Intrapreneurship and Organizational Intrapreneurship and Organizational P f Th ti l P tiP f Th ti l P tiPerformance: Theoretical Perspectives, Performance: Theoretical Perspectives,

Approaches and OutcomesApproaches and Outcomes

ByBy

Samuel Samuel ObinoObino MokayaMokayaBA PGD Ph D (Student)BA PGD Ph D (Student)BA, PGD, Ph.D. (Student)BA, PGD, Ph.D. (Student)

o’mokaya@rpe.jkuat.ac.keo’mokaya@rpe.jkuat.ac.ke, skomokaya@yahoo.com, skomokaya@yahoo.com

JomoJomo Kenyatta University of Agriculture & Technology, Nairobi, Kenyatta University of Agriculture & Technology, Nairobi, KKKenyaKenya

PaperPaper Presented at the 5Presented at the 5thth InternationalInternational MoiMoi University ConferenceUniversity Conference

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Paper Paper Presented at the 5Presented at the 5 International International MoiMoi University Conference University Conference on on “Research and Knowledge Dissemination towards building of “Research and Knowledge Dissemination towards building of

Healthy and SocioHealthy and Socio--economically Stable Nations”,economically Stable Nations”, 4th to 8th August 4th to 8th August 2009,2009, EldoretEldoret, Kenya, Kenya

BackgroundBackgroundIntrapreneurship (corporate entrepreneurship) has been of Intrapreneurship (corporate entrepreneurship) has been of interest to scholars & practitioners due to its beneficial effect oninterest to scholars & practitioners due to its beneficial effect oninterest to scholars & practitioners due to its beneficial effect on interest to scholars & practitioners due to its beneficial effect on firm performance and competitiveness. firm performance and competitiveness. It is a concept that is fast gaining importance & is the panacea of It is a concept that is fast gaining importance & is the panacea of the future for corporate organizations operating in a dynamic &the future for corporate organizations operating in a dynamic &the future for corporate organizations operating in a dynamic & the future for corporate organizations operating in a dynamic & competitive environment.competitive environment.The quest for competitive advantage & improved performance The quest for competitive advantage & improved performance can no longer be found simply in lower costs or higher quality orcan no longer be found simply in lower costs or higher quality orcan no longer be found simply in lower costs, or higher quality, or can no longer be found simply in lower costs, or higher quality, or better services but lies in adaptability, flexibility, speed, better services but lies in adaptability, flexibility, speed, aggressiveness & innovativeness, all aspects of entrepreneurship. aggressiveness & innovativeness, all aspects of entrepreneurship. This is line with Peter Drucker’s old saying that;This is line with Peter Drucker’s old saying that;This is line with Peter Drucker s old saying that;This is line with Peter Drucker s old saying that;

the only constant thing in business is change seems true & the the only constant thing in business is change seems true & the fastfast--changing business environments, changing business changing business environments, changing business structures &d rules of competition are becoming part of thestructures &d rules of competition are becoming part of thestructures &d rules of competition are becoming part of the structures &d rules of competition are becoming part of the ordinary life of most companies, as these are prerequisites for ordinary life of most companies, as these are prerequisites for staying in business (Drucker, 1958).staying in business (Drucker, 1958).

