Entrepreneurship/Intrapreneurship

Robert D. Hisrich University of Tulsa

I I
ABSTRACT: This article examines the aspects and char- utilize resources, and reduce waste, and who produces jobs others
acteristics of entrepreneurship and intrapreneurship from are glad to get. (Vesper, 1980, p. 2)
a psychological perspective. The importance of both in Each of these views entrepreneurs from a slightly
contributing new products and services so vital to economic different perspective, and each definition is somewhat re-
development and growth is discussed. The characteristics strictive. Entrepreneurs are found in all professions---ed-
of entrepreneurs are discussed in terms of (a) the desir- ucation, medicine, research, law, architecture, engineer-
ability and possibility of being an entrepreneur; (b) the ing, social work, manufacturing, and distribution. To in-
childhood family environment of the entrepreneur; (c) the dude all types of entrepreneurial behavior, there is a much
education level of the entrepreneur and spouse; (d) personal broader definition: "Entrepreneurship is the process of
values, age, work history, and motivation of the entrepre- creating something different with value by devoting the
neur; and (e) role models and support systems. The typical necessary time and effort, assuming the accompanying
corporate versus the intrapreneurial culture is examined financial, psychic, and social risks, and receiving the re-
with respect to developing a climate for intrapreneurship suiting rewards of monetary and personal satisfaction"
as well as the characteristics of intrapreneurs. Although (Hisrich & Peters, 1989, p. 6). For persons who actually
intrapreneurship may not be the right environment for start their own business, the experience is filled with en-
every corporate culture, the possibilities that come from thusiasm, frustration, anxiety, and hard work. There is a
establishing it in an organization rather than from high failure rate due to poor sales, intense competition,
achieving results in the more traditional corporate culture or lack of capital. The Small Business Administration
are dismissed. (SBA) reports, for example, that four out of five new busi-
nesses fail within their first five years. The financial and
The importance of innovation in the development of new emotional risks indeed are very high.
products, processes, and services for the market is widely Due in part to the high risks and costs involved, a
recognized. As early as the 1930s, Schumpeter (1934) hybrid form of entrepreneurship has emerged that is
linked innovation and the innovation process to the en- called intrapreneurship (Pinchot, 1985). An intrapreneur
trepreneur. According to Schumpeter, when the economy is a corporate entrepreneur; this allows entrepreneurship
is in a stationary state, profit-motivated entrepreneurs to occur in an existing organization. Intrapreneurs, fike
will innovate to raise marginal productivity and increase entrepreneurs, take new ideas and develop solid, func-
profits. Who are these entrepreneurs? What is their mo- tioning, and, it is hoped, profitable businesses. Intrapre-
tivation? Can they be a part of an existing organization? neurs possess the same entrepreneurial spirit as entre-
In spite of the increased interest in entrepreneurship, prenenrs.
a concise, universally accepted definition has not yet The vigor of this entrepreneurial spirit in the United
emerged. The term has taken on different meanings since States has posed some questions for psychologists who
its inception in French in the middle ages when it was are frequently asked to deal with entrepreneurship and
literally translated as between-taker or go between. Most intrapreneurship. Business organizations, city and state
of the definitions of entrepreneurship note that the term governments, and universities all want to foster this en-
refers to behaviors that include demonstrating initiative trepreneurial spirit. What is it? Who has it? How can it
and creative thinking, organizing social and economic be enhanced?
mechanisms to turn resources and situations to practical Characteristics of Entrepreneurs
account, and accepting risk and failure.
As may be expected, entrepreneurs and intrapreneurs are
To an economist, an entrepreneur is one who brings resources, similar in many respects. They are leaders who have an
labor, materials, and other assets into combinations that make impact on their cultures, particularly those around them
their value greater than before, and also one who introduces who share in their vision of the creation of something
changes, innovations, and a new order. To a psychologist, such new of value and wealth with potential for new employ-
a person is typically driven by certain forces--need to obtain
or attain sornethln~; to experiment, to accomplish, or perhaps ment. In 1987, almost 850,000 new companies were
to escape authority of others . . . . To one businessman an en- formed compared to 200,000 in 1965 and only 90,000
trepreneur appears as a threat, an aggressivecompetitor, whereas in 1950 (Birch, 1987). In addition to these in that year,
to another businessman the same entrepreneur may be an ally, there were about 400,000 new partnerships and 300,000
a source of supply, a cUstomer, or someone good to invest in.. newly self-employed people. These 1.5 million new en-
•. The same person is seen by a capitafist philosopher as one tities correspond to the average annual 1.5 million new
who creates wealth for others as well, who finds better ways to private sector jobs created each year in the economy.

