DEVELOPING CORPORATE ENTREPRENEURS: A REVIEW OF LITERATURE

1. 4TH
INTERNATIONAL CONFERENCE ON ENTREPRENEURSHIP
DEVELOPING CORPORATE ENTREPRENEURS: A REVIEW OF LITERATURE
Authors:
Co-Author
Ms. Japji Kaur Sadana (MMS – 3rd
SEM (HR))
Prof. Rabiya Jidda (Faculty – Human Resources)
Institute Affiliation: Guru Nanak Institute of Management Studies
ABSTRACT
The economic slowdown wreaked havoc in the job market globally. In most developed countries,
employers laid off employees in hordes, creating an apocalypse of sorts. Developing countries
including India faced similar upheaval, but not of the sorts seen in the Western nations. The
virtual war for talent that used to be the order of the day till more than a year back, suddenly
turned upside down as recession hit the developed world, creating a ripple effect in India.
As companies shed flab in terms of their human resources, the dynamics between the employer
and the employee took a major shift. Yet, there was something that did not change. This was the
necessity to identify outstanding talent and leadership within an organization and the need to
retain key employees.
No organization can prosper if its employees feel shackled. Empowering them by giving them the
freedom to experiment and take calculated risks can help retain talent. Terms such as
“reinventing the corporation,” “organizational renewal” and the “empowered organization”
are used to describe change efforts where “Intrapreneurship” is a central ingredient. This could
also develop a culture of innovation, where every employee can pitch innovative ideas for
products or services or business processes.
The paper attempts to critically review the existing literature on intrapreneurship / corporate
entrepreneurship and the strategies adapted by various organizations to develop entrepreneurial
talent that they possess.
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2. Key Words
Intrapreneurship, Corporate entrepreneurship, Empowered organisations, Entreprenuerial
activities
INTRODUCTION
In the past 20 years, entrepreneurship has become a very valued element of our economic fabric.
It has been recognized for its worth by individuals who have taken this route, through necessity
or choice, and various government programs and venture capital initiatives that have sprouted to
support innovative entrepreneurial projects.
Often overlooked, however, is the importance of intrapreneurship in the growth of established
businesses? Intrapreneurship can be defined as the launch and management of new, innovative
opportunities from within existing, larger organizations. Other than the setting in which they
occur, entrepreneurship and intrapreneurship are really quite similar and can be achieved using
the same framework.
“Intrapreneuring is the process of encouraging employees to initiate and manage new ventures or
improvements within the organisation.” Intrapreneurs closely resemble entrepreneurs. They are
the hands-on doers who turn ideas into realities inside the organisation. The intrapreneurial
process synergises individual aspirations with organisational objectives. When organisations
create a culture, which allows individuals to satisfy their entrepreneurial itch without leaving the
organisation Intrapreneurs are born!
All organizations function on a tripod of activities, with the head being the overall strategy and
direction and the legs are marketing, operations, and administration. While there is never any
guarantee of success, an organization has its best chance for success when the three legs are
working in harmony with each other and running in the direction dictated by the head.
Conversely, the wrong strategy can sink you pretty fast. It's easy to see that, if any of the legs is
out of sync with the rest of the organization, then the enterprise, department, or project is certain
to have problems. Having an internal champion for your initiative can make negotiating the
success of your project easier within the whole organization--with executive buy-in, more
support is available to push a project forward.
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3. The first thing people who are considering new ventures should do is to take a hard look in a
mirror and be brutal about where their weaknesses are--not just candid, brutal. Nobody can be all
things to all people all of the time, so it's important for you to uncover your weaknesses and
ensure that you know what they are. The way to success in any venture is to focus on your
strengths, do what you really like doing and keep doing those things as often as possible with
consistent excellence. Looking in the mirror is important because, once you recognize your
weaknesses, you can find people who are strong in that area and add them to your team. This
creates the harmony necessary for the successful launch of an idea and enhances the team's
likelihood of success.
Another important facet of launching new ventures--either entrepreneurially or
intrapreneurially--is that it usually takes at least two years for them to really develop the
momentum that they need to survive for any length of time, or make a contribution to the
organization that spawned them. In most instances, I have found that the first year of a new
venture is spent learning about all the mistakes in the initial business plan and adapting it to
reality. During the second year, enough processes are usually in place for the venture to start
developing momentum and to show some signs of success--though it's still unlikely to have
achieved the original objectives set out for it. By the third year, however, an initiative should
show the kinds of returns that make all the hard work worthwhile. With that in mind, anyone
seeking to launch a new initiative of any scale within an organization needs to get a two to three
year commitment so that you have a fighting chance to make a success of the project.
