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 ~b\a
CHARACTERISTICS G ~6\j
THAT IDENTIFY
THE
INTRACORPORATE ENTREPRENEUR
(INTRAPRENEUR)

by
Jeanette van Greunen

DISSERTATION
Submitted in partial fulfilment of the
requirements for the degree

M. Com (Business Management)

in the
Faculty Economics and Management Sciences
of the
Rand Afrikaans University

Study Leader: Prof S. Kruger

March 1994
FOREWORD AND ACKNOWLEDGEMENTS

A word of thanks to the following people who made a significant contribution to

the successful completion of this dissertation:

* My study leader, Prof. Stephen Kruger, for his leadership, guidance and
continued support.

* Elaine Katz for her invaluable assistance with the editing and refining of the
dissertation.

* My business associate, Moira Katz, for her continued encouragement,

inspiration and assistance with research.

* My dedicated working team at Van Greunen & Associates C.C., who made
it possible for me to allocate time to work on the dissertation.

* Many of my clients, associates and social network, for their interest,

encouragement, and snippets of information.

* My family.

J. VAN GREUNEN
JOHANNESBURG
MARCH 1994
 ii

CHARACTERISTICS THAT IDENTIFY THE INTRACORPORATE ENTREPRENEUR

(INTRAPRENEUR)
Page
CHAPTER ONE: INTRODUCTION

1.1. Introduction and Background 1

1.2. Problem saternent 6
1.3. Objective of the study 7
1.4. Scope of the study 8
1.5. Methodology of the study 8
1.6. Definitions and dscriptions 9
1.6.1. The Entrepreneur 9
1.6.2. The Manager 10
1.6.3. The Intrapreneur 10
1.7. The programme of the study 11

CHAPTER TWO: DEFINING AND DESCRIBING THE ENTREPRENEUR, THE

MANAGER, AND THE INTRAPRENEUR

2.1. Introduction 13
2.2. The Entrepreneur 14
2.2.1.- The functions of the Entrepreneur 20
2.2.1.1. Identifying and evaluating the opportunity 20
2.2.1.2. Developing the business plan 20
2.2.1.3. Obtaining the resources required 21
2.2.1.4. Managing the business 21
2.2.2. The advantages of being an Entrepreneur 21
2.2.2.1. Independence and freedom of action 21
2.2.2.2. Independent ownership 21
2.2.2.3. The speeding up of the decision-making process 22
2.2.2.4. The availability of venture capitcal 22
2.2.2.5. A sense of accomplishment 22
 iii

2.2.2.6. The acquisition of power 22

2.2.2.7. The excitement of the challenge 22
2.2.2.8. The personal control of life 23
2.2.2.9. The need for and the gain of respect 23
2.2.3. The disadvantages of being an Entrepreneur 23
2.2.3.1. Undercapitalisation 23
2.2.3.2. Poor planning 23
2.2.3.3. Lack of expertise and credibility 24
2.2.3.4. Poor money management 24
2.2.3.5. Failure to follow regulations 24
2.2.3.6. Lack of managerial skills 24
2.2.3.7. Lack of perseverance 25
2.3. The Manager 25
2.3.1. The functions of the Manager 28
2.3.1.1. Goal setting 29
2.3.1.2. Planning 29
2.3.1.3. Organising and assembling resources 29
2.3.1.4. Implementing plans and procedures 29
2.3.1.5. Controlling and maintaining organisational activity 30
2.4. The Intrapreneur 30
2.4.1. The functions of the Intrapreneur 34
2.4.1.1. Defining a problem 34
2.4.1.2. Coalition building 35
2.4.1.3. Mobilisation and completion 35
2.4.1.4. Successors or dismantling 36
2.4.2. The advantages of being an Intrapreneur 36
2.4.2.1. Marketing 36
2.4.2.2. Technology 36
2.4.2.3. Trustworthy people 37
2.4.2.4. Pilot plant and shared-time production 37
2.4.2.5. Finance 38
2.4.3. Limits of Intrapreneurship
®
 iv

2.5. Conclusion 39

CHAPTER THREE: DESCRIBING THE CHARACTERISTICS OF' THE

ENTREPRENEUR, THE MANAGER AND THE INTRAPRENEUR

3.1. Introduction 41
3.2. Entrepreneurial characteristics common to both
the Entrepreneur and the Intrapreneur 41
3.2.1. Performance motivation ~)
3.2.1.1. Aspiration level 46
3.2.1.2. Ability to cause things to happen 46-J
3.2.1.3. Goal orientation 48
3.2.1.4. Action orientation 49
3.2.1.5. Time orientation 51
3.2.1.6. Perseverance 52
3.2.2. Attitude toward financial gain 53
3.2.3. Attitude to risk-taking GD
3.2.4.
3.2.5.
3.2.6.
Creativity, innovative ability and vision
Leadership
Confidence, self-image, and perception of probable success
&®
58

3.2.7. Desire for responsibility 60

3.2.8. Adaptability to and tolerance for ambiguity 60
3.2.9. Ability to plan realistically 61
3.2.10. Ability to organise and administer 61
3.2.11. Honesty and integrity 62
3.2.12. Problem solving and decision-making styles @
3.2.13. Desire for autonomy and independence 63
3.3. Additional specific characteristics of the Entrepreneur 64
3.3.1. Pursuing the ideal of freedom 66

~
3.3.2. Need to assume control
3.3.3. Sense of distrust
3.3.4. Need for feedback
~
 v

3.4. Managerial characteristics common to both the Manager and the

Intrapreneur 68
3.4.1. Attitude towards money 68
3.4.2. Inclination for generality 69
3.5. Additional specific characteristics of the Manager 69
3.5.1. Primary motivation: promotion and rewards . 70
3.5.2. Need for power 70
3.5.3. Working within the system 71
3.5.4. Planning, controlling and administrative system 71
3.5.5. Disinclination to take risk 71
3.5.6. Problem-solving and decision-making styles 72
3.5.7. Delegation of responsibility 72
3.6. Additional specific characteristics of the Intrapreneur 72
3.6.1. Dedication 73
3.6.2. Putting internal priorities first 73
3.6.3. Serving self and the organisation 73
3.6.4. Building support, creating and managing a team
and inspiring trust 74
3.6.5. Crossing organisational boundaries 76
3.6.6. Setting high internal standards 76
3.7. Conclusion 77

CHAPTER FOUR: A PERSEPECTIVE ON INTRAPRENEURSHIP

4.1. Introduction 79
4.2. The motivation for Intrapreneurship 79
4.3. Characteristics of the Intrapreneur 82
4.3.1. Primary motives 86
4.3.2. Time orientation 86
4.3.3. Action 86
4.3.4. Skills 86
4.3.5. Courage and sense of destiny 87
 vi

4.3.6. Attention 84
4.3.7. Risks 84
4.3.8. Market research 85
4.3.9. Status 85
4.3.10. Failure and mistakes 85
4.3.11. Decisions 85
4.3.12. Service to self and others 86
4.3.13. Attitude toward the system 86
4.3.14. Problem-solving style 86
4.3.15. Relationship with others 87
4.4. Identifying the Intrapreneur 90
4.5. Guidelines for intrapreneurs 92
4.6. Requirements for the practice of Intrapreneurship 93
4.6.1. Providing leadership and strategy 94
4.6.2. Creativity 95
4.6.3. Resource allocation 96
4.6.4. Training 97
4.6.5. Reward system 97
4.6.6. Organisational and industry knowledge 99
4.6.7. Communication systems 99
4.6.8. Identification and recognition of Intrapreneurs 100
4.6.9. Assuring continuity and experimentation 101
4.7. Conclusions 103

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1. Summary 107

5.2. Conclusions 108
5.3. Recommendations 111

LIST OF TABLES vii

LIST OF FIGURES vii
BIBLIOGRAPHY 114
 vii

LIST OF TABLES
Page

1 Checklist for feelings on control 48

2 Checklist for willingness to take risks 56
3 Checklist for feelings on independence 64
4 Sponsorship sprectrum 74
5 Who is the Intrapreneur? 83
6 Characteristics of the Intrapreneur 90
7 Are you an Intrapreneur? 94
8 The Intrapreneur's "Ten Commandments" 95
9 Creativity 99
10 Communication 103
11 Entrepreneurship in an Entrepreneurial organisation 105

LIST OF FI GURES
Pages

1 The Manager's opportunity matrix 17

2 Tendencies toward Nonentrepreneurial or
Entrepreneurial activity 18
3 The unique psychological characteristics of
Entrep reneurs 45
4 The Intrapreneurial grid 51
5 Innovation gap 80

...
 viii

OPSOMMING

TITEL
Eienskappe wat die intrapreneur identifiseer.

INLEIDING
Veranderinge in ekonomiese faktore, tegnologie, die g/obalisering van besigheid, en
ander faktore het gelei na dramatiese veranderinge in die tradisionele bestuurstaak.
'n Kombinasie van bestuurs- en entrepreneursvaardighede, die eienskappe eie aan
die intrapreneur, mag die vereiste vlak van innovasie en kreatiwiteit verskaf vir
toekomstige sukses.

DOEL
Die doel van hierdie studie is om die eienskappe van die intrapreneur the
identifiseer deur die intrapreneur met die entrepreneur en bestuurder te verge/yk.
Die studie beoog ook om riglyne te verskaf aan ondernemings wat beoog om meer
entrepreneuries voor te kom, sowel as om metodes vir die identifisering van
intrapreneurs te veskaf.

METODE VAN STUDIE

'n Deeglike literatuurstudie is ondergaan om die eienskappe van die intrapreneur te
vergelyk en te identifiseer.

BEVINDINGE
Die studie bevind dat die intrapreneur het eienskappe eie aan beide die entrepreneur
en die bestuurder het. Die spesifieke eienskappe van die intrapreneur is sy of haar
verrnoe om te skep en te innoveer binne die beperkinge van die bestaande
onderneming. Verdere bevindinge is dat ondernemings meer entrepreneuries kan
voorkom en so geleenthede verskaf vir intrapreneurs om na vore te kom.
 1

CHAPTER ONE

THE PROBLEM STATEMENT AND OBJECTIVE OF THE STUDY

1 ~ 1. INTRODUCTION AND BACKGROUND

The second half of the twentieth century has witnessed the transformation of the
business environment caused inter alia by the globilisation of commerce and
industry, modifications to economic theories, technological innovation and the
enormous development of information technology. Apart from making new
demands on business and management, these factors have created a great deal of
uncertainty and risk. To deal with these extensive changes present-day
corporations have to continuously examine their policies in order to determine
appropriate strategies. Indeed, the managerial task has become exceedingly
complex.

Kanter (1989: 18) suggests, that the would-be entrepreneur, if he is to succeed,

must balance his dreams with discipline. By this Kanter means that the
entrepreneur requires vision coupled with practicality: he must continue to identify
the potential in wider opportunities, but at the same time he must recognise the
realities of more constrained resources. Because business is being conducted
under more pressure and with greater international scope than ever before, new
commercial strategies are clearly essential and, if they are to succeed, they must
address the central contradiction of our times. The route to success in the
corporate olympics means operating under a new, apparently contradictory
strategic imperative: .... "to do more with less".

The answer to present-time challenges and those of the future, is innovation.

Throughout the world today innovation, a process in which !he role of the
 2
individual is strongly emphasised, is seen as a national priority. The important role
of innovation is clearly demonstrated by White (1988: 55), who identifies five
phases in the life of an .organisation: first, the entrepreneur and the organisation;
second, professional management; third, participative or interactive management;
fourth, the bureaucracy; and fifth, the coming of the intrapreneur. These five
phases are now summarised.

Phase One - The Entrepreneur and the Organisation

Phase one is the birth phase of the organisation. The success or failure of this
phase rests solely on the abilities of one person, the entrepreneur, who is the
innovator and the risk-taker. His/her enthusiasm and spirit rule the entire
organisation. In this first phase of an organisation's life, the entrepreneur is
synonymous with the organisation. In this capacity he/she has three main
functions, namely innovation, management and co-ordination, and risk-taking.

* His/her first role is innovation which draws upon his aesthetic sense and
involves his doing something different. He/she is able to do this because
he/she does not accept the established boundaries and structures of
business and technology. Yet he/she can anticipate how any changes may
affect them.

* His/her second role is managing and co-ordinating. By bringing together and

co-ordinating people, raw materials, technoloqv, and finance, he is able to
produce a marketable commodity.

* His/her third role is risk-taking, which involves going beyond established

boundaries. As the outcome of so doing is always uncertain, to deal with
uncertainty is to "deal with risk.

Drawing on Drucker, White (1988: 55) elaborates:

\
\
 3
n ••• the man at the top knows who the few people are in the organization,
in whom responsibility for key results rests, without having to consult the
records or any of his associates... He knows their assignments,
backgrounds, what they can do, their limitations... n

When the owner-entrepreneur can no longer effectively run the organisation onan
intimate basis, phase two of the organisation's life has evolved. He/she must now
hire assistants.

Phase Two - Professional Management

Phase two is the embryonic stage of professional management. At this point the
owner-entrepreneur must shift his/her focus to accommodate the new objectives:
expansion, through increased finance, while at the same time remaining profitable.
To give him/her the time to accomplish these objectives, the entrepreneur-owner
must hire managers. At this stage, because leadership still resides firmly with the
owner-entrepreneur, the manager has to do routine tasks and has limited or no
authority.

Phase Three - Participative or Interactive Management

Phase three, the next growth stage, requires the organisation to develop managers.
These must be competent to handle their own departments, to discuss problems
with other department heads and to find solutions as a result of the growth of the
organisation. These managers are given a greater degree of responsibility than
before within their specific areas. They are accountable to the entrepreneur for
their unit's profit levels, market share, costs and budget controls.

Phase Four - The Bureaucracy

..
During phase four standardised procedures are instituted to streamline work. The
management structure of the organisation is formalised, usually into a pyramid
 4

configuration, with the chief executive officer at the 'top and the employees at the
bottom. All employees have supervisors, including the chief executive officer, who
must report to a board of directors.

During this phase the organisation eventually reaches a crisis point, as all the
systems within the organisation combine to exceed their utility and so impede
growth. Managers tend to become resentful of the control mechanisms, and
innovation tends to grind to a halt. Procedures take precedence over problems and
people. Younger more enthusiastic managers often leave the organisation either
to start their own businesses, or to take up better positions with other
organisations where they can exercise their talents and develop their potential.
This is the crisis which precipitates the evolution of Phase five.

Phase Five - The Coming- of the Intrapreneur

Phase five does not emerge full blown, but must slowly evolve. This process
involves developing a more flexible and behavioural approach to management so
that the spirit and enthusiasm, that were lost in the ascendency of structure and
procedure, can be restored. To move into this phase an organisation develops
people-centred and team-oriented structures. Phase five organisations display
characteristic features. These include productivity improvement by consensus,
concurrent control and flexibility, an identifiable corporate structure, and a simpler
form and a leaner staff. More important, entrepreneurship, with a bias toward
action that is customer-oriented is encouraged.

In the past, organisations have not tended to deal with the emerging
"entrepreneurial spirit" of managers, many of whom redefine themselves as
"entrepreneurs", leave the corporation and start their own small businesses.
But a critical examination of the traditional practice of management, has led to the
wide-spread acceptance of the idea that changes need to- be applied within
orqanlsations to foster an environment of creativity and innovation.
 5
For instance in 1985 the President and Chief Executive of Beijerinvest in Sweden,
a major European conglomerate that includes Volvo, stressed this need for change.
(pinchot, 1985: 58). He stated:

"Today we must support people with ideas and initiative - the entrepreneurs
- because they are agents of change and our hope for the future.
Experience shows that successful companies are those who have initiated
change in technology, marketing or organization and managed to keep a lead
in changes over competitors. Therefore, entrepreneurs are needed not only
to start new business ventures on a small scale, but also to put life into
existing companies, especially the large ones. The trouble is entrepreneurs
and large companies do not seem to get on well together, although they
should need each other. The entrepreneur needs the resources of a large
company to try his ,ideas on. The large company needs the innovative force
and initiative of an entrepreneur. But the entrepreneur likes to be his own
boss and the organization of a large company usually gives little room for
independence" .

As this statement illustrates, there is clearly a need to foster an entrepreneurial

spirit amongst managers within the organisation. This is now known as
intrapreneurship. The concept of "intracorporate entrepreneurs and
intrapreneuring" was developed by Gifford Pinehot III during the 1980's.
According to Hisrich and Peters (1987: 509), the interest in intrapreneurship by
existing orqanlsatlons is the result of societal changes with repercussions at the
business level. Individuals who believe strongly in their own talents have an
increasing desire to create something of their own. They want to do their "own
thing" on their own terms. This strong drive for personal expression and
responsibility has resulted in individuals striving for more freedom in the
organisational structure.

If this freedom is not forthcoming to such an individual, they often develop a

'dislike for the organisation. This, in turn, can cause them to become less
 6
productive, or even to leave the organisation so that they can achieve self-
actualisation elsewhere. This search for meaning, coupled with impatience, is
causing more discontent in structured organisations than ever before. When the
organisation fails to provide meaningful employment, individuals will search for an
institution that will provide it.

One solution to this problem appears to be intrapreneurship. It is a method for

facilitating individuals who think that something can be done differently and better
within the organisation.

1.2. PROBLEM STATEMENT

Although the terms "entrepreneur" and "intracorporate entrepreneur

(intrapreneur)", have been used synonymously, a distinct difference exits between
them. For organisations to cope with the challenges of modern business, a climate
for creativity and innovation must be provided. In order to do so, organisations ~i
. i
need to develop a clear understanding of the nature of the intracorporate
entrepreneur (intrapreneur) and the environment within which he/she functions.
This understanding will enable organisations to provide the conditions within which
the intracorporate entrepreneur (intrapreneur) may pursue his/her creative -and ~
,....----
innovative ideas to the benefit of both parties.

According to Ross (1987: 79), more and more managers of established \

organisations are accepting two conclusions about bureaucracy and innovation.
The first is that the complex structure of the modern corporation inhibits innovation
and change. The second is that some way should be found to encourage the
entrepreneurial spirit in the corporation and to release the innovative potential
among its members. Although these two conclusions are apparently
straightforward, they are nevertheless paradoxical:
.
it is necessary to retain many
of the organisation's classical trappings, yet to encourage the innovation that the !

trappings inhibit. All the same, the answer is clear. The skills of both the
)
 7
professional corporate manager and the entrepreneur are needed. Neither alone is
enough. Recent research and experience indicate the need for combining
managerial and entrepreneurial skills. Evidence also shows that start-up firms,
particularly those in high-tech, are more successful if the founders have had prior
i experience in the relevant markets and technology, and have obtained this
experience with "large" organisations.. It is possible that they have succeeded
because they have had the best of both worlds: freedom to innovate combined
with the required managerial background. Multi-dime':lsional individuals, who are
the product of both worlds, appear to have managed such organisations..

* First, they learn and practise the fundamentals of professional management:

planning, organising, controlling, communicating, and rational decision-
making.

* Second, they adopt entrepreneurial behaviour as part of the basic company

culture, and in so doing obviate the bureaucratic roadblocks that inhibit
innovation.

* Third, they encourage innovation and entrepreneurship among subordinates.

The distinctions between the entrepreneur and the intrapreneur, as mentioned, are
more often than not blurred." This study therefore attempts to overcome this
problem by identifying the specific characteristics of the intrapreneur.

1.3 OBJECTIVE OF THE STUDY

The objectives of this study are threefold:

* to describe the entrepreneur, the

.
manager, and the intracorporate
entrepreneur (intrapreneur);
 8

* to describe and compare the characteristics of the entrepreneur, the

manager, and the intracorporate entrepreneur (intrapreneur);

* to identify the distinct characteristics of the intracorporate entrepreneur

(intrapreneur) .

1.4. SCOPE OF THE STUDY

The intracorporate entrepreneur (intrapreneur) is a wide and debateable field of

study. The research topic will be limited to a literature study of the characteristics
of the intrapreneur, as identified in comparisons between the intrapreneur, the
entrepreneur, and the manager.

