Externally orientated

Internal Corporate venturing

Original new Product Development

Intrapreneuring Sustained Regeneration

Figure 2. Types and levels of CE.



Table 1. Managers, entrepreneurs and corporate entrepreneurs

Traditional managers Traditional entrepreneurs Corporate entrepreneurs

Organizational attributesAttitude to Sees organization as May rapidly advance in a Dislikes the organizational system

organization nurturing and protective, firm — when frustrated,seeks position within it rejects the system and

forms his/her ownManagerial Pleases others (higher in Pleases self and customers Pleases self, customers and

satisfaction the organizational sponsorshierarchy)

Primary motives Wants promotion and Wants freedom. Goal Wants freedom and access toother traditional oriented, self-reliant and corporate resourcescorporate rewards self-motivated

Relationship Organizational hierarchy Transactions and Transactions withinwith others as basic relationship deal-making as basic organizational hierarchy

relationship

Managerial attributesDecisions Agrees with those in Follows private vision. More patient and willing to

power/delays decisions Decisive, action compromise than entrepreneurfor superiors oriented

Delegation of Delegates action — Gets hands dirty and Gets hands dirty — can do workaction reporting and supervising can upset employees by but knows how to delegate

takes most of time doing their workManagement Primarily on events inside Primarily on technology Both inside management and

attention the organization and marketplace outside of firm, focus oncustomers

Market research Has market studies done Creates needs. Talks to Does own market research andto discover needs and customers and forms intuitive market evaluation likeguide product/service own opinions the entrepreneurconcepts

Problem-solving Works out problems Escapes problems in Works out problems within thestyle within the system formal structures by system, or bypasses it without

leaving to start own leavingbusiness

Skills Professional management, Knows business Very like the entrepreneur, butabstract analytical tools, intimately. More situation demands greater abilitypeople management and business acumen than to prosper within organizationpolitical skills managerial skills. Often

technically trained

Personal attributesPersonal Can be forceful and Self-confident, Self-confident; courageous —

attributes ambitious — fearful of optimistic, courageous cynical about system butothers’ ability to harm optimistic about ability to career development outwit it

Education Highly educated Less well educated — Often highly educated, especiallysome graduate work, in technical fieldsbut rarely PhD

Failure and Strives to avoid mistakes Deals with mistakes and Attempts to hide risky projectsmistakes and surprises. Postpones failures as learning from view so can learn from

recognizing failure experiences mistakes without public failureFamily history Family members worked Entrepreneurial small Entrepreneurial small business,

for large organizations business, professional or professional or farm backgroundfarm background

Risk Careful Likes moderate risk. Likes moderate risk — unafraid ofInvests heavily but dismissal so little personal riskexpects to succeed

Status Cares about status Happy sitting on an Dismisses traditional statussymbols orange crate if job is symbols of freedom

getting done

Source: Adapted from Jones-Evans (2000).


the framework, what industry these organiza-tions were in and where these organizationswere geographically located. In general,research into individual CE characteristicsappears weak and unsubstantiated. However,it is suggested that organizations wouldbenefit from understanding the personality ofthe corporate entrepreneur, as it would helpin many aspects of HR, such as recruitmentand selection, training and development andreward. Further research is required in thisarea.

At the team level, there is a growing litera-ture that explores business venture groups.However, much of this fails to differentiate thecontext of the venture group, for example,whether it is an entrepreneurial ‘start-up’group, an internal corporate venture group or an external ‘spin-off’ venture group. The literature that focuses more specifically on corporate venture groups is limited in quan-tity, analytical approach and scope. Generalthemes emerging from the literature appear tofocus on the venture team manager andinclude: the importance of an intrapreneurialventure manager for venture success; the sig-nificance of appropriate rewarding of venture

managers; the previous relevant work experi-ence of the venture manager; allowing freetime for project managers and encouragingventure team formation. There is also limitedresearch associated with informal corporateventure groups, such as skunkworks, and weprovide a contribution in both of these areas,as well as the other two levels (individual andorganizational) with our research agenda.

