Chapter 2 – Theoretical research
1. The challenge of Innovation in established companies
Established companies tend to be less innovative than young companies (Greiner, 1998, p. 60). The author relates decline in the innovation rate to the firm’s age. Therefore, a closer look at the company-life-cycle model is a propitious approach to determine the reasons for the decrease in innovativeness. Miller and Friesen (1984) summarise previous research findings on the life-cycle of companies and propose a five-stage-model: birth, growth, maturity, rival and decline. Young firms are assigned to birth and growth phase, whereas established companies are associated to maturity, rival and decline phase (appendix no. 2). In the following, young and established companies are contrasted and their differentiating characteristics are highlighted predominantly based on the research of Miller and Friesen (1984).
In the birth or entrepreneurial phase, firms are young and small. Their market is typically homogeneous. The companies usually exhibit a very simple organisational structure with authority spread across all hierarchical levels. Their primary objective during this phase is to establish a distinctive competence by developing new products or services. Drucker (1984) states: “Innovation is the specific function of entrepreneurship […]. It is the means by which the entrepreneur creates new wealth-producing resources” (p. 3). Moreover, a trial and error culture can be observed in which proactivity, tolerance of failure and risk-taking are encouraged. The fast market development and the limited amount of available resources induces decision making methods that are based on intuition rather than extensive analytics. Employees are not specialised in single tasks, but are generalists involved in operational as well as strategic functions. Finally, the employees are primarily motivated by a collective and compelling vision. (Greiner, 1998, p. 60; Hanks, Watson, & Jansen, 1993, p. 12; Miller & Friesen, 1984, p. 1163; Wessel, 2012)
In the final or decline phase, the market stagnates and the firm’s sales begin to decrease. Its profitability drops because of a saturated market and a lack of innovativeness. Decision making is normally characterised by extreme conservatism as risk taking is discouraged. Strict and complex hierarchies as well as bureaucratic and standardised processes make communication between hierarchical levels and among departments difficult. Sinetar (1985, p. 57) argues that the primary objective of the established company is to sustain and protect the resources that have been acquired over time. A fragmentation of tasks leads to extreme specialisation of employees which in turn can be a central barrier to change. Furthermore, innovations that are not directly linked to the core business are typically perceived as a waste of resources. Those projects are often abandoned or sold. (Hannan & Freeman, 1984, p. 157; Miller & Friesen, 1984, p. 1163; Sørensen & Stuart, 2000, p. 83; Süssmuth Dyckerhoff, 1995, p. 17).
In summary, the creativity, dynamism and flexibility and therefore the capability of companies to innovate decrease in the lifetime of a firm. Baden-Fuller (1995), Süssmuth Dyckerhoff (1995) and Hornsby et al. (2002) suggest that intrapreneurship can combine the advantages of young and small companies with those of established firms. They argue that intrapreneurship can be one solution to “revitalise” (Süssmuth Dyckerhoff, 1995, p. 20) the innovative power of established companies. In the following part, the concept of intrapreneurship is approached by delineating it from related terminologies, determining a definition and taking three different perspectives on the concept.
