An introduction to intrapreneurship

Companies are in a constant push to remain relevant. They need to maintain and gain competitive advantage. Whilst striving for innovation and optimisation, firms have been looking into ways to manage innovation. Figuring out how to generate competitive advantages. One way is that employees need to act intrapreneurial. Meaning, an employee has to take risks. They leverage small changes to spark larger changes to innovate. Intrapreneurship is a broad multi-level concept, one which warrants a proper introduction.

What are intrapreneurs?

Intrapreneurs are entrepreneurial-thinking people within existing firms. These employees are crucial in thinking across boundaries of organisational units ⁸. In doing so, these intrapreneurial employees are the foundation for innovation and gaining competitive advantages. Intrapreneurs are important as their behaviour influences the organisation' performance by facilitating strategic renewal and access to new resources and skills ⁸.

In this essay we will look at intrapreneurship as a concept and intrapreneurs as the people who act intrapreneurially.

Entrepreneurs, intrapreneurs; potato, potato?

Intrapreneurship might seem a synonym to entrepreneurship. However, three distinct differences do exist between these two concepts.

1. Intrapreneurs are able to use the existing resources of the company
2. The operate within organisations
3. They work within organisations that already have their own policies and bureaucracy

Intrapreneurship originates from Pinchot (1985) who stated that intrapreneurs closely resemble entrepreneurs, who turn ideas into realities inside an organisation.

Intrapreneurship is a bottom-up process

Intrapreneurship describes the activities of employees to create new products, processes and services, start self-renewal, or venture new business. With the goal to enhance the competitiveness and performance of the organisation ¹. Intrapreneurs are proactive, innovative and take risks to enhance the organisation. Key is the emphasis that it is employee-initiated. It comes from employees and isn't directed by senior management. Some argue that intrapreneurs behave in a way that deviates from existing practices within the organisation ¹.

Intrapreneurial employees can induce bottom-up inspired innovations in for-profit organisations ³. Employees can use opportunistic tactics. Leveraging small changes to spark larger changes in the broader organisation ⁴. Intrapreneurship is a set of activities of an individual or an organisation. With the purpose to increase competitiveness and performance of the organisation. It's not a behaviour of someone or an organisation.

Corporate entrepreneurship is not a synonym to intrapreneurship

In literature, the words intrapreneurship and corporate entrepreneurship are both used. Corporate entrepreneurship is 'a process of corporate renewal in established firms. The goal of this process is to increase profitability, to enable strategic renewal and to foster innovativeness' ⁵. The goal of corporate entrepreneurship is quite similar with the goal of intrapreneurship.

Researchers often refer to individual workers when they apply the term intrapreneurship. Corporate entrepreneurship is a firm-level process. One that business owners and general managers can engage in to foster new ventures, innovations, and strategic renewal ⁶.

In other words, corporate entrepreneurship is top-down. The boardroom decides to enter a new market or to redesign a process. Intrapreneurship is a bottom-up process. The activities of individual workers lead to exploration and exploitation of business opportunities.

Intrapreneurship as a function of behaviour and outcomes

Neessen et al. defined a framework of intrapreneurship¹ that splits organisation and individual level. The individual facet looks at the behaviour of the employee. Behaviour that leads to outcomes that are beneficial to the organisation. The framework links individual behaviour to organisational outcomes. A relation that most literature defines implicit.

According to this framework, an employee has to be innovative and proactive. An employee needs to recognise and exploit opportunities, take risks, and have the proper network. So, they can introduce new products, innovations or self-renewal that are beneficial to the organisation.

The behaviour of intrapreneurs

The framework of Neessen et al. is centred around Theory of Planned Behaviour. This theory is a pronounced theory to investigate the determinant of human social behaviour. In other words, the theory is used to describe the influence of attitudes and characteristics on behaviour, in this case intrapreneurial behaviour. Intrapreneurial behaviour consists of the dimensions:

• Innovativeness
• Proactiveness
• Opportunity recognition/exploitation
• Risk-taking
• Networking

Important to note is that several academics narrowed this list in their measurements to only contain innovativeness, proactiveness and risk-taking ⁶⁷.

Innovation as key element of intrapreneurship

It is widely regarded that innovation is a key factor of intrapreneurship. Any entrepreneurial activity is characterised by some form of innovation. Innovativeness is defined as "a predisposition to engage in creativity and experimentation through the introduction of new products" (Rauch, 2009)[@@todo-citation]. Innovative behaviour influences the firm's performance by facilitating strategic renewal and access to new resources and skills.

