THE RELATIONSHIP BETWEEN THE INTRAPRENEURIAL CULTURE AND THE DEGREE OF TECHNOLOGICAL INNOVATION IN THE PRODUCTIVE ORGANIZATIONS: A TEST FOR THE TOOLS

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1 THE RELATIONSHIP BETWEEN THE INTRAPRENEURIAL CULTURE AND THE DEGREE OF TECHNOLOGICAL INNOVATION IN THE PRODUCTIVE ORGANIZATIONS: A TEST FOR THE TOOLS Fábio Gomes da Silva UTFPR fabio.gsilva@terra.com.br Adriane Hartman UTFPR adriane.h@terra.com.br Dálcio Roberto dos Reis UTFPR dalcioreis@terra.com.br Abstract: The fast and continuous changes occurring in the modern business world demand constant technological innovations from the organizations. In order to promote such innovations, the intrapreneuring appears as an incentive factor to the generation and sharing of new ideas that will become technological innovations. The aim of this work is to test and validate the tools created to assess the intrapreneurial culture and the degree of technological innovations existing in the productive organizations as well as to compare the two factors to check whether there is a direct relationship between them or not. For the development of the research, two computer-based tools were created based on some indicators used to evaluate the factors already mentioned. These tools

2 were applied to a case study in a paper industry in the Paraná State. The results of the research showed the validity of the tools created and the existence of a direct relationship between the intrapreneurial culture and the degree of technological innovation of that organization. Keywords: Technological innovation, intrapreneuring, intrapreneurial culture. 1. Introduction Current times are characterized by an era of intense and deep changes which occur daily in the global market at an impressive speed. In this extremely globalized and competitive world, following the changes has been the great challenge for most organizations all over the world. Therefore, technological innovation management appears as a fundamental and vital tool. Technological innovation has never been so intensely approached by several authors, researchers, entrepreneurs, professors and students, as in the last decade. One way of facilitating the development of technological innovations in companies is through the implementation of an intrapreneurial culture within these companies. Intrapreneuring is a concept that was introduced in literature by Pinchot III (1989) to identify the workers in big companies, who whenever motivated, rewarded and supported by the organization, generated continuous innovations

3 to those companies, felling fulfilled as entrepreneurs without having to quit their jobs in order to be able to put their ideas into practice. From Pinchot s III (1989) point of view, the intrapreneurs are less motivated by power than executives. The fact that they are motivated by fulfillment rather than power explains both, their strength as initiators of business and their potential weakness as managers of big business. For this reason, they are fulfilled within the organizations which hired them as workers, however, they act as entrepreneurs rather than common employees. 2. The relation between intrapreneuring and technological innovation. To Pinchot and Pellman (2004), in the XXI century there is no more choice, either one learns how to innovate or the tendency is to disappear from the market. This is the reality nowadays; clients no longer accept products and services which do not reflect continuous innovation. The consumers needs and desires change quickly, not only in relation to products but also in relation to the services offered to them such as assistance. This situation is also present in Uriarte s (2000) view, who analyses the necessity of supporting people with innovative ideas and initiatives (entrepreneurs and intrapreneurs), because those people are change agents and the hope for the future of the organizations. According to Pinchot and Pellman (2004), an innovation, even the smallest one, will always have an intrapreneurial action as support.

4 Intrapreneurs are the ones to promote technological innovation in the companies, putting into practice their new ideas. But what happens with most organizations is that they do not present a favorable environment so that entrepreneurs appear, which usually blocks the innovation process. When intrapreneurs appear, the way to the innovation becomes fertile and facilitated, once these intrapreneurs are always open to continuous learning and to apply their new ideas. Pinchot and Pellman (2004) also point out that the success of innovation depends much more on fast learning and quick response to the new learning rather than on being sure one is right. They also say that in the complex current world, mainly regarding multinationals, one or two people involved in the creation of a favorable environment to intrapreneurs is not enough. It is necessary to develop a shared belief in the innovation and the clear determination to keep it through the maintenance of intrapreneurs. For Santos and Zaffalon (2005), technological innovation has close relationship with intrapreneuring in big organizations which have already consolidated in the market where they are inserted. In fact, this article focuses on the role and importance of internal entrepreneurs actions as agents of innovation in already consolidated companies. Even researchers highlight that such companies keep creating functional units in their respective organizational structures which are responsible for seeking innovation. (SANTOS;ZAFALON, 2005, p. 149).