Turning to the organizational level, thefocus is on the process of CE (for example,how it is accomplished). Four main areas of CEresearch were found relating to strategy; struc-ture; reward and resources; and managementsupport and how these influence CE activity.The most influential contribution to ourworking model was Burgelman’s (1983) modelof strategic behaviour, corporate context andthe concept of strategy (see Figure 3). Themodel shows two very different strategicprocesses, or loops occurring simultaneouslyin large complex firms.

The bottom loop is the induced strategicbehaviour relationship. This is often seen asthe official path for innovation within organizations and is the outcome of corporatestrategy (Kuratko et al., 1990). Therefore,


Weak influence

Strong influence

Autonomous Strategic Behaviour

Induced Strategic Behaviour

Strategic Context

Structural Context

Concept of Corporate Strategy

Figure 3. A model of the interaction of strategic behaviour, corporate context and the concept of strategy.Source: Taken from Burgelman (1984: 155).

corporate strategy and induced strategicbehaviour can change the structural context.The top loop is the autonomous strategic loop.This influences corporate strategy (Kuratko et al., 1990) and will occur when operationallevel employees identify opportunities notconsidered by strategic level management.Therefore, autonomous strategic behaviourcan change the strategic context and the struc-tural context in turn. This model drew ourattention to the notion that CE could be drivenby top-level strategy, or that strategy could be changed through bottom-up CE. CE activ-ity occurs at different levels and in differentforms as the formal outcome of, or informalinput to, corporate strategy. This model formsa key component of our conceptual frame-work and provides a range of potentialresearch questions. For example, to whatextent is CE activity shaped by a formal strat-egy for change and/or informal individual/team innovation?

In our review of the CE literature we foundonly two models that attempt to describe theCE process in detail. Hornsby et al. (1993)present an interactive model of CE whichexplores the various components that affectthe corporate entrepreneurship process fromthe CE ‘trigger’ to implementation. Gautamand Verma (1997) present a cyclical model ofthe CE process that explores the organiza-tional components that lead to entrepreneur-ial activities. However, this model neglects theeffects of culture. Unlike Burgelman’s (1983)strategically centred model, these two modelsare more holistic in nature, examining theinter-relationships between the environment,the organization and the individuals withinthem. Although informed by previousresearch, neither has been empirically tested.Elements from all three models have informedthe development of the conceptual frameworkpresented here and provide further potentialresearch questions. For example, what is theimpact of structure, culture and HR practiceson CE activity? What positive and negativefactors support and hinder CE?

Having summarized the key CE literature thefocus now turns to organizational learning.

Organizational learning

As with CE, interest in OL centres around environmental uncertainty and change. In orderto remain competitive, organizations need tocontinually anticipate and adapt to theirchanging external environment. It is not ourintention to rehearse familiar themes in the OLliterature but rather to focus on the key con-tributions that informed the development of

Interest in OL centresaround environmentaluncertainty and change

our conceptual framework (see, for example,Argyris and Schön, 1978; Crossan et al., 1999;Huber, 1991; Kim, 1993; Kasl et al., 1993;Pedler et al., 1991, 1996; Senge, 1990;Tjepkema et al., 2002).

The review of the OL literature has revealeda similar three-level pattern to the CE litera-ture, where learning occurs at the individual,team and organizational levels. As with CE,several ambiguities are identified. First, thereare many different definitions of OL but mostusually refer to change — both cognitive (references to knowledge) and behaviouralchanges (Tsang, 1997). Differences can usuallybe attributed to whether these changes aredescribed as potential changes, or whetherthey are actual and will impact upon futureorganizational behaviour. Second, the terms‘organizational learning’ and ‘learning orga-nization’ are often used interchangeably butin reality have different meanings. Some arguethat OL is an ongoing process or activity(becoming) whilst the learning organizationrepresents an ideal type, the highest state ofOL, an idealistic state (being) (Tsang, 1997;Sun, 2003).

