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Corporate Entrepreneurship, also known as internal entrepreneurship or intrapreneurship, is the development of products and services that will provide new sources of income by identifying, encouraging, and supporting entrepreneurial activities within the organization, taking advantage of the revenues and opportunities of the parent company. The corporate entrepreneur is the person who enables the development of these products and services within the organization and is the source of innovation within the organization.
The term corporate entrepreneurship was first used in this form by Professor Michael E. Gerber in his book “The E-Myth Revisited”.
Why is Corporate Entrepreneurship Important?
Corporate entrepreneurship is important for companies of all sizes – large, medium and small. In many companies, the source of innovation comes from the different ideas and out-of-the-box thinking of creative and intelligent employees. These out-of-the-box thinking and different ideas are new revenue streams for companies and contribute greatly to the economies of the country and the region. Therefore, corporate entrepreneurship is not only a process that affects corporations, but also micro and macro governments in terms of taxation of new products and services and money inflow and outflow.
The importance of corporate entrepreneurship can be summarized in the following three points:
- Creating new income streams
- Nurturing Employee Creativity and Motivation
- Presenting Different Product and Service Options
Creating New Revenue Streams through Corporate Entrepreneurship
The development of new products and services in line with the ideas of employees within the organization will create new income gates for the organization, reduce the cost of research and development processes, and thus provide the beginning of an accelerated growth within the organization with reduced costs and increased income.
Nurturing Employee Creativity and Motivation through Corporate Entrepreneurship
If organizations support employees’ different ideas and entrepreneurship, it will increase employees’ commitment to their positions and the organizations they work for, lead them to embrace their work much more and allow them to have a more productive working life.
Supporting intrapreneurship is the antithesis of silent resignation. When employees know that what they do outside of their duties matters, they are more likely to stick to their jobs and feel that they are taken into account.
In organizations where internal entrepreneurship is not supported, employees who perform the same tasks in the same positions for years without using creativity, feel that they are not important in the organization, so they switch to the so-called silent resignation, fulfill the minimum requirements with minimum effort and lose their dynamism.
Introducing Different Product and Service Options through Corporate Entrepreneurship
Corporate entrepreneurship can help organizations create the next big hit product or service. In workplaces where a certain team approaches the R&D process with the same mentality and people outside this corporate team have no say in decision-making and product development, it is inevitable to get stuck in the same product and service range as creativity becomes sterile after a while.
However, employees in different departments, with different educational backgrounds and life experiences, can contribute to the development of an organization’s product range by approaching the product and service development process from a creative perspective.
Putting Corporate Entrepreneurship into Practice
In order to implement corporate entrepreneurship properly, organizations must first create the environment in which corporate entrepreneurship can flourish. The successful implementation of corporate entrepreneurship depends on organizations training their employees, giving them freedom, taking into account how they want to work and how they want to work, and minimizing internal bureaucracy. In short, it would be an empty request to expect employees to set examples of entrepreneurship without establishing a corporate culture that will nurture corporate entrepreneurship.
Employee Trainings for Successful Corporate Entrepreneurship
For corporate entrepreneurship to be successfully implemented within organizations, employees need to be supported by the organizations they work for in the areas they want to specialize in. This can be material training support, in-house seminars, training agreements with contracted institutions, or internal training that resembles a master-apprentice relationship.
In this way, organizations that make it a priority to advance their employees in their positions will increase their loyalty, open career paths and encourage intrapreneurship by paving the way for them to develop products and services related to their areas of expertise.
Free Spaces for Successful Intrapreneurship
In order to implement a successful example of corporate entrepreneurship, employees need environments that nurture their creativity. If employees feel like they are in prison in the place where they work, they cannot perform activities that require creativity and therefore cannot contribute to entrepreneurship within the organization.
The most important thing that organizations can do to prevent this problem is to recognize their employees’ work habits, work environment preferences and how they can use their productivity at the highest rate.
Of course, not all employees have the same work habits. But if 80% of an organization’s employees feel more comfortable working remotely and are more productive that way, putting them in an office environment will kill their creativity and reduce their productivity.
Organizations that want to encourage corporate entrepreneurship should survey their employees on such issues and shape their working environment in line with the results to create a freer environment.
Reduce Corporate Bureaucracy for Successful Corporate Entrepreneurship
In environments where organizational bureaucracy is so rigid that it dictates down to the rules of speech, it would be a dream to expect outstanding creativity and entrepreneurship. In order for employees to nurture their creativity and come up with new entrepreneurial ideas, they need to be able to speak their minds freely, to be freed from formal tasks, and to perform routine and repetitive tasks at the lowest possible level. Organizations that want to demonstrate successful corporate entrepreneurship and support intrapreneurship within their organization should therefore minimize corporate bureaucracy.
Examples of Corporate Entrepreneurship
Internationally, there are many well-known brands that demonstrate successful examples of corporate entrepreneurship. These brands foster the spirit of corporate entrepreneurship by increasing employee freedom. Here are some of the brands that demonstrate successful examples of corporate entrepreneurship:
Google with Innovation Break App
Google’s “Innovation Break” allows its engineers to devote twenty percent of their working time to an area of interest. This gives Google engineers time to gain the inspiration and knowledge needed for new ideas, which in turn can lead to creative Google products and services.
