The Intrapreneur Innovation: Led by Medium and Small Size

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Manuel Alfonso Garzón Castrillón

Univ. Empresa, Bogotá (Colombia) 1 (8): 31-55, junio de 2005

The Intrapreneur Innovation:Led by Medium and Small SizeCompanies‘Managers*

(Qualitative Research)By Manuel Alfonso Garzón Castrillón * *

ABSTRACTThis research is focused on an exploratory study developed with Pymes managers and theirroles as intrapreneurs. Using their leadership to impel innovation into organizations.

Looking to determined how Pymes employers incentive into organizations individuals or groupinnovations. Therefore, it is possible to think that managers lead the innovation process, whichis classified gradually according to companies needs in order to improve their competitiveness.Organization must have intrapreneuring and organized culture with flexible structure to generateindividual autonomy. A characteristic is the amount of capital risk needed; that is why it isnecessary encourage their work and their risk tolerance.

Key Words: Intrapreneur, innovation, high intra-entrepreneurs, intrapreneur organizationalculture, medium and small size companies –Pyme- (Pequeña y mediana empresa)

RESUMENEsta investigación esta centrada en el estudio exploratorio de los directivos en la Pymes enBogotá D. C. y los roles que desempeñan como altos intraemprendedores haciendo uso de unliderazgo estratégico para impulsar la innovación en sus organizaciones.

El estudio esta dirigido a determinar como los gerentes de las Pymes en Bogotá D.C. ponenatención a incentivar al interior de las organizaciones la innovación individual o en equipo, delo cual se puede inferir que el directivo de mayor rango es el que lidera el proceso de inno-vación, como un top intrapreneur; que impulsa innovación intraemprededora clasificada

* Paper accepted to the 2005 BALAS (The business Association Latin American Studies)Conference. Madrid May, Institute of enterprise Business School.

** PhD,.Director research group and teacher Business Faculty, Rosario [email protected]

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The Intrapreneur Innovation: Led by Mediun and Small Size Companies‘ Managers


gradual, como una necesidad para mejorar la competitividad de la empresa. Se requiere para loanterior de la puesta en marcha de una cultura organizacional intraemprendedora que busquegenerar autonomía individual, con una estructura flexible característica de las Pymes, un granapoyo con capital de riesgo. También es necesario el incentivo del desempeño premio y unagran tolerancia al riesgo.

Tiene como objetivo general determinar cuáles son los factores que caracterizan al directivode una Pyme para orientar la innovación como una estrategia para afrontar la competitividady que rasgos de cultura se requieren. Como objetivos específicos se plantearon: obtenerinformación relacionada con los factores que facilitan la función Directiva intraemprendedo-ra; Identificar los factores que facilitan la innovación y el cambio estratégico en las pymes eidentificar los rasgos de la cultura intraemprendedora que se presenta en la Pymes.

Palabras Claves: Intraemprendedor, innovación. Altos intraemprendedores, cultura organi-zacional intraemprededora, Pymes

1. ANTECEDENTS

This research is focused on an ex-ploratory study with Pymes’ manag-ers in Bogotá D.C. and their rolesas high intrapreneurs using theintrapreneur leadership to boost in-novation in their organizations. Thisstudy is part of the research project“Knowledge management”.

The current high intrapreneur is dif-ferent from the former one. Historyteaches us that Industrial Revolution,during XIX century, had an importantnumber of creative entrepreneurs thatperceived new opportunities andfound the correct way to face them.

Looking backwards, the pioneer ofentrepreneur behavior in 3M wasDick Drew, according to Art Fry,quoted by Garzón (1998: 29). In 1923,he discovered the adhesive tape,

which is used today to paint cars withtwo colors.

During the 50’s, Mammen, in aHarvard Business Review article,talks about innovation as base ofwork developed by researchers inSilicon Valley. He describes them as“few brilliant people in a dark roomfull of money and hope.” There isan innovation management methodwith a hope strategy.

During the 60’s, literature related toinnovation in topics as change man-agement and technologic transfer,is written.

During the 70´s academics as McGinnis and Verney (1987) wrotestudies about the creative spirit in-side the organizations or the corpo-rative entrepreneur.

In 1974 Art Fry goes beyond theintrapreneuring innovation history

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with the post-it and his projectionover the 3M´s internal organization.

In 1985 Gifford Pinchot III pub-lished his book Intrapreneuring, tak-ing back the term intrapreneurinvented by the journalist, NormanMacrae, in a The economist articleon Decembre 25 of 1976. In 1979,the Swedish group, Foresight, offeredprograms to companies to trainingintrapreneurs. The Pinchot´s pro-posal establish the needed principlesinto organizations to allow employ-ees to behave as intrapreneurs.

Peter Drucker in 1985 published hisbook “Innovation and entrepreneur-ship, practice and principies.” In thisbook he brings in the need of achange in mentality about innovationand the entrepreneurs’ function.

Between 1985 and 1998, cases, ar-ticles, books and doctoral researchesas Clagett´s, Garzón´s and two newPichot Gifford III´s books are orien-tated to intrapreneurs and their roleinto organizations as engines of in-novation. This is an answer to thelack of innovation and competitivityin big companies.