Entrepreneurs tend to neglect activities in which they are weak because they don't have a facility
for them. People involved in intrapreneurial projects are lucky because they can usually enlist
someone with other skill sets from other parts of the organization, at least on a part time basis.
Attracting someone with different skills to your project team can be very important for your
success, and it's easy to do, because most people within organizations recognize that getting
business or serving customers (internal as well as external) is integral to a company's success.
This is the tip of the innovative, intrapreneurial iceberg that is seldom considered as
organizations quietly go about their business. If your career within an organization is to blossom,
you are likely to be called upon to lead an intrapreneurial initiative of some sort. It's important to
do what it takes to give flint initiative a chance to succeed.
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4. OBJECTIVES OF THE STUDY
1. To study the way Intrapreneurship is given impetus, as a way of retaining key employees.
2. To understand expectations of employees from their organizations.
3. To discuss the realities and human resource practices of organizations / institutions /
academia towards enhancing retention
RESEARCH METHODOLOGY
The research paper has used secondary data sources like books, magazines and journals to
explore the facets involved in developing intrapreneurs. Various e-journals and websites were
also reviewed to enable the findings included in the paper.
LITERATURE REVIEW
Invention of the term – ‘Intrapreneur’
In an article in The Economist in 1976, Norman Macrae predicted a number of trends in
business - one of them being "that dynamic corporations of the future should simultaneously be
trying alternative ways of doing things in competition within themselves". In 1982, he revisited
those thoughts in another Economist article, noting that this trend had resulted in confederations
of intrapreneurs. He suggested that firms should not be paying people for attendance, but should
be paying competing groups for modules of work done. One suggestion was to set up a number
of typing pools contracted for a certain amount of work over a certain time period for a lump
sum. The members of the pool would be responsible for apportioning work, setting pay, setting
work hours or even whether to subcontract out part of the work. Applied across the business
spectrum such groups would provide the intrapreneurial competition he envisioned.
During the same time frame, Gifford and Elizabeth Pinchot were developing their concept of
intra-corporate entrepreneur. They coined the word intrapreneur giving credit for their thinking
to the 1976 article by Macrae. Under their model a person wishing to develop an intrapreneurial
project would initially have to risk something of value to themselves - a portion of their salary,
for instance. The intrapreneur could then sell the completed project for both cash bonuses and
intra-capital which could be used to develop future projects. Based on the success of some of the
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5. early trials of their methods in Sweden they began a school for intrapreneurs and in 1985 they
published their first book, Intrapreneuring, combining the findings from their research and
practical applications.
Here is short review of the history of Intrapreneurship and short overviews of "real world" case
studies. Corporate entrepreneurship or the popular term intrapreneurship is a valuable secret
weapon over the last 40 years for success used by 3M, Anaconda-Ericsson, GE, Lockheed,
Rubbermaid, Sony, Toyota, and many other major companies internationally. Haller wrote his
Master's Degree in Management Thesis, in 1981, on the "real world" use of intrapreneurship
techniques. This detailed quantitative analysis was a formal case study of Intrapreneurship
Success at PR1ME Computer Inc. from 1977 to 1980. PR1ME Computer Inc. grew from just a
small OTC listed firm to a $480 million annual sales firm and to be the #1 performing stock on
the NYSE in four years.
The word "Intrapreneurship" was brought into the mainstream media by, Apple's Chairman,
Steve Jobs. Job's popularized the term "intrapreneurship" in his "Newsweek," article (in their
September 30, 1985 issue) in which he stated for the record, "The Macintosh team was what is
commonly known as intrapreneurship... a group of people going, in essence, back to the garage,
but in a large company."
Evolution of Intrapreneurship – Corporate Entrepreneurship
Intrapreneurship, which is sometimes referred to as Corporate Entrepreneurship, is based on the
concept of using entrepreneurial techniques within an organization (which can be a corporation,
partnership, association, or even a non-profit organization). Intrapreneur can be utilized to create
a new service, product, division or subsidiary to help the organization to add additional revenue
and to be able to survive in tough times. Intrapreneurship, and sometimes even grow faster and
more profitable.
Some enlightened organizations allow an intrapreneur time freedom to pursue new ideas for the
organization. Many firms around the world have created formal Intrapreneurship Programs. To
have a successful Intrapreneurship program the team must overcome the roadblocks of formal
organizational structure and possibly a slow moving organization bureaucracy. The individual
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6. Intrapreneur, or Corporate Entrepreneur, learn how to successfully convince both middle
management and senior management that the new, "out of the box" idea has merit, market, and
would be both profitable and synergistic to the organization's basic mission.