Sony with PlayStation
Although Sony is a world giant in the field of electronics and entertainment, it was not a company that was thinking of entering the gaming space. The idea for the PlayStation was developed by entrepreneur Ken Kutagari and pushed on Sony. Considering that today, game-related revenues account for 29% of Sony’s total revenues, there is little need to talk about how profitable this decision is.
3M with 15% Break App
3M, like Google, encourages employees to devote a certain portion of their time within the organization to areas of interest or passion. Unlike Google, 3M has set the allocated time at 15%. 3M reaped the rewards of this practice with its “Post It Not Papers”.
Advantages and Disadvantages of Corporate Entrepreneurship
While we have touched on the advantages of intrapreneurship in general, this culture is not without certain disadvantages for both employees and organizations. In this section, we will list the advantages and disadvantages of intrapreneurship and examine them in depth.
Advantages of Intrapreneurship
One of the biggest advantages of corporate entrepreneurship is that would-be entrepreneurs find themselves in the company of people from different educational backgrounds and with different life experiences. They can be inspired by different ideas, create new products and offer different services.
Another benefit that corporate entrepreneurship provides to entrepreneurs is, of course, resources. Entrepreneurs may not find all the resources they need at the beginning of their entrepreneurial path. But by working under a larger company that fosters a corporate startup culture, they can access all the resources, capital and network they need to make the products in their heads a reality.
Disadvantages of Corporate Entrepreneurship
One of the biggest disadvantages of corporate entrepreneurship for entrepreneurs is corporate bureaucracy. Institutional bureaucracy can prolong the process of developing new products and services by taking 5x the time that entrepreneurs could do on their own in x amount of time due to the approval process, endless waiting, and so on.
At the same time, entrepreneurs who demonstrate entrepreneurship within a particular organization may feel that they are not sufficiently rewarded. They may feel that their work in a field outside their job description will not be appreciated and therefore will not be rewarded, and therefore they may be less motivated to develop new products and services.
Types of Corporate Entrepreneurship
There are seven types of entrepreneurship in total. They are intrapreneurship, public entrepreneurship, opportunity entrepreneurship, women’s entrepreneurship, commercial entrepreneurship, social entrepreneurship and virtual entrepreneurship. Let’s take a closer look at the types of entrepreneurship.
Intrapreneurship
Intrapreneurship can be summarized as the transformation of an idea, created by the employees of an organization, into a profitable product or service and the benefit of the organization from the profit arising from this idea. Organizations support intrapreneurship to a large extent because they themselves benefit from the products or services resulting from intrapreneurship.
Public Entrepreneurship
Public entrepreneurship is a type of entrepreneurship in which the state plays the role of entrepreneur. This type of entrepreneurship is especially common in countries with a statist system of government, where the state can intervene in the free market. Examples of public entrepreneurship in our country are Kent Lokantaları (City Restaurants) that municipalities have signed in recent years due to declining income and economic problems, and Atatürk Orman Çiftliği (Atatürk Forest Farm), which was established by Atatürk to support and encourage production.
Commercial Entrepreneurship
Commercial entrepreneurship is the process of introducing new products and services for the sole purpose of making a profit, in a revenue-oriented manner. Commercial entrepreneurship is also called private sector entrepreneurship. Examples of commercial entrepreneurship include any type of business that is established solely for profit, either individually or collectively. Restaurants, toy shops, clothing stores and many more are examples of business entrepreneurship.
Entrepreneurship Opportunity
Opportunity entrepreneurship is a type of entrepreneurship that is created by seizing the right time and conditions. In opportunity entrepreneurship, time and conditions are everything. In our country, where people have difficulty finding taxis and are dissatisfied with existing taxis, bringing scooters and MartıTAGs to the country with applications such as Martı is an example of opportunity entrepreneurship.
Women Entrepreneurship
Women’s entrepreneurship is any form of creating new products and services where the entrepreneur is a woman. Women entrepreneurship is supported in many countries so that women can take more place in the business world and carry themselves into the future in an economically free way. In our country, women entrepreneurship is supported in the same way and the number of women entrepreneurs is increasing in many different sectors.
Virtual Entrepreneurship
Virtual entrepreneurship is a type of entrepreneurship realized online in the digital world. In recent years, virtual entrepreneurship has gained great momentum. Virtual entrepreneurship is very similar to commercial entrepreneurship. The difference of virtual entrepreneurship from commercial entrepreneurship is that it takes place in a digital environment and does not require a physical shop. Shops opened through e-commerce platforms such as Etsy, Amazon, etc. can be shown as examples of virtual entrepreneurship.
Social Entrepreneurship
Social entrepreneurship is a type of entrepreneurship whose sole purpose is not to make a profit, but to strengthen various weak points in society. This entrepreneurship is divided into two types: non-profit and for-profit. But both have in common the aim of strengthening various weak points in society.
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