This research topic can lead to empirical research regarding both the intracorporate
entrepreneur (intrapreneur) , and the environment within which he/she functions
successfully.

1.5. METHODOLOGY

Information has been collected in the following way:

* literature regarding the subject materials

* interpretation of literature

The collected information has been described, analysed, interpreted, and evaluated

..
on a qualitative basis and conclusions have been drawn and recommendations
made.
 9

1.6. DEFINITIONS AND DESCRIPTIONS

To ensure clarity on the entrepreneur, the manager and the intrapreneur, a brief
definition of each follows.

1.6.1. The Entrepreneur

.
The function of the entrepreneur is to reform or revolutionise the pattern of
--_._----------'_.
production. He can do so by exploiting an invention or, more generally, by
-----------------:------ ----------------
furthering an untried technological possibility for producing a new commodity.
----_ --._- ......

He/she can also produce an old invention in a new way, open a new source of
supply or materials, or provide a new outlet for products, or reorganise a new
industry.

According to" Hisrich and Peters (1987: 8), the entrepreneur may be defined as
follows: ."

"The entrepreneur organizes and "operates an enterprise for personal gain.

He pays current prices for the material consumed in the business, for the
use of land, for the personal service he employs, and for the capital he
"
requires. He contributes his own initiative, skills and ingenuity in planning,
organizing, and administering the enterprise. He also assumes
--
the chance
-,._~---,~._., ~.,- ~.

of loss or gain consequent to unforeseen and uncontrollable circumstances.

He retains for himself the net residue of the annual receipts of the
enterprise. "

In essence, an entrepreneur is a person who take§!.isks, usually in an independent ;\

ca'pacity, to begin or to maintain a productive operation.
 10
1.6.2. The Manager

Stoner (1982: 8) defines management as the process of planning, organising,

leading, and controlling the efforts of organisation members and of using all other
organisational resources to achieve stated organisational goals.

Management can therefore been defined as .... "getting things done through
people". They achieve these goals by arranging for others to perform whatever
tasks may be necessary - not by performing the tasks themselves.

1.6.3. The Intrapreneur

An intrapreneur operates in a corporate environment, where he actively seeks

opportunities and deliberately risks introducing change and improvement. Such
entrepreneurial activities are conducted within large orqanlsatlons., which
sometimes allow, or even encourage, the creation of new and relatively
autonomous organisational subunits for pioneering new products or services.

YThe term "intrapreneur" is derived from intracorporate entrepreneur. According to

\
\\ Wood (1988: 13), he/she is the person who identifies an opportunity and reacts
J .
( to it by developing a new product, service, or market within an organisation, and
i.accepts the risk and management thereof.

Intrapreneurs are characterised by their propensity to both "dream" and "do".

They take responsibility for creating innovation of any kind within an organisation.
Although the intrapreneurs may be the creators or inventors themselves, they are
the "dreamers" who work out how to turn an idea into a profitable reality (Pinchot
.1985: 14).

In summary, the intrapreneur, who has characteristics similar to those of the] ~

entrepreneur, he does not operate on his own, but does so in a corporate
 11

environment. There he actively seeks opportunities and deliberately risks the

introduction of change and improvement.

, 1 .7. THE PROGRAMME OF THE STUDY

The study material is divided into the following chapters:

Chapter Two: Describing and the Defining the Entrepreneur, the Manager and the
Intrapreneur "

The main theme of the dissertation is to identify the characteristics of the

intracorporate entrepreneur (intrapreneur). Before this task can be accomplished
the entrepreneur, the manager and the intrapreneur need to be described in more
detail. Chapter Two is thus devoted to describing the entrepreneur, the manager
and the intrapreneur, with specific reference to defining them, describing their
functions, and outlining the advantages and disadvantages of each.

Chapter Three: Describing the Characteristics of the Entrepreneur, the Manager,

and the Intrapreneur

The intrapreneur who" possesses some unique characteristics, also has many
characteristics common to both the entrepreneur and the manager. Chapter Three
is devoted to these issues. Firstly, it identifies the characteristics common to both
the entrepreneur and the intrapreneur. Secondly, it examines the characteristics
to both the manager and the intrapreneur. Thirdly, and lastly, it delineates the
characteristics which are specific to the entrepreneur, to the intrapreneur and to
the manager.
...
 12

Chapter F.our:. A Perspective on Intrapreneurship

Chapter Four is devoted to two themes: first, the identification of distinct

characteristics of the intrapreneur; second, the examination of the environment
conducive to the practice of intrapreneurship and intrapreneuring.

Chapter Five: Summary, Recommendations and Conclusions

Chapter "Five is devoted to summarising the first four chapters, to drawinp

conclusions from them and to making recommendations ..

..
 13

CHAPTER TWO

DESCRIBING AND DEFINING THE ENTREPRENEUR, THE MANAGER

AND THE INTRAPRENEUR

2.1. INTRODUCTION

The habitat of entrepreneurs is often, but not always, small business. When a
. ----
company grows beyond some critical size, its increasing complexity forces it to
replace its venturesome founders with professional managers, who are not usually
noted for their inventive, risk-taking behaviour.

In the course of their activities many large corporations come across some new
technology, but for various reasons fail to pursue it. Typically, some employee
sees the potential of the technology and leave the large organisation to set up their
own enterprises. This -is a problem for large companies. Not only do they miss
technological opportunities, but they also lose talented employees. The solution
to this dual difficulty is for large companies to create a working environment which
stimulates and uses the entrepreneurial skills of employees.

According to Pinchot (1985: 32), a traditional company offers typical career paths
in technological development without a management role being present, or in
l
management itself. Yet for certain people neither of these career paths can fully
realise their talents. It is for them that intrapreneurship, which bridges the gap
between- manager and inventor, offers-a third and fulfilling career path. like
entrepreneurs, intrapreneurs are not necessarily inventors of new products or
services. Their contribution can be the adoption of new ideas or even working
prototypes and turning them into profitable realities. Once they have converted
their ideas into functioning businesses, the value of which accountants can
acknowledge,·intrapreneurs tend to grow bored. At this point, they often need to J
 14

hand over such ventures to proven managers to maintain and develop, while they
go back to establishing new ventures, which others, once again, ultimately
manage.

If one is to understand to what extent the intrapreneur straddles the dual roles of
manager and entrepreneur, it is necessary to have a knowledge of each of these
three categories. The focus of this chapter is therefore to define and describe in
turn the entrepreneur, the manager and the intrapreneur.

2.2. THE ENTREPRENEUR

Although entrepreneurial activity has characterised each and every "historical

epoch, entrepreneurs in today's sense arose in Britain with the advent of the
Industrial Revolution in the late eighteenth century. Restlessness and abounding
I
energy were the hallmarks of these early entrepreneurs. Few had mone~, and none ;/
came from the nobility. They emerged from the lower middle classes and were
\
driven by an impelling need to convert dreams and innovative ideas into actuality. \ / / \- '
Believing in the worth of the work in which they were totally involved, their major /(0':/
objectives were the growth and enlargement of their business enterprise. They(
\

therefore. did. not consider the wealth they accumulated as being of first \
importance. Rather, their success endowed their efforts with worth and dignity.
In short, a sense of achievement was their prime reward (Schollhammer, 1979: 8).

In blazoning this trail, these pioneer businessman established the basic criterion for
entrepreneurship, a yardstick by which their followers measured their own
achievement, namely that innovation must be the central characteristic of
entrepreneurial endeavour. This is also the view of the economist, Joseph A.
'Schumpfer, who emphasises that the concept of innovation distinguishes
enterprise from other forms of endeavour. He further contends that nobody is an
entrepreneur all the time. The entrepreneur behaves as such only when introducing
innovations (Schollhammer, 1979: 8).
 15

Schurnpter's views are supported by other economists. Bosman (1980: 3), for
instance, claims that ,an entrepreneur is an innovative person with a directed
e[!ergetic drive. He aims to increase economic wealth, he is able to organise and
control environmental variables, he moves in areas of uncertainty and creates a risk
i

taking environment, and he is capable of coping with stress, strain and uncertainty.
While other definitions contain additional elements, innovation is still a central
criterion. It is suggested, for example, that an entrepreneur is an individual who
perceives an opportunity, organises an economic activity, takes risks, strives for
profits, constantly and tirelessly struggles to achieve progressively higher standards
of excellence, innovates, is highly "achievement motivated", and is very often a
"social deviant" (Taylor and Leppitt, 1975: 155).

Individuals who are involved in the identification and implementation of original

ideas are also called entrepreneurs. This may mean a single person involved in a
start-up phase of a new and generally small business, or several persons involved
in large, already established enterprises. In the latter case, a group may be
engaged in risk-taking activities regarding the continuation of the business. Such
entrepreneurs, as Arthur Cole suggests, engage in broad organising and decision-
making functions. Similarly, they may specialise in making judgements about the
coordination of scarce resources (Casson, 1982: 23).

f\~cording to Sanfe (1991: 1):

"The entrepreneur is ever restless, always on the move; a retro-powered and

committed innovator, a creative gofer; constantly scanning every horizon for
-~-----------

an opportunity, poking into the future, looking to bring about changes,

c

continuously dealing with uncertCiinty and the unknown; having the ability
to make probabilities out of possibilities and moulding dissonance into a
melodic tune. The entrepreneur operates in high gear, is driven, thrives on
_._.• __ __ __.. ....." ___.O._"' •• ... , ••. '_'__ __ __ - ._ _
~
-
.
,
"
_
'
.
~
'
"
"
~
"
.
"
_
~
.
~
>
_
~
_
~
.
'
_
_
,
.
,
~
_
_
,
.
~
_
~
~
.
_
.
"
'
_
~
~
"
_
V
<
~
_
"
_
"
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~
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"
>
_
~
staying loose, adjusting, fine tuning, and is an inveterate fiddler who often
...'----------------------~-------
upsets what is, which is predictably disconcerting tothose involved in the
........... ... ..--------._-_.~._-- ---_ _
project. All in all, entrepreneurs are mavericks and soloists who have a
 16
rough-hewn approach to things and uncompromising determination to do it
" 0'-- ~_. - •• _-:-;-.;.~ ..• _---~_.

their way. It sets them apart in sharp contract, from those reposing snugly
in entitled union jobs or who are cushy number-crunching minions in large _~

r--.:..orporations. There is plenty sweat, tears, fears, and precious littl~ glamour p~::"==!J l
in entrepreneur war stories."

The entrepreneur is the one who undertakes a venture, organises it, raises capital
to finance it, and assumes all or a major portion of the risk. These people create
change, provide a variety of job opportunities, and also serve as role models to
inspire new generations of entrepreneurs. They often reap huge rewards for
themselves and the venture capitalists who have the foresight to back them. In
essence, the entrepreneur can be described as anyone who takes the risk to
develop and implement an enterprise.

Entrepreneurship must be seen in the context of a range of behaviours, as

described by Burch (1986: 16). With reference to Figure 1, below, at one extreme
there is a promoter type manager, who feels confident of his/ her ability to seize
opportunity. This manager anticipates surprises and expects not only to adjust to
change but also to capitalise on it and make things happen. At the other extreme,
is the trustee-type manager, who feels threatened by change and the unknown,
and whose inclination is to rely on the status quo. Predictability fosters effective
management of existing resources while unpredictability endangers them. As
managers move closer to the promoter end of the scale they become more
entrepreneurial, and as they move toward the trustee end of the scale they become
less so or more administrative.

A close relationship exists between opportunity and individual needs. To be an

entrepreneurial opportunity, a prospect must pass two tests: it's future state must
involve growth or at least change; and the individual must believe it is possible for
that state to be reached. ...
 17
FIGURE 1 THE MANAGER'S OPPORTUNITY MATRIX

Desired future state

charaterised by
growth or change

Yes No

Self- Yes
perceived
power and
ability to
realise goals

No

Source: Stevenson and Gumbert (1985:89)

A continuum of entrepreneurial activity, starting with no entrepreneurial tendencies

and ending with very strong ones, can be identified in Figure 2. The labourer is
the least entrepreneurial person, while the inventrepreneur has the strongest
tendencies. The .bureaucrat, lender, professional, and manager tend to be non-
entrepreneurial. Although the copycat entrepreneurs simply imitate someone else's
-product or service and business, they have fairly strong entrepreneurial tendencies
except in innovation. Opportunistic entrepreneurs who have..fairly strong overall
tendencies for entrepreneurial activity, are characterised by the capacity for
spotting and exploiting opportunities. Venture capitalists, who hava.a strong
 18

wealth-seeking tendency, are not entrepreneurs as such, but are primary sources
of equity finance for business ventures, especially for those starting up or in an
early stage expansion phase. Both the innovative entrepreneur and the
inventrepreneur have very strong overall tendencies toward entrepreneurial activity.

FIGURE 2 TENDENCIES TOWARD NONENTREPRENEURIAL OR

ENTREPRENEURIAL ACTIVITY

L-
:J
a>
L-
:J
U L-
::J
L-
:::l
c
(ij 0Z:; a>
~ c ca> UI a> L-
.- c a> a> 0.
.2 >c
in ~ e ._ a> ~
L-
U
UI a> §
~a.
:::l L-
1Il a> en 0) 00. to. C
1Il >.a> oa>
co~
a> "C J!! ~
L-
:::l
rn
c
a>
...J
o
0:
C
1Il
:::E o
g-EUJ ~E
0 lJJ cC
....
_lJJ
c

Nonentrepreneurial
.....
Dependence-seeking .•· • . . . . . . . . . . . . . . • • . .. E
Subsistence-seekinq.e- . . . . . . . . . . . . . . . • . . .• ~
:f!
Averse to Opportunity « . . . . . . . . . . . . . . . . . .. ~
Noninnovate • . . • . . . . . . . . . . . . . . . . . . . . • . .
Averse to Venture-s. • . • . . . . . . • . . . . . . • • • • •. G- c::
Averse to risk ..· • • . . . • . . . • . . . • . . . . . • . • .. ~
c
Analytic e . . . . • • . • • . . . • • . . • • • . • • • • • • • •• ~
Entrepreneurial
· •.......•...•...•.. ~ Independence-seeking
. • . . . . . . . . . • . . . • . . . . . . . '." Wealth-seeking
· .•...•...........•...~ Opportunity-seeking
· • . . . . . . . • . • • . . . . • . . . . . . . • • . . ~ lnnovative
· •••••••••.•..••.••••.••.• Venture-seeking
. . . . . . . . . . . . . . . . . . . . . . . . . . . Risk-accepting
• .••.•••••••••••••.•••.•••••.•• Intuitive

Source: Burch (1986:31)

Definitions of the entrepreneur generally refer to one who organises, manages, and
assumes the risks of a business enterprise (Luchsinger, 1987: 10). But they have
many other facets as Hisrich and Peters (1989:10) shows: ..
 19

"To an economist, an entrepreneur is one Who brings resources, labour,

materials, and other assets into combinations that make their value greater
than before, and also one who introduces changes, innovations, and a new
order. To a psychologist, such a person is typically driven by certain forces
- need to obtain or attain something, to experiment, to accomplish, or
perhaps to escape authority of other... To one businessman, an entrepreneur
/\

appears as a threat, an aggressive competitor, whereas to - another

businessman the same entrepreneur may be an ally, a source of supply, a
customer, or someone good to invest in... The same person is seen. by a
capitalist philosopher as one who creates wealth for others as well, who
finds better ways to utilize resources, and reduce waste, and who produces
jobs others are glad to get."

Entrepreneurship also involves creating incremental wealth. This is accomplished

by individuals who assume the major risks in terms of equipment, time, and career
commitment, or who provide value for some product or service. The product or
service may not be new, but the entrepreneur adds value through receiving and
allocating the necessary skills and resources. The result of his participation is
monetary and' personal satisfaction (Hisrich and Peters, 1989: 10).

Within the business the specific job of the entrepreneur is to transfer to the future
the present-day capacities of the enterprise - to enable already successful
businesses to remain successful in the future (Drucker, 1974: 47).

Another aspect of the entrepreneur may be his influence on the environment.

r
According to Vesper (1980: 2), the entrepreneur is someone who combines '[) c-,
resources, raw materials and other factors. He aims to improve the environment,
introduce changes, to make discoveries and introducing a new economic
. dispensation.

In summary, the definition of the entrepreneur generally includes the following

behaviours:
 20

* initiative taking;
c

* the organising and reorganising of social and economic mechanisms to turn

resources and situations to practical account; and

* the acceptance of risk or failure.

2.2.1. THE FUNCTIONS OF THE ENTREPRENEUR

The entrepreneur has at least four main functions: to identify and evaluate the
opportunity; to develop the business plan; to obtain the resources required; and
to
.... manage the business. These are outlined below.

2.2.1.1. Identifying and evaluating the opportunity

The entrepreneur is alert to possibilities, and is constantly looking for a need to

create or develop a product or service. He/she taps the sources such as
consumers, business associates, technical people, and so on. Using his/her
personal skills together with his assessment of the viability of the opportunity, the
entrepreneursdecide whether to pursue the matters.

2.2.1.2. Developing the business plan

A well developed business plan assists the entrepreneur to elicit the support of
people, especially those from financial institutions. The business plan should
contain information regarding the following: the characteristics and size of the
market segment; the market plan; the production requirements; the financial
plan; the organisation plan; and the financial requirements.
 21
2.2.1.3. Obtaining the resources required

The resources needed for the opportunity must be assessed. Existing resources
must be compared with the required resources to determine what will ultimately
be required.

2.2.1.4. Managing the business

The entrepreneur puts the business plan into action: he deals with the operationat
problems of the growing business.

2.2.2. THE ADVANTAGES OF BEING AN ENTREPRENEUR

«<.
The independent entrepreneur experiences a number of benefits. The following are",
described below: independence and freedom of action; independent ownershlp.y"
the speeding up of the decision-making process; the availability of venture capltak'<.
a sense 'of accomplishment; the acquisition of power; the excitement of th'e/
challenges; the personal control of life; and the need for and gain of respect. )

2.2.2.1. Independence and freedom of action O t\ctl)L\1\(:\1\ ~,' I . I

.... ,IL~ C~
'e \iI'''! ~ d
J
to~ aile,S'<

The successful entrepreneur enjoys considerable independence and freedom of

action. He does not need to get permission to try a new approach.

2.2.2.2. Independent ownership

Independent ownership, which permits a flexible approach, may naturally lead to

wealth and freedom.
 22
2.2.2.3. The speeding up of the decision-making process J30~"E'cl(.,\': '~j v ".d- .__ -
. ~Yu..Lh""'", L"--',/1't)) ,-~-<.~

The bureaucracy of big business often retards decision-making. The entrepreneur

has the freedom to assess a situation and make a decision without necessarily
having to consult any other parties.

Du' \~"sDc ~no.\,-ki d v ()1)~{Y\,Qn "-

2.2.2.4.. The availability of venture capital
\W\.I.Jd~LCcl

Although venture capital is not always available, nevertheless venture capital may
also include wider services, such as the provision of information and other
resources.

2.2.2.5.

A sense of accomplishment is a compelling reason why many people become

entrepreneurs. They enjoy building from nothing, and so fulfilling their dreams and
aspirations.

-,"'\.<1j
b\.~ ~(J:J
\- - \j

2.2.2.6. The acquisition of power fjj'j

The desire for power is a strong and persuasive face among entrepreneurs. After
working diligently for a firm, would-be entrepreneurs become frustrated with the
corporate infighting and their lack of power to accomplish things. They leave the
firm driven by the "master of the ship" syndrome.

2.2.2.7.

Many entrepreneurs discover that the excitement of establishing a new venture is

·its own reward. The pursuit of excellence, the desire to effect change, and the
willingness to create value, are the sole ambitions of many entrepreneurs. They
have a passionate desire to make something work and in this way to contribute
substantially to society.
 23
2.2.2.8. The personal control of life

The entrepreneur finds the personal power to control his life beneficial and
challenging.

2.2.2.9. The need for and the gain of respect

Motivated by a Maslovian need, many entrepreneurs want to attain the respect of

family, friends, and associates. They achieve this through success.

