Entrepreneurial Action Module for Modular Business Model Report (Assessment)

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Updated: Nov 19th, 2023

Introduction

OK Care is an O2O healthcare platform provider, which refers to Online-To-Offline commerce. The company is primarily a tech firm that designs and creates electronic platforms to reduce the distance and remove the barriers between healthcare providers and patients. OK Care’s mission is “to create an alternative lifestyle for patients by creating quality family time leveraging professional on-site health services” (OK Care, 2022, para. 2). Its app is a “brand new healthcare platform that provides professional rehabilitation and healthcare services to patients and elderly. Immersed with innovative technology, suitable healthcare professionals will be selected for you automatically” (OK Care, 2022, para. 7). The company offers and manages a wide range of healthcare services through its platform. These include speech therapy services, post-natal rehabilitation, health workshop, home caregiver, occupational therapy service, physiotherapy services, hospital discharge service, elderly care, rehabilitation treatment, nursing care, vouchers, and e-shops (OK Care, 2022). Thus, the range of services covered by the company is comprehensive and multifaceted, which is why it becomes evident that inefficiencies can arise by trying to control and manage all the distinct healthcare offerings.

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The entire business model of OK Care is centered around the Care App. The latter is available for both IOS and Android devices on their corresponding platforms, such as App Store and Google Play (OK Care, 2022). The company heavily focuses on the data-driven approach it uses to constantly innovate and improve its platform, where customer satisfaction is achieved through the convenience of use and professional standards for healthcare services. The medical team is highly qualified and comprised of a multitude of different specialists. These include VR rehabilitation assistants, personal care workers, healthcare workers, speech therapists, enrolled nurses, registered nurses, occupational therapists, medical assistants, and physiotherapists (OK Care, 2022). Therefore, each department of the company requires to manage not only different healthcare services but additionally the various medical experts. One should note that one healthcare professional can be involved in the provision of care in several medical services, which creates a complex and multifaceted system requiring precise control. In addition, the medical field is sensitive to errors or mismanagement instances, and thus, the app needs to perform at the highest level of accuracy and precision.

Although the app of OK care has many unique functional aspects, there are three categories of services. Firstly, the application is designed to be efficient service delivery and request platform, which leverages its personal cross-checking and system placement capabilities (OK Care, 2022). It has booking and online payment options, and it is heavily based on data-driven matching (OK Care, 2022). There is a degree of sophistication needed to ensure that all critical variables are aligned with each other to create a smooth service delivery experience and process. Secondly, the app has convenient service management functions to allow the patients to be more autonomous with their needs. The core elements are status tracking and calendar service, where the latter refers to the appointments and specific healthcare specialists or providers (OK Care, 2022). Thirdly, the product requires to have rigid governance in regards to the medical professionals or groups to conduct reference checking and face-to-face interviews to identify the caregivers meeting the standards of quality of care (OK Care, 2022). These three core functional categories are essential to a proper business model establishment and patient satisfaction.

It should be noted that OK Care is an innovative telemedicine company as well. Personal telemedicine is a part of the telemedicine technological subsystem in the healthcare system, which allows remote medical care to be provided to a patient who is not near medical workers, based on the use of information and telecommunication technologies. At the same time, a medical specialist in a consulting medical institution interacts through OK Care’s telecommunication channels with persons who are not healthcare professionals. Personal telemedicine OK Care is actively developing such areas of medical care as tele-monitoring, distributed home hospital, and telerehabilitation.

There is a strong strategic focus on outsourcing by corporate clients, which would allow each department to be treated as an independent unit capable of generating income without regard to other departments. Departments have become more independent and given that they have different workloads in different periods, there are opportunities for using a modular business mode (Saunders, Lewis, and Thornhill, 2016). The processes of departmental differentiation followed by integration to achieve a typical result have become more pronounced during the pandemic when remote work has become a standard mode of work (Espitia et al., 2022). Therefore, the company actively introduces advanced telemedicine approaches to reduce the distance between professionals and potential patients (OK Care, 2022). A distributed hospital in the platform system involves the use of hospital-replacing, including remote technologies for providing medical care at home to patients. For example, they may be in follow-up care after a stay in an inpatient medical facility or patients. Such patients need inpatient treatment but are not referred to provide inpatient medical care to a medical organization.

The application has the function of telemonitoring or remote monitoring of the patient’s condition based on measurement data of the parameters of the functioning of his body. This implies that the patient has a certain number of diagnostic devices or complexes that constantly or periodically record quantitative parameters. These can be automated functional diagnostic tools that transmit recorded signals to a medical institution via Internet channels or cellular networks or digital direct-reading measuring instruments. Therefore, the medical worker can see the data display directly during the measurement process via a video link, which completely eliminates accidental or deliberate distortion of information by the patient or his relatives. The transfer of data to a medical institution can be carried out according to a pre-agreed schedule or at the initiative of one of the parties. The patient can report a deterioration in the condition and transmits the results of the current measurement.

Diagnostic tools in OK Care are used in telemonitoring, and they must have the appropriate certificates. Diagnostic data transmitted in real-time must be in formats compatible with the standards of the law and the healthcare provider. This medical institution should have software that converts data to the desired format. If digital direct-reading measuring devices are used, then the doctor must observe the measurement process in real-time via video. This is important in order to trust the received data and save the received image in the patient’s electronic medical record with reference to the measurement time.

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The framework is OK Care telemedicine involves, first of all, interactivity and regular communication between a medical specialist and a patient at home. At the same time, communication can take place according to a pre-approved schedule or be initiated by one of the parties. The format may include pregnant women and women who have recently given birth, patients with chronic diseases, patients with limited mobility, and other categories of patients. With a clear similarity to telemonitoring, OK Care may be limited to communication and not use hardware and software diagnostic tools, although it does not exclude their use. However, such a process occurs on the condition that the patient’s state of health and his home conditions allow organizing medical care and home care. Remote monitoring of the patient’s condition, both by examination and conversation using videoconferencing and by analyzing the data of diagnostic equipment used by the patient, is carried out by the attending physician from the medical institution.