February 1990 • American Psychologist 209

Copyright 1990 by the American Psychological Association, Inc. 00034)66X/90/$00.75
Vol. 45, No. 2, 209-222
 Entrepreneurship has resulted in several million new not surprising to find a high rate of company formation
businesses being formed throughout the world, even in in the United States. On the other hand, successfully es-
controlled economies such as China, Hungary, and Po- tablishing a new business and making money is not as
land. Indeed, millions of company formations occur de- highly valued, and failure may be a disgrace in the cultures
spite recession, inflation, high interest rates, lack of in- of some countries, such as Ireland and Norway.
frastructure, economic uncertainty, and the fear of failure However, even an entire culture is not totally for or
(Hisrich, 1986). These company formations are very per- against entrepreneurship. Many different subcultures that
sonal human processes that, although unique, have some shape value systems are operant within a cultural frame-
common characteristics. Like all processes these entail a work. There are pockets of entrepreneurial subcultures
movement from something to somethingma movement in the United States, of which the more widely recognized
from a present life-style to forming a new enterprise. ones are: Route 128, Silicon Valley, Dallas-Fort Worth,
and the North Carolina Triangle. These subcultures sup-
Change From Present Life-Style port and even promote entrepreneurship---forming a new
The decision to leave a present career and life-style is not company--as one of the best occupations. No wonder
an easy one. It takes a great deal of energy to change and more people actively plan to form new enterprises in these
create something new. Although persons tend to start supportive environments.
businesses in familiar areas, two work environments tend There are of course variations within these subcul-
to be particularly good in spawning new enterprises: re- tures (such as the one in Silicon Valley) caused by family
search and development and marketing. Persons develop traits and the overall parental relationship. Parents who
new product ideas or processes and often leave to form are supportive and encourage independence, achieve-
a new company when the new idea is not accepted by ment, and responsibility have an influence on the child's
the present employer; similarly, some employees in mar- desire for entrepreneurial activity (Bowen & Hisrich,
keting become familiar with the market and unfilled cus- 1986).
tomers' wants and needs and often start new enterprises It is hypothesized that the encouragement to form
to fill these needs. a company is further influenced by teachers. Teachers
Disruption also causes a person to leave a present can significantly influence persons with regard not only
life-style. A significant number of companies are formed to business careers but to entrepreneurship as one possible
by people who have retired, who are relocated due to a career path. Schools with exciting courses in entrepre-
move by the other member in a dual-career family, or neurship and innovation tend to spawn entrepreneurs and
who have been fired. There is probably no greater force can actually drive the entrepreneurial environment in an
than personal ~lislocation to galvanize a person into ac- economic area. For example, the number of entrepre-
tion. A study in one major city in the United States in- neurship courses taken increases the interest in starting
dicated that the number of new business listings in the a new venture. The Massachusetts Institute of Teclmology
Yellow Pages increased by 12% during a layoff period and Harvard are located near Route 128; Stanford is in
(I4_isrich, 1984). Another cause of disruption and resulting the Silicon Valley; the University of North Carolina,
company formation is the completion of an educational North Carolina State, and Duke are the points of the
degree. For example, a student who does not receive a North Carolina Triangle; and University of Texas facili-
promotion after completing a master's degree in business tates the activity in the Dallas-Fort Worth area. A strong
administration may decide to start a new company. education base is almost a prerequisite for entrepreneurial
What causes this change due to personal disruption activity and company formation in an area.
to result in a new company's being formed instead of Finally, it is felt that peers are very important in the
something else? The decision to start a new company decision to form a company. An area with an entrepre-
occurs when a person perceives that it is both desirable neurial pool and meeting places where entrepreneurs and
and possible. potential entrepreneurs meet and discuss ideas, problems,
Desirable. It is hypothesized that the perception that and solutions spawns more new companies than an area
starting a new company is desirable results in part, from without these features. For example, technology-oriented
a person's culture, subculture, family, teachers, and peers persons get together regularly at Tulsa Tech Talk to discuss
(Hisrich, 1986). A culture that values the successful cre- technical problems as well as commercial feasibility and
ation of a new business will spawn more company for- company formation. This has resulted in several new
mations than one that does not; this is evident in the ventures.
company formation rate for the United States versus for Possible. Although the desire generated from the
the Soviet Union. For example, the American culture culture, subculture, family, teachers, and peers needs to
places a high value on being your own boss, having in- be present before any action is taken, the second part of
dividual opportunity, being a success, and making the equation centers around the question: What makes
m o n e y u a l l aspects of entrepreneurship. Therefore, it is it possible to form a new company? Several factors--
government, background, marketing, role models, and
finances--contribute to creating a new venture. The gov-
Correspondence concerning this article should be addressed to Robert
D. Hisrich, Bovaird Chair of Entrepreneurship, The University of Tulsa, ernment contributes by providing the infrastructure to
600 South College, Tulsa, OK 74104. support a new venture. It is no wonder that more tom-