2. Conceptual definition and delimitation of Intrapreneurship
After more than 35 years of research, there are many different terms and concepts related to intrapreneurship and it seems that no universally accepted definition exists (Sharma & Chrisman, 1999, p. 83). Different terms are used to describe the same concept and the same notion is applied to different phenomena. Even some authors are inconsistent with their terminology (e.g. Kuratko, Hornsby, and Covin (2014) and Kuratko, Montagno, and Hornsby (1990)). Despite much confusion, Sharma and Chrisman (1999, pp. 86–88) indicate that the literature can be categorised in three main concepts: (a) Corporate entrepreneurship, (b) internal corporate venturing, and (c) intrapreneurship (appendix no. 3). These three concepts commonly describe the phenomenon of entrepreneurial activities within existing firms. Apart from that the terms should be delineated from each other as follows:
(a) Corporate Entrepreneurship (CE) “refers to the process whereby the firms engage in diversification through internal development” (Burgelman, 1983, p. 223). This definition highlights the strategic perspective of CE. It is a process that is initiated by the management with the aim of strategic renewal, changing the scope of the business and building sustainable competitive advantages (Zahra, 1996, p. 1715). Russell (1999, p. 66) notes that CE concerns the organisation as a whole, and aims at making the entire firm act entrepreneurial. Therefore, this concept is also labelled as the corporation-centred approach. (Kuratko et al., 1990, p. 255; Sharma & Chrisman, 1999, p. 87; Stopford & Baden-Fuller, 1994, p. 521; Zahra, 1993, p. 321)
(b) Internal corporate venturing (ICV) refers to the question of how to handle promising entrepreneurial initiatives that originate from within the corporation (Burgelman, 1983, p. 224). Roberts and Berry (1985) point out that “internal ventures are the firm’s attempt to enter different markets or develop substantially different products from those of its existent base business by setting up a separate entity within the existing corporate body” (p. 6). Further, Sharma and Chrisman (1999, pp. 93–94) suggest that ICV requires changes in the strategy of an existing corporation. Therefore, the authors propose that ICV should be considered as one outcome of CE. This concept can be referred to as the start-up-centred approach. (Kuratko et al., 1990, p. 30; Sharma & Chrisman, 1999, p. 93; Stopford & Baden-Fuller, 1994, p. 522; Zahra, 1996, p. 1715)
(c) Intrapreneurship (=intracorporate entrepreneurship) differs from the previous concepts in that it takes the perspective of the employee. Pinchot (1985) states in his renowned book Intrapreneuring: Why you don’t have to leave the corporation to become an Entrepreneur that “intrapreneurs are any of the ‘dreamers who do’. Those who take hands-on responsibility for creating innovation of any kind within an organisation. They may be the creators or inventors but are always the dreamers who figure out how to turn an idea into a profitable reality.” (p. ix). Intrapreneurship is seen as a bottom-up process in which the employees take entrepreneurial actions within the structures of their corporation (Antoncic & Hisrich, 2001, p. 495). Knight (1987, p. 290) points out that they carry through their idea against hurdles and that they are intrinsically motivated. Also Bitzer (1991, p. 19) emphasises the individual’s perspective by denoting the intrapreneur as the “nucleus” of the process. Therefore, this concept is called the human-centred approach.
There are three perspectives on intrapreneurship (Covin & Slevin, 1991, p. 10; Eckardt, 2015, p. 33; Süssmuth Dyckerhoff, 1995, p. 26 & 41). The (a) context perspective discusses external environment factors that influence intrapreneurship in companies. These are, among others, the company’s strategy or industry and society characteristics. For example, the research suggests that entrepreneurship is more likely to happen in dynamic and instable industries (Sandberg & Hofer, 1987, p. 13). The effect of the context perspective on intrapreneurship is not in the scope of this thesis and therefore it will not be elaborated any further. The (b) organisational perspective refers to the parameters within the organisation that determine the ease with which employees can engage in intrapreneurial behaviour. The culture of the company, the set of shared values, as well as the availability of resources and the organisational structure are issues that are covered by the organisational perspective. Finally, the (c) person perspective analyses the personality of intrapreneurs. For example, Pinchot (1985, p. 51) suggests that the intrapreneur can be characterised by his strive to autonomy, that he is self-motivated, visionary and generally not afraid to take moderate risk.
The second and third perspective are within the focus of this thesis. Hence the intrapreneurship definition by Bitzer (1991, p. 17) is adopted for the remainder of this study: Intrapreneurship includes not only the identification and promotion of intrapreneurs (person perspective), but also the creation of an appropriate innovation support structure, and a corporate culture (organisational perspective), that are necessary for the realisation of the intrapreneurship concept. In the following part, the origin of intrapreneurship is investigated by taking a closer look at the organisation and person perspectives.
