Clarifying the intrapreneurship concept

Bostjan Antoncic and Robert D. Hisrich

Introduction
Entrepreneurship is an emerging and evolving field of inquiry. Entrepreneurship research has been expanding its boundaries by exploring and developing explanations and predictions of entrepreneurship phenomena in terms of events, such as innovation, new venture creation and growth, and in terms of characteristics of individual entrepreneurs and entrepreneurial organizations. The largest institutionalized community of entrepreneurship scholars the Entrepreneurship Division of the Academy of Management has developed an entrepreneurship specific domain that incorporates the creation and management of new businesses, small businesses and family businesses, and the characteristics and special problems of entrepreneurs; it has further identified major topics such as new venture ideas and strategies, ecological influences on venture creation and demise, the acquisition and management of venture capital and venture teams, self-employment, the ownermanager, management succession, corporate venturing, and the relationship between entrepreneurship and economic development. One growing entrepreneurship research subfield is intrapreneurship, i.e. entrepreneurship in existing organizations. Emerging in the past two decades, the initial research in intrapreneurship focused on new business venturing, i.e. the formation of new ventures by existing organizations, mostly corporations, and the focus on the entrepreneurial individual inside a corporation this focus was then extended to include entrepreneurial characteristics at the organizational level. Intrapreneurship research has evolved into three focal areas. The first area of focus is on the individual intrapreneur (Souder, 1981; Pinchot, 1985; Luchsinger and Bagby, 1987; Ross, 1987; Lessem, 1988; Knight, 1989; McKinney and McKinney, 1989; Jones and Butler, 1992; Jennings et al., 1994), mainly emphasizing the intrapreneurs individual characteristics. Recognition and support of entrepreneurs in organizations is also a part of this focal area. The second area of focus has been on the formation of new corporate ventures (Hlavacek and Thompson, 1973; Cooper,
This article was supported by a grant from the Mixon-Callahan Fund.

The authors Bostjan Antoncic is Professor Entrepreneurship in the Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia. Robert D. Hisrich is Mixon Chaired Professor in the MAPS Department, Weatherhead School of Management, Case Western Reserve University, Cleveland, Ohio, USA. Keywords Intrapreneurship, Entrepreneurialism, Management, Strategy, Competitiveness Abstract This research contributes to the development of the theory of intrapreneurship by clarifying the intrapreneurship concept. Intrapreneurship is more precisely defined by referring to emergent behavioral intentions and behaviors that are related to departures from the customary ways of doing business in existing organizations. The intrapreneurship concept is positioned in the management literature, is contrasted with other similar management concepts and developed as an integrative concept composed of eight distinct, yet related dimensions. Electronic access The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/1462-6004.htm

Journal of Small Business and Enterprise Development Volume 10 . Number 1 . 2003 . pp. 7-24 # MCB UP Limited . ISSN 1462-6004 DOI 10.1108/14626000310461187

Clarifying the intrapreneurship concept Bostjan Antoncic and Robert D. Hisrich

Journal of Small Business and Enterprise Development Volume 10 . Number 1 . 2003 . 7-24

1981; Fast and Pratt, 1981; Hisrich and Peters, 1984; MacMillan et al., 1984; Szypersky and Klandt, 1984; Vesper, 1984; Burgelman, 1985; Carrier, 1994; Krueger and Brazeal, 1994), with a primary emphasis on the differentiation of types of new ventures, their fit with the corporation, and their enabling corporate internal environment. The third area of focus is on the entrepreneurial organization (Hanan, 1976; Quinn, 1979; Schollhammer, 1981; Burgelman, 1983; Kanter, 1984; Drucker, 1985; Pinchot, 1985; Duncan et al., 1988; Rule and Irwin, 1988; Stevenson and Jarillo, 1990; Kuratko et al., 1993; Merrifield, 1993; Stopford and Baden-Fuller, 1994; Muzyka et al., 1995), which mainly emphasizes characteristics of such organizations. The main contributions of the intrapreneurship sub-field have been in: raising awareness and understanding of the role of entrepreneurship in existing organizations for the revitalization and performance of those organizations, improving understanding of successful intrapreneurs and new corporate ventures in their context, and improving an understanding of entrepreneurial organizations. While a great deal of understanding has been obtained in the past two decades, integrative efforts are still rare. The main objective of this paper is the clarification of the intrapreneurship concept. We are not aware of any study that systematically differentiates intrapreneurship from a group of similar yet distinct management concepts. To clarify this, it is necessary to re-clarify the dimensional structure of intrapreneurship concept by bounding it at the organizational level of analysis. Lumpkin and Dess (1996) provided an excellent conceptualization of entrepreneurial orientation. They identified most of the key dimensions of a firm-level entrepreneurship concept such as autonomy, innovativeness, risk taking, proactiveness and competitive aggressiveness. While making an important contribution to the understanding of entrepreneurship orientation in general, they tried to be too inclusive by not making a categorical decision on the level of analysis. Their discussion of entrepreneurial orientation, even if organizationally-centered, tries to cover both individual and organizational level entrepreneurship characteristics. This is reflected in their 8

discussion on autonomy and some autonomous activities without specifically stressing new business venturing activities and strategic firm-level considerations as selfrenewal that were reflected in the work of Zahra (1991, 1993) in his studies of entrepreneurship at the corporate level. In addition, their conceptualizations gave too little emphasis on the central domains of entrepreneurship emergence (Gartner et al., 1992), and intrapreneurship new firm formation (Hlavacek and Thompson, 1973; Cooper, 1981; Fast and Pratt, 1981; Hisrich and Peters, 1984; MacMillan et al., 1984; Szypersky and Klandt, 1984; Vesper, 1984; Burgelman, 1985; Carrier, 1994; Krueger and Brazeal, 1994). This paper corrects these deficiencies, and if effect expands on this work, by providing a definition that differentiates intrapreneurship from other similar management concepts identifies key dimensions of intrapreneurship.

