Corporate Entrepreneurship Audit (CEA): A Diagnostic Tool for Assessing Entrepreneurial Orientation

What is the Corporate Entrepreneurship Audit (CEA)?

The questionnaire

The Corporate Entrepreneurship Audit (CEA) offers a structured, research-based approach to assessing the entrepreneurial orientation of organizational architecture. This diagnostic tool can be applied to any level of organization – the organization overall, division, department and so on.

It provides a means of analyzing potential areas for improvement based upon issues flagged in this book, rather than a crude pass/fail test. This involves making informed judgments about certain criteria and, as such, is subjective rather than objective. It does not answer the question
as to why things are the way they are.

Part 1 catalogues the observed characteristics of an entrepreneurial organization in the four dimensions of organizational architecture – leadership, culture, structure and strategies – in 100 statements concerning the organization. These statements are derived from the checklists in Tables 15.1 to 15.4. Respondents are asked to circle the appropriate score for each statement from 0 (= not true at all) to 6 (= very true). Scores are totaled and mappedonto a CEA Results Grid, which shows results in percentages. This allows the company profile to be compared against competitors in the industry (if available).

Part 2 lists 25 statements concerning the commercial environment the organization faces, to help assess whether it ‘fits’ with an entrepreneurial architecture. These statements are based on Table 15.5. Respondents are asked to circle the appropriate score for each statement from 0 (= not true at all) to 6 (= very true). Scores are then totaled and mapped onto the results grid. The higher the score, the more competitive the commercial environment. This can then be compared to the company CEA profile and a judgement made about whether this ‘fits’ with the environmental profile. Scores are totaled and mapped onto a CEA Results Grid, which shows results in percentages. This allows performance to be compared against best practice in the industry (if available) and the appropriateness of the organization’s footprint to be measured in terms of the environment. Where benchmark comparisons are required, they should be made against competitor organizations.

The CEA is a snapshot at a point of time based upon your judgments, and possibly those of others within the organization. Combining it with an understanding of the strategic direction the organization is taking and in the context of its portfolio of operations, gives you the opportunity to really understand, not only the entrepreneurial orientation of the organization, but also how this might be improved. It should be used as a basis for a detailed discussion about the architecture of the organization – understanding what the underlying causes of the CEA results are and why they are important. In looking at this detail, never forget to also look at the commercial results generated by the organization – whether or not it is performing well in its industry.