3. Evolution of intrapreneurship – An internal and external perspective
To understand how intrapreneurship evolves, its determinants need to be identified. In this part, the origin of intrapreneurship is analysed from the internal and external perspective, which have been introduced in the last part. Within these perspectives five concepts are developed: motives, perceived capabilities, culture & values, organisational structure and availability of resources. Each concept contains several determinants of intrapreneurship. Since intrapreneurship is defined as the human-centred approach, henceforth the employee’s point of view is adopted. Thus, the person perspective is called the internal view and the organisational perspective is denoted the external view.
In the first section of this part, the internal determinants are summarised from the literature and the intrapreneurial personality is defined. The second section describes the characteristics of the intrapreneurial environment in which the intrapreneurial personality can unfold (appendix no. 4).
3.1. Internal view – the intrapreneurship personality
Hornsby, Naffziger, Kuratko, and Montagno (1993) point out “that it is important to recognise the influence of [personality characteristics] on innovative behavior” (p. 32). Therefore, the goal of this section is to identify the internal determinants that lead to intrapreneurial behaviour. Eckardt (2015, p. 33) states that there is a need to analyse the two concepts “motives” and “perceived capabilities” of employees as they determine the degree to which they make use of an entrepreneurial environment. A general framework is introduced first to explain the origin of human actions. The two concepts “motives” and “perceived capabilities” are taken from the research fields of work psychology and organisational behaviour. Subsequently, these concepts are applied to the specific topic of intrapreneurship. A characterising collection of motives and perceived capabilities is identified from the intrapreneurship literature. This collection will be defined as the intrapreneurship personality.
3.1.1. Conceptual framework: Motives and perceived capabilities as primary internal determinants of employee’s behaviour
Heckhausen and Heckhausen (2008, p. 7) describe the behavioural process. They argue that motivation is the force that initiates and directs the actions of an individual. The behaviour intentions are formulated based on the individual’s motivation. These intentions are necessary to enter “the volitional phases of planning and action” (p. 7). Thus, to understand the origin of human actions, the factors that influence the motivation need to be identified. For this, two constructs play an important role: Motives and perceived capabilities. The effect of implicit and explicit motives on motivation has been extensively studied by McClelland (1985), McClelland, Koestner, and Weinberger (1989) and Brunstein, Schultheiss, and Grassmann (1998).The importance of perceived capabilities for the motivational process has been researched especially by Thomas and Velthouse (1990), Ajzen (1991) and Bandura (1993).
McClelland (1985) establishes the idea that individuals interact with their environment to fulfil their motives. He distinguishes between explicit and implicit motives. Implicit motives are subconscious and lead to preferences and behaviours. Among the most important implicit motives are power, affiliation and achievement. The power-motive refers to the ability to exert control, the affiliation-motive makes people build up relations and the achievement-motive describes the behavioural tendency to reach personal, challenging goals. The explicit motives are the self-attributed reasons that people use to explain their actions. Thus, they are closely related to individual value propositions, cognitive preference and the development of goals (Brunstein et al., 1998, p. 495). McClelland (1985, p. 812) concludes that motives are important determinants of what people do. Gerig (1998, p. 91) emphasises that motives are hypothetical constructs that explain behaviour and actions.
Regarding the effect of perceived capabilities on motivation, the research mainly builds on the literature by Bandura (1978). The author highlights the importance of self-efficacy as a major determinant of work motivation (1978, p. 141). The psychological constructs of self-efficacy and perceived behavioural control are closely linked to the definition of perceived capability adopted for this study: the subjective ability to be in control of the environment and therefore be able to reach a personal goal. Ajzen (1991, p. 183) argues that it is especially important to assess perceived behavioural abilities rather than actual capabilities if the goal is to identify the motivationally relevant determinants of behaviour. Bandura (1993) summarises: “People act on their beliefs about what they can do, as well as their beliefs about the likely outcomes of performance. The motivating potential of outcome expectancies is thus […] governed by self-beliefs of capability” (p. 130).
The impact of motives and perceived capabilities on the individual’s behaviour is summarised in appendix no. 5. In the following, this framework is applied to the specific case of intrapreneurship to identify its internal determinants.