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The increasing demand for faster product development, more features in The increasing demand for faster product development, more features in smaller products, higher and uniform quality, stability and lower prices, smaller products, higher and uniform quality, stability and lower prices, demands for an entrepreneurial & flexible company with the right demands for an entrepreneurial & flexible company with the right environment & systems that stimulate entrepreneurship it its employeesenvironment & systems that stimulate entrepreneurship it its employeesenvironment & systems that stimulate entrepreneurship it its employees environment & systems that stimulate entrepreneurship it its employees (Christensen, 2004). (Christensen, 2004). Intrapreneurship works in a supportive environment, where employees have Intrapreneurship works in a supportive environment, where employees have the opportunity to work independently, are given tremendous latitude & arethe opportunity to work independently, are given tremendous latitude & arethe opportunity to work independently, are given tremendous latitude & are the opportunity to work independently, are given tremendous latitude & are expected to generate & implement new ideas to enhance firm performance.expected to generate & implement new ideas to enhance firm performance.This requires adaptability, flexibility, speed, aggressiveness and innovativeness, This requires adaptability, flexibility, speed, aggressiveness and innovativeness, all boiling down to one word, all boiling down to one word, intrapreneurship.intrapreneurship.In modern business setup, corporate managers are unanimous in In modern business setup, corporate managers are unanimous in their desire to make their employees & organizations more their desire to make their employees & organizations more entrepreneurial (Herbert et al, 1999), as high intrapreneurial entrepreneurial (Herbert et al, 1999), as high intrapreneurial p ( , ), g pp ( , ), g pintensity results in better performance (growth & profitability).intensity results in better performance (growth & profitability).Results include new products & services, improvement of old Results include new products & services, improvement of old ones; new & improved processes & systems which improveones; new & improved processes & systems which improveones; new & improved processes & systems which improve ones; new & improved processes & systems which improve efficiencies (Pearce & Carland, 2001). . efficiencies (Pearce & Carland, 2001). . Therefore identifying & fostering intrapreneurship within a firm Therefore identifying & fostering intrapreneurship within a firm i j tifi d i l b th i t ill d li j tifi d i l b th i t ill d l

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is justified precisely because the intrapreneur will develop new is justified precisely because the intrapreneur will develop new products and ideas, which will ultimately improve the firm’s products and ideas, which will ultimately improve the firm’s performance.performance.

PurposePurposeThe purpose of the analysis is to explore the meaning & role of The purpose of the analysis is to explore the meaning & role of intrapreneurship in organizational performance. intrapreneurship in organizational performance. To survive and thrive in today's dynamic business environment, To survive and thrive in today's dynamic business environment, there is overall desire to improve efficiency & productivitythere is overall desire to improve efficiency & productivitythere is overall desire to improve efficiency & productivity there is overall desire to improve efficiency & productivity (Kuratko & Hodgets, 1998) & to achieve this; firms need to create (Kuratko & Hodgets, 1998) & to achieve this; firms need to create & continually renew a spirit of disciplined intrapreneurship as the & continually renew a spirit of disciplined intrapreneurship as the source for continous generation of disruptive innovationssource for continous generation of disruptive innovationssource for continous generation of disruptive innovations source for continous generation of disruptive innovations (products & services) that alter the rules of the competitive (products & services) that alter the rules of the competitive landscape in their favour (Cole, 1959). landscape in their favour (Cole, 1959). There is adequate empirical evidence that intrapreneurship isThere is adequate empirical evidence that intrapreneurship isThere is adequate empirical evidence that intrapreneurship is There is adequate empirical evidence that intrapreneurship is closely linked to improved enterprise performance (Drejer et al, closely linked to improved enterprise performance (Drejer et al, 2004; Lindsey, 2001; Herbert & Brazeal, 1999; Holt, 1992; Covin 2004; Lindsey, 2001; Herbert & Brazeal, 1999; Holt, 1992; Covin & Slevin 1991; Pinchot 1985 and Schumpeter 1934)& Slevin 1991; Pinchot 1985 and Schumpeter 1934)& Slevin, 1991; Pinchot 1985 and Schumpeter, 1934). & Slevin, 1991; Pinchot 1985 and Schumpeter, 1934). Ayudurai & Sohail (2005) contend that if intrapreneurship can be Ayudurai & Sohail (2005) contend that if intrapreneurship can be used as a competitive tool, then its development & significance used as a competitive tool, then its development & significance

b l d & hi hli h db l d & hi hli h d44

must be explored & highlighted.must be explored & highlighted.

Results and AnalysisResults and AnalysisThe ConceptThe Concept

Intrapreneurship, (corporate entrepreneurship) has been used in Intrapreneurship, (corporate entrepreneurship) has been used in many organizations as a strategy for organizational renewal & many organizations as a strategy for organizational renewal & improved performance. improved performance.

