Corporate entrepreneurship and intrapreneurship

Get Complete Project Material File(s) Now! »

Frame of Reference

In these sections theories within intrapreneurship, corporate entrepreneurship, intrapreneurs, motivation, and studies of Generation Y are presented. First, organisational prerequisites for creating and advantages of using intrapreneurship and corporate entrepreneurship are explained. Thereafter the characteristics and organisational implications for intrapreneurs are looked into as well as motivation theory for what drives and motivates employ-ees. Lastly, information, values and managerial strategies for attracting and retaining Generation Y are presented together with a theory testing model, developed by the authors with the help of the theory.

Sustaining a competitive advantage, a key to endure

Obtaining and maintaining a competitive advantage have become extremely difficult, especially the latter. (Singh, 2004) The direct result of the fierce competition of sustaining a competitive advantage is a decreasing organisational life-span. Most companies eventually decline and dis-appear, due to everything from poor management and market insight to lack of innovation. However, some have consistently managed to stay ahead and outlive many competitors. A few examples of such organisations are 3M, General Electrics (GE), and Philips.
What companies like these have learned over the years is that as customers increasingly request custom-made solutions and expect more creative responses to their particular requirements, an entrepreneurial focus from top to bottom is necessary. Without it, it is easy to stick to what you do and have trouble adjusting to market changes. GE for example, started out as a light bulb producer in 1878 but has over the years diversified into other markets such as engines, health-care and finance. Their broad portfolio and entrepreneurial focus (Drucker, 2007) makes them highly adaptive and thus far less vulnerable to market changes (Coulson-Thomas, 1999).

 Corporate entrepreneurship and intrapreneurship

Successful and enduring companies like these have adopted and refined methods for incre-mental renewal through innovation. Two methods that both refer to a process where employees through innovative ideas incrementally renew the organisation is intrapreneurship and corporate entrepreneurship (CE) (Floyd & Wooldrigde, 1999; Pinchot & Pellman, 1999). Intrapreneurship was first coined by Macrae (1976) and later adopted by Pinchot (1985). Together with CE, it is considered important aspects for organisations to 1) obtain and sustain a competitive advantage and 2) endure. To simplify CE and intrapreneurship and consequently in what way they both affect the workplace, the model (figure 2) by Åmo & Kolvereid (2005) is useful.

Corporate entrepreneurship

As shown by the model, CE stem from „an answer to a request‟. This request refer to tasks stemmed from the strategy set by the organisation, that calls for corporate entrepreneurs within the firm to engage in, or as stated in the model, answer. Hence, CE is driven by a strong strate-gic focus on entrepreneurial activities that leverage core competencies into creating innovation. It deals with how organisations influence internal innovation and creativity (Åmo & Kolvereid, 2005). CE is a deliberate corporate strategy aimed to develop and implement novel ideas (Homsby, Kuratko, Zahra, 2002). Its main purpose is to incrementally transform the organisa-tion to sustain and gain competitive advantage (Dess et al., 2003). In practice, CE very much revolves around 1) in what ways the organisation stimulate, facilitate and take advantage of en-trepreneurial activities and initiatives from employees, and 2) how the result of these later con-tribute to the success of the company (Kanter, 1984). Sharma & Chrisman (1999) suggest that three types of phenomena form the focus for understanding CE: venturing, innovation, and renewal.
Corporations actively using CE have made it clear to their employees that innovation is vital to them through a clear strategic intent, and to a certain degree encourage them to be entrepre-neurs within the firm. However, through CE, and this is arguably the most noticeable discrep-ancy between it and intrapreneurship, the corporation to a larger degree serve as the innovation initiator through creating plans, rules and guidelines for the individual corporate entrepreneur (Kanter, 1984). Compared to intrapreneurship, classic CE is more of a top-bottom approach where the corporate entrepreneur usually innovates within a quite narrow field defined by the corporation beforehand. However, CE may also give the employees a larger freedom to inno-vate; it much depends on the nature of the innovation, competencies of the corporate entrepre-neur(s), the organisational strategies, funds devoted, managers and culture of the company. This is presented in a model (figure 3) by Sathe (2003) where the relationship between corporate entrepreneur (ship), management culture, business environment and managers is explicitly dis-played and the importance of strategy is highlighted through the influence all the way from cor-porate executives to the individual entrepreneur.
Within organisations using CE, top managers should actively communicate the strategic direc-tion the organisation is heading (Kanter, 1984). They do so by imposing a strategy to which employees (including middle managers) respond with a flow of innovative ideas. This creates a controlled creativity that leads to the best of the firm (Block and MacMillian, 1993).
Just as energy is the basis of life itself and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress
To enable this innovativeness, a company must incorporate CE into their overall strategic plan (Burgelman 1983a, 1983b, 1984), but also create the organisational culture and structure for employees to facilitate innovation. The purpose of a CE strategy is obtaining success through recognising, maintaining and continuously creating competitive advantages. In order to make it applicable, sustainable and implementable it is made up of a set of commitments and actions (Dess et al., 2003). It signals (both internally and externally) that the organisation see entrepre-neurial behaviour as a cornerstone to stay competitive in the market (Russell, 1999).
CE is usually a group process that relies on the dynamic relations between employees within the firm and is carried out in project teams, specialist departments and so forth. However, research show that the groups within the entrepreneurial process of CE oftentimes gain from having an individual leading and pinpointing the direction (Morris, Davis & Allen, 1994). But CE is far from always a group process. Ideas to incremental changes possible of transforming the com-pany could come from all parts of the firm, and as long as the instruments for identifying and taking advantage of the innovation exists, the company may benefit from them.
Creating an environment for CE is brought together by a way of leading and managing that puts internal entrepreneurship in the centre. The optimal CE organisations empower each em-ployee and make them feel and act as they were owners of the firm, thus putting in extra effort to ensure sustainable organisational success. This created a win-win situation for company and its employees. The company gets devoted staff which very well might mean that extra competi-tive effort, while employees get an increase sense of freedom, purpose, and job security, and oftentimes also incentives such as bonuses, promotions and ownership in successful new ven-ture spinoffs (Wolcott, R & Lippitz, M, 2009).
A company that has been tremendously successful through consistently using a strategy-lead CE approach is the Japanese producer Honda. They clearly arranged their organisational culture, rules and management to stimulate CE and utilise their core expertise within engines as a basis of innovation to enter a range of new markets and thus within short became world leaders within several areas of expertise (Kumar & Haran, 2006).