Two contributions have informed the devel-opment of the conceptual framework pre-sented here. These are Kasl et al.’s (1993) fourphases of team learning and Crossan et al.’s(1999) 4I framework, both discussed briefly




below. They both consider the process oflearning from individual to group and organi-zational learning. Group or team learning is asomewhat neglected research area but onewhich would increase understanding of bothorganizational learning and corporate entre-preneurship and one to which we endeavourto make a contribution.

Kasl et al. (1993: 144–5) have developedfour phases of group learning.

� Phase 1. Contained learning: a groupexists, but learning, if any, is containedwithin individual members.

� Phase 2. Collected learning: individualsbegin to share information and meaning per-spectives. Group knowledge is an aggregateof individual knowledge and there is not yetan experience of having knowledge that isuniquely the group’s own.

� Phase 3. Constructed learning: the groupcreates knowledge of its own. Individuals’knowledge and meaning perspectives areintegrated and not aggregated.

� Phase 4. Continuous learning: the grouphabituates processes of transforming itsexperience into knowledge.

Kasl et al. (1993) suggest that groups are propelled from one phase to the next usingthree propositions. The first two propositionsemphasize the importance of trust, respect,understanding and listening among groupmember in order to progress from one phaseto the next. However, we feel that their thirdproposition is the most exciting in relation toCE because it presents a new approach toresearching the relationships between learn-ing and corporate venture team activity:

The energy that propels a group from con-structed to continuous learning is createdwhen the group frames its identity as alearning group and becomes conscious of monitoring its processes as learningprocesses, rather than the processes ofinterpersonal interaction and role fulfil-ment that are described in the groupsdynamics literature. (Kasl et al., 1993)

The notion that teams frame themselves as‘learning teams’ raises possible research ques-tions. For example: How do successful andunsuccessful venture groups frame and iden-tify themselves? How do informal venturegroups frame and identify themselves com-pared with formal venture groups? Whatform(s) of learning occur in such groups?What are the implications for human resourcedevelopment, reward policy and corporatestrategy? Such questions, coupled with issuesraised in the other two propositions, such asthe role of trust and emotional intelligence,further inform our empirical research agendaexploring the inter-relationships between CEand OL.

Turning to the second contribution, Crossanet al. (1999) view OL as the principle meansof achieving strategic renewal within an enter-prise and their interest in strategic renewal hasresulted in the development of their 4I frame-work. Four key premises form the foundationsof their framework. First, OL involves a tensionbetween assimilating new learning (explo-ration) and using what has been learned(exploitation). Second, OL is multi-level (indi-vidual, group and organizational). Third, thefour social and psychological processes ofintuiting, interpreting, integrating and institu-tionalizing link the three levels of organiza-tional learning. Finally, cognition affects actionand vice versa.

Figure 4 describes the four processes andshows the levels at which they occur. Intuit-ing is the beginning of new learning andappears to be a largely subconscious process.Crossan et al. (1999) emphasize that the sub-conscious process is particularly prevalent inentrepreneurial intuiting.

Interpreting begins picking up on the con-scious elements of the learning process. It isthrough this process that individuals developcognitive maps or mental models, about theenvironment in which they exist. As interpre-tive processes move beyond the individual andbecome embedded within the work group or team, they become integrative. The focuson integrating is coherent, collective action(Crossan et al., 1999). This requires shared


understanding between group or teammembers and continuous conversation playsan important role in producing this. Institu-tionalizing sets organizational learning apartfrom individual learning and provides a meansof leveraging the learning of individualmembers. Figure 5 illustrates how the fourmicro processes link to the three levels oflearning within organizations through thefeedback and feedforward loops.