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p pp pIt is a process by which individuals inside organizations pursue It is a process by which individuals inside organizations pursue opportunities without regard to resources they currently control opportunities without regard to resources they currently control (Stevenson & Jarillo, 1990). (Stevenson & Jarillo, 1990). When effectively promoted and channeled, intrapreneurship When effectively promoted and channeled, intrapreneurship fosters innovation & helps employees with good ideas to better fosters innovation & helps employees with good ideas to better channel the resources to develop more successful products.channel the resources to develop more successful products.In a corporate setIn a corporate set--up, employees who engage in entrepreneurship up, employees who engage in entrepreneurship are called intrapreneurs, defined by Pinchot (1985) as;are called intrapreneurs, defined by Pinchot (1985) as;

Persons who take the handsPersons who take the hands--on responsibility for creating innovation of any on responsibility for creating innovation of any ki d ithi i tiki d ithi i tikind within an organization. kind within an organization. ‘Corporate commandos’, ‘Corporate commandos’, courageous souls who form underground teams courageous souls who form underground teams and networks that routinely bootleg the company resources. and networks that routinely bootleg the company resources.

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Intrapreneurs make things happen, creating new commercial Intrapreneurs make things happen, creating new commercial successes by violating policy, ignoring chain of command, defying successes by violating policy, ignoring chain of command, defying established procedures & coming up with new great products.established procedures & coming up with new great products.Intrapreneurship embraces innovations as a key ingredient: Intrapreneurship embraces innovations as a key ingredient:

product reproduct re--formulations, process reformulations, process re--engineering or costengineering or cost--cutting, seeking untapped markets, new applications of cutting, seeking untapped markets, new applications of existing products, new ventures, all not being normal efforts of existing products, new ventures, all not being normal efforts of the firm. the firm.

Miller and Friesen (1982) argue entrepreneurial firms are Miller and Friesen (1982) argue entrepreneurial firms are h t i d b th i t illi t i t hil t kih t i d b th i t illi t i t hil t kicharacterized by their strong willingness to innovate while taking characterized by their strong willingness to innovate while taking

risks in the process.risks in the process.In the Schumpeterian innovation concept, intrapreneurship In the Schumpeterian innovation concept, intrapreneurship i l th it f ti l ti t h lli l th it f ti l ti t h llinvolves the pursuit of creative or new solutions to challenges involves the pursuit of creative or new solutions to challenges confronting the firm;confronting the firm;

development or enhancement of old & new products and development or enhancement of old & new products and services markets and administrative techniques &services markets and administrative techniques &services, markets and administrative techniques & services, markets and administrative techniques & technologies for performing organizational functions. technologies for performing organizational functions. changes in strategy, organizational structures and systems & changes in strategy, organizational structures and systems & methods of dealing with competitors are all innovations in themethods of dealing with competitors are all innovations in the

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methods of dealing with competitors are all innovations in the methods of dealing with competitors are all innovations in the broadest sense of the term (Schumpeter, 1934). broadest sense of the term (Schumpeter, 1934).

Though many firms commonly acquire ideas or innovations Though many firms commonly acquire ideas or innovations internally, there are a number of situations where some seek internally, there are a number of situations where some seek innovative ideas externally (innovative ideas externally (exopreneurshipexopreneurship) in form of ) in form of f hi i bf hi i b t ti d t t i lli (Ch 1999)t ti d t t i lli (Ch 1999)franchising, subfranchising, sub--contracting and strategic alliances (Chang, 1999). contracting and strategic alliances (Chang, 1999). However, the most common practice is that organizations first However, the most common practice is that organizations first seek ideas intrapreneurially from employees, & then move to the seek ideas intrapreneurially from employees, & then move to the divergence in sourcing innovations externallydivergence in sourcing innovations externallydivergence in sourcing innovations externally.divergence in sourcing innovations externally.

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Dimensions and ElementsDimensions and ElementsThough there is consensus that corporate entrepreneurship is Though there is consensus that corporate entrepreneurship is beneficial for the organization, there is still disagreement on thebeneficial for the organization, there is still disagreement on thebeneficial for the organization, there is still disagreement on the beneficial for the organization, there is still disagreement on the actual dimensions of its construct (Covin and Miles, 1999). actual dimensions of its construct (Covin and Miles, 1999). Various researchers (Miller, 1983; Miller and Friesen, 1983; Various researchers (Miller, 1983; Miller and Friesen, 1983; Lumpkin and Dess, 1996; Covin and Miles, 1999; Antoncic andLumpkin and Dess, 1996; Covin and Miles, 1999; Antoncic andLumpkin and Dess, 1996; Covin and Miles, 1999; Antoncic and Lumpkin and Dess, 1996; Covin and Miles, 1999; Antoncic and Hisrich, 2001) argue that the construct could be classified into Hisrich, 2001) argue that the construct could be classified into four dimensions, namely: (i) four dimensions, namely: (i) new business venturingnew business venturing, (ii) , (ii) innovativenessinnovativeness, (iii) , (iii) selfself--renewalrenewal, and (iv) , and (iv) propro--activenessactiveness. .

