Corporate Entrepreneurship

(Intrapreneurship):
Developing the Entrepreneurial Mindset in
Organizations

Prof. Sudipto Bhattacharya

The Entrepreneurial Economy

Factors in the emergence of the entrepreneurial
economy:
The rapid evolution of knowledge and technology promoted
high-tech entrepreneurial start-ups.
Demographic trends adding fuel to the proliferation of newly
developing ventures.
The venture capital market became an effective funding
mechanism.
Industries began to learn how to manage entrepreneurship.

Who Are Intrapreneurs?

Intrapreneurs are sometimes captured by the
description as a dreamer who does.
They tend to be action oriented.

They can move quickly to get things done.

They are goal oriented, willing to do whatever it takes to
achieve their objectives.
They are also a combination of thinker, doer, planner,
and worker.

They combine vision and action.

The Nature of Intrapreneurship

Defining The Concept
Corporate Entrepreneurship
Activities that receive organizational sanction and
resource commitments for the purpose of innovative
results.
A process whereby an individual or a group of individuals, in association
with an existing organization, creates a new organization or instigates
renewal or innovation within the organization.
A process that can facilitate firms efforts to innovate constantly and cope
effectively with the competitive realities that companies encounter when
competing in international markets.

The Need for Corporate Entrepreneurship

Rapid growth in the number of new and sophisticated
competitors
Sense of distrust in the traditional methods of corporate
management
An exodus of some of the best and brightest people from
corporations to become small business entrepreneurs
International competition
Downsizing of major corporations

An overall desire to improve efficiency and productivity

Entrepreneur vs. Intrapreneur

An entrepreneur is
independent in his operations
An entrepreneur himself raises
funds required for the
enterprise
Entrepreneur bears the risk
involved in the business
An entrepreneur operates from
outside

Intrapreneur is dependent on
the entrepreneur i.e. Owner
Funds are not raised by the
intrapreneur
An intrapreneur doesnt fully
bear the risk involved in the
enterprise
Intrapreneur operates from
within the organization itself

Successful Innovative Companies

Factors in large corporations that are successful
innovators:
Atmosphere and vision
Orientation to the market
Small, flat organizations
Multiple approaches
Interactive learning

Reengineering Corporate Thinking

Steps to develop policies that will help innovative
people reach their full potential:
1. Set explicit goals
2. Create a system of feedback and positive reinforcement
3. Emphasize individual responsibility
4. Give rewards based on results
5. Do not punish failures.

Encouraging an Intrapreneurial Environment

Steps to help restructure corporate thinking and
encourage an intrapreneurial environment:
1. Early identification of potential intrapreneurs
2. Top management sponsorship of intrapreneurial projects
3. Creation of both diversity and order in strategic activities
4. Promotion of intrapreneurship through experimentation
5. Development of collaboration between intrapreneurial
participants and the organization at large

Benefits of an Entrepreneurial Philosophy

Leads to the development of new products and

services and helps the organization expand and grow.
Creates a work force that can help the enterprise
maintain its competitive posture.
Promotes a climate conducive to high achievers and
helps the enterprise motivate and keep its best people.

Conceptualizing a
Corporate Entrepreneurial Strategy
Corporate Entrepreneurship (CE) Strategy
A vision-directed, organization-wide reliance on
entrepreneurial behavior that purposefully and continuously
rejuvenates the organization and shapes the scope of its
operations through the recognition and exploitation of
entrepreneurial opportunity.
It requires the creation of congruence between the
entrepreneurial vision of the organizations leaders and the
entrepreneurial actions of those throughout the
organization.

Conceptualizing a
Corporate Entrepreneurial Strategy (contd)
Critical steps of a corporate entrepreneurial strategy:
Developing the vision
Encouraging innovation
Structuring for an intrapreneurial climate
Developing individual managers for corporate
entrepreneurship

Developing venture teams.

Corporate Entrepreneurship Strategy Process

Source: R. Duane Ireland, Donald F. Kuratko, and Jeffrey G. Covin, Antecedents, Elements, and Consequences of Corporate
Entrepreneurship, Best Paper Proceedings: National Academy of Management (August 2003)

Model of the
Corporate Entrepreneurship Strategy Process

Corporate entrepreneurship strategy is manifested

through the presence of three elements:
An entrepreneurial strategic vision

A proentrepreneurship organizational architecture

Entrepreneurial processes and behavior as exhibited
across the organizational hierarchy.

Shared Vision

Source: Jon Arild Johannessen, A Systematic Approach to the Problem of Rooting a Vision in the Basic Components of an
Organization, Entrepreneurship, Innovation, and Change (March 1994): 47.

Structuring for a
Corporate Entrepreneurial Environment
Reestablishing the drive to innovate:
Invest heavily in entrepreneurial activities that allow new
ideas to flourish in an innovative environment.
Provide nurturing and information-sharing activities.
Employee perception of an innovative environment is critical.

Corporate Venturing
Institutionalizing the process of embracing the goal of growth
through development of innovative products, processes, and
technologies with an emphasis on long-term prosperity.

Developing Individual Managers for Corporate

Entrepreneurship
Corporate Entrepreneurship Training Program
(Corporate Breakthrough Training)
1. The Breakthrough Experience
2. Breakthrough Thinking
3. Idea Acceleration Process
4. Barriers and Facilitators to Innovative Thinking
5. Sustaining Breakthrough Teams
6. The Breakthrough Plan

Corporate Entrepreneurship
Assessment Instrument
Key Entrepreneurial Climate Factors
Management support
Autonomy/work discretion
Rewards/reinforcement
Time availability
Organizational boundary

Facilitating Intrapreneurial Behavior

Organizations foster intrapreneurial behavior by:
Encouragingnot mandatingintrapreneurial activity
Proper control of human resource policies related to
selected rotation
Sustaining a commitment to intrapreneurial projects long
enough for momentum to occur.
Bet on people, not on analysis.

Rewarding intrapreneuring:
Allow inventor to take charge of the new venture
Grant discretionary time to work on future projects
Make intracapital available for future research ideas

The Ten Commandments Of An Intrapreneurs

Source: Adapted from Intrapreneuring by Gifford Pinchot III, 1985, 22. Copyright 1985 by Gifford Pinchot III.

Developing Venture Teams

Venture Team
A semiautonomous, self-directing, self-managing, highperforming group of two or more people who formally create
and share the ownership of a new organization.
The leader is called a product champion or an
intrapreneur.

Collective Entrepreneurship
Individual skills are integrated into a group; this collective
capacity to innovate becomes something greater than the
sum of its parts.

An Interactive Model of Corporate Entrepreneuring

Source: Jeffrey S. Hornsby, Douglas W. Naffziger, Donald F. Kuratko, and Ray V. Montagno, An Interactive Model of the Corporate
Entrepreneurship Process, Entrepreneurship Theory and Practice (spring 1993): 31.

Sustaining Corporate Entrepreneurship

Sustained Corporate Entrepreneurship Model
Based on theoretical foundations from previous strategy
and entrepreneurship research.
Considers the comparisons made at the individual and
organizational level on organizational outcomes, both
perceived and real, that influence the continuation of the
entrepreneurial activity.
Transformational trigger
Something external or internal to the company (e.g., corporate
entrepreneurial activity) that causes a change to take place)
initiates the need for strategic adaptation or change.

Corporate Entrepreneurship at IBM

Emerging Business Opportunity (EBO) Program
Key Rules:
Think big . . . really big.
Bring in the A-team.
Start small.
Establish unique measurement techniques.