In 1994, Roman Lombriser wroteand defended his thesis in the Doc-toral Program of Strategic Manage-ment at the International University.This thesis was supervised by IgorAnsoff, and published by the Finan-cial Times. In his thesis he tacklesthe concept of Intrapreneur leader-

ship. He stressed the importance ofan increase strategic leadership in allkind of companies. He called “TopIntrapreneur” the board of directors.Considering them responsible fortheir companies. Distinguish themfrom the common intrapreneurs. Thetop intrapreneur is the general man-ager. He has under his responsibilitythe transformation of his company.

2. OBJECTIVES

The innovation is related with thestrategic change and the organiza-tional intrapreneur culture of Pymesin Bogotá D.C. This study wants toreach the following objectives:

• Get information about factors thatmake easy intrapreneur manage-ment function in Pymes in Bogo-tá D.C.

• Identify factors that facilitate in-novation and strategic change inPymes in Bogotá D.C.

• Identify characteristics of intrapre-neur organizational culture estab-lished by Garzón et al (2002:25) inPymes in Bogotá DC.

3. JUSTIFICATION

The lack of continuity in the environ-mental changes demands new suc-cess strategies. In ages of big changes,historic success strategies will notguaranty the wished outcomes.

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Therefore the success high intrapre-neurs, as is stated by Lombriser (1994:33), perform a key task developing newstrategies as an answer to the envi-ronmental threat or an opportunity.They:

• Warn the need or opportunity ofan early strategic change to startan active response.

• Lead the process of managerialdecision. This involves the decisiontakers, the consequences and risksof these decisions.

• Keep a group vision over thepractical carrying out of change

The published material over businessis abundant and provides informationabout what managers should do.However, only few studies haveproved their advices in real. Fewerhave focused on the intrapreneuraspect of Pymes´ managers

This exploratory study researchesthe high intrepreneurs´ attitude ofPymes in Bogotá D.C., which leadtheir companies to a strategic change,and the consequences that intrapre-neur culture had in their organiza-tions.

The data was collected through asemi-structural personal inter-views. They were done to fourteenPymes’ managers. Companies werefrom a wide number of economicsectors.

4. LITERATUREREVISION

4.1. The Pyme inColombia

To start the analysis of Pymes in Co-lombia, is mandatory define them. Itcan be a misunderstanding about itsmeaning.

In Colombia, according to the Promo-tion for the Micro, Small and MediumSize Company Law (Ley para elFomento de la Micro, Pequeña yMediana Empresa), 590 law, Pymesare classified:

Micro-company: Less than ten em-ployees. Total assets bellow to 501monthly minimum salaries.Small company: Between 11 and 50employees. Total assets higher than501 and lower than 5.001 monthlyminimum salaries.

Medium: Between 51 and 200 em-ployees. Total assets between 5.001and 15.000 month minimum salaries.

Despite this classification, the limitsare not enough to develop an analy-sis about what this companies needin innovation topics.

The micro, small and médium com-pany ´s contribution is seen in theseindicators:

The Annual Manufacture Poll let usdetermine the importance that

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MIPYME has in Colombian stage.These companies represent the96.4% of the total number of com-panies, providing the 63% employ-ment; the 45% of the manufactureoutput, the 40% of salaries and the37% of aggregated value. There aremore than 650.000 entrepreneurs inthe social security system.

The geographical distribution establishsthat PYMES follow the same trendof manufacture industry. The 70% aregathered in the four (4) principal pro-ductive centers: Cundinamarca-Bogotá, Antioquia, Valle y Atlántico.

4.2. Main Sectors

The PYMES are concentrated inagricultural and mining industry.These two industries represent the71% of the industrial production.Excluding oil refinery and petro-chemical industry, industry based onuse of natural resources representsthe 60% of total industry outcome.

The main sectors are: Food, Leatherand shoes, Furniture and wood,Clothing industry, Graphic arts, Plas-tic and chemistry, Metallurgical andmetalmechanical, auto parts andmining –non-metallic.

4.3. Pyme Featuresin Bogotá

The study developed by Barriga etal (2003) found the following :

• The study founding to Bogotá showsthat the market size attended bymost of Pymes is small and local.97% of their sales are for localmarket. The gross assets amountand the annual sales are lowerthan U$500.000 for the 48,5%.The production capacity andproduct batch lack of continuity.This shows that the use oftechnologies of scales is limited.Therefore, less demanding ininvestment.

• The main corporate body amongPymes is limited company.Though 7.9% expect get resour-ces issuing shares. Informality iscommon among societies,specially in the leather and shoesindustry, 27,3%, where one ofeach four has not formalized itsjuridical situation. All companiesstarted up with national capital,specially family resources,owners and third people howhave become shareholders in35%, 31% and 29% respectively.

• Managers are characterized bytheir maturity and expertise. Theyare older than 40 years with workexperience higher that 10 yearsand with high educational level.More than half have undergra-duate education and 10% havepost-graduate education. There isa new generation of entrepreneu-rs where the 22.4% are women.

• Company objectives are focusedon improve profits, in its accoun-ting concept, more than improveowners wealthy. At short term,

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the objective is liquidity. This isdue to problems in local marketsand the loyal and disloyal compe-tence impact, that has affectedwork capital structure.

