Organizational environment for entrepreneuring and Intrapreneuring

At times, special organizational arrangements need to be made for fostering and utilizing entrepreneurship. Frequently, entrepreneurship is thought to apply to managing small business, but the concept can also be applied to large organizations and to managers carrying out entrepreneurial roles through which they initiate changes to take advantage of opportunities.

Although it is common to search for the “entrepreneurial personality,� Peter Drucker suggested that this search may not be successful. Instead one should look for a commitment to systematic innovation, which is a specific activity of entrepreneurs. The essence of entrepreneurship is innovative, that is goal-oriented change to utilize the enterprise’s potential. As entrepreneurs, managers try to improve the situations.

Gifford Pinchot makes a distinction between intrapreneur and entrepreneur. Specifically, an intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture by operating within the organizational environment. In contrast, the entrepreneur is a person, who does the same, but outside the organizational setting. The term “entrepreneur� designates an enterprising person working either within or outside the organization.

Since it is a managerial responsibility to create an environment for effective and efficient achievement of group goals, managers must promote opportunities for entrepreneurs to utilize their potential for innovation. Entrepreneurs take personal risks in initiating change, and they expect to be rewarded for it. The taking of reasonable risk will, at times, result in failure, but this must be tolerated. Finally, entrepreneurs need some degree of freedom to pursue their ideas; this, in turn, requires that sufficient authority be delegated.

Innovative persons often have ideas that are contrary to “conventional wisdom.� It is quite common that these individuals are not well liked by their colleagues and that their contributions are often not sufficiently appreciated. It is, therefore, not surprising that entrepreneurs leave large companies and start their own business. When Steve Wozniak could not get his dream of building

a small computer fulfilled at Hewlett-Packard, he felt that prestigious firm to form — together with another entrepreneur, Steve Jobs — Apple Computers. Progressive companies, such as IBM or 3M, consciously try to develop an organizational environment that promotes entrepreneurship within the company.