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Original Research

Entrepreneurial orientation and corporate governance structures at the firm level in the South African oil and gas industry

Vincent B. Molokwu, Jose Barreria, Boris Urban

SA Journal of Human Resource Management; Vol 11, No 1 (2013), 15 pages. doi: 10.4102/sajhrm.v11i1.443

Submitted: 04 November 2011
Published:  07 March 2013

Abstract

Orientation: Corporate governance systems (CGS) have been observed as one of the most important structures and mechanisms that regulate the relationships between executives and shareholders. By having well-defined and established CGS, company board members and executives are able to shape company vision and increase managerial commitment towards formulating strategies that espouse an entrepreneurial orientation (EO). Firms with high levels of EO tend to be innovative and encourage creative initiatives in new products and technology developments.

Research purpose: In an emerging economy such as South Africa, one of the primary goals of an organisation is growth and good governance, which can be achieved through wellgoverned structures and continuous innovation in the face of challenges. This study identified potential links between the multidimensional constructs of CGS and EO at the firm level in the South African oil and gas industry.

Motivation for the study: One of the greatest challenges faced by organisations when implementing CGS is to ensure compliance.

Research design, approach and method: Board members and senior decision-makers were surveyed in the South African oil and gas industry, using a structured questionnaire. A series of correlational analyses were used to determine the strength of relationships between the dimensions of EO and CGS.

Main findings: By drawing extensively on existing theory on EO, this study found that the different dimensions of CGS have a significant and positive relationship with each of the EO dimensions – innovation, risk-taking and proactiveness.

Practical/managerial implications: Corporate boards supportive of entrepreneurship must provide appropriate reward systems, top management support, explicit goals and appropriate organisational values which signal to employees that entrepreneurial behaviour action is desirable. Practitioners should scrutinise their governance structures in their organisations to ensure an alignment with EO practices.

Contribution/value-add: Generally, research on EO and governance in Africa as a whole may be considered as valuable, as very few empirical studies have been previously conducted which focus on the nexus of CGS and EO. The study is one of the first to conduct empirical research on EO and CGS in an emerging market and unique industry context – the South African oil and gas industry.


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Author affiliations

Vincent B. Molokwu, Graduate School of Business Administration, University of the Witwatersrand, South Africa
Jose Barreria, Graduate School of Business Administration, University of the Witwatersrand, South Africa
Boris Urban, Graduate School of Business Administration, University of the Witwatersrand, South Africa

Keywords

corporate governance; correlational analysis; entrepreneurial orientation; innovativeness; South African oil and gas industry

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ISSN: 1683-7584 (print) | ISSN: 2071-078X (online)


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