• Entrepreneurs´ perception abouttime threshold is heterogeneous.Without clear limits of short, me-dium an long term. In general, lessthan three years is consideredshort term, medium until five yearsand long term until seven years.

4.4 Intrapreneur Ing

The word intrapreneur has Frenchroots, from the word “entrepreneur”,which comes from the enterpriseterm. Germans have its equivalentwith Unternehman, which has thesame meaning (Luchsinger y Babgy1987:10). “The combination with athome, inside, in, therefore gives theterm intrapreneur. Thus, the entre-preneur is who live inside or is in theborders of an organization. It is asocial invention that allow people toexpress their own potential” (Kolch-ing y Hyclak 1987: 15). This termwas used for first time at The econo-mist magazine by the journalistNorman Macrae in 1976 and withthe meaning that lead this researchby Gifford Pinchot III in 1985.

Taking into account the term originand based on the bibliographic revi-sion over intrapreneur nature the fol-lowing definition is proposed:

Intrapreneurs are people with entre-preneur vision. They oriented theirbehavior to the development andarising of their internal entrepreneurspirit, generating and making themost of innovative ideas. Develop-ing them as profitable business op-portunities. They compromise theirtime and their effort to research, cre-ate and model those ideas in busi-ness, to benefit their own businessand the steady company’s growth.Intrapreneurs see success where oth-ers see failures or problems. Theirstrong point is the innovation of prod-ucts and services with talent and cre-ativity, becoming in a change agent.They are called internal entrepreneurs,intrabusinessman, intracorportion,corporative businessman, intrapre-neuring and new adventure units.(NVUs) (Pinchot:1985; Peter &Waterman1982; Finch 1985; Ross &Unwalle 1986; Duncan 1986; Pinchot1987; Hill 1987; Cates 1987 Luch-singer 1987; Fry 1987;Mac Ginniss &Verney 1987; Kolchin & Hyclack;Bart 1988; Rule & Irwin 1988, Agor1989; Gerard 1989; Filion 1989;Dufour 1989; Jadoul 1989; Claget1992, Kuatko & Hodgetts 1992;Revista Apertura 1992; Romero1993; Salinas 1993 & Garzón 1995,Garzón et al 2002))

This concept requires people thatassume that behavior. “These arepeople with an average intelligencelevel or a bit higher, which means thatthey are not genius”. (Kuatko yHodgetts 1992)

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4.5. IntrapreneurLeadership(Top Intrapreneur)

According to Lombriser (1994: 26-28), an intrapreneur is a person howforesees challenges of future envi-ronments and goes ahead, allowingcompany´s reaction according to thenew external conditions. This meansthat they most be the highest intra-preneurs of their companies.

Therefore, the intrapreneur leaderbehavior is what leads organizationalchanges to success.

4.5.1. IntrapreneurLearning

We understand intrapreneur learningaccording to Garzon (1994)as a so-cial activity. That expresses itself inorganizations through different col-laborative stages. Allowing gatheringand integration of different experi-ences, knowledge and abilities arounda community in which all memberslearn from each other.

This means that, learning is a pro-cess that modifies every part thattakes part in the process. Not onlydoes the person under the learningprocess changes but also the envi-ronment where he interacts.

4.5.2. Strategic Change

The objective of high intrapreneuractions, based on Lombriser (1994:

145), when a organizational compe-tence is created, are to provide theorganization with the needed capacityto perform the change.

High intrapreneurs create and sharewith others a new success model.They develop and implement in theorganization an exciting vision aboutthe company´s future. To reach thisvision, they feed and award the be-havior and the acceptance of entre-preneur risk.

4.5.3. Idea Gestor

Taking Lombriser (1994: 207) ideaup again; the high intrapreneurs trackactively the environment, to detectrising signs of new opportunities andthreats. They look for those oppor-tunities e try to make those threatsin opportunities. They introducechange soon, when the informationis incomplete.

4.5.4. Recongnizing theOpportunity

The entrepreneur and intrapreneurprocess, start with an idea. Thisneeds a development to become in acertain business opportunity, that jus-tify a business plan. Therefore, deter-mine that there is a good opportunityin the “opportunity window”, whichopens and closes constantly as ananswer of the volatile and dynamicmarket nature; represented by tech-

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nology changes and competitors re-actions. “It is important to organiza-tional success and to intrapreneur,make a careful study about key op-portunities. It is important as well,find initiative and create favorableconditions to execute them”. (Timmons1990 cap 3).

Therefore, the generation of a realbusiness opportunity has three stages:(Varela 1992:123)

• Identification of business idea• Evaluation of business idea• Conformation of the business op-

portunity

Each one of them require differentprocesses and qualities, according toVarela (1991), the business idea willcome out when the future intrapre-neur relates his imaginative andcreative capacity to business pro-spective. He starts to relate that withresources, markets, contacts, tech-nology, among others. This is madewith the specific intention to make itwork out inside the organization. Thebusiness opportunity comes out whenthe idea is based on customer needs,competitive advantage, human re-sources, technology, finance. Busi-ness ideas must have the support ofan sponsor and the vital impulse ofintrapreneurs who make it real.

