Human Resources Management activities through Strategic Entrepreneurial Approach: Iranian Oil Companies, A Case Study

Human Resources Management activities through Strategic Entrepreneurial Approach: Iranian Oil Companies, A Case Study Yashar Salamzadeh Graduate School of Business, USM, Malaysia Se

Human Resources Management activities through Strategic

Entrepreneurial Approach: Iranian Oil Companies, A Case Study

Yashar Salamzadeh

Graduate School of Business, USM, Malaysia

Setayesh Gharehchaei

Farabi Institute of Higher Education, Malaysia

Abstract

Objective: The concept of strategic management is to keep pace with developments in management theory

Strategic business is combination of the concepts of entrepreneurship and strategic management in recent decades that is considered by many researchers Since one of the major factors affecting the productivity of industries, is the approach of entrepreneurship, we are about to determine the correlation between human resource management and organizations' entrepreneurial approach The main question in this study is what

is the impact of the strategic entrepreneurial approach on the human resource management activities?

Methods: In this descriptive survey About 240 employees of oil companies are considered as the research

population the researcher made questionnaire was distributed among samples The correlation between variables is tested using multiple regressions by SPSS and path analysis by LISREL software

Theoretical Framework: The main elements of the strategic entrepreneurial are used from Hitt et al model

(2001) and For the human resources management part we chose three main dimensions among too many different models and categories using expert focus groups, as The HRM Field is really wide and including all aspects might result in a great Bias

Results: Outcomes show that the conceptual model is mapped correctly and confirm the correlation

between strategic entrepreneurship attitude and human resources management In this study in the main hypothesis it is confirmed that there is a positive and significant impact of strategic entrepreneurial attitude

on human resources management, path analysis and correlation test results showed that the correlation between the two variables are in the medium level So the main research hypothesis is confirmed, in the sense that strategic entrepreneurial attitude change will cause fluctuations in Human Resource Management

Conclusion: It is therefore recommended to officials and industry executives to take action the approach

towards entrepreneurship education strategy among their human resources in order to improve their output and outcome

Contribution: The Correlation between Strategic Entrepreneurial approach and Main dimensions of HRM

clears the path for decision makers how to empower entrepreneurial attitude in their organization through HRM activities and as this attitude influences the organizational success in dynamic business environment,

We can greatly count on empirical outcomes of this research

Keywords: Entrepreneurship, Strategic Entrepreneurship, Human Resources Management, Competitive

Advantage, Iran, Oil Companies

1 Introduction

Developments in today’s world, globalization and the transition from traditional society to an information

innovative and entrepreneurial Competitive advantage is an important element in entrepreneurship and achievement to it, is possible by creativity and innovation Entrepreneurship is required to identify timely opportunities and threats Also Creative employees with novel ideas and organizational innovation will indeed act as a competitive edge for the organization and we have to pay attention to this issue in Strategic Entrepreneurial Approach (Salamzadeh, et al., 2016)

Identifying opportunities to enter the market and utilization of it will help entrepreneurs Entrepreneurship first was raised in 17th century in France, at that time entrepreneurs were paid to carry out orders in

commercial projectsInvalid source specified Generally entrepreneurial processes in organizations, can

determine how to achieve the approved goals, trying to take advantage of opportunities in the market, discover new opportunities and working on competitive advantages (Corbett, et al., 2013 ; Covin et al., 2000 ; Ireland et al, 2009)

According to the theory of Schumpeter "creative destruction", the entrepreneur is not someone who will provide initial capital or to invent a new product, but entrepreneurs are who have ideas about the business With a variety of definitions of entrepreneurship, a definition that includes almost all the definitions is: Entrepreneurship is a process that creative and entrepreneurial people with new ideas, identify new opportunities and mobilize resources, attempt to create business and new companies, and this fact is combined with risk-taking and leads to introducing a new product or service or value to the society (Hisrich & Peters, 2002; Thompson et al., 2000) The link between Human capital or human resources has emerged as a highly utilized theoretical view through which researchers can better understand entrepreneurship (Henry, C et al., 2016)

The need for an orientation strategy to entrepreneurship is originated from three basic needs that are mean increase of new competitors, distrust of traditional management practices, and leaving the workforces and independent entrepreneurs’ action and in the meantime, the expansion of advanced information and communication technologies has increased significantly (Kuratko & Hodgetts, 1992) Strategic entrepreneurship as a combination of basic principles of entrepreneurship and strategic management and order to understand how to create value through the exploitation of entrepreneurial opportunities in the external environment and develop competitive advantage in companies and organization in recent years has gained a special place in the literature on entrepreneurship (Venkataraman & Sarasvathy, 2001; Hitt at al., 2001) Strategic Entrepreneurship is a result of the balance between opportunistic behavior and

advantage-seeking behavior Invalid source specified

The key concept of strategic entrepreneurship that is to gain competitive advantage and sustainable value creation Organizations must strike a balance between the searches for new opportunities in the market

