Seeing

Seeing environmental environmental

opportunities: effects of opportunities

intrapreneurial ability,
11
efficacy, motivation and
desirability
Todd J. Hostager
University of Wisconsin-Eau Claire, Eau Claire, USA,
Thomas C. Neil
Clark Atlanta University, Atlanta, USA,
Ronald L. Decker and Richard D. Lorentz
University of Wisconsin-Eau Claire, Eau Claire, USA
Introduction
A growing concern for the environment has led to a greener competitive
landscape in the 1990s (Porter and van der Linde, 1995a, 1995b). Changing
social values, coupled with an increased understanding of environmental
science and technology, have pushed the demand for environmentally friendly
products past the $200 billion mark (Shrivastava and Hart, 1994). Visions of
green and sustainable corporations have encouraged firms to clean up their
own acts by finding ways to reduce pollution and waste, conserve energy, and
provide more environmentally-friendly products and services (e.g. Cairncross,
1995; Callenbach et al., 1993; Rands and Starik, 1995). At the same time, firms
have faced increased pressures to improve their competitiveness by reinventing
the corporation and its products, services and markets (e.g. Champy, 1995;
Chesbrough and Teece, 1996; D’Aveni, 1994; Goldman et al., 1995; Hammer,
1996; Hammer and Champy, 1993; Hammer and Stanton, 1995; Peters, 1994;
Pinchot and Pinchot, 1994.)
The combined effect of these trends is that environmental opportunities are
becoming increasingly attractive as potential sources of new products, services,
markets, profits and competitive advantage (Cairncross, 1995; Einsmann, 1992;
Porter and van der Linde, 1995a, 1995b). How, then, can corporations take
advantage of these opportunities? The short answer is that firms must develop
the ability to carry out a range of different tasks associated with environmental
intrapreneurship, defined as individuals and groups working within the
corporation to:
Journal of Organizational Change
Management, Vol. 11 No. 1, 1998,
The authors wish to thank Norris Krueger and two anonymous reviewers for helpful comments pp. 11-25, © MCB University
on an earlier draft. Press, 0953-4814
JOCM (1) identify ideas for new products or services that reflect a concern for the
11,1 environment (e.g. recycled materials, reduced pollution, efficient use of
resources); and
(2) turn these ideas into profitable products and services (cf. Pinchot, 1985).
How can corporations develop and support environmental intrapreneurship?
12 More than two decades of research has clarified our understanding of the type
of corporate context that encourages intrapreneurial activity. For example, we
know that management support, available resources, organizational structure,
incentives and other contextual factors play important roles in promoting
intrapreneurial behavior (e.g. Brazeal, 1993, 1996; Fry, 1987; Kanter, 1989;
Kuratko et al., 1990; Peters and Waterman, 1982; Pinchot, 1985; Pinchot and
Pinchot, 1994; Schuler, 1986; Tushman and Moore, 1988; Van de Ven et al., 1989).
Despite clear gains in our understanding of intrapreneurial context and
behavior, comparatively little attention has been paid to the role and impacts of
perception, however.
In this article we hope to advance the cause of environmental
intrapreneurship by presenting a model that illustrates how ability, efficacy
(perceived ability), motivation and desirability (perceived motivation) affect the
performance of a key intrapreneurial task: seeing opportunities. Our model
draws on decades of research ranging from Bandura’s landmark studies of self-
efficacy (e.g. 1977, 1982, 1986, 1997) to Krueger and Dickson’s (1994) recent
application of efficacy theory to the perception of opportunities and threats.
Following Lindsley et al. (1995), the model adds further value for practitioners,
consultants and scholars by addressing:
• efficacy perceptions on both a micro and a macro level (self-efficacy and
collective efficacy); and
• the nature and effects of mutually reinforcing efficacy-performance
spirals.

Recognizing environmental opportunities: effects of ability,

efficacy, motivation and desirability
One of the timeworn tenets of social science is that performance is a function of
ability and motivation (Bird, 1989; Mitchell, 1978). Recent research has handed
down a new verdict, however: performance is a function of ability and
motivation in real and perceived terms (e.g. Bandura, 1986; Bandura and Wood,
1989; Lindsley et al., 1995). The basic structure of our model, presented in
Figure 1, reflects the fundamental logic of this approach: performance on the
task of recognizing opportunities is a function of ability, efficacy, motivation,
and desirability.

