A manager in a company who encourages innovative product, modified development and latest marketing skills are known as Intrapreneurs. He acts like an entrepreneur and also works in a large organization.
To know further about this managing duty, let us quickly explore this.
Intrapreneurship
An intrapreneur is an employee who is responsible for developing an innovative idea or pitching a fruitful project within a company. The intrapreneur may not come with the risks or reap the rewards of an entrepreneur but the intrapreneur has access to the company’s resources and capabilities of an established setup. Intrapreneurs are the employees of a company who are designated to work on a special idea or an important project. With the given time and freedom, they are expected to develop the project as an entrepreneur would.
However, they do not work singly, intrapreneurs have the resources and capabilities of the firm at their need.
Entrepreneur Meaning
An individual who creates a brand new business, bearing most of the risks and also enjoying most of the rewards is termed as an “Entrepreneur”. The entrepreneur is generally seen as an innovator who is the source of new ideas, goods and services and business procedures. Entrepreneurs play a leading role in any economy. With the use of skills and initiative, they anticipate the needs and bring new ideas to the market and the society at large. Entrepreneurs who are successful in taking on the risks of a start-up are rewarded not only with profits but also with fame and assured continued growth opportunities at their hands.
Entrepreneurship is one of the resources economists categorized as essential to production, the other three being the land, natural resources and labour/capital. An entrepreneur combines the first three of these to facilitate their working in manufacturing goods or provide services.
Entrepreneur and Intrapreneur
Intrapreneurs and entrepreneurs have altogether different objectives. An entrepreneur visualises in creating a company from the scratch or zero. While an intrapreneur has the later vision for an already established company. Their vision may involve remarkable changes according to the company traditions, processes or products. The intrapreneur typically has direct applicability to his skills and experience to serve in his job.
For intrapreneurs, it is to work within an existing framework which offers many advantages to them. The main benefit is that the organization provides them with the resources they need which include human resources, a legal team and financial department. Also, intrapreneurship enables the professionals to use the funding from their organization. On the other hand, Entrepreneurship may offer more freedom as entrepreneurs can determine the work culture, schedule and even the basic dress code for their business.
Types of Intrapreneurship
There are two types of intrapreneurship:
1. Added Value
The first type of intrapreneurship is directly linked to the core activity of the organization. Intrapreneurial ideas will add value to the company, thus they foster innovation and pave the way for growth. They are appointed to add value to compliment the parent company in some way. The intrapreneurs carefully analyse what society needs and develop their project according to that.
2. Spin-Off
The parent company may choose the project to not create a new company, but rather a different entity within the company’s ambit This varies greatly from one intrapreneurial project to another. At times, simply sharing of resources lead to a successful project.
Social Intrapreneurship
In the era where business meets sustainable development along with social responsibilities, a new kind of manager emerges as the social intrapreneur. A social intrapreneur is also an entrepreneurial employee who develops a profitable new product or service or business model which creates value for the society at large.
Social intrapreneurs help employers meet commitments and they create value for customers and the communities. Some companies see social intrapreneurs as one way to stay competitive from others in the market.
Social intrapreneurs start initiatives within the existing institutions:
Corporate, education, public or non-profit organizations create social or environmental benefit while moving the institution’s mission and goals forward. They use these existing infrastructures and organisational resources as levers to deliver a social value on a large scale.
Intrapreneurship is an important concept, though not recently, Steve argues that every company should formulate their HR team to hire such managers which provide benefit to the company in the long run.
FAQs on Intrapreneurship: Meaning and Importance in Business
1. What is meant by intrapreneurship in the context of business studies?
Intrapreneurship refers to a system where employees within a large organisation are encouraged to act like entrepreneurs. They are empowered to take initiative, be innovative, and develop new products, services, or processes for the company. Essentially, it is entrepreneurship within an existing business, leveraging the company's resources and brand to drive growth from the inside.
2. Why is intrapreneurship considered important for modern businesses?
Intrapreneurship is crucial for several reasons as per the CBSE curriculum. Its primary importance lies in:
- Fostering Innovation: It allows companies to discover new ideas and technologies without external acquisitions, leading to a sustainable competitive advantage.
- Driving Growth: New ventures and products developed internally can open up new revenue streams.
- Increasing Productivity: Empowered and motivated employees are often more productive and engaged in their work.
- Retaining Talent: It provides a platform for creative and ambitious employees to grow, reducing the risk of them leaving to start their own ventures.
3. How is an intrapreneur different from an entrepreneur?
While both share an innovative and proactive mindset, the key difference lies in the context they operate in. An entrepreneur starts their own new venture, bears the full financial risk, and operates independently. In contrast, an intrapreneur works within an established company, uses the company's resources, and the financial risk is borne by the organisation, not the individual.
4. What are the essential qualities of a successful intrapreneur?
A successful intrapreneur typically exhibits a unique blend of personal and professional traits, including:
- Visionary and Proactive: They identify opportunities that others might miss and take the initiative to act on them.
- Problem-Solving Skills: They are adept at navigating corporate structures and finding solutions to overcome obstacles.
- Risk-Taker: While the company bears the financial risk, intrapreneurs risk their professional reputation and time on projects that might fail.
- Strong Leadership: They must be able to inspire and lead a team within the company to bring their vision to life.
5. Can you provide some real-world examples of intrapreneurship?
Several famous products are the result of intrapreneurship. For example, the Sony PlayStation was developed by Ken Kutaragi, a junior employee who championed the idea within Sony. Another classic example is the Post-it Note from 3M, which was created by an employee, Art Fry, using a co-worker's invention of a low-tack adhesive, driven by the company's '15% Time' policy that encouraged innovation.
6. How can a large company effectively promote a culture of intrapreneurship?
To foster intrapreneurship, a company must create a supportive environment. Key strategies include: establishing a clear vision that encourages innovation, allocating dedicated resources (time and money) for new projects, creating a culture where failure is treated as a learning opportunity, and implementing reward systems that recognise and incentivise intrapreneurial success. This helps transform the organisational mindset from purely operational to innovative.
7. What are the potential challenges or risks for an employee acting as an intrapreneur?
While the company bears financial risk, an intrapreneur faces significant professional challenges. These include potential resistance from management who may be risk-averse, difficulty in securing resources within a rigid corporate budget, and the risk of career stagnation if their innovative project fails. They often have to navigate corporate politics and convince stakeholders, which can be a major hurdle.