4.5.5. Planification

High intrapreneurs, as demonstratedby Lombriser (1994: 207), are in-

volved personal and directly instrategy definition. This involves allimportant people with responsibility inthe strategy performance and withknowledge to make strategic decisionanalysis. To make strategic analysisthe hierarchical level are defined. Try-ing to reach agreement in the teamover the strategic decision.

High intrapreneurs base their decisionson explicit estimations of likely risks.They reduce risks with actions di-rected to that goal and use a gradualcommitment strategy if the ignoranceor risk are high.

4.6. OrganizationalCulture

4.6.1. OrganizationalCulture Antecendent

The 80´s was scenary of one of themost important events in organiza-tional studies. Studies published aboutthis topic have left a deep footprintin managerial procedures and in thecrowd. Why does an organizationperform successfully and other alikeis mediocre? Some studies considerthat the answer is found in the orga-nizational culture: culture that cre-ates from values, principles andorganizational practices.

Denisson (1991) states that researchof culture in organization includes thesimbolic interactive prospective ofMead(1934); Cooley (1922) and

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Blumer (1969), the anthropology andsocial statement of Kluckhorm (1951)and Levi-Strauss (1963), the culturalreality as social construction ofBerger and Luckman (1966), mithsof Eliade(1959), arquetypes ofMitroff(1984) and idelogy historiesof Starbuck (1982). All are useful toexplain people’s behavior, as moreobjective organization characteristicsbecause they incorporate and enun-ciate clearly the identity of organi-zational members. Maybe the mostpositive impact of cultural prospectiveis that it has represented a return toinductive thought over organization’sbehavioral characteristics.

4.6.2. Definition ofOrganizational Culture

The organizational culture is integralpart of organizations life and it hasimportant implications to managerialaction. The culture of an organiza-tion is comes from things, words,actions and feelings that its membershave in common. This clarifies thatculture is what allows cohesion to itsmembers to reach determined goalor objective. Organization is made ofpeople, have elements and propermanifestations of its organizationalculture, understood as “particular sys-tem of symbols inducted by society,by the organization’s history and itsformer leaders. According to thisconception, culture is not an staticelement, but an alive new material,used in different ways for each em-

ployee and transformed by them dur-ing the decodification process of or-ganizational events.”(Allaire y Firsirotu1992:33).

Therefore, the culture is a powerfulforce over the organization that canbe related with tastes and preferencesof its members, depending on the iden-tification degree having with the or-ganization. Culture is related with thesub-systems of what it is made.

Based on different definitions for thisresearch this meaning is proposed.Organizational culture is the systemof particular symbols, customs, hab-its, legends, tastes, preferences, in-fluenced by society, organizationalhistory, its founders, its actual andformer leaders, which modeling therelationship between person andproblems, coordinating those an-swers. This definition retakes in itsconception proposal of Allaire andFirsiroto (1992) and Ouchi (1981)Beals and Hoijer quoted by Deal andKennedy ( 1985) Varela (1991),which base their hypotheses in thesystemic approach proposed byLudwin Von Bertalanffy (1951), itspioneer. This approach allows to de-termine that inside the organizationthere is a cultural system as macro-system, this is an all made by piecesor sub-systems interrelated in a dy-namic equilibrium, one of them is theintrapreneur organizational culture.

It is important clarify that the proposedmeaning does not retake and is con-

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traire to Foucault’s (1991) proposalsin things related with general horizonand joint analysis and Habbermas(1993) about totality concept.

Therefore if organizational eventsallow independence, freedom, ca-pacity to have control over decisiontaken, commitment feeling, ownershipfeeling of wear the t-shirt, and respon-sibility, will favor innovation as hasbeen stated. (Fry, 1987 ; Finch,1985;Karagozolgu 1993; Kolchin 1987;McGinnis 1987; Kuatko 1992 ;Gerard1989; Pinchot 1985 ;Peters andWaterman 1982 ; Drucker 1985 ;Hornsby 1993 and 1986).

Taking into account characteristicsthat reveal the essence of organiza-tional culture according to Robbins(1987) and requests established instudy of cases consulate in intrapre-neur programs, following proposaloutcome.

4.6.3. IntrapreneurOrganizational CultureCharacteristics

• Individual autonomy: It includesresponsibility, independence, free-dom of failure, time to practiceinitiative that intrapreneurs have inthe organization, capacity and con-trol over decisions took.

• Structure: Related with flexibilityin schedules and budgets, withdecentralization that accept disor-der, lack of coordination, leaving

a bit a side order, with wide des-cription of jobs and little supervi-sion.

• Support: Make reference to theimpulse of directives and godfa-thers in intrapreneur activities.

• Identity: Related to ownership feel,commitment or wear organization’st-shirt.

• Performance – AWARD: Re-quires awards, in risk capital,more time, promotions, bonus,shares, profits participations, per-sonal recognition, among others.

• Conflict tolerance: Specially ininterdisciplinary teams.

• Risk tolerance: The degree inwhich the intrapreneur is encoura-ged to be innovative, aggressive,entrepreneur and takes moderaterisks.

Sources:Kuatko (1992Cap4); Ross(1986:46); Fry (1987:9); Hornsby(1993:32) ; Taylor (1990:100); Barthet al(1988:36); Pla(1989:47); Duncanet al (1988:20); Peters and Waterman(1982: 189); Cates (1987: 45); Robbins(1987: 440);Gerard (1989); Fondationd L’ entrepreneurship (1989).