5 Therefore, a direct relation between the existence of an intrepreneurial culture and technological innovation becomes a real fact for the modern organizations. The incentive to the appearance of intrapreneurs generates innovations that promote several competitive advantages for the companies which lead the markets in which they are inserted. 3. Methodology The study was carried out in a paper industry in the region of Campos Gerais in Paraná State, through development and implementation of two tools elaborated with the aim of evaluating the intrapreneurial culture and the degree of technological innovation in the organizations, respectively, with the objective of comparing these two factors and verifying the existence or not of a direct relation between them. For the development of the first tool, a questionnaire was created with 25 (twenty-five) questions based on the intrapreneuring indicators proposed by Pinchot and Pelmann (2004), adapted to the Brazilian reality according to Dornelas (2003), Chianeto (2004) and De Masi (2000). The questionnaire, according to Marconi and Lakatos (2001) is a technique of data collection of the extensive direct observation kind, and should be composed of a series of questions which must be answered in written form and without the researcher s presence. This questionnaire was sent to 15 (fifteen) of the company s employees, via with instructions, based on Lima (2004), who suggests

6 that this kind of data collection instrument be sent to the respondents via post office, mail carrier, attached to a product or through electronic means, always attached to an explanatory letter. The questionnaire was developed in the Microsoft Excel program, answered electronically and returned via . Table 1 shows the questionnaire used in the research on the intrapreneurial culture. Those are multiple choice questions which were divided into 08 (eight) different groups, which can be seen in figure 1. Decision Making Process Incentives/Motivation Leadership Autonomy Teams Rewards Innovation Control/Measurement Figure 1- Intrapreneuring indicators groups

7 Figure 1 shows that the eight groups of indicators interacting within an organization generate a suitable intrapreneurial culture, through a decision making process that prioritizes incentives, motivation and autonomy so that people share their knowledge seeking innovation, being rewarded for that, favoring team work and constantly monitoring the results obtained so that these teams keep constantly motivated promoting a favorable environment to the appearance of intrapreneurial workers, seeking continuous innovation in a sustainable way. While developing the second tool, a form with 30 (thirty) questions based on the technological innovation proposed by the Research, Development and Engeneering of Innovator Companies (ANPEI) and the Technological Innovation Industrial Research (PINTEC) was generated. Both institutions use technological innovation indicators presented in the Oslo Manual and in the Frascatti Manual from the Organization for the Economic Development and Cooperation (OECD). These indicators where also adapted to the Brazilian reality based on Reis (2004), Sbragia (2001), and Stefanovitz and Nagano (2005). These questions were also separated into groups, according to figure 2.

8 QUESTIONNAIRE (Intrapreneurial culture) Third International Conference on Production Research a.cross "X" the option which is closest to your company reality; b.choose only one answer for each question. c.s (ALWAYS) F (OFTEN) R (RARELY) N (NEVER) IFPR NS (DO ABEPRO NOT KNOW) - PUCPR - PPGEPS ÍTEM QUESTION S F R N NS COMUNICATION The vision and strategic objectives of your company are informed/taught to all 1 employees. 2 The degree of importance given to the clients by the employees is high. 3 The company informs/spreads their decisions among all the workers. Employees are asked about how happy they are with the existing incentive programs 4 to the sharing of new ideas. 5 DECISION PROCESS The company managers decisions are taken visualizing results in a period longer than 3 years. 6 The company works according to the policies and guidelines informed. 7 The company works with social, environmental and/or ethical responsibility programs. INCENTIVES / MOTIVATION 8 There are incentives for the employees who present new ideas. 9 Whenever errors and/or failure occur, the employee still receives incentive. Workers are encouraged to explore new ideas without having the obligation of being 10 successful. The company encourages small (even minimum) improvements presented by the 11 employees. REWARDS 12 Employees who create a new Project remain working with it after it proves successful. 13 The new ideas (innovations) proposed by employees are accepted. The company values small (even minimum) improvements presented by the 14 employees. The company rewards new ideas generated by employees when they are effectively 15 used. AUTONOMY 16 Employees can choose the projects they want to work on. Managers and/or team leaders have autonomy and motivation to give incentive to 17 innovation projects. There is autonomy to act even without permission for the company s good 18 performance when the superior is absent. Employees have access to the information needed to develop their projects when the 19 owners of the information are not present. Employees can access the resources needed to develop their projects when the 20 owners of the resources are not present. LEADERSHIP 21 Employees are trained to substitute their immediate superiors whenever necessary. 22 TEAMS People help and care about one another rather than thinking about their own area only. (Community) 23 The level of cooperation among the several sectors of the company is high. 24 Multifunctional teams are formed to work on development of new projects. CONTROL / MEASUREMENT 25 The company monitors the results obtained with the implementation of the ideas suggested. Table 1 Intrapreneurial Culture Evaluation Questionnaire