Defining intrapreneurship
Entrepreneurship When looking at defining entrepreneurship:
Increased consensus has been attained on the concept of entrepreneurship as the process of uncovering and developing an opportunity to create value through innovation and seizing that opportunity without regard to either resources (human and capital) or the location of the entrepreneur in a new or existing company (Churchill, 1992, p. 586).

Entrepreneurship is considered an individual or organizational level behavioral phenomenon, or a process of emergence (Gartner et al., 1992). Emergence-related behavioral intentions and behaviors, such as organization formation and innovation, differentiate entrepreneurship from nonentrepreneurship, which refers more to management of existing, or customary activities. This definition of entrepreneurship is used in this paper as it provides a view consistent with historically-defined distinctions between entrepreneurial and lessentrepreneurial small business owners and small business ventures (Carland et al., 1984), entrepreneurs and owner/managers (Schumpeter, 1934), entrepreneurial and administrative managerial behavior (Stevenson and Gumpert, 1985), and entrepreneurial and less-entrepreneurial firmbehavior (Covin and Slevin, 1991). It is in

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accordance with the Schumpeterian outcomebased concept that entrepreneurship refers to value creation by carrying out new combinations that cause discontinuity. In this view, entrepreneurship exists only when new combinations are actually carried out and ceases when this process is completed (Bull and Willard, 1993). In effect, entrepreneurship is comprised of such noncustomary events. At the individual, as well as the organizational, level, entrepreneurship can be seen as either outcome-based behavior or its intentions, which can be observed in a series of smaller events, or in one or few larger events, such as new venture formation or breakthrough innovation. Entrepreneurship can be viewed in both absolute terms (for example, new firm vs no new firm), as well as in relative terms (more entrepreneurial vs less entrepreneurial). New firm creation is the most obvious manifestation of entrepreneurship and, as such, the most important topic of examination of entrepreneurship at the individual level. Intrapreneurship At the organizational level, however, new firm formation may also be seen in relative terms. This is due to the fact that some established companies may form more units or firms than other organizations. Entrepreneurship in organizations is a matter of degree. The view in this paper is that organizations differ with regard to levels of entrepreneurship. Organizations can be viewed on the intrapreneurship continuum that ranges from less to more entrepreneurial. Pure forms, in absolute terms, such as totally entrepreneurial or totally non-entrepreneurial organizations are abstractions that help us understand reality, but do not actually exist in the real world. The view of intrapreneurship as a continuum is evident in Covin and Slevins (1989) distinction between conservative (risk averse, non-innovative, and reactive) firms and entrepreneurial (risk taking, innovative, and proactive) firms, and in Brazeal and Herberts (1999) organizational entrepreneurship representation that ranges from the entrepreneurially-challenged firm (with a non-existent commitment to entrepreneurship) to the entrepreneurial firm (with a total commitment to entrepreneurship), as well as in other intrapreneurship studies (Zahra, 1991, 1993; 9

Knight, 1997; Lumpkin and Dess, 1997; Lumpkin, 1998). Intrapreneurships broadest definition is perhaps entrepreneurship within an existing organization[1]. Such a definition is needed as a starting point because in intrapreneurship research:
. . . broad definitions better reflect the early stage of development of the field, avoid the need for excessive retrenchment as new knowledge becomes available, and provide considerable latitude for a theoretical and empirical process to emerge that will eventually permit the unique parts of the whole to be classified, defined, and understood in relation to that whole (Sharma and Chrisman, 1999, p. 12).

In previous research, intrapreneurship has been defined in several ways: as a process by which individuals inside organizations pursue opportunities independent of the resources they currently control (Stevenson and Jarillo, 1990); as doing new things and departing from the customary to pursue opportunities (Vesper, 1990); as a spirit of entrepreneurship within the existing organization (Hisrich and Peters, 1998); and as creation of new organizations by an organization, or as an instigation of renewal and innovation within that organization (Sharma and Chrisman, 1999). Some researchers used narrower definitions excluding smaller organizations and focusing on corporations (Schollhammer, 1982; Burgelman, 1983, 1985; Pinchot, 1985; Rule and Irwin, 1988; Kuratko et al., 1993). Others limit the term only to new venture formation (Kanter and Richardson, 1991; Badguerahanian and Abetti, 1995). In this paper, intrapreneurship is defined as entrepreneurship within an existing organization, referring to emergent behavioral intentions and behaviors of an organization that are related to departures from the customary. Intrapreneurial processes go on inside an existing firm, regardless of its size. Intrapreneurship refers not only to the creation of new business ventures, but also to other innovative activities and orientations such as development of new products, services, technologies, administrative techniques, strategies and competitive postures. Its characteristic dimensions, which are discussed in the following section, are new business venturing, product/service innovation, process innovation, self-renewal, risk taking, proactiveness, and competitive aggressiveness. Since this paper deals with entrepreneurship at the organizational level,

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corporate entrepreneurship may also be considered an appropriate term. Since the emphasis is on entrepreneurial behavioral intentions and behaviors in small, mediumsized and large firms, not only in large corporations, the term intrapreneurship is more appropriate.

Differentiating intrapreneurship from similar concepts

Concepts can often be given a more precise definition by specifying what they are not (Osigweh, 1989), in addition to specifying what they are and by comparing them to other similar but distinct concepts. Specifically, the intrapreneurship concept can be better defined by: determining what it is not (the customary) comparing it to other similar management concepts, such as diversification, capability, organizational learning, and organizational innovation. First, intrapreneurship, as emergent behavioral intentions and behaviors, operates at organizational margins or boundaries not at the organizational core. The core consists of the management of the customary, where the major concern is with existing routines, their repetition, and with the efficiency of existing production and support operations: this is the antithesis of introducing changes outside the framework of existing businesses such as the creation of new businesses or within the framework of existing businesses such as organizational renewal and innovation (Sandberg, 1992). Intrapreneurship can be viewed as a curious, constantly searching activity at the frontier, not at the core. Second, intrapreneurship needs to be differentiated from similar concepts. Key similarities and differences of the intrapreneurship concept as compared to similar management concepts (diversification, capabilities, organizational learning, and organizational innovation) are summarized in Table I and discussed below. Diversification strategy and intrapreneurship Diversification strategy can be viewed as a reflection of corporate strategy that addresses the question of what business the organization should be in. Most diversification is driven by the search for synergy, or an inquiry into what complements the organizations existing 10