2.2.3. THE DISADVANTAGES OF BEING AN ENTREPRENEUR

The idea of entrepreneurship appeals to many people. Yet the entrepreneurial

failure rate is very high. Although business practices may be responsible for the
failure of such enterprises, the psychological and general characteristics of the
entrepreneur may also be significant. This combination of personality and
business-related factors is well illustrated by Sauser (1987: 33 - 34), who suggests
that the determinants, given in the list below, are responsible for the
entrepreneurial failures.

2.2.3.1. Undercapitalisation

Many entrepreneurs fail to grasp the concepts of fixed costs and break-even
analysis, and go into business "on a shoe string". As the development of many
business ventures takes place only after a fairly lengthy period, the entrepreneur
who starts the business with little capital may have none left at the time when the
business actually penetrates the market.

2.2.3.2. Poor planning

Many entrepreneurs design and deliver a product or service which does not meet
 24

the needs of their intended customers. Some locate their businesses poorly, while
others fail to assess the strengths of their competitors. Insufficient research may
therefore lead to the provision of an unwanted product or service, or one for which
there is insufficient demand.

2.2.3.3. lack of expertise and credibility

Entrepreneurs may get involved in ventures which are far beyond their sphere of
expertise. Even when they possess such expertise, many entrepreneurs lack
credibility with their customers. They are unable to compete with well-established
competitors, and thus lose out in the market place.

2.2.3.4. Poor money management

Many small businesses fail because their entrepreneurs become involved with cash
flow problems, give credit too freely, are slow to collect their funds, or simply
spend money on the wrong things. Even the most creative entrepreneur will fail
if he/she cannot manage the budget properly.

2.2.3.5. Failure to follow regulations

The entrepreneur's characteristic of frustration with "red tape" and paper work can
be a liability causing him to ignore regulations, including the completion of Value
Added Tax forms, the submission of business licences, the disregard for zoning
restrictions, and the completion of forms.

2.2.3.6. lack of managerial skills

Many entrepreneurs produce dazzling plans and ideas, but fail to implement them
because they are unable to direct the work of other people. Motivating, selecting,
training, directing, communicating, and resolving conflict, are all essential skills for
managerial success. Yet many entrepreneurs lack these skills and consequently
 25
fail miserably as administrators.

2.2.3.7. lack of perseverance

A critical psychological characteristic of the entrepreneur is his/her ability to

persevere, especially under difficult circumstances. While the entrepreneur's
characteristics may be superbly suited to building a company, he/she is sometimes
poorly equipped to head it. The entrepreneur's gifts and drives, including his
maverick-like thirst for autonomy, do not necessarily serve him well as the leader
of ,a major corporation. This is particularly so when staying power and
perseverence, attributes the entrepreneur often lacks, are vital to the success of
the business (White, 1988: 33).

2.3. THE MANAGER

Early in the history of management a manager was defined as someone who was
"responsible for the work of other people". This definition distinguished the
manager's function from that of the owner. It also made clear that managing was
a specific kind of work which could be analysed, studied and improved
systematically (Drucker, 1977: 14). Such views, though modified, still hold good
today.

Kast and Rosenzweig (1985: xi) describe the manager as follows:

"The evolution and proliferation of organizations has encouraged the

emergence of a new type of professional - the manager. Professional
management is not based on ownership, but on skills derived from
knowledge and experience. These professionals are not rare; there are
more than 11 million people classified as managers or allministrators in our
society and the number is increasing steadily. They fill a variety of positions
in organizations - corporate executives, government officials, production
 26
supervisors, school principles, police sergeants, and entrepreneurs."

All instttutlons.. from the smallest to the largest, require management and
managers. Managers hold an organisation together and enable it to work, and no

i
business institution can function without them. The need for management does
not simply arise because the job has become too big for any one person to handle
alone. At some point in the development of the business quantity, of supply is not
the only important factor: attention must also be given to the quality of the
product or service. The "owners" no longer run "their own" businesses, even if
they are the sole proprietors. They are now in charge of a business enterprise and,
if they do not rapidly become rnanaqers., they will soon cease to be "owners" and
will be replaced. Alternatively, the business will go bankrupt. It is at this point
then that the business turns into an organisation. For its survival it requires
different structures, different principles, different behaviour, and different work.
In short, .it needs managers and management.

The importance of management is stressed by Professor Frederick Harbison and

Charles A. Myers (Collins, 1970: 7), who conducted an extensive international
study of management and entrepreneurship. They conclude that:

"Management is a economic resource, or a factor of production. In this

respect, it is similar to capital, labour, or natural resources and is combined
with them in varying proportions in productive processes. Managerial
resources, like capital, for example, must be accumulated and effectively
employed or invested in productive activity. A country's economic
development may be limited by a relative shortage of this critical factor or
that development may be accelerated significantly by a high capacity to
accumulate it. In many instances, moreover, management is an even more
critical factor in industrialization than capital, and it is almost always more
vital to development than either labour or natural resources".

Drucker (1977: 16) suqqests that this definition may be changed to accommodate
 27
people who are responsible for contributing to the 'success of an enterprise, but
who are not responsible for the work of other people. In addition, managers can
be persons charged with the development and maintenance of quality standards
for a company's products, the personnel working on the distributive system
1 through which the company's products are being brought to the market, and the
advertising director, who may be responsible for the basic promotion policy of a
company.

Drucker (1977: 17) further suggests that the first criterion in identifying.. those
people in an organisation who have management responsibility is not command
over people. Instead, it is responsibility for contribution. In his view, function
rather than power has to be the distinctive criterion and the organising principle.
Finally, another view of management, that of Kast and Rosenzweig (1985: xi), is
that it is intellectual work performed by people in an organisational context.

According to Professor Henry Mintzberg of McGill University. in Canada,

organisations need managers for five reasons (Manning, 1988: 178):

* to make sure the organisation fulfills its basic purpose;

* to design and stabilise the firm's operations;

* to manage the strategy-creating process, so that the organisation adapts to

its environment over time;

* to make sure the organisation meets the goals of those people who control
it;

. * to act as the key channel of communication between the organisation and

its environment.

The effective manager is a producer, who achieves results and outperforms the
 28

competition through his functional knowledge of marketing, engineering, finance,

or some other discipline, is an administrator who can schedule, coordinate, and
verify implementation, is an entrepreneur who is able to identify new c~urses of
action, set new goals, and change the systems through which they are
implemented, and is an integrator who takes individual risks, and group risks, sets
individual goals, and group goals, and provides individual entrepreneurship, and
group entrepreneurship.

Managers keep things running smoothly, effectively and harmoniously so that

things work in the present, and so that the present may become a stepping-stone
for the future. Their responsibility is to keep the peace in order to get things done.

A manager essentially sees goals as arising from external circumstances and

changing events, and consequently he reacts to circumstances after they have
occurred. Consequently, managers focus on the present, they administer and
maintain systems in the ambit of getting the task done correctly. The instinct for
survival leads to a reliance on proven tools of planning and budgeting, and a
tendency towards conservatism. This stability orientation tends to rely upon
routine rather than interpersonal involvement, which may produce unpredictable
change. This would lead to a tendency to rely on positional power and to operate
from a premise of viewing people as incompetent, and who are therefore not to be
trusted. Development of staff in terms of the manager's win/lose power
orientation is not a prloritv (Charlton, 1993: 24).

2.3.1. THE FUNCTIONS OF THE MANAGER

Management is the primary force within organisations for co-ordinating human and
,materials resources, and managers are responsible for organisational performance
focusing on both current results and future potential.' ManagE!tnent includes the
human element of leadership as well as the application of various technical skills
such as decision making and planning. The task of managers, as enumerated by
 29
Kast and Rosenzweig (1985: 403), are set out below.

2.3.1.1. Goal setting

Managers always set goals at least implicitly to emphasise future conditions which
the organisation tries to achieve. Specific goals include production quantities, cost
targets, sales quotas, and completion of deadlines.

2.3.1.2. Planning

Managers use planning to achieve their goals, deciding in advance what is to be

done and in what way. This involves developing an overall strategy and
formulating general policies plus specific programmes and procedures. Planning
provides the framework for integrating decisions taken throughout the organisation
and over time. Planning provides a means for managers and organisations to cope
with changes in their environment.

2.3.1.3. Organising and assembling resources

Resources are required to enable the organisation to implement its plans. It is

management's responsibility to assemble the required resources and to see that
they are efficiently used. Managers also have to ensure that organisation
structures and processes are designed to fit particular situations.

2.3.1.4. Implementing plans and procedures

Although managers often direct the activities concerned with implementing plans
. and procedures, on other occasions they may be only indirectly involved. In such
Jnstances they delegate tasks to others and merely keep in touch. The amount of
human effort involved in implementation is a function of the mgnager's ability to
influence others, including his subordinates, peers, and bosses. Good managers
create a climate within which people are motivated to perform well.
 30
2.3.11.5. Controlling and maintaining organisational activity

Managers have to control and maintain organisational activity within allowable

limits, as measured by expectations. How well management has carried out this
function can, and should, be determined by measuring and evaluating the
organisation's results.

Drucker (1977: 20) agrees that the above five functions constitute the basic
operations of the manager: together they result in the integration of resources.into
a viable. growing organism. In addition, he stresses the importance of the
manager's communicative skills, both with his subordinates and superiors, and his
ability to select suitable people to manage and to perform the assigned tasks. He
also emphasises the managers' integrating function. According to Drucker, the
manager makes a team out of the people that are responsible for various jobs.
He/she achieves this through his personal relations with the people that he works
with. He/she accomplishes this through his "people decisions" concerning pay,
placement, and promotion. And he/she does this through constant upward and
downward communication, with subordinates, peers and superiors, and his
colleagues. Linked to all this is the manager's analysis, appraisal and interpretation
of performance results, and his communication of the meaning' of such
measurements to his. subordinates, superiors and colleagues. Finally, as Drucker
insists, a manager develops people, including himself or herself.

2.4. THE INTRAPRENEUR

The people who do entrepreneurial work within large organisations are called
intrapreneurs,' and the process by which they effect change is called
"intrapreneurship". "Intra" is a term that means "within". Thus intrapreneurs are
people who work within the constraints of and with the support of complex
organisations, involving as they do, multiple job responsibilities and relationships.
Intrapreneurs who exist at all levels in an organisation, vary from factorv-tloor
 31

employees to research and development scientists, and from low-level team

leaders, to high-level managers (Cornwall, 1990: 176). The term "corporate
entrepreneur" will therefore be used synonymously with "intrapreneur", the term
"corporate entrepreneuring" with "intrapreneuring". Corporate entrepreneur
(intrapreneur) refers to the person, behaviour, and characteristics. Corporate
entrepreneuring (intrapreneuring) referring to the activities conducted by the
corporate entrepreneur.

Intrapreneuring is a revolutionary system for stepping up innovation within larqe

firms by making better use of entrepreneurial talents. It can allow the organisation )
to retain the services of its finest innovators bY' providing them with the /
opportunity to implement their ideas without their having to leave the company. ( -J.----
,
Thus intrapreneuring offers a sound way to respond to the business challenges of I
I
the 1990's and those that. will occur beyond that d a t e . \ - )

As an individual in an existing corporate business, the intrapreneur investigates

potential. marketing possibilities, identifies attractive possibilities and initiates
production and sales. In fact, the intrapreneur starts a business within the firm, ~ I

but
_ does
_- so
- -.. with that firm's support: the organisation gives the intrapreneur the
--~_w_--<~.

opportunity to develop his ideas, which may be his own or which may emanate
_ _;..",_.".o.c·~.·.·"-,,,>

!rol1).within the firm itself (Kierluff, .1979: 6). The intrapreneur therefore
duplicates the energy, resourcefulness and innovation of independent
entrepreneurs, and it is the corporation which supports him and which gives him
the tools to do it with.

The intrapreneurs like the independent entrepreneurs are not necessarily inventors
of
- new products
'_......
or services. Their contribution is taking new ideas or working
---"-'-'-~'~.~-" ',-~

prototypes and turning them into profitable realities. When the ideas have been
---...__ ....._, ... "

.converted into functioning businesses, intrapreneurs often tend to lose interest in

the projects they have initiated. At this point, they hand over the projects to
professional managers to maintain and develop. The intrapreneurs then return to
initiating and building new ventures which, when they are developed, are once
 32

again handed over to others to manage (Pinchot, 198.7: 32). As has been shown,
an intrapreneur engages in innovation within the firm. But it should be understood
that innovation is a much broader concept than the mere development of new

products. Burch (1986: 14) describe_~_~.~.~p~~.~!._~~.~~~~~~~~.~.~.~:~ ar~!.is~.:.~.. .:if to

below:

* the introduction of a new product or service that improves the quality. or

reduces the price of the existing product or service;

* the implementation of a system or resource that differentiates any existing

product or .servlce:

* the introduction of a new system that increases productivity and assists

decision-making;

* the opening of a new market;

* the conquest of a new source of supply or raw materials, half-manufactured

products, or alternative materials or methodologies; and

* the creation of new organisations.

Burch (1986: 14), who claims that the intrapreneur is .... " the ramrod of innovation
_ _ _ _ ._ _ ~. ~_.• _-----~'_ .• ~-~. _ . . . . ._,._ "_.' . _ . . . . . . . . . . • . • • . . _ _ ._. , __' ••. >r_~ ._'~ .• _ •• ~ __ ._._._~ • . • _~ _ _ .• _~" •. _. _ _ "' _ _ ._._ .• _ •. _ ..

in, large __
corporations",
__ __ _.. __ __"_
~, ~. _.,,_<~ _.
further
.~~, ~
suggests that innovation does not have to result in
__ ..__,.,..,_,_..,_. ,"_'
~ _~.~ _~. .-..~_ ' m " " ' - - ' _ ' " __ ~. ._ v_. ,, _ _ < _,~._.~ .. _ . _ • • • . • ••. .• .'--".

something earth-shaking and profound. It can be as simple as an adjustment to an

exiSttng-ptO(fuCrOrprocess':As'''in-novatlO;:;~-rl;'~~'~~i~I't~ '!he"successful
performance of a business, the intrapreneur plays a vital role, but he cannot do so
without being given support and responsibility. The difficulty that most large
organisations have with innovation stems from their attempts to proceed with it,
but without empowering their intrapreneurs.
 33
A study conducted in 1985 at Southwestern Bell Telephone Corporations identified
four distinct intrapreneurial work styles, listed below, which all large organisations
need to recognise White (1988: 34). Its findings are listed below.

* The True Intrapreneurs

These people constitute 17 per cent of all employees. Their personality profiles
closely resemble those ·of independent entrepreneurs. The true intrapreneurs are
people who perceive themselves as being willing to take reasonable risks on the
job to implement those ideas in which they believe. They are also highly self-
confident: they trust both their ideas and their abilities. Not only do they see
themselves as part of the organisation in the roles of innovators and self-starters,
but they also view themselves as team leaders, who recognise problems and
endeavour to solve them. The findings of the Bell Telephone Survey indicate that
these people agree most strongly with the following statements: "I consider
myself to be an entrepreneur"; "I consider myself smarter than most bosses I have
had"; "I attempt to do a better job than is expected of me"; "I seek out situations
in which I have extra responsibilities".

True intrapreneurs straddle management and non-management categories of work:

19 per cent are members of management, while 14 per cent are non-management
employees, who show intrapreneurial attitudes. The Bell Telephone Survey found
that these true intrapreneurs are more than twice as likely as other employees to
read business, financial and technical magazines, as well as general interest
magazines and newspapers. It seems their interest in the world around them
stimulates them.

* The Threshold Intrapreneur

These people constitute 42 per cent of employees. Although they perceive

themselves as willing to take reasonable risks to implement their ideas, unlike true
intrapreneurs, they do not have a high level of self-confidence. They still see
 34
themselves as potential leaders. They undertake onerous extra responsibilities and
enjoy their job independence. All the' same, they need to be encouraged to
vocalise their ideas and to persist with them.

* The Hard Worker

Hard workers comprise just over 20 per cent of the employee population. Being
efficient employees with a strong work ethic, they work well with other people,
but do not see themselves as leaders and need to be given a strong sense of
direction. These people are valued because of the stability they give to the
company.

* The Maintainer Worker

The "maintainers" represent 20 per cent of employees. Although they perform

their jobs adequately, they seldom seek out extra responsibility.

2.4.1. THE FUNCTIONS OF THE INTRAPRENEUR

Intrapreneurs may be found working in "organisational garages" across the

country. These may include a dusty place on the production floor, an out-of-the-
way laboratory, or a quiet engineering spot. Here intrapreneurs occupy part of
their time with their own ideas. The corporate entrepreneurial (intrapreneurial)
process constitutes at least four phases: defining a problem; coalition building;
mobilising and completing the task; and transferring the task to a successor
(Cornwall, 1990: 179).

2.4.1.1. Defining a problem

This is the phase of gathering information, and is accomplished through day-

dreaming and fact-finding. Although intrapreneurs tend to listen to their internal
 35
voices, they also rely on the information of others to determine product and service
costs. Ascertaining whether the product or process slots in with the organisation's
objectives is also an important task. Once the concept has been defined and
approved, resources need to be acquired so that work can begin.

2.4.1.2. Coalition building

The second phase involves coalition building. Intrapreneurs cannot continue their
work without co-operation and support: they must find sponsors; and they must
receive the approval of their superiors. Such coalitions are built by intrapreneurs
providing their track records, establishing their skills, integrity, and ability to
communicate, and by demonstrating that the risk to the organisation is reasonable.

2.4.1.3. Mobilisation and completion

In this third phase, involving the mobilisation and completion of the venture, the
project is both active and visible. Now the qualities required by the intrapreneur
are flexibility and enthusiasm because his hard-won support must be retained and
nurtured. To cope successfully with competitors and detractors, the intrapreneur
turns inward to his team for continued backing, and turns outward to other
members of the organisation for sustained endorsement.

2.4.1.4. Successors or dismantling

The fourth and final phase is one of either managing the innovation, if it has been
successful, or dismantling it, if it has been a failure. If the project has been a
success and has therefore become part of the organisation's status quo, someone
in the organisation has to take it over: the mature process or product requires
management skills to maximise profitability and to ensure stability. As
intrapreneurs often, but not always, lack such business skills.. the intrapreneur,
who initiates the venture, is replaced, or, as is frequently the case, steps down
voluntarily from the project.
 36
2.4.2. THE ADVANTAGES OF BEING AN INTRAPRENEUR

Corporate entrepreneuring (intrapreneurship) brings with it a number of advantages

to both the intrapreneur and the corporation. These are: marketing; technology;
i trust won by the people; access to pilot plant and shared-time production; and the
availability of finance. All are described below.

2.4.2.1. Marketing

One of the greatest advantages of "bigness" is not the traditional economies of

scale in manufacturing, but rather the methods of marketing, distribution, and
service marketing. Big business has extensive marketing experience sophisticated
marketing communication, and good contact with customers. Another important
advantage is the loyalty in respect of brand names or the specific name of a
business (Du Preez, 1992: 84). Clearly the organisational strength is often a good
reason for intrapreneuring: even when the intrapreneur must bypass existing
company distribution channels, it is the company name that counts.

2.4.2.2. Technology

A big business offers a broad basis for available and patented technology. For the
intrapreneur, it offers core resources, which enables him to avail himself of the
height of specialisation. The availability of a broad base of both theoretical and
applied knowledge facilitates the application of basic research to anyone of the
corporation's departments or division. Thus the intrapreneur can move freely
between the various. laboratories gathering information for specific new

. . . (Du Preez, 1992: 84).

developments

Not only can large firms financially afford to do more fundamental research than
small ones, but they can also expect a greater return on such research. This is
firstly because research may be applied in one of many departments for which the
original research was not initially intended. Secondly, in large and diverse firms
 37
there is a greater chance than in small firms that the research results will be
applicable to some business, in which the holding company already has an interest,
or in another, into which the company is competent to enter. Thus the large
company offer the intrapreneur many and varied opportunities for innovation
\ (Pinchot, 1985: 89).