210 February 1990 * American Psychologist

panies are formed in the United States, given its roads, and work experiences. An entrepreneur may have pre-
communication and transportation systems, utilities, and viously been a nurse, secretary, assembly line worker,
economic stability, than in other countries with what may salesperson, mechanic, homemaker, manager, or engineer.
be available there. Even the tax rate for companies and An entrepreneur can be a man or a woman, Black or
individuals in the United States is better than countries White, college educated or not college educated.
such as Ireland or England. Countries that have a re- Although many of the various aspects of an entre-
pressive tax rate, particularly for individuals, can suppress preneur's background have been explored, only a few have
company formation because a significant monetary gain differentiated the entrepreneur from the general populace
cannot be achieved even though the social, psychological, or managers. The background areas explored include
and financial risks are still present. childhood family environment, education, personal val-
The entrepreneur also must have the background ues, age, and work history.
needed to make the company formation possible.
Knowledge acquired from formal education and previous
Childhood Family Environment
business experience makes a potential entrepreneur feel
capable of forming and managing a new enterprise. Al- Specific topics in the family environment of the entre-
though educational systems are important because they preneur while growing up include birth order, parent's
provide the needed knowledge of business, people still occupation and social status, and relationship with the
tend to start successful businesses in fields in which they parents. The impact of birth order has had conflicting
have worked. In fact, in many cases the idea for the new research results since Hennig and Jardim (1977) found
company occurs while the person is working in a partic- that female executives tend to be first born. Being first
ular business position. Indeed, entrepreneurs are not born or an only child is postulated to result in the child's
born; they develop. receiving special attention and, thereby, developing more
Marketing also plays a critical role in forming a new self-confidence. In a national sample of 468 female en-
company. Not only must a market of sufficient size be trepreneurs, Hisrieh and Brush (1984) found 50% to be
present, but also the marketing know-how of putting to- first born. However, in many studies of male and female
gether the best total package of product, price, distribu- entrepreneurs the first-born effect has not been present
tion, and promotion to ensure successful product (Bowen & Hisrich, 1986). Because the relation to entre-
launching. A company is more easily formed in an area prenenrship has been only weakly demonstrated, further
where there is market demand and not just new tech- research on the first-born syndrome is needed to deter-
nology aiming at the same market. Some companies that mine if it really does have an effect on a person's becoming
are based on new technology often find that there is no an entrepreneur (Auster & Auster, 1981; Chusmin, 1983;
market for this technology and may in time cease to exist. Sexton & Kent, 1981).
Perhaps one of the most powerful influences that In terms of the occupation of the entrepreneurs'
make company formation seem possible are role models. parents, there is strong evidence that entrepreneurs tend
To see someone else do something and succeed makes it to have self-employed or entrepreneurial fathers. Female
easier to picture oneself doing a similar, and of course, entrepreneurs are as likely to report self-employed or en-
better, activity. A frequent comment of entrepreneurs trepreneurial fathers as male entrepreneurs. The inde-
when informally queried about their motivation for start- pendent nature and flexibility of self-employment ex-
ing their new venture is, "If that person could do it, so emplified by the father or mother is ingrained at an early
can I!" age. As one entrepreneur stated, "My father was so con-
Finally, financial resources needed to form a new sumed by the venture he started and provided such a
company must be readily available. Although the majority strong example, it never occurred to me to go to work
of the start-up money for any new company comes from for anyone else." This feeling of independence is&ten
personal savings, credit, friends, and relatives, there is further enforced by the presence of an entrepreneurial
still often a need for seed (start-up) capital or other types mother. Although the results are much less consistent,
of risk capital (Wetzel, 1986). Risk-capital investors play female entrepreneurs, at least, appear to have more than
an essential role in the development and growth of en- their share of entrepreneurial mothers (see Table 1). Al-
trepreneurial activity. When seed capital is readily avail- though there are no comparative studies of nonentrepre-
able, more new companies form; this is evident in the neurs, the overall parental relationship appears to be a
increased number of company formations in the United very important aspect of the childhood family environ-
States when there is abundant risk (seed) capital (Wetzel, ment in establishing a person's desire for entrepreneurial
1986). activity. Parents who are supportive and encourage in-
This entrepreneurial decision process occurs in a dependence, achievement, and responsibility appear to
diverse group of persons with a wide variety of charac- be very important for female entrepreneurs (Hisrich &
teristics and backgrounds. Before I consider the various Brush, 1986). A national study of female entrepreneurs
characteristics and backgrounds of the typical entrepre- indicated that they tend to grow up in middle- to upper-
neur, understand that there is really no such thing as a class environments in which families are likely to be rel-
typical entrepreneurial profile. Entreprenenrs come from atively child-centered and be similar to their fathers in
a variety of educational backgrounds, family situations, personality (Hisrich & Brush, 1984).

