Corporate Entrepreneurship

Corporate entrepreneurship refers to entrepreneurship, but within the bounds of a corporate enterprise. An entrepreneur is a person who works within an organization but is committed to think beyond the box and constantly innovates.

A corporate entrepreneur is similar to an entrepreneur with regards to the focus both lay on innovation. Entrepreneurs emerge from within an organization which itself is committed to harboring and nurturing innovation. The organizational culture must support and encourage innovation in order to enable and stimulate the rise of entrepreneurs.

Corporate entrepreneurs, however, undertake lesser risk as compared to entrepreneurs, in the sense that these individuals firstly do not need to raise capital. They work within organizations which already exist. These individuals are provided with the required financial resources to carry out their activities. While entrepreneurs look to innovate with respect to product and services, entrepreneurs in addition to innovating products and services also try and innovate with respect to production processes and management policies. Their aim may be to develop new products or revitalize old and existing products. They may come up with unique ways of using products and services or may be even unique and innovative distribution channels. Corporate entrepreneurs are not owners of an enterprise. They simply represent employees who are paid a salary by the company with whom they are employed with, but have the zeal and the gusto to do more than their normal job duties and activities. Such employees feel the sense of ownership and belongingness to the organization and want to contribute more than the average employee.

Organizations that encourage corporate entrepreneurship put in place a special compensation scheme for such intrapreneurs. Generally, organizations pay such employees a fixed compensation in addition to a larger variable component of compensation which is linked to the project these intrapreneurs are working on. This motivates these employees to perform better as their compensation is linked to the performance of the project.

With respect to risk, the corporate entrepreneur’s risk in case of failure of the project undertaken is only restricted to loss as far as performance linked compensation goes and is not personally liable for losses like in the case of an entrepreneur. However, an important point to consider is the fact that a corporate entrepreneur is dependent on the organization that he works for whereas an entrepreneur is independent and has no constraints imposed on him externally; rather the entrepreneur has personal constraints.

Corporate entrepreneurs face the challenge of organization culture in addition to market obstacles. The corporate entrepreneur as they are at times called has to additionally overcome organizational hurdles, blocks and mindsets and get necessary approvals to carry on his activities which at times may be tough.

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