Intrapreneurial ability and opportunity recognition

Working from left to right across the top half of Figure 1, ability refers to the full
range of capabilities and resources available within the corporation for use in
 INTRAPRENEURIAL
ABILITY: INTRAPRENEURIAL
EFFICACY:
Organizational-
• Resources Collective-
• Competencies • Company track record
• Structures • Shared beliefs that
• Systems ‘we’ can do it

Individual- Individual-
• Knowledge • Personal track record
• Skills • Belief that ‘I’ can
• Creativity do it
• Experience EFFECTS ON
OPPORTUNITY
RECOGNITION (OR):
ENVIRONMENTAL
INTRAPRENEURIAL OPPORTUNITY POOL; • Frequency of OR activity
MOTIVATION: H1-H16 • Duration of OR activity
• Regulations • Effort expended during OR
MICRO-LEVEL MOTIVATORS • Issues • OR Goal Setting
(SOCIETAL & ORGANIZATIONAL) • Problems • Learning/improved OR skills
• Needs • Number of opportunities
Noneconomic Benefits- • Number of threats
INTRAPRENEURIAL • Risk taking propensity
• Cleaner environment DESIRABILITY:
• Decreased waste
• Sustainability Collective-
Economic Benefits- • Shared beliefs that
noneconomic benefits
• Profits will accrue to society
• Market Share • Shared beliefs that
• Growth economic benefits will
accrue to the firm
MICRO-LEVEL MOTIVATORS
(INDIVIDUAL) Individual-
Extrinsic Motivation- • Belief that ‘I’ will
receive extrinsic
• Salary/wages rewards
• Promotions • Belief that ‘I’ will
• Status receive intrinsic
rewards
Intrinsic Motivation-
• Pride
• Accomplishment
• Challenge

opportunities
recognition of
desirability on the
Figure 1.
13
opportunities
Seeing

environmental
Effects of

efficacy, motivation and

intrapreneurial ability,
environmental
JOCM accomplishing any of the various tasks of intrapreneurship, including the
11,1 recognition of new opportunities. At the organizational level, this includes
various systems, structures, resources and competencies that support
intrapreneurship (cf. Brazeal, 1993, 1996; Fry, 1987; Schuler, 1986). Pinchot
(1985), for instance, highlights the importance of a corporate context that
includes experienced mentors, slack resources, freedom to experiment with new
14 ideas, tolerance of failure, and freedom to form cross-functional venture teams.
Corporate communication and information systems support opportunity
recognition by linking members of the firm with one another and with a variety
of external opportunity resources, including:
• customers – their needs and values, in economic and noneconomic terms;
• competitors – their positions on the environment, including what types
of products and services they will and will not offer in the marketplace;
• government – the policies, rules, regulations and reports of various
agencies;
• special interest groups – the position papers, technical reports,
statements of philosophy, etc., of groups like the Sierra Club, National
Audubon Society, Greenpeace and the Royal Society for the Protection of
Birds; and
• technologies and techniques – information on new technological
developments and state-of-the-art practices relevant to environmentally
friendly products and services.
Local area networks (LANs), intranets and groupware packages like Lotus
Notes have indeed proven helpful in providing access to external sources of new
ideas and in diffusing this information in a rapid and efficient manner
throughout the firm (Stewart, 1994, 1997). This type of infrastructure yields
additional benefits by providing increased access to internal sources of new
ideas, including up-to-date information on resources, technologies, products,
services and activities throughout all departments and divisions of the firm.
Ability at the individual level includes the broad array of knowledge and
skills that each person brings to the corporate setting. Several types of ability
are of particular relevance to recognizing environmental opportunities:
• awareness of environmental concepts, practices, philosophies and
science, including recycling, green products and services, sustainability,
etc.;
• knowledge of customer needs and preferences, economic and
noneconomic;
• awareness of cutting edge technological developments relevant to the
design, production and delivery of products and services within the firm;
• skill in using current communication and information technologies to
connect with opportunity sources and share knowledge and experiences
with others;
 • creative thinking skills, in solo and in collaborative modes; and Seeing
• prior experience in recognizing, screening and evaluating new environmental
opportunities. opportunities
One straightforward approach to increasing the pool of individual abilities is
through selection of personnel – hire people with the requisite knowledge,
awareness, skills and experience. A second approach is to enhance the abilities 15
of existing members through corporate training and development activities
(Schuler, 1986). Seminars or workshops centered on the environment – learning
about recyclable products and materials, techniques for reducing waste and
pollution, basic principles of sustainable organizations, basic concepts of
environmental science, etc. – add ability and increase the firm’s chances for
recognizing more and better opportunities (Callenbach et al., 1993). Lessons in
the use of metaphors, lateral thinking, and other approaches to creative
thinking may increase the odds of seeing new environmental opportunities (e.g.
Adams, 1979; de Bono, 1992, 1994; Gordon, 1961; Morgan, 1986; Von Oech,
1983). Training and practice in creative collaboration – “jamming” with other
members of the firm – should increase the odds even further (Bastien and
Hostager, 1988; Brown and Eisenhardt, 1997; Hatch, 1997; Iansiti, 1995; Kao,
1996).