1.1. New business venturing can result in new business creation within an New business venturing can result in new business creation within an existing organization (Stopford & Badenexisting organization (Stopford & Baden--Fuller, 1994) Fuller, 1994) -- redefining products redefining products or services (Zahra, 1991) developing new markets (Zahra, 1991). or services (Zahra, 1991) developing new markets (Zahra, 1991).

22 Innovativeness refers to creation of new products and services technologyInnovativeness refers to creation of new products and services technology2.2. Innovativeness refers to creation of new products and services, technology Innovativeness refers to creation of new products and services, technology (Covin and Slevin, 1991; Zahra, 1993; Knight, 1997). (Covin and Slevin, 1991; Zahra, 1993; Knight, 1997).

3.3. SelfSelf--renewal, reflects the transformation of organizations through the renewal, reflects the transformation of organizations through the renewal of key ideas on which they are built (Guth & Ginsberg, 1990; renewal of key ideas on which they are built (Guth & Ginsberg, 1990; Zahra 1991)Zahra 1991) redefinition of the business concept reorganization &redefinition of the business concept reorganization &Zahra, 1991) Zahra, 1991) -- redefinition of the business concept, reorganization & redefinition of the business concept, reorganization & introduction of systemintroduction of system--wide changes for innovation (Zahra, 1993), new wide changes for innovation (Zahra, 1993), new strategic direction (Vesper, 1984) & continuous renewal of the organization. strategic direction (Vesper, 1984) & continuous renewal of the organization.

4.4. ProPro--activeness, is related to aggressive posturing (Knight, 1997) & activeness, is related to aggressive posturing (Knight, 1997) & l d hi l ti t tit (C i d Sl i 1991) i kl d hi l ti t tit (C i d Sl i 1991) i k t kit ki

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leadership relative to competitors (Covin and Slevin 1991), riskleadership relative to competitors (Covin and Slevin 1991), risk--taking taking (Stopford & Baden(Stopford & Baden--Fuller, 1994), initiativeFuller, 1994), initiative--taking (Lumpkin and Dess, taking (Lumpkin and Dess, 1996), aggressiveness in pursuing opportunities (Covin and Slevin, 1991). 1996), aggressiveness in pursuing opportunities (Covin and Slevin, 1991).

Environment and SystemsEnvironment and SystemsThe single most important factor in establishing an intrapreneurThe single most important factor in establishing an intrapreneur--friendly organization is placing employees in an innovativefriendly organization is placing employees in an innovativefriendly organization is placing employees in an innovative friendly organization is placing employees in an innovative working environment. working environment. Rigid & conservative organizational structures often have a Rigid & conservative organizational structures often have a stifling effect on intrapreneurial effortsstifling effect on intrapreneurial effortsstifling effect on intrapreneurial efforts. stifling effect on intrapreneurial efforts. Firms that establish a culture of innovation Firms that establish a culture of innovation -- support with support with economic & technical resources, expedited with decisioneconomic & technical resources, expedited with decision--making making processes are likely to see tangible resultsprocesses are likely to see tangible resultsprocesses are likely to see tangible results. processes are likely to see tangible results. It should demonstrate willingness to break with traditions by It should demonstrate willingness to break with traditions by embracing initiatives that run counter to the way it has done embracing initiatives that run counter to the way it has done things in the pastthings in the past -- intrapreneurs thrive on the freedom whichintrapreneurs thrive on the freedom whichthings in the past things in the past intrapreneurs thrive on the freedom which intrapreneurs thrive on the freedom which fuels their innate desire to innovate.fuels their innate desire to innovate.

cutting the red tape so that anyone can come forward with an idea on how cutting the red tape so that anyone can come forward with an idea on how to improve any aspect of the business, no matter where that person fits on to improve any aspect of the business, no matter where that person fits on th i ti l h t f d t f il ith l f lti tth i ti l h t f d t f il ith l f lti tthe organizational chart; freedom to fail with lessons for ultimate success. the organizational chart; freedom to fail with lessons for ultimate success.