2.4.2.3. Trustworthy people

Every large organisation is resolute about obtaining knowledge concerning the

future of the markets in which it operates. At the same time, it is also well aware
of its own plans with respect to these markets. By having access to their
companies' plans, forecasts, and markets, intrapreneurs have great advantages
over entrepreneurs operating outside the company. More importantly, company
networks are bounded. This means that priority secrets can be freely shared with
insiders, who can be trusted, in that they know where the boundaries are (Pinchot,
1985: 92).

2.4.2.4. Pilot plant and shared-time production

In a company operating under capacity, the intrapreneur has a good chance that
his ideas will be .tested by the plant, which is eager to try something new. Such
opportunities, while good in theory, are, of course, limited. They occur in only
those few firms that give intrapreneurs the flexibility to cross divisional boundaries
freely in search of what they need (Pinchot, 1985: 94). Fry of 3M (Pinchot 1985:
93) states:

"When I want to test a new product there is always some piece of 3M that
can make it. It may cost a little more, and I may have to skip it all over the
place to get it done, but I can get enough for test market. Then after the
tests are in we can design a plant to do it right and the final process will be
very efficient."
 38
2.4.2.5. Finance

It is only natural that large firms can supply intrapreneurs with financial resources.
Intrapreneurs who dream grandiose dreams must, of course, bear the full brunt of
corporate bureaucracy, which understandably seeks to protect itself from huge-
scale financial blunders (Pinchot, 1987: 95).

There are certain unique circumstances in which intrapreneuring can be more

beneficial than entrepreneuring. Such instances occur when:

* the innovator's vision is inherently more intrapreneurial than entrepreneurial,

when, for instance, the idea has the potential to improve the company
business:

the innovator wants to do new things, but the desire to stay with the
friendships and security of the corporation is stronger than the desire for a
chance of great wealth;

* the innovator's capital requirements are more easily derived from within the
corporation than outside it;

* the innovator wants to practise creating a business inside the corporation

before risking personal funds outside its confines;

* the innovator is dependent on the company's name or marketing channels

to· boost the marketing of his product or service;

* the innovator needs continuing access to the company's proprietary

technology to stay competitive.
 39

2.4.3. LIMITS OF INTRAPRENEURSHIP

Intrapreneurship and intrapreneuring are not applicable or desirable in all

circumstances. The applicability of some conditions as suggested by Nielsen,
.. Peters and Hisrich (1983: 182) are listed below:

* it applies more to large than to small organisations;

* it applies more to secondary rather than primary strategic activities;

* it applies more to secondary activities that need to be at least partially

performed within the corporation rather than to secondary activities that
need to be performed solely by outside specialists;

* it applies more to rapidly than to slowly evolving environment.

2.5. CONCLUSIONS

It has been indicated in this chapter that the intrapreneur straddles the dual roles
of manager and entrepreneur. The entrepreneur takes the step of leaving the
corporation for various reasons the most prominent being the need for
independence and autonomy, and the desire to break free from the restraints
imposed by a typical bureaucratic corporation. The entrepreneur identifles and
evaluates opportunities, develops a business plan, obtains the resources required
and then manages the new business. Being an entrepreneur has some advantages,
namely freedom of action, independent ownership, speedy decision-making, the
availability of venture capital, a sense of accomplishment and power, the

.
excitement of a challenge, personal control of life, and the acquisition of respect.
In turn, entrepreneurs fail because of undercapitalisation, poor planning, lack of
expertise, unwise money management, a disregard for regulations, inept managerial
 40
skills, and a want of perseverence.

The manager in contrast, makes an important contribution to the corporation after

the business has been established and after the entrepreneur no longer controls all

)
the activities. The manager then gets involved with setting goals, planning work,
organising and assembling resources, implementing plans and procedures, and
controlling and maintaining organisational activity.

The intrapreneur combines the activities of the entrepreneur and manager...He

defines a problem, builds a coalition of supporters, mobilises action, and hands
over his successes to a manager, or dismantles an unsuccessful project.
Intrapreneuring, offers the advantages of marketing networks, the accessibility of
technology, the support of trustworthy people, the availability of a pilot plant, the
benefit of shared production and time, and the readiness of finance.
 41
CHAPTER THREE

DESCRIBING THE CHARACTERISTICS OF THE ENTREPRENEUR,THE

MANAGER, AND THE INTRAPRENEUR

3.1. INTRQDUCTION

The intrapreneur shares common characteristics with the entrepreneur as well as

the manager. The identification and description of the characteristics of the
entrepreneur, the manager, and the intrapreneur will enable the identification of
these common characteristics and the identification of the distinct characteristics
of the intrapreneur.

3.2. ENTREPRENEURIAL CHARACTERISTICS COMMON TO BOTH

THE ENTREPRENEUR AND THE INTRAPRENEUR

The following entrepreneurial characteristics are common to both the entrepreneur

and the intrapreneur: performance motivation; aspiration level; and the ability to
cause things to happen. ~~_!~~~~,~ott_as (1980: 7) added their goal, action, and
time
_.'_.
orientations, and their attitudes towards perseverance,
• .__ _._ ..
financial__ gain,
_•._,->_"r._·_·
and risk-
"·
~
_
.
"
~
"
.
"
~
·
_
·
·
~
--',!.~~~J~. The _!oll~_win~~o~mon _~tt~ib.~te~~re also important: th~_~_~_e.~tive and
innovative abilities, and vision; their readiness to take on leadership, and their self-
confidence; their good self-image and their assumptions about probable success;
Finally, common to both are these additional features: their desire for
responsibility; their adaptability to and tolerance of ambiguity; their ability to plan
- - - - - - - - - - - - - - - - - - - - - - - _..._ ---
rea~~~!~_~~_~~y; their ability to ~rganise and adminis!.er; their honesty and integrity;
their problem solving and decision making style, and lastly, their desire for
autonomy and independence. These characteristics are all deScribed below.
 42

3.2.1. Performance motivation

In the entrepreneurial role, performance motivated behaviour includes the desire lor
personal excellence, the ability to cause things to happen, the focus on goal, action
and, time orientation, and, finally, perseverance (Pottas, 1981: 6).

Performance motivated people, a category into which entrepreneurs fall, are

defined as people who strive to do their best on each and every occasion. They
set high personal standards of excellence, which incorporate strong but realistic
goals, and they rely on themselves to achieve these goals. They are persistent, are
action oriented, and are aware of the need to use time effectively.

According to McClelland (Finlay 1990: 24) one of the primary psychological drives
that motivates the entrepreneur is a high need for achievement, usually identified
as n Ach. This need can be defined as a desire or drive within the person t~~t

motivates accomplishme!2!__~rj~_f!!~~5:1,.~,~.~~ur: In ~~._Em~~rene~.r!~I._~2rg~)(t,

accomplishment can be defined as theJiJlfilment of a 09 a.l embodying a ° rea~nable

ch_a'-'-'I-"'e'-n....g~e=-t=o::t:::h:-e_in-=d=iv=i=d=u=a=I's===c=o=m=p=~nce (Finlay.!_1_9_90: 24). By contrast, a. !i3~k

seen as e~.~-ca7r;~.!!Q....ch~U.~.f}n~!. and itlheretQr~ not motivating. The need fo
achievement is a configuration of four component traits: taking risks; taking the
initiative; setting goals; and needing performance feedback.

The primary psychological drive among entrepreneurs stems from a strong need for
achievement. Entrepreneurs have a sense of accomplishment in fulfilling their
goals, but only when these embody a reasonable challenge to their competence;
a task is perceived as being motivating (Scholl hammer, 1979: 12). The
entrepreneur aims to achieve better than others do, so revealing the will to win.
In fulfilling this aim the entrepreneur sets and demands high standards from
himself, reveals a unique and innovative view, and has a long-term wish or plan
to attain something (Coetsee, 1992: 5).

Achievement-motivated individuals also often show the characteristics as outlined

 43

by Steiner and Miner (1977: 283). Such indlviduals.often experience:

* a difficulty in relaxing on holiday;

* a tendency to become annoyed when people are late for appointments;

* dislike of any form of waste;

* a dislike of being under the influence of liquor; .

* a tendency to think about work after hours;

* a preference for difficult but competent partners rather than sympathetic,

incompetent ones; .

* an ·intolerance of inefficiency;

* the ability to work hard in order to achieve high personal aspirations.

An individual revealing six or more of these characteristics probably possesses a

high level of achievement motivation. Entrepreneurs reveal these characteristics
to a greater degree than the average individual in other professions. This indicates
that entrepreneurs are more motivated by achievement than the average middle
manager.

According to Steiner and Miner (1977: 284) The relationship between achievement
motivation and entrepreneurship takes on the following form:

• they have a predisposition to attaining success rather than avoiding failure;

• they tend to give more attention to realistic possibilities which could lead to
success;
 44
* they prefer situations in which they are able to influence and control the
results;

* they are futuristlcallv orientated and prepared to wait for the reward;

* they prefer situations with a clear criteria for success; and

* they prefer situations to which clear, individual responsibilities are attached,

so that if they succeed, it will be ascribed to their own efforts.

These characteristics are all true of the intrapreneur. He becomes emotionally

involved with the project that he/she is working on and, as a result, accepts
personal.responsibility for the risks involved to achieve success.

As Figure 3 shows below, the following features determine the performance

motivation of entrepreneurs as well as intrapreneurs: they strive for personal
excellence and are goal oriented; and the need to perform well provides the
motivation to achieve goals. This is a behaviourial process which enables the
entrepreneur to channel his motivation energy into achieving his goals.
 45
FIGURE 3 THE UNIQUE PSYCHOLOGICAL -CHARACTERISTICS OF
ENTREPRENEURS

PERFORMANCE MOTIVATION

PERSONAL EXCELLENCE GOAL ORIENTED

Aspirations
Time Orientation
High but realistic goals
Orderly
Accept demanding but challenging Planning
tasks Timeous
Take calculated risks Utilise time well
Security conscious Future oriented
Sets high standards

Action Orientation

1 -4
Busy, active people
Works to achieve
goals
Personal Causing

Confidence in self, abilities and

competence
Take initiative
Feel in control of things
Are not victims of circumstances Perseverance
Want to succeed
Keep going
Depends on own abilities to
Do not postpone
overcome problems Does not get
Driven by success rather than fear discouraged
of failure Completion behaviour
Setbacks become
new challenges

i I

Source: Pottas (1980:- 7)

 46
3.2.1.1. Aspiration level

A characteristic of people who are motivated to perform is their ability to set high,
but realistic, aspirations. Although they do not try to achieve the impossible, they
do establish high goals. They are prepared to work on demanding and challenging
tasks, even if there is a possibility of failure. They therefore take calculated risks,
prefer challenges to security, and are highly demanding of themselves as well as
others.

Entrepreneurs see a business as the opportunity to fulfil their performance

motivation. To identify and start a new business is a demanding and challenging
task, which is suitable for people who are prepared to exchange their security for
calculated risks.

The identification of an opportunity within the organisation drives the intrapreneur

in the same way as the starting up of a new business drives the entrepreneur.

3.2.1.2. Ability to cause things to happen

As Figure 3 shows, the second element in personal excellence is the entrepreneur's

belief that he has the personal ability to cause things to happen. Entrepreneurs.
have a high level of confidence in themselves, in their abilities and in their"'-/
competence, and they consider that they have the talents to be successful. When I ~
faced with problems, they find ways to overcome them. They judge themselves
to be in control of their destinies and do not perceive themselves as being victims \
. --.J
of circumstance.

As they are motivated by the need to succeed rather than by the fear of failure,
they work hard to be successful, and interpret failure as being a JearninOg
experience which will be of future help. They generate ideas, which they test with
enthusiasm. Because they take the initiative, they precipitate events. Their ability
 47
to think creatively, and to experiment with new ideas causes them to have an
innovative impact on the community.

Entrepreneurs therefore take the initiative to identify business opportunities. They

are prepared to take risks with respect to money, time and energy to start up a
business. They rely on their own resources, whether capital, equipment,
knowledge or skills, and take responsibility for their own actions without blaming
political or economic circumstances for failures.

So-called external people believe that the rewards in life come from forces outside
themselves: they relate in some way to luck, fate, or powerful external forces.
In contrast, so-called internal people believe that it is they who can influence
events to their own good or detriment. Entrepreneurs, who seek independence and
autonomy and rely on their own resources to achieve their ends, score highly as
so-called internal people. Entrepreneurs as well as intrapreneurs consider
themselves to be in control of their own lives, and to be able to steer the course
of events: they believe in their own abilities to succeed, and feel that they are
able to bring about a change in their environment and to influence events. This
characteristic relates to their motivation, their confidence and their need for
personalresponslbititv (Scholl hammer, 1979: 12).

Hisrich and Peters (1989: 50) suggest a few questions that may be asked to test
an individual's level of internal or external control. These are outlined in Table 1
below.
 48
TABLE 1 CHECKLIST FOR FEELINGS ON CONTROL

Checklist for Feelings on Control

1. Do you often feel "That's just the way t.hings are and there's nothing' can do about it"?
2. When things go right and are terrific for you, do you think "It's most likely'''? .
3. Do you think you should go into business or do something with your time for pay
because everything you read these days is urging you in that direction?
4. Do you know that if you decide to do something, you'll do it and nothing can stop you?
5. Even though it's scary to try something new, are you the kind who tries it?
6. Your friends. husband, and mother tell you that it's foolish of you to want a career.
Have you listened to them and stayed home all these years7
7. Do you think it's important for everyone to like you?
8. When you do a good job, is your pleasure in a job well done satisfaction enough?
9. If you want something, do you ask for it rather than wait for someone to notice you and
"just give it to you"? .
10. Even though people tell you Wit can't be done" do you have to find out for yourself?

Source: Hisrich and Peters (1989: 30)

3.2.1.3. Goal orientation

Goal orientation implies a set of goals, a purposeful kind of behaviour, and the
insight to formulate clearly attainable and measurable goals, As Figure 3 shows,
goal orientation is the product of three elements, namely, action orientation, time
orientation and perseverance. These elements influence each other and interact
with one another. The higher the aspiration level and the stronger the belief of
persons that they are in control of those events in which they have participated,
the more realistic are their. wishes and ideals. This means that there is a high
probability that they can achieve their goals.

By setting challenging but attainable goars entrepreneurs are able to focus or direct
their business activities, can be selective in the evaluation of opportunities, and are
 49
able to know when to' reject them. Having goals and direction assists the
entrepreneur to determine priorities and to translate them into methods for
measuring achievement.

Intrapreneurs are self-determined goal setters who often take the initiative to do
things they are self-appointed to their tasks. Also, their goals are not abstract, but
are concrete and measurable. Initially the goals are set in weekly increments and
range, with objectives, through five- to ten- year plans (Pinchot, 1985: ·50).

3.2.1.4. Action orientation

As Figure 3 shows, the first element that indicates a person's desire to perform,
is the extent of his/her involvement in goal oriented activities. People who are
motivated to perform describe themselves as busy, active people. They usually
have a full programme, work long hours and need little sleep. They are hard
working and busy themselves with activities that will produce results which accord
with their wishes and ideals.

Entrepreneurs are therefore ready to identify business opportunities, to do research,

to conduct interviews with experts, and to link their plans with action. Their
readiness to involve themselves in projects, facilitates their success rather than
failure.

Intrapreneurs are naturally action oriented. Rather than plan endlessly, they almost
immediately start doing something to realise their plans, namely, transforming their
ideas into concrete products and services. One of the most consistent traits of the
intrapreneur is his/her unwillingness to take "no" for an answer (Pinchot, 1985:
48). To ensure that the work is done, and in order to keep in touch with the whole
process, intrapreneurs are prepared to undertake routine tasks .•Such tasks provide
the knowledge which enables them to take quick decisions, and to visualise and
to execute drastic changes.
 50
Most of the peculiarities of the intrapreneurial personality can be understood by
considering the pressures of combining in one person both a strong visionary and
an insatiable doer who cannot rest until his/her vision is made manifest on earth
as it is in his/her mind. These pressures not only explain their drive but also their
intolerance of being told what or how to do. While they are open to information
and ideas, they have all the orders they can stand from their own internal
imperatives. The drive to realise the vision explains their dedication arntWillin-gness
to form any tasks, no matter how mundane,
.. _--._------------
if that is what is needed to make
-------------_~_-_._

the, roject succeed (Pinchot, 1985: 53). --------

Most occupations require either vision or action, as is evident at higher levels in the
corporate structure, where company planners dream about corporate growth.
Although intrapreneurs are dreamers, too, they are planners and workers. As
shown in Figure 4, the intrapreneur combines vision with action. Once they have
initiated an idea, intrapreneurs are invariably unwilling to accept its rejection.
Paying attention to people both within and outside the organisation, they try to
mobilise support for executing the idea, by persuading customers and "insiders"
that there is potential and a need for such a venture in the market place.
 51
FIGURE 4 THE INTRAPRENEURIAL GRID

ARTIST
INTREPRENEUR
INVENTOR

DREAMER PLANNER

z
o LINE
en MANAGER
s

WORKER

ACTION

Source: Pinchot (1987: 54)

3.2.1.5. Time orientation

As Figure 3 shows, the second element in goal orientation is the awareness of

time, especially future time. Entrepreneurs take experiences trornthe.past and
_ .• - _ ...•.. __•.• -~• • ~.~......". _ _ . .... , _ _ • . • • • ' _ _' , _ . ,w. ''_ ,,"_.".--

build on them. Also, being career oriented, they develop clear plans about where
-----,_ ..~-------._----
they are going to and what they want to achieve, even in the long term. As they
are fully aware of limited resources, they use time productively, are usually
punctual, and are impatient with people who waste time.
 52
Optimistically oriented toward the future, entrepreneurs plan and think ahead.
They search for and anticipate possibilities that lie beyond the present. The
entrepreneur has clear future plans. Although, long term goals may not be as
clearly defined, they are invariably present. They are aware that "time is money"
and that the way in which time is used may make the difference between success
or failure. They therefore use their own time as well as other people's effectively.

Depending on the type of venture, intrapreneurs usually project end goals that are
three years or longer. Such plans, may of course, include concrete measurable
goals for the shorter term. But the short-term actions are always guided by the
long-term ones. This, despite the urgency to meet the ever-present self-imposed
organisational time tables, requires a long-term perspective (Cornwall, 1990: 187).

3.2.1.6. Perseverance

As Figure 3 (p 45) shows, the third element in goal orientation, is perseverance:

people who have a strong need to perform are persistent. Such people are not
easily discouraged by set backs but persevere in finding solutions to problems.
They also rely on their own abilities and skills and do not easily accept assistance
from other people. They do not procrastinate. Rather, they tend to complete
projects immediately, finding it unnecessary to postpone difficult issues.

Perseverance is the corner-stone of energy (driving power) and intimately related

to needs, desires and goals. Perseverance implies the individuals' ability to persist
with activities for longer periods than is usual, while energy is that attribute which
arouses it.

A high level of energy is a prerequisite for the entrepreneurial role. Entrepreneurs

exhibit a much higher level of energy than the average person. =rhey are active and
mobile and devote a high proportion of their time to getting the task done, often
 53
in novel ways. As they tend to be acutely aware of the passage of time, they are
driven to engage energetically with their work (Coetsee, 1992: 20).

In the establishment of any new intrapreneurial venture, obstacles will invariably

occur. Only by persistence on the part of the intrapreneur will a new venture be
created and successful commercialisation result (Hisrich and Peters, 1989: 517).

3.2.2. Attitude toward financial gain

According to Pinchot (1985: 65), one of the most misunderstood aspects of the
entrepreneur is his/her relationship to money. Popular opinion holds that
entrepreneurs are driven by greed and that fundamental to their character is a lust
for money that drives them to do things that ordinary people would not do.
Actually,' money is very rarely the primary driving force for successful
entrepreneurs. Their attitude toward money is complex and intimate.

