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What’s so entrepreneurial about intrapreneurs?

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Abstract

This paper discusses the determinants of becoming an intrapreneur. Individuals maximise their utility while deciding among three occupations: independent entrepreneurship, paid employment and intrapreneurship. I show that intrapreneurs resemble employees rather than entrepreneurs. Specifically, comparing the decision-making of intrapreneurs to that of entrepreneurs, the former are significantly more risk averse, expect lower but less uncertain reward and are broadly endowed with a poorer set of entrepreneurial abilities; despite having higher levels of human capital they fail to recognise business opportunities and have lower confidence in their entrepreneurial skills. A distinction within the category of intrapreneurship, based on the level of engagement and therefore the level of personal risks they bear, adds to our understanding of intrapreneurship. Engaged intrapreneurs, i.e., intrapreneurs that expect to acquire an ownership stake in the business, unlike the rest of intrapreneurs, share the attributes usually assumed to characterise entrepreneurs.

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Notes

  1. Specifically, 70% of the intrapreneurs said to participate in projects in an advanced stage of development, so that their tasks included activities such as promoting the idea, preparing a business plan, developing marketing activities and searching for funding sources, whereas the rest of intrapreneurs were still developing ideas and searching for information to transfer them to their directors.

  2. This extension about intrapreneurship of the Spanish GEM survey in 2008 was carried out on a subsample of 2,000 employees, out of the total 30,879 Spanish interviews, and enables discrimination of intrapreneurs from employees solely in this smaller sample. For empirical analysis, this reduces the initial sample of employees from 17,784 to 1,887 observations, since I am unable to separate intrapreneurs from general employees in the rest of the sample. The excluded subsample, therefore, consists of the pooled sample of wage earners, retired, students, inactive and owner-managers of established businesses.

  3. Missing values for some of these variables will limit the size of the sample in the following regression analyses.

  4. Due to the methodology to identify intrapreneurs employed in GEM, as explained in footnote 2, entrepreneurs were overrepresented in the sample: while the ratio of entrepreneurs over the total sample of employees represented 3.5% (615/17,784), the ratio was significantly higher (30.7%) over the subsample of employees (315/2,000). I overcome this issue by weighting the data by their inverse sampling probability so that each occupational category matches its real proportion in the population. Unweighted regressions provided similar results.

  5. Results are available upon request.

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Acknowledgments

I would like to thank Mark Hart, Luis Garicano and Iñaki Peña, participants at the RENT XXII conference in Budapest and seminar participants at the Basque Institute of Competitiveness, Spain, as well as two anonymous referees for helpful comments. All errors and omissions remain mine. I am grateful for the financial support of the Basque Government and the Basque Institute of Competitiveness.

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  1. Economics and Strategy Group, Aston Business School, Birmingham, B4 7ET, UK

    Aloña Martiarena

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Correspondence to Aloña Martiarena.

Appendix

Appendix

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Table 4 Description of variables
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Martiarena, A. What’s so entrepreneurial about intrapreneurs?. Small Bus Econ 40, 27–39 (2013). https://doi.org/10.1007/s11187-011-9348-1

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