Intrapreneurship is closely related to corporate entrepreneurship that is creation of new products
within the sector or organisation using existing employees (Chang, 1998) Intrapreneurship or
'corporate entrepreneurship' as it is sometimes known was first referred to in mid- 1970 (Hanan,
1976, Peterson and Berger, 1972;), however Pinchots, (1985) book on intrapreneurship generated
a lot of interest in this important phenomena particularly among researchers resulting in a
number of empirical studies in the area (Holt et al 2007). A major characteristic of
Intrapreneurship is 'creation of innovative products or processes by creating an entrepreneurial
culture within an already existing organisation' (Fry, 1987). The distinctiveness of an
entrepreneurial organization has been studied by researchers in the past (Antonic-Hirsch, 2000
and 2003). An 'Intrapreneur' just like an 'entrepreneur' must have the ability to successfully
execute his own ideas although he is not the owner of the enterprise (Cunningham & Lischeron,
1991). In other words an Intrapreneur recognizes a business opportunity and exploits it
successfully, keeping in mind the aims and objectives of the organization. Research on
Intrapreneurship has covered variants of the concept like exopreneurship (Chang, 1998) and
corporate venturing (Burgelman, 1983).
Succeeding at Corporate Entrepreneurship
Out of the various models of successful corporate entrepreneurship, the most widely accepted one is
the Burgelman’s Process model of Internal Corporate Venturing (ICV).
(See Exhibit I).
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7. Source: Corporate Entrepreneurship, Effective Executive, The ICFAI University Press, April
2007.
Exhibit I: Burgelman’s Process model of Internal Corporate Venturing
As shown in the model, while going for internal corporate venturing, the key activities of the top
management include rationalizing and structuring the plan of the new venture. The key activities of
middle management or the new venture development management team are strategy building and
delineating for the business activities. At the functional level, the group leader or the venture
manager has to establish a link between technical requirements and need of the customer and
strategically forcing the idea for adoption. There is also an overlap between the top and the middle
management in terms of selecting the business plan or people and between middle management and
lower management where both of them can act as a product champion.
Burgelman was of the view that the motor of corporate entrepreneurship resides in the autonomous
strategic initiatives of individuals at the operational levels in the organization. Therefore,
organizations can build a competitive advantage by nurturing the people at the operational level.
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8. The above model was quoted from the “Leveraging Innovation for Successful Corporate
Entrepreneurship – A Case Study on Gadre Marine Export, Mirakarwada, Ratnagiri”,
research paper written by: Dr.R.Gopal, Prof. Rashmi Gopinathan, Ms. Shilpa Varma
Pioneers of Intrapreneurship
These classic examples from the big leagues of product innovation began with an intrapreneur —
an employee who convinced his or her company to chart a new course. Often with no more than
a kernel of an idea, these employees went on to create changes in companies as varied as Sun
Microsystems and 3M.
In each case, it took more than one person to launch the product. Every intrapreneur needs
colleagues to refine, repurpose, or just plain redraw his or her idea; marketing folks to help figure
out exactly what the product is (or is not); and higher-ups who are willing to champion it, even if
a return on investment is years in the making.
Post-it Notes
Intrapreneurs: Spencer Silver and Art Fry
Company: 3M
Year Launched: 1980
The Post-it, now as indispensable to the typical office worker as a chair and desk, might never
have made it to market without 3M’s longstanding “bootlegging” policy. The company’s
program allows employees to spend up to 15 percent of their time at work developing their ideas.
That’s how 3M scientist Spencer Silver invented a light, repositionable adhesive in 1968,
although he was unsure how best to use it. He gave seminar after seminar, explaining the
advantages of his adhesive to co-workers, but he was unable to drum up much enthusiasm for his
not-so-sticky stickum. Five years later, Art Frey, one of Silver’s colleagues, noticed his
bookmarks were constantly falling out of his hymnals during choir practice. He remembered
Silver’s seminars, and in that “Eureka” moment, the Post-it was born. The product languished
until a marketing manager, Bill Shoonenberg, designed a campaign called the “Boise Blitz” to
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9. drive sales and blanketed the state of Idaho in Post-its. The sticky notes went national in 1980
and quickly became an office-supply and household standard.
Sony PlayStation
Intrapreneur: Ken Kutaragi
Company: Sony Computer Entertainment Inc.