3.1.2. The distinct set of motives and perceived capabilities that constitute the intrapreneurial personality
By reviewing the fundamental intrapreneurship publications from 1982 to 2000, it becomes clear what distinguishes intrapreneurs. The determinants are summarised in appendix no. 6.
Motives
Openness towards innovation: One of the core principles of intrapreneurial employees is their openness towards new ideas. Typically, they are receptive to novel approaches, processes or products and appreciate working with equally open and innovative co-workers. This motive is fundamental as it is the basis for the employee’s positive attitude towards self-initiative and experimentation. (Antoncic & Hisrich, 2003, p. 19; Bitzer, 1991, p. 21; Hisrich, 1990, p. 220; Pinchot, 1985, p. 37)
Strive to autonomy: A central motive of entrepreneurship as well as intrapreneurship is the individual’s need for autonomy. The freedom to act is a critical motivator for intrapreneurial employees. When the intrapreneurial employee is free in his behaviour, it also increases his commitment and task identification. On the other hand, a lack of autonomy can have a considerable negative impact on the employee’s motivation, so far that some even leave the firm to found their own company or look for a new job with greater freedom. (Bitzer, 1991, p. 21; Dess & Lumpkin, 2005, p. 148; Gerig, 1998, p. 104 & 132; Luchsinger & Bagby, 1987, p. 11; McGinnis & Verney, 1987, p. 20; Morris, Avila, & Allen, 1993, p. 599; Pinchot, 1985, p. 54)
Believe in internal locus of control: Typically, intrapreneurs have a positive attitude towards life in general. They are known as “internals”, meaning that they are convinced that success is mainly attributable to their own actions and that they have control over their outcomes. This motive is closely related to McClelland’s motive of power, or the perceived ability to exert control over the course of events. (Gerig, 1998, p. 133; Luchsinger & Bagby, 1987, p. 11; McGinnis & Verney, 1987, p. 20; Wunderer, 2001, p. 197)
Critical thinking: It is at the heart of every entrepreneur and intrapreneur to question the status quo. The concept of self-renewal is inherent to their personality. It refers to the tendency to question the fundamental ideas and assumptions on which society and business relies. The tendency to scrutinize underlying assumptions enables those employees to come up with new and unconventional solutions. (Antoncic & Hisrich, 2003, p. 19; Bitzer, 1991, p. 22; Gerig, 1998, p. 222; McGinnis & Verney, 1987, p. 20; Pinchot, 1985, p. 31)
Achievement orientation: As McClelland put forward, achievement belongs to the “big three” implicit motives. Intrapreneurs have a strong need to set and accomplish challenging goals. As a consequence, they believe in focusing on the outcome instead of the process. Furthermore, intrapreneurs are normally intrinsically motivated by achieving and self-actualizing rather than by extrinsic motivators. (Bitzer, 1991, p. 21; Gerig, 1998, p. 132; Luchsinger & Bagby, 1987, p. 11; McGinnis & Verney, 1987, p. 20, Pinchot, 1985, p. 50, 1985, p. 31; Wunderer, 2001, p. 193)
Perceived Capabilities
Ability to envision & lead: The ability to build and convey a vision is of crucial importance for the intrapreneur himself as well as his team. Intrapreneurs can visualise concrete steps for action to make their ideas happen. They are typically perceived as transformational leaders that impart a sense of mission to their team members. (Bass & Seltzer, 1990, p. 695; Bitzer, 1991, p. 21; Gerig, 1998, p. 132; Luchsinger & Bagby, 1987, p. 12; Pinchot, 1985, p. 37; Wunderer, 2001, p. 193)
Ability to take risk & act under uncertainty: Assuming responsibility for bringing forward own ideas involves considerable personal risk. These risks can be monetary, reputational, or even career related. Employees who are not able to regularly make decisions that involve these risks lack a major capability of intrapreneurs. Nevertheless, it needs to be emphasised that intrapreneurs do not take any risk to pursue their idea. They make decisions only after a careful consideration of risks and benefits . (Antoncic & Hisrich, 2003, p. 18; Gerig, 1998, p. 100; Hisrich, 1990, p. 217; Luchsinger & Bagby, 1987, p. 11; Morris et al., 1993, p. 596)
Ability to persuade & persevere: A major asset within corporations is the ability to persuade, convince co-workers and manager, and persist against barriers. The typical inertia of established companies, organisational complexity and deep hierarchies are daily obstacles that require persistence and persuasive power to overcome them. This also involves physical and emotional strength that enables the employee to continue when others might give up. (Bitzer, 1991, p. 20 & 22; Gerig, 1998, p. 23; McGinnis & Verney, 1987, p. 21; Pinchot, 1985, p. 31; Wunderer, 2001, p. 193)