What drives the entrepreneur is a deep, personal need for achievement, but the
need generally becomes wedded to a rather specific vision of what he wants to
accomplish. David McClelland explains this (Pinchot, 1985: 66):

"Somewhat surprisingly, in terms of traditional American business and

economic theory, he (the entrepreneur) does not seem to be galvanised into
activity by the prospect of profit; it is people with a low achievement need
who require money incentives to make them work harder. The person with
a high need works hard anyway, provided there is an opportunity of
achieving something."

The entrepreneur is interested in money rewards or profits primarily because of the

feedback they given him as to how well he is doing. For the real entrepreneur
money is not the incentive to effort but rather the measure of the project's
success. Financial gain is often second in importance to achievement.
 54
Entrepreneurs value money, but not for itself. They view money rather as a
concrete symbol that represents the accomplishment of a challenging objective:
it is a testimony to their competence.

The intrapreneur is not guaranteed any financial reward for his efforts, as in many
cases the organisation is not even aware of the intrapreneur's activities.
Intrapreneurs tend to experience satisfaction from achieving what they had set out
to do, rather than from aspiring to financial rewards systems (Pinchot, 1985: 67).

3.2.3. Attitude to risk-taking V

Contrary to the popular belief that views the entrepreneur as a daring, devil-may-
care risk-taker, studies by David McClelland and others show that successful
entrepreneurs avoid high-risk situations; rather, they seek and enjoy calculated
moderate risk (Pinchot, 1985: 68). Entrepreneurs realise that their dedication to
a task depends on their power of judgement to influence the results successfully,
and they accept that their decisions do hold a lesser or greater measure of risk.
Thus entrepreneurs are not gamblers, in the strict sense of the word. They prefer
to set goals that require a high level of performance, a level that they believe will
demand exertion, but that they are confident they can meet.

The entrepreneurs' "manageable" risk is investing in a venture that his measures

can improve, thereby enhancing its potential focus (Finley, 1990: 24). Risk is a
necessary element of business, especially in a competitive economy. Yet even
before risking investment, the entrepreneur generally loses income as a result of
having given up his job. Part of the entrepreneur's strategy to minimise risk is to
find ways to get a head start in the market place. Another entrepreneurial strategy
for reducing risk is to anticipate barriers and to remain open to feedback, both
positive and negative (Pinchot, 1985:68).

It is true that the entrepreneur gravitates to risks which others shy away from.
 55
According to psychologists, it is possible that the entrepreneur's risk-taking has to
do with his need to rebel. But it may also be that the winning entrepreneur has
learned how to be wily in his/her risk-taking so that the "gamble" is less than it
would be 'for others. For instance, the entrepreneur will take an apparent wild risk,
such as walking away from a good job to start something on his own. But
because of his self-confidence, the risk to him does not appear to be unduly high.
Because of his self-belief, he calculates the odds differently. It is his conviction
that the venture has a better than ever chance of succeeding (White, 1988: 32).

The propensity of intrapreneurs for risk-taking is complex. According to Pinchot

(1985: 6~), intrapre~e..un~ntroll~bJe·risks.and..do-what-tbey
can to avoid
them.. They are more willing than most to accept risks that depend directly on
~

their skills, because of their self-confidence and belief in themselves. Corporations

would not accept wild risk-takers because they would not be able to afford them.
The true intrapreneur works hard to minimise risk within the confines of
accomplishing challenging, but not impossible goals.

According to Coetsee (1992: 23), the risks that are taken are not only financial,
but also include:

* A Family Risk. The time and energy devoted to the business can place
excessive strain on an entrepreneur's marriage .and family life.

* A Career Risk. If the entrepreneur fails in his business venture it could harm
further career opportunities.

* A Psychological Risk. The entrepreneur's reputation is at stake and failure

could harm his self-confidence and motivation.

Cornwall (1990: 189) offers other interesting insights. -He suggests that
organisations encouraging entrepreneurial activities take the primary risk in
supporting intrapreneurs. Intrapreneurs, on the other hand, do take major risks in
 56
devoting" a lot of time and commitment to their ideas, only, possibly to find that
they have been working on the wrong product and have wasted irreplaceable
effort. The real risk for the intrapreneur is a personal one as he invests in himself
his failure may be a personal loss .
...

Intrapreneurs clearly tend to avoid high-risk situations. They are prepared to

accept the challenge of a calculated or a fair risk. Their high levels of confidence
allow them to take risks about which they will seek positive and negative feedback
in order to identify stumbling blocks in advance.

Hisrich and Peters (1989: 54) suggest a few questions that may be asked to test
an individual's willingness to take risks. These questions are outlined in Table 2
below.

TABLE 2 CHECKLIST FOR WILLINGNESS TO TAKE RISKS

Willingness to Take Risks

1. Can you take risks with money, that is, invest, and not know the outcome?
2. Do you take an umbrella with you every time you travel? A hot water bottle? A
thermometer?
3. If you're frightened of something, will you try to conquer the fear?
4. Do you like trying new food, new places, and totally new experiences?
5. Do you need to know the answer before you'll ask the question?
6. Have you taken a risk in the last six months?
7. Can you walk up to a total stranger and strike up a conversation?
8. Have you ever intentionally travelled an unfamiliar route?
9. Do you need to know that it's been done already before you're willing to try it?
10. Have you ever gone on a blind date?

Source: Hisrich and Peters (1989: 54)

 57
3.2.4. Creativity, Innovative ability and Vision'

Creativity is the individual's imaginative power to think creatively, and this

innovative ability is his facility to establish something. His vision is a leadership
quality, which may assume charismatic and daring proportions, and is
communicable to others. Mote specifically, to innovate is to search for new
opportunities, to improve an existing product or service, to create a new product
or service, or to combine existing elements of products or services in newer and
more useful ways.

The entrepreneur's vision is neither a vague idea of a goal, nor simply a clear
picture of the product or service. It embraces all aspects of the business in the
process of creation, and all the steps in this process: the ability to visualise the
ste~om idea ~actualization. The entrepreneurs therefore "play over" a new
business opportunity, considerthe paths to be taken and identify any barriers that
may be encountered. In short, the vision becomes a working model of all aspects
of the business being created and the steps needed to make them happen (Pinchot,
1985: 37).

The creativity of the intrapreneur involves a broad understanding of the internal and
external environments (Hisrich and Peters, 1989: 516). He must also be a
visionary: a person who dreams great dreams, and overcome all obstacles to "sell"
his/her dreams to others. The intrapreneur's vision is not only a vivid picture of the
product or service, but a workable model of all aspects of the business to be
established. The intrapreneur is the general manager of a new business which, as
yet, does not exist (Du Preez, 1992: 79). For the entrepreneur, the new product
or service, its manufacture, marketing, distribution and financing is an integrated
process: the ability to visualise the complete innovation process is a basic skill and
characteristic of the intrapreneur.
 58

3.2.5. Leadership

Entrepreneurs have a comparatively low need for affiliation and a fairly strong
leaning towards individualism. Entrepreneurs, who need purposeful activity, tend
to be more production or task-orientated than person-orientated. They direct their
own energy and that of their co-workers and subordinates towards sharply defined
goals.

Intrapreneurs are leaders who empower others. They are advocates for their ideas.
As leaders, they maintain the enthusiasm of the people who are assisting them.
They may not be charismatic leaders, but they find ways to get their people what
they need. They support their people, meet their needs, and provide them with
vision and structure.

The paradox of intrapreneurial leadership, according to Pinchot (1985: 175), is that

there is a strong need for decisive centralized direction-setting in the early phases
of a new business. A clear entrepreneurial statement is needed to guide the basic
direction of this business. In contrast, domineering leadership and uninvolved team
members are no longer acceptable practice. Teams are required to question,
clarify, and upgrade the vision expressed by the leader. Successful intrapreneurial
leaders need to ffiSQ1y~ this parad~_through_"participatory management. In
---- -=:::::::::=::: -------------
developing an effective team for creating something new, open discussion is
encouraged with freedom by team members to disagree so that the original idea
can be dissected until the best solution is reached (Hisrich and Peters, 1989: 517).

Conventional modern managers often see intrapreneurs as being more concerned

with their own success and power than with their subordinates' welfare. The
intrapreneurs demand exceedingly long hours. They may reject the seemingly
"good" work of others and insist on showing people exactly how they want it
done. The great puzzle for conventional managers is why some people seem to
enjoy working for such egotists, and why they even become intensely loyal to
them. Good intrapreneurial leaders always manage to convey the sense that a
~--------------
 59

project has grwer .sigAffieaAGe--tt:lan-Simply-a--pefs()naUdft~

Successful intrapreneurs are often caught up in a vision which has grown larger
~-------------_...:::...._~-
than themselves. The vision gives meaning totheirlIVes, anOt1ley get others to
share the importance of achieving it. One of the most powerful incentives for
getting the enthusiastic cooperation of others is allowing them the freedom to help
create the new vision. The commitment, completeness, responsibility, and
excitement of a new idea inspires the "total dedication"of the intrapreneur. Such
dedication tends to make the intrapreneur sacrifice people for objectives. Although
concerned intrapreneurs exist, when a conflict arises their priorities generally lie on
the side of getting a quality job done on time rather than on meeting people's
needs. This attitude does not derive from disrespect for their team; it is just that
they do not consider their own or anyone else's comfort nearly as important as
getting the job done (Cornwall, 1990: 191).

3.2.6. Confidence, self-image, and perception of probable success

Confidence often stems from the achievement of success and is a significant

attribute of entrepreneurial personalities. Such success, which relates to the
entrepreneurs confidence and positive self-image is under-pinned by their optimism
to succeed rather than their fear of failure. They study the facts that can be
gathered, and make judgements concerning them. When facts are not fully
available, they nevertheless proceed with the tasks by relying on their high level
of self-confidence. They do so with aplomb because they trust their own abilities,
knowledge and skills.

The intrapreneur, inspired by his belief that he will succeed, is confident and has
a positive self-image which extends to the prospects for their businesses. Even
when a project has obviously been a failure, intrapreneurs often refuse to
acknowledge this. Being optimistic they perceive failure as a learning experience,
rather than a personal disaster. In short, they refuse to "quit" (Pinchot, 1985: 51).
 60
3.2.7. Desire for responsibility

As a matter of course entrepreneurs assume personal responsibility for

accomplishment. As self-initiating doers, they set goals for themselves and decide
• how to attain them through their own strengths. They also desire personal
responsibility for accomplishment, and want to be held personally accountable for
any results.

Another reaction is to see themselves as responsible for their own destiny. As a

result they do not tend to blame their failure on others, but rather focus on those
aspects of the scheme that were under their control in order to gauge how they
could have improved them.

3.2.8. Adaptability to and tolerance of ambiguity v

Entrepreneurs seek independence and will take risks to achieve it. Linked to such
risk taking is the uncertainty of the future. Aspiring entrepreneurs can certainly
tolerate this uncertainty as is evident by their propensity to leave the security of
their jobs. Security and clarity about their futures and roles are less important to
entrepreneurs, relative to their goals, than to most persons (Finley, 1990: 25). The
entrepreneur's tolerance of ambiguity suggests his ability to deal with the
unstructured and the unpredictable. This is undoubtedly an asset, as the
entrepreneur deals with a variety of business situations many of which are
unpredictable.

For both the entrepreneur and intrapreneur the early establishment phase of a
business or project the outcome is uncertain, causing them to make many ad hoc
decisions, if and when problems arise. They have to make decisions even if they
have insufficient information. They thus adapt to changing ciroumstances. When
their plans are rejected, because actual conditions differ from those anticipated,
they do not give up. Instead, they assess the situation objectively, formulate a
 61

new plan and activate it in the belief that it will- be effective in the new
circumstances. This suggests their ability to handle and tolerate ambiguity without
their effectiveness being impaired.

3.2.9. Ability to plan realistically

The ability of the entrepreneur to set challenging but practicable goals shows that
he is highly capable of realistic planning. The entrepreneur competently sets
short-, medium- and long-term goals enabling him to achieve his wishes, desires
and ideals.

As an objective person, the entrepreneur (and the intrapreneur) shapes his thoughts
and activities in a pragmatic way: in the way that he gathers the available facts,
studies them, and determines a course of action. When there are insufficient facts
to define the situation completely, a practical approach and self-confidence enables
him/her to proceed and to overcome unforseen obstacles.

Both the entrepreneur and intrapreneur must have the ability to comprehend their
own situation as well as that of the business as a whole, and to foresee what
effect a potential change will have on the entire system. Intrapreneurs have
undeniable intuitive skills. Yet at the same time they use analytical skills, which
they are often called upon to use both within their own businesses and in the
corporation (Pinchot, 1985: 69).

3.2.10. Ability to organise and administer

Entrepreneurs and intrapreneurs show organising and administrative ability in

identifying and using the talents of others. They respect competence, and choose
specialists to implement tasks efficiently. Although they tend to do routine work
well, they know that such tasks can often be better done by others. Their great
 62
strength as administrators lies in their ability to antlclpate future possibilities. They
tend to show unusual skills in organising both work and people. They are highly
objective when choosing individuals for specific tasks, and they invariably choose
the expert over the friend.

3.2.11. Honesty and integrity

Most venture capitalists' descriptions of the entrepreneur, what is strikingly similar

is their insistence that honesty and integrity are characteristics of the successful
entrepreneur. This finding is contrary to the received wisdom, which perceives
entrepreneurs as being willing to sacrifice morals for profit. Yet this finding is not
surprising considering that entrepreneurs are generally deeply committed to what
they consider to be worthwhile purposes. They may be flexible concerning rules,
but they are not, on the whole, dishonest. This is borne out by the statements of
venture capitalists. One declared: II They are darned honest with themselves. If
there is a problem, they tend to get it out in the open fast and then stick with it
until it is solved. or Another said: II All entrepreneurs are extremely honest with
themselves, and will not tolerated untruthfulness or dishonesty from anyone on
their team.", Pinchot (1985:71). Venture capitalists need honest entrepreneurs
because they entrust entrepreneurs with the operating control of their finances.

Honesty and integrity are important attributes of the intrapreneur. When

intrapreneurs experience difficulty with a project, they will discuss it with the
relevant sponsors and managers without involving too many people in the
organisation. They also need to be honest with themselves (Pinchot, 1985: 70).

3.2.12. Problem-solving and decision-making style

The entrepreneur endeavours to perform difficult tasks as quickly and

independently as possible, and enjoys grappling with problems in the process.
 63
The intrapreneur is good at problem solving. He/she expects daily problems: it is
rather a matter of how many and how complex the problems will be. An
intrapreneurial project seldom goes smoothly, and to the intrapreneur finds ways
to move forward.

3.2.13. Desire for autonomy and independence

The force that propels the entrepreneur to initiate the process of going into
business on his own, is frequently the craving for autonomy. As an employee, the
entrepreneur presents a constant problem to his superiors: he is the "Wild Man"
in an organisation, who pushes the rules to breaking point, who hungers for a free
range, and who feels stifled in any organisation except his own. "Autonomy" is
therefore the "force" that propels the entrepreneur into his solitary orbit (White,
1988: 27).

The intrapreneur enjoys autonomy and independence, but not to the same degree
as the entrepreneur. The intrapreneur achieves autonomy and freedom by crossing
organisational boundaries, working in silence until he/she has specific results to
show organisational members, gets protection from sponsors, and negotiates the
system within which he/she is working.

Hisrich and Peters (1989: 52) suggest using the following questions to determine
the extent to which individuals require independence. These questions are outlined
in Table 3 below.

-
 64
TABLE 3 CHECKLIST FOR FEELINGS ON INDEPENDENCE

Feelings on Independence

1. I hate to go shopping for clothes alone.

2. If my friends won't go to a movie I want to see, I'll go by myself.
3. I want to be financially independent.
4. I often need to ask other people's opinion.
5. I'd rather have other people decide where to go on a social evening out.
6. when I know I'm in charge, I don't apologize, I just do what has to be done.
7. I'll speak up for an unpopular cause if I believe in it.
8. I'm afraid to be different.
9. I want the approval of others.
10. I usually wait for people to call me to go places, rather than intrude on them.

Source: Hisrich and Peters (1989: 52)

3.3. THE ADDITIONAL SPECIFIC CHARACTERISTICS OF THE

ENTREPRENEUR

Entrepreneurs seem to possess many similar traits. These includce a high level of
energy, a desire to become involved in innovative adventures, a willingness to
assume personal responsibility for making events occur in preferred ways, and a
desire for achievement for its own sake. Kets de Vries (1985: 160) suggests that
entrepreneurs also seem to be achievement oriented, enjoy taking responsibility for
d~cisions, and dislike repetitive, routine work.

Entrepreneurs, who are creative, possess high levels of energy, perseverance and
imagination. These qualities combined with a willingness to take moderate
calculated risks enable them to transform simple, ill-defined igeas into concrete
realities. Entrepreneurs can infect an organisation with enthusiasm. They convey
- -
a sense of purpose, and by so doing convince others that they are the centre of the
----'"-_._-_ .._._-------~---_._----_._-_._._-_.
 65
action. Their ability to captivate others, whether it be through an enigmatic
seductiveness, or through an elusive charisma, enable them to lead an organisation
and to give it momentum. Despite their undeniable mystique, entrepreneurs often
have personality quirks that make them difficult people to work with. For example,
their
i
preference for action, which may precipitate their deeds, can sometimes have
dire consequences for the organisation.

It is not enough for an entrepreneur to be a brilliant creator. Additionally, he needs

to be a smart politician, a charismatic speaker, an inspiring coach something.. of a
_ technical expert, as well as an efficient administrator. ~ no single
~ -"ntrepreneur embodies all these characteristics. T e for being a
~uccessful entrepreneur, therefore; appears to be the bility
"-~"'-"--'---'---""----'~'-~'-'-' ,
consisting of recruits who have the very skills which the entrepreneur himself lacks
(White, 1988: 30).

According to Maslow's'. hierarchy of needs, the entrepreneur's needs for

psychological, safety, and love needs, tend to be relatively low, whereas the need
for self-esteem, that is the need to prove himself, tends to be very high. With
regard to the traditional five managerial functions, namely, planning, organising,
staffing, directing, and controlling, the entrepreneur's strongest skills lies in
planning, selecting, motivating and rewarding people, whereas his other skills are
!

weaker. According to McGregor's dichotomy, the entrepreneur will be either a

strong "theory X" or a strong "theory V", but not a moderate. With respect to
Blake and Mouton, he will be 9.1, that is high task oriented and low people
oriented. Finally, as regards Hertzberg's "motivators" and "dissatisfiers" formula,
the former dominates strongly, with achievement or ego drive being the main key,
whereas "dissatisfiers" such as status, working conditions, and even money, are
of much less importance (Burns and Dewhurst, 1989: 10).

In addition to the entrepreneurial characteristics common to both the entrepreneur

and the intrapreneur, the additional specific characteristics of the entrepreneur are:
pursuing the ideal of freedom; the need to assume control; a sense of distrust; and
~ ---~-~'-'.- ...-"---_. ._--.----_.
 66
the
,
need for feedback. These characteristics are described below.

3.3.1. Pursuing the ideal of freedom

At the deepest level of personality some entrepreneurs may be prone to what

psychoanalysts call "splitting". In other words, their perceptions of the world are
divided; one domain is full of blocks and frustrations, and the other presents an
ideal of freedom.' The entrepreneur's compulsion to seek freedom by building his
. own business, can be the result of such a division. This is part of the
psychological signature of the entrepreneur, one of the hidden forces that sets him
apart from those who are happy to spend their lives in large corporations (White,
1988: 28).

Typically, entrepreneurs do not get on well with their bosses, and this is often the
reason for their "striking out on their own". In fact, one of the main reasons that
the entrepreneur takes risks seems to be to achieve independence from his boss:
the restrictions and approval requirements of a job annoy him. Entrepreneurs also
tend to look for new ways to perform work, but are restricted from so doing,
because most organisations are too bureaucratic to do anything other than follow
established way~ (Finlay, 1990: 24).

The aspiration to be independent of others is a striking characteristic of the

entrepreneur, who needs this freedom to pursue his wishes, desires and goals. By
owning his own business, the entrepreneur can become his own boss.

