Discuss the Importance of Intrapreneurship to Business Development & Growth Firms

These days, corporate organisations are finding it getting harder to survive by merely competing and normal operational management. Neither strategy nor change management would be considered particularly important if products and markets were stable and organisational change was rare: however, that is not the case. They are, therefore, increasingly looking towards their Intrapreneurial leaders to take them beyond competition to create new businesses in new markets, keep up with changes, and require creativity. That means creativity both at a strategic level and also on the front line, from administration to true entrepreneurship. 

3.3 Failure issue: An important climate of Intrapreneurship

Large corporate have its own business culture and environment, which was formed in a long time and difficult to be changed. It is necessary to construct an advantageous climate for entrepreneurship.

Evidence is strong that nothing leads to failure like success. Even many of the most successful companies have been unable to identify and capture as many opportunities as quickly as could entrepreneurs ‘in the world’. Failure issue can not be neglected. The difficulty for intrapreneurship in business development indicates in entrepreneurial behaviour rather than intrapreneur existing. Intrapreneurship, a business culture in essence, happens to a large organisation, most of which tend to be stable and stagnant, innovation and proactive are hardly accepted, let alone risk-taking. Also, there is no guarantee for success in each an entrepreneurial behaviour, which does not mean the intrapreneur has opportunity of ‘free failure’.

Therefore, it is important to allow failure happening and trial and error encouragement in Intrapreneurship (Hisrich and Peters, 1998). Stated by Kirby, 2003, reward system, including monetary and non-monetary, should encourage intrapreneurs for their successive innovation and creation. The door must be left open to innovation and opportunities that come from other sources and along other paths. 

Growth Firms

1.0 Growth for business survival and expanding

It has already been pointed out that most small firms do not grow to any size. They are ‘life-style business’ that provide the owner-manager with an acceptable income but, more important, a comfortable life-style. Basically, small business owners can no longer do everything with one or two key support staff; communications are failing and mistakes are happening too frequently for their ‘comfort’ (Burns and Harrison, 1996). Also as predictive models mentioned, in terms of age and size of firm, the more a firm grows the more likely it is to survive.

The election of the Conservative administration in 1979, under Margaret Thatcher, coincided with recent growth in, and attention given to, the SME sector of the economy. They argued that free market philosophy of this administration fitted the more important role given to entrepreneurship and small enterprises. Therefore, firms, particular for small firms, must develop in their early stages to be a certain size if they are to survive.

2.0 The positive influence of job creation and employment

According to OECD, growth firms are those firms that rank first according to a measure that combines relative (percentage) and absolute rates of employment expansion. The advantage of placing a greater role on the small firm indicates on the individual job, which also helps to avoid large-scale state intervention in the economy (Deakins, 1999).

Small firms exhibit higher net job creation rates than large firms do. Deakins argued that, 1999, many large firms were making workers redundant while small firms could be important for future job creation. Particularly, growth firms account for a disproportionately large part of gross jobs gained. According to Rumball et al, from 1986 to 1998 growth firms share 34% job creation compared with 17% of Controlled-growth, 17% of Non-expansionary SMEs and 25% of large firms. And Storey presents the fastest growing 4% create half of the employment by the small firms sector (1994). Furthermore, high-growth firms are found in all industries and in all regions of the countries examined.

3.0 The driving force of growth

The owner is the only person who can decide whether to go for growth, and all that it entails, or to establish comfortable limits (Burns and Harrison, 1996). Deakins stated, 1999, ‘the person or entrepreneur that enters small business ownership because they have desires to develop their businesses, to achieve growth, expand employment and grow into a medium-sized or large firm.’ Burn and Harrison also list seven characteristics of entrepreneurial owners in growth: opportunistic, adventurous, ‘ideas’ people, restless, high-profile image makers, proactive, and innovative. The entrepreneurial owner will have a plan for dealing with changing situation, and then make growth rapid (Paul and Jean, 1996: 41).

However, Burns and Harrison argue that, 1996, for the majority of business owners, the decision is about how to keep success at a maximum while maintaining the size of the company for their own comfort (Paul and Jean, 1996: 41). Why then are there so few ‘high growth companies’? As Scott and Rosa asked, is it really true that most small firm owner manger lack of the entrepreneurial drive and motivation to grow their assets? They present findings in an ISBA conference, 1997, as entrepreneurs grow their total capital assets through stating several firms, rather than growing a new one to its optimal limits.

Initiated from the element of entrepreneur, as well, other factors are also playing significant roles in growth, such as management, marketing, accounting and finance (Burns and Harrison, 1996). Barber et al suggest that, ‘the challenge facing the growing firm can be stated in terms of a move from relatively narrow market niches in which it exploits a narrow range of distinctive assets into a situation in which it serves a larger number of market segments with a much broader skills and knowledge base.’ As a firm grows, the application of the functional disciplines of marketing, accounting and people management changes, as well the role of the owner-manager. Growth consists of the above elements simultaneously. In a word, growth is a complicated procedure involved in all sorts of resources in a small firm, which is marshalled by an effective entrepreneurial owner.