Therefore the change from admin-istrative culture to intrapreneur“should be structured and systemicin organizations. It must be supportedby the organizational culture of thehigh direction, creating the proper at-mosphere, that leads to cover needsof identification and development ofbusiness” (Barth et al 1986:36)

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Other important aspect that musthave taken into account is the needof “built an organization with a cul-ture that lead to team work, thatmotivates people to make things indifferent way and better” (Taylor1990. 100)

It is necessary clarify that the ex-pression organizational culture mustnot be taken as fashion according toTrevenet et al, (1991), but the basesfor the born of new intrapreneur be-haviors. It only represents a benefitsif it helps company to solve its adap-tation and organizational problems.The equilibrium between the benefitsand the limits of the culture will beestablished on this base.

It can be inferred that a profoundchange inside organizations must bedone to turn from a culture charac-terized, according to Horacio Andrade(1992) for a high and strict formal-ization, dogmatic, and basically taskorientated. It has a high degree ofpower centralization in the handlingof information and decisions taking.The leadership trends to autocracyand paternalism, with high control andsupervision. There is a strong fightfor power, which lets an starring roleto rules, policies and established pro-cedures to a intrapreneur culture.

This is not an easy change. Its changemust be gradual, it can not be fast.Studies developed by Kras, (1993)Cambio organizational(1993); Fund-ameca , (1993); Nosnik, (1993) andJosé de la Cerda Gastelúm, (1993)show results that allow state that

Latin-American organizations havehad an important progress in this topic,“though very recent and far from thehigh competitive administration“ (Dela Cerda 1993:23). It is important tounderstand the intrapreneur spirit. Itmust start with a value system, spe-cially with the eleventh mandate: “donot kill the idea of a new product orservice” (Peters and Waterman1982:213).

It is necessary create confidence intothe organization in each one of themembers. Confidence, self – confi-dence and collective confidence.This is the base for any organiza-tional prove of boost intrapreneur. Itis not easy. It is the result of a pro-cess but not a wish imposed. Startedfor “open the organization’s book”,so everybody will be able to see it.The book would show which onesare the better and worst possiblesceneries, that can be reached withthe spreading of the entrepreneurculture inside itself.

Confidence inside makes easy thesecond key: delegation. Let peopletake autonomy decisions over the re-search of possible variations in a pro-cess or/and in a product or service.

Delegation implies “share power”,democratize structures, break para-digm “power and control” by othermanagement models more flexiblebase on better practices of leadership.Limits established by selfish interestmust be defeat, and increase the rela-tive power of each boos or department.

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The environment of this spreadingeffort of entrepreneur culture is de-termined by the quality of the inter-nal communication channels andbosses’ behavior.

4.6.4 Culture in theScenary of HighIntrapreneurs

The efficient high intrapreneurs af-fect principally the strategic cultureinside the organization. They com-municate the change as somethingpositive that must be welcome, giv-ing confidence to take risks andmake emphasis on the future and onfactors that are definitive to be suc-cessful in the new environment.

• Social culture: embrace values,rules, behaviors that affect the so-cial process into the organization.

• Strategic culture: embrace values,rules, behaviors that affect theorganizational strategic work.

• Operative culture: embrace values,rules, behaviors that affect ope-rative work.

• The success high intrapreneursare focused in these factors

4.7. Innovation

To determine innovation concept inthis research, it is necessary clarifythe innovation meaning of Adair(1992). He gave the meaning of make

or introduce something new, ideas,methods or new instruments.

Schumpeter(1939) defines innovationas an irreversible historic change ofmake things. He defines company asthe realization of new combinations andentrepreneurs to which that realizationis aimed. This is expressed as a“change in the production function”.

It is important clarify that this researchis focused in the intrapreneur, whogives the innovation initiative and thiscan end or not in an invention. Borrel(1982:265) makes a distintion betweenoriginal innovation, innovation trans-ference and adaptable innovation.Innovation can be transferred to othersituations. It is called adaptable inno-vation to transferred technology.

Innovation is more than have new idea.It includes the process of introducethem with success or make things tohappen in a new way, for instance,making new ideas in useful, practicaland trade able products or services.

After look carefully at different po-sitions quoted related with innova-tion, for this research the followingmeaning is proposed :

Innovation is the action of introduceor produce something new, idea,method, instrument, ways of thinkingin business, services, of start up in amarket, organize, solve problems,make adaptations and modificationsto products or services with the pur-pose of fulfill needs or generatenew. Source: Adair 1992; Brohel

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1982; Clagett 1992; Drucker 1986,1992; Hagen and Aiken en Asomoza1980; Porter 1991; Henderson andClark 1990; Romero 1993; and Schn-arch 1992).

Authors define different kinds of in-novation. Schumpeter, (1939) di-vides five kinds: production of a newgood, a new production method, aexploitation of a new sources ofraw materials, reach a new market,the reorganization of a productionsystem. Other authors as Stephen,(1992); Ramírez et al., (1992); Halty,(1986); Hannan and Freeman, (1984);Henderson and Clarck (1990); Katz,(1986); Corona(1989); Abernathy enRamírez et al. , (1992) clasify inno-vations in absolutes or radical, thatbreak with everything. Incrementalinnovation or making minor changesin existing products or services, tak-ing advantage of their potential.