Crossan et al. (1999) state that the processesare progressive and sequenced through eachlevel but not every process occurs at everylevel within an organization. As one movesthrough from the individual level of intuitingand interpreting, through group integrating to organizational institutionalizing (feedfor-ward), the process of learning becomes lessfluid and incremental. Crossan et al. (1999)note that problems arise between interpretingand integrating and institutionalizing and intu-

iting (feedback). This model provides a frame-work for exploring the positive and negativefactors influencing entrepreneurial activitywithin large organizations. In exploring feed-back and feedforward, the model shouldprovide insight into factors that both encour-age and inhibit entrepreneurship within largeorganizations. The 4I framework is the onlymodel we found that connects individual,team and organizational learning in this way.

Having briefly examined CE and OL sepa-rately, the inter-relationships between theseconcepts are addressed.

Inter-relationships between CE and OL

It is only recently that researchers have con-centrated more specifically on the inter-relationships between CE and OL. In reviewingthis literature, we found only two contribu-



Level Description of Process Inputs/ Outcomes

Individual

Group

Organization

Intuiting: The preconscious recognition of the pattern and orpossibilities inherent in a personal stream of experience. Thisprocess can affect the intuitive individual’s behaviour, but it only affects others as they attempt to (inter) act with that individual.

Interpreting: The explaining of an insight, or idea to one’s selfand to others. This process goes from the preverbal and requiresthe development of language.

Integrating: The process of developing shared understanding amongst individuals and the taking of coordinated action through mutual adjustment. Dialogue and joint action are crucial to the development of shared understanding. This process will initiallybe ad hoc and informal, but if the coordinated action taking is recurring and significant it will be institutionalized.

Institutionalizing: The process of ensuring that routine actionsoccur. Tasks are defined, actions specified and organizational mechanisms put in place to ensure that certain actions occur.Institutionalizing is the process of embedding learning that has occurred by individuals and groups into the institutions oforganization including systems, structures, procedures and strategy.

Experiences Images Metaphors

Language Cognitive map Conversation/ dialogue

SharedunderstandingsMutual adjustmentInteractive systems

Routines Diagnostic systems Rules and procedures

Figure 4. Learning in organizations: four processes through three levels.Source: Adapted from Crossan et al. (1999) and Crossan and Bedrow (2003).


tions that attempt to describe the relationshipbetween OL and CE. Both of these are largelyinfluenced by the knowledge management literature and approach organizational learningfrom the management science perspective.Easterby-Smith (1997) and Zahra et al. (1999)offer a cyclical model of corporate entrepre-neurship, knowledge and organizational competence development. Dess et al. (2003)propose a cyclical model that explores therelationships among corporate entrepreneur-ship strategy, organizational learning, knowl-edge, implementation and feedback. Dess et al.’s (2003) model draws heavily from thatof Zahra et al. (1999) and therefore sharesmany similar criticisms.

It is only recently thatresearchers have

concentrated on the inter-relationships between CE

and OL

First, both models introduce two new labelsto OL (acquisitive and experimental), ignoring

the significant work on the three levels of OLthat have been discussed by key theorists suchas Bateson (1973) and Argyris and Schön(1978) (single-loop learning, double-looplearning and deutero-learning). Using similarlabels and meanings would help developshared understanding between researchersexploring the inter-relationships between CEand OL. Second, both models examine howcorporate entrepreneurship may impact onorganizational learning, but they neglect toexplore how individuals’ and groups’ socialconstructions of the organization in whichthey exist may impact on this relationship. Itis suggested that adopting an approach wherethe inter-relationships between the individualsand groups that contribute to CE activities andsubsequent OL activities are explored maycontribute to a more comprehensive and in-depth understanding of the processesinvolved in this complex and dynamic relationship.

A conceptual framework of the inter-relationships between CE and OL

So far, we have briefly presented key researchfindings from our review of both the CE andOL literatures and the limited research explor-


Intuiting

Institutionalizing

Feedforward

Feed

back

Individual

Group

Organizational

Individual Group Organizational

Interpreting

Integrating

Figure 5. The 4I model of organizational learning as a dynamic process (Crossan et al., 1999).

ing the relationships between the two. Wehave noted similar key factors, such as struc-ture, culture and HR practices, which mightinfluence, positively and negatively, both CEand OL. However, we also briefly noted philo-sophical and methodological limitations in thisresearch.