Therefore, for intrapreneurship to flourish in a firm, the Therefore, for intrapreneurship to flourish in a firm, the leadership has to be willing to listen to & recognize good ideas leadership has to be willing to listen to & recognize good ideas whenever & from whom they arisewhenever & from whom they arise

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whenever & from whom they arise. whenever & from whom they arise. Another important element is the opportunity to share credit Another important element is the opportunity to share credit equitably & across the board and willingness to break precedent. equitably & across the board and willingness to break precedent.

Processes, rules of procedure and behaviour which do not apply Processes, rules of procedure and behaviour which do not apply due to changing business conditions, situations and opportunities due to changing business conditions, situations and opportunities should be discarded to create way for establishing new precedents should be discarded to create way for establishing new precedents t d t t itit d t t itito respond to new opportunities.to respond to new opportunities.Kuratko and Hodgets (1998), companies wishing to establish Kuratko and Hodgets (1998), companies wishing to establish corporate entrepreneurship need to provide the freedom & corporate entrepreneurship need to provide the freedom & encouragement intrapreneurs require in developing their ideasencouragement intrapreneurs require in developing their ideasencouragement intrapreneurs require in developing their ideas. encouragement intrapreneurs require in developing their ideas. The four major steps to establish such an environment: The four major steps to establish such an environment:

setting explicit goals mutually agreed by workers & management, setting explicit goals mutually agreed by workers & management, ti t f f db k & iti i f tti t f f db k & iti i f tcreating a system of feedback & positive reinforcement, creating a system of feedback & positive reinforcement,

emphasizing on individual responsibility and,emphasizing on individual responsibility and,giving rewards based on results.giving rewards based on results.

Internal organizational factors that stimulate intrapreneurshipInternal organizational factors that stimulate intrapreneurshipInternal organizational factors that stimulate intrapreneurship Internal organizational factors that stimulate intrapreneurship include:include:

Firm’s incentives and control systems (Sathe, 1985), Firm’s incentives and control systems (Sathe, 1985), Culture (Hisrich and Peters 1986; Brazeal 1993)Culture (Hisrich and Peters 1986; Brazeal 1993)Culture (Hisrich and Peters, 1986; Brazeal, 1993), Culture (Hisrich and Peters, 1986; Brazeal, 1993), Organizational structure (Naman and Slevin, 1993); Organizational structure (Naman and Slevin, 1993); Management support (Kuratko et al, 1993).Management support (Kuratko et al, 1993).Rewards (Stevenson and Jarillo (1990) Rewards (Stevenson and Jarillo (1990)

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ewa ds (Steve so a d Ja o ( 990)ewa ds (Steve so a d Ja o ( 990)Others Others -- autonomy / work discretion; resources including time autonomy / work discretion; resources including time and their availability; existence of supportive structures; risk and their availability; existence of supportive structures; risk taking & tolerance for failure when it occurs.taking & tolerance for failure when it occurs.