product/market-related resources. It deals with the strategic selection of businesses for entrance or expansion based on an examination of their market, or product, familiarity to the existing organizational product/market base (Roberts and Berry, 1985). A widely accepted classification of diversification strategy based on research of Rumelt (1974, 1982) includes seven categories: single business, dominant vertical, dominant constrained, dominant linkedunrelated, related constrained, related linked, and unrelated business. These categories can be assessed according to the product/market relatedness of businesses at the corporate level. The concept of intrapreneurship, on the other hand, is not about the product/market relatedness to, and the synergy with, the existing business, but rather about emergence, creation and newness. Intrapreneurship and diversification still cannot be considered totally distinct. Changing diversification focus, as well as entering new, unfamiliar businesses in terms of product/markets, can be considered intrapreneurial activities of existing firms, since they represent departures from the customary. Capabilities and intrapreneurship While diversification strategy itself has been seen as instrumental to the achievement of competitive advantage, especially in terms of the positive impact of related diversification on corporate business results such as profitability (Rumelt, 1974, 1982; Christensen and Montgomery, 1981; Montgomery, 1982; Palepu, 1985), the relatedness can be better understood in terms of the capabilities concept. The capabilities concept is predominantly based on insights from resource-based theory of the firm (Penrose, 1959; Wernerfelt, 1984, 1989; Barney, 1991; Mahoney and Pandian, 1992; Peteraf, 1993), where endowments of organizational resources, which are durable and difficult to imitate, differentiate the organization from its competitors and may be an important element in explaining achievement of organizational competitive advantage for large, as well as smaller firms (Rangone, 1999). Porter (1987) suggested that a diversification alternative should be assessed by using three essential tests:

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Table I Differentiation of intrapreneurship from similar management concepts Concept Diversification strategy Key concern Key similarity Key difference Product/market relatedness and synergy across organizational businesses not a primary focus of intrapreneurship; intrapreneurship also includes non-product/market-based emergent activities and orientations Search for organizational inter-business coherence and synergy not a key concern of intrapreneurship Building knowledge base, organizational memory and routines not a main concern of intrapreneurship

Product/market relatedness of Changes in diversification organizational businesses focus, especially in terms of entering new, product/market unfamiliar businesses

Capabilities

Coherent combinations of resources and activities across value chains of organizational businesses Knowledge acquisition and retention, and organizational routines improvement New combinations from the organizational perspective (product, technological, administrative innovation)

Intrapreneurship as a manifestation of organizational innovative capabilities Intrapreneurship may create disruptions that are part of the learning process

Organizational learning

Organizational innovation

Creation of something new in Predominant focus of terms of new combinations in intrapreneurship is also on production and support creation of new ventures; this activities is not the focus for organizational innovativeness

(1) the attractiveness test where the industries chosen for diversification should be structurally attractive or capable of being made attractive; (2) the cost-of-entry test where the cost of entry should not capitalize all the future profits; and (3) the better-off test where either the new unit should gain competitive advantage from its link with the corporation or vice versa. Porter advocated the soundness of basing a corporate strategy on relatedness or connectiveness among business units dependent concepts such as sharing activities and transferring skills. Therefore, not all types of diversification are equally desirable and feasible in terms of business results or competitive advantage. In this view, before considering diversification options, corporations should assess the foundations on which such corporate strategic decisions are based. In this sense, Porter wrote about the creation of horizontal organizational mechanisms that would facilitate interrelationships among the core businesses and lay the groundwork for future related diversification. 11

The reasoning of other researchers parallels to some extent Porters shared-activities view. For example, Prahalad and Hamel (1990) proposed the development of strategic architecture the road map that identifies which core competencies to build and their constituent technologies. Core competencies, or collective learning in the organization (or corporate resources) concerning the coordination of diverse production skills and integration of multiple streams of technologies are, in their view, the roots of competitiveness. Stalk et al. (1992) viewed the organization as capabilities that are even more broadly based than core competencies and encompass the entire value chain or, in other words, business processes (capabilities) that link together its businesses, especially through R&D and production. Similarly, Haspelagh and Jemison (1991) viewed an organization as a set of capabilities embodied in an organizational framework that, when applied in the marketplace, create and sustain elements of competitive advantage for the firm. This research defined core capabilities as those that are central to competitive advantage and: incorporate an integrated set of managerial and technological skills; are hard to acquire through other means than

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experience; contribute significantly to perceived customer benefits; and can be widely applied within the companys business domain. Therefore, according to these researchers, decisions on diversification strategy need to be grounded on something that is organization specific, even if intangible, no matter what expression is used such as: horizontal organizational mechanisms (Porter, 1987); strategic architecture and core competencies (Prahalad and Hamel, 1990); capabilities (Stalk et al., 1992); or core capabilities (Haspelagh and Jemison, 1991). For a diversification to be potentially successful, it should fit capabilities in terms of transferability. Similar to Porter (1987), who advocated sharing activities and transferring skills, Haspelagh and Jemison (1991) identified the three most important sources of capability transfer (or synergy) resource sharing, functional skill transfer, and general management skill transfer. Capabilities can be viewed as a texture binding businesses together into a coherent whole. At the same time, they can be seen as a grounding for the development of a diversification strategy that would not shake this coherence, but rather strengthen parts of the value chain in order for the organization to create more value than competitors, i.e. to achieve competitive advantage. Competitive advantage in terms of sustained profitability has also been shown to result from intrapreneurship (Zahra and Covin, 1995; Wiklund, 1999). Capabilities can be defined as organizationspecific combinations of tangible and intangible resources across the organizational businesses value chains. In contrast to capabilities, where the focus is on the creation of synergies among existing businesses and between existing businesses and new businesses, intrapreneurship is not concerned with such strategic fits, but rather with emergent activities. Intrapreneurship cannot be viewed as a search for organizational interbusiness coherence, but instead as an emergence of diversity. One part of the capabilities construct, or innovation capabilities that refer to an organizational ability to develop new products or processes (Rangone, 1999), is actually close to intrapreneurship. In particular, intrapreneurship activities and orientations related to the creation of new products and 12