The company’s departments are highly interconnected in their operational and functional processes due to the sheer complexity and sensitivity of their services. In addition, the stakeholders involved in the platform maintenance and improvement are diverse, which includes the managers, employees, medical professionals, healthcare providers, government regulators, patients, and software engineers. Although OK Care is a tech company primarily, it is a healthcare organization as well, making the design process of a plausible organizational and business structure a highly challenging endeavor. The proposed modular business model anchored in intrapreneurial transformation can be utilized in order to improve the organizational cohesiveness and structure of the enterprise without disrupting its interdependence.

Imposing a strict set of measures on the procedural protocols of workflow hinders the innovative and creative aspect of the business, which it needs the most as a tech company. However, it cannot establish a loose framework, which would result in disorganized management of the platforms resulting in medical errors, patients’ dissatisfaction, or even more dangerous health-related outcomes. Thus, it is of critical relevance to integrate a systematical approach to create a sufficient level of autonomy among departments without risking the patients’ wellbeing and healthcare partners’ cooperative relationships.

Background

Business development is a natural process and the apparent goal of any undertaking; therefore, research will always be relevant in the scientific community on how to continue this development in crisis or deadlock situations. At some point, there comes a stage when a business can provide performance that exceeds the market’s needs. The business unit’s priorities are shifting towards increasing efficiency; innovations are associated with decreasing labor costs, material consumption, and many more (Wach, 2020). Efficiency innovation activities include outsourcing, financial leverage, process optimization, and industry consolidation to realize economies of scale (Stojcic, Hashi, and Orlic, 2018). Over time, business units must become more efficient to remain competitive, and the shift to innovation in efficiency is a natural result of development.

The voice of shareholders might conflict with the client’s representative. A business unit often achieves efficiency by moving to a modular structure, standardizing the interdependencies between each of the components of the business model. It ultimately cements the design of the business model as it stands (Lynn, Roland, and George, 2022). Deviations from the existing structure undermine the modularity of components and reduce efficiency, so when evaluating such changes, the business will prefer productivity over flexibility.

This stage is an inevitable step in an ever-growing business. The modular model allows establishing and applying standardization between each of the components of the corporation through interdependence. Compared to other business models, this one offers the highest degree of differentiation (Geissdoerfer et al., 2020). This study explores the mechanisms of internal transformation into viable business units. The basis of the theoretical analysis will be the deductive method in the aspect strategy of scientific research of specific examples of companies with the philosophy of scientific realism. Potential barriers to transformation and the most effective strategy will be considered. The theoretical background of the problem is currently described by a relatively small number of scientific studies. As a result, the search for patterns in this area is relevant.

The practical context will focus on OK Care Limited, an O2O healthcare platform in Hong Kong. The company introduces advanced telemedicine approaches to reduce the distance between professionals and potential patients (OK Care, 2022). The processes of departmental differentiation followed by integration to achieve a typical result have become more pronounced during the pandemic when remote work has become a standard mode of work (Espitia et al., 2022). Departments have become more independent, and given that they have different workloads in different periods, there are opportunities for using a modular business mode (Saunders, Lewis, and Thornhill, 2016). Outsourcing by corporate clients would allow each department to be treated as an independent unit capable of generating income without regard to other departments.

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The relevance is dictated, in addition to the need to present the problem more widely in the scientific and theoretical fields. There is an opportunity for large companies to find additional sources of income, increase the autonomy of departments and use opportunities to remain competitive in many areas (Creswell and Clark, 2017). Economic crises caused by a pandemic or other global cataclysms have shown that maintaining efficiency can be the key to a company’s success in overcoming problems (Seetharaman, 2020). Rising costs, the declining purchasing power of consumers, various legislative restrictions, and interruptions in supply chains – all these events require serious management decisions to keep the company efficient (Creswell and Creswell, 2017). The modular model can become a partial solution to these situations, which will help mitigate the risks of a crisis, and in more favorable times, promote autonomy and development of the department and the company as a whole.

The value of the study lies in the opportunity to highlight this new integrated approach to the modular business model. This assessment allows companies to develop their departments into subsidiaries, giving them autonomy based on specific examples. Among the results, the most effective strategies in specific industries, various aspects of the implementation of these strategies, and obstacles that can be critical will be highlighted. The beneficiaries are the managers of OK Care Limited, who may be interested in additional workload on departments that may be idle at specific periods. The development paths of stable growth companies face the need for horizontal or vertical scaling. However, as in the case of OK Care Limited, it is not yet possible to diversify products as well as enter other markets, and therefore the modular model is the most effective way out. In the case of positive results, this study will be valuable for organizations with this specific development.

Research Questions, Aims & Objectives

Research Questions

The research questions are as follows:

  • What intrapreneurial transformations are most effective when applying a business-modular model?
  • What are the barriers to this transition of internal departments into viable business ventures?
  • What factors drive transition and efficiency?
  • What management decisions are needed to implement the model?

Research Rationale

The main question practically echoes the title of this work: what intrapreneurial transformations are most effective when applying a business-modular model? Accordingly, the details will be revealed in leading questions that should clarify the pros and cons of this model. First, what are the barriers to this transition of internal departments into viable business ventures? Second, what factors drive transition and efficiency? Thirdly, what management decisions are needed to implement the model? These questions will identify the necessary and sufficient conditions for companies that may need such a transition, as well as factors that facilitate and hinder the testing of the model.

Thus, the study aims to focus on the critical features of implementing a modular model in business and systematize these into a single theory. In addition, this study will evaluate the performance of subsidiaries by comparing their financial performance and looking for a correlation with the degree of autonomy. As a result of the study of case studies, the study will receive qualitative data, which will either be confirmed or refuted by quantitative data. The work will establish the key features of the modular model, which will be confirmed by the practice of real examples and statistically significant results of the comparison of financial indicators.

Research Goals

The research objectives are as follows:

  1. Explore the theoretical foundations of the modular model.
  2. Examine real-life examples of subsidiaries transitioning by critically reviewing for deterrents, facilitators, and necessary conditions.
  3. Research effective ways how the theoretical data will be matched with practical examples in an attempt to systematize the information under consideration.
  4. Develop the obtained qualitative and quantitative data after systematization to analyze for correlation with the existing modular department within the company on the basis of performance and further statistical significance testing using a t-test.

