Intrapreneurship the Concept of Intrapreneurship Evolved From Essay

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Intrapreneurship

The concept of intrapreneurship evolved from entrepreneurship, but the two are now distinct entities within the concept of the firm. Entrepreneurship is traditionally understood to be an individual or individuals starting a company from scratch, using their own resources or the resources of investors. They take on a significant amount of risk in order to start the company, and are entitled to all of the rewards, divided in whatever manner has been arranged. Intrapreneurship is a similar concept, except that it takes place within the context of an existing company. The company provides some of the resources to the intrapreneurs, and in exchange receives some of the benefits associated with the venture. This subtle difference with respect to risk and reward characterizes much of the difference between entrepreneurs and intrapreneurs. This paper will analyze the differences between the two and explain how this affects the firm.

Many organizations seek to encourage intrapreneurship as part of their innovation pipeline. They attract a segment of worker that seeks to innovate and drive new businesses, but needs the risk/reward profile more associated with a corporate environment than a true entrepreneurial environment (Hisrich, 1990). Intrapreneurship also represents a deviation from the norms of doing business for most corporations. There are a number of different dimensions that identify how intrapreneurship can affect the culture of an organization (Antoncic & Hisrich, 2003), but organizations that can successfully foster an intrapreneurship environment often become more innovative as a result, when compared with more centralized organizations.

Electronic Arts is one company that has long had an intrapreneurship program. The company has used this to develop a number of different games and lines of games within its overall corporate umbrella.

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EA does this in part as a retention strategy, in order to avoid having its best developers quit to start their own studios, which would ultimately compete with EA. Many of EA's titles originally spawned from intrapreneurs, a situation that mirrors most major technology companies (Takahashi, 2000).

Because intrapreneurship is so extensive at Electronic Arts, it has become part of the corporate culture. However, that does not mean that there are not issues relating to the high level of intrapreneurship. The company has enjoyed commercial success with some of the products created by the intrapreneurs, and this has encouraged a number of top developers to build their own studios within the company rather than to leave the company in order to pursue their projects. The company has, however, been forced to structure its operations largely around these individual studios, making it a relatively decentralized operation, with locations and studios around the world. EA has become something of an incubator/marketer, where studio heads operate with significant autonomy in exchange for delivering products that the company can take to market.

This decentralization results in some challenges, however. While only the top developers / project managers can be greenlighted for intrapreneurial activities, that they enjoy significant autonomy takes some of the deadline pressure and the ability to direct development away from the central location. The company must maintain strong communications links to the spinoff companies in order to know what is coming down the pipeline, so that the company can coordinate its production and marketing efforts. This coordination is one of the biggest challenges of having an organization that emphasizes intrapreneurship so….....

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