3.3.2. Need to assume control

According to Kets de Vries (1985: 160), a significant theme in the life and
personality of many entrepreneurs is the need for control. Kets de Vries further
suggests that the entrepreneurs' preoccupation with control affects their ability to
 67

take direction or to give it appropriately, a characteristic which has serious

implications for how they get along with others. Some entrepreneurs are strikingly
ambivalent when an issue of control surfaces: they are filled with fantasies of
grandiosity, influence, power, and authority. Yet they simultaneously also feel
helpless: they seem to fear that their grandiose desires wil1 become uncontrollable
1

and place them ultimately at the mercy of others. Consequently some

entrepreneurs have seriousamr-cUIt~fessing issues of dominance and
submission, and are~Picious of authorit~
,,------_
... ....-
-------~--"--
While managers seem able to identify in a positive and constructive way with
authority figures and to use them as role models, many entrepreneurs seem to lack
the manager's fluidity in changing from a superior to a subordinate role. Instead,
the entrepreneurs often experience structure as stifling. Unless they have created
the structure, they find it v~ry difficult to work with others in structured situations.

People who have an inability to submit to authority and to accept organisational

rules are often driven into a corner.. The same is true of entrepreneurs who are
sometimes viewed as misfits who need to create their own environments.

3.3.3. Sense of distrust

Entrepreneurs are prone to being suspicious of others, an attitude exemplifying

their strong distrust of the world around them. They therefore tend to scan the
environment to find something that will confirm any suspicions. Such an attitude
has distinct advantages: it alerts the entrepreneur to competitors, suppliers,
customers, or government moves that may affect the industry. The entrepreneur
fears being victimised, and is prepared to protect himself from being caught
unawares (Kets de Vries, 1985: 162).
 68
3.3.4. Need for Feedback

Entrepreneurs have a need for concrete, timeous, accurate feedback concerning

their achievements: They want to know how they are doing, whether good or bad,
, and they are stimulated to achieve higher levels of performance by learning about
•
the effectiveness of their efforts this far. Such feedback also stimulates them to
invest even more energy in their strong points.

3.4. MANAGERIAL CHARACTERISTICS COMMON TO BOTH THE

MANAGER AND THE INTRAPRENEUR

The manager and intrapreneur share these characteristics: attitude toward money;
and an inclination for generality. These characteristics are described below.

3.4.1. Attitude towards money

Although the manager has a "professional" responsibility for his organisation's

financial welfare, its profits do not represent a personal monetary goal. Instead,
the earnings of his firm are a yardstick against which he measures the viability of
a project and the correctness of its implementation. The manager does not have
real control over money unless he is at the top of the organisation. He contributes
to profits by being responsible for the revenue of his part of the organisation. He
controls costs and spending in his area.

, The intrapreneur may well receive some financial benefit from a successful project.
. Money, as established previously, is not the primary motivator which drives the
intrapreneur to work on a project, but rather the challenge of making the project
succeed.
 69

3.4.2. Inclination for generality

By inclination the manager is prone to generality. He is interested in acquiring any

general knowledge that may be relevant to the management part of his part of the
operation. His strength as a manager lies in his wide range of knowledge and in
his ability to synthesise it. The higher his position in his organisation, the wider
must be his range of general abilities. He does not need to have specialist
expertise in all the fields for which he is responsible, but he does need to possess
sufficient general knowledge to manage his project, to judge its performance, and
. to help his subordinates develop their specialist skills.

Likewise, the intrapreneur has a general approach to management in contrast to

that of the specialist. The task of the intrapreneur demands that he often carries
out certain functions beyond his existing job description (Du Preez, 1992: 82).

3.5. THE ADDITIONAL SPECIFIC CHARACTERISTICS OF THE

MANAGER

Attempts have been made to identify the nature of management by selecting a

representative sample of managers and administering to them batteries of
psychological tests. The data thus derived indicate whether managers tend to be
introverted or extroverted, whether they are high verbal or high analytical, and
whether they have the Interests typical of the social service, the accounting,
teaching, or the medical professions. All this collected and analysed information,
however, reveals very little about the mental and personality characteristics of
some people who are classified as managers.

According to Smith (1983: 7), there are many managers who take no risks, do not
apply initiative, accept little or no responsibility, and withdraw from accountability.
These managers are typically described as bureaucrats. For a bureaucrat, the
organisation offers safety and security. This is where his/her performance is
 70

measured in terms of his/her the compliance with policies, rules and procedures.

Over and above the managerial characteristics common to both the manager and
intrapreneur, a few distinct characteristics of the traditional manager are identified.
These include his/her primary motivation for promotion and rewards, his/her need
for power, his/her ability to work within the system; his/her implementation of
planning, controlling and administrative systems; his/her disinclination to take risks;
his/her problem-solving style and, finally, his/her ability to delegate responsibility
to his subordinates. These characteristics are described below.

3.5.1. Primary motivation: promotion and rewards

The manager is motivated primarily by promotion and typical corporate rewards.

The manager's goal, his/her avenue to success, is to occupy increasingly important
positions in an already established structure. Within the organisational context
status symbols, including job titles, are important to the manager.

3.5.2. Need for power

The true manager generally assumes leadership in both the business organisation
and the community: he wishes to be involved in decision-making and instruction-
giving, and insists on being given information which may strengthen his position.
Thus the manager has a strong tendency to influence and control others. This
need for power finds clear expression in personal and social gain. Indeed, the
~anager is keenly aware of his reputation and position (Moolman, 1992: 4). This
penchant to influence and impress others, and to give unsolicited support and
advice, tends to provoke positive and negative feelings in others.
 71
3.5.3. Working within the system

The manager feels at home with the corporate or bureaucratic environment and
prefers the administrative duties required to technical work. He/she feels
) comfortable with the structure provided, and this assist in reducing risks in the
business context. As long as procedures, policies and rules are provided, the
parameters are in place to guide the actions and decisions of the manager. The
manager uses his political skills combined with occupational or functional
competence to determine success within the corporation.

3.5.4. Planning, controlling and administrative systems

The manager is comfortable with plans, budgets, schedules, and projects. These
are frequently seen as the end rather than the means. The manager may focus on
efficiency or activity rather than the effectiveness of the results. The manager is
also ultimately involved with standards, reports, and the other various control
techniques.

3.5.5. Disinclination to take risk

In firms where organisational entrepreneurship exists, managers often risk their

reputations, and in some cases their careers, on the new ventures that they are
attempting to develop. But in organisations that offer little or no intrapreneurial
support, the personal consequences may be so detrimental that managers are
unwilling to undertake entrepreneurial risk. For these managers, the probability of
"downside risk" is too great. It brings scant recognition, rewards, or promotion
and may jeopardise their careers and even cause dismissal (Cornwall, 1990: 14).

•
 72
3.5.6. Problem-solving and decision-making style

Because of the managers disinclination to take risk, he will involve various parties
in investigating and agreeing on a problem-solving decision before taking any
1 action. Problems are investigated to determine who is responsible for the problem
or why it has occurred. Decision are made in conjunction with people at higher
levels of authority, and their implementation will be delayed until some indication
has been given of what would be preferred.

3.5.7. Delegation of responsibility

The manager has the ability to delegate authority is all-important. Such an

attribute involves not only the delegation of tasks to his subordinates but also
those which serve to maximise productivity. Just as his directors trust him to run
his operation well, so, too, the manager entrusts his subordinates to take
responsibility for the freedom he has given them. Such delegation is by no means
haphazard or liberal: the manager chooses very carefully what responsibilities to
delegate and to whom such responsibilities may be given.

3.6. THE ADDITIONAL SPECIFIC CHARACTERISTICS OF THE

INTRAPRENEUR

The additional characteristics of the intrapreneur include the following: dedication;

putting internal priorities first; serving self and the organisation; building support;
c, creating and maintaining a team, and inspiring its trust; crossing organisational
boundaries; and setting high internal standards. These characteristics are
described below.
 73

3.6.1. Dedication

The primary motivator of the intrapreneur is a passion for, and a belief in, an idea,
one that arouses his curiosity and commitment. This passion leads to persistence,
commitment and drive. These derive from the "heart". This emotional focus is the
key to the intrapreneur. He will not let go his commitment to an idea or to an
unsolved problem. An intrapreneur devotes much time and energy to developing
and defining an idea, to building a coalition, and to mobilising people and resources
within an organisation to convert an idea into manufactured products, or to a new
business, or to a new organisational process. Over and above this, they make a
commitment to their ideas. In short, intrapreneurs believe in their ideas
(Cornwall, 1990: 176).

The dedication of intrapreneurs is often so fanatical that they neglect other facets
of their lives. It has a negative side in that they tend to consider goals more
important than people.

3.6.2. Putting internal priorities first

Although they are guided by their customers, intrapreneurs also personally feel the
need to complete their project. Most intrapreneurs become successful pursuing
ventures that have become deeply and personally meaningful. They believe that
the world needs the product they propose and that it will be a valuable contribution
(pinchot, 1985: 48).

3.6.3. Serving self and the organisation

The successful intrapreneur serves both himself and the organisation that employs
him. While goal-oriented and self-motivated intrapreneurs want freedom and
access to organisational resources, they also respond to organisational rewards and
 74

recognition. Consequently their work is pleasing not only to themselves, but also
to the customers and sponsors in the organisation. likewise, although the
intrapreneur needsa strong organisations with its resources, including technology,
people, and knowledge, to establish a product effectively, he also needs strong
"\ beliefs and feelings to help him sustain his efforts. As a result intrapreneurs and
their organisations have a delicately balanced relationship, which can be fractured
if, and when, the intrapreneur leaves the enterprise to pursue his own ideas
(Cornwall, 1990: 185).

3.6.4. Building support, creating and managing a team and inspiring trust

Intrapreneurs need the skills to bring a group of individuals together to form a

team. They must also possess a thorough knowledge of managerial principles and
the market and, in the absence of information, be capable of making quick
decisions. The intrapreneur has to perform certain functions which do not fall
within his job description. For instance, an individual with a technical background
often needs to study marketing, manufacturing, sales and finance and to conduct
market research. Finally, the intrapreneur is very dependent on the support of his
team members, his colleagues and his directors. It is important that he instills in
them a sense of trust. In the words of Hisrich and Peters (1989: 516), he needs
*-
--
to be a good "diplomat".

Openness and encouragement lead to the establishment of a strong coalition of

supporters. The intrapreneur must encourage and affirm each team member,
particularly during problem times. This encouragement is very important, as the
usual motivators of career paths and job security are not operational in establishing
.a new intrapreneurial venture. A good intrapreneur makes everyone a hero (Hisrich
and Peters, 1989: 517).

Intrapreneurs work with good people wherever they can find them within an
organisation. They also often make use of the help of suppliers and vendors
 75
outside the organisation. Sponsors are the people in the organisation who assist
the corporate entrepreneur in learning organisational skills or who supplement the
intrapreneur's skills with their own. They may assist him by providing additional
budget, by providing useful information and advise, and by assisting generally with
the phases of a project. Table 4 below shows the spectrum under which sponsors
fall. On the one extreme the inventors are the people who understand the new
product or service, but do not know how to make a business out of it. On the
other are the protectors who approve and protect the intrapreneur.

TABLE 4 SPONSORSHIP SPECTRUM

INVENTOR INTRAPRENEUR SPONSOR PROTECTOR

Understands the new Attention is on Attention is primarily Very high level

product or service, business realities; on removing sponsor who
. but do not know how may occasionally organisational barriers approves and
to make a business forget realities of and giving advice to protects, but only
out of it. corporate politics. the intrapreneur. occasionally meets
with the
intrapreneur.

Source: Pinchot (1985: 149)

The intrapreneur attempts to minimise obvious organisational failures. In turn,

managers and sponsors, who are skilled in intrapreneurship, protect the
intrapreneur for as long as possible in the introductory stages of the project. This
assistance facilitates the development of the intrapreneurial project before it goes
" public in the organisation. The "supporters" ensure the constant supply of funds,
minimise any intrusions, and help convince superiors and peers to support the
project (Cornwall 1990: 189).
 76
3.6.5. Crossing organisational boundaries

To avoid negative reactions to an idea which has not yet proved itself the
intrapreneur does not communicate his intentions at the early stage of the project.
1 He/she does certain tasks themselves instead of delegating them to the appropriate
departments. This requires him/her to cross traditional organisational boundaries:
he assumes the various functions of marketing, engineering, research,
manufacturing, sales and finance, and takes responsibility for all aspects of the
project (Pinchot, 1985: 40). Although intrapreneurs frequently have marketing.. or
technology backgrounds, they belong to neither once they take on the role of
intrapreneur. They therefore cross the barriers that divide the organisation into
functions.

Intrapreneurs communicate productively, formal and informally, with a wide cross-

section of people both outside and inside their businesses. Within the organisation
the intrapreneur needs to communicate effectively with all the members of the
hierarchy, and outside the organisation he/she does so too. This ability to
communicate productively is the result of the intrapreneur's ability to achieve
knowledge in a wide variety of fields, including accounting, finance, marketing and
production (Cornwall, 1990: 188).

Pinchot (1985: 40) describes an individual who is not only anxious to innovate,
but also thrives on learning to manipulate the system by taking risks, and by
developing new products, businesses and processes. To the intrapreneur the
system is a challenge, not an inhibitor.

3.6.6. Setting high internal standards

Intrapreneurs gain little satisfaction from adhering to standards imposed by others,

and may ignore them. They are famous for neglecting documentation. All the
same, they set high internal standards for th.emselves in the areas that they
 77
consider important. This constant striving for excellence, when combined with
a good measure of impatience and alack of respect for tradition, seems to produce
superior new products and services in almost unrealistically rapid spans of time
(Pinchot, 1985: 50).

3.7. CONCLUSIONS

The intrapreneur has many characteristics in common with the entrepreneur.

These include performance motivation, a high aspiration level, the ability to cause
things to happen, goal, action, and time orientations, and the strength to
persevere. They also have similar attitudes to financial gain and risk-taking. Their
mutual attributes are leadership qualities, self-confidence, a positive self-image, and
the assumption of probable ·success. Both types of business men have the talent
to plan realistically and to organise and to administer, jobs undertaken with honesty
and integrity. Their similar styles of problem-solving and decision-making work in
tandem with their shared desires for autonomy and independence.

The entrepreneur has specific characteristics. These include pursuing the ideal of
freedom; the need to assume control; a sense of distrust; and the need for
feedback.

The intrapreneur also has characteristics in common with the manager. These
include a similar attitude towards money, and an inclination for generality.

The manager has specific characteristics. These include a primary motivation for
" promotion and reward; the need for power; a desire toward working within the
system when planning, controlling, and administering systems; a disinclination to
take risks and a distinctive problem-solving and decision-making style.
 78
The intrapreneur has additional specific characteristics, too. His/her primary
motives are his/her feelings and emotions; he/she puts internal priorities first;
he/she builds support, creates and manages a team in which he inspires trust, and
he/she crosses organisational boundaries.
 79

CHAPTER FOUR

A PERSPECTIVE ON INTRAPRENEURSHIP

4.1. INTRODUCTION

Many large corporations have responded to the need for innovation by bringing
entrepreneurial function inside the company. This process, often referred to as
"intrapreneurship", pursues innovation in new ventures established under the
existing corporate umbrella. Many firms have discovered, however, that existing
management systems, which helped sustain their earlier success, clash with the
entrepreneurial style of the new venture. This conflict raises two critical questions:
whtether traditional managers, even successful ones can manage "entrepreneurs"
within the corporate environment, and whether a traditional or bureaucratic
organisation can adopt the required strategies to encourage these "entrepreneurs"
to flourish within the corporate environment.

The purpose of this chapter is to show that corporate organisations can permit the
thrival of intrapreneurship within traditional frameworks. It does so by dividing the
chapter into five discrete sections. The first examines the motivation for
intrapreneurship, while the second describes the intrapreneur's characteristics. The
third section provides guidelines for the identification of the intrapreneur, and the
fourth suggests ways in which the intrapreneur can best operate. Finally, the fifth
section discusses the requirements for the successful practice of intrapreneurship.

4.2. THE MOTIVATION FOR INTRAPRENEURSHIP

.\

The roles individuals assume in a business life cycle can be placed on a spectrum.
The cycle starts at one end with idea people and inventors who would typically be
 80
the entrepreneur, moves through to intrapreneurs in the middle, and then on to
professional managers at the other end. The difficulty most large organisations
experience with innovation stems from their trying to proceed without empowering
intrapreneurs. If intrapreneurs are not present, attempts to innovate often fail.
This is because in the innovative process several vital steps are omitted between
the creation of ideas and in the actual development into marketeable products or
services.

FIGURE 5 INNOVATION GAP

IntrapreneU"1

Clat_ "'ototype 8...... St-.t Up Trying Rapid I\epliCltion lnaamant" Maintain- Running
Feedback PI.... the PI.... Adj~ of I MIni- C",",- log by Down the
of Reolity It able Only Book lnotolled
Plnern Cepti .. 8_

Source: Pinchot (1985: 34)

According to Kaplan (1987: 84), a notion seems to exist that entrepreneurship and
management are in opposition to each other. In contrast to the entrepreneur,
managers are often viewed as being stodgy, as liable to panic under pressure, not
clear on long on strategic abstractions and short on nitty-gritty. In addition,
 81

managers are viewed as being quick to guard the interests of the company, but
... slow to promote the virtues of free enterprise. All the same, if entrepreneurs are
to be held in high esteem, it does not follow that managers should be denigrated.

Although the intrapreneur has been accepted as the corporate entrepreneur, some
people consider the "corporation" and the "entrepreneur" to be so opposite to one
another that the term "intrapreneur" is an oxymoron - a contradiction in terms.
On the other hand, social scientists like Ross (1987: 76) argues that an
organisation without an entrepreneurial spirit becomes a bureaucracy. On the other
hand, the small firm cannot depend on entrepreneurship alone. Without
professional management it may remain small - or even go out of business.

According to McKinney and McKinney (1989:77), the entrepreneurial function and

the management function, both necessary in any business, serve different
purposes. Managers are responsible for developing routines to handle day-to-day
problems, Entrepreneurs, by contrast, must be free to operate strategically and to
allocate resources in response to highly unstructured conditions. Without an
element of entrepreneurship to centralise and direct innovation, the corporate
organisation may stagnate. Without effective management, the entrepreneurial
venture is likely to fail in the long run. Thus we need to understand how both
functions can coexist in the same company.

But the organisation managed by intrapreneurs who follow principles of

entrepreneurship has the best of both worlds. They can mobilise innovation and
resources on behalf of worthy projects (Luchsinger and Bagby, 1987: 12). There
is room for entrepreneurship in independent organisations or ventures, as well as
intrapreneuring in organisations that foster and support. Both forms are needed for
achievement-motivated people whether they work in corporations or build
independent ventures. The creation of a corporate climate that unleashes the
excitement, enthusiasm and spirit of the entrepreneur, while still providing a place
for him/her within the company. He/she in turn, inject into the corporation that
same vitality that we admire in small business. These intrapreneurs are the same
 82
people who, if not encouraged and nourished within the. corporation, will eventually
'"- take their enthusiasm, ideas and excitement away, set up their own businesses
and, usually, compete with the corporation.

4.3. THE CHARACTERISTICS OF THE INTRAPRENEUR

Pinchot (1985: 54 - 56) compares the intrapreneur with the entrepreneur and with
the traditional manager. This comparison is outlined in Table 5.