While intrapreneurs may not want to go into business for While intrapreneurs may not want to go into business for themselves, but they still have a hunger to make use of their themselves, but they still have a hunger to make use of their talents and a wish to be compensated for their contributions.talents and a wish to be compensated for their contributions.This above viewpoint is supported by Blyers and Rue (1997) in This above viewpoint is supported by Blyers and Rue (1997) in their argument that the free enterprise system is based on the their argument that the free enterprise system is based on the premise that rewards should be based on performance. premise that rewards should be based on performance. The performance The performance -- reward relationship is desirable not only at the reward relationship is desirable not only at the corporate level but also at the individual level corporate level but also at the individual level -- rewards or pay rewards or pay raises based on performance are more likely to make employees raises based on performance are more likely to make employees experience a feeling of accomplishment and satisfaction therebyexperience a feeling of accomplishment and satisfaction therebyexperience a feeling of accomplishment and satisfaction, thereby experience a feeling of accomplishment and satisfaction, thereby increasing their intrapreneurial propensity.increasing their intrapreneurial propensity.The external environment has an influence on entrepreneurial The external environment has an influence on entrepreneurial activity with dynamism technological opportunities industryactivity with dynamism technological opportunities industryactivity with dynamism, technological opportunities, industry activity with dynamism, technological opportunities, industry growth and demand for new products being favourable for growth and demand for new products being favourable for intrapreneurship (Covin and Slevin, 1991; Zahra, 1993; Antoncic intrapreneurship (Covin and Slevin, 1991; Zahra, 1993; Antoncic & Hisrich, 2001).& Hisrich, 2001)., ), )

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ApproachesApproachesThere are a number of approaches that can encourage the creativity that leads There are a number of approaches that can encourage the creativity that leads to profitable innovations within a firm:to profitable innovations within a firm:pp

Inundating “creativity Inundating “creativity –– inclined” people with exhortations to inclined” people with exhortations to Think outside the box Think outside the box Think Think sidewayssideways about problems about problems N t k ith th ith diff t tiN t k ith th ith diff t tiNetwork with others with different perspectivesNetwork with others with different perspectives

Offering rewards and recognitions to successful innovators; Offering rewards and recognitions to successful innovators; Exhorting supervisors and gate Exhorting supervisors and gate -- keepers to be receptive to new ideas,keepers to be receptive to new ideas,Wink at and ignore time taken from assigned projects and applied toWink at and ignore time taken from assigned projects and applied toWink at and ignore time taken from assigned projects and applied to Wink at and ignore time taken from assigned projects and applied to unauthorized ideas unauthorized ideas ByBy--passes to bureaucratic procedures created for new ideas.passes to bureaucratic procedures created for new ideas.

Intrepreneurship embodies efforts that require organizational sanctions and Intrepreneurship embodies efforts that require organizational sanctions and resource commitments for purpose of carrying out innovative activities in the resource commitments for purpose of carrying out innovative activities in the form of product process & organizational innovations (Jennings and Young, form of product process & organizational innovations (Jennings and Young, 1990). 1990). The two common approaches used are Skunkworks and bootlegging (Bateman The two common approaches used are Skunkworks and bootlegging (Bateman e wo co o pp o c es used e S u wo s d boo egg g ( ee wo co o pp o c es used e S u wo s d boo egg g ( eand Zeithaml, 1993). and Zeithaml, 1993).

Skunkworks Skunkworks -- project teams designated to produce a new product (has project teams designated to produce a new product (has specific goal &specified time frame with a respected person as manager)specific goal &specified time frame with a respected person as manager)In bootlegging managers & workers make informal efforts to create newIn bootlegging managers & workers make informal efforts to create new

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In bootlegging, managers & workers make informal efforts to create new In bootlegging, managers & workers make informal efforts to create new products & processes; sometimes secretive when a bootlegger believes the products & processes; sometimes secretive when a bootlegger believes the firm will frown on these activities; results into innovative products and firm will frown on these activities; results into innovative products and processes.processes.

Rapid & costRapid & cost--effective innovation is solution to firms in the 21st effective innovation is solution to firms in the 21st century & beyond remaining competitive (Lindsey, 2001). century & beyond remaining competitive (Lindsey, 2001). Such firms must transform into entrepreneurial managementSuch firms must transform into entrepreneurial managementSuch firms must transform into entrepreneurial management Such firms must transform into entrepreneurial management style through creation of environments in which employees:style through creation of environments in which employees:

Can take direct responsibility for turning an innovative idea Can take direct responsibility for turning an innovative idea into a profitable finished productinto a profitable finished productinto a profitable finished product, into a profitable finished product, Must be willing to be intrapreneurial or willing to do any job Must be willing to be intrapreneurial or willing to do any job needed to advance their project regardless of their job needed to advance their project regardless of their job description; description; Share credit widely; Share credit widely; Remember it is easier to ask for forgiveness than permission;Remember it is easier to ask for forgiveness than permission;Remember it is easier to ask for forgiveness than permission; Remember it is easier to ask for forgiveness than permission; Ask for advice before asking for resources; Ask for advice before asking for resources; Come to work each day willing to be fired; Come to work each day willing to be fired; Keep the best interests of the company and its customers in Keep the best interests of the company and its customers in mind while bending the rules; mind while bending the rules; UnderUnder--promise and overpromise and over--deliver and honour and educate theirdeliver and honour and educate their

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UnderUnder promise and overpromise and over deliver and honour and educate their deliver and honour and educate their sponsors.sponsors.