Our conceptual framework is now pre-sented in the form of two working models,inspired by the yin yang symbol (Figure 6).The yin yang symbol represents the ancientChinese understanding of how things work.The outer circle represents ‘everything’, whilethe black and white shapes within the circlerepresent the interaction of two energies,called ‘yin’ (black) and ‘yang’ (white), which‘cause’ everything to happen. They are notcompletely black or white, just as things in lifeare not completely black or white, and theycannot exist without each other. The shape ofthe yin and yang sections of the symbol givesa sense of the continual movement of thesetwo energies, yin to yang and yang to yin,causing everything to happen.

We have called the first model OL yin andthe second CE yang. Both models show dif-ferent, yet inter-related relationships betweenfour key constructs:

� Organizational learning.� Corporate entrepreneurship.� Changes in the external environment. For

example, changes in the wider cultural,economic, political or technological envi-ronment, or in the more specific marketenvironment.

� Changes in the internal environment. Forexample, changes in strategy, structure,reward, resources and culture.

Exploring these connections and inter-relationships, we found it useful to focus oneach concept separately and consider theimplications for the other.Thus, we centre ourfirst working model on OL and explore theimpact on, and inter-relationships with, CE,and vice versa in the second model.

OL yin

The first model (see Figure 7) shows OL (2)in its centre. We propose that the OL in thecentre represents the hub for all types andforms of OL activity. For example, in thiscentre, OL may represent individual, team ororganizational learning. The OL may be intuit-ing, interpreting, integrating or institutionaliz-ing (Crossan et al., 1999). Learning could besingle-loop, double-loop or deutero-learning(Argyris and Schön, 1978) and may involvescanning and unlearning (Huber, 1991).

There are two paths mapped out in themodel. The black lines denote the path for official strategic innovation, whilst the greypath denotes the unofficial innovation, orautonomous strategic behaviour (Burgelman,1983).To explain the model, we will begin thecycle when a change occurs in the externalenvironment (1), although this may not be thestart of the cycle in reality. We propose that anorganization will have to learn about a changebefore it can react to it (2). In the case of offi-cial CE (3), once OL has occurred, CE activi-ties may be orientated externally (5) — suchas merger or joint venture — or may be orien-tated internally (6) — such as venture groups.In the case of unofficial autonomous CE (4),these changes may also be externally orientated(8) — such as independent spin-offs — or inter-nally orientated (9) — such as skunkworks.

If the CE is externally orientated, then thiswill have an obvious effect on the presentmarket environment and subsequently cause achange in it (1) through the introduction of anew product or service. So the cycle wouldbegin again. If the CE activities are internallyorientated, then this will cause changes in theinternal environment (7), such as job redesign,restructure, new reward system or revised



Figure 6. The yin yang symbol.


learning and development activities. We arguethat these changes would require further orga-nizational learning support (2) and then theCE spiral would begin again (3 or 4).

The dashed lines in the model represent ouracknowledgment that these cycles could notrun as smoothly as described above. Forexample, externally orientated CE activitieswould probably also induce changes in theinternal environment and vice versa. We alsorecognize that the act of OL (2) itself maycause internal changes (7), without the inter-action with CE activities.

CE yang

Our second model (illustrated in Figure 8)shows CE at its centre (4). We propose that CE

represents all of the different types of CE (suchas intrapreneurship, mergers and acquisitionsand venture groups) and can be official orunofficial in nature. As with the first model,there are two main paths and we will begin byassuming a change in the external environ-ment (1), although again, this may not be theinitial trigger in reality.

A change in the external environment (1)may be learned at the organizational level (2)or at the individual/group level (3). We haveindicated the path for organizational levellearning with the black line and individuallevel learning with the grey line.

