Intrapreneurship is a combination of entrepreneurship and management skills. In simple words, Intrapreneurship is the practice of entrepreneurship by employees within an organization.
Meaning & Concept
A dictionary meaning to word provides that, “A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation is an intrapreneur.” It is derived as INTRA (corporate) + (entre) PRENEUR].
The trend today is such that everyone who is capable of managing others business is himself indulging in entrepreneurship. This is resulting in the inadequacy of management staff.
In the emergence of this changing pattern, the concept of intrapreneurship is originated where the intrapreneur (i.e. Manager) is made the head of a given business unit and asked to manage it for the organization while employing innovative skills.
As an example, when a company seeks for diversification options, they can appoint one of their managers as an intrapreneur to launch the business venture while allowing him to share the part of the profits made by the new business venture.
Features of Intrapreneurship
An intrapreneur thinks like an entrepreneur looking out for opportunities, which profits the organization.
Intrapreneurship is a novel way of making organizations more profitable where employees entertain entrepreneurial thoughts.
It is in the interest of an organization to encourage intrapreneurs. Intrapreneurship is a significant method for companies to reinvent themselves and improve performance.
Managers would do well to take employees who do not appear entrepreneurial but can turn out to be good intrapreneurial choices.
Key Characteristics of Intrapreneurship
- It promotes managers to be more innovative and take more responsibility while demonstrating charismatic leadership qualities.
- Intrapreneurship projects are funded by a large business organization and agreed the percentage of profits are remitted to the fund provider/headquarters of the business.
- Intrapreneurship will cultivate entrepreneurial skills/culture within the corporate culture where managers will be motivated to accept more risk.
- Due to the backing from the headquarters, the chances of failure are low when compared to startups.
- It adds value to the life of the intrapreneur as he is being given the task of being an entrepreneur while receiving necessary training from headquarters.
- Business portfolio of funding organization will be expanded creating diversification.
- Finally, it creates wealth for the headquarters as well as for the intrapreneur through its profit sharing.
Difference Between Entrepreneur and Intrapreneur
1. An entrepreneur takes the substantial risk in being the owner and operator of a business with expectations of financial profit and other rewards that the business may generate.
On the contrary, an intrapreneur is an individual employed by an organization for remuneration, which is based on the financial success of the unit he is responsible for. Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal, and insight.
As the intrapreneur continues to express his ideas vigorously, it will reveal the gap between the philosophy of the organization and the employee.
If the organization supports him in pursuing his ideas, he succeeds. If not, he is likely to leave the organization and set up his own business.
The words entrepreneur and intrapreneur have acquired a special significance in the context of economic growth in a rapidly changing industrial climate both in developed and developing countries.
An entrepreneur is a key person who envisages new opportunities, new techniques, new lines of production, new products and coordinates all other activities. He likes to experiment with new ideas and thus, face uncertainty. He works for himself and for profits.
2. On the other hand, intrapreneurs are entrepreneurs who catch hold of a new idea for product service or process and work to bring this idea to fruition within the framework of the organization. Related: 37 Essential Qualities of Successful Entrepreneur (Must Know).
Intrapreneurs with their innovations and dedicated effort are perceived as a valuable asset by the organization, inspiring others. They serve as champions to others in those organizations.
In America, a number of business executives have left their jobs and started their own enterprises because they were not given the chance to test and implement their innovative ideas.
Later they achieved phenomenal success in their new venture and posed a threat to the companies they left. These executives turned entrepreneurs are known as an intrapreneur.
3. The Entrepreneur is typically a visionary who spots an opportunity in the marketplace and has the passion, guile and contact base to set the wheels in motion.
The Intrapreneur has the passion and drive but also has the operational skills of running the “clockwork” of the business to enable a good idea to be turned into commercial reality. He is the “inside entrepreneur”.
4. Both “preneurs” set themselves aside from employees in a number of ways but perhaps the most significant is in their relationship with the business.
It’s a question of commitment over involvement. Employees are involved, “preneurs” are committed.
5. Not every business needs an Entrepreneur, but every business needs an Intrapreneur.
In the same way that the seed of a business idea needs an Entrepreneur to shape and cultivate it, so the Entrepreneur needs the Intrapreneur to pluck from his grasp those seeds of opportunity, convert them into a viable commercial plan and then manage that plan to a profitable reality. Without the intrapreneur, ideas entrepreneurs and small business are doomed to fail.
Intrapreneurship vs Entrepreneurship
- Entrepreneurs can be found anywhere; whereas intrapreneurs are found, rather encouraged within the confines of an organization.
- While entrepreneurs face hurdles in the form of ridicule and setbacks from the society in general; intrapreneurs have to face rivalry within the organization they work.
- Entrepreneurs find it difficult to arrange resources while these are readily available to intrapreneurs.
Thus, now you know the Intrapreneurship: Meaning Concept Features Differences.