What is intrapreneurship and why is it important?
Business
With the world becoming progressively complicated every day, organizations must adapt to changes by innovation. Intrapreneurship is such an act of behaving and innovating like an entrepreneur within organizations. Within this paper, I’ll discuss what contributions intrapreneurship might bring to an organization and what characteristics affect the performance of intrapreneurship within the context of Chinese enterprises.
Contributions of intrapreneurship
One of the critical contributions of intrapreneurship is the performance of the organization. The improvement of performance can be achieved by both formal and informal intrapreneurship. The way it’s done is that intrapreneurship creates new knowledge and understandings that can be used as a link to bridge existing performance and new competencies.
Intrapreneurship mindset encourages organizational learning, which is defined as “continuous learning and use of knowledge, which can serve as a critical key to success for facilitating individual, team, and organizational learning leading to continuous improvement and innovation in business operations” (Alipour, Idris, Ismail, Uli & Karimi, 2011). It creates foundations for building innovativeness which “has a significant and positive relationship with profitability, growth and shareholders’ wealth” (Alipour, Idris, Ismail, Uli & Karimi, 2011). Evidence from China also provides support for such theories. Data was collected through questionnaires, the Chinese entrepreneurs of small or medium-sized enterprises were asked to complete the questionnaires in front of the researcher, furthermore, the research results show that “intrapreneurship was found to be positively related to growth” (Antoncic, Antoncic & Li, 2018).
Another contribution of intrapreneurship becomes employee satisfaction. Furthermore, employee satisfaction is employees’ satisfaction with their jobs or the degree to which employees like their jobs (Spector, 1997). Employee satisfaction, usually considered an essential element of organizational management and enjoys direct or indirect connections to company operations. According to the research of Jasna Auer Antoncic and Bostjan Antoncic, the results show that there’s a positive association between employee satisfaction and intrapreneurship (2011).
The factor of employee satisfaction becomes composed of four distinct dimensions of:
- Firstly, general satisfaction
- Secondly, employee relationships
- Thirdly, remuneration
- Fourthly, benefits
- Fifthly, organizational culture
- Lastly, employee loyalty
Moreover, it’s said in the research that “The estimated standardized coefficient was found to be positive (0.59) and significant (sig.<0.05),” which supports the claim of how intrapreneurship could help companies to improve employee satisfaction in various dimensions. A possible explanation of such an increase in employee satisfaction is that intrapreneurship could influence revolutionary progress in enterprises’ structure. Intrapreneurship within the enterprises suggests a structural innovation of changing the hierarchical structure into a flatter structure. This could be particularly significant in the Chinese enterprise environment where hierarchical structures are still quite common within various enterprises. Conclusively, changing enterprise structures as an intrapreneurship act could benefit a firm’s sustainability in the Chinese business environment by positively affecting firm operations through increasing employee satisfaction.
More research has shown that there are additional aspects of intrapreneurship outcomes that, however, may or may not intersect with the contributions discussed above. According to the measurements provided by Jarna Heinonen and Kaisu Korvela, all of the three variables of appreciation of work and job satisfaction, perceived customer satisfaction, and external satisfaction in work demonstrates a larger scale than the critical value, which means intrapreneurship is likely to have potential outcomes of all three variables (2003). In addition, this research shows the potentials of how intrapreneurship could help with multiple aspects of company performance.
Characteristics and their impact on intrapreneurship
After discussing how crucial intrapreneurship could be to companies’ performance, as a result, a corresponding question naturally arises – what characteristics contribute to intrapreneurship?
Personality characteristics of the entrepreneur are essential for their enterprise activities and performance (Antoncic, 2012). “Personality characteristics may be valuable for the acquisition of knowledge, skills, development of capabilities, selection between choices, the advancement of activities, and the results attained by a person and their enterprise” (Antoncic, Antoncic & Li, 2018). An entrepreneur, or intrapreneur, is expected to be innovative and creative, among other characteristics.
One way of looking at this is through psychological models. For example, the big five personality factors can be important for the manifestation of entrepreneurship. Furthermore, as the findings of studies indicate, the openness personality factor may be the most important of the five factors for differentiating real-life entrepreneurs from other people (Antoncic, Bostjan & Kregar, Tina & Singh, Gangaram & DeNoble, Alex, 2014). People who score higher than other people in personality traits of openness, that is, those who can be described as creative, imaginative, philosophical, intellectual, complex, and deep, tend to have a greater probability of becoming successful entrepreneurs or intrapreneurs than other people.
Organizational elements could also benefit the development of intrapreneurship within companies.
Furthermore, organizational elements that can contribute to intrapreneurship are open communication, formal control, a thorough analysis of the environment, organizational support, organizational values, and cooperation via strategic alliances (Antoncic, 2008). These elements could be developed in enterprises of different sizes. However, in small and medium-sized enterprises, the development of intrapreneurship and organizational factors can still depend on key decision-makers — namely entrepreneurs and intrapreneurs, since they are the ones who generally perform the role of managing the company.
Another interesting aspect of intrapreneurship in China is how guanxi, the socially embedded personal relationships, could enable managers to initiate specific types of intrapreneurship initiatives in their organizations. According to Carol Zhang’s findings, it is revealed how “the women managers draw on three forms of guanxi
(external, within and back-stage) to display intrapreneurial actions as well as the firm specific factors that constitute important determinants of women intrapreneurship” (2020). One of the implications of such findings could be that intrapreneurs in China, especially female intrapreneurs, still need support from different dimensions, or they would not depend so much on their personal guanxi.
Conclusion
In conclusion, in this paper, I’ve discussed multiple advantages intrapreneurship could bring to Chinese enterprises, including enterprise performance and employee satisfaction. In addition, some of the characteristics of effectively developing intrapreneurship would be a personality of openness and organizational elements. Lastly, research also shows that personal guanxi also plays a part in determining female intrapreneurship in China, suggesting a call for future development and potential changes.
Written by Jessie Zhou
Bibliography
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