Problem solving capabilities: Pursuing novel ideas or approaches implies facing problems that have no common solution. Hence, it is an essential requirement for intrapreneurs to be able to solve problems independently and in a well-structured manner. While taking a holistic view when solving problems, the intrapreneur usually excels in simplifying complex problems. (Gerig, 1998, p. 274; Luchsinger & Bagby, 1987, p. 11; Wunderer, 2001, p. 204)
Networking & political skills: The intrapreneur’s success depends to a large degree on his personal network within the company. In the corporate context this means that intrapreneurs honour their sponsors, allies and supporters that are critical to secure resources and overcome corporate barriers. Therefore, intrapreneurs normally stand out with their excellent social and communication skills. (Bitzer, 1991, p. 22; Gerig, 1998, p. 159; Hisrich, 1990, p. 217; Morris et al., 1993, p. 597; Pinchot, 1985, p. 31)
Proactive behaviour: Finally, implementing own ideas in established firms requires proactive behaviour of the intrapreneur. The research provides numerous evidence for the positive effects of proactivity. For example, it is related to good personal networks as well as higher individual and team performance. (Covin & Slevin, 1991, p. 11; Hisrich, 1990, p. 217; McGinnis & Verney, 1987, p. 21; Morris et al., 1993, p. 596; Wunderer, 2001, p. 199)
3.2. External view – the intrapreneurship environment
The goal of this part is to identify the external factors that facilitate entrepreneurial behaviour. Assessing the firm’s entrepreneurial environment is crucial to understand the context in which employees perceive opportunities (Zahra, 1991, p. 265). Furthermore, it helps to promote entrepreneurial behaviours (Hornsby et al., 2002, p. 254). Following the human-centred approach of intrapreneurship, external is defined as the factors concerning the employee’s immediate working environment. First a general perspective is taken to identify the three concepts that predict the employee’s entrepreneurial behaviour: culture & values, organisational structure and availability of resources. Subsequently, the literature is reviewed to determine the specific factors that are most relevant to create an environment in which intrapreneurship is possible. The collection of intervening factors will be defined as the intrapreneurship environment.
3.2.1. Conceptual framework: Values, structures & resources as primary external determinants of employee’s entrepreneurial behaviour
Gerig (1998, p. 194) suggests that the organisational structure as well as the culture and values are the main external factors that influence the employee’s activities. Covin and Slevin (1991, p. 10) follow a similar approach. In their analysis of antecedents of corporate entrepreneurship, they evaluate the top management’s values and philosophies, the organisational culture, the organisational resources and competencies as well as the organisational structure. In this research, the determinants of intrapreneurship will be summarised in the following three concepts: (a) the organisational culture and values, (b) the organisational structure and (c) the availability of resources.
(a) The organisational culture relates to the shared set of values, beliefs and attitudes, that determine the norms for appropriate behaviour within the organisation. The normative function of the culture establishes a framework for the actions of the employees (Martins & Terblanche, 2003, p. 65). Covin and Slevin (1991, p. 66) cite Cornwell and Perlman (1990): “Culture is a key determinant of, and the first step in fostering, entrepreneurial activity within an organisation. It touches and influences everything that people do”. (b) The organisational structure refers to the degree of work specialisation, centralisation of decision power and other processes and rules in the company. It impacts the behaviour by, for instance, influencing the quality and quantity of the vertical and horizontal communication or affecting the employee’s commitment and involvement (Damanpour, 1991, p. 558). It is important to notice that not the objectively measurable structure influences the behaviour, but how it is subjectively perceived by the employee (Gerig, 1998, p. 186). Therefore, it is valid to assess the structure with a survey. (c) The availability of resources encompasses, for example, monetary and time resources or other means such as human resources, equipment and facilities or organisational systems like the company’s market research function. These resources are a necessary condition for entrepreneurial behaviour within companies. Insufficient resources are frequently mentioned as a main barrier to intrapreneurship (Covin & Slevin, 1991, p. 15).