TABLE 5 WHO IS THE INTRAPRENEUR?
TRADITIONAL
MANAGERS
Primary Wants promotion and
Motives other traditional corporate
rewards. Power-
motivated.
Time Responds to quotas and
Orientation budgets, weekly,
monthly, quarterly, annual
planning horizons! the
next promotion or
transfer.
Action Delegates action.
Supervising and reporting
take most of energy.
Skills Professional management.
Often business-school
trained. Abstract
analytical tools, people-
management, and political
skills.
Courage Sees others in charge of
and his or her destiny. Can be
Destiny forceful and ambitious,
but may be fearful of
others' ability to do him
or her in.
83
TRADITIONAL
ENTREPRENEURS
Wants freedom. Goal-
oriented, self-reliant, and
self-motivated.
End goals of 5-10 year
growth of business in
view as guides. Takes
action now to move
next step along way.
Gets hands dirty. May
upset employees by
suddenly doing their
work.
Knows business
intimately. More
business acumen than
managerial or political
skill. Often technically
trained if in technical
business.
Self-confident,
optimistic, courageous.
INTRAPRENEURS
Wants freedom and
access to corporate
resources. Goal-oriented
and self-motivated, but
also responds to ,-
corporate rewards and
recognition.
End goals of 3-15 years,
depending on type of
venture. Urgency to
meet self-imposed and
corporate timetables.
Gets hands dirty. May
know how to delegate,
but when necessary
does what needs to be
done.
Very like the
entrepreneur, but the
situation demands
greater ability to prosper
within the organization.
Needs help with this.
Self-confident and
courageous. Many
intrapreneurs are cynical
about the system, but
.
optimistic about their
ability to outwit it.
 84

TRADITIONAL MANAGERS TRADITIONAL INTRAPRENEURS

ENTREPRENEURS

Attention Primarily on events inside Primarily on technology Both inside and outside.
corporation. and marketplace. Sells insiders on needs
of venture and
marketplace, but also
focuses on customers.
Risk Careful. Likes moderate risk. Likes moderate risk.
Invests heavily, but Generally not afraid of
expects to succeed. being fired so sees little
personal risk.
Market Has market studies done Creates needs. Creates Does own market
Research to discover needs and products that often research and intuitive
guide product can't be tested with market evaluation like
conceptualization. market research- the entrepreneur.
potential customers
don't yet understand
them. Talks to
customers and forms
own opinions.
Status Cares about status Happy sitting on an Considers traditional
symbols (corner office, orange crate if job is status symbols a joke-
etc.). getting done. treasures symbols of
freedom.
Failure and Strives to avoid mistakes Deals with mistakes Sensitive to need to
Mistakes and surprises. Postpones and failures as learning appear orderly in
recognizing failure. experiences. corporation. Attempts to
hide risky projects from
view so can learn from
mistakes without
political cost of public
failure.
Decision Agrees with those in Follows private vision. Adept at getting others
power. Delays decision Decisive, action- to agree to private
until gets a feel of what oriented. vision. Somewhat more
bosses want. patient and willing to
compromise than the
entrepreneur, but still a
doer.
 85

TRADITIONAL TRADITIONAL INTRAPRENEURS

MANAGERS ENTREPRENEURS

Who Serves Pleases others. Pleases self and Pleases self, customers,
customers. and sponsors.
Attitude Sees system as nurturing May rapidly advance in a Dislikes the system but
Toward the and protective, seeks system, then, when learns to manipulate it.
System position within it. frustrated, reject the
system and forms his or
her own.
Problem- Works out problems Escapes problems in Works out problems "

Solving within the system. large and formal within the system, or
Style structures by leaving bypasses it without
and starting over on leaving.
own.
Family Family members worked Entrepreneurial small- Entrepreneurial small-
History for large organizations. business, professional, business, professional,
Independent of mother, or farm background. or farm background.
Relationship good relations with Absent father or poor Better relations with
with father, but slightly relations with father. father, but still stormy.
Parents dependent.

Socioecono- Middle-class background. Lower-class background Middle-class

mic in some early studies, background.
Background middle-class in more
recent ones.

Educational Highly educated. Less well educated in Often highly educated,

Level earlier studies, some particularly in technical
graduate work but not fields, sometimes not.
Ph.D. in later ones.

Relationship Hierarchy as basic Transactions and deal Transactions within

with Others relationship. making as basic hierarchy.

relationship.

Source: Pinchot (1985: 54 - 56)

 86
4.3.1. Primary motives

The intrapreneur, like the entrepreneur, is motivated by independence, freedom and

a sense of achievement. They are both achievement oriented, and therefore set
their own challenges, and take personal responsibility for their actions. In contrast,
The manager is motivated primarily by promotion and typical corporate rewards.
the intrapreneur responds to corporate rewards, but usually as a means of
measuring his/her success rather than the reward in itself.

4.3.2. Time orientation

The intrapreneur balances his time orientation between the long-term goals and
activities of the entrepreneur and the short-term activities of the manager. The
intrapreneur sets goals of three to fifteen years duration depending on the type of
venture he/she is working on. The entrepreneur sets longer-term goals, although
he is driven by day-to-day activities. The manager, by nature, works in shorter
time frames.

4.3.3. Action

The intrapreneur balances the doing of the work with the delegating of it. He
accepts that certain people are more competent in some activities than himself and
under given circumstances will trust them to carry out the work. The entrepreneur,
especially in the early stages, is responsible for all activities of the business. His
need for control drives him to do all the work himself. The manager delegates
work continually and supervises those entrusted with the work to ensure that it is
carried out.

4.3.4. Skills
f·

The intrapreneur usually has technical knowledge of the project that he is working
on. In addition, he develops skills to deal with the organisation and its systems
 87
and procedures. The entrepreneur develops good business skills, has a sound
technical knowledge of the product or service that he is providing. The manager
focuses on professional management, and is often business-school trained to
develop his "people" and "political" skills required to work within an organisation.

4.3.5. Courage and sense of destiny

The intrapreneur is self-confident and courageous. He/she is naturally cynical

about the organisational system but feels confident about his/her ability to outwit
it. He/she feels in control of his/her own life and can make things happen. The
entrepreneur is very similar to the intrapreneur in that they are self-confident,
optimistic, and courageous. He/she, too, believe that he/she is in control of his/her
own life and accepts full responsibility for his/her actions. The manager sees
others as being in charge of their destiny. The manager can also be forceful and
ambitious but may be fearful that other people may take advantage of them.

4.3.6. Attention

The intrapreneur pays attention to details within and outside the organisation.
He/she focus on insiders to determine the need for the venture. But also puts
emphasis on customers to determine their needs. The entrepreneur primarily
stresses on technology and the market place. The manager pays attention to
events that happen inside the organisation.

4.3.7. Risk

The intrapreneurs, like entrepreneurs, are moderate risk-takers. They have a strong
belief in themselves which reduces their perception of the risk that they are taking.
Managers are much more cautious about taking risks, and would-prefer to involve
various parties in making any decisions requiring a degree of risk.
 88
4.3.8. .Market research
....

The intrapreneurs do their own market research in order to evaluate a project's

requirements. This function is not delegated to anyone else. The entrepreneur by
contrast will create needs. He/she will talk to customers and form his/her own
opinion of what is required. Market research cannot always be used, as customers
do not yet understand some of the products or services that the entrepreneur has
in mind. The manager has market studies done by others to determine the needs
of the product and to guide the conceptualisation of the product.

4.3.9. Status

The intrapreneur does not respond to status symbols. What is important to him
is his freedom. The entrepreneur is also not responsive to symbols. This eases his
decision to leave the organisation and start his own business. The manager, in
contrast, resopnd very well to status symbols, with specific reference to job titles.

4.3.10. Failure and mistakes

The intrapreneur is sensitive to public opinion and tries to ensure that everything
is perceived as being orderly in the corporation. He/she will attempt to hide the
project from view so that he/she can learn from his/her mistakes without public
exposure. He/she views failure and mistakes as a learning experience, and does
not abandon projects even after many people have perceived them as being
failures. The entrepreneur, who usually fails at least once in business, deals with
mistakes and failures as learning experiences. The manager strives to avoid any
rnistakes and surprises. A failure may negatively affect the symbols, promotions,
or·reward systems that he/she responds to.

..
4.3.11. Decision

The intrapreneur is adept at getting others to agree to his/her private vision.

 89
He/she is prepared to involve others to a certain degree in his/her decision making
and in the shaping of his/her vision. The entrepreneur follows his/her own private
vision. He/she makes his/her own decisions and ensures that these decisions are
carried out. The manager will agree with those people in power. He/she will
usually delay any decisions until he/she has obtained a good indication of what the
senior executives may want.

4.3.12. Service to self and others

The intrapreneur first works to satisfy his internal goals, and later serves his
customers, sponsors and the organisation. Entrepreneurs serve both themselves
and their customers. The manager works to please other people especially those
at a higher level than himself.

4.3.13. Attitude toward the system

The distinct characteristic of the intrapreneur is that he dislikes the system, but
learns to manipulate it. The entrepreneur tends to advance rapidly in the system,
but at some stage will become sufficiently frustrated to create his own
environment. At this stage he is not prepared to negotiate the system. The
manager sees the system as being nurturing and protective and one within which
he can function effectively.

4.3.14. Problem-solving style

The intrapreneur works out problems within the system, or finds mechanisms to
bypass them without having to leave the corporation. He therefore sees problems
as being challenges with which he is prepared to deal to develop his/her projects.
The entrepreneur escapes the typical problems experienced in large corporations
by leaving and starting up his/her own business. When faced' with problems in
his/her own business, he/she sees them as challenges. In fact, the entrepreneur
seems continually to be looking for potential problems so that he/she is not caught
 90
unawares. The manager works out problems within the system, focusing
predominantly on the. reason that the problem occurred.

4.3.15. Relationship with others

The intrapreneur develops positive relationships with people in the organisation, but
across hierarchical lines. The entrepreneur forms his relationships around
transactions and deal making. The manager uses the hierarchy as the basis for
developing relationships ensuring that he works within its constraints.

The characteristics of the intrapreneur have been extensively described in Chapter

3. Table 6, below, provides a summary of them.

TABLE 6 CHARACTERISTICS OF THE INTRAPRENEUR

* Performance motivated - A sense of achievement

* Fanatical dedication to his/her work - Emotional involvement

* High aspirations - Sets high internal standards

* Ability to cause things to happen - Believes he/she is in control of
his/her life

* Goal orientated - Set high, realistic, attainable goals

* Action orientated - Does the work him/herself, but able to delegate

* Time orientated - Set short-, medium- and long-term goals

* Perseverance - Pursues his/her goals regardless of resistance from

others
* Financial Gain - A means for measuring success, money itself not
being a prime motivator
 91
Table 6 (continued)

* Risk - Takes calculated risks

* Creative and innovative
* Vision - Able to dream and make the dreams work in practice
* Leadership - Ability to mobilise people although the project recieves
the greatest attention
* Confidence and positive self image - Believes in his/her ability to
succeed

* Takes full responsibility

* Adaptable to and tolerant of ambiguity
* Deals with failure and mistakes as learning experiences
* Ability to plan realistically

* Ability to organise and administer

* Honesty and integrity
* Ability to solve problems and make decisions
* Strives for autonomy and independence

* Builds support - Inspires trust from team members

* Crosses organisational boundaries

While the behaviours of the entrepreneur and the intrapreneur are similar, some
intriguing differences should be pointed out. Each stimulates increased
productivity and effort that adds value. Each depends heavily on the innovative
process. However, their settings differ. The entrepreneur provides his/her own
setting, while the entrepreneur operates within the setting of an established
organisation with its structural and procedural constraints. Nevertheless, each
retles heavily on teamwork and group innovation.

The intrapreneur is considered to have a more difficult job than the entrepreneur.
Entrepreneurs have more control over their environments, especially the internal
ones. However, financial risk is carried by the intrapreneur's company, whereas
 92
the entrepreneur bears his own. The innovative company can also provide a
source of administrative and operational support. Failure means bankruptcy to the
entrepreneur, but the intrapreneur can return to his/her parent organisation. While
the entrepreneur is the boss, the intrapreneur must still report to his/her superiors
and seek sponsorship, especially in the face of internal criticism or resistance. The
behaviourial style of the intrapreneur is therefore crucial to success.

According to Kolchin and Hyclak (1987:16), the system is a challenge to the

intrapreneur. This attitude contrasts with that of the traditional manager, who
plays strictly by the company'srules in the hope of achieving rapid promotion and
other corporate rewards. The traditional manager is therefore less willing than the
intrapreneur to take risks for fear of failure.

There is, however, a blending of these two extremes of managerial behaviour. An

intrapreneur who to all outward appearances seems to be the loyal, traditional
manager, may conceal inside a person driven by an inner entrepreneurial spirit.

According to Feinburg (1989: 100), intrapreneurs do not wish to manage

independent businesses. They prefer the security of a regular salary. Intrapreneurs
are therefore not individualists, but they possess good managerial abilities and are
good team builders. They use groups and mobilise them to function optimally.
They prefer an integrated environment where ideas can flow freely across the
borders of sections and departments, and where resources are available (Kanter,
1983: 212).

Luchsinger and Bagby (1987: 12) suggest that intrapreneurship involves the
"development of a new idea, product or service within a business. By contrast,
entrepreneurship involves the creation of a new business.

..
True entrepreneurs, according to researchers who have attempted to isolate the
personality characteristics that distinguish successful ones, have a driving need for
achievement, autonomy and aggression. A true entrepreneur, says Kolmondon
 93

(Lee and Zemke, 1985: 32), principal consultant with Control Data Business
Advisors of Minneapolis, is not an "organisation man". She sees the type as a
continuum of traits, ranging from the truly driven entrepreneur to the more
organisationally palatable intrapreneur. A true entrepreneur cannot be kept inside
a company, Kolmodon adds, because it is impossible to create the high-risk and
high-reward environment they thrive on.

Shays and de Chambeau (Lee and Zemke, 1985: 32) suggest that there are two
types of successful people; those who know how to manipulate their
organisations to meet their need to do something different, and those who possess
the self-confidence and determination necessary to leave the organisation and to
go on their own: the intra- and the entre- preneurs.

4.4. IDENTIFYING THE INTRAPRENEUR

Although the task of intrapreneuring pushes people into certain patterns, there is
no set formula for determining in advance who can be an intrapreneur and who
cannot. People become intrapreneurs when circumstances drive them to an act of
will: the decision to make a new business concept into a reality within their
company despite the barriers and risks (Pinchot, 1985: 33).

Pinchot (1985: 31) offers a list of questions for any aspiring intrapreneurto check
themselves against. These questions are provided in Table 7.
 92
the entrepreneur bears his own. The innovative company can also provide a
source of administrative and operational support. Failure means bankruptcy to the
entrepreneur, but the intrapreneur can return to his/her parent organisation. While
the entrepreneur is the boss, the intrapreneur must still report to his/hersuperiors
and seek sponsorship, especially in the face of internal criticism or resistance. The
behaviourial style of the intrapreneur is therefore crucial to success.

According to Kolchin and Hyclak (1987:16), the system is a challenge to the

intrapreneur. This attitude contrasts with that of the traditional manager, who
plays strictly by the company'srules in the hope of achieving rapid promotion and
other corporate rewards. The traditional manager is therefore less willing than the
intrapreneur to take risks for fear of failure.

There is, however, a blending of these two extremes of managerial behaviour. An

intrapreneur who to all outward appearances seems to be the loyal, traditional
manager, may conceal inside a person driven by an inner entrepreneurial spirit.

According to Feinburg (1989: 100), intrapreneurs do not wish to manage

independent businesses. They prefer the security of a regular salary. Intrapreneurs
are therefore not individualists, but they possess good managerial abilities and are
good team builders. They use groups and mobilise them to function optimally.
They prefer an integrated environment where ideas can flow freely across the
borders of sections and departments, and where resources are available (Kanter,
1983: 212).

Luchsinger and Bagby (1987: 12) suggest that intrapreneurship involves the
., development of a new idea, product or service within a business. By contrast,
entrepreneurship involves the creation of a new business.

...
True entrepreneurs, according to researchers who have attempted to isolate the
personality characteristics that distinguish successful ones, have a driving need for
achievement, autonomy and aggression. A true entrepreneur, says Kolmondon
 95

4.5. GUIDELINES FOR INTRAPRENEURS

The guidelines, as listed in Table 8 are recommended by Pinchot (1985: 22) for
intrapreneurs who wish to be successful at working on a project within an
organisation.

TABLE 8 THE INTRAPRENEUR'S "TEN COMMANDMENTS"

The Intrapreneur's Ten Commandments

1. Come to work each day willing to be fired.

2. Circumvent any orders aimed at stopping your dream.
3. Do any job needed to make your project work, regardless of your job description.
4. Find people to help you.
5. Follow your intuition about the people you choose, and work only with the best.
6. Work underground as long as you can - publicity triggers the corporate immune
mechanism.
7. Never bet on a race unless you are running in it.
8. Remember it is easier to ask for forgiveness than for permission.
9. Be true about your goals, but be realistic about the ways to achieve them.
10. Honor your sponsors.

Source: Pinchot (1985: 22)

Sauser (1987: 34) adds the following guidelines for would-be intrapreneurs.
* Analyse your needs for funding carefully and never undercapitalise.
* Plan adequately for emergencies, delays, and cost increases.
* Draw upon the full resources of your organisation to help you with market
research, product evaluation, outlet location, and other tactical decisions.

* Never disregard the advice of your firm's own experts - even if the advice
may be discouraging.
* Don't get involved in areas where you have no skill, expertise, track record,
 97

Corporations face two major problems in trying to encourage and nurture

intracorporate entrepreneurship (intrapreneurship). Firstly, there are few
organisations genuinely committed to attracting, hiring, and developing the creative
talent they will need in the future. Creative people disrupt the established order
by asking questions and experimenting with new ways of doing things when well
established procedures are available to provide direction. Secondly, few
corporations have any concept of how to compensate creative ernplovees.: For
corporate entrepreneurship to work within organisations, one does not only need
people with corporate entrepreneurial characteristics, but, for example, an
environment conducive to creativity and innovation is also required. Some of the
critical requirements are outlined below.

4.6.1. Providing leadership and strategy

Charlton (1993: 24) suggests that leadership, in contrast to traditional and rational
•..
management is a requirement for business. He describes a leader as someone who>
maintains an active attitude towards goals and who, as part of self-management,
sees himself as a source of action by employing systems thinking. A leader has
a clear vision of the future and is active in influencing and guiding people whil
creating a context that is meaningful for others. This presupposes the ability t
empathise with people while trusting and relying on others because they ar
viewed as creative and competent. Consequently the leader adopts the active rol
\
of teacher and creates a learning culture, at the same time removing organisational )).w..~·
obstacles hindering personal growth in others - a prerequisite to empowerment. \
The leaders as pacemakers risks conflict as an integral part of individual and \
, organisational growth. This is in contrast to the manager who, as peacemaker, ,."')
avoids contentious issues. A leader has the courage of his/her convictions and

..
links efficiency with effectiveness by facing fundamental issues preventing
organisational growth. Senior management must make a personal commitment to
support innovation. They must understand and communicate that new solutions
are required, and that companies are operating in a new environment where change
 94
TABLE 7 ARE YOU AN INTRAPRENEUR?

Answer "Yes" or "No" to the following questions: YES NO

1. Does your desire to make things work better occupy as much of your
time as fulfilling your duty maintain them the way they are?
2. Do you get excited about what you are doing at work?
3. Do you think about new ideas while driving to work or taking a
shower?
.
4. Can you visualize concrete steps for action when you consider ways
to make a new idea happen?

5. Do you get in trouble from time to time for doing things that exceed
your authority?
6. Are you able to keep your ideas under cover, suppressing your urge to
tell everyone about them until you have tested them and developed a
plan for implementation?
7. Have you successfully pushed through bleak times when something
you worked on looked like it might fail?
8. Do you have more than your share of both fans and critics?

9. Do you have a network of friends at work whom you can count on for
help?
10. Do you get easily annoyed by others' incompetent attempts to execute
portions of your ideas?

11. Can you consider trying to overcome a natural perfectionist tendency

to do all the work yourself and share responsibility for your ideas with
-
a team?
12. Would you be willing to give up some salary in exchange for the
chance to tryout your business idea if the rewards for success were
adequate?

If you have answered yes more times than no, the chances are your are
already behaving like an intrapreneur.