(entrepreneurs) and to maintain the competitive advantages of strategic managementInvalid source specified Strategic Entrepreneurship have been recognized as critical to the process of creative destruction

and creative construction (Agarwal et al 2007; Ferreira et al 2017)

On the other hand, Today, human resources is a key factor in creating competitive advantage for organizations and organizations needs to effective and efficient personnel that should be able to achieve their objectives for growth and comprehensive development Accordingly, the question arises whether strategic entrepreneurial approach has a significant impact on entrepreneurship in oil companies employees or not? Hence in this research we are about to examine the impact of strategic entrepreneurial approach on human resources management

2 Materials and Methods

2.1 Entrepreneurship

Entrepreneurial research in organizations has expanded continuously over the past few decades (Goodale,

et al., 2011, p 116) entrepreneurship is a process that leads to more satisfaction or new demand The entrepreneurial individuals within the organization or individual with no regard to the limits of available resources are pursuing entrepreneurial opportunities (Chen, et al., 2015) Peter Drucker says: what you hear about entrepreneurship and America as the leader in management thinking, is an exaggeration, there is no magic, no mystery and no relation to the gene Entrepreneurship is a science and it can be learned like other sciences (Kuratko & Hodgetts, 1992)

Overall, the best definition that can be offered about entrepreneurship is: innovation process and taking advantage that takes place by opportunities with effort, perseverance, acceptance of financial risks, psychological and social empowerments and, of course, motivated by financial gain, achievement, self-fulfillment and independence (Hisrich & Drnovsek, 2002) (Javalgi, et al., 2014, p 3)

2.2 Entrepreneurial approach

Entrepreneurship is the process of creating value through a unique set of resources, in order to take advantage of opportunities (Kuratko & Hodgetts, 1992)

Attitude has been defined as assessment of the desirable or undesirable behavior from the perspective of a person The connection between these two concepts has created an entrepreneurial approach (Claar, et al.,

2009, pp 68-69) Research Results suggest that approaches are the best predictors of entrepreneurial tendencies There are several researches proved that entrepreneurship education in increasing individual entrepreneurial motivation and thus has an impact on increasing the possibility of entrepreneurship (Mitra & Matlay, 2004)

Several models have been proposed to assess the entrepreneurial approach which can be pointed out to the Shapero and Sokol dimensions of entrepreneurship (1982), and Boyd and Vozikis Entrepreneurial intentions pattern (1994) and Bird entrepreneurial model (1998)

Despite the usefulness of these models in entrepreneurship research, but because of the nature of providence and as they do not pay attention to social factors, they couldn't be used comprehensively

2.3 Strategic Entrepreneurship

CE strategy as a common ideology, seeks to gain competitive advantage through innovation and entrepreneurial behavior on a sustainable basis (Russell, 1999) Integrating entrepreneurship and strategic management offers an approach that enables various organizations and businesses to utilize current opportunities, create transformation and value creation An entrepreneurial strategic perspective is the result

of three logical factors: intensity of competition, technological environment and expand product range on the market Other environmental conditions can also have impact on formation of strategic perspective in an entrepreneurial organization (Ireland, et al., 2003) However, keeping in mind both concepts of entrepreneurship and strategic management is emphasizing on both aspects of strategic modelling

One of the comments in this field is that organizational entrepreneurship must be established by senior managers (Higdon, 2000, p 16) Senior managers always are known as forming the perspective of the organization and its designed functions (Heller, 1999, p 25) (Bartlett & Ghoshal, 1997) Of course, it's not that all managers who are faced with discussed circumstances, are not planning an entrepreneurial strategic vision Based on the concept of strategic management, environmental conditions cannot lead to formation of an entrepreneurial strategic perspective unless with recognizing by entrepreneurial senior manager (Child, 1972) Porter, David, Mintzberg, Boston Consulting Group, McKinsey, GE and other experts' Model in the field

of strategy, are tools that enable entrepreneurs in all stages of business, to apply the best strategy To succeed

2.4 Human Resource Management

Human resource Management is defined as the management and administration of the most valuable assets of a set of strategic and sustainable resources, employees who work there individually and come together to contribute towards achieving the objectives (Armstrong, 1999) Human resource management, with its influence on employee performance has significant impact on individual and organizational performance (Kaifeng & et al, 2012)

At the level of individual performance, human resource management tries to influence individual abilities, motivation and opportunities Two major fields of studies related to human resources as a competitive advantage are Human Capital and Human Capital Management (Chan, et al., 2004, p 19)

A human resources management method in small, medium and large organizations is somewhat different

As researches show, there is a linear correlation between the sizes of the organization and structure, the organization's education and human resources problems ( Cassell, et al., 2002, p 672)

