INTRAPRENEURSHIP
In many cases, as organizations increase in size and complexity they cease to be entrepreneurial. There is always a tendency tendency to follow established procedures procedures and practices at at the expense of imagination, imagination, innovation and responsiveness responsiveness to changes in the environment. environment. The business environment is however very dynamic characterized with rapid changes and innovations. Thus if a company is to remain competitive, it requires Intrapreneurship (entrepreneurship existing within the organization) to be able to identify and take advantage of opportunities in the market through innovation. The Concept of Intrapreneurship Intrapreneurship
The intrapreneurship phenomenon has been explained in various terms such as intrapreneuring; corporate entrepreneurship; internal corporate entrepreneurship; corporate venturing; internal corporate entrepreneurship; strategic renewal; internal entrepreneurship and venturing (Antoncic; 2007; Sharma and Chrisman; 1999: 14). The term intrapreneur was first used by Gifford Pinchot in the lat e 1980’s and refers to individuals who take hands-on responsibility for shaping innovation inside the organization. He described an intrapreneur as “person who focuses on innovation and creativity and who transforms a dream or an idea into a
profitable venture, by operating within the organizational environment.” The American Heritage Dictionary in 1992 defined an intrapreneur as: “A person within a large corporation
who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation”. The intrapreneur: “is not a blue-sky dreamer or an intellectual giant. He or she may even be a product-service idea thief or may be impatient and egotistical. But most of all, such people get the job done. Intrapreneurs can be determined as entrepreneurs within established firms, and they almost resemble independent entrepreneurs. An intrapreneur changes his/her own environment. Intrapreneurs turn ideas into realities within an organization. The intrapreneur challenges the status quo and struggle to improve the system from within (Shetty; 2004: 54). Intrapreneur comes up with new estimations, take full advantage of opportunities and turn them to beneficial new realities, support change and
develop creative reactions in the organization. An intrapreneur act in organization as an entrepreneur.
Intrapreneurship is basically an individual action. Intrapreneurship is the practice of composing new business products and opportunities in an organization by proactive empowerment. The term intrapreneurship refers to a process that goes on within a founded firm, regardless of its size, and leads not only to new business ventures but also to other innovative activities and orientations such as development of new products, services, technologies, managerial techniques, strategies, and competitive postures (Antoncic and Hisrich, 2001).
Intrapreneurship is “the process of uncovering and developing an opportunity to create value
through innovation and seizing that opportunity without regard to either resources or the location of the entrepreneur” (Menzel, Aaltio and Ulijn; 2007) Intrapreneurship has conceived
as the actions of employees within organizations leading to innovation of product, services or processes. Some researchers used the term intrapreneurship only for big-size organizations. They are excluding smaller organizations when they defined the term (Antoncic and Hisrich; 2003). However we can say that intrapreneurship realizable in small and medium size organizations too.
Drucker stated that “today’s businesses, especially the large ones, simply will not survive in this period of rapid change and innovation unless they acquire entrepreneurial competence”. Today
-especially- large-size companies are turning to intrapreneurship because of they are not getting the continual innovation, development, and value creation that they previously had (Menzel et al., 2006). Intrapreneurship is a sub-field of entrepreneurship and intrapreneurship’s broadest definition is entrepreneurship in an existing firm (Antoncic and Hisrich, 2003). In other words intrapreneurship is entrepreneurship practiced by individuals inside founded organizations. Intrapreneurship has been defined in distinct ways; as a process; as doing new things; as a spirit of entrepreneurship inside the existing firm; and as creation of new organizations by an organization (Antoncic and Hisrich, 2003).
Intrapreneurship as a Process
Intrapreneurship can be considered as a process. Sharma and Chrisman describe intrapreneurship as “. . . the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization, or instigate renewal or innovation within that organization” (Sharma and Chrisman; 1999) “Intrapreneurship is a
process by which individuals-either on their own or inside organizations pursue opportunities without regard to the resources they currently control” (Stevenson and Jarillo, 1990). Another description of intrapreneurship as a process is “the process of uncovering and developing an
opportunity to create value through innovation and seizing that opportunity without regard to either resources or the location of the entrepreneur” (Antoncic and Hisrich, 2001). A
NTAGE Intrapreneurship Dimensions
Antoncic and Hisrich (2003) describe eight intrapreneurship dimensions which include: new ventures; new businesses; product/service innovativeness; process innovativeness; selfrenewal; risk taking; proactiveness; and competitive aggressiveness. New Ventures and New Businesses New business venturing is the most important dimension of intrapreneurship as it can results in the creation of a new business within an established organization by redefining the firm’s
products/services and/or by entering new markets. The new ventures dimension refers to creation of new parts or firms, whereas the new business by the founded organization without forming new organizational entities. Product/Service and Process Innovativeness and Innovation Intrapreneurship includes new product improvement, and new manufacture methods and procedures. New product and/or service improvement can be estimated a vital factor that differentiates successful from unsuccessful organizations. Schumpeter stressed the role of entrepreneur as an innovator. From a Schumpeterian view an entrepreneur carries out new
combinations of resources to create products that didn’t exist before (Hall and Sobel; 2006).