9 Impact of innovations on the company Sources of innovation Input indicators Improvement innovations Radical innovations Output Indicators Profitability Figure 2 Groups of Technological Innovation Indicators in Organizations. Table 2 presents the form of evaluation of the degree of technological innovation in an organization. Such form was answered by the Production Manager of the company being studied, through an interview with him, since according to Lima (2004), the interview develops some kind of commitment of the interviewee with the research and this increases the credibility of the material collected. Marconi and Lakatos (2001) emphasize that the interview is a conversation carried out face-to-face, in a methodical way, which provides the interviewer, verbally, with the information needed. Another reason that led to the use of interview as the main data collection instrument for this research was the intention of getting, besides objective information in relation to the topic approached, the interviewee s impressions, perceptions and interpretation in relation to the topics raised. In Lima s view (2004), the interview

10 promotes this possibility because it is a personal meeting between interviewer and interviewee, which permits evaluation of the testimony. Structured interview was used, as it was totally based on the form devised, which was even sent to the interviewee in advance so that he could prepare himself for the interview. According to Lima (2004) the structured or standard interview characterizes by the fact that at the moment of the interview, the interviewer and the interviewee are oriented by a previously elaborated and known guide, consequently speeding the delivery of data.

11 FORM (Level of innovation) a. Cross "x" the option that represents the reality of your company; COLUMNS b. Choose only y one answer for each question % ou - 2 a 24% 25 a a a % ou + ÍTEM QUESTÃO % % % INPUT INDICATORS 1 What percentage of the company Human Resources is exclusively dedicated to R & D? 2 What percentage of the company s earnings is invested in R & D? 3 What percentage of the company s facilities (buildings, physical area etc) are exclusively destined to R & D activities? OUTPUT INDICATORS 4 What percentage of the company s earnings come from products launched in the last 5 years? What percentage of the company s earnings come from technologies, products or processes created by the company and 5 sold to third parties (royalties) in the last 5 years? In relation to the new productive processes introduced/modified in the last 5 years: if the company had none, cross column 1; if the company 6 had from 1 to 10, cross column 2; from 11 to 20, column 3; from 21 to 30, column 4; from 31 to 40, column 5; more than 40, column 6. 7 What is the costs economy resulting from the company s productive processes improvement in the last 5 years? In relation to finished projects that generated innovation in the last 5 years: if the company had none, cross column 1, if the company had 8 from 1 to 10, cross column 2; from 11-20, column 3, from 21 to 30, column 4, from 31 to 40 column 5; more than 40, column 6. In relation to patent registered: If the company has no patents, cross column 1; if the company has from 1 to 3 9 patens, cross column 2, from 4 to 8, column 3; from 9 to 15, column 4; from 16 to 30, column 5; more than 30, column 6. FORMS OF INNOVATION 10 Which percentage of the main innovation in products or processes in the last 5 years originated from a totally new technology? 11 Which percentage of the main innovations in products or services in the last 5 years originated from the improvements or adaptation of already existing products? INNOVATION SOURCES

12 12 Which percentage of innovation had as origin the R & D activities, in the last 5 years? 13 Which percentage of innovations had as origin the cooperation with other companies (alliances) in the last 5 years? 14 Which percentage of innovations had as origin the cooperation with universities and/or research institutes in the last 5 years? 15 Which percentage of innovation had as origin the machines, equipment, materials, components or software suppliers in the last 5 years? 16 Which percentage of innovation had as origins the clients and consumers in the last 5 years? 17 Which percentage of innovation had as origins the competitors (benchmarking) in the last 5 years? 18 Which percentage of innovation had as origins the consultancy services in the last 5 years? 19 Which percentage of innovation had as origins other companies in the group, in the last 5 years? 20 Which percentage of innovation had as origins the acquisition of licenses, patents and/or know-how, in the last 5 years? 21 Which percentage of innovation had as origins fairs, exhibitions, conferences, meetings and publications, in the last 5 years? 22 Which percentage of innovation had as origins Computerized information nets, in the last 5 years? 23 Which percentage of innovation had as origins the training for the employees, in the last 5 years? 24 Which percentage of innovation had as origins significant changes of software, in the last 5 year? 25 Which percentage of innovation had as origins the new use for an already existing product, in the last 5 years? INNOVATIONS IMPACTS 26 Innovations in products and/or processes, in the last 5 years, had impact in the company improving the quality of products in: 27 Innovations in products or processes in the last 5 years, had impact in the company increasing the number of products offered to the market in: 28 Innovations in products and/or processes, in the last 5 years, had impact in the company increasing its participation in the market (market-share )in: 29 Innovations in products and/or processes, in the lat 5 year, had impact in the company increasing its productive capacity y in: 30 Innovations in products and/or processes, in the last 5 years, had impact in the company reducing the consumption of raw-material in: Table 2 Technological Innovation Level

