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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.

Intrapreneurship framework as developed by Neessen et al. (2019)

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 [^6, ^7].

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 individuals start with recognising problems. Followed by generation 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

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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.

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).

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.

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.

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.

References

1 Neessen, P. C. M., Caniëls, M. C. J., Vos, B., & de Jong, J. P. (2019). The intrapreneurial employee: Toward an integrated model of intrapreneurship and research agenda. International Entrepreneurship and Management Journal, 15(2), 545–571. https://doi.org/10.1007/s11365-018-0552-1
2 Ross, J. (1987). Corporations and entrepreneurs: paradox and opportunity. Business Horizons., 30(4), 76–80.
3 Alt, E., & Craig, J. B. (2016). Selling issues with solutions: igniting social intrapreneurship in for-profit organizations. Journal of Management Studies, 53(5), 794–820.
4 Heinze, K. L., & Weber, K. (2016). Toward organizational pluralism: institutional intrapreneurship in integrative medicine. Organization Science, 27(1), 157–172
5 Fischer, A. (2011). Recognizing opportunities: initiating service innovation in PSFs. Journal of Knowledge Management, 15(6), 915–927.
6 de Jong et al. (2011). Corporate entrepreneurship at the individual level: Measurement and determinants. EIM research reports.
7 de Jong, J. P. J., Parker, S. K., Wennekers, S., & Wu, C.-H. (2015). Entrepreneurial Behavior in Organizations: Does Job Design Matter? Entrepreneurship Theory and Practice, 39(4), 981–995. https://doi.org/10.1111/etap.12084
8 Blanka, C. (2019). An individual-level perspective on intrapreneurship: A review and ways forward. Review of Managerial Science, 13(5), 919–961. https://doi.org/10.1007/s11846-018-0277-0

An introduction to intrapreneurship