Define intrapreneurship and intrapreneur, and describe the key

challenges for intrapreneurship in large companies. Use case studies

or real-life examples to illustrate your answer. (400 words)

2. Discuss the differences between start-up entrepreneurship and

corporate entrepreneurship, using real-life examples to illustrate
your answer.

5. What problems does disruptive technology create for large

corporations? Use at least one example in your answer

Innovative corporate management style that encourages employees within an organization to

create new product ideas. If employee ideas are approved, management will finance research and
development of the product while sharing an equitable partnership arrangement with the
employee. Intrapreneurship is an independent and daring management concept and has worked
very successfully in small and new business organizations.
Intrapreneurs are employees who work within a business in an entrepreneurial capacity, creating
innovative new products and processes for the organization. Intrapreneurship is often associated
with larger companies that have taken notice of the rise in entrepreneurial activity in recent
years; these firms endeavor to create an environment wherein creative employees can pursue
new ways of doing things and new product ideas within the context of the corporation. But
smaller firms can instill a commitment to intrapreneurship within its work force as well. In fact,
small businesses, which originate as entrepreneurial ventures, are often ideally suited to foster an
intrapreneurial environment, since their owners have first-hand knowledge of the opportunities
and perils that accompany new business initiatives. "For larger companies, intrapreneuring is a
way to recapture the spirit that put them on the road to success in the first place, " observed
Nation's Business. "For smaller companies, it can be a way of maintaining the entrepreneurial
drive that gave them birth."
Intrapreneurship practices have developed in response to the modern world's rapidly changing
marketplace. "While businesses of varying sizes have long had internal units for development of
new products, many found such arrangements were inadequate in today's business environment,
" contended Nation's Business. "Creative young people chafed under corporate bureaucracies and
frequently left to develop their ideas as entrepreneurs. Their former employers lost not only
highly promising talent, but also a chance for profitable new lines. Intrapreneuring in its current
form represents the determination of such employers to solve their particular brain drain
problem. They are doing so by creating the environmentand providing the incentivesfor
entrepreneurship within their existing business operations."
Internal corporate "incubators" are one innovative example of this trend. In these programs,
employees can use the company's resources (including their already established name and
reputation, as well as management experience, financial assistance, and infrastructure) to build
and promote their own new business ideas. These and similar arrangements enable companies to

stem the loss of ambitious and talented employees to entrepreneurial ventures. Entrepreneurialminded employees, meanwhile, "get the challengeand the profitsof creating their own
'companies' with little of the risk they would face on their own, " observed David Cuthill in Los
Angeles Business Journal.
Organizational Characteristics That Encourage Intrapreneurship
The single most important factor in establishing an "intrapreneur-friendly" organization is
making sure that your employees are placed in an innovative working environment. Rigid and
conservative organizational structures often have a stifling effect on intrapreneurial efforts.
Conservative firms are capable of operating at a high level of efficiency and profitability, but
they generally do not provide an environment that is conducive to intrapreneurial activity (and
organizations that do not encourage creativity and leadership often alienate talented employees).
But as Erik Rule and Donald Irwin stated in Journal of Business Strategy, companies that
establish a culture of innovation through: 1) formation of intrapreneurial teams and task forces;
2) recruitment of new staff with new ideas; 3) application of strategic plans that focus on
achieving innovation; and 4) establishment of internal research and development programs are
likely to see tangible results.
Other keys to instilling an intrepreneurial environment in your business include the following:
1. Support from ownership and top management. This support should not simply consist of
passive approval of innovative ways of thinking. Ideally, it should also take the form of
active support, such as can be seen in mentoring relationships. Indeed, the small business
owner's own entrepreneurial experiences can be valuable to his firm's intrapreneurial
employees if he makes himself available to them.
2. Recognition that the style of intrapreneurialism that is encouraged needs to be compatible
with business operations and the organization's overall culture.
3. Make sure that communication systems within the company are strong so that
intrapreneurs who have new ideas for products or processes can be heard.
4. Intelligent allocation of resources to pursue intrapreneurial ideas.
5. Reward intrapreneurs. All in all, intrapreneurs tend to be creative, dedicated, and talented
in a variety of areas. They are thus of significant value even to companies that do not
feature particularly innovative environments. Their importance is heightened, then, to
firms that do rely on intrapreneurial initiatives for growth. Since they are such important
resources, they should be rewarded accordingly (both in financial and emotional terms).
For while intrapreneurs may not want to go into business for themselves, they still have a
hunger to make use of their talents and a wish to be compensated for their contributions.
If your small business is unable or unwilling to provide sufficient rewards, then it should
be prepared to lose that intrapreneur to another organization that can meet his/her desires
for professional fulfillment.
6. Allow intrapreneurs to follow through. Intrapreneurs who think of a new approach or
process deserve to be allowed to maintain their involvement on the project, rather than
have it be handed off to some other person or task force. Ensuring that the individual
stays involved with the initiative makes sense for several important reasons. The
intrapreneur's creativity and emotional investment in the project can be tremendously