Innovative individuals start with recognising problems. Followed by generation of ideas for fixes. These ideas are championed to managers and colleagues to finally build prototypes or models for further assessment and adoption.

Proactivity

Pioneering behaviour and taking initiative to pursue new opportunities. Attempting to lead rather than follow. These are all key elements of proactivity (Lumpkin & Dess, 1996). In organisational behaviour literature proactivity is presented as self-initiated and future-oriented action that aims to change and improve the situation or oneself (Parker & Collins, 2010).

Risk-taking

In short, risk-taking describes to the possibility that something unpleasant will happen. In Entrepreneurial Orientation risk-taking is associated with the possible losses of assets. Assets being effort and resources. For workers risk-taking should be defined slightly differently ⁷. Workers might face reputation damage, resistance from peers, and even losing their job. As such, entrepreneurial risk also involves psychological, social, and/or personal matters (Gasse, 1982).

Risk-taking has to be seen as moving forward without getting permission or consensus upfront ⁷.

Opportunity recognition / exploitation

The ability to identify business opportunities enhances the opportunity for entrepreneurship. Although entrepreneurs recognise more business opportunities then intrapreneurs. Intrapreneurs still find recognise more opportunities then employees.

Networking

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The attitudes of an intrapreneur

The relation to the organisation is a widely researched dimension in the field of intrapreneurship. Organisational commitment has a positive relation with perceptions of innovativeness, proactiveness, and risk-taking. Being able to identify with the organisation, e.g. feeling of belonging, is positively related to intrapreneurship.

Likewise, the job satisfaction of an employee has a positive relationship with intrapreneurship. Satisfaction is found to be a mediator between organisational intrapreneurship and performance (Rutherford & Holt, 2007). An individual having the behaviour of selling an idea in the organisation has be found to be related to the job satisfaction of the employee.

In addition, potential knowledge (the adaptability to transfer knowledge) is of particular value to firms as it enables them to adapt to changes. Potential knowledge lies in the individual and can been seen as intellectual property. If firms do not value this, individuals will want to maximise their personal return on the potential knowledge and therefore will decide either to become entrepreneurs or to foster intrapreneurial activities.

The characteristics of an intrapreneur

An important characteristic of intrapreneurs is the perception of itself. An intrapreneur beliefs that he or she is capable of successfully performing a task. This perception is often called self-efficacy. When an employee has high self-efficacy high levels of entrepreneurial behaviour, opportunity recognition, and product performance have been found. Higher levels of self-efficacy also leads to a higher intention to act intrapreneurially.

Past experience and personal knowledge are both connect to intrapreneurship. An individual with past experience are typically inclined to act intrapreneurially in the new organisation. Knowledge from past experiences improves the recognition of opportunities. Knowledge from education and training (personal knowledge) is related to the probability of becoming an intrapreneur. Intrapreneurs have been found to have higher education levels in comparison to other employees.

Persistence and endurance are important abilities to develop and implement new ideas (Davis, 1999; Sundin and Tilmar, 2008).

Traits from the Big Five model have been associated with intrapreneurship. Extraversion positively links to innovative behaviour, whereas neuroticism negatively associates with intrapreneurial orientation. Characteristics of intrapreneurs can be defined as: "they are a combination of thinker, doer, planner, and worker. They combine vision and action" (Zhu et al. 2014, p. 1440015-12).

The factors organisations can influence for their intrapreneurs

A successful intrapreneur depends on its organisational context. The actions of an intrapreneur can be facilitated or limited by the organisation.

Important for intrapreneurs is the support of management to undertake intrapreneurial activities. Management support is the willingness of management to facilitate and promote intrapreneurship. For example, by encouraging and recognising that their activities involve some risk-taking. Intrapreneurship can be enhanced by establishing it as a norm within the organisation.

The structure of the organisation can positively influence intrapreneurship. The way information flows - like described in Typology of organisational cultures can influence the evaluation, selection, and implementation of ideas. Whether or not decision-making is centralised or decentralised can influence the self-efficacy of employees. Empowerment allows employees to develop proactive behaviour through an organisational structure that aims for autonomy and commitment of employees in decision-making ⁸.

Autonomy and work discretion both influence the intrapreneur. A decentralised decision-making process leads to more intrapreneurial activities. Likewise, this effect also shows when employees get the freedom to design their own work.