processes can be viewed as a manifestation of innovative capabilities. Overall, the two strategic management concepts (diversification and capabilities) differ from the intrapreneurship concept, even though they also share some similarities with intrapreneurship. They seem to be closer to analytical strategy making than to innovative strategy making (Miller and Friesen, 1983) and closer to the planning mode than to the entrepreneurial mode (Mintzberg, 1973). Having a strong reliance on the existing resource base, these concepts seem to operate to a large extent in the realm of management of the existing resources and activities as opposed to departing from the customary, which is characteristic of intrapreneurship. Organizational learning and intrapreneurship Organizational learning is the third concept from management literature that needs to be differentiated from intrapreneurship. Organizational learning refers to organizational acquisition and retention of knowledge, and improvement in organizational routines. It can be viewed as routine-based, history-dependent and targetoriented (Levitt and March, 1988) and plays an important role in the development of dynamic capabilities (Teece et al., 1997). According to Dodgson (1993, p. 377), organizational learning:
. . . can be described as the ways firms build, supplement and organize knowledge and routines around their activities and within their cultures, and adapt and develop organizational efficiency by improving the use of broad skills of their workforces.

Similarly, Argote and McGrath (1993) regarded organizational experiential acquisition of knowledge and the process of its becoming embedded in the organization, as well as the effects of such knowledge acquisition on organizational performance, as focuses of organizational learning. Weick and Westley (1996, p. 445) associated organizational learning not only with the establishment of organizational routines, but also with: accepting disruptive, non-routine behavior in the interest of alignment between existing routines and disruptive events. From this vantage point, intrapreneurship may create disruptions that may or may not have an impact on learning,

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because these disruptions can be viewed as a change that is not necessarily related to learning (Fiol and Lyles, 1985). Intrapreneurship can be seen as a possible organizational predisposition that may lead to learning. Changes in organizational routines created through intrapreneurship may through time become a new routine for an organization. An organization may learn how to be entrepreneurial on the basis of its past experience with intrapreneurship activities and, consequently, may engage in intrapreneurship more efficiently. In process terms, a reverse loop from learning to intrapreneurship may also be identified. Indeed, organizational learning as a process of knowledge creation and distribution in the organization has been seen as a function of the absorptive capacity, which is founded in a prior knowledge base and the intensity of effort; it requires learning capability (capacity to assimilate knowledge) and develops problem-solving skills, i.e. the capacity to create new knowledge and to innovate (Kim, 1998). Hence, there may be important linkages between learning and intrapreneurship when intrapreneurship is a process that evolves over time. As a concept, intrapreneurship that is viewed as a disruption of existing routines in its departure from the customary can be differentiated from learning and can be defined as establishing and improving organizational routines and knowledge. Learning seems to be based on routines and history (experience) or as Levitt and March (1988, p, 320) stated:
Routines are based on interpretations of the past more than anticipations of future. They adapt to experience incrementally in response to feedback about outcomes.

Learning starts from bases that are embedded in existing organizational activities and procedures (routines) that are repetitious, and in organizational memories (Fiol and Lyles, 1985). Organizational learning, hence, starts predominantly from what already exists, and makes an effort toward improving it, whereas intrapreneurship leaps into the relatively unknown, regardless of its starting base in terms of knowledge, routines or resources. Organizational innovation and intrapreneurship Organizational innovation is a concept from management literature that can be considered 13

the closest to the intrapreneurship concept. Innovation cannot be discounted as a defining element of entrepreneurship and intrapreneurship. Even if the research agendas of innovation have gone in different directions, depending on the underlying field of study (see Gopalakrishnan and Damanpour, 1997), it must be remembered that innovation and entrepreneurship research have an important common historical background (Sundbo, 1998). This background pertains to the broad view of innovation the Schumpeterian innovation concept[2]. Schumpeter positioned the entrepreneur as an agent of change, whose creative behavior in terms of different innovation aspects was seen as a disruption (as a creative destruction) in the economic equilibrium of an industry. Drucker (1985) also considered innovation a specific function of entrepreneurship. In his view, innovation distinguishes what is entrepreneurial from what is managerial. Indeed, it is Schumpeterian innovation that differentiates behavior of entrepreneurs from non-entrepreneurial managers (Carland et al., 1984), making entrepreneurship and innovation almost inseparable. Despite this similarity, in this paper the intrapreneurship concept is differentiated from the innovation concept. An important reason for the use of the intrapreneurship term instead of the organizational innovation term for firm-level entrepreneurship lies in the difficulty in finding a common definition of innovation. Gopalkrishnan and Damanpour (1997) reviewed innovation research in different research areas such as economics, organizational sociology and technology management, and recognized that innovation is commonly viewed as one of the key means of adapting to change as well as creating and adopting something new. But they also found that: researchers within each discipline conceptualize innovation differently, and have quite different views of its impact on an industry or a firm productivity, survival, growth, and performance (Gopalkrishnan and Damanpour, 1997, p. 15), depending on the focal stage of the innovation process, the level of study and the innovation type. Similarly, Wolfe (1994), in reviewing research in organizational innovation, found that innovation has a complex, context-sensitive nature. Innovation is a broad, widely-used concept that has different meanings in