helpful in further developing the process or product for future use. Moreover, they
usually possess the most knowledge and understanding of the various issues under
consideration. Most importantly, however, the small business enterprise should make sure
that its talented and creative employees have continued input because not allowing them
to do so can have a profoundly morale-bruising impact.
Further Reading:
Carrier, Camille. "Intrapreneurship in Large Firms and SMEs: A Comparative Study."
International Small Business Journal. April-June 1994.
Carrier, Camille. "Intrapreneurship in Small Businesses: An Exploratory Study."
Entrepreneurship: Theory and Practice. Fall 1996.
Cutbill, David. "Incubators: The Blueprint for New Economy Companies." Los Angeles Business
Journal. March 27, 2000.
Huggins, Sheryl E. "Internal Moonlighting: Use Your Day Job to Branch Out on Your Own."
Black Enterprise. October 1997 "Intrapreneurship: A Welcome Trend in the Business World."
Nation's Business. June 1986.
Millner, Marlon. "Intrapreneurship: Techie Turns System He Built for Former Employer into a
Small Business." Washington Business Journal. May 1, 1998.
Oden, Howard W. Managing Corporate Culture, Innovation, and Intrapreneurship. Greenwood
Press, 1998.
Pinchot, Gifford, and Ron Pellman. Intrapreneuring in Action: A Handbook for Business
Innovation. Berrett-Koehler, 1999.
Pryor, Austin K., and E. Michael Shays. "Growing the Business with Intrapreneurs." Business
Quarterly. Spring 1993.
Rule, Erik G., and Donald W. Irwin. "Fostering Intrapreneurship: The New Competitive Edge."
Journal of Business Strategy. May-June 1988.
Shatzer, Lisa, and Linda Schwartz. "Managing Intrapreneurship." Management Decision. Annual
1991.
Examples
A classic case of intrapreneurs is that of the founders of Adobe, John Warnock and Charles Geschke.
They both were employees of Xerox. As employees of Xerox, they were frustrated because their new
product ideas were not encouraged. They quit Xerox in the early 1980s to begin their own business.
Currently, Adobe has an annual turnover of over $3 billion.
A lot of companies are known for their efforts towards nurturing their in-house talents to promote
innovation. The prominent among them is Skunk Works group at Lockheed Martin. This group formed

in 1943 to build P-80 fighter jets. Kelly Johnson was the director of the project, a person who gave
14 rules of intrapreneurship.
At 3M employees could spend their 15% time working on the projects they like for the betterment of
the company. On the initial success of the project, 3M even funds it for further development.
Genesis Grant is another 3M intrapreneurial program which finances projects that might not end up
getting funds through normal channels. Genesis Grant offers $85,000 to these innovators to carry
forward their projects.
Robbie Bach, J Allard and teams XBOX might not have been feasible without the Microsofts money
and infrastructure. The project required 100s of millions and quality talent to make the product.