Innovation is an important dimension of intrapreneurship as a result the intrapreneurship is an entrepreneurial action in an existing organization. Extent of innovation refers to the measure of newness of a venture in the market. For the ventures that are totally new to the marketplace, and perhaps even create new markets, the firm in question is the pioneer and faces significantly better challenges as a result (Sharma and Chrisman, 1999). Intrapreneurship involves “innovative products or processes developed by creating an entrepreneurial culture within an already existing organization” (Hill; 2003). So innovativeness is one of the main driving forces of
the intrapreneurship. Self-renewal The self-renewal dimension imitates the transformation of organizations through the renewal of basic ideas on which they are built. It has strategic and organizational change nuances and includes the redefinition of the business conception, reorganization, and the introduction of system-wide changes for innovation.
Proactiveness Proactiveness indicates a company’s determination to follow promising opportunities, rather
than only responding to competitors’ moves. Proactiveness concept refers to the extent to which organizations attempt to lead rather than follow competitors in such key business areas as the introduction of new products or services, operating technologies, and administrative techniques.”
Risk-taking Intrapreneurs are risk takers who are willing to commit their time and energy to making a good idea an innovative reality in their organization. Through this process they add a large repertoire of skills and experiences that helps build a career. It is necessary to develop an intrapreneurial environment for risk-taking. Risk-taking emerges as a regular factor in that employees and management must have a wish to take a risk and have a tolerance for collapse should it arise. Intrapreneur is somebody who a person within a large corporation who takes direct
responsibility for turning an idea into a profitable finished product through assertive risk taking and innovation”. Risk-taking is one of the important elements of intrapreneurship. So by
encouraging risk taking and experimentation, a corporation has more chances of creating a successful product.
Competitive Aggressiveness Competitive aggressiveness refers to the company’s tendency to challenge its competitors.
Competitive aggressiveness is an administrative tendency expressed in an organizational willingness to take on and dominate competitors. Entrepreneurial condition is fairly reflected in the firm’s tendency to aggressively compete with industry rivals. Competitive aggressiveness marks the company’s aggr essive attack to competitors. Barriers to Intrapreneurship
In a competitive business environment, it is clear that companies need to search for new business notions and opportunities and make the essential arrangements to bring them to gainful results. However, many organizations face some difficulties in doing this. Barriers of intrapreneurship prevent entrepreneurship within the organization (Kirby; 2006).
Some operational difficulties in intrapreneurship have been noted as inadequate planning, improbable corporate expectations, insufficient corporate support, and misreading the market. These are the main obstacles to successful new business development (Kuratko et al., 1990). Organizations need some procedures to direct or redirect resources to establish effective intrapreneurship strategies and survival of intrapreneurship.
An organization needs a number of factors to develop an intrapreneurial environment such as management support, motivations, organizational structure, resources and risk taking (Kuratko et al.; 1990). Intrapreneurship barriers can be categorized into four main titles.
Resistance to Change: Individuals frequently resist change for the reason that they have already invested a great contract of time and force in mastering certain job, and fear that their asset will be wasted. Change is resisted because of the future is unfamiliar and collapse could potentially cause risk to personal status and respect. It’s meaning that innovation could pressure existing power
structures and relations.
The Inherent Nature of Large Organizations In large organizations managers are required to structure in order to be able to control it. In large organizations management is forced to establish stable, quantifiable performance standards, resulting in large quantities of paperwork. The traditional corporate culture has a climate and recompense system (Hill; 2003). Intrapreneurship is prevented when an organization is characterized by poor communication and structural silos by the flow of useful information.
Lack of Entrepreneurial Ability Entrepreneurship is a concept and it can be defined as a creation of new organization or as create of new economic activity or as the pursuit of innovation. An entrepreneur discovers, evaluates, and exploits opportunities to create new goods and services. Therefore to be able to realize intrapreneurship in a company it is necessary to have entrepreneurial tendency and ability. So lack of entrepreneurial tendency can be accepted as a barrier to intrapreneurship.