Year Launched: 1994
Ken Kutaragi was working in Sony’s sound labs when he bought his daughter a Nintendo game
console. Watching her play, he was dismayed by the system’s primitive sound effects. He
realized that a digital chip dedicated solely to sound would improve the quality of the games —
and the product itself. Keeping his job at Sony, Kutaragi developed the SPC7000 for the next
generation of Nintendo machines. Sony execs nearly fired him after discovering his sideline
project, but then-CEO Norio Ohga realized the value of his innovation and encouraged
Kutaragi’s efforts. With Sony’s blessing, Kutaragi worked with Nintendo to develop a CD-
ROM-based Nintendo. But Nintendo decided not to go forward with it, so Kutaragi helped Sony
develop its own gaming system, which became the PlayStation. The first PlayStation made Sony
a major player in the games market, but the PlayStation 2 did even better, becoming the best-
selling game console of all time. Kutaragi founded Sony Computer Entertainment, one of the
Sony’s most profitable divisions.
Java Programming Language
Intrapreneurs: Patrick Naughton, James Gosling, Bill Joy
Company: Sun Microsystems
Year Launched: 1995
The circuitous route Java took to market began when Patrick Naughton, a 25-year-old, up-and-
coming programmer, told Sun CEO Scott McNealy he was leaving the company. McNealy asked
Naughton to give him an assessment of what Sun was doing wrong, and the programmer
responded that Sun, then known for its business workstations, was missing out on the fast-
growing PC consumer market. His 12-page e-mail quickly became a rallying cry to change Sun’s
direction. Naughton stayed, and Sun set up a group dedicated to breaking into the consumer
market. Group member James Gosling created an elegant object-oriented programming language
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10. called Oak (renamed Java), which Sun initially hoped would be used by Time Warner in its cable
set-top boxes. When that deal fell through, it looked like the language would be abandoned. It
took Bill Joy, a Sun co-founder, to champion the project. Joy realized that with the explosion of
the Web, a programming language like Oak could be used across different platforms —
computers, cell phones, PDAs, and more. Joy also understood that the key to making Java a
cross-platform linchpin was to give the language and development kit away. By the end of 1996,
Java had nearly 100 licensees and had attracted 6,000 developers.
Current Scenario Across Industries With Special Reference To Emirates Of Dubai
The rate of growth in Dubai has increased at a phenomenal rate during the last decade.
Sustainable competitive advantage can be gained and the economy can stay ahead in the
competition, if it evolves a strategy in which entrepreneurial ability is nurtured and innovation is
encouraged. In every economy 'Intrapreneurship' or 'corporate entrepreneurship' plays a pivotal
role in the expansion and diversification of business. This is necessary if the economy wishes to
enjoy an accelerated economic growth. It is therefore, vital to establish and cultivate an
'intrapreneurial' climate in SME as well as large scale industry within the country.
Intrapreneurship is basically about bringing entrepreneurship behaviour into an organization. An
intrapreneur concentrates on improving an organisation's financial and market performance by
improving the competitiveness of the enterprise through innovation.
The primary aim of examining the industries is to understand the patterns of relationship and
nature constructs in the Intrapreneurial model with special reference to middle and top level
managers working in the service and manufacturing sector in the Emirates of Dubai.
The instrument being used by us was developed by Hill and Moerdyk and is based on the
Tushman and Nadler (1997) Congruence Model for organisational analysis. This model
examines the important elements of an effective sector. It suggests that there are four
interconnected elements of a sector namely; task, individuals, formal sectoral arrangements
which include organisational structure and flexibility and informal sector which incorporate
intrapreneurial leadership and culture. These elements interact with each other as well as with the
external environment. According to Tushman and Nadler (1997), if a sector/individual
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11. demonstrates these characteristics, and if they are aligned with and mutually supportive of each
other, the sector/individual will score highly in that area, allowing for the conclusion to be drawn
that the sector/individual is Intrapreneurial in nature. The constructs or enablers in the
Congruence Model that have been included in the study of Intrapreneurship by researchers and
are explained as follows:
1. Task Innovation
The task of a sector has been defined as the basic or inherent work done by the sector. In a
dynamic, technology driven economy, new product development and strategies are given prime
importance. This would encourage 'would-be intrapreneurs' to create innovative products. The
task innovation integrates the efforts of the individual and the sector in maintaining an improved
quality of sectors product and services. Top management is an effective force in the organization,
especially if decision-making power is concentrated in its hands. The potentially ambiguous and
uncertain consequences resulting from adoption of new ideas in bureaucratically addicted
organization means that pro-change attitudes are needed to support innovation (Mohamed A.K.