Intrapreneurial efficacy and opportunity recognition

As shown in Figure 1, perceptions of ability (efficacy) moderate the relationship
between actual ability and task performance. More than two decades of
research has demonstrated a strong link between task performance and
efficacy, defined as the belief or “conviction that one can successfully execute
the behavior required” (Bandura, 1977, p. 193). Perceptions of self-efficacy
develop as we gain experience and competence in various cognitive, social,
linguistic and physical tasks (Bandura, 1982). Since self-efficacy is a form of
cognitive self-evaluation, there is no guarantee that perceptions of abilities will
accurately represent actual abilities, however.
Recent studies have documented the specific ways that self-efficacy affects
task performance. Bandura (1986) and Bandura and Wood (1989) found that
perceived efficacy is linked with initiating and persisting at task behavior under
high uncertainty, decreased behavioral rigidity (increased variety) when facing
threats and setting higher goals. Bandura (1982) also found that efficacy affects
choice of settings and activities, the acquisition of new skills, and the degree of
effort expended on tasks. More recently, Krueger and Dickson (1993, 1994)
found that increased efficacy leads to perceptions of more opportunities and
fewer threats which, in turn, leads to an increased likelihood of risk-taking
behavior.
Despite the relevance of this research, practitioners, consultants and scholars
who are familiar with intrapreneurship know that efficacy perceptions are not
limited to individuals. In a groundbreaking study, Lindsley et al. (1995)
conducted an investigation of the nature and impacts of efficacy perceptions on
JOCM a social level. Building on the ideas of Bandura (1982), they proposed a formal
11,1 definition of collective efficacy as “the group’s (or organization’s) collective
belief that it can successfully perform a specific task” (Lindsley et al., 1995,
p. 648). Collective efficacy perceptions develop as the firm demonstrates greater
skill and competence in accomplishing its tasks.
3M is a classic example of a firm marked by high degrees of perceived
16 efficacy on both a collective and an individual level. Models of intrapreneurial
success – Scotch tape, Post-It Notes, etc. – occupy a central position in the
cultural lore of 3M, reinforcing perceptions of collective efficacy and
encouraging individuals to try their hand at intrapreneurship (Fry, 1987; Peters
and Waterman, 1982; Pinchot, 1985). Firms like 3M provide us with models of
high intrapreneurial efficacy (IE), defined as a combination of:
• collectively-held beliefs that the firm is able to accomplish generic
intrapreneurial tasks (including opportunity recognition); and
• each person’s beliefs regarding their own ability to perform one or more
of these tasks within the firm respectively.
High IE firms like 3M recognize that intrapreneurial success takes a
combination of:
• real capabilities and resources on individual and organizational levels;
and
• beliefs that I/we can identify new opportunities and figure out how to
translate them into profitable realities.

