CEOs’ Entrepreneurship in Relation to Reaction to Organizational Change

Abstract

This article presents the results of the research conducted in Lithuania and dealing with 48 CEOs’ entrepreneurship possible correlations and their reaction to organizational change. The research is based on analysis of scientific literature and conclusions. This article makes it possible to cast a new sight at entrepreneurship. The main methodological approaches based on the idea that entrepreneurs can be not only independent business owners or agents, but all who really implement new ideas and their functions (Gross, 2005) As scientific literature clearly distinguishes the main concrete entrepreneurial traits, this allows to survey their intensity whose certain level makes it possible to identify the traits of an entrepreneur, a person and a potential entrepreneur. Entrepreneurs are more frequent among CEOs than among others (Robinson et al, 1991; Sharma and Chrisman, 1999; Cromie, 2000; Usbasaran et al, 2001; Yursever, 2003). The other aspect of the research concerns organizational change. Bearley and Johnes (1995) hold that an organization is in a constant change state, therefore a very significant factor influencing a change process is an effective change management. This depends on CEOs. Each CEO tends to react to organizational change in some ways. The problem of this article is embedded in the relationship between CEOs’ entrepreneurship and their reaction to change as entrepreneurship is first of all related to innovations that bring changes into organizations (Zhao, 2005). As the aim of this article is to analyze and research CEOs’ entrepreneurship and reaction to organizational change, the results of empirical research have revealed that not all three CEOs’ personality traits - need for achievement, risk propensity, and locus of control - are interrelated. Positive correlation relations have been found only between risk propensity and need for achievement. But only locus of control correlates with reaction to organizational change – the greater locus internality, the higher CEOs’ support to organizational change, and CEO’s resistance to it decreases. The subject of the article is the relation between CEOs’ entrepreneurial personality traits identifying their intensivity levels and their reaction to change. The first chapter is devoted to CEOs’ entrepreneurship and reveals the main personality traits, the second part reviews the main theoretical concepts of the reaction to organizational change. This work analyses three personality features – the need for achievement, locus of control, and risk propensity. Together with innovation, which is not dealt with in this article, these features are considered to be the main psychological traits (Brockhaus, 1980; McClelland, 1987; Cromie, 2000). The results of this research have revealed that CEOs tend more to support changes than to oppose them, however, both resistance and support of change are rather similar among entrepreneurial CEOs and among non-entrepreneurial CEOs. This research has been carried out according to the methods of Orlov (1978), Jackson (1994), Rotter (Бажин et al, 1983), Bovey and Hede (Pundzienė, 2000), and their adaptation questionnaire allowing to assess the need for achievement, locus of control and its internality, risk propensity as well as the intention to resist and support changes. The research is based on systematic and comparative analysis of literature. Empirical research is substantiated by the questionnaire data and the analysis of the research results has been carried out by means of SPSS packet using the statistical criteria of linear logistic regression indices and their groups’ comparison as well as by means of the analysis methods relationship correlation.