Organizational level learning will ‘cause’organizations to react through CE activities(4). As the OL ying model illustrates, theseactivities will most likely be formal and official


Strategic level Strategic level–team level Externally oriented Internally Oriented

Individual levelExternally oriented

Individual/ Team level

Internally oriented

Changing External

Environment (1)

Changing Internal

Environment (7)

Formal/ Official CE Activities

(3)

Informal/ unofficial

CE Activities

(4)

OL (2)

Entrepreneurial Partnerships, Merger and

Acquisitions, Joint Ventures, Independent

spin-offs (5)

Venture groups, ICV(6)

Skunkworks, informal

intrapreneurship (9)

Independentspin-offs

(8)

Figure 7. OL yin.

in nature, whereas individual/group-levellearning will most probably induceautonomous CE behaviour (Burgelman, 1983).Whatever type of CE behaviour is created,our model shows that this will lead to bothinternal change (5) and external environment(possibly market) change (1). Drawing fromCrossan et al. (1999), the dotted straight linesin our model show how learning may progressfrom the individual level up through the orga-nization (intuiting to institutionalizing, feed-forward) and how learning can progress fromthe organizational level through to the indi-vidual level (institutionalizing to intuiting,feedback).

As with our first model, we acknowledgethat in reality the overall process is morecomplex. OL (2) and individual/group learn-

ing (3) may create changes in the internalorganizational environment (5), without theintervention of CE activities. The dashedarrows illustrate this. For both models weargue that OL activities could not directly leadto changes in the external market environ-ment per se, since a change in the market environment would require some form of CEintervention. However, OL activities maycreate changes in the external environment,including cultural, political, economical andtechnological change.

Conclusions

In this paper, we have critically reviewed theCE and OL literature, exploring both the intra-



Strategic induced CE Activity

Autonomous Induced CE activity

Changing External

Environment (1)

Changing InternalEnvironment (5)

OL(2)

INDIVIDUAL/ GROUP

LEARNING (3)

FormalCE

Informal(4)

Feed forward

Feedback

Intuiting

Institutionalizing

Figure 8. CE yang.


relationships within and inter-relationshipsbetween, these two broad fields. An importantoutcome of the review is the identification ofa lack of empirical research exploring thecomplex, dynamic and possibly synergisticrelationship between these two areas. Toaddress this, we have introduced a yin yangconceptual framework to present our currentunderstanding of the possible processes andrelationships between the various forms of OLand CE.

We hope to explore the validity and applic-ability of these processes and relationshipsthrough in-depth analyses of large organiza-tions within the UK. Furthermore, by adaptingJones-Evans’ (2000) framework to include OLcharacteristics, we aim to test existing theoriesand our own conceptualization of thecomplex relationships between CE and OL.Weplan to employ this revised framework tooperationalize the concepts of CE and OL toconduct our empirical analysis of the variousindividual, team and organizational aspects of,and inter-relationships between, CE and OL.Such empirical research should contribute toa greater understanding of these and con-tribute valuable insight to practitioners andresearchers within many key fields of HRD/HRM, organizational behaviour and strategy.

Biographical notes

Sally Sambrook studied and worked at Not-tingham Business School for eight years, andis a Visiting Research Fellow. Sally joined theUniversity of Wales Bangor in 1999 and afterseveral years as Lecturer in Human ResourceManagement, joined the Faculty of Health,where she is Programme Leader for the MSc inHealth and Social Care Leadership. With hernursing and training background, Sally’sresearch interests include studying humanresource development (HRD) within thehealth service and she has published numer-ous journal articles, edited texts and bookchapters on HRD.

Clair Roberts is in the process of complet-ing her PhD at the School for Business at theUniversity of Wales, Bangor. Since embarking

on her PhD, Clair has twice won the LloydJones Award for her research into corporateentrepreneurship and her business consul-tancy services to local SMEs. Clair’s researchinterests span organizational behaviour, HRMand corporate strategy, most particularly organizational learning, corporate entrepre-neurship and organizational change.

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