February 1990 * American Psychologist 211

Table 1
Occupations of Entrepreneurs' Parents
~ of entTepreneumIn gee~ral or male enb-epreneursonly Studies of female e ~

Brockhaus (1982) cited four studies suggesting that Hisrich and Brush (1983) reported a nationwide sample of
entrepreneurs tend to have entrepreneurial fathers. 468 female entrepreneurs; 36% had entrepreneurial
fathers; 11% had entrepreneurial mothers.
Brockhaus and Nord (1979) found that 31 St. Louis Mescon and Stevens (1982) found that 53% of 108
male entrepreneurs were no more likely then male Arizona real estate brokers had fathers who were
managers to have entrepreneurial fathers. entrepreneurs. No mothers were entn)lxeneurs.
Cooper end Dunkalberg (1984) reported that 47.5% of Sexton end Kent (1981) found that 40°/o of 48 Texas
1,394 entrepreneurs had parents who owned a female entrepreneurs had entrepreneurial
business. fathers end 13% entrepreneurial mothers (vs. 13% and
11% for 45 female executives).
Jacobowitz end Vidler (1983) found that 72% of mid- Waddell (1983) found that 63.8% of 47 female
Atlantic state entrepreneurs had parents or close entrepreneurs reported entrepreneurial fathers, end
relatives who were self-employed. 31.9% reported entrepreneudel mothers (vs. 42.5%
end 8.5% for female managers er¢l 36.2% end 8.5%
for secretaries).
Shapero and Sokol (1982) reported that 50% to 58% of Watkins end Watkins (1983) found that 37% of 58 British
company founders in the United States had self- female entrepreneurs had self-employed fathers (self-
employed fathers (at a time when salf-employed employment in the male United Kingdom labor force is
persons were only 12% of the work force). They 9%). Sixteen percent of mothers were whole or part
cited data on the same pattern in nine other cultures. owners of businesses (female self-employment was
4o/0).
No~e. Data are from "The FemaleEntrepreneur: A Career DevelopmentPerspective" by Donald D. Bowen and Robert D. Hisdch, 1986, Academy of Management
Review, 11, p. 399.
I I