...
Source: Pinchot (1985: 31)
 96
....
or credibility.
* Manage your budget carefully.
* Don't trample upon organisational policies and procedures when you can
work within the system.
* Hone your managerial skills to a fine edge before you launch your internal
venture.

4.6. REQUIREMENTS FOR THE PRACTICE OF

INTRAPRENEURSHIP

Kanter (1983: 27) defines the entrepreneurial organisation as follows:

"Entrepreneurs - Entrepreneurial organizations - always operate at the edge

of their competence focusing more of their resources and attention on what
they do not yet know (e.g. investment in R&D) than controlling what they
already know. They measure themselves not by the standards of the past
(how far they have come) but by visions of the future (how far they have
yet to go). And they do not allow the past to serve as a restraint on the
future; the mere fact that something has not worked in the past does not
man that it cannot be made to work in the future. And the mere fact that
something has worked in the past does not mean that it should remain."

Pinchot (1984: 82) offers the following insights regarding the development of
intrapreneurship:

"Intrapreneurship is a social invention which will allow people to express

their own potential more fully. Much of this potential is now trapped within
the hierarchical layers of huge organizations. This system-is a step toward
freeing individuals and organizations to build fuller, more meaningful, richer
and more productive lives."
 99
TABLE 9 CREATIVITY

1. Are all our people encouraged to think in new ways about products, services, systems,
etc?
2. Is "re-invention" of their jobs written into their job descriptions - i.e. do we expect
people to work themselves out of their present jobs?
3. Do we regularly and systematically challenge all our beliefs, assumptions, and
behaviours?
4. Do we have a disciplined process for gathering, reviewing, and testing new ideas - i.e. a
suggestion scheme that works?
5. Do we have a budget to support new ideas?
6. Do we act on new ideas?
7. Do we regularly and systematically praise and reward creative thinking, and do our
people know that the rewards exist, how to earn them, and who's earned them
recently? ,
8. Do we tolerate risk and error?
9. Do we give people time off for projects that interest them, even though the payoff is
not immediately obvious?

Source: Manning (1988: 223)

4.6.3. Resource allocation

Rule (1988: 45) suggests that to uncover innovative ideas in organisations, the
senior executives must communicate the importance of innovation to all levels of
the organisation thorough a variety of channels. Organisations have the challenge
to screen out projects with poor prospects while accepting projects with
substantial merit. Screening will ensure that the best ideas are allocated sufficient
resources and are given a high enough priority to be successfully developed and
implemented. The generation and screening processes should be supported by real
..., .,
commitments of resources, time, and money for idea exploration and development.
New opportunities will be strongly encouraged, if the organisation makes an
investment in exploring and innovative idea.
 103

TABLE 10 COMMUNICATION

1. Do all our people understand our mission and strategy?

2. Do they know "what counts around here" i.e. company key success factors?
3. Do they know what they personally must do to make the company successful - l.e, their
own key success factors?
4. Do they get the information they need to do their jobs?
5. Do they get regular, honest, and open feedback on their performance?
6. Do they feel they can safely be honest with their superiors?
7. Do they get enough information on how the company is doing?
8. Do they get too much information, or is it presented in a way that makes it hard to use?
9. Are they asked for their ideas?
10. Are they given reasons when their ideas aren't used?
11. Do they communicate freely across functions, departments, branches, divisions?
12. Does communication flow upwards as well as downwards?
13. Do we communicate effectively with all our stakeholders?
14. Do we have a total communications strategy, or do we let communication take care of
itself?
15. Are there areas in our company where communication is particularly poor?

16. Do we rely too much on written communication - i.e., memos, letters, and reports?

Source: Manning (1988: 225)

4.6.8. Identification and recognition of intrapreneurs

Intrapreneurs are self-selecting; the company cannot hire or appoint people to this
role. Because they are likely to emerge from any part of the organisation, a
structural mechanism- such as a multi-disciplinary review board should be in place
to ldentlfv them as soon as possible. Once potential intrapreneurs have been
identified, a formal system of assigning each to a senior management member may
prove valuable. This sponsor helps to smooth the way for" the intrapreneur
administratively, and acts as an aid in obtaining ad hoc budgets, approvals, and the
co-operation of others.
 98
is the key to success. Leaders must be willing to share power, encourage
integrative team building and collaborative problem-solving approaches.

An organisation must become organised and build a culture conducive to

intrapreneurship. It must have a strategic commitment to encourage creative
people and a means of integrating their ideas into corporate strategy if and when
innovation results. The following strategic moves would be required to ensure
that intrapreneurs can be developed within organisations.

* The Chief Executive Officer and other high-level managers must make
frequent public statements reinforcing the importance of innovation.

* Creativity and innovation must be given high priority for concrete and
symbolic reasons when formal goal-setting systems are used.

* Reward systems must be designed to encourage innovation.

* Top management must recognise that creative people are driven as much by
the ethics of creation and competition.

4.6.2. Creativity

It is not enough to continually create new products or to improve old ones. New
ways of doing business are just as important. Innovation must become a way of
life; good ideas always be sought, analysed, tested and supported. Manning
(1988: 224) suggest that the questions listed in Table 9, below, are asked .

..
 100
The innovator and sponsor decide what human resources are needed to explore an
idea because they know their strengths and weaknesses and are therefore in the
best position to identify the needed resources.

Management should let the innovation team define its resource requirements and
time schedule while maintaining control over the total budget and the overall time
schedule. This provides control while giving the team the freedom to make
expenditures as required.

4.6.4. Training

Pinchot (1985: 18) suggests that employees must be trained in acquiring

intrapreneurial skills. Intrapreneurs are not necessarily born, they can be made.
Training succeeds because it gives people permission to use a part of themselves
that their managers may have been suppressing. Intrapreneurs may be missing
some skills. Although they may have some functional abilities which are often
technical they may need assistance with marketing or accounting. They do not
have to be excellent at all functions, but do need to be able to understand enough
to work with people in those fields. Training should be structured to build teams.
Therefore the whole team should work together while training.

4.6.5. Reward Systems

To sustain innovation, innovative behaviour must be reinforced. In general,

individuals place different values on different rewards. Traditional reward systems
contradict the intrapreneur. Management positions do not suit intrapreneurs as
they do not have the temperament for it: they need freedom to create, not more
..
responsibility in managing old ideas. Greater managerial responsibility reduces
technical creativity. One solution to fostering intrapreneurship is the development
of an intracapital system.
 101

Duncan, Ginter, Rucks and Jacobs (1988: 19) describe intracapital as a

discretionary budget with no time limit on its expenditure. This capital may be
used to buy the corporate resources that the intrapreneur needs. This may involve
purchasing more computer time, or the time and expertise of other departments.
The following guidelines may be be observed in the development of an intracapital
system.

* Intrapreneurs should be expected to assume some potential risks. The

corporation and individual may enter into a risk contract in which each
understands the risks assumed by all parties. Risk-sharing systems are
based on the intrapreneur testing his/her commitment in the same way that
the corporation is required to test its commitment; innovators are more
dedicated and enthusiastic when tangible measurements of commitment are
required. Thus other employees should know that the intrapreneur assumed
personal risks. Employees will accept the legitimacy of greater autonomy
if they know that those reaping the benefits have taken the greatest risk;
and the intrapreneur should receive tangible evidence of the corporation's
commitment when the risk contract is executed.

* All parties should understand how success will be measured and how profits
and costs will be defined.

* The method of allocating profits from all ventures should be understood and
accepted. It should include: allocations to the general fund of the
organisation; bonuses to members of the team; distribution to intracapital
funds that can be reinvested for future use by the intrapreneur; and
distribution of earnings from the discretionary fund until it is spent.

* ..
Contingencies should be anticipated in advance. If necessary, provisions
should be made for the intrapreneur to depart from the corporation.

* The corporation and the intrapreneur should view the contract as a moral
 104

4.6.9. Assuring continuity and experimentation

Intrapreneurs have visions and final objectives which includes the actual
implementation of a new process, the production of a product, or the marketing of
a new service. Specialised delegation of project-related tasks should be
encouraged on an ad hoc basis, in the form of project teams, and these should be
shaped by the same goals that motivate the intrapreneur the innovation of a
specific product, process or service. The intrapreneur should remain as the leader
of the project from its beginning to its end, or until he/she wishes to pursue
another new idea within the company.

A company wanting to establish an entrepreneurial spirit has to establish an

environment that allows and encourages mistakes and failures, as this is the only
way that permits new products to be developed. The company should ensure that
initially there are no corporate parameters in the way of the opportunity. These
would obstruct the creative problem solving approach and would inhibit attempts
to establish new ventures.

Table 11, below, provides a checklist for establishing whether an organisation

facilitates intrapreneurship.
 •

102

commitment rather than a legal one.

4.6.6. Organisational and industry knowledge

McGinnis (1987: 19) suggests that employees who understand the organisation's
strategic goals and the ways in which those goals are being pursued are more likely
to be innovative than employees who are uninformed or ignorant of the
organisation's strategies and tactics. Such knowledgeable employees possess a
broad basis of knowledge which can inform their innovations. Organisations must
therefore help employees to understand their industry, They can do so by
distributing trade publications, by discussing competitor products and practices
in employee forums, by increasing employee contact with customers and suppliers,
and by rotating employees in their jobs.

4.6.7. Communication systems

Enlightened rules eliminate non-essential restrictions on employee conduct and

thereby enhance the climate for individual innovation. In the the organisational
hierarchy upward and downward communication in matters relating to new ideas
or changes are essential to the job environment. Employees need to know what
is important to the company, and what their mission and their role in it are. They
also need to understand that they are permitted to created and share ideas and to
recognise that their ideas count. Manning (1988: 225) suggests that the
corporation should ask similar questions to those suggested in Table 10, below.

..
 105
TABLE 11 INTRAPRENEURSHIP IN AN ENTREPRENEURIAL ORGANISATION

The reader's responses to the following statements will assist in identifying YES NO
the use of intrapreneurship within the organization.

1. I can name several successful intrapreneurs in the organization.

2. I can name people who have sponsored an intrapreneur in the
organization.
3. I have worked on a people team.
I have seen or have written a business plan to be presented in the
.
4.
organization for a new idea.

5. It is common to attend meetings at which a demonstration is made of

a prototype of a new product or process.
6. I have been approached in the last two months by an intrapreneur
seeking feedback on an idea.
7. I work with at least one person who spends time trying to turn an idea
into a new product or process.
8. This week I have had contact in the organization with at least one
other person who is excited about an idea he or she is pursuing.

9. My organisation allows employees to follow through on ideas, that is,

to become intrapreneurs, regardless of the level at which they work in
the organization.
10. People in my organization are more concerned with good ideas than
with turf issues.

11. Implementing new ideas is never so frustrating that I have been

'.
tempted to seek employment in another organization.

12. The organization's budget includes resources earmarked for new

ventures.
13. I can list people in the organization who are supportive of new ideas
and could support me as an intrapreneur.

14. I know of an intrapreneur who sold top management an idea that went
on to become a new product or process.

15. I know of at least one intrapreneur who chose to leave the

organization so he or she could follow through on his or her ideas .
..

Source: Cornwall (1990: 187).

 107

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1. SUMMARY

.
The managerial task has become characterised by change, uncertainty and risk as
a result of the globalisation of business, changes in the basic economic factors,
technological change, and the development of information technology. Innovation
is seen to be a worldwide priority to dealing with these changes imposed on
business to ensure long-term survival. A critical examination of the traditional
practice of rnanaqernent, has led to the acceptance that changes need to be
applied within the organisation to foster an envlronment of creativity and
innovation.

In addition to these external factors affecting business, a number of internal factors

need consideration. The organisation moves through certain phases of
development, with the entrepreneur and manager each, having a distinct role to
play. The entrepreneur is primarily involved in the first two phases of
development and the manager in the third and fourth phase of development. After
?
the first two phases of development the entrepreneur finds the organisation too
limiting, and after extreme frustration with the system, leaves to start his/her own
business. The manager finds after the third and fourth phases that significant
changes are required in business which are in contrast to the traditional practice
of management. When the organisation reaches its fifth stage of development,
neither the entrepreneur nor the manager "fit" the required role: a distinct "gap"
can be identified.
.-
Gifford Pinchot developed the term "intrapreneur" to describe the person that
would fit this "gap" as identified. The intrapreneur being an individual who thinks
•
 106

4.7. CONCLUSIONS

This chapter has shown that entrepreneurial organisations, which that intend
applying intrapreneurship, need to consider a combination of entrepreneurial and
managerial skills. It has also identified a business gap. It has shown the specific
contribution which the intrapreneur can make in the innovative process. In
summarising the characteristics of the intrapreneur, it has indicated that a
distinctive fedature of the intrapreneur is his/her ability to work within the system
and to negotiate it, despite all the frustrations that he/she experiences.

Intrapreneurs cannot be appointed: they emerge voluntary and only when the
environment is conducive. For the intrapreneur to emerge and function effectively
an environment of intrapreneurship needs to be created. Corporations need to
apply strategies which include a defined leadership style, and informed strategy
and vision, definitive training and reward systems, and methodical resource
allocation permitting experimentation.

..
 108
that something can be done differently and better within the organisation if given
the required flexibility and autonomy. A closer inspection of the intrapreneur
shows a combination of professional corporate management skills with the
innovative and creative behaviour as identified in entrepreneurs.

An extensive literature survey was undertaken to identify the characteristics of the

intrapreneur. The objective of the study was to describe, compare and identify
distinct characteristics of the intrapreneur through comparison to the entrepreneur
and manager.

The intrapreneur, if he/she is to be successful, needs an environment conducive to

the practice of entrepreneurial activities. In order to conclude the study of the
intrapreneur, attention has been given to the organisation to recommend some
requirements for the practice of "intrapreneurship".

5.2. CONCLUSIONS

The following conclusions may be drawn from the study:

• Changes in external and internal factors require organisations to rethink their

strategies to cope with future demands. Traditional bureaucratic structures
and systems, not conducive to innovation and creativity, need to be
realigned. The entrepreneurial function and the management function are
both essential to the organisation, but no longer in isolation, these functions
need to be combined, in order to foster an entrepreneurial spirit amongst
people within organisations.

• The innovation gap which exists between the role of tl)~ entrepreneur and
the manager can be filled with the intrapreneur I who essentially, uses a [ (
combination of entrepreneurial and managerial skills.
 110
for feedback.

• The intrapreneur has characteristics common to the manager. These

characteristics are: attitude toward money; and an inclination toward
generality.

• The manager has unique characteristics which include: a primary motivation

for promotion and rewards; the need for power; willingnesS to work .within
the existing system; use of planning, controlling and administrative
systems; a disinclination to take risk; a problem-solving and decision-making
style which involves higher authority; and the delegation of responsibility.

• The intrapreneur has unique characteristics which include: dedication,

putting internal priorities first; serving him/herself first and then the
organisation; building support, creating and managing a team and inspiring
trust; crossing organisational boundaries; and setting high internal standards.

• The most significant characteristic of the intrapreneur is his/her ability to [Ill Q

negotiate the system, to cross organisational boundaries, as required.
He/she does not leave the organisation to create their own system like the
entrepreneur. And he/she also does not accept the system as a given and
I
~ V\

work within it, like the manager. In fact, to the intrapreneur, the system
and learning how to manipulate it is a challenge, not an inhibitor.

• There is no set formula for determining in advance who can be an

intrapreneur and who cannot. People tend to become intrapreneurs when
circumstances drive them to an act of will.

••
• Intrapreneurs cannot be appointed in the organisation. They will emerge
spontaneously, and from any part of the organisation. It is an internal
decision to become an intrapreneur.
 109

• Intrapreneurs are people who work within the constraints of and with the
support of complex organisations, involving multiple job responsibilities and
relationships. They exist at all levels within an organisation.

• Intrapreneurs are not necessarily inventors of new products or services.

Their contribution is to take a new idea or working prototype and turn them
into profitable realities, which the manager can maintain.

• The intrapreneur moves through four phases of development. They define

a problem, build a coalition of supporters, mobilise people and resources to
complete the project, and hand over the successful project to the manager
or dismantle it if it is unsuccessful.

• Being an intrapreneur has distinct advantages over starting up a business.

These include marketing support, assistance with technology, trustworthy
people, pilot plant and shared-time production to test prototypes, and
financial assistance from the organisation

• The intrapreneur has characteristics common to the entrepreneur. These

characteristics are: performance motivation; aspiration level; and the ability
to cause things to happen: their goal, action, and time orientations,· and
their attitudes towards perseverance, financial gain, and risk-taking; their
creative and innovative abilities, and vision; their readiness to take on
leadership, and their self-confidence; their good self-image and their
assumptions about probable success; their desire for responsibility; their
adaptability to and tolerance of ambiguity; their ability to plan realistically;
their ability to organise and administer; their honesty and integrity; their
problem solving and decision making style, and lastly, their desire for
autonomy and independence.
••

• The entrepreneur has unique characteristics which include: pursing the ideal
of freedom; the need to assume control; a sense of distrust; and the need
 111

• Organisations can become more entrepreneurial by applying the following

strategies: providing leadership and an overall strategy; allowing and
fostering creativity; making resources available for projects and allowing
intrapreneurs to select what resources are required; providing training in all
disciplines which would assist the intrapreneur; implementing a reward
system; enhancing organisational and industry knowledge amongst all
employees; developing flexible and informal communication systems;
identifying and recognising intrapreneurs as they emerge; and assuring
continuity and experimentation.

5.3. RECOMMENDATIONS

The following recommendations are made as a result of the conclusions drawn in

this study:

• As a result of the limited information available in the South African context,

empirical research should be undertaken in the following two areas:

* The extent to which South African organisations foster creativity and

innovation, and the identification of strategies that have been applied
to do so.

* The identification of the characteristics of South African

intrapreneurs.

• Support services need to be provided to individual organisations who wish

to become more entrepreneurial. Some of these services would include the

.-
development of instruments and surveys, a general consulting service for
organisations, a consulting service for intrapreneurs, and the development
of a "school" where intrapreneurs are encouraged to develop their
prototypes and skills required to succeed within their organisations.
 112
The following instruments or surveys would assist these organisations:

* an assessment of the present level of entrepreneurial activity within

the organisation;

* an assessment of what hinders or impedes the practice of

entrepreneurial activity within the organisation; and

* a survey of what employees feel should. be done to enhance

innovation and creativity in their organisation;

A consulting service would be of assistance with the development of a new

strategy within the organisation. This would include assistance with the
development of new leadership, enhancing creativity within, making
resources available, providing training internally or externally, developing a
reward system, developing flexible communication system, sharing more
information about the organisation, creating opportunities for
experimentation, and communicating the organisations intentions to all
employees.

The following instruments or surveys will be of assistance to would-be

intrapreneurs:

* a personal assessment to determine whether he/she is presently

engaging in intrapreneurial activity;

* a personal assessment to determine whether he/she has the attributes

of an intrapreneur as identified; and

.-
a personal assessment to determine what skills need to be developed
*
to assist him/her to be successful as an intrapreneur.
 113

The creation of an "intrepreneurial school", funded by Universities,

organisations and parties interested in enhancing innovation and creativity
within South Africa as a whole, could be of great assistance to organisations
and intrapreneurs. The organisation can allow experimentation to take place
without interrupting present commitments of production. The intrapreneur
can concentrate on the prototype with the support of the organisation. The
"School" can supply professional and competent people in the various fields
of accounting, production, human relations, general management, t~ assist
the intrapreneur. When a successful prototype has been developed and
tested at the school it can be further developed and produced within the·
organisation.

..
 114

BIBLIOGRAPHY

BANFE, C. 1991. Entrepreneur: From zero to hero. New York. Nostrand

Reinhold.

BURCH, J.G. 1986. Profiling the entrepreneur. Business Horizons. September-

October: 13 - 16.

BURNS, P. & DEWHURST, J. 1989. Small business and entrepreneurship.

London. Macmillan Education Ltd.

CHARLTON, G. 1993. Leadership the Human Race: A guide to developing

leadership potential in Southern Africa. Pretoria. Juta & Co Ltd.
~
I

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