13 4. Results analysis and final considerations After answered the intrapreneurial culture evaluation questionnaire of the organization studied and also the form for the evaluation of the degree of the company technological innovation through the interview carried out with the production manager, a computerized tool developed in Microsoft Excel worksheets carried out the tabulation of answers obtained and presented the results shown in figures 3 and PUNCTUATION Company Punctuation Intrapreneurial Low Average Intrapreneurial Seqüência1 122, PUNCTUATION / BENCHMARKING Figure 3 Results of the Intrapreneurial Culture Evaluation With the analysis of the graph in figure 3, one can see that the company studied had its intrapreneurial culture evaluated and classified as intrapreneurial average, according to the punctuation defined in the computerized tool, which automatically classifies the company by the results obtained through the employees answers to the questionnaire. The graph shows that an intrapreneurial company must reach from 190 (a hundred and ninety) to 250 (two hundred and fifty) points. While an intrapreneurial

14 low gets under 95 (ninety-five) points, the company studied reached (a hundred and twenty-two point forty) points, that is, intrapreneurial average PUNCTUATION Company Punctuation Innovative Low Avarege Innovative Seqüência PUNCTUATION / BENCHMARKING Figure 4 Technological Innovation Degree Evation Results Analyzing the graph in figure 4, one can observe that the company studied had its degree of technological innovation evaluated and was classified as innovative average, according to the punctuation defined in the computerized tool, which automatically classifies the company by the results obtained through the answers fed into the form. The graph shows that an innovative company must reach from 380 (three hundred and eighty) to 480 (four hundred and eighty) points. The company studied got 251 (two hundred and fifty-one) points, that is, it is considered innovative average. Thus the research concludes that the tools developed for the intrapreneurial culture and the degree of technological innovation permit to evaluate such factors in different organizations as, from now on, they can be considered tested and validated.

15 Also, through the analysis of this specific case in the paper industry studied, a direct relation between intrapreneuring and technological innovation in the organization was verified. However, this result does not prove that the situation occurs necessarily in all companies. For this reason, as a recommendation, further research should apply the tools presented here to several other companies in order to confirm or deny the existence of a direct relation between the two factors analyzed. References CHIAVENATO, I. Empreendedorismo: dando asas ao espírito empreendedor. São Paulo: Saraiva, DE MASI, Domenico. O ócio criativo. Rio de Janeiro: Sextante, DORNELAS, J. C. A. Empreendedorismo corporativo: como ser empreendedor, inovar e se diferenciar na sua empresa. Rio de Janeiro: Elsevier, LIMA, M. C. Monografia: a engenharia da produção acadêmica. a São Paulo: Saraiva, MARCONI, M. A.; LAKATOS, E. M. Metodologia do trabalho científico. São Paulo: Atlas, ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. OECD Proposed guidelines for collecting and interpreting technological innovation data: Oslo manual. Paris, OECD, The measurement of scientific and technological activities: proposed standard practice for surveys of ressearch and experimental development: Frascati manual. Paris, OECD, 1993.

16 PINCHOT III, G. Intrapreneuring: : por que você não precisa deixar a empresa para tornar-se um empreendedor. São Paulo: Harbra, ; PELLMAN, R. Intra- empreendedorismo na prática: um guia de inovação nos negócios. Rio de Janeiro: Campus, REIS, D. R. Gestão da inovação tecnológica. São Paulo: Manole, SBRAGIA, R. Avaliação dos resultados de P & D na empresa: uma possível abrdagem para o problema. In: VASCONCELLOS, Eduardo (Org). Gerenciamento da Tecnologia: um instrumento para a competitividade empresarial. São Paulo: Blücher, SANTOS, S. A.; ZAFFALON, F. R. Intra-empreendedorismo e sua relação com a inovação em empresas consolidadas. In: SANTOS, S. A. (Org). Empreendedorismo de base tecnológica. Maringá PR: Unicorpore, STEFANOVITZ, J. P.; NAGANO, M. S. Aquisição e criação de conhecimento na indústria de alta tecnologia. Anais do XV Encontro Nacional de Engenharia de Produção. Porto Alegre, RS, 29 de out a 01 de nov, URIARTE, L. R. Identificação do perfil intraempreendedor. Florianópolis-SC: Universidade Federal de Santa Catarina, 2000.