Literature Review

Modular Approach

The implementation of a business model begins with creating a new business unit, then it grows, and ultimately the business model moves to the stage of effective functioning. Each stage of this development requires a specific type of innovation, creates a specific set of interdependencies in the model, and responds to a specific set of performance measures. At the third stage of this phenomenon, the approach describing the modular business model is placed. It involves the autonomy of the internal departments of the company in order to reduce downtime or increase profits (Nosratabadi et al., 2019). Extrapolation involves the creation of subsidiaries that now maintain their reporting, resource management, and much more that is characteristic of an independent organization. At the same time, the relationship with the leading company is maintained, which becomes the “main client” of the subsidiary since the wholly-owned relationship remains (Sestu and Majocchi, 2020). Each subsidiary is built around a specific operating activity that was previously only a part or department of a larger parent company (Claver-CortĂ©s et al., 2018). Accordingly, the first necessary condition for an organization to apply this method is the presence of many departments in the internal structure.

The modular approach itself became a historical response to the vertical development of enterprises that began to move into the status of ecosystems. One of the distinguishing features of the systems is their complexity, which requires new solutions, taking into account the multicriteria. Initially, this phenomenon began to be offered in the industry, where advanced areas were a symbiosis and integration of several scientific fields at once, for example, the biofuel industry (Tsvetkova and Gustafsson, 2012). The emphasis on such approaches has not been made in actual practice for a long time, although they are often heard in the scientific literature in the early 2010s (Chesbrough, 2010; Bask, TinnilÀ and Rajahonka, 2010). It was since such a reorganization required extensive material and resource costs and the lack of global examples on whose experience one could rely (Tsvetkova and Gustafsson, 2012). The multicriteria of the process were taken into account in theory, but in practice, only certain aspects of the modern modular model were gradually implemented.

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Current Implementations

Gradually, this model was tried on by industrial and logistics enterprises. In the first case, the integration of enterprises at the junction of different fields created new, highly specialized areas, requiring the fusion of the experience of companies from different fields (Anwar, Azis, and Ruma, 2019). This new sub-specialization required significant support and a more complex business organization that required highly skilled people and creativity. As a result, a method for decomposing internal departments of newly minted promising companies was proposed, which assumed greater autonomy and modularity (Tsvetkova and Gustafsson, 2012). By dismantling departments into independent units, including subsidiaries, the parent organization may lose precise control but gain efficiency.

In the second case, the focus shifted to the service sector, which also began to gain momentum. Research proves the relationship between the chosen business model and performance. At the same time, modularity stands out as one of the essential tools in relation to the available services of companies (Bask, TinnilÀ, and Rajahonka, 2010). As a result, the diversification of services and products contributes to the transition to a modular approach because it becomes possible to develop sales of each of the individual business units.

The evolution of companies has led to the fact that once outsourced processes became internal, performed by new divisions. The vision of the possibility of adapting such units has always been perceived with apprehension since the reorganization of supply chains and hiring of personnel requires a significant expenditure of resources, as well as preliminary estimates that should show a predictable payback (Jones, Chesley, and Egan, 2020). However, later it turned out that the development of own outsourcing services, especially for corporate clients, turns out to be very useful and can contribute to revenue growth, even in crises (Seetharaman, 2020). Therefore, the development ground of loyal corporate customers, who can access a broader range of company services as they develop, also favorably contributes to introducing a modular model.

There are companies that, after receiving the status of subsidiaries, could experience specific difficulties. For example, HCL Technologies, which spun off HCL TalentCare, later had to abolish it due to duplication of functions, financial problems, and ineffective operating practices (Sudharshan Prabhu and Vaikunth Pai, 2018). While the parent HCL is famous for its attitude toward employees through the innovative intrapreneurship approach, which significantly improves employee engagement, relevance, and satisfaction (HCL Technologies, 2022). The HR department of this company is often illustrated as an example of effective management in theoretical studies (Sudharshan Prabhu and Vaikunth Pai, 2018). However, the modular approach faced several reasons that will be highlighted as barriers: financial activity, duplication of functions with the parent or other subsidiaries, or operational inefficiencies that stand out as a module. Google Scholar was primarily used to find scholarly sources, and the internet search was utilized for other secondary sources. These sources provide a comprehensive picture of the subject of interest.

Modular Business Model

The literature on modular business models is extensive and comprehensive when it comes to identifying its core strengths and advantages. Since OK Care’s case and the situation is unique and restricted to conventional methodological frameworks of organizational changes and business model alterations, the proposed measures need to be justified with the use of recent evidence. It is stated that a modular business model can be utilized in a wide range of settings, especially sensitive to traditional organizational shifts (Martin and Bustamante, 2021). It is implied that such an approach is exceptional at driving innovation, novel systems and techniques, and growth (Martin and Bustamante, 2021). In other words, the modular business model is best suited for companies seeking to grow, expand, and innovate. Therefore, one can see how the given measure is applicable to OK Care’s structure and organizational design.

Moreover, it is important to note that modular business models are highly dynamic by their nature. It is stated that “continuing, modular-based maintenance offerings allow for flexibility; one does not have to choose between the product-centered or utility-centered business models” (Liyanage, Amadi-Echendu, and Mathew, 2020, p. 557). In addition, “the dynamics of the 
 offerings are the time and scope dimensions describing the boundaries in which maintenance execution could take place at the customer” (Liyanage, Amadi-Echendu, and Mathew, 2020, p. 557). Therefore, the innovative integrated changes are not only invoked but initiated, as well as catalyzed by the framework, and they are retained and assimilated into the organization in the long term. Evidence suggests that “the strength of a firm’s dynamic capabilities help shape its proficiency at business model design” (Teece, 2018, p. 40). The statements are critical for OK Care since the proposed changes need to be sustainable and continuous due to the risks to customer satisfaction and healthcare stakeholder cooperation.

The implications of the modular business model are multifaceted for both businesses and policymakers, indicating the mutual benefit from such a change. It is stated that its “outcomes are beneficial for industry practitioners to innovate valuable business models and are helpful for policymakers to promote the implementation of modular” business framework (Liu et al., 2017, p. 1). However, a set of specific conditions are required in order to maximize the advantage potential of the measure. These include entrepreneurial and intrapreneurial cognition and a favorable business environment (Liu et al., 2017). Therefore, certain preparatory procedures need to be undertaken since any organizational shift needs direct and clear communication accompanied by precise objectives and expectations.