Researches will include a wide range of human resources, researches in this area could include how culture impacts on human resources practices and systems, How internalization or localization of human resource management works and the impact of environmental factors on HR applications ( Bruton & Lau, 2008, p 652) Generally the results obtained from the use of human resources management and organizational effectiveness indicate a positive effect on organizational performance But however, still numerous questions remain unanswered in this context (Den Hartog & Verburg, 2004, p 55) (Randy Evans & Davis, 2005, p 771)

Figure1 Fomburn compatible models of human resource management

2.5 Entrepreneurial organization and human resources management

Researchers in the field of strategic human resources have argued that organizations can effectively influence the interaction, behavior, relationships and motivation of employees (CHRISTOPHER J & SMITH, 2006) Entrepreneur organizations are not exempt from this issue Entrepreneur organizations often are young organizations with the adoption of new responsibilities and challenges of entering an unknown industry must learn ways to gain legitimacy in the industry In this way human resources of organizations, often because of the small size of the organization, are facing quantitative restrictions that can assist the organization in search

of new opportunities, competitive advantages, and success in the market The importance of human resources

in entrepreneur organizations is even more than the legitimacy and acceptance in business and shortcomings (Cardon & Stevens, 2004, p 297) In particular, people with entrepreneurial attitude has high social skills, including social understanding, effective management, confidence, etc and are capable of making landscapes

of the business These skills as a key advantage help them in obtaining the resources that they need, whether financial or human resources In other words, entrepreneurs are more proficient in obtaining human resources

as human resource management (BARON, 2007, p 172)

Figure 2 Harvard Human Resource Management Framework

2.6 The impact of strategic entrepreneurial attitude on human resources management

One of entrepreneurship types, especially in the private sector, is strategic entrepreneurship (Ireland, et al., 2003) A strategic word used in this term, is an important way to value the continuation of competitive advantage and wealth (Venkataraman & Sarasvathy, 2001) Innovation, networking, integration, globalization, growth and organizational learning, resources and management teams and strong supervision related to strategic management and entrepreneurship are six dimensions that are the activities which take place in the field of strategy and entrepreneurship Strategic Entrepreneurship can also be categorized in four dimensions: entrepreneurial mind, culture and entrepreneurial leadership, strategic management and development resources to develop innovative creativity

In fact, entrepreneurship and strategic management both create value on how to make changes through the utilization of entrepreneurial opportunities in the external environment and then develop their competitive advantage to take advantage of these opportunities (Ireland, et al., 2001)

While some hybrid models would emphasize on networking, learning and growth, Hitt et al, with revising the model of Ireland et al, added some dimensions to achieve sustainable competitive advantage, competencies and capabilities of an entrepreneur’s pattern

Figure 3: The main elements of the strategic entrepreneurial in Hitt et al model (2001)

Realization of innovation is affected by the influence of human capital To influence the organization's human resources they should be imagined through strategic human resource management, in this way we can increase employee motivation and desire for innovation and in this way organizations will also have the opportunity to identify and invest on their knowledge and expertise (Scarborough & Carter, 2001) The human resource management initiatives in the field of recruitment can provide the ground for innovative behaviors Focus on training and development of human resources through creativity, innovation and entrepreneurship training ground for the promotion of activities in the organization (Abdullah, et al., 2010)

Stan et al., in 2012, in an article titled "Performance indicators to evaluate employees on industrial production lines" have analyzed performance indicators In this study, performance indicators has been given through improved decision-making, existence of risk in the supply chain and the ability in management of distributor portfolio In this study the advantage of the use of performance indicators is obtained through forecast revenues and acquisitions opportunities in industrial production lines (Stan, et al., 2012)

2.7 Hypotheses and conceptual model

Based on studies and review the theoretical foundations, the conceptual model in present study is presented as below

Figure 4 The conceptual model

2.7.1 hypotheses

Based on the conceptual model for research, hypotheses are as follows:

Main hypothesis:

Strategic entrepreneurial attitude has a positive and significant impact on human resource management Subsidiary hypotheses:

1 Strategic entrepreneurial attitude has a positive and significant impact on learning and motivation of Oil Companies' Employees

2 Strategic entrepreneurial attitude has a positive and significant impact on the working System of Oil Companies' Employees

3 Strategic entrepreneurial attitude has a positive and significant impact on job satisfaction of Oil Companies' Employees

This research from philosophical view is a positivist one and from the aim of the research is an applied research and in terms of data collection and the nature and methods is a descriptive survey Since researchers sought to examine the correlation and effects between the two components, this survey is solidarity Our approach, according to our philosophy, is an inductive approach The data analysis is done by SPSS To obtain the reliability and validity of the Researcher made questionnaire of ours, Cronbach's alpha reliability coefficient and KMO index are used