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different theoretical frames. Perhaps an innovation may need to be bounded by viewing it in more classical terms such as commercialization of an invention, which predominantly means commercialization of a new product or technology. However, by viewing organizational innovativeness broadly, the distinction between intrapreneurship and innovation remains subtle. The two concepts share the focus on newness. Organizational innovativeness is more concerned with product, technological, and, to a certain extent, administrative innovations, whereas the concern of intrapreneurship is more with emergent activities and orientations that represent departures from the customary that may or may not be product or technology innovation related. That is, innovation from the intrapreneurship perspective also includes additional elements. The most important of these elements is the creation of new units or firms, which is central to the entrepreneurship field as a whole. In addition, intrapreneurship may also encompass activities and orientations that illustrate a departure from the customary in terms of changes in strategy and organizing, as well as risk-taking, proactive, and aggressive posturing that are discussed in more detail in the following section. In this sense, organizational innovativeness can be considered a subset of intrapreneurship. Intrapreneurship, in contrast to organizational innovativeness, deals with entrepreneurship in existing firms and, as such, belongs to the domain of the entrepreneurship research field. This is evident in the development of the intrapreneurship research sub-field, which is discussed in the introduction and in the next section where two intrapreneurship research streams are identified. Intrapreneurship is a more appropriate term to use because it is more specifically bounded. The use of the term intrapreneurship is a more precise way of describing organizational-level Schumpeterian-type-innovativeness-based entrepreneurship and new business venturing. It needs to be noted, however, that the Schumpetrian assumption of creative destruction is relaxed to a certain extent in intrapreneurship. In this paper, innovation is not distinguished in terms of dichotomization in a more Schumpeterian-like innovation on 14

one pole, which is discontinuous (framebraking, revolutionary), and a continuous (evolutionary) innovation on the other pole. Innovativeness is rather viewed in a nondichotomous fashion by focusing on the extent of innovation at the firm level, regardless of the innovation type (discontinuous/continuous). Yet, product innovation is differentiated from production process innovation. However, more subtle distinctions of innovativeness in products and processes, such as: the incremental-modulararchitectural-radical innovation classification that is based on the extent an innovation affects core concepts and linkages between core concepts and components in production (Henderson and Clark, 1990), and the sustaining-disruptive technologies classification that is based on relationship of technological change to product performance in the marketplace (Christensen, 1997), are outside the domain of this paper. Again, it needs to be stressed that intrapreneurship, as well as innovativeness, in this study are viewed as relative rather than absolute concepts. The nature of intrapreneurship at the organizational level of analysis can be better understood by identifying its dimensions. These dimensions new business venturing, product/service innovation, process innovation, self-renewal, risk-taking, proactiveness, and competitive aggressiveness are discussed in the following section.

Intrapreneurship dimensions
Intrapreneurship can be more precisely understood through its content and characteristic dimensions. Past classifications of organizational level entrepreneurship characteristics are summarized in Table II and discussed below. Intrapreneurship classification streams Two streams or approaches to the classification of organizational level entrepreneurship can be identified. The first stream, which can be labeled the entrepreneurial orientation approach, is based on Miller and Friesens (1983) categorization of innovative strategy making. Covin and Slevin (1986, 1991) have expanded on this concept, renamed it entrepreneurial posture, and retained three now widely-accepted

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Table II Classifications of organizational level entrepreneurship Scholars Miller and Friesen (1983) Concept name Innovation (a dimension of strategy-making) Characteristic dimensions New products Definitions ``Introductions of new products and production-service technologies, the search for novel solutions to marketing and production problems (Miller and Friesen, 1983, p. 222) ``The attempt to lead rather than follow competitors (Miller and Friesden, 1983, p. 222) ``Risk taking with regard to investment decisions and strategic actions in face of uncertainty (Covin and Slevin, 1991, p. 10) ``The extensiveness and frequency of product innovation and the related tendency toward technological leadership (Covin and Slevin, 1991, p. 10) ``The pioneering nature of the firms propensity to aggressively and proactively compete with industry rivals (Covin and Slevin, 1991, p. 10) ``The birth of new businesses within existing organizations (Guth and Ginsberg, 1990, p. 5) ``The transformation of organizations through renewal of the key ideas on which they are built (Guth and Ginsberg, 1990, p. 5) ``Creating new business through market developments or by undertaking product, process, technological and administrative innovations (Zahra, 1993, p. 321) ``The redefinition of the business concept, reorganization, and the introduction of system-wide changes for innovation (Zahra, 1993, p. 321) ``Independent action of an individual or a team in bringing forth an idea or a vision and carrying through completion (Lumpkin and Dess, 1996, p. 140) ``A firms tendency to engage in and support new ideas, novelty, experimentation, and creative processes that may result in new products, services or technological processes (Lumpkin and Dess, 1996, p. 142) ``A sense of uncertainty . . . probability of loss or negative outcome . . . high leverage from borrowing and heavy commitment of resources (Lumpkin and Dess, 1996, p. 144) ``Taking initiative by anticipating and pursuing new opportunities and by participating in emerging markets (Lumpkin and Dess, 1996, p. 146) ``Propensity to directly and intensely challenge its competitors to achieve entry or improve position (Lumpkin and Dess, 1996, p. 148) ``Pursuit of creative or novel solutions to challenges confronting the firm, including the development or enhancement of products and services, as well as administrative techniques and technologies for performing organizational functions (Knight, 1997, p. 214) ``The opposite of reactiveness and is associated with aggressive posturing relative to competitors (Knight, 1997, p. 214)

Risk taking Proactiveness

Covin and Slevin (1986, 1991)

Entrepreneurial posture

Risk taking

Innovativeness

Proactiveness

Guth and Ginsberg (1990) Corporate entrepreneurship

Internal innovation or venturing Strategic renewal

Zahra (1991, 1993)

Corporate entrepreneurship

Innovation and venturing

Strategic renewal

Lumpkin and Dess (1996)

Entrepreneurial orientation

Autonomy

Innovativeness

Risk taking

Proactiveness

Competitive aggressiveness

Knight (1997)