Unhealthy Organizational Politics “Organizations that are replete with unhealthy political activity, infighting, and uncooperative
organizational members have a very difficult time bringing out the best in people to create better business performance.” Being focused on a new opportunity demands a commitment to
objectives. If this is not present then, at best, there will be disagreement on the value that particular opportunities present. At worst, different factions will work against one other. As a
result, opportunities will slip. This will leave the more focused and less political new entrant free to exploit them.
Technological inertia A corporation may regard its business as based on a” particular technology rather than the
serving of customer needs. It might prefer to rely on the technology approach 'it's good at'. However, new technological approaches to satisfying needs can develop rapidly. Such technological inertia leaves the field open for new entrants to make technological innovation the basis of their business. For example, the typewriter' industry had a great deal of expertise in designing, manufacturing and marketing machines which produced documents. The manufacturers were very good at their business. However, they defined themselves in terms of the mechanical technology used by typewriters. They did not think of themselves as providing customers with a document management service. As a result, they were easy prey for a whole generation of entrepreneurs who moved in with electronic word processing products, which provided a much better way to manage documents.
Cultural inertia Along with its technology, an established business has its own 'way of doing things'. This way of doing things - its culture - influences the way in which it delivers value to its customers. The best way to deliver value to customers will change as the competitive climate evolves. If the business does not change its way of doing things to meet new challenges then it may not be in a position to exploit new opportunities. Never entrants may take advantage of this by adopting a culture more appropriate to the altered climate.
Intrapreneurship and Innovation
Intrapreneurship and innovation are companion terms. Intrapreneurship involves looking for a new innovation and taking advantage of it. It is an activity of acknowledged importance in companies large and small, old and new. It is an essential means of innovation for competitive advantage, especially in rapidly changing sectors and uncertain economic times.
A special combination of both managerial and entrepreneurial skills defines intrapreneurs. These skills are realized through participation in innovative processes, which can enhance the organization as well as provide direct experience for individuals. Intrapreneurship supports organizational growth through community rather than individual actions. Intrapreneurship exemplifies individual intrapreneurial skills and identifies key aspects of organizational infrastructure required to support intrapreneurial activity.
The term ‘Intrapreneur’ or intracorporate entrepreneur was used in the ‘80s to describe employees within established organizations, whose actions led to ‘rapid and cost effective innovation as the primary source of competitive advantage’ especially but not exclusively with
regard to technological dominance. Intrapreneurial behavior is found to be a significant factor in organizational effectiveness especially when higher levels of economic uncertainty require more innovative, flexible and entrepreneurial management practices.
Intrapreneurs engage proactively in innovation processes leading to successful implementation and exploitation, involving more than just having the initial ‘good idea’. Teamwork, cross
functional groups and several intrapreneurs working together can be required during the innovation process. New ideas and creative thought are required but delivery requires the successful individual or team to proceed with persistence and determination throughout the process no matter what obstacles or difficulties are in the path. Having confidence and experience in organizational politics and dynamics, managing people and overcoming technical or practical challenges are crucial. Intrapreneurs may be self selected; each bringing different strengths to the innovation process but their success requires organizational support and recognition especially from senior management (Davis, 1999).
References
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6. Menzel H.C., I. Aaltio and J. M. Ulijn (2007), “On the Way to Creativity: Engineers as Intrapreneurs in Organizations” , Technovation 27 , 732-743
7. Stevenson, H. H. And C. J. Jarillo (1990), “A Paradigm of Entrepreneurship: Entrepreneurial Management” , Strategic Management Journal, 11, 17-27
8. Hall, J. C. and R.S. Sobel (July 2006), “Public Policy and Entrepreneurship”, the University of Kansas, Technical Report 06-0717 9. Hill, M. E. (2003), “the Development of an Instrument to Measure Intrapreneurship: Entrepreneurship within the Corporate Setting”, Unpublished Thesis, Department of
Psychology Rhodes University 10. Kirby, D. A. (2006), “Creating Entrepreneurial Universities in the UK: Applying Entrepreneurship Theory to Practice”, Journal of Technology Transfer, 31 , 599-603
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Management Journal, Vol. 11, 49-58 12. Davis, S.K., (1999), “Decision Criteria in the Evaluation of Potential Intrapreneurs”, Journal of Engineering Technology Management, 16 , 295-327.