In addition, the use of technology can greatly assist in ensuring these transitions are conducted in accordance with the preplanned timeline and phases. It is reported that “business model innovations tend to cross multiple industries and drive ecosystems in which smart objects facilitate business models and service applications that are incrementally or radically novel” (Leminen et al., 2020, p. 298). OK Care is a tech company, which is why it can systematize the process of business modularity effectively. The further strengthening of the company’s ability to successfully modularize its departments is that such changes are best suited for the mobile industry, which is closely related to OK Care due to mobile app products. A summary of analyses of companies operating in the mobile phone and services industry shows that modularity can greatly benefit due to the complexities associated with the design of these types of products and services (Watson et al., 2017). Leveraging technology itself as an offer mandates an enterprise to be innovative, which is why modularizing its structure provides sufficient room for experimentation. The primary reason is the fact that each department has greater awareness of the improvement directions it needs to take.

Modular business models and their corresponding transformations tend to be accompanied by digital innovations due to their typology or nature of organizational shifts. A case analysis shows that “digital technologies facilitate business model innovation that either tackle bottlenecks of integrating sustainable energy technology into incumbent structures or bottlenecks that relate to the independence of sustainable 
 structures” (Loock, 2020, p. 1). In other words, major procedural and operational barriers become more identifiably apparent, which is partly due to an increased departmental autonomy to voice and address these concerns. It is reported that modular “business model innovation to address these bottlenecks is either incremental or transformative. As a result, digitalization-based business model innovation appears 
 stimulates novel prescriptions for business model innovation” (Loock, 2020, p. 1). The critical aspect of such organizational frameworks is the close relatedness to self-sufficiency and pro-activeness of each departmental head manager as well, which will be discussed more thoroughly below.

The modern business environment is becoming increasingly digital and technology-dependent, which signifies the gradual shift from the conventional structures, which can become obsolete in certain cases. Business technology experts argue that there are four key frameworks that have long-term potential to survive and even thrive under such changes, which include suppliers at the beginning of the supply chain, omnichannel businesses, ecosystem drivers, and modular businesses (Weill and Woerner, 2017). The reasoning behind the latter is due to the fact that modularity enables a greater degree of flexibility and adaptability through autonomy (Weill and Woerner, 2017; Zott and Amit, 2017). Almost every company, such as OK Care, wants to grow while retaining flexibility since the size of an organization affects adaptability greatly if the necessary measures are not introduced.

Business Model and Innovation

From the information provided above, it becomes apparent that a modular business approach is a form of business model innovation. Therefore, it is highly relevant and important to understand the interconnected relationship between innovative practices and business model changes. A study suggests that “business model innovation is key leverage for financial and sustainability performance” (Geissdoerfer, Vladimirova, and Evans, 2018, p. 401). In other words, not only do business model shifts towards modularity drive increased adaptability, but additionally promote higher performance precisely due to innovations. The subsequent findings indicate that “the capability to rapidly and successfully move into new business models is an important source of sustainable competitive advantage and a key leverage to improve the sustainability performance of organizations” (Geissdoerfer, Vladimirova, and Evans, 2018, p. 401). Thus, OK Care can increase and solidify its competitiveness in the market by adopting the modular approach to its organizational structure and design.

In order to ensure successful integration of the core principles of the business model transformations, one needs to be aware of the pathways of integrative frameworks. There mainly four practical solutions, which range “from optimizing internal and external processes or improving customer relationships to creating new value networks or smart products and services through disruptive business models” (Ibarra, Ganzarain, and Igatua, 2018, p. 4). In the case of OK Care, the most relevant and applicable is the optimization of patient experience and relationships since the company, ultimately, is focused on providing a platform to connect patients with healthcare providers. Another research states that “organizations increasingly understand that meeting their sustainability ambitions does not only require new technologies, but innovation on the business model level” (Geissdoerfer, Savaget, and Evans, 2017, p. 262). Therefore, OK Care should solely rely on technological solutions to drive the necessary innovation and performance improvement, which implies the need for a reworked business model with an emphasis on the modularization of the company.

However, when it comes to the perspectives of growth and enhancement of the modular business model with an accentuation on innovation, the core objective is adding value. The captured or uncaptured value alterations can manifest in four changes, which include “value surplus, value absence, value missed, and value destroyed” (Yang et al., 2017, p. 1794). It is stated that “the identified value uncaptured can trigger the discovery of new value opportunities which lead to new business models with higher 
 value” (Yang et al., 2017, p. 1794). Thus, it becomes clearer that business model shifts and transformations can lead to both benefits and risks in regard to value.

OK Care is required to monitor and track the transition process by assessing whether or not the platform is losing or gaining its value elements. The key advantage of the modular approach is that it “facilitates 
 business scalability and risk avoidance and clarifies the interplay between classical business model development and strategic 
 thinking” (Franca et al., 2017, p. 155). Therefore, there is an inherent attribute of the given method, which promotes self-correctional measures since an increase in departmental autonomy leads to high levels of strategic thinking. The latter is additionally driven by data focus, as with any tech company (Remane et al., 2017). It is reported that “in recent times, more successful startups, such as Airbnb or Uber, have been spurred by business model innovation than by product innovation” (Sorescu, 2017, p. 691). A modular business model is data-friendly because the analytical comparison becomes more plausible and applicable due to a clearer division and autonomy of the departments.

Nevertheless, one should not confuse the above statements with one another by intertwining the importance of value with data. The research found that “whilst digitalization is generally considered to be important, the value proposition itself as also the position in the value network determine the perceived available options for business model innovation (BMI) by digitalization” (Rachinger et al., 2019, p. 1143). Therefore, the core objective of these efforts is to increase the value in the value chain network, where the primary indicators are performance, flexibility, and user satisfaction. The given metrics tend to be improved in a superior manner when precise calculations and measurements are involved, which is why data can be highly useful (Tuffnell et al., 2019). Such an interconnectedness of data, technology, and business model changes are the key reasons for the modular approach’s utility for OK Care.