Covin and Slevin (1991) also suggest to take into consideration the external environment and strategic variables. As already pointed out, the contextual factors are excluded from this research. The rationale behind this is methodological as well as practical. On the one hand, the sample of this study comprises only interview partners from one company and therefore no reference group is included. Thus, the effect of the contextual variables could not be interpreted reasonably. On the other hand, this study has a strong practical background. Therefore, only those variables that can be influenced by the middle management are of interest. As the industry or strategy factors are not subject to change, the research outcome would not provide any managerial implications for the recipients of this research.
The impact of the culture and values, the structure, and the resources on the employee’s intrapreneurial behaviour is summarised in appendix no. 5. In the following, the three concepts are applied to the specific case of intrapreneurship for the purpose of identifying the external determinants of intrapreneurship.
3.2.2. The distinct set of values, organisational structure, and resources that constitute the intrapreneurial environment
Corresponding to the internal view, the specific determinants of the intrapreneurial environment are summarised from the relevant literature and categorised in the concepts culture and shared values, organisational structure, and the availability of resources (appendix no. 6).
Shared values & culture
Management support & advice: The literature frequently mentions a supportive culture as the major enabler of intrapreneurship. That means the management needs to be open to new ideas and concepts. This results in the fundamental belief that changes initiated by the employee are not a challenge that needs to be solved but an opportunity for the company. The management support is crucial for the intrapreneur in order to receive resources, expertise, protection, training, recognition and to be encouraged to also bring forward small and experimental projects. (Bitzer, 1991, p. 37; Damanpour, 1991, p. 558; Gerig, 1998, p. 197; Hisrich & Peters, 1986, p. 320; Hornsby et al., 1993, p. 32; Kuratko et al., 1990, p. 49; Luchsinger & Bagby, 1987, p. 12; McGinnis & Verney, 1987, p. 22)
Open communication & trust: An open, diverse and trusting culture needs to be established. This generates new input and feedback (i.e. “cross-fertilization of ideas”) and encourages the employees to bring in their ideas even if they might seem overly ambitious. The intrapreneurial culture is governed by a relationship of trust between the intrapreneur and his supervisors and sponsors. In addition, open communication establishes a participatory management style. This increases identification and engagement of the employees with a problem and can lead to innovation. Moreover, trust and open communication are central ingredients for team-work, which is crucial for intrapreneurship. (Bitzer, 1991, p. 38; Damanpour, 1991, p. 559; Gerig, 1998, p. 197; McGinnis & Verney, 1987, p. 22; Wunderer, 2001, p. 193; Zahra, 1991, p. 266)
Failure tolerance: Entrepreneurial ventures are always related to uncertainty and the risk of failure. Thus, it is essential for an entrepreneurial environment to tolerate mistakes, encourage experimentation and to see failure as a chance to learn. This is also known as the “trial and error” mantra of entrepreneurship. In an intrapreneurial corporation the value of employee’s initiatives is not solely measured by financial outcomes but also through the learning potential of the individual (i.e. internal training). (Bitzer, 1991, p. 37; Gerig, 1998, p. 197; Hisrich & Peters, 1986, p. 319; Kuratko et al., 1990, p. 50; Luchsinger & Bagby, 1987, p. 11)
Extrinsic rewards: Intrapreneurial engagement should be rewarded. The reward can either be financial (e.g. through an equity position in the project) or non-monetary (e.g. by feedback, fame, grades) but it must be contingent on performance. Despite this, it needs to be mentioned that intrapreneurs are strongly intrinsically motivated (see intrapreneurial motives). Corporations therefore need to be aware of the threat of undermining the intrinsic motivation by offering extrinsic incentives. (Bitzer, 1991, p. 37; Deci, 1971, p. 114; Hisrich & Peters, 1986, p. 320; Hornsby et al., 1993, p. 32; Kuratko et al., 1990; Luchsinger & Bagby, 1987, p. 11; Wunderer, 2001, p. 208)