This search process of Hendersonand Clarck(1990) propose a classi-fication that contemplates:

• Incremental innovation or minorchanges; modular innovation, forstages. Radical innovation andarchitectural innovation. Its essen-ce is the reconfiguration of anestablish system. Tiding the currentcomponents in a new way, makingsignificant changes between thesecomponents. These changes arebased on how product componentsare tide. To be integrated in a newway more efficient.

• Radical Innovation, Kuatko Hod-getts, (1992): It is the innovationthat requires experimentation andrepresent inaugural preconceptionsthat have been issued (computers,post it, pampers, etc.). Incrementinnovation, which refers to a sys-tematic evolution of a product orservice through new or more mar-kets (pop corn at the microwave,frozen yogurt, etc) Kuatko y Hod-getts 1992). It is important takinginto account, that incremental in-novation is after the introductionof radical innovation.

• Arquitectural innovation thatcontemplates the impact of com-ponents in the system. This pro-duce important changes in theinteraction between the product’scomponents (Henderson & Clarck1990: 9-13).

Therefore the typology to use in thisresearch is as follows:

• Radical innovation• Incremental or gradual innovation• Arquitectural innovation

Therefore, we can see that the onlyunchanging thing is the change.Never did the scenarios havechanged so vertiginous in all as-pects and more in innovation, inwhich the obsolescence goes faster.One of the most important changesis the lost of value of economies ofscale and its replacement for theeconomies of ambit. It is charac-terized by small productions of highquality and with competitive costs.

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On the other hand, the organizationis conceived as a cultural institution,that is orientated under values suchas responsibility and professionalism.

Finally, and based in the explanationabove, a theory about innovation can-not be developed. We already knowenough to say when, where andhow a systematic way of new in-novation opportunities is found. Andhow the probabilities of success offail are evaluated. In changing en-vironments organizations have twoways to follow:

React fast to environment changescreating internal process of innova-tion, which generate changes in theenvironment. According to Peters(1989), there is not more importantcapacity for an organization than thechange in itself. The second mostimportant task is, to give the welcometo innovation. Innovation in the or-ganizations is a economic and socialresponsibility. For this reason is man-datory learn to innovate, this implieschanges to avoid failure.

5. METHDOLOGY

5.1. ResearchApproach

The study approach was a qualitativeinvestigation, based on the conceptthat the experience is the best way tounderstand the social behavior. It hasthe advantages of:

• Include a wide sort of variablesin the leadership behaviors re-search.

• Interpret actions and facts troughthe eyes of the people researched.

The qualitative research was developedwith personal interviews to Pymes´managers. Inviting to discover a caseof initiation and execution of a strate-gic change under their personal su-pervision.

The research process has beenproved by the hermeneutic. It helpsspecify the qualitative aspect. It isthe interpretation of an historic andlinguistic condition present in the hu-man condition. This is a research thatlet approach the problem in an oppo-site way as it is done in the analyticrationality. It has previous proceduresto the treatment of the objective. Talkover hermeneutic means go furtherthan the simple description, keepingthe tension between singularity and thecontext (culture) and the search of uni-versals that let improve the knowledgeover what is studied. It also implies thepertinent tension between the analy-sis categories above and the emergentcategories of the studied reality.

5.2. Stages ofMethodologyConstruction

The qualitative method is based inthree stages: cases acknowledge-ment. This embrace exploration of

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the situation, research design and thework field preparation. Cases charac-terizing corresponds to recollectionand organization of information.Cases study in depth include the pat-tern identification that organize thesituation and the data analysis, theirinterpretation and the inductive con-ceptualization.

First stage: Case acknowledge-ment that embrace the explorationof situations, research design andpreparation of the field work.

To do this a form of a semi-structureinterview was prepared. (see attachedNo.1). Fourteen students of the in-trapreneur organization subject weretrained to apply the interviews. Theinterviews were recorded, transcribedand checked by a research assistant.1

To the elaboration form of the semi-structure interview in its first stage,was taken from the questionnairemade by Lombriser in his Doctoralthesis (1994:225). The second partwas based on Garzon´s Doctoral the-sis (1998: 51-52).

The semi-structured interview waschosen as essential instrument ofdata recollection because with thistechnique it is possible to have per-

sonal contact and go deeper into theresearched topic.

The interviews lasted between 1,5and 2,5 hours. The arithmetic meanwas of 2 hours. In all interviews thesame procedure was used. After asmall introduction about the studyobjectives, the interviewer asked thequestions in the questionnaire.

After the interview, a protocol of themeeting was written. In these casesare the tape transcription. Eachprotocol was printed. Afterward theresearch assistant listened the record-ings and review the fidelity betweenthese and the written protocol. Themistakes were corrected.

Second stage: Information charac-terization and organization.

The interview transcriptions wereused to codify the answers intoanalysis categories, using the soft-ware Atlas.ti, the knowledge work-bench, version WIN 4.2, scientificsoftware developed in Berlin.