Education quently these studies fail to indicate that entrepreneurs

The education of the entrepreneur has received significant can be differentiated on these values from managers, un-
successful entrepreneurs, or even the general population.
research attention (see Table 2). Education was important
For example, whereas entrepreneurs appear to be effective
in the upbringing of most entrepreneurs. Its importance
leaders in that they are able to communicate their vision
is reflected not only in the level of education obtained
for the company in such a way that others cooperate, the
but also in the fact that it continues to play a major role
degree of this leadership has not been thoroughly re-
as entrepreneurs try to cope with problems and to correct
searched nor does the amount distinguish them from
deficiencies in business training. Although a formal ed-
successful managers. Although personal value scales for
ueation is, of course, not necessary for starting a new
leadership as well as support, aggression, benevolence,
business, as reflected in the success of such high school
conformity, creativity, veracity, and resource-seeking are
dropouts as Andrew Carnegie, William Durant, Henry
important for identifying entrepreneurs, they frequently
Ford, and William Lear, it does provide a good back-
identify successful persons as well (Brockhaus & Horwitz,
ground, particularly when it is related to the field of the
1986). However, studies have shown that the entrepreneur
venture. In terms of type and quality of education, female
has a different set of attitudes about the nature of the
entrepreneurs appear to experience some disadvantage.
management process and business in general (Gasse,
Although nearly 70% of all female entrepreneurs have a
1977). Indeed, the nature of the enterprise and the op-
college degree, many with graduate degrees, the most
portunism, intuition, and individuality of the entrepre-
popular college majors are English, psychology, education,
neur diverge significantly from the bureaucratic organi-
and sociology, and a few have degrees in engineering, sci-
zation and the planning, rationality, and predictability of
ence, or math (Hisrich & Brush, 1986). Both male and
its managers. Perhaps all these traits are encompassed in
female entrepreneurs have cited educational needs in the
areas of finance, strategic planning, marketing (particu- a winning image that allows the entrepreneur to create
larly distribution), and management. Entrepreneurs in- and nurture the new venture. In one study, winning
formally have indicated the importance of being able to emerged as the best term to describe companies that have
deal with people and communicate clearly. an excellent overall reputation ("To the Winners," 1986).
Five consensus characteristics of these companies were:
Personal Values superior quality in products; quality service to customers;
Although there have been many studies to indicate that flexibility, or the ability to adapt to changes in the mar-
personal values are important for entrepreneurs, fre- ketplace; high-caliber management; and honesty and eth-

212 February 1990 • American Psychologist

Table 2
Amount of Education of Entrepreneurs
Sttclkm Findings Comments

Entrepreneurs in general
Brockhaus (1982) Reviewed four studies concluding that All samples were small and limited to
entrepreneurs tend to be better one geographical area or industry.
educated than the general
population, but less so than
managers.
Cooper & Dunkelberg (1984) This was a national survey of 1,805
small business owners that showed
that a larger proportion of business
starters or purchasers
(approximately 64%) have less than
a college degree compared to those
who inherit or are brought in to run
the business (57%).
Gasse (1982) Reported four studies in which Education level varied with industry
entrepreneurs were better educated (e.g., high tech).
than the general public.
Jacobowltz & Vidler (1982) Results of interviews with 430 The sample was composed of
entrepreneurs showed that they did Pennsylvania and New Jersey
not prosper in schools; 30% were entrepreneurs; 11% were female.
high school dropouts. Only 11%
graduated from a four-year college.

Male versus female entrepreneurs

Humphreys & McClung (1981) Of the female entrepreneurs, 54.8% Oklahoma sample of 86 female
were college graduates. This entrepreneurs from all areas of the
surpasses the rate for men and state.
women in general, and for male
managers and administrators.
Charboneau (1981 ) Quoted 1977 Census Bureau study Also quotes SBA study with similar
showing that the average female finding.
entrepreneur is a college graduate.
DeCarlo & Lyons (1979) Female entrepreneurs have more 122 female entrepreneurs drawn at
education than the average adult random in mid-Atlantic states.
female. Non-minority female
entrepreneurs have more education
than minority female entrepreneurs.
Hisrich & Brush (1983) This nationwide survey showed that
68% of 468 female entrepreneurs
were at least college graduates.
Mescon & Stevins (1982) Two thirds had attended college; 15% Sample of 108 female real estate
had pursued graduate degrees. brokerage owners in Arizona.
Sexton & Kent (1981) Female entrepreneurs were slightly Interviewed 93 women (48 female
less educated than female entrepreneurs) from Texas.
executives (44% and 51% college
graduates, respectively). Younger
female entrepreneurs were better
educated than female executives of
companies.
Note. Data are from "The Female Entrepreneur:. A Career Development Perspective" by Donald D. Bowen and Robert D. Hisrich, 1986, Academy of Management
Rev/ew, 11, p. 397.
I I I II

its in business practices. A successful entrepreneur is al- Age

most always characterized as a winner; it is almost a pre-
requisite for them actually to become one ("To the The relation of age in the entrepreneurial career process
Winners," 1986). has also been carefully researched (Ronstadt, 1982, 1983).