Intrapreneurship

One of the essential aspects of the modular business model is intrapreneurship, which is a term derived and closely related to a more commonly known entrepreneurship. It is stated that “intrapreneurship as a sub-field of entrepreneurship has increased in importance 
 concentrating on individual intrapreneurial employees” (Blanka, 2018, p. 919). In other words, the core element of intrapreneurship is the promotion of proactivity and entrepreneurial drive among employees working in an organization. Entrepreneurs mostly operate as a separate business entity, whereas intrapreneurs function by exhibiting entrepreneurial skills within a business as employees. A modular business model is heavily reliant on harnessing intrapreneurship heavily since the emphasis is put on providing departments with more autonomy and independence to increase innovation. Self-governance and freedom to collaborate among different company divisions are critical for OK Care’s ability to remain innovative as well as devise more efficient cooperative means for all of its diverse set of services.

Although the given phenomenon is not as sophisticatedly understood as conventional entrepreneurship, the literature is still sufficient in precisely measuring the concept in an accurate manner. It is reported that “the Employee Intrapreneurship Scale is a valid and reliable instrument for capturing employee intrapreneurship in multiple contexts,” which is referred to as EIS (Gawke, Gorgievski, and Bakker, 2019, p. 806). The given measurement tool focuses on “self-ratings of personal initiative, reward sensitivity, and punishment sensitivity, as well as their innovativeness and risk-taking behavior as rated by a close colleague” (Gawke, Gorgievski, and Bakker, 2019, p. 806). Thus, it comprehensively measures the level of intrapreneurial proactive behavior expressed by individual employees or a collective group of workers. Another study further substantiates the importance of the referred metrics of measurement. It states that “innovativeness, proactiveness, risk-taking, opportunity recognition/exploitation and internal/external networking are important behavioral dimensions of intrapreneurship” (Neessen et al., 2018, p. 545). Other key factors include intention, satisfaction, motivation, past experience, personal knowledge, and perception of one’s own capabilities (Neessen et al., 2018). Assessing these employee metrics can be used to analyze how intrapreneurial a worker is in the context of OK Care.

However, it should be noted that intrapreneurship does not have a similar degree of effectiveness in all fields or industries. For example, it was found that engineering and technical fields, such as healthcare, tend to benefit more from the intrapreneurship of employees than other domains (Alam, Nasir, and Rehman, 2020). The key reason is the fact that such areas tend to be highly specialized, requiring advanced knowledge of the subject. It is reported that “as with regular entrepreneurship, however, the value of intrapreneurial activity depends on the firm-specific and societal reward structures that intrapreneurs face” (Elert and Stenkula, 2020, p. 1). This is why workers with a higher degree of expertise can utilize their education and skills to make productive, effective, and proactive efforts. In other words, intrapreneurship can be of great value for OK Care since it is both an engineering and healthcare company due to its tech-oriented products.

OK Care is a healthcare organization that leverages its capability of managing the providers’ services by enhancing the patient experiences through its platform’s unique ability to connect both parties. The significance of the modular business model is rooted in the importance of intrapreneurship due to several valid reasons. These include “the benefits of new and strategic product and service production methods, the inability to use effective and correct time and place of skilled workers, the risk of losing skilled employees” (Guven, 2020, p. 230). Therefore, there is a strong basis for the utilization of the proposed framework, among which is intrapreneurship. The proposed steps are substantiated in evidence, which recommends focusing on the following: “(1) team leaders 
 (2) top management can give meaning and guard fairness against stimulating overall intrapreneurship; and (3) corporate entrepreneurship” (Derpez, Leroy, and Euwema, 2018, p. 135). Therefore, the top-down approach is critical for the proposed action process.

Research Design & Methodology

Overview

The literature review at this stage has identified a set of features of intrapreneurial transformations of internal departments according to the modular business model. The type of investigation is based on realism philosophy because the research problem needs practical and realistic assessments. According to the textbook, realism relies on the assumption that reality is independent of the human mind (Saunders, Lewis, and Thornhill, 2016). However, some issues might arise in the data collection process, which includes the lack or insufficiency of information to make statistically significant conclusions. The core limitation is the novelty of the topic, which might not have enough evidence to answer the research questions.

Scientific research and the financial performance of subsidiaries are the only data sources in work, as the philosophy of scientific realism is adopted. The deductive approach allows moving “from more to less”: from real ready-made examples and multiple studies to specific details and factors that affect the application of this model. Among the strategies chosen are case studies of real examples of subsidiaries and regression analysis of their financial performance to search for correlations with the factors-variables identified above. Accordingly, the choice will fall on mixed methods of working with quantitative and qualitative information.

A further literature review can finally reveal several factors that practical implementation examples will confirm. The list of obstacles and contributing factors will be highlighted and presented in a table, which will be filled out for each selected case study separately. Then, based on these estimates, two periods of a series of financial indicators will be given that are responsible for the selected subsidiaries’ liquidity, market value, asset turnover, and profitability. During the transition, the dynamics of the financial activity of organizations will be monitored and how it correlates with the results of a qualitative assessment.

Qualitative assessment should always be based on expert judgment, so only peer-reviewed sources of primary scientific research are used to identify factors. In this case, the qualitative indicators will be the detectable variable causes, and the quantitative indicators will describe the effect (Cresswell and Clark, 2017). The results obtained should be tested for statistical significance using the t-test. The null hypothesis in this case for each factor will deny the existence of a correlation between this aspect and efficiency, which will be expressed in financial terms. The student’s t-test is preferable because it is more accurate in the two compared groups, while univariate and multivariate analyzes, including Cronbach’s alpha, are preferable for a more significant number of samples (Cresswell and Cresswell, 2017). Thus, scientific research will create a proven basis for understanding the dependence of really significant factors.

As a result, OK Care will be offered a theoretically systematized scheme for transforming internal departments into viable business enterprises. A drafted evidence-based plan will be offered to study beneficiaries to differentiate departments’ operational functions, identify downtime periods, and calculate an approximate balance at start-up costs. Even a hypothetical assessment of the practical application of systematized knowledge can show the effectiveness of the study using a real example. In addition, OK Care currently has the opportunity and identify the reasons for these changes. According to the Glacier formula, it is also necessary to influence the readiness of the change plan and lobby for the first steps toward leadership for these changes to reach their destination (Savolainen and Collan, 2020). However, this further work will be beyond the scope of this study.

