The impact of corporate entrepreneurship on service innovation : a case of a South African banking institution

Abstract

BACKGROUND: Financial services companies pride themselves on delivering quality services tocustomers. To sustain their revenue streams in tough macroeconomic times and rapid technological growth, they are challenged to continuously innovate their services. AIM: The purpose of this study was to determine the dimensions of corporate entrepreneurship (management support, work discretion, rewards and reinforcement, organisational boundaries and time availability) that predict service innovation in the financial services companies. SETTING: Business managers and analysts in a South African bank. METHODS: A case study approach was used to gather responses from business managers and analysts in one of the leading South African banks. The quantitative data were collected through an online survey utilising scales for corporate entrepreneurship and service innovation. Factor analysis and multiple linear regression were inferential statistical techniques used to analyse the data. RESULTS: The findings of the study illustrate that some dimensions of corporate entrepreneurship predicted service innovation. Rewards and recognition, management support and time availability significantly (p< 0.05) predicted service innovation. Work discretion and organisational boundaries were not significant predictors of service innovation. This may suggest that financial institutions limit employees’ freedom to make decisions, use standardised procedures that may reduce employees’ creativity to innovate and discourage employees from making mistakes. CONCLUSION: The insights gained from this study are useful to companies that are looking for methods to revive or improve commercial services offered to customers and build competitive advantage through corporate entrepreneurship.