Organisational structure
Perceived flexibility of structures & processes: The structure of an intrapreneurial company is characterised by decentral decision power, a minimum of bureaucracy, and loose boundaries between departments. Accomplishing administrative tasks should be fast and easy. This encourages openness, facilitates vertical and horizontal communication, accelerates decision time and nurtures cross fertilization of ideas. On the contrary, rigid hierarchies are often a barrier to intrapreneurship, especially when expertise from more than one department is needed. For the employee’s behaviour, it matters how the structure is perceived rather than how it is objectively. (Covin & Slevin, 1991, p. 18; Damanpour, 1991, p. 558; Gerig, 1998, p. 195; Hornsby et al., 1993, p. 31; Kanter, 1985, p. 55; Luchsinger & Bagby, 1987, p. 12; McGinnis & Verney, 1987, p. 22)
Granted autonomy: This determinant of intrapreneurship is closely related to the loose structure and processes. Granting autonomy, i.e. giving the employees the freedom to decide about their projects, means to empower them. The empowerment of individuals is the consequence of a structure in which power is decentralised. However, autonomy concerns not only the decisional power regarding the intrapreneurial project. It also refers to allowing the employees to decide about their problem solving process or their working rhythm. Research has shown that output orientation (i.e. freedom in the problem solving process) is essential to stimulate creativity and innovation, whereas process orientation restricts creativity and innovation. Autonomy furthermore fosters commitment, involvement and identification with the task and the company as a whole. (Bitzer, 1991, p. 38; Damanpour, 1991, p. 558; Gerig, 1998, p. 193; Hornsby et al., 1993, p. 32; Lumpkin & Dess, 1996, p. 140)
Resource availability
Financial resources: For intrapreneurship, financial resources are an essential requirement. A separate fund for innovation outside of the operating budget enables the employees to undertake their own initiatives. Oftentimes these projects cannot be pursued, as managers have the requirement of immediate profitability, and therefore terminate risky ideas. Researchers put forward that the perceived adequacy of financial resources may have an effect on the intrinsic motivation of employees to pursue own ideas. (Amabile, Conti, Coon, Lazenby, & Herron, 1996, p. 1161; Bitzer, 1991, p. 26; Covin & Slevin, 1991, p. 15; Kanter, 1985, p. 57; Pinchot, 1985, p. 14)
Time resources: A common shortcoming during the implementation of intrapreneurship is the underestimation of the required time input. Following up on own ideas necessitates that the employees have sufficient time to work on them. Therefore, the daily workload of people should be moderated accordingly and not all projects should have strict deadlines. Famous examples for the practical implementation of this requirement are Google’s “20% time” policy or 3M’s “15 Percent Time”. (Bitzer, 1991, p. 27; Hisrich & Peters, 1986, p. 319; Hornsby et al., 1993, p. 32; Kuratko et al., 1990, p. 53; Wunderer, 2001, p. 208)
Other resources: Finally, researchers mention a variety of other helpful organisational resources. These can be for example human resources, facilities, equipment, information or organisational functions such as the company’s market research department. These resources can, for example, help to understand the technical aspects of a problem, facilitate the prototyping process or provide access to market data to build the business case. Collectively they can be a significant deterrent or facilitator for intrapreneurial behaviour. (Antoncic & Hisrich, 2003, p. 17; Bitzer, 1991, p. 27; Covin & Slevin, 1991, p. 15; Damanpour, 1991, p. 558; Lumpkin & Dess, 1996, p. 143; Pinchot, 1985, p. 31)