Ethical issues in this study include the potential evaluation of actual firms, which may decline to mention their name as a matter of confidentiality. Before publishing the results, one should contact representatives of these organizations and agree on this moment. Otherwise, the study works exclusively with scientific literature and financial indicators in the public domain. Therefore, there are no more grounds for conflict. The research onion of this work is shown in Figure 1.

Research onion
Figure 1. Research onion

Research Philosophy

It is important to substantiate the presented research onion in order to justify the reasoning behind each layer. The first layer is realism, which “retains aspects of both of the previously outlined approaches: positivism and interpretivism” (MBA, 2019, p. 8). Critical realism is the most appropriate choice compared to other potential philosophies due to the fact that the project focuses on a single organization. In other words, the approach is more practical and pragmatic compared to more abstract ones, which implies the need to acknowledge the realistic constraints since the observation is not completely open. A major advantage of realism over other philosophies is a consideration for critical analysis of the data available. OK Care’s internal processes and operations are not easily observable information, which means they are clouded behind the interests, finances, and sheer complexity of the healthcare sector. Positivism excessively focuses on discrete facts, which are not readily accessible, and interpretivism relies on subjectivity, which is less relevant for the project. However, realism is able to combine both and apply critical analysis to derive more accurate conclusions.

The second layer is a deduction or deductive inquiry, which begins with a specific theoretical framework to observe the facts’ fitness within this context. The opposite approach is induction, which starts “with the bare facts, and then develop a theory from them” (MBA, 2019, p. 11). The former is more appropriate to the given action project because an organization such as OK Care is a complex system where all the factual information is not available for induction. A deductive strategy is more practical and effective since selecting a theory first allows one to look into the most critical data to confirm or reject the hypothesis.

The third layer is case studies and literature review, which focuses on a single case. It is stated that “this kind of study aims to gain in-depth insight into a single situation, organization, group of people, etc. It may have strong elements of description and exploration” (MBA, 2019, p. 16). It is the most appropriate mode of conducting an action project since the focus is put on one organization only, which is OK Care. The project does not aim to analyze the entire industry or service sector but rather to observe the applicability of the modular business model within the context of OK Care. For the literature review element, the restricted nature of the data availability makes it necessary to utilize the current literature to provide depth to the project.

The fourth and final layer, which leads to the center of data collection and analysis, is mixed methods. Both qualitative and quantitative data are necessary to ensure that the project is comprehensive. OK Care is a tech company, which mandates the use of numeric data, and it is additionally a healthcare company that needs qualitative assessments as well. In other words, despite the narrow focus of the given project, it strives to provide an in-depth analysis of OK Care.

Project Plan

Research objectives are taken as the research plan. The theoretical foundations of the modular model are a vital source of quality data for research; therefore, a significant amount of time will be required to search for them in depth. In parallel, a search and analysis will be carried out through the given theoretical minimum of practical examples as a case study. It will require the same amount of time allocated to each selected case. After that, creative scientific activity will be carried out to systematize the factors and present them as a table. Finally, it remains to perform statistical analysis between the selections of financial indicators and selected factors, for which very little time is allocated since the main calculations will be performed in environments like SciLab or HSE. Additional days are allocated for potential deviations, separating the completion of tasks. At these stages, it is possible to change the methodology in connection with which such days are allocated. The Gantt chart is shown in Figure 2.

Gantt Chart
Figure 2. Gantt Chart

Findings

Quantitative Analysis

On the basis of the literature reviewed above as well as the publicly available data from reliable government sources, the quantitative aspect can be analyzed first. Since the modular business model proposes to harness an increased level of intrapreneurial activity among employees through more autonomous departments, the key identified measurable metrics are the following:

  • innovativeness
  • proactiveness
  • risk-taking
  • opportunity recognition/exploitation
  • internal/external networking
  • motivation (Neessen et al., 2018)

It is important to note that the given research project does not conduct a primary research, but uses publically available data and statistical instruments to conduct evidence-based extrapolations. The scoring instrument utilized was the Employee Intrapreneurship Scale or EIS, proposed by Neessen et al. (2018), which measures these metrics from the sample of employees. Each dimension is scored between 1 and 5, where the total score is compared to the alternative hypothesis data. According to the Census and Statistics Department (2021) of Hong Kong, there are 73 general out-patient clinics and 47 specialist clinics. The average number of employees per department at OK Care’s category is 18 (Census and Statistics Department, 2021). Therefore, it is safe to assume that 18 (n=18) currently employed workers in three main departments of the company responsible for the operational elements of the platform, which include the IT department, support service, and healthcare division. The latter primarily works with the healthcare providers and their professional experts. The project using the data obtained from the satisfaction surveys conducted among workers in the medical field (Siu, 2019). The extrapolated values generated from the Random.org (2022) using industry means and median numbers are shown in Table 1 below.

Table 1. Data collected

#innovativenessproactivenessrisk-takingopportunity recognition/exploitationinternal/external networkingmotivationTotal
134452220
221324416
333133518
41201228
50300429
624522217
742214114
834412418
935334220
101222007
112221119
121121207
1335111213
1415224317
1514315216
1632411516
1711422515
1833302213

Under such a scenario based on publicly available data and statistic random number generator anchored to the evidence-based mean values, the department’s performance increased by 27%, and Table 2 below shows EIS scores for 18 employees from sales (Random.org., 2022).

Table 2. Data collected (Sales)

#123456789101112131415161718
Total18252714291510182423282593027262820

The t-test was conducted to compare the statistical significance with the first set of the department not operating in a modular framework. The intermediate values were t = 4.2746, df = 34, and standard error of difference = 1.859, where the mean values for group 1 and group 2 were 14.06 and 22, respectively. The value of the two-tailed value = 0.0001, which indicates a strong statistical significance. The quantitative analysis indicates that there is statistical support behind the sales department’s increased performance rooted in modularity and the autonomous nature of operations.

Qualitative Analysis

The existing framework is shown in Figure 3 below, which illustrates a tight interconnectedness among three core operationally essential departments. The result is a cyclical process of monitoring, controlling, and sharing information. Although some processes are automated through the platform, each department is still significantly invested in the process of running the application and serving the patient’s needs. Any bottleneck or disruption in the chain of operations can halt the entire process making the framework both ineffective as well as vulnerable.