Based on the information gatheredfrom the interview, the next step wasto categorize. Organizing from theinitial questions, making a pre-diag-nosis based on the interviewed wordsand classifying in certain category. Inthe same way, finding inside the samecategory what happen with thePymes´ managers in their relationswith themselves. The categoriesused are showed bellow:

1 Egna Avendaño Cárdenas Graduated in In-ternational Relations and member of theresearch seedbed of the Faculty of Manage-ment and Business.

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1. Intrapreneur organizationalculture1.1. Risk tolerance1.2. Support to innovating ideas1.3. Identity and ownership feeling1.4. Autonomy1.5. Structure1.6. Performance - award1.7. Conflict tolerance

2. Innovation2.1. Processes ( how was done)2.2. Causes ( external and internal)2.3. Opportunity2.4. Outcomes

2.4.1. Outcome arquitectu-ral innovation

2.4.2. Outcome gradualinnovation

2.4.3. Outcome radicalinnovation

3. Intrapreneur leadership.3.1. Leader role3.2. Strategic change3.3. Idea mentor3.4. Supervision3.5. Reasons3.6. Planification3.7. Orientation

Third stage: Patron identification toorganize the situation. This embracethe data analysis and their interpre-tation.

The information categorizing, suppliedby the interviewed managers respondto the need of retake the initial ca-tegories to determine the informationpertinence in the exploratory researchproject developed. Making pre-diag-nosis and tiding the interviewedvoices with the initial categories.

Once the interviews content hasbeen reviewed, it is analyzed in con-cordance to the codification systemdone and the support of Atlas.ti ver-sion WIN 4.2.

Data analysis and interpretation de-manded a review by the researcher.From this review frequency tableswere generated of each on of thesignification category. Each categorywas confronted with the interviewedanswers getting crossed analysistables, tendency and frequency tables.Based on this the researcher devel-ops a discussion about the results andestablishes conclusions.

5.3. Reliability

To this study the content analysiswas used. This technique gives em-phasis to different message compo-nents. There are three categories,defined by Roger Muccheilli in 1974:The first one, the logic-semantic tech-nique (also called of thematic AC),this is the most frequent and typical.It resorts to logic to summarize, de-fine categories and verify the argu-ments and conclusions validity. Thisleads the analyst to verify, classifyand eventually uses statistics, throughthe frequencies list, that is the mostsimple technique of thematic analy-sis. It consist in make a list with thefrequency of words appearance inthe text. This was obtained from thesoftware used to analyze the answers

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and questions of open end. This re-quires categorize each interview inquestions and answers. Afterwards,it demands the lecture and identifi-cation through what is highlighted ineach answer and text quotation foreach interview identifying its relationwith the codification system.

6. ANALYSIS ANDDISCUSSION OFRESULTS

There are several aspects in thePymes´ high intrapreneur behavior,which will be analyzed based on theresults of exploratory study.

First field:

This study confirm the results got byLombriser(1994:207), where it isproved that the high intrapreneurstrack actively the enviroment to de-tect weak or soon signs of new op-portunities or threats.

This is shown by the Pymes´ managersinterviewed in:

• We look for differentiation• We do this based on the knowled-

ge of market needs.• We identify products in foreign

markets.• We are strong observation and

monitoring the environment• We look for improve our organi-

zations competitive

Second field:

To Lombriser (1994:207) high intra-preneurs plan the strategy. They arepart of the planning strategy, involv-ing important people and with respon-sibility in the strategy development.In the poll pymes:

• Managers design the plan andsupervise its fulfillment.

• The above taking into accountknowledge, experience and vision.

• They try to reach the team agree-ment.

• They direct the business plansachievements.

• They foresee alternative plans.

Third Field:

In the process of carrying out thestrategy, the high intrapreneurs stu-died by Lombriser (1994: 208)started planning but delegating thedetailed planning. Keeping a joint vi-sion process and establishing controls.The pymes´ high intrapreneurs:

• Direct• Are the ideas mentors (all the

intervieweds)• Start the project• Lead the project• Join the team• Get everybody involved• Coordinate the development• Are sponsors• Take the final decisions• Assume the responsibility for

failure or success• Oversee and control the execution

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According to the interviewed, peopleget involve:

• With good communication• Total and direct to everybody• Verbal, informal in the team• Written communication with cus-

tomers• With periodical reports• Using different available media in

the organization

Four field: Creation of a intrapre-neur culture.

Taking the model developed byGarzón (2002: 51) that reveals theessence of a intrapreneur organiza-tional culture, the outcome obtainedthat make easy the intrapreneur workat pymes in order are:

• Risk tolerance• Support to innovative ideas• Identity and ownership feeling• Autonomy• Structure• Performance – award• Conflict tolerance

Each one of this characteristics isdescribed as follows by the pymesmanagers:

Risk tolerance

•· It is a permanent factor in an in-trapreneur life to keep update inthe market.

• It is necessary be willing to takerisks

• Lots of risks must be taken• The risk is to lose customers if

there is not innovation• Followed hunches (understood as

the match between experience andknowledge in a mental process) isnecessary when things fallthemselves or change.

• It is necessary to make peopleaware of the process to measurescope and risk taken.

• The steps forward are donegradually, thus risks are less andis more difficult fail.

• If we fail, we have to accept andlearn.

• The 90% were ideas, 10% risk.