Others include:Others include:Sharing the business strategy, Sharing the business strategy, Communicating the firm’s vision, Communicating the firm’s vision, Creating unobstructed implementation channels, Creating unobstructed implementation channels, Supporting intraprise launch, by providing a sponsor (manager) for cutting Supporting intraprise launch, by providing a sponsor (manager) for cutting through the redthrough the red--tape and nontape and non--constructive politics, constructive politics, Providing resources helping establish achievable milestones providingProviding resources helping establish achievable milestones providingProviding resources, helping establish achievable milestones, providing Providing resources, helping establish achievable milestones, providing training, training, Sheltering original mistakes, being part of the intraprise, Sheltering original mistakes, being part of the intraprise, ensuring the project remains intact & gets proper recognition. ensuring the project remains intact & gets proper recognition. g p j g p p gg p j g p p gDiagnosis and improvement of innovation climate. Diagnosis and improvement of innovation climate.

Innovation is much more efficiently accomplished when done in a Innovation is much more efficiently accomplished when done in a supportive environment.supportive environment.

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OutcomesOutcomesThere is a strong relationship between intrapreneurship and firm There is a strong relationship between intrapreneurship and firm performance & intrapreneurship can give grounds forperformance & intrapreneurship can give grounds forperformance & intrapreneurship can give grounds for performance & intrapreneurship can give grounds for competitive advantage of an existing firms (Lindsey, 2001).competitive advantage of an existing firms (Lindsey, 2001).The manifestations of such competitive advantage may be (Covin The manifestations of such competitive advantage may be (Covin and Myles 1999):and Myles 1999):and Myles, 1999):and Myles, 1999):

Differentiation or cost leadership in the market, Differentiation or cost leadership in the market, Quick response to any changes, Quick response to any changes, N t t i di ti f ki l i ithi thN t t i di ti f ki l i ithi thNew strategic direction or new ways of working or learning within the New strategic direction or new ways of working or learning within the organization.organization.

Lumpkin & Dess (1996); Wiklund (1999), firm performance is Lumpkin & Dess (1996); Wiklund (1999), firm performance is ltilti di i l d h ld i l d b th th & fi i ldi i l d h ld i l d b th th & fi i lmultimulti--dimensional and should include both growth & financial dimensional and should include both growth & financial

performance measures. performance measures. Wiklund (1999) suggests that sales growth has high generality & a Wiklund (1999) suggests that sales growth has high generality & a suitable measure of growth since it reflects increased demand for suitable measure of growth since it reflects increased demand for a firm’s products or services. a firm’s products or services. Zahra (1991), growth itself is not a sufficient measure as in someZahra (1991), growth itself is not a sufficient measure as in some

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Zahra (1991), growth itself is not a sufficient measure as in some Zahra (1991), growth itself is not a sufficient measure as in some instances, a firm might choose to tradeinstances, a firm might choose to trade--off longoff long--term growth for term growth for shortshort--term profitability. term profitability.