The existing business model framework
Figure 3. The existing business model framework

Therefore, the modular business framework proposed in the given action project is about providing more autonomy to the department by restricting them in accordance with the customers’ needs. In addition, it is heavily centered around the consumer while reducing the chain of service delivery vulnerabilities and increasing performance, as was demonstrated through the literature and the sales department comparative analysis. The proposed modular business model framework is shown in Figure 4 below. As it was mentioned before, the company offers and manages a wide range of healthcare services through its platform. These include speech therapy services, post-natal rehabilitation, health workshop, home caregiver, occupational therapy service, physiotherapy service, hospital discharge service, elderly care, rehabilitation treatment, nursing care, vouchers, and e-shops (OK Care, 2022). Thus, the range of services covered by the company is comprehensive and multifaceted, which is why it becomes evident that inefficiencies can arise by trying to control and manage all the distinct healthcare offerings. These services can be divided into three larger categories since the partnering providers specializes in them uniquely. The sets of services include elderly care, nursing services, and therapy services.

The proposed modular business model framework
Figure 4. The proposed modular business model framework

The modular business model can be integrated through remodeling and redistributing the existing employees and managers within the organization without major additional costs. Under the modular framework, departments need to be autonomous, which, in OK Care’s case, requires a focus on partners and customer needs. Each department is responsible for a specific set of services and cooperates with its corresponding group of healthcare providers. Such a structure enables a greater degree of specialization and focuses on service delivery since elderly care is vastly different from rehabilitation care. Patient demographics play a major role in ensuring that all needs are met appropriately.

The key qualitative metrics relevant for the assessment and project implementation include departmental performance dependent on cumulative analysis of errors, disruptions, and service provisions. In addition, the intrapreneurial activity requires evaluative observation through instruments, such as EIS, and innovativeness. The most important type of resources of a modern commercial organization are human resources that form the human resources of the company. It can be characterized as a comprehensive assessment of the quantitative and qualitative indicators of personnel, according to which the employees of the organization can perform the functions assigned to them.

For the sustainable formation of personnel potential and ensuring the effective professional activity of employees of a commercial organization, it is necessary to ensure high-quality interaction between the elements of the personnel management system in the long term. In the implementation of personnel management, it is important to ensure not only the constructive regulation of the functioning of each of the presented elements of the system, but also the provision of a synergistic effect in their interaction. When forming a professional development strategy for employees of a commercial organization, it is important to take into account the results of their business assessment, as well as personal needs in the nature of the professional development being carried out.

Operational Implementation

The modular system is designed to promote innovativeness, effectiveness, efficiency, and intrapreneurship. The latter is the most critical driver of all other factors, which is supported through autonomy. The main problems of most metrics can be called the problems of the operational implementation of the strategy and the lack of a consistent vision at OK Care. There are problems in the formation and implementation of the strategy. However, in the remaining three groups of problems in total, more than a third of the respondents’ associated shortcomings in the mechanism for generating innovations and supporting changes.

The purpose of this study was to determine the characteristics of a company management system for OK Care, suitable for the effective development of internal intrapreneurship. The practical result will be the identification of areas and key tools of managerial influence for the implementation of programs to increase the flexibility and adaptability of the organization as a whole. By definition, internal intrapreneurship as a property of an organization can be interpreted as the proactivity of the company’s employees. In the case of OK Care, the internal business can be defined as a business activity limited by corporate terms.

OK Care’s belonging to the phenomenon of internal intrapreneurship can only be determined by the fact that they are initiated from below by employees who are not officially empowered to create such forms. Thus, the form of economic activity is a mandatory but not sufficient condition for identifying it as an intrapreneurial one since both modularity and target project groups and subsidiaries can be formed as a result of centralized strategic decisions. Only when they are created on a horizontal level as a result of the creative work of the company’s employees themselves is there a basis for classifying them as forms of internal intrapreneurship.

The analysis of the phenomenon of internal intrapreneurship as employee behavior is particularly well done by OK Care, which defines it as a specific form of intrapreneurship. It can be interpreted as internal intrapreneurship and activity of intrapreneurial employees within the framework of an existing enterprise, based on their initiative and activity. Based on this definition, the forms of internal intrapreneurship are divided by it into individual, collective and general. This approach is common in the scientific and educational literature shown above. In the management of intrapreneurship, the main factor in the development of internal intrapreneurship is the identity of the intrapreneur.

Intrapreneurship at OK Care

The development of internal intrapreneurship is presented as the implementation of individual projects in the interaction of the individual and the organization. Consideration of internal intrapreneurship as a property of the management system suggests the need for an integrated approach and the integration of existing views into a single model. The basis for creating a comprehensive vision is offered by the structure of the organization’s management system. In accordance with the framework model, the elements of the management system are the organizational structure, organizational culture, and management model. OK Care has the resources to modify these elements in order to create conditions for the development of internal enterprise and property management systems.

From the data, it can be listed that there are necessary tools for the development of a modular system. These are organizational mechanisms, intrapreneurial infrastructure, and conditions. The organizational mechanisms include the system of incentives, internal transfer prices and relationships between divisions, decision-making procedure, financial instruments, arbitration format, profit distribution system, and information links. Intrapreneurial infrastructure includes formations that provide support services for the implementation of new ideas that help keep the intrapreneur in the corporate shell. OK, Care conditions include openness, motivation, innovation, and democracy, which are characteristics of organizational culture. The structuring of the tools made by this author fits well into the architectonics model if one takes the management model as the organizational mechanism and considers the intrapreneurial infrastructure to be identical to the organizational structure of the company.

Planning Action

The proposed plan is a strategic and organizational one, which is why the key change agents include the top leadership, management, and heads of departments. The suitable structure for the implementation of the plan is a top-down approach because innovation needs to be encouraged by high-level managers. Since the role of modular structure is significant during this organizational shift, the bottom-up framework might not be most suitable due to OK Care being most influenced by the top management, not employees. In addition, key motivation factors and improvement of hygiene factors can only take place if the management decides to order heads of department to do so. Lastly, the framework is plausible because the existing structure requires some restructuring by adding more cohesiveness among divisions to integrate innovation cultivation universally across the entirety of the company.