Predicted effects of ability and efficacy

Opportunity recognition depends in part on the extent of ability and efficacy on
both an individual and a collective level. Drawing on the findings of prior
studies noted above, we identify the following propositions for future research:
Abil ity-efficacy propositions. The degree of individual and collective
intrapreneurial task ability, combined with the levels of perceived self-efficacy
and collective efficacy, will be positively related to the following:
• frequency of initiating opportunity recognition activity – looking for
opportunities more often (proposition 1);
• amount of time spent in opportunity recognition activity – spending
more time looking for opportunities (proposition 2);
• amount of effort spent in opportunity recognition activity (proposition 3);
• establishing challenging goals for opportunity recognition (proposition 4);
• learning more about how to recognize opportunities (proposition 5);
• seeing greater numbers of opportunities (proposition 6);
• seeing fewer numbers of perceived threats (proposition 7);
• increased likelihood of risk taking behavior (proposition 8).
Intrapreneurial motivation, desirability and opportunity recognition Seeing
Numerous studies have underscored the importance of motivation on the environmental
performance of intrapreneurial tasks (e.g. Brazeal, 1993; Fry, 1987; Hisrich and opportunities
Peters, 1986; Kanter, 1989; Kuratko et al., 1990; MacMillan et al., 1986; Souder,
1987; Sykes and Block, 1989; Van de Ven et al., 1989). Environmental
intrapreneurship presents a range of potential economic and noneconomic
motivators to employees, managers, organizations, stockholders, customers, 17
communities and other stakeholders of the firm (Cairncross, 1995; Jacobs, 1991;
Porter and van der Linde, 1995a, 1995b). Examples of these motivators are
noted in the bottom left-hand side of Figure 1.
Some members of the firm may be motivated to look for environmental
opportunities by a sense of duty to leave behind a greener, cleaner and safer
planet than they inherited. Some may be driven by the prospects of financial
gain, a promotion, or the opportunity to actively participate in the development
and marketing of their idea. Some may be motivated by a combination of
economic and noneconomic factors. Others may resist the effort entirely,
believing the stereotype that a concern for the environment automatically
entails negative economic consequences for the firm (increased costs, decreased
quality, decreased sales, decreased profits, etc.).
How, then, should firms attempt to motivate their members to look for new
environmental opportunities? One important part of the answer is to expect
that individuals will differ in the specific factors which they perceive as
motivating. Following the lead of Shapero (1975, 1982) and Krueger (1993), we
will use the term desirability to refer to levels of perceived motivation. Like
other actions within the firm, the degree to which the act of seeking out new
environmental opportunities is viewed as desirable may depend on any of a
number of factors, including:
• attitudes toward the act;
• social norms (i.e. shared behavioral prescriptions and proscriptions);
• intrinsic rewards (pride, accomplishment, fun, excitement, enjoyment,
etc.);
• extrinsic rewards (money, recognition, promotions, etc.); and
• punishments and disincentives (cf. Deci and Ryan, 1985; Steers and
Porter, 1983).
What can firms do to increase the desirability of seeing new environmental
opportunities? Allowing individuals to select their own incentives from a
smorgasbord of intrinsic and extrinsic motivators can bolster desirability (Deci
and Ryan, 1985). Providing intrapreneurs with a stake in the ownership,
development and outcomes of their new idea is one means of instilling a mix of
intrinsic and extrinsic motivation (Fry, 1987). Establishing a greater awareness
of the nature and consequences of environmental intrapreneurship through
workshops, seminars and other methods of corporate training and development
can increase desirability by influencing prevailing attitudes and cultural norms.
JOCM Learning more about the rich banquet of economic and noneconomic
11,1 motivators associated with environmentally-friendly products and services can
help the firm to further expand the smorgasbord of rewards for seeing new
opportunities (Callenbach et al., 1993).