Entrepreneurial orientation

Innovativeness

Proactiveness

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characteristics of firm level entrepreneurship: innovativeness, proactiveness and risk taking. Lumpkin and Dess (1996) have named the concept the entrepreneurial orientation and further extended the concept by identifying two additional dimensions: autonomy and competitive aggressiveness. Instead of talking about characteristics of organizational level entrepreneurship and considering entrepreneurial orientation a uni-dimensional concept, as evident in studies of Covin and Slevin (1986, 1991), Lumpkin and Dess (1996) consider entrepreneurial orientation a multi-dimensional concept. Knight (1997) also favors this multidimensional concept but has reduced Covin and Slevins (1986, 1991) categorization to two dimensions (innovativeness and proactiveness) on the basis of his empirical findings. The second stream, which is evident in works of Guth and Ginsberg (1990) and Zahra (1991, 1993), can be labeled the corporate entrepreneurship approach, since it deals with entrepreneurship at the overall corporation level. This approach, in a manner similar to the entrepreneurial orientation approach, accounts for innovativeness in broad, Schumpeterian terms. However, in contrast to the entrepreneurial orientation approach, the corporate entrepreneurship approach specifically identifies two important characteristics of organization level entrepreneurship. The first characteristic consist of corporate venturing activities or the creation of new businesses by the established corporation, whereas the second is strategic renewal as a means of redefining strategy and organizing the corporation. Hence, the corporate entrepreneurship approach complements the entrepreneurship orientation approach by adding venturing and strategy considerations. Previous views of organizational level entrepreneurship (intrapreneurship) can be integrated and classified into eight dimensions: new ventures; new businesses; product/service innovativeness; process innovativeness; self-renewal; risk taking; proactiveness; and competitive aggressiveness. New ventures and new businesses New business venturing is a salient characteristic of intrapreneurship since it can result in new business creation within an existing organization (Stopford and Baden16

Fuller, 1994). In large corporations, as well as in smaller established firms, new venturing can include the formation of more formally autonomous or semi-autonomous units or firms, often labeled incubative entrepreneurship (Schollhammer, 1981, 1982), internal venturing (Hisrich and Peters, 1984), corporate start-ups (MacMillan et al., 1984), autonomous business unit creation (Vesper, 1984), venturing activities (Guth and Ginsberg, 1990), newstreams (Kanter and Richardson, 1991), and corporate venturing (Sharma and Chrisman, 1999). These new entities can reside within (internal venturing) or outside (external venturing) the existing organizational domain (Sharma and Chrisman, 1999). Pursuit of and entering new businesses by redefining the companys products (or services) (Rule and Irwin, 1988; Zahra, 1991) and/or by developing new markets (Zahra, 1991) has also been considered an important element of intrapreneurship. Entering new businesses, however, can be seen as closer to the organizational core activities than creation of new units or firms. This is because the new business creation emerges as a newness within the existing organizational structure, whereas with the event of a new venture formation a new organizational element is born that represents a change in the organizational structure. Overall, for all organizations, regardless of size, the new ventures dimension refers to the formation of new units or firms, whereas the new businesses dimension refers to entering new businesses by the existing organization without forming new organizational entities. Product/service and process innovativeness In contrast, dimensions related to product/ service and process innovativeness refer to product and service innovation with an emphasis on development and innovation in technology. Intrapreneurship includes new product development, product improvements, and new production methods and procedures (Schollhammer, 1982). Covin and Slevin (1991) considered one part of the entrepreneurial posture a reflection of itself in the extensiveness and frequency of product innovation and the related tendency of technological leadership. Knight (1997) included the development or enhancement of products and services as well as techniques

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and technologies in production as part of organizational innovativeness. Zahra (1993) included product innovation and technological entrepreneurship as innovative aspects of manufacturing firms. Both approaches to the intrapreneurship classification discussed above (the entrepreneurial orientation approach and the corporate entrepreneurship approach) consider both product/service innovativeness and technological innovativeness as pertaining to a similar innovativeness dimension. However, researchers of strategic innovation and change (see Tushman and Anderson, 1997) have long distinguished between product-related innovation (product innovation) and technology-related innovation (process innovation). Technology can be distinguished from actual products and services by its relation to the process of production, and refers to
. . . the ensemble of theoretical and practical knowledge, knowhow, skills and artifacts that are used by the firm to develop, produce and deliver its products or services . . . (it) can be embodied in people, materials, facilities, procedures, and in physical processes (Burgelman and Rosenbloom, 1997, p. 273).

corporation. Stopford and Baden-Fuller (1994) view activities associated with the renewal of existing organizations as an element of intrapreneurship. Thus, selfrenewal can be considered an important dimension of intrapreneurship. Risk taking Risk taking is another dimension of intrapreneurship and is a very important property of entrepreneurship. Since Cantillon (1734), who first developed the term entrepreneur and defined this as a person who bears risk of profit or loss, risk taking has been viewed as a fundamental element of the entrepreneur and entrepreneurship (Knight, 1921; Schumpeter, 1934; McClelland, 1961; Hisrich, 1986; Hisrich and Peters, 1998). Risk, as the possibility of loss, may be viewed as an inherent characteristic of innovativeness, new business formation, and aggressive or proactive actions of existing firms. While there is an argument for a possible strong association of risk taking with other intrapreneurship dimensions, in past research (Covin and Slevin, 1989; Lumpkin and Dess, 1996) risk taking has been considered a distinctive characteristic or dimension of entrepreneurship in existing firms. Risk taking can refer to the quick pursuit of opportunities, fast commitment of resources and bold actions (Lumpkin and Dess, 1997; Lumpkin, 1998). Indeed, boldness in pursuing opportunities (Covin and Slevin, 1991) and experimentation (Stopford and Baden-Fuller, 1994) have been considered characteristic of firm level entrepreneurship. Mintzberg (1973) views risk taking and decisive action catalyzed by a strong leader as elements of the entrepreneurial mode, where entrepreneurial strategy-making is characterized by dramatic forward leaps, in terms of making large, bold decisions in the face of uncertainty. Khandwalla (1977) considers risk taking to be a defining element of entrepreneurial management. Miles and Snow (1978) view their prospector firms as risk takers. Dess et al. (1997) feel that entrepreneurial strategy reflects of a bold, directive, opportunity-seeking style with elements of risk taking and experimentation. On the basis of this research, risk taking can be viewed as a dimension of intrapreneurship that is related, but separate from, other dimensions.