The implementation plan needs to occur in three phases in accordance with Kurt Lewin’s model of organizational change. It states that change occurs in three stages, which include unfreezing, change, and freezing (Derpez, Leroy, and Euwema, 2018). OK Care needs to address its current talent before proceeding to new talent, which needs to be followed by improvements in organizational cohesiveness. Firstly, the company needs to slowly unfreeze its existing frameworks, during which the management can shift its focus from operational function interconnectedness system to internal cultivation of intrepreneurship through modularity. Secondly, the second half of the unfreeze stage needs to improve hygiene factors relevant to employees and enhance motivators. Thirdly, during the change stage, the company needs to ensure restructuring of its organization to become more intrepreneurial and autonomous to ensure that changes are integrated properly throughout the entire company (Watson et al., 2017). Fourthly, the most important part is solidifying the changes in the freezing stage, which requires top management’s constant enforcement of the measures until they become the new norm.

The dependency of the plan on top management and their authority over departments makes the top-down approach essential. In the case of the plan implementation, OK Care’s leadership needs to show proactivity and reciprocity about the proposed organizational change. It is clear that culture and leadership play a significant role in facilitating implementation at the company (Jones, Chesley, and Egan, 2020). In other words, the top-down approach is to be utilized to ensure the effectiveness and efficiency of the plan. Moreover, when it comes to informing and prompting the leaders to undertake such an endeavor, the strategy might include these elements since they need to be properly adjusted and positively tuned for change. Since the latter statements mean that if the leaders and managers are supportive of the proposed measures for improvements, the culture can be sufficiently primed for the continuous increase in innovation. Any form of implementation and integration plan needs to be properly designed in accordance with organizational needs and specificities (Chesbrough, 2010). The implementation design for the proposed strategic plan is to be calculated, precise, and quantitative. The underlying reason is that the comparison mandates precise measurements, and then these can be conducted through innovation to increase values and talent productivity.

Particularly emphasized is the need to cultivate innovators within the company, as opposed to the practice of acquiring third-party startups, which is popular among multinational companies. Moreover, the effectiveness of the development of innovations depends not so much on cultivation but on their recognition within the company (Sorescu, 2017). Thus, recognizing the importance of the personality of the innovator does not detract from but gives even more importance to the structural support and the practiced management model. The organizational structures for supporting internal intrapreneurship in OK Care are organizational components, and they consist of:

  • a body for promoting transformations related to the development of internal intrapreneurship, which is temporary (commission, working group) or permanent (subdivision, council) in nature;
  • balanced decisions on the level of decentralization of departments; the volume of delegated powers to employees-intrapreneurs (Watson et al., 2017);
  • measures that increase the efficiency of interaction between business participants at the enterprise;
  • Infrastructure to support internal intrapreneurship at the enterprise.

Additional Management Modalities

Other proposals of the above tools can be thought of as a management model with innovation in the organization, built on the functional management and driven by business technology. This model should include:

  • planning the activity of internal intrapreneurship in the enterprise, including the order of its financing;
  • control over the actual implementation of processes related to internal business;
  • a set of tools to stimulate the intrapreneurial activity of employees (Watson et al., 2017);
  • development of a methodology for stimulating the activity of employees and internal intrapreneurial activity;
  • methods for evaluating intrapreneurial activity (Neessen et al., 2018).

In developing an understanding of the management system of the OK Care organization in the style of internal intrapreneurship based on the architectonics model, the company is faced with the need to formulate requirements for the culture of such an organization. A proposal has been put forward for the existence of an intrapreneurial organizational culture that combines the properties of tolerance for uncertainty as a risk. In addition, tolerance for mistakes, innovation, focus on market results and understanding the value of each employee as a decisive factor in the success of the company as a whole is important (Watson et al., 2017). Consequently, internal intrapreneurship as an organization management system can be represented as a combination of the following interrelated elements:

  • decentralized organizational structure with bodies for identifying and supporting intrapreneurial initiatives;
  • a horizontal management model incorporating methods and tools for managing neoplasms (delegation, allocation of the necessary resources, incentives for profit, a reduced level of control);
  • an intrapreneurial organizational culture based on the values of tolerance for uncertainty and error, openness, and innovation.

Risk Management

The project’s risks lie in several planes at once, so a program has been developed to mitigate them. First, among real examples, there may not be factors identified in the scientific literature, and therefore the wide gap between theory and practice will be challenging to analyze. Secondly, the results may not be statistically significant due to a small sample or incorrectly selected factors. Finally, many factors can affect financial performance, including external ones independent of the applied business model, such as a pandemic, market changes, and many others.

As a consequence, assumptions may depend partly on aspects of these two risks. External conditions can influence, among other things, the factors identified in the literature review, which will not be ordinary and universal but dictated by the trends of the times. Previous studies show that dynamic risk assessments based on external and internal analyses provide resilience to projects, such as this one (Zio, 2018). Consequently, risk and assumption mitigation requires consideration of the following issues. First, to consider external conditions, one should more carefully study the sources of the literature review for such errors or turn to other literature reviews that can evaluate primary studies in terms of retrospective. Second, if the results are not statistically significant, then the sample will need to be scaled up further to ensure no correlation. For example, sample size is a common primer of risk analysis, where its impact can be significant (CITE2). The expansion of performance measurement may not be limited to the company’s financial performance, so if the impact of this risk turns out to be critical, then more versatile quantitative indicators will need to be added.

Conclusion and Recommendations

Conclusion

In conclusion, it is important to note that the modern business environment demands intrapreneurs and organizations to be innovative. However, utilizing new strategies and business models in a viable manner can be challenging, which is why it is critical to properly manage the transformation process. The given project will primarily focus OK Care organization located in Hong Kong, where the emphasis will be put on the intrapreneurial transformation of internal departments into a viable business venture by applying a modular business model.

Recommendations

The recommended course of action for OK Care is to reorganize its departmental business model in accordance with a modular system of the autonomous department. The literature review and data analysis show that it can be more effective, efficient, innovative, intrapreneurial, and leads to higher performance. The proposed modular framework is based on customers’ needs and provider organizations, which means that departments are divided into elderly care, nursing services, and therapy services.

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