Using a sample of 151 employees from three government organizations, we tested a model of corporate
entrepreneurship that is influenced by individual characteristics (represented by the five factor model of
personality), context (represented by the firm's memory and learning orientation). and process (represented by
the facets of the Corporate Entrepreneurship Assessment Instrument). Our results indicated that contextual and
process variables influenced corporate entrepreneurship while the individual characteristics did not. Moreover,
corporate entrepreneurship did mediate the relationship between these antecedents and job satisfaction,
affective commitment, and performance.
**********
Entrepreneurial activities and behaviors in larger, established organizations have been termed corporate
entrepreneurship. And, the diffusion and adoption of corporate entrepreneurship by individuals within these
corporate structures has positively affected organizations' performance. Kuratko, Ireland, and Hornsby (2001)
found that corporate entrepreneurship activities in a large firm resulted in diversified products and markets, as
well as being instrumental to producing "impressive financial results"(p. 69). Several quantitative studies have
further supported this claim, linking corporate entrepreneurship to increased growth and increased profitability
(Zahra & Covin, 1995; Zahra & Garvis, 2000). Moreover, others have found that corporate entrepreneurship is
positively linked to intangible outcomes, like knowledge, skill development, and job satisfaction (e.g., Adonisi,
2003; Ireland, Kuratko, & Covin, 2003).
Not surprisingly, the field of corporate entrepreneurship (CE) has developed rapidly since 1983; when Miller
published a cornerstone piece, which put forth CE instrumentation (1). This increase is largely because the area
holds such great promise for firms competing in an environment that is increasingly dynamic, complex, and
uncertain (Ireland et al., 2003). Accordingly, several have tried to isolate the organizational factors that
promote CE. By synthesizing the literature, Hornsby, Kuratko, and Zahra (2002) identified five key factors that
influence corporate entrepreneurship to include management support, work discretion and autonomy, rewards
and reinforcement, time availability, and organizational boundaries. From this, Hornsby et al. presented the
Corporate Entrepreneurship Assessment Instrument (CEAI)--a survey instrument designed to help managers
and leaders measure each of these factors. In essence, Ireland, Kuratko, and Morris (2006) argue that the CEAI
provides a sound basis for managers to effectively manage, facilitate and improve CE activities.

While the works addressed above have moved the field forward empirically, there remain vagaries surrounding
CE. This is typical of a field in the relatively early stages of development, and will likely be mitigated as
researchers conduct additional empirical examinations (Zahra, Jennings, & Kuratko, 1999). It is the general
goal of this work to provide such an examination by submitting and testing a more comprehensive individuallevel, theory-based model of CE. We do this by, first, empirically and independently testing the CEAI index
put forth by Hornsby et al. The factor structure they presented was robust in the original publication, but to our
knowledge the model's predictive validity has only been tested in a few settings (Adonisi, 2003; Wood, Holt,
Reed, & Hudgens, In press). Accordingly, we examine the extent to which the factors derived from the original
tests presented by Hornsby et al. predict CE. Second, by including context and individual personality variables,
we endeavor to put forth a more comprehensive individual-level model of CE. Finally, we examine possible
mediating effects of CE on desired individual outcomes. Our model is depicted in Figure 1.
[FIGURE 1 OMITTED]
Definitional Issues in Corporate Entrepreneurship
An important component in any study of CE is a review of definitional issues. While the field is beginning to
coalesce around a central understanding, theoretical ambiguities still exist. A hallmark of the field is its
boundary spanning nature; that is, CE inherently includes the individual, but is focused on directing
individuals' action toward enhancing firm performance. This is an attractive feature in field application, but
becomes problematic when attempting to define and measure the construct. For example, Dess, Ireland, Zahra,
Floyd, Janney, and Lane (2003) identify four types of CE: sustained regeneration, organizational rejuvenation,
strategic renewal, and domain redefinition. The breadth of these categories suggests that the concept of CE has
yet to be defined clearly.
In a general sense, Zahra (1993) does define CE as "... a process of organizational renewal that has two distinct
but related dimensions: innovation and venturing; and strategic renewal." Miller (1983) and several others
(Morris & Paul, 1987; Covin & Slevin, 1990; Dean, Meyer, & DeCastro, 1993) have shared this perspective by
specifying three components of CE: proactiveness, innovation, and risk taking. Similarly, Lumpkin and Dess
(1996) identified autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness as a set
of behaviors that reflect CE. Kuratko, Ireland, Covin, and Hornsby (2005) suggest that corporate
entrepreneurship represents a set of internal behaviors "requiring organizational sanctions and resource
commitments for the purpose of developing different types of value-creating innovations" (p. 700). Finally,
Ireland, Kuratko, and Morris (2006) hold that "Corporate entrepreneurship is a process through which
individuals in an established firm pursue entrepreneurial opportunities to innovate without regard to the level
and nature of currently available resources" (p. 10).
Regardless of the specific behaviors, corporate entrepreneurship involves enabling and promoting workers'
abilities to innovatively create value within the organization (Covin & Slevin, 1989; Ireland et al., 2003;
Kuratko et al., 2001). And, though there is considerable disagreement regarding the specific behaviors that
represent corporate entrepreneurship, there has been some convergence--especially in empirical work--around
the Covin and Slevin (1989) conceptualization of innovativeness, proactiveness, and risk taking among the
members within a larger organizational context (Zahra et al., 1999). Here we adopt Covin and Slevin's (1989)
conceptualization and measurement of CE.
Individual-level Model of Corporate Entrepreneurship