The introduction of new products can be distinguished from the introduction of new elements into the organizations production process (Damanpour, 1996). According to this distinction, and in contrast to previous intrapreneurship research, the product/service innovativeness dimension is differentiated from the process innovativeness dimension. Self-renewal The self-renewal dimension reflects the transformation of organizations through the renewal of the key ideas on which the organizations are built (Guth and Ginsberg, 1990; Zahra, 1991; Sharma and Chrisman, 1999). This dimension has strategic and organizational change connotations and includes a redefinition of the business concept, reorganization, and the introduction of system-wide changes for innovation (Zahra, 1993). Vesper (1984) views new strategic direction (significant departure from corporate strategy) as being a part of intrapreneurship. Muzyka et al. (1995) believe the organizational imperative to continual renewal of its businesses and achieving adaptability and flexibility as crucial characteristics of an entrepreneurial 17

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Proactiveness The proactiveness dimension is related to pioneering (Covin and Slevin, 1991) and initiative taking in pursuing new opportunities or entering new markets (Lumpkin and Dess, 1996). The concept of proactiveness:
. . . refers to the extent to which organizations attempt to lead rather than follow competitors in such key business areas as the introduction of new products or services, operating technologies, and administrative techniques (Covin and Slevin, 1986, p. 631).

competitive aggressiveness is associated with an aggressive organizational relationship to its competitors. Proactiveness is a response to opportunities, whereas competitive aggressiveness is a response to threats (Lumpkin and Dess, 1997, p. 49). This differentiation was also empirically supported; researchers (Lumpkin and Dess, 1997; Lumpkin, 1998) found that the two dimensions can be distinct, since they tend to vary independently. The eight-dimensional intrapreneurship concept These eight dimensions integrate previous categorizations (Covin and Slevin, 1989; Guth and Ginsberg, 1990; Zahra, 1991; Lumpkin and Dess, 1996; Knight, 1997) that are relevant for firm-level entrepreneurship. One dimension autonomy has been conceptualized in previous research as being somewhat distinct from the eight dimensions used in this study. Autonomy, which was previously seen (Lumpkin and Dess, 1996) as a part of entrepreneurial orientation, but developed predominantly as a characteristic of the individual as opposed to the firm, can be captured at the organizational level in the new ventures dimension in terms of the creation of new autonomous or semiautonomous units or firms. The eight dimensions are somewhat distinct in terms of their activities and orientations (see Table III). For the new ventures dimension, emphasis is on formation of new autonomous or semi-autonomous entities such as units and firms. The new business dimension emphasizes the pursuit of and entering into new businesses within the existing organization that are related to the firms current products or markets. The product/service innovativeness dimension emphasizes the creation of new products and services. The process innovativeness dimension refers to innovations in production procedures and techniques. The self-renewal dimension emphasizes strategy reformulation, reorganization and organizational change. The risk-taking dimension emphasizes the possibility of loss in taking bold actions quickly and committing resources in the pursuit of new opportunities. The proactiveness dimension reflects top management orientation for pioneering and initiative taking. Competitive aggressiveness

The future orientation of proactiveness is expressed in anticipation of, and action taken, on the basis of future needs (Venkatraman, 1989; Lumpkin and Dess, 1996). Stopford and Baden-Fullers (1994) frame-breaking change type is congruent with this dimension. Proactiveness includes pioneering and initiative taking that is reflected in the orientations and activities of top management. Competitive aggressiveness The final dimension competitive aggressiveness refers to the firms propensity to challenge its competitors (Lumpkin and Dess, 1996). Covin and Slevin (1991) feel that the entrepreneurial posture is partly reflected in the firms tendency to aggressively compete with industry rivals. Covin and Covin (1990) view competitive aggressiveness as a managerial disposition expressed in an organizational willingness and desire to take on and dominate competitors. Millers (1987) assertive strategy making is congruent with this dimension. Most researchers who follow the entrepreneurial orientation approach (Miller and Friesen, 1983; Covin and Slevin, 1986, 1991; Knight, 1997) have not distinguished between competitive aggressiveness and proactiveness, whereas scholars that follow the corporate entrepreneurship approach (Guth and Ginsberg, 1990; Zahra, 1991, 1993) usually ignore these two intrapreneurship dimensions. Regardless, an important distinction needs to be made between the two dimensions. As noted by Lumpkin and Dess (1996, 1997) and Lumpkin (1998), proactiveness and competitive aggressiveness can be considered two distinct dimensions of organizational level entrepreneurship. In this respect, such differentiation is due to the fact that proactiveness relates to pioneering in seizing market opportunities, whereas 18

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Table III Intrapreneurship dimensions Dimension New ventures Definition Creation of new autonomous or semiautonomous units or firms Theoretical grounds Schollhammer (1981) Hisrich and Peters (1984) MacMillan et al. (1984) Vesper (1984) Kanter and Richardson (1991) Stopford and Baden-Fuller (1994) Sharma and Chrisman (1999) Rule and Irvin (1988) Zahra (1991) Stopford and Baden-Fuller (1994) Schollhammer (1982) Covin and Slevin (1991) Zahra (1993) Damanpour (1996) Burgelman and Rosenblom (1997) Knight (1997) Tushman and Anderson (1997) Schollhammer (1982) Covin and Slevin (1991) Zahra (1993) Damanpour (1996) Burgelman and Rosenblom (1997) Knight (1997) Tushman and Anderson (1997) Vesper (1984) Guth and Ginsberg (1990) Zahra (1991, 1993) Stopford and Baden-Fuller (1994) Muzyka et al. (1995) Sharma and Chrisman (1999)

New businesses

Pursuit of and entering into new businesses related to current products or markets