Support to innovative ideas

• When an ideas is proposed, it isdiscussed and developed after ateam agreement.

• It is given trusting people• It requires priority changes• External support must be demanded• It requires escort• It is necessary to make people

feel confidence• It must be given everyday• Debe darse todos los días.

Identity and ownership feeling

• People who participated feels lovefor their work and for the company.

• A flexible schedule lets peoplefeel identity and commitment

• Recognize what people do is im-portant and helps to organizationperdurability

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• Empowerment generates it• It is got aware of the responsibility• It depends on the organization

management to reach it• People who work for the organi-

zation are necessary• It was reached with a commit-

ment culture• It requires tools that let the em-

ployee participate without fear.• It requires a good time manage-

ment.

Autonomy

• There is total autonomy with res-ponsibility

• It requires tranquility to makemistakes

• It lets freedom• It demands independence and

freedom

Structure

• Requires a structure redefinition• All have the same responsibilities• Decisions are taken by agreement• The innovating team is strengthe-

ned• Low formalization• Coexisted with disorder• Flexibility is needed

Performance – award (the moreused)

• Bonus• Awards (shares)• Public acknowledgement

• Salary improvements• Extra- income• Profits participation• Promotions• Budgets for innovation (risk ca-

pital)

Conflict tolerance

• Argument is allowed• An open doors management is

required• It generates creativity• It is constructive• It invites to participation• It is tolerated because everybody

wanted that innovation• It accepts disorder

Fifth field

Innovation, according to Lombriser(1994: 212) the important is processand mentality. To this respect, inter-viewed stated:

• The innovation project was devel-oped to solve the work disorder inthe organization

• It was made intuitively• Came from the tool knowledge

and customer requirements• It started selling the idea to people

to fulfill the commitment• It needed to bring the idea to

people at the project.• The main objective was search the

way to keep organization informabout the product development.

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• People should know companyvery well. Its objectives at longand short term.

• It is made through the agreementprocess

Respect to innovation answers thesewere:

• Gradual 13• Arquitectural 1• Radical 0

Sixth field

Other important aspect identified to thesuccess change generation by pymes´managers to develop innovation in theirorganizations is the organizationallearning. This confirm the statementsof Garzón (2003) as follows:

• To innovate it is necessary to getinformation

• Working and learning in team letimprove the learning

• The first step was training tospeak the same language

• We learn from our mistakes andwe never did those again

• The trained, at his return to the or-ganization trained other employees

• In the innovation process wewere stressed and asked for addi-tional motivation training

• A pyme that wants to be a know -ledge organization generates in-novations permanently

• Innovation development impliedan entire learning process

• To innovate we had to learn aboutmaterials and processes.

• First we looked for informationand then we taught our knowled-ge to make everybody learns

• A key element was kind ofknowledge that was going to betransferred and the used metho-dology

• The key was the consultancy.Argue the options with the teamand finally socialize with the or-ganization.

Contraire outcome against fromthe theory statements

The following are the results that donot match with the profile of the highintrapreneur proposed by Lombriser(1994: 214). He classifies this as“less efficient” related with innova-tion causes:

• The change was my idea. I plannedand developed the strategy

• Tiredness and money issues makepeople innovate

• Because of misunderstandingwith customers

• Customers complains• Technological improvements• High costs of raw materials• WOST analysis• Improving market share• Solve maintenance problems• Imports substitution

These is identified by Lombriser(1993:207) as the development of re-active strategic information, reactingto the threats and introducing late thechange, when de signs are not strong.

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CONCLUSIONS

To reach succes at the Pymes, theyneed a new kind of managers that,quoting Lombriser is called highintrapreneur, who has to fulfill threebasic qualities and abilities:

1. Entrepreneur capacity to foreseein a creative way the strategiesthat will be taken in the future.

2. Organizative ability to create anintrapreneur organizational culturecharacterized in importance order:• Risk tolerance• Support to innovative ideas• Identity and ownership feeling• Autonomy• Structure• Performance – award• Conflict tolerance

Therefore high intrapreneurs influen-ce directly in the organizations’social,strategic and operative culture

3. The behavior stages of high in-trapreneur of polled Pymes are:• Fist stage: follow actively the

environment to detect weak ornew signs of new opportuni-ties and / or threats.

• Second stage: High intrapre-neurs plan the new strategypersonally and directly. Theyinvolve all important peoplewith responsibility around thestrategy execution

• Third stage: High intrapre-neurs start the general plan but

delegate the detailed plan,maintaining a joint process vi-sion and establishing controls.

The high intrapreneurs interviewed insome aspects can be classified ac-cording to Lombriser as “less effi-cient” establishing internal and externalcauses of the innovation performed,the development of reactive strategicinnovation, reacting to threats and in-troducing a late change.

The organizational learning is con-sidered as a key variable to boostinnovation, integration of differentexperiences, knowledge and abilitiesaround a community in which allmembers learn from each other,modifying the attitude in the personbehavior and the environment wherehe interacts, improving:

• The organization strategiccapacity

• Strengthened the change capacity• Improving the organization per-

formance

Finally, taking into account the inter-views to pymes´ managers, high in-trapreneurs get a systematic strategicdirection and active during all thechange process.

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Documents

The Intrapreneur Innovation: Led by Medium and Small Size