Figure 1 presents the integrated model of corporate entrepreneurship that guided this research effort and
summarizes the constructs that were explored. While there were several individual, context, and process
variables that could be investigated, the corporate entrepreneurship literature suggested a subset of variables
that would be appropriate as a starting point for this exploratory investigation. Individual characteristics
consisted of the facets of the five-factor model of personality, including extraversion, agreeableness, openness,
conscientiousness, and neuroticism (Costa & McCrae, 1992; Zhao & Siebert, 2006). Contextual variables were
memory and learning orientation (Hult, Snow, & Kandemir, 2003). Process variables were those identified by
Hornsby et al. (2002) and included management support, work discretion, rewards and reinforcement, and time
availability. It should be noted that these variables were selected for both theoretical and practical reasons.
First, these variables were included because there appeared to be some empirical relationship evident between
a particular variable and entrepreneurship. For more practical reasons, the variables were selected because
valid and reliable measures were available. We examine each of these in more detail in the subsequent sections.
Individual Characteristics
Even though research on individual antecedents of individual entrepreneurship has been largely inconclusive,
there remains an interest in attempting to uncover such constructs (Miner &, 2004; Stewart & Roth, 2001).
Zhao and Siebert (2006) accumulated results across 23 studies, finding significant differences between
entrepreneurs and managers on four personality dimensions. Intuition and anecdotal evidence lead us to
suspect that, in an organizational setting, individual characteristics should have some impact on each person's
propensity to act entrepreneurially as well. It is important to note that, though we do view CE as an individual
construct, we do not view it as simply an extension of individual entrepreneurship.
Consistent with Zhao and Siebert (2006), we measured individual characteristics using the five-factor model of
personality. As noted, this is a commonly accepted taxonomy of personality and is often termed the Big Five
(Costa & McCrae, 1992). The five-factor model defines personality as broad factors that include extraversion,
agreeableness, openness, conscientiousness, and neuroticism (2). In summary, extraversion represents one's
tendency to be sociable, assertive, and active. Agreeableness represents one's tendency to be trusting,
compliant, and altruistic. Openness represents one's tendency to be imaginative, unconventional, and inventive.
Conscientiousness represents one's tendency to be thorough, confident, and dependable. Finally, neuroticism
represents one's tendency to be anxious, tense, and insecure. These specific traits are appropriate for testing the
extent to which individual characteristics influence CE because they have been linked to a number of
meaningful behaviors in organizational settings, including job performance (e.g., Hofmann & Jones, 2005),
leadership (e.g., Judge, Bono, Ilies, & Gerhardt, 2002), and creativity (e.g., Baer & Oldham, 2006). Based on
this, we propose:
Corporate entrepreneurship

Corporations are a vital part of an economy. So are foundations, government, and faith based
initiatives. In corporations employees are starving for a new direction to create a new economy
and adapt. Corporations are largely responsible for more business transparency because of the
push for information technology (IT) and access to relevant information. Look at what
information can be gathered from a Google search and now we can go directly to the consumer
via Twitter and most importantly made our voices heard to produce positive change.
If you're in a corporation trying to catch the next trend, then see what you think of this approach.
Instill corporate entrepreneurship by:

1. Find Your Entrepreneurial Spirit

Answer the following questions:
Have you created anything new, improved a service or process to get work and get it done better?
Are your employees excited like kids or dragging in with a bewildered look? Are you proactive
in your industry or reactive? Do your employees even know what to do with an idea and how it
flows through your organization? Are you finding the right partnerships to serve the marketplace
in a unique and better way? Are you creating new relationships and do you really understand
how to grow an idea and what it takes to germinate?
2. Maintain a Winning Mental Mindset
Employees need to know and believe what they are doing really makes a positive difference.
They are more interested in having serious fun at work hundreds of days a year versus the weeks
of vacation they receive. Work on instilling the mental motivation skills so your employees can
be proud of the work they do to compete in a capitalistic marketplace. Put winning back into the
workplace culture. More successes increases confidence and builds a foundation for mental
motivation skills through confidence and acts as a resource to grab from to create more
successes. Increasing your employees' mental motivation skills to learn at another new best level
is the fastest way for performance improvement to grow, profit, and evolve.
3. Use Leadership Teamwork
The top down structure of leadership has been diminishing more and more and this will continue
because of the will of the people and technology. Sure, for every decision there is a decision
maker or group of decision makers. As a decision maker or non-decision maker are you involved
in facilitated sessions or retreats to help decipher what your team really wants, prioritize, and
produce goals and metrics? My research indicates that the majority of employees want to be on a
team. However, the dynamics of a team are missing because they are not empowered to input for
various reasons. Therefore, they feel isolated and this disrupts their mindset by putting their
thinking in a rut. Sure, they can be fired but isn't the purpose of a corporation to develop and
grow each employee as an individual with unique talents and skills as well as a teammate. You'll
be surprised that instead of handling moral and attitude issues they will be forcing you to look at
ways for you as a leader to grow, distribute, and incentize them to make your job easier and
corporation more productive and profitable. Empowerment is not a buzzword. It is real and if
you are willing to garner its creative force it will create the excitement you are looking for as a
leader, boss, and employee.
Your clients will see the difference in your work and offerings. Spruce up your entrepreneurial
spirit, winning mental mindset, and leadership teamwork on a regular basis. It's not a one shot
deal. You'll have more serious fun. It just takes investment of work, time, and money. That's real
good because you receive a return on investment. It will make the hundreds of days at work just
as exciting as those vacation days unless, of course, you're going on an all expenses paid trip to
Hawaii.

Disruptive technologies

The Innovator's Dilemma

In his book, The Innovator's Dilemma [3], Professor Clayton Christensen of Harvard Business
School describes a theory about how large, outstanding firms can fail "by doing everything
right." The Innovator's Dilemma, according to Christensen, describes companies whose
successes and capabilities can actually become obstacles in the face of changing markets and
technologies.
Christensen describes two types of technologies: sustaining technologies and disruptive
technologies. Sustaining technologies are technologies that improve product performance. These
are technologies that most large companies are familiar with; technologies that involve
improving a product that has an established role in the market. Most large companies are adept
at turning sustaining technology challenges into achievements. Christensen claims that large
companies have problems dealing with disruptive technologies. Disruptive technologies are
"innovations that result in worse product performance, at least in the near term." They are
generally "cheaper, simpler, smaller, and, frequently, more convenient to use." Disruptive
technologies occur less frequently, but when they do, they can cause the failure of highly
successful companies who are only prepared for sustaining technologies.

Disruptive vs. Sustaining Technologies

As the above graph shows, disruptive technologies cause problems because they do not initially
satisfy the demands of even the high end of the market. Because of that, large companies choose
to overlook disruptive technologies until they become more attractive profit-wise. Disruptive
technologies, however, eventually surpass sustaining technologies in satisfying market demand
with lower costs. When this happens, large companies who did not invest in the disruptive
technology sooner are left behind. This, according to Christensen, is the "Innovator's Dilemma."

Large companies have certain barriers to innovation which make it difficult to invest in
disruptive technologies early on. Being industry veterans means that they have set ways in
approaching new technologies. Baggage from precedents (such as equipment, training,
procedures) hinder a quick response to disruptive technologies. Large companies also have an
established customer base whom they must be accountable to. These customers often ask for
better versions of current products rather than completely new technologies. Customers are a
substantial barrier to innovation. Finally, companies make decisions according to their place in
the value network--or, to put it simply, companies make decisions according to where they are in
the market. The chart below ties elements of the Innovator's Dilemma to Teradyne's Aurora
Story.

Solving the Innovator's Dilemma

The next logical question in light of the rather grim picture presented by the Innovators
Dilemma is can a firm hope to succeed? The answer lies in firms being able to identify, develop
and successfully market emerging, potentially disruptive technologies before they overtake the
traditional sustaining technology. However, as described by the Innovators Dilemma, the value
networks and organization structures of these firms make it an arduous process to complete.
Identification of these disruptive technologies can be a daunting mission because, as Christensen
states, markets that do not exist cannot be analyzed." One cannot predict what the market or
probability of success will be for these emerging technologies. Therefore, managers need to
engage in discovery-driven planning, in which they operate on the assumption that new markets
can not be analyzed and instead rely on learning by doing and real-time adjustment of strategy
and planning. The key obstacle to success with this approach is the stigma of failure in many
firms. In trying to solve the Innovators Dilemma, managers should leave room for failure in
their planning, and be willing to invest in what may be a potentially disruptive technology. This
requires that the firm itself be willing to leave room from failure, and should failure occur, wrap
the lessons from the experience back into the firm as preparation for the next opportunity.

Even after correctly identifying potentially disruptive technologies, firms still must circumvent
its hierarchy and bureaucracy that can stifle the free pursuit of creative ideas. Christensen
suggests that firms need to provide experimental groups within the company a freer rein. With
a few exceptions, the only instances in which mainstream firms have successfully established a
timely position in a disruptive technology were those in which the firms managers set up an
autonomous organization charged with building a new and independent business around the
disruptive technology.1 This autonomous organization will then be able to choose the customers
it answers to, choose how much profit it needs to make, and how to run its business.
Furthermore, the firm must quickly develop the new technology to compete with smaller, more
mobile firms while maintaining its core business. Finally, even if engineers successfully develop
a working product, they must find an appropriate market to target, a difficult task given the
unpredictable nature of markets. In short, there are many variables involved in solving the
Innovators Dilemma with few lifelines along the way.

"Discovering markets for emerging technologies inherently involves failure, and most individual
decision makers find it very difficult to risk backing a project that might fail because the market
is not there."
-Clayton Christensen, The Innovator's Dilemma.
Human resource systems can significantly affect disruptive technology. These effects occur through
identifying disruptive technology as an organizational goal, encouraging the development and
implementation of disruptive technology, rewarding employees for actions related to disruptive technology,
and providing an organizational climate that facilitates development of disruptive technology. Both the
intended and unintended effects of specific human resource practices must be considered. Also, firms
must be prepared to accept the development of unsuccessful new technologies if they want to encourage
the development of new technologies, some of which may become disruptive technologies.
Introduction
Christensen (1997) describes an innovator's dilemma, which concerns the adoption of technologies so
new and dramatically different they are characterized as disruptive technologies. These disruptive
technologies change the nature of their industry and the viability of firms not using the disruptive
technologies. Although these technologies may result in worse product performance initially, they are
associated with later successes due to advantages such as lower cost, simpler operation, smaller size,
and greater convenience. Also, this success results in the eventual obsolescence of other previously
dominant technologies. Competing firms may eventually fail without the relevant disruptive technology,

even when such firms have previously dominated their industry. Examples of such disruptive technologies
include those seen when the production of personal desktop computers was introduced into the computer
industry, which was dominated by firms focusing on mainframe computers; the transistor replaced
vacuum tubes and transformed the electronics industry; and production of small off-road motorcycles
successfully challenged the market dominated by powerful over-the-road motorcycles (Christensen).