Product/service innovativeness

Creation of new products and services

Process innovativeness

Innovations in production procedures and techniques

Self-renewal

Strategy reformulation, reorganization and organizational change

Risk taking

Possibility of loss related to quickness in Mintzberg (1973) taking bold actions and committing resources Khandwalla (1977) in the pursuit of new opportunities Miles and Snow (1978) Covin and Slevin (1986, 1989, 1991) Stopford and Baden-Fuller (1994) Dess et al. (1996) Lumpkin and Dess (1996, 1997) Lumpkin (1998) Top management orientation for pioneering and initiative taking Covin and Slevin (1986, 1991) Venkatraman (1989) Stopford and Baden-Fuller (1994) Lumpkin and Dess (1996, 1997) Dess et al. (1997) Lumpkin (1998) Covin and Slevin (1986, 1991) Miller (1987) Covin and Covin (1990) Lumpkin and Dess (1996, 1997) Knight (1997) Lumpkin (1998)

Proactiveness

Competitive aggressiveness

Aggressive posturing towards competitors

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emphasizes the firms aggressive posturing towards competitors. Therefore, in the frame of Lumpkin and Dess (1996), who suggested that dimensions of entrepreneurial orientation might vary independently, and in the light of recent empirical research (Lumpkin and Dess, 1997; Lumpkin, 1998; Stetz et al., 1998) that support this notion, the intrapreneurship dimensions may in fact be differentiated from each other. The eight dimensions can also pertain to the same concept of intrapreneurship in terms of the Schumpeterian innovation concept, a building block of entrepreneurship. The pursuit of creative or new solutions to challenges confronting the firm, including the development or enhancement of old and new products and services, markets, administrative techniques and technologies for performing organizational functions, as well as changes in strategy, organization, and methods of dealing with competitors, may be seen as innovations in the broadest sense. Indeed, entrepreneurial capability was equated to creativity and innovation in established corporations (Rule and Irwin, 1988). Stetz et al. (1998) found that firm-level entrepreneurship dimensions not only show distinctiveness, but that they also co-vary. Hence, the dimensions cannot only be different from each other, but also related, thereby forming the basis of intrapreneurship. From these two perspectives, the intrapreneurship construct can be derived on the basis of the concept composed of the eight dimensions that are distinctive enough (discriminant) not to be redundant, and at the same time similar enough (correlated convergent), to pertain to the same construct. A refined intrapreneurship construct that includes eight dimensions (new ventures, new businesses, product/service innovativeness, process innovativeness, self-renewal, risk taking, proactiveness, and competitive aggressiveness) should show both convergent and discriminant validity. We propose that intrapreneurship should be viewed as a multidimensional concept with eight distinctive, yet related elements.

Conclusion
Intrapreneurship (i.e. entrepreneurship in existing organizations) is an important area of 20

inquiry in entrepreneurship research. This research contributes to the theory of intrapreneurship by clarifying the intrapreneurship concept. Intrapreneurship is more precisely defined by referring to emergent behavioral intentions and behaviors that are related to departures from the customary ways of doing business in existing organizations. It is our opinion that intrapreneurship should be viewed, following the proposed definition, as an essentially activity-based or activity-oriented concept that operates at the organizational boundary and stretches current organizational products and services, technologies, norms, orientations, structures, or operations into new directions. By centering future research around this core definition the intrapreneurship theory can be further developed and strengthened. The intrapreneurship concept is now more clearly positioned in the management literature (contrasted with other similar management concepts, such as diversification strategy, capabilities, organizational learning, and organizational innovation) revealing intrapreneurship similarities and differences to other concepts. In some ways intrapreneurship can operate in the area of diversification (changes is diversification focus towards new product/market unrelated businesses), capabilities (emergence of organizational innovative capabilities), organizational learning (creation of disruptions as a part of the learning process), and organizational innovation (creation of new combinations in production and support activities). On the other hand, intrapreneurship is distinct from the concepts of diversification and capabilities, since it includes non-product-market-related emergent activities and does not have relatedness, coherence and synergy as central focuses. In contrast to organizational learning, intrapreneurship is not limited to building knowledge base, organizational memory and routines. In comparison to organizational innovation, the creation of new ventures is a key distinctive characteristic of intrapreneurship. Intrapreneurship is now developed as a more complete integrative concept based on two predominant streams in previous theory (entrepreneurial orientation and corporate entrepreneurship) that span the boundaries of entrepreneurship and strategic management

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literature. Our proposition is that intrapreneurship should be viewed as a multidimensional concept with eight distinctive, related components (new ventures, new businesses, product/service innovativeness, process innovativeness, selfrenewal, risk taking, proactiveness, and competitive aggressiveness). By analyzing, nurturing and advancing these intrapreneurship dimensions, managers can make significant improvements in performance of their organizations.

Notes
1 Terms such as intrapreneuring (Pinchot, 1985), corporate entrepreneurship (Burgelman, 1983; Vesper, 1984; Guth and Ginsberg, 1990; Hornsby et al., 1993; Zahra, 1991, 1993; Stopford and BadenFuller, 1994; Sharma and Chrisman, 1999), intracorporate entrepreneurship (Cooper, 1981), corporate venturing (MacMillan, 1986; Vesper, 1990), internal corporate entrepreneurship (Schollhammer, 1981, 1982; Jones and Butler, 1992), innovative (Miller and Friesen, 1983) and entrepreneurial strategy making (Dess et al., 1997), firm-level entrepreneurial posture (Covin and Slevin, 1986, 1991) and orientation (Lumpkin and Dess, 1996; Knight, 1997) have been used to describe the phenomenon of intrapreneurship. 2 Schumpeter (1934, p. 66) understood innovation broadly as: the introduction of a new product or a new product quality; the introduction of a new production method (this may be based on a new scientific discovery, but certainly not need be. It can also be a new way of dealing with a product commercially); the opening-up of a new market; the use of new raw materials or sources of semi-manufactures; and the creation of a new industry organization such as the establishment of a monopoly situation for the breakdown of a monopoly.

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