February 1990 • American Psychologist 213

In evaluating these results, however, it is important to Motivation
differentiate between entrepreneurial age (the age of the
entrepreneur reflected in the experience in the field of What motivates an entrepreneur to take all the risks in
the feature or being self-employed) and chronological age. launching a new venture and to pursue an entrepreneurial
As is discussed in the next section, entrepreneurial ex- career despite the overwhelming odds against success
perience is one of the best predictors of success particu- when the SBA indicates that 75% of all businesses fail
larly when the new venture is in the same field as previous within the first five years? Although many people are in-
business experience. terested in starting a new venture and even have the back-
In terms of chronological age, entrepreneurs initiate ground and financial resources to do so, few decide to
their entrepreneurial careers at a wide variety of ages. actually start their own business. Persons who are com-
Although an average age has little meaning, generally fortable and secure in a job situation, have a family to
when appropriate training and preparation are present, support, and like their present life-style and reasonably
earlier starts in an entrepreneurial career are better than predictable leisure time often do not want to take the
later ones. Also there are milestone years that occur in risks associated with venturing out alone.
approximate five-year intervals between 25 and 50 when Although the motivations for venturing out alone
a person is more inclined to start an entrepreneurial career vary greatly, the reason cited most frequently in a national
(Ronstadt, 1984). As one entrepreneur succinctly stated survey of 468 female entrepreneurs for becoming an en-
in one survey, "I felt it was now or never in terms of trepreneur is independence, that is, they do not want to
starting a new venture when I approached 30." Generally work for anyone else (Hisrich & Brush, 1984). This desire
male entrepreneurs tend to start their first significant to be one's own boss is what drives both male and female
venture in their early 30s, whereas female entrepreneurs entrepreneurs to accept all the social, psychological, and
tend to do this in their middle 30s. financial risks and work the numerous hours needed to
create and nurture a successful new venture. Nothing less
than this motivation would be strong enough to success-
Work History fuUy launch a new venture. Other motivating factors differ
between male and female entrepreneurs (Hisrich & Peters,
Work history is not only a negative displacement (through
1989). Money is the second reason for starting a new
lack of employment) in the decision to launch a new
venture for men, whereas job satisfaction, achievement,
entrepreneurial venture hut is also important in the
opportunity, and money are the reasons in rank order for
growth and eventual success of the new venture launched.
women.
Although dissatisfaction with various aspects of one's
job--challenge, promotional opportunities, frustration,
and boredom--often motivates the launching of a new Role Models and Support Systems
venture, previous technical and industry experience is Several entrepreneurs have informally mentioned that one
important once the decision to launch has been made. of the most important facts to influence them in their
Particularly important experience areas are: obtaining fi- career choice are role models. Role models can be parents,
nancing, such as bank financing and venture capital; de- brothers or sisters, other relatives, successful entrepreneurs
veloping the best product or service for the market; es- in the surrounding community, or nationally touted en-
tablishing manufacturing facilities; developing channels trepreneurs. Frequently successful entrepreneurs provide
of distribution; and preparing the marketing plan for a catalyst for potential entrepreneurs who scrutinize them
market introduction. to launch a venture. As one entrepreneur indicated to
As the venture becomes established and starts grow- me in a personal interview, "After evaluating Ted and his
ing, managerial experience and skills become increasingly success as an entrepreneur, I knew I was much smarter
important. Although most ventures start with managing and could do a better job. So, I started my own business."
one's own activities and those of a few part- or full-time Role models also can serve in a supportive capacity
employees, as the number of employees increases along as mentors during and after the launch of the new ven-
with the size, complexity, and geographical diversity of ture. Indeed, an entrepreneur needs a strong support and
the business, managerial skills come more and more into advisory system in every phase of the new venture. This
play. This is particularly true when the new venture re- support system is perhaps most crucial during the start-
quires the presence of other managers. up phase in providing information, advice, and guidance
In addition to managerial experience, entrepreneu- on such matters as organizational structure, needed fi-
rial experience is important. It is generally easier to start nancial resources, marketing, and market segments. Be-
a second, third, or fourth venture than it is to start the cause entrepreneurship is a social role embedded in a
first one. The need for entrepreneurial experience in- social context, it is important for an entrepreneur early
creases as the complexity of the venture increases. Most on to establish connections to these support resources.
entrepreneurs indicate that their most significant venture As initial contacts and connections expand, they
is not their fLrstone (Hisrich & Brush, 1986). Throughout form a network with similar properties prevalent in a
their entrepreneurial careers entrepreneurs are exposed social network-density (extensiveness of ties between two
to more corridors of new venture opportunities than persons) and centrality (the total number of persons in
workers in other career paths. the network). The strength of the tie between the entre-