2.8 Research Population

The study population included all managers and employees of the oil company, the volume of the entire community is 240 experts Using Morgan's Table we determined the sample size of 148 and

we also used a random cluster sampling Method

2.9 Research Instrument

In this study, we use both field and library methods and required information is obtained through a questionnaire According to this, researcher made questionnaire is used Cornbrash’s alpha was used to determine the reliability of the test and the result is very good value of 0.956 that represents the reliability of the questionnaire As well as to test the validity of the questionnaire, questionnaires were distributed among the experts and its validity was confirmed by them

Table 1 Reliability Statistics Cronbach's Alpha N of Items

2.10 Data Analysis

After collecting data through surveys to examine the correlation between variables and hypothesis testing, two statistical softwares (SPSS and LISREL) were used

3 Results

The results obtained from the questionnaires, are according to the following Figure:

Figure 5 Path analysis using LISREL software

The results obtained from the analysis represents that the amount of growth dimension is 0, 43, innovation dimension is 0:56, identify opportunities dimension with a value of 0.62, the risk dimension with a value of 0.62, perspective dimension with a value of 0.61 and finally flexibility dimension with a value of 0.52 have a

good correlation with strategic entrepreneurial attitude Also with regard to human resources management variable we can say that the scale of the variable values are: Learning and Motivation equal to 0.58, Working system equal to 0.56 and well-being and job satisfaction equal to 0.58 have correlated with this variable

3.1 Models' Fitness

Indicators showing the model fitness are: GFI (goodness of fit index), AGFI (adjusted goodness of fit index), NFI (Not Soft Index Fitness), CFI (comparative fit index) The higher index of 0.9, show the acceptable fit of the model RMSEA is the mean square error of approximation index in the investigation of another statistic in the fitness model RMSEA values less than 0.05 indicates acceptable fit model The index value between0.05 to 0.08 indicates a relatively good fit and value of between.08 to 0.1 indicates a moderate fit Finally, fitted RMSEA

value greater than 0.1 indicates poor model fit Invalid source specified Another indicator model can be used

to check the ratio χ2 (chi-square) on the degrees of freedom To fix the model's goodness of fit this ratio should

be smaller than 3 RMR Index residuals mean square values, having a value of 0.05 indicates a good fit index The index is close to 0 indicates is a very good fit of the model Table 1 shows these indicators for our model

Table 2 Indicators of goodness of fit test

CFI NFI

RMSEA AGFI

GFI RMR

𝑋2/DF

0.99 0.97

0.062 0.90

0.94 0.027

1.55

3.2 correlation between strategic Entrepreneurial attitude and Human Resources Management

In our regression test, The first table is Model Summary This table shows the values of R and R2 The R-value is 0.642, which refers to the correlation between two variables As it can be seen, there is relatively strong correlation between the two variables of strategic entrepreneurial attitude and human resources management

R2 value shows how much the dependent variable of human resource management can be determined by the independent variable of strategic entrepreneurship attitude In our research, human resource management variables can explain 41.2 percent of Strategic Entrepreneurial attitude, which is in fact a moderate amount

Table 3 Model Summary

a Predictors: (Constant), strategic entrepreneurial attitudes

ANOVA is the next table This table shows that the regression model can significantly (and appropriately) predict the dependent variable Sig column is the statistical significance of the regression model which shows that the applied model is a good predictor variable of human resources management In our research, the significance amount is less than 0.05 indicates that the regression model is significant

Table 4 ANOVA b

1

a Predictors: (Constant), strategic entrepreneurial attitudes

b Dependent Variable: Human resource management

The following Coefficients table, gives information about the predictive variables We see that the constant value and strategic entrepreneurial attitude variable for both models have been significant After determining the significance of the constant and strategic entrepreneurial attitude variable, standardized regression coefficient column represents the standardized regression coefficient and the amount of beta Standardized regression coefficient or Beta is equal to 0.642 that shows the effectiveness of strategic entrepreneurial attitude

on Human resources management

Table 5 Coefficients a

Standardized

a Dependent Variable: Human resource management

F statistic is based on regression analysis and the results of this test and related statistics are presented in table below:

Table 6 Regression analysis of the first subsidiary hypothesis

F

df sig

results

102.340 (146,1)

.000

Confirming the correlation between strategic entrepreneurial

attitude and human resources management

According to statistics F and significance level we confirmed the correlation between strategic entrepreneurial attitude and human resource management (sig <0.05) Based on the correlation coefficient between these two components which is obtained 0.64 and based on the obtained coefficient of determination, human resource management to 0.41 is dependent to entrepreneurial attitude The following regression equation, shows the correlation between two variables:

HRM = 0.85 + 0.63 * Strategic Entrepreneurial Attitude

3.3 correlation between strategic entrepreneurial attitude and human resource management Dimensions including learning and motivation, working systems and Job satisfaction (regression)