Rewards should be in line with the goals and based of results. It increases the willingness of employees to participate in innovative projects. On the same note rewards are also a predictor of job satisfaction and increases commitment.

Puech and Durand (2017) researched what how long intrapreneurs needed to become intrapreneurs. They found that the quality of time is more important than the actual amount of time, especially during the exploration phase in which it is not always clear what activities the intrapreneur should undertake ¹.

The outcomes of intrapreneurial behaviour

New products or services, new businesses, and self-renewal are the defined outcomes of intrapreneurial behaviour in the framework of Neessen et al.

Gawke et al. (2017, 2019) conceptualise that what sets intrapreneurs apart from other innovative and proactive employees, are behaviours that specifically revolve around new venture creation and strategic renewal. New venture creation involves the development of new businesses or new organisations (Gartner 1985). New venture behaviour consists of an employee’s agentic and anticipatory behaviours with the goal of creating new business or new organisations for an exist- ing organisation (Gawke et al. 2017, 2019). Strategic renewal entails the process, content and outcome of attributes of an organisation being refreshed or replaced, with the potential of affecting long-term prospects (Agarwal and Helfat 2009). Strategic renewal behaviour includes behaviours that aim to increase an organisation’s ability to react to internal and external developments (Gawke et al. 2017, 2019) ¹⁰.

Knowledge and innovation are primarily linked to intrapreneurship. Stam (2013) argued that radical innovations within knowledge-intensive organisations are likely to be recognised by employees ⁸.

Influencing intrapreneurial behaviour

Intrapreneurs benefit from autonomy over variety

Intrapreneurship is beneficial for the organisation. So, how to increase intrapreneurial behaviour?

Research from de Jong et al ⁷ analysed the effects of job autonomy and job variety. These are two variables of job design that potentially can influence the intrapreneurial behaviour of an employee.

The results showed that job autonomy is strongly related with overall intrapreneurial behaviour. Predominantly with the dimensions of innovativeness and proactiveness. Significant results for risk-taking were note found. For job variety no relationship was found.

It is suspected that autonomy leads to higher-level decision making - and thus mastering of new experiences. While job variety often means just taking on a prescribed set of extra tasks. Tasks that not necessarily increase motivation or mastery experiences.

Trust of managers as an influence on intrapreneurial behaviour

Trust between manager and employee has been found relevant to increase the self-efficacy of the employee. Trust is required to benefit from the social ties and the capital residing in them. Likewise, trust plays a key role in intrapreneurial behaviour as this behaviour requires departing from the usual way of working and challenging the status quo ⁸.

Personality and attitudes of managers drive intrapreneurial activities

Especially middle-level managers endorse, refine, and shepherd entrepreneurial opportunities. They identify, acquire, and deploy necessary resources to pursue those opportunities. Their leadership can influence intrapreneurial behaviour. Transformational leadership is positively related to intrapreneurial behaviour ⁸.

Managers need to present a suitable opportunity

For people to behave intrapreneurially, they need to be presented with an suitable opportunity. Management needs to present this opportunity to employees to spark interest in intrapreneurship. Clear commitment from managers to intrapreneurship is a precursor for intrapreneurial activities.

Rewarding intrapreneurs to boost intrapreneurship

Rewarding innovative outcomes not only act to honour the activity, but also emphasises the desired intrapreneurial behaviour. It broadcasts the behaviour throughout the organisation ⁸.

Intrapreneurship and corporate entrepreneurship strengthen each other

Although intrapreneurship and corporate entrepreneurship are two distinct theoretical perspectives, they both influence intrapreneurial behaviour. Rigtering and Weitzel (2013) developed a two-step model of intrapreneurship. These two steps being:

1. Intrapreneurship needs to be stimulated by the organisation, as employees are able to develop and identify opportunities.
2. Employees are actively involved in innovation projects (intrapreneurship)

Examining formal and informal work contexts, the authors state that horizontal aspects of participation at work, available resources and trust in managers lead to higher levels of intrapreneurial behaviour (concerning innovative behaviour and personal initiative, but not risk taking). In a second step, their research shows that employees exhibit- ing innovative behaviour and personal initiative are more likely to be intrapreneurs and are also involved in more intrapreneurial projects. Risk taking does not have a significant effect. Thus, the authors show that intrapreneurship is only indirectly affected by work context, namely through individual-level factors, such as innovative workplace behaviour and personal initiative. To further stimulate intrapreneur- ship, management and leadership styles play an important role and help foster the existing intrapreneurial potential of employees (Moriano et al. 2014).