Barriers to entrepreneurship in public enterprises: boards contributing to inertia

ABSTRACT

This article adopts a qualitative comparative causal mapping approach to extend knowledge of the interrelated barriers to public entrepreneurship and the outcomes of such entrepreneurship. The results highlight marked differences between the sales segment and the distribution grid segment of German public enterprises that should prompt a refined perspective on public entrepreneurship. Notably, besides intra-organizational barriers and those interfering from the external environment, results also show that a public enterprise’s supervisory board can hinder its progress. This study thus contributes to recent discussion on governance and entrepreneurship by revealing a feature that could distinguish public from private enterprises.

KEYWORDS:

• Causal mapping
• governance
• public enterprise
• public entrepreneurship

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Acknowledgments

The author is grateful for the feedback provided by Andreas Kuckertz (University of Hohenheim), Sabine Löbbe (Reutlingen University), and the two anonymous referees. In addition, I am grateful for the valuable comments provided by the participants of the 22nd G-Forum in Stuttgart, Germany.

Disclosure statement

No potential conflict was reported by the author.

Notes

1. Provision of a sufficient number of goods and services that are crucial for life, such as energy supply, public transport, and waste management in an affordable manner to all citizens – regardless of whether doing so is profitable for the public enterprise (Neumeier 2015; Mühlemeier 2019).

2. The systems of one-tier, two-tier and the Nordic model differ. For an overview, see e.g. OECD (2019, 115-170). For the purpose of this study, we use the terms ‘board’ and ‘governing body’, following Smith (2014) and Huse (2018). The main task of the board in the German two-tier governance system is to monitor (Ringe 2016), while the management is ‘charged with directly running the company and setting its strategy’ (Ringe 2016, 31).

3. Owing to legal constraints (legal unbundling), two enterprises are fully owned subsidiaries of two other enterprises in the sample. Generally, all enterprises are owned by government.

4. Sales and Distribution Grid are two submarkets of the energy market and are here referred to as business segments.

5. For a definition, see e.g. Knieps (2015, 135).

6. Government established independent offices to guarantee non-discriminatory access to network infrastructure and a regulatory regime put in place to compare the efficiency among the natural monopolies within the market (Cullmann 2012).

7. The translation from the original codes into English was based on the back-translation technique (Brislin 1970).

8. This law varies from federal state to federal state in the Federal Republic of Germany.

9. The sales territory is restricted to the area of the municipality or its environs.

10. All quotations have been translated.

Additional information

Funding

This work was supported by the Ministry for Science, Research and Art of Baden-Wuerttemberg, Germany.

Notes on contributors

Timo Tremml

Timo Tremml is a researcher at the Reutlingen Energy Center for Distributed Energy Systems and Energy Efficiency, Reutlingen University. As part of his cooperative doctorate degree programme, he is also an external PhD student at the Institute of Marketing & Management, Entrepreneurship Research Group, University of Hohenheim. His research focuses on entrepreneurship in public enterprises.