214 February 1990 ° American Psychologist

preneur and any individual in the network is, of course, The client group is a particularly important group
dependent on the frequency, level, and reciprocity of the to cultivate. This group not only represents the sources
relationship. The more frequent, the more in-depth, and of revenue to the venture but can also be the best source
the more mutually beneficial a relationship is, the stronger of advertising--word of mouth. There is nothing better
and more durable is the network between the entrepre- than word-of-mouth advertising from satisfied customers
neur and the individual (Aldrich, Rosen, & Woodward, to help establish a winning business reputation and pro-
1987; Carsrud, Gaglio, & Olm, 1986). mote goodwill. Customers, excited about the entrepre-
Moral Support Network neur's concern about the product or service to fulfill their
need, happily provide valuable feedback on the product
It is important for every entrepreneur to establish a moral or service that is offered as well as on new products or
support system of family and friends---a cheering squad. services that are being developed.
This cheering squad is particularly important during the Suppliers are another important ingredient in the
many difficult times and the loneliness that occur professional support network because they help establish
throughout the entrepreneurial process. The majority of credibility with creditors and customers as well. A new
entrepreneurs in a sample of 468 indicated that their venture needs to establish a solid track record with sup-
spouse was their biggest supporter (Hisrich & Brush, pliers in order to build a good relationship and ensure
1984). This support provides more understanding during adequate availability of raw materials and other resources.
the excessive amount of time that needs to be devoted to Suppliers can also provide good information on the nature
the new venture. and trends in the industry as well as the nature and di-
Friends also play key roles in a moral support net- rection of competition.
work. Not only can friends provide advice that is often Besides mentors and business associates, trade as-
more honest than that received from other sources, but sociations can provide an excellent mechanism for a
they also provide encouragement, understanding, and professional support network. Trade association members
even assistance. Entrepreneurs can confide in friends can be developed into a regional or national network and
without fear of criticism. should be carefully cultivated to keep the new venture
Finally, relatives (children, parents, grandparents, competitive. Trade associations are familiar with any new
aunts, and uncles) can also be a strong sources of moral developments and can provide overall industry data.
support, particularly if any are also entrepreneurs. As Finally, personal affiliations of the entrepreneur can
one entrepreneur stated, "The total family support I re- also form a valuable professional support network. Af-
ceived was the key of my success. Having an understand- filiations developed with people through hobbies, sporting
ing cheering squad giving me encouragement allowed me events, clubs, civic involvements, and school alumni
to persist through the many difficulties and problems" groups are excellentpotentialsources of referrals,advice,
(Hisrich & Brush, 1986). and information.
Regardless of the actual nature, each entrepreneur
Professional Support Network needs to establishboth a morale and a professionalsup-
In addition to moral encouragement, the entrepreneur port network. These contactsprovide confidence,support,
needs advice, information, and resources throughout the advice, and information. As one entrepreneur indicated,
establishment and growth of the new venture. These can "In your own business,you are all alone. There is a def-
be obtained through networking. initeneed to establishsupport groups to share problems
Although a large number of business formations oc- with and gain overallsupport for the new venture" (His-
cur without any major planning, conceptually a strong rich & Brush, 1984).
