Business & Economics

Intrapreneurship

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Intrapreneurship
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  Intrapreneurship 1 st  lecture  –  9/09 Entrepreneurship : acts of organizational creation, renewal, or innovation that occur within or outside an existing organization Entrepreneurs  are individuals or groups of individuals, acting independently or as part of a corporate system, who create new organizations or instigate renewal or innovation within an existing organization    New combinations that previously didn’t exist, creating disequilibrium (creative destruction)  The presence of an innovation is viewed as a sufficient condition for entrepreneurship but not a necessary one, because organizational creation or renewal can occur in the absence of innovation Intrapreneurs  are those who take hands-on responsibility for creating innovation of any kind within an organization. They may be the creators or inventors but are always the ones who figure out how to turn an idea into a profitable reality Corporate entrepreneurship  is the process whereby an individual or a group of individuals, in association with an existing organization, create a new organization or instigate renewal or innovation within that organization -> applying entrepreneurship within an established firm. Independent Entrepreneurship - alone outside an organisation Corporate Entrepreneurship - within an organisation A) The focus with intrapreneurship is on (behavioural) outcomes in the form of venture or strategic renewal B) Innovation, creativity, or proactivity can be easily expressed as part of daily work routine The Three elements of CE: Venturing : Creating new businesses inside or outside the organizational domain Strategic renewal : Significant changes to an organization’s business or corporate level strategy or structure Innovation : The introduction of an srcinal invention or idea into a commercially usable form that is new to the marketplace and has the potential to transform the competitive environment as well as the organization Actors: - Top Management  (Holistic understanding of firm strategies)   Role: Strategy making, resource allocation, developing conditions for CE Structural conditions: High power, High autonomy, Few actors -Middle Managemen t (Fragmented understanding of firm strategies) Role: 1. Facilitators of information flows that reconcile top-level perspectives and lower-level implementation issues 2. Experimenting, adjusting, and conforming to the subprocesses that are developed at upper levels. Structural conditions: Medium power, Medium autonomy, Limited number of actors -Operational management/lower-level employees  (Fragmented understanding of firm strategies) Role: 1. Executing the core tasks of the organizations. 2. Supporting management or the execution of core tasks. 3. R&D. Structural conditions: Low power, Often lower autonomy, Large number of actors  Middle-level managers entrepreneurial behaviour: -   Endorse, refine and shepherd entrepreneurial opportunities -   Identify, acquire and deploy resources needed to pursue entrepreneurial opportunities The role of middle-level managers focuses on effectively communicating information between the firm's two internal managerial stakeholders (top-level managers and operating-level managers). Their central organizational position allows them to gather and absorb innovative ideas from inside and outside the firm. 2 nd  lecture  –  16/09 What makes a firm entrepreneurial? 5 dimensions used to describe key entrepreneurial processes about a firm’s entrepreneurial orientation  (EO). They may be independent each other but must occur combined. EO refers to the process, practices and decision-making activities that lead to new-entry  -> essential act of entrepreneurship (new entry is the outcome) Entrepreneurship : New entry (what entrepreneurship consists of)   Entrepreneurial Orientation : How is the new entry undertaken   -   Autonomy : the independent action of an individual or a group of individuals in bringing forth an idea or a vision and carrying through to completion -> changes in horizontal structure to foster it -   Innovativeness : firm’s tendency to engage in and support new ideas, novelty, experimentation and creative processes that may result in products, services or technological processes. (creative destr) -   Risk-taking : entrepreneurs look on what they can afford to lose. Firms with an entrepreneurial orientation are often typified by risk-taking behaviour -   Proactiveness : acting in anticipation of future problems, need or changes -   Competitive   aggressiveness : firm’s propensity to directly and intensively challenge its competitors to enter or improve their position and to outperform rivals in the marketplace. The Bottom-up process (small introduction) Employees can undertake autonomous strategic action (intrapreneurs) Autonomous strategic action creates strategic diversity, leading to diversification through new entry and strategic flexibility. Strategy-making as a social process -   Strategy practitioners interact and make social coalitions; they are influenced by different outside events and influences; -   Strategy practitioners influence the structural context of an organization but are, at the same time, influenced by this context (= mutual constitution between structure and agency) Strategy practitioners have shared concepts of a firms’ current and past successes an d failures.    Induced strategic behaviour fits this current strategic concept (top-down process)    Autonomous strategic behaviour falls outside the current concept of strategy (bottom-up process); The latter often srcinates from outside (but managed inside) and generates new combinations; it is the basis for radical innovation. It involves initiatives of individuals or small groups that are outside the scope of the corporate strategy at the time they come about. Autonomous strategic initiatives typically involve new  combinations of competencies (invention) that are not currently recognized as distinctive or centrally important to the firm. They often come about because a company's competencies are fungible and lead to new businesses that are different from the company's core business. Autonomous strategic initiatives may be complements or substitutes from the perspective of the core business. Bottom-up process: middle managers question the current strategy, providing top management the opportunity to rationalise successful ASB retroactively Downsides of ASB: It disrupts existing (operational) processes and existing concepts of corporate strategy, it increases risk, It increases diversification and, thereby, organizational complexity 5 th  Lecture  –  30/09  Intrapreneurs  closely resemble entrepreneurs; they are the employees who turn ideas into realities inside an organisation.    The characteristics of an intrapreneur •   Although experience is necessary, long tenure is associated with a passive approach to decision-making and resistance to change •   Educational level is in general positively associated with intrapreneurship due to higher degree of cognitive complexity •   Although some studies argue that younger employees / managers are more likely to take risks and challenge the status quo, empirical evidence is lacking. Personality The concept of personality includes stable motives, attitudes, and the direction of individuals’ experiences and actions. The most used approach to personality is OCEAN big five •   O penness to new experience: being curious, creative, non-traditional, and adaptable to novel ideas. •   C onscientiousness: work motivation, achievement motivation, goal orientation, self-control, organizing, and planning behavior. •   E xtraversion: associated with energy, dominance, assertiveness, and ambition. •   A greeableness: It reflects individual differences in general concern for social harmony. •   N euroticism / emotional stability: tendency to experience negative emotions, such as anger, anxiety, or depression.    The behaviours of an intrapreneurs Intrapreneurial behavior / employee intrapreneurship It refers to an individual employee's agentic and anticipatory behaviours aimed at creating new businesses for the organization (i.e., venture behavior) and enhancing an organization's ability to react to internal and external advancements (i.e., strategic renewal behaviour). Agentic and anticipatory: •   Proactive: Intrapreneurship is often self-initiated and is not the (direct) result of management (May occur without management knowing it) •   Future aimed: behavior that has a mid to long term focus, and not aimed at direct gratification / rewards. New venture creation and strategic renewal:    Strategic: the aim of the behaviour is to add value to the organisation and not directly to his or her own job performance    Challenges the status quo: successfully creating a new venture or strategically renew the organisation coincides with departing from the customary.  There are three kinds of proactive behaviour: 1.   Proactive work behaviour 2.   Proactive strategic behaviour 3.   Proactive person-environment fit behaviour    Employee intrapreneurship is a specific form of proactive strategic behaviour, just like strategic scanning and issue selling. The entrepreneurial orientation:    Proactivity: reflects the self-starting nature of intrapreneur    Risk-taking: reflects challenging the status quo and the possible negative consequences    Innovativeness: reflects the novel outcomes often related to intrapreneurship    The motivation of intrapreneurs Theories that help us explain “why”: theory of planned behaviour (TPB) and proactive motivation theory (PMT). Theory of planned behaviour    –  attitude, subjective norm and perceived behavioural control affect intention, which in turns affect behaviour; there is also a direct link between perceived behavioural control and behaviour. Attitude: refers to one’s evaluations of, or attitu de toward behaviour, and it is related to one’s outcome expectancy; Subjective norm: refers to perceptions on whether one is expected by their peers to perform the recommended behaviour; Perceived behavioural control refers to the conviction that one can successfully execute a task if it has control over that task. (one can successfully execute the behaviour required to produce the outcome) Strengths : it gives some point to tackle if one wants to change the individual behaviour; if you want to intervene it is easy to see where you could step in and try to make changes. It is very specific and easy to implement. Limitations : searching for causes it is harder, meaning what drive the intentions. It is a very simple model so it misses some important variables which instead should be considered. There should be more feedback-loop in it; in fact, behaviour may affect attitudes for example, it is not unidirectional. It is limited to the effect of intention on behaviour.
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