Mohamed, 2002). Innovation is regarded as something new which leads to change (Martins &
Terblanche, 2003). Similarly, Burgelman, (1983) suggested that task innovation is related to
corporate strategy. He suggested that induced strategic behaviour is the official path for
innovation and he proposes that as long as operational level participants see opportunities that
exceed the Opportunity set' proffered by top management, autonomous strategic behaviour
(Intrapreneurship) will occur. At an individual level, the task of an individual within an
Intrapreneurial sector is the identification, development and exploitation of new opportunities.
2. Intrapreneurial Employee
Individuals who make up the sector are an essential factor for the sectors success. Every sector
requires individuals who are willing to take up the challenge of uncertainty and risk. These
individuals strive to achieve their goal. Every sector must have at least one of the vibrant
employees who can lead the change. An intrapreneur is an individual who is creative and
therefore is continuously searching for new ideas, new markets and new products. Sectors should
have individuals who are willing to be exposed to situations with uncertain outcomes, who enjoy
new and exciting, risktaking activities. Intrapreneurs have a novel way of looking at innovations,
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12. at products, services and markets. He is willing to take risks and is ambitious to break new
grounds. An Intrapreneurial employee would be willing to take the responsibility to figure out
how an idea can be turned into a profitable reality.
3. Organisational Structure
Organisational structure or hierarchy of authority refers to the structure of management which
traditionally was hierarchical however; today organisations have been restructured so that
organisations are flatter. The logic behind the transition is that the unnecessary cost of
duplication is controlled and decision making becomes more effective. Intrapreneurs get
frustrated in a steeply hierarchical organisation because permission is required at different levels.
Hierarchical organisations restrict vertical mobility and stifle creativity and innovation.
Intrapreneurial organisations tend to be more decentralised and have smaller power distance.
Specialisation in specific areas helps an intrapreneur to focus on particular tasks, thus making
innovation feasible. However, too much specialisation stifles innovation, an individual looses
'sight of the big picture' The importance of Organisational Structure has been identified in a
number of ways. 3M and Dupont institutionalised a corporate culture that encouraged
Intrapreneurship. Fry's (1987) invention, the self sticking pieces of note paper 'Post-it' has
become a standard part of practically all offices. Fry explains how an environment of creativity
and innovation at 3M allowed him and his fellow inventors to develop unusual and ultimately
successful products. Creativity and close regulation is antithetical (Chisholm, 1987). According
to Chisholm the organisational challenge is to establish those policies necessary to meet the
legal, social and preservation requirements of the corporation while at the same time allowing
the intrapreneur, organisational freedom to achieve (Martins & Terblanche, 2003).
4. Organisational Incentive Policy
An organisation can follow either an explicit or an implicit system. However, innovation and
invention of new products is a continuous process for any organisation and in order to encourage
their employees to constantly search for new and better alternatives an organisation must offer
incentives. To create a viable Intrapreneurial attitude the organisation must be sensitive to the
nature of its reward system (Chisholm, 1987) 'Intracapital' or 'discretional budget' with no time
limit on its expenditure must be introduced. 'Intracapital' could be used to buy corporate
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13. resources that an intrapreneur requires (Duncan et al., 2001) When an intrapreneur makes a
significant contribution to cost reductions, either revenue increases or both. Some portion of the
added net income should be reserved to support future creativity. Behaviour that is rewarded
reflects the values of an organization (Martins & Terblanche, 2003). It is important for the
organisation to understand which reward is conducive to innovative behaviour (McGinnis &
Verney, 1987). However, rewards can be extrinsic such as pay increases, bonuses and shares and
stock options. Intrinsic rewards include a feeling of accomplishment (Ahmed, 1998), recognition
of performance and provision of discretionary funds (Fry 1987).
5. Intrapreneurial Leadership
A charismatic leader in a company instills an intrapreneurial philosophy in the employees in an
organisation. Leadership qualities in employees help to create an ambience in which innovation
and creativity are nurtured. Commitment and involvement in the organisation give a leader a
sense of direction keeping in mind the vision and mission of the organisation. In analysing what
makes a good venture leader Hanan (1976) lists three qualities i.e., personal leadership style, the
ability to be comfortable in the presence of a high risk/reward ratio and the generation of mini-
plans or strategies which focus on the firms long term objectives. When establishing an
entrepreneurial programme senior management must empower employees to generate new ideas.
And extend their support by allocating the necessary resources required for its successful
implementation. Innovative leaders should be given freedom and rewarded for their
achievements (Rule & Irwin, 1988).