  Intrapreneurship

Intrapreneurship, also referred to as sustained regeneration (Covin & Miles, 1999), has the ca-pability to generate and sustain innovation through the organisational crafting of a hotbed for creativity (Hitt, 2002). By solving organisational problems and needs with inventive and unusual resolutions, the firm accomplishes innovativeness that later may result in new processes, tech-nologies, products and services for the firm (Yeoh & Jeong, 1995). Intrapreneurship help cor-porations succeed under compound and highly demanding circumstances through leveraging corporation performance (Åmo & Kolvereid, 2005).
The intrapreneur, the individual employee practicing intrapreneurship, is an abbreviation for intra corporate entrepreneur (Pinchot and Pellman, 1999). As the name implies, intrapreneurship is in many aspects quite similar to CE. In short, it is entrepreneurship within a corporate environment (Antoncic, 2001; Davis, 1999), but instead of an answer to a reques‟, which CE is denoted as in the previous model by Åmo & Kolvereid (2005) (figure 2 pg. 9) intrapreneurship is re-ferred to as self-determined. When comparing, intrapreneurship is more of a bottom-up approach stemming rather from self-initiated individual initiatives to implement innovation aimed at in-fluencing the organisation rather than an organisational strategic intent (Block & MacMillan, 1993). Through their innovativeness intrapreneurs aid their respective organisations in incre-mentally renovating structures and strategies, thereby strengthening its position on the market (Davis, 1999; Antoncic & Hisrich, 2001).
Even though the concepts of entrepreneurship and intrapreneurship are closely related, there are some discrepancies between them (Davis, 1999; Honig, 2001; Antoncic, 2001; Åmo & Kolvereid, 2005). Although intrapreneurs take risk, they do not make decisions with their own resources as entrepreneurs usually do (Antoncic & Hisrich, 2001; Luchsinger & Bagby 1987; Morris et al., 2008), however both could prove difficult if reluctant to make uncertain choices. Other differences include that intrapreneurship is internal while entrepreneurship is external, and that entrepreneurs make up their own rules, routines and organisational culture where as the intrapreneur has them set within the parent organisation. However, even though the entre-preneur and the intrapreneur have slightly different concerns such as risk to take into considera-tion, both consistently look for new business opportunities (Honig, 2001).

1 Introduction
1.1 Background
1.2 Company information – Stretch
1.3 Company information – DGC.
1.4 Company information Avanza Bank
1.5 Challenge
1.6 Purpose
1.7 Perspective
1.8 Delimitations
1.9 Definitions
1.10 Methodology
2 Frame of Reference 
2.1 Sustaining a competitive advantage, a key to endure
2.2 Corporate entrepreneurship and intrapreneurship .
2.3 Intrapreneurs – how to spot them
2.4 The dynamic relationship between intrapreneur and organisation
2.5 Organisational implications
2.6 Overcome the barriers
2.7 Job satisfaction; motivation and creativity
2.9 Y did they become this way?
2.10 There is more in life than work – Generation Y brings new values to the stage
2.11 Employing Generation Y – time for organisational change
2.12 Make them stay and listen – a new managerial approach
2.13 Generation Y – a summary
2.14 Theory Testing Model
3 Method
3.1 Research approach
3.2 Data collection
3.3 Analysis method
3.4 Credibility of the research
4 Empirical Findings 
4.1 Case studies
4.2 Empirical findings from explorative pre-study
4.3 Empirical findings from interviews
4.4 Empirical material from surveys
5 Analysis 
5.1 The presence of Intrapreneurship / CE
5.2 Are the interviewees’ intrapreneurs?
5.3 The relationship between the intrapreneur and the organisation
5.4 Great place to work for Generation Y?
5.5 Analysis of survey
6 Conclusions and beyond 
6.1 Qualifying case study
6.2 End conclusions
7 Discussion 
7.1 Strengths and weaknesses with study
7.2 Suggestions for future research
8 References 
Appendices 
GET THE COMPLETE PROJECT