Predicted effects of motivation and desirability

18 Opportunity recognition depends on motivation in real and perceived terms.
Like ability and efficacy, we predict that motivation and desirability will impact
on opportunity recognition in some predictable ways:
Motivation-desirability propositions. The actual number, magnitude and
variety of intrapreneurial task motivators, combined with levels of perceived
desirability, will be positively related to the following:
• frequency of initiating opportunity recognition activity – looking for
opportunities more often (proposition 9);
• amount of time spent in opportunity recognition activity – spending
more time looking for opportunities (proposition 10);
• amount of effort spent in opportunity recognition activity (proposition
11);
• establishing challenging goals for opportunity recognition (proposition
12);
• learning more about how to recognize opportunities (proposition 13);
• seeing greater numbers of opportunities (proposition 14);
• seeing fewer numbers of perceived threats (proposition 15);
• increased likelihood of risk taking behavior (proposition 16).

Efficacy-performance spirals: impacts on opportunity recognition

and screening
If performance is a function of ability, efficacy, motivation and desirability, we
might reasonably expect that performance will in turn affect these factors. This
is generally the case. How well a company performs in operational and financial
terms will ultimately determine the amount and type of available resources
(Pfeffer and Salancik, 1978). Moreover, a string of successes or failures can
profoundly impact on morale and motivation within a firm. In this section we
will outline a basic model for describing the development of performance-
ability-efficacy-motivation-desirability relationships across time.

Enhanced opportunity recognition

Viewed as a developmental process, we see that performance, ability, efficacy,
motivation and desirability exist within a mutually reinforcing web of
relationships. Figure 2 adapts Lindsley et al.’s notion of an “efficacy-
performance spiral” (1995, p. 645) to our present focus on the task of
opportunity recognition.
 Opportunity Seeing
Recognition Etc.
(OR) Task environmental
Performance- opportunities
• Frequency of OR activity
• Duration of OR activity
• (Etc.)
Intrapreneurial 19
Efficacy-
• Collective
• Individual

Emotional
Arousal-
• Motivators
• Desirability
Intrapreneurial
Ability-
• Organizational
• Individual
Performance
Feedback-
• Timely
• Detailed
• Constructive
Opportunity
Recognition
(OR) Task
Performance-
• Frequency of OR activity
• Duration of OR activity
• (Etc.)

Intrapreneurial
Efficacy-
• Collective
• Individual

Emotional
Arousal-
• Motivators Figure 2.
• Desirability An upward spiral of
increasing performance
Intrapreneurial in recognizing new
Ability- environmental
• Organizational opportunities
• Individual

Lindsley et al. distinguished between upward spirals based on mutually

reinforcing cycles of increased efficacy and performance, and downward spirals
involving mutually reinforcing cycles of decreased efficacy and performance.
JOCM Figure 2 portrays an upward spiral of developing ability, motivation and
11,1 performance in opportunity recognition. At the base of the spiral is a
foundation that includes the set of individual and collective intrapreneurial
abilities assembled by the firm.
Following Lindsley et al., we expect that the effects of ability on task
performance will be mediated by perceived efficacy and emotional arousal
20 based on actual motivators and perceived motivation (desirability). Moving up
the spiral, we see that ability is mediated by perceived intrapreneurial efficacy,
in this case the extent to which members of the firm believe that they and the
corporation are able to see new environmental opportunities (self-efficacy and
collective efficacy). Ability and efficacy, in turn, are mediated by the emotional
arousal resulting from rewards, recognition, pride and other motivators, in real
and perceived terms.
In short, performance in the task of identifying new environmental
opportunities depends on ability, efficacy, motivation and desirability.
Propositions 1-16 identified some specific impacts of these factors on
performance – frequency of looking for opportunities, time and effort spent in
looking for opportunities, number of opportunities identified, etc. Performance
feedback, delivered in a timely, detailed and constructive manner, fuels the
upward spiral by:
• helping members of the firm to learn more about how to recognize
opportunities (increased ability); and
• strengthening perceptions of intrapreneurial efficacy and desirability.
The spiral continues as increased ability, efficacy, motivation and desirability
encourages members of the firm to look for additional environmental
opportunities (enhanced task performance).