Qualities that are important to develop an intrapreneurial organization include, employees who
understand the organizations strategic goals and have an expertise in their field thus making
innovation possible. Leaders have a good grasp over the situation in an organisation and are
instrumental in translating dreams into reality. Innovative behaviour must be reinforced by an
appropriate reward system and enlightened rules that eliminate the non-essential restrictions on
employees and enhance the climate for innovation (McGinnis & Verney, 1987).The biggest
challenge for a leader is to retain their intrapreneurial ability rather than adopt a stringent
management style as the organisation grows.
6. Organisational Culture
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14. Culture of an organisation though intangible provides meaning and direction. In the words of
Hofstede (1980) culture refers to 'the way we do things around here'. Organisational culture
refers to deeply held beliefs and values. Involvement, consistency and adaptability are cultural
traits that are positively related to effectiveness (Ahmed 1998). Culture has an influence on the
degree to which creativity and innovation are stimulated in an organization (Martins &
Terblanche, 2003). Martins' model is based on the interaction between the organizational sub-
systems including the aims and objectives of an organization, its value system, and psycho-
sociological subsystem. His model includes external and internal environment and the
dimensions of culture. Values like flexibility, freedom and cooperative team work will promote
creativity and innovation. McGinnis and Verney (1987) refer to this as a "Killer Instinct" an
innovative individual knows when to push forward and when to back off. Internally, a firm must
become organised and build a culture conducive to intrapreneurship. It must have a strategic
commitment to encourage creative people and a means of integrating their ideas into corporate
strategy if and when innovation results. (Duncan et al 2001)
External Inputs and Outputs are important for Intrapreneurial development. External inputs refer
to the materials the organisation needs to work with, which includes the history of the
organisation, its environment and its resources. On the other hand, external output refers to the
pattern of activities, behaviour and performance of the system at various levels.
Intrapreneurial Development
Bill Gates said, “I want to put a PC on every desk, in every home and in every office.” Ford said,
“I want to put a car in every garage, in every home.” It is these dreams that led to great
achievements. Dreams are what help people move ahead. Narayan Murthy never let go of his
Infosys dream.
It was found out that, young executives, especially those in the IT industry were asked what they
wanted from their careers. The good news is that most of them were happy doing what they
were- but only right now! The rejoinder to their response would alarm any HR department. After
all, hiring the right candidate is a Herculean task!
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15. Well, the inevitable is that these employees will move on to pursuing their entrepreneurial
dreams. But organisations can take advantage of the fact that while three-quarters harbour
dreams of their own enterprise, most of them are unaware of how to get there! Once
organisations recognise this entrepreneurial drive amongst their employees, they should also
recognise the gold mine in it. Unfortunately, most consider this drive as a major obstacle in
workforce stability.
Organisations don’t have to lose top performers to the desire of nurturing entrepreneurial dreams.
Smart organisations should realise that in such dreams lies an untapped pool of initiatives. When
given the opportunity within the organisation it to realise a sense of ownership and satisfaction
these individuals are bound to stick around allaying HR fears of high turnover.
In addition creating an environment in which creativity, innovation and entrepreneurial skills can
be exercised would fan the individuals’ aspirations bringing out the best in them. This would
reflect in their ability to perform better thereby impacting the organisation positively. Some
smart managers pay attention to maintaining good relations with such individuals for future
references. After all, history has it that entrepreneurs are celebrated the world over.
Training Intrapreneurs
Intrapreneurs persisted despite obstacles. Every failure lacked a dedicated intrapreneur, although,
Innovations were on the decline till someone donned the intrapreneurial role.
Most training managers believe that intrapreneurs are born not made. But a marked improvement
in individuals’ post intrapreneurial training tells a different story!
Most organisations provide training in intrapreneurship only to those who volunteer! The
assumption is that only those who are courageous enough to volunteer can succeed as
intrapreneurs. Training success is partly because these individuals look around the training room
and realise, “My goodness, there are other people like me in this world and it seems that the
corporation is really serious now about wanting this aspect of me employed.” In other words,
training allows these individuals to use a part of their potential that they failed to recognise.
Training boosts their drive and vision.
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16. An intrapreneur possesses complementary skills. He needs to be knowledgeable HRD, finance,
sales, marketing and quality control. Training is crucial if these skills are missing.
Getting Started
An organisation needs to develop an environment, which supports individuals with new ideas.
To encourage intrapreneurial initiatives organisations should:
 Identify individuals with new ideas and risk taking abilities
 Look for ways to retain then from the start as such people are most likely to leave
 Provide opportunities to develop their strengths and work on their weaknesses
 Align individual goals with organisational objectives
 Ask the most-likely-to-leave employee what would make him stay- he might take on the
ownership of his idea and stay on!
 Implement and support ideas whenever possible
 Career development opportunities is one of the first ‘carrots’ organisations offer bright
employees. Developing intrapreneurial skills in employees not only keeps talent in the
organisation, it also keeps them satisfied and happy.
Intrapreneurs Within Firms
Employees in human resource departments (or units within human resource departments) can
become intrapreneurs when they develop ideas for providing human resources in a new way or to
new customers. IBM, Disney, and Xerox all provide excellent examples of this type of change.
In 1992 IBM unveiled a new company called Workforce Solutions that operated within IBM.
Workforce Solutions offers human resource services and programs to IBM and other firms. Walt
Disney Company operated Disney University as part of its human resource and community
relations departments. Disney University sells human resource experience and knowledge to
other firms.
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17. Xerox Corporation formed Human Resource Solutions in response to the large number of
benchmarking requests Xerox had received from other firms. Xerox's Human Resource Solutions
has become a business within Xerox Corporation (Laabs, 1995).
Many organisations have placed greater importance on a service-orientated approach to their
business activities. Customers are seen as both internal and external and employees are expected
to be positive, polite and professional. This customer service focus has resulted in an emphasis
on being a team player. In such a team performance environment employees must manage their
own time, solve problems, apply logic and reasoning skills and be able to set and follow through
goals.
“They need to be self-motivated entrepreneurs who are fixers, not finger pointers.”
Consequently, the culture and ethos of a customer service focus has enabled an increase in
intrapreneurism. This in turn has led to the development of intrapreneurial competing teams
within a company. Teams can function as small businesses within the organisation, which are
nested and networked together. Teams can focus on either a product or a process (such as
secretarial services or PR). Such practices result in a free market system where work is more
effectively co-ordinate and responsibility is distributed more evenly. Pinchot (1999) has noted
that intrapreneurial activity increases the speed and cost-effectiveness of technology transfer
from research and development to the marketplace.
Pinchot has developed the “Ten Steps to an Entrepreneurial Organisation” based on need factors,
which he considers vital for the development of organisational intrapreneurism:
 Give users of internal services a choice of more than one internal vendor.
 Give employees the security of something akin to ownership rights in internal intraprises
they create, as well as the larger corporation.
 Demand and engender truth and honesty, marketplace feedback and marketplace
discipline, to support widespread decision-making.
 Give intrapreneurial teams responsibility for their own bottom line even if they are
subsidized as a profit centre rather than a cost centre.
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18.  Allow many options and diversity in personnel, in jobs, in innovation efforts, alliances,
and exchanges.
 Provide extensive training and education, and safety nets, so employees can develop and
take risks as their organisation develops.
 Create an internal “bank account” for every internal enterprise.
 Streamline systems for registering internal enterprises so that they have standing in the
corporation.
 Establish a system for registering agreements and contracts between internal enterprises,
so that people can give their word and trust the system.
 Establish a justice system for adjudicating disputes between internal enterprises and
between employees and enterprises.”
Intrapreneurs In Two Or More Firms Working Together
In order to achieve economies of scale, the human resource departments of several firms can
work together to form a new corporation that provides human resource services to any number of
firms. This approach, which has been referred to as "inside-outsourcing," is relatively new. It
was used by the human resource departments of nine Fortune 1000 firms in recent years to place
the human resource function virtually out of the parent companies. The new firm can sell human
resource services back to the parent company. They also can sell services on the open market to
firms other than the parent companies.
The operation of this type of human resource organization allows the parent organizations to
treat the new human resource organization as a free agent operating in a competitive
environment.
When the initial contract period is over, parent companies use the performance of the human
resource organization as a basis for deciding on any future purchase of services. Parent
companies are free to decide whether or not they want to continue purchasing all or some of the
services provided by the human resource organization. Key human resource professionals in the
new human resource organization are partners in the new business in which they own stock. An
advisory board, composed of top human resource leaders, helps the human resource organization
maximize the quality of service delivery so they maintain a competitive advantage.
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19. Challenges to Intrapreneurship
Large companies have little choice but to grow not only through their existing businesses but by
creating and sustaining innovative new businesses. All the resources of large corporations don’t
make corporate entrepreneurship easy since new ventures usually fit together poorly with well-
established systems, processes, and cultures. Garvin and Levesque explain that to succeed,
companies must balance old and new organizational traits. The challenges that arise when
companies pursue new businesses, the causes of problems in the usual responses to those
challenges, and they explore several balancing acts, the choices they entail, and the risks
corporations face when they fail to get the balance right.
Three main challenges confront companies when they pursue new businesses.
The first of these is that emerging business usually lack hard data, making financial forecasts
undependable and large errors common.
Secondly, mavericks are essential in order to generate the fresh ideas needed for innovation, but
most mavericks can’t tell the difference between good and bad ideas. As Home Depot CEO
Robert Nardelli put it: “There’s only a fine line between entrepreneurship and insubordination.”
Finally, there is a poor fit between new businesses and old systems, especially with regard to
budgeting and human resource management.
The two traditional responses to these challenges usually fail. One is to disperse the task of new-
business creation by assigning it to existing divisions. The other is to centralize it by placing it
with special-purpose divisions or venture groups. Both approaches have brought mixed results.
Diffused responsibility tends to fizzle out while centralization isolates. A more promising
approach is to perform three balancing acts to meld the cultures while avoiding extreme
behavior.
The first challenge is to balance trial-and-error strategy formulation and open-minded
opportunism with rigor and discipline. This involves narrowing potential choices before diving
deep, learning from closely observing small groups of consumers, using prototypes to test
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20. assumptions about products, services, and business models, using nonfinancial milestones to
measure progress, and knowing how and when to pull the plug on a new venture.
Secondly, companies need to find the best combination of operational experience and invention.
They can do this by staffing new ventures with “mature turks,” changing veterans’ thinking by
asking them to serve on new businesses’ oversight bodies, knowing which capabilities to develop
and which to acquire, and making old and new businesses share responsibility for operating
decisions.
The final trick is to balance integration of new businesses with autonomy. Too little autonomy is
stifling but too much leads to a lack of organizational learning. This balance can be attained by
assigning both corporate and operating sponsors to new ventures, stipulating criteria for handing
new businesses over to existing businesses, and mixing formal oversight with informal support
by creatively combining dotted- and solid-line reporting relationships. The authors conclude with
a detailed look at IBM’s Emerging Business Opportunity system, which maintains all three
balancing acts simultaneously.
KEY FINDINGS
1. It is not an easy task for any organization to identify a handful of people, amongst
thousands of equally educated and skilled employees. What makes it possible for them is
the fact that such people make themselves identifiable through their sheer hard work,
efficiency and the ability to stretch themselves beyond their expected level of duty.
2. In a highly competitive business environment, organizations have begun to understand
the value of those people who defy the norms of just being “an employee”, and possess
the zeal, excellence and innovative mind and spirit of an entrepreneur. These are the
“intrapreneurs”—the ultimate transformation managers, who work for their organization
with the same passion as if they were running their own business.
3. Intrapreneurs think out-of-the-box, are proactive in understanding market needs and help
their organization to survive and grow in a competitive and agile market. Identifying and
investing in their training, fast track career progression, organizations are in turn able to
retain such people for longer duration and it actually contributes to the bottom line
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21. results.
4. Developing intrapreneurs is not a random process rather as suggested by Burgleman’s
Process model, it requires involvement and continues commitment by various levels in
the organization. This is in line with the fundamental belief in human resources that any
change can have an impact only if all levels in the organization believe and contribute to
its achievement.
5. Finally, although the benefits of corporate entrepreneurship are often glamorized, the
journey of an organization towards developing an entrepreneurial culture often requires
overcoming several challenges.
LIMITATIONS AND FUTURE SCOPE OF THE STUDY
1. The study is limited in its approach as it lacks empirical evidence to support the findings
from literature review.
2. Although there is a plethora of information available on intrapreneurship or corporate
entrepreneurship and what do organizations do to develop their talent, sufficient
information is lacking on the way in which organizations integrate other HR practices
like performance management and rewards to create an entrepreneurial culture.
3. The link between intrapreneurship and employee retention and the effect of
intrapreneurship on business performance is also an area which can be investigated
further.
CONCLUSION
World is wheeling on the era of youngsters to determine the future ways and means of sustaining
global economy, wherein they have to be sharpened, motivated, groomed and chanced for their
organizational / institutional / academic strength according to industrial (service & technical)
requirements. In an atmosphere of trust fostered by high levels of communication and
cooperation, managers can create internal opportunities for employees to apply their knowledge
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22. in different contexts, develop new skills, increase their awareness of the capabilities of the firm,
and perhaps discover opportunities for intrapreneurial ventures.
REFERENCES
ezinearticles.com
findarticles.com/p/articles
www.smallbusinessnotes.com
famousyoungsuccessfulentrepreneur.blogspot.com
www.dare.co.in/strategy
globeservejournalofmissions.org
www.allbusiness.com
www.ellerman.org
www.jstor.org
www.iitk.ac.in
www.bnet.com
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