Smallbone et al contend that ‘one of the most important factors [in influencing growth] is the commitment of the leader of the company to achieving growth’. The opinion is also indicated by the Churchill and Lewis Model, which points out four crises of growth: leadership, autonomy, control and red tape. These four challengeable aspects are closely related to the commitment of owner manager. As its small scale, the growth is primarily focused on around ‘take-off’ stage, which is more critical than any other four stages. In this stage, after survival and success, some businesses indicate its ‘life-style’ for comfort while others happen to some problems like ‘dark side of entrepreneurship’ and ‘quirks’. Dewhurst has found this situation and states, ‘Frequently an entrepreneur in a growing organisation will become increasingly distrustful; he will begin to see all things as operating against him.’ So, the personal behaviours of the owner-manager interact with managerial defects to produce weaknesses in marketing, finance and management issues.

4.0 Conclusion:

Intrapreneurship is a particular function which has been credited with increasing the speed and cost-effectiveness of technology transfer from research, innovation and creative development to the marketplace. Intrapreneurs are largely considered as inventors who come up with new improving forces for a corporate. They are also considered similar to risk-takers, in the sense, they are stepping out of their traditional role within the business. Therefore, we should make an appropriate climate for their failure and encourage them to be successful next time.

Today, managing growth means managing change. The more rapid the growth, the more difficult it is to mange. There is no agreement on exactly what measure to use to distinguish a high performance firm. That a small firm survives and develop further more depends on dynamic growth and change. Simplistically, it may be suggested that, since growth necessitates change, those firms which have enjoyed sustainable growth are those which were most receptive to change and/or have managed change most effectively.

5.0 Reference:

[1] Daniel Muzyka, Neil Churchill, The Evolution of Entrepreneurship in Large Organisations, Mastering Entrepreneurship: Your Single-Source Guide to Becoming a Master of Entrepreneurship, Ed by Sue Birley, Dan Muzyka, Financial Times, 2000

[2] Small Business Notes—Intrapreneurship,  

[3] Sandra Vandermerwe, Sue Birley, The Boss as a Force for Change, Mastering Entrepreneurship: Your Single-Source Guide to Becoming a Master of Entrepreneurship, Ed by Sue Birley, Dan Muzyka, Financial Times, 2000

[4] Small Business Notes: History of Intrapreneurship, 2004,  

[5] Carla King, Intrapreneurship: Heady Business, 2004,

[6] Bernard Burnes, Managing Change: A Strategic Approach to Organisational Dynamics, 3rd Ed, Financial Times, Prentice Hall, 2000

[7] Some Thoughts on Intrapreneurship,  

[8] Coulson-Thomas, C and Coe, T, The Flat Organisation, British Institute of Management: London, 1991

[9] Ezzamel, M, Green, C, Lilley, S and Willmott, H, Change Management: appendix 1-A Review and Analysis of Recent Changes in UK Management Practices, The Financial Services Research Centre, UMIST: Manchester, 1994

[10] Small Business Notes—Human Resources Issues in Intrapreneurship, 2004,  

[11] Paul Burns and Jean Harrison, Growth, Small Business and Entrepreneurship, 2nd Edition, 1996

[12] David Deakins, Enterprise Support and Government Policy, Entrepreneurship and Small Firms, 2nd Edition, 1999

[13] High-growth Firms and Employment,  

[14] Paul Schreyer, High-Growth Firms and Employment, STI Working Papers, 2000/3, Directorate for Science, Technology and Industry,  

[15] Donald Rumball, Dynamics of Growth: Is High Growth Sustainable? Leading Growth Firms Series, 2001,  

[16] David Storey and Nigel Sykes, Uncertainty, Innovation and Management, Small Business and Entrepreneurship, 2nd Edition, 1996

[17] David Deakins, Entrepreneurial and Growth Firms, Entrepreneurship and Small Firms, 2nd Edition, 1999

[18] Michael Stott and Peter Rosa, New Businesses from Old: the Role of Portfolio Entrepreneurs in the Start-up and Growth of Small Business, in Small Firms Enterprising Futures, Ed by Monder Ram et al, 1997

[19] Barber, J, Metcalfe, S and Porteous M, Barriers to Growth: the ACARD Study’, in Barriers Growth in Small Firms, Routledge, London, 1989 cited by David Deakins, Entrepreneurship and Small Firms, 2nd Edition, 1999

[20] David Deakins, The Small Firms The UK Economy, Entrepreneurship and Small Firms, 2nd Edition, 1999

[21] Edward, B. Roberts, Entrepreneurs in High Technology: Lesson from MIT and Beyond, Survival versus Success, Oxford University Press, 1991

[22] Smallbone, D, Leigh, R and North, D, The Characteristics and Strategies of High Growth SMEs, International Journal of Entrepreneurial Behaviour and Research, vol. 1, no. 3

[23] Jim Dewhurst, The Entrepreneurship, Small Business and Entrepreneurship, 2nd Edition, 1996

[24] Strategic Management/ Business Policy, University of Hull, Handouts,  

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