Enhanced opportunity screening

As members of the firm become more experienced at recognizing new
environmental opportunities and begin to see which opportunities ultimately
succeed and fail in the marketplace, they begin to learn what separates the good
ideas from the not-so-good ideas. Like problem formulation (Cowan, 1986, 1988;
Keisler and Sproull, 1982; Lyles and Mitroff, 1980) and strategic issue diagnosis
(Dutton and Duncan, 1987; Dutton and Jackson, 1987), the initial screening or
evaluation of a new environmental opportunity is a subjective process mediated
by perceptions. We predict, therefore, that efficacy and desirability perceptions
will impact on both the recognition and the subsequent screening of new
environmental opportunities.
Figure 3 illustrates how these perceptions can serve as “screens” or filters
that help members of the firm to sift through a pool of recognized opportunities
and sort the good from the bad ideas. According to Vesper, the viability of an
opportunity “is a function of both the nature of the opportunity and of the
entrepreneur’s capabilities and desires” (1993, p. 9). Stevenson and Jarillo
 PERCEPTUAL SCREENS Seeing
INTRAPRENEURIAL
EFFICACY:
environmental
Collective-
opportunities
• Company track record
• Shared beliefs that
‘we’ can do it
Individual-
H17 HIGH POTENTIAL
21
• Personal track record
• Belief that ‘I’ can ENVIRONMENTAL
ENVIRONMENTAL do it OPPORTUNITIES
OPPORTUNITY POOL:
INTRAPRENEURIAL
• Regulations DESIRABILITY:
• Issues
• Problems Collective-
• Needs • Shared beliefs that LOW POTENTIAL
noneconomic benefits ENVIRONMENTAL
will accrue to society OPPORTUNITIES
• Shared beliefs that H18
economic benefits will
accrue to the firm Figure 3.
Individual- The role of perceived
• Belief that ‘I’ will efficacy and desirability
receive extrinsic in screening
rewards
• Belief that ‘I’ will environmental
receive intrinsic opportunities
rewards

concurred with this view, defining opportunity as a “future situation which is

deemed desirable and feasible” (1990, p. 23).
Consistent with these approaches, we define good or high potential
environmental opportunities as ideas perceived as feasible and desirable. The
degree to which a particular opportunity is feasible depends on the extent to
which members of the firm believe that they and the firm have the proper
abilities to develop and profit from the idea (efficacy). Desirability depends on
the extent to which they believe that sufficient economic and noneconomic
benefits will accrue to themselves and to the firm. Low potential environmental
opportunities fall short in one or more of these regards. Thus we predict that as
perceptions of intrapreneurial efficacy and desirability increase, members of the
firm will become more skilled at the tasks of screening for high potential
environmental opportunities (proposition 17) and screening out low potential
ideas (proposition 18).

Conclusion
Faced with mounting pressures to reinvent the corporation in a competitive and
environmentally sensitive manner – a “lean and green” mode – firms will
benefit from learning more about how to encourage their members to develop
skills in seeing new environmental opportunities. In this article we presented a
model that linked opportunity recognition with ability, efficacy, motivation and
desirability. In addition to providing a series of propositions for further
research, we identified a range of practices that could be employed to achieve
JOCM enhanced performance in opportunity recognition through improvements in the
11,1 areas of ability, efficacy, motivation and desirability.
The potential gains in financial, competitive and social terms are indeed
substantial for those corporations who wish to take advantage of
environmental opportunities. By using our model to develop an environmental
opportunity training and development program within the firm, it should be
22 possible for employees and managers to begin to see more opportunities and to
learn how to recognize opportunities that might otherwise be overlooked or
viewed as threats. In situations involving additional costs arising from newly
imposed environmental restrictions, requirements and regulations, for instance,
it may be possible to turn the perceived threat into a profit-generating
opportunity (Cairncross, 1995; Kellogg, 1994).
In general, learning more about how to recognize environmental
opportunities should help to increase the yield of new ideas generated within
the corporation, resulting in a larger pool of ideas and a greater chance of
financial success. Moreover, an enhanced ability to recognize opportunities
should provide the corporation with a competitive advantage over rival firms,
enabling the corporation to see and act on opportunities that rivals overlook or
view as threats (Krueger and Dickson, 1994). When this ability is used to
identify environmentally friendly opportunities, the corporation and its
stakeholders stand to gain substantial economic and noneconomic benefits.

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