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What is Intrapreneurship?

August 8, 2011 by Hajara Saleeth in Management with 1 Comment

Intraprenurship is a combination of  entrepreneurship and management skills. Entrepreneurship is defined as the process of making money, earning profits and increasing the wealth while posing characteristics such as risk taking, management, leadership and innovation. (Read the article on “What is Entrepreneurship”) Entrepreneurship is based on above mentioned key characteristics and it is agreed that entrepreneurs create job opportunities for the management staff who manage the day to day business activities of the business venture commenced by the entrepreneur. However, with the increasing level of entrepreneurs in the business world through the formation of start ups, it is evident that management staff who are capable of handling organizations are not adequate.  Since most of the managers leave their jobs to become entrepreneurs with start ups, 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 manager as an intraprenuer to launch the business venture while allowing him to share the part of the profits made by the new business venture.

Key Characteristics of  Intraprenuers can be summarized as follows.

  • It promotes the managers to be more innovative and take more responsibility while demonstrating charismatic leadership qualities.
  • Intraprenuership projects are funded by large business organization and agreed percentage of profits are remitted to the fund provider/head quarters of the business.
  • Intraprenuership 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 start ups.
  • It add value to the life of the intraprenuer 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 intreprenuer through its profit sharing agreement.
However, there is exploitation happening in the model of intrapreneurship as some companies tend to increase their wealth at the expense of the intrapreneur.

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One Comment

  1. mimDecember 2, 2011 at 3:46 pmReply

    the most influential consultant alive.

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