Accordingly, Wiklund (1999) suggests that measures of both Accordingly, Wiklund (1999) suggests that measures of both growth & profitability provide a better indication of overall firm growth & profitability provide a better indication of overall firm performance.performance.Study by Marcus et al (1999) on the impact of intrapreneurial Study by Marcus et al (1999) on the impact of intrapreneurial programmes on Fortune 500 manufacturing firms revealed programmes on Fortune 500 manufacturing firms revealed positive results on sales, profits & return on investment resulting positive results on sales, profits & return on investment resulting from development & sale of new productsfrom development & sale of new productsfrom development & sale of new products. from development & sale of new products. Study by Antoncinc and Hisrich (2000) on intrapreneurship Study by Antoncinc and Hisrich (2000) on intrapreneurship modeling in transition economies (comparison of Slovenia & modeling in transition economies (comparison of Slovenia & USA) revealed a positive relationship between the presence ofUSA) revealed a positive relationship between the presence ofUSA) revealed a positive relationship between the presence of USA) revealed a positive relationship between the presence of intrapreneurship and firm performance, measured in form of intrapreneurship and firm performance, measured in form of growth & profitability. growth & profitability. Study by Miller & Friesen (1982) revealed that the rate of growthStudy by Miller & Friesen (1982) revealed that the rate of growthStudy by Miller & Friesen (1982), revealed that the rate of growth Study by Miller & Friesen (1982), revealed that the rate of growth in sales for entrepreneurial firms was significantly higher than in sales for entrepreneurial firms was significantly higher than those of conservative firms. those of conservative firms. NonNon--financial outcomes include learning & knowledge creationfinancial outcomes include learning & knowledge creationNonNon financial outcomes include learning & knowledge creation financial outcomes include learning & knowledge creation (Zahra et al, 1999), customer satisfaction as well as job (Zahra et al, 1999), customer satisfaction as well as job satisfaction of the employees. satisfaction of the employees.

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Proposed ModelProposed ModelNote: The proposed model borrows heavily from those proposed by other theoristsfrom those proposed by other theorists (Heinonen and Korvela, 2003; Hornsby et al, 1993).

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Conclusions and RecommendationsConclusions and RecommendationsIntrapreneurship is a strategic response to the quest for competitive Intrapreneurship is a strategic response to the quest for competitive advantage & improved performance.advantage & improved performance.g p pg p pIntrapreneurial organizations engage in new business venturing, are Intrapreneurial organizations engage in new business venturing, are innovative, continuously renew themselves & are proinnovative, continuously renew themselves & are pro--active. active. Intrapreneurship requires the existence of environment & systems that Intrapreneurship requires the existence of environment & systems that encourage & stimulate employees to act & behave intrapreneurially;encourage & stimulate employees to act & behave intrapreneurially;encourage & stimulate employees to act & behave intrapreneurially;encourage & stimulate employees to act & behave intrapreneurially;

Chang (1998) contends that the relationship between entrepreneurial posture & Chang (1998) contends that the relationship between entrepreneurial posture & firm performance is moderated by environmental conditions. firm performance is moderated by environmental conditions.

Firms that nurture organizational structures & values conducive to Firms that nurture organizational structures & values conducive to i t i l ti iti & h t i t i l i t tii t i l ti iti & h t i t i l i t tiintrapreneurial activities & have strong intrapreneurial orientations are intrapreneurial activities & have strong intrapreneurial orientations are likely to experience better performance. likely to experience better performance. Intrapreneurship is closely related to firm performance, with firms Intrapreneurship is closely related to firm performance, with firms experiencing high performance levels characterized by high intrapreneurial experiencing high performance levels characterized by high intrapreneurial p g g p y g pp g g p y g pintensities. intensities. The outcomes of intrapreneurial efforts include new products, new The outcomes of intrapreneurial efforts include new products, new processes, new technologies, new markets, learning, customer satisfaction, processes, new technologies, new markets, learning, customer satisfaction, job satisfaction; all having a positive effect on firm growth and profitability.job satisfaction; all having a positive effect on firm growth and profitability.job satisfaction; all having a positive effect on firm growth and profitability.job satisfaction; all having a positive effect on firm growth and profitability.Firms regardless of size should pursue intrapreneurship as a competitive and Firms regardless of size should pursue intrapreneurship as a competitive and performance improvement strategy.performance improvement strategy.For intrapreneurship to thrive, firms need to put in place an environment For intrapreneurship to thrive, firms need to put in place an environment

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with support systems, structures and resources that encourage employees to with support systems, structures and resources that encourage employees to behave entrepreneurially.behave entrepreneurially.Various measures of growth and profitability should be considered as its in Various measures of growth and profitability should be considered as its in measuring intrapreneurial outcomes.measuring intrapreneurial outcomes.

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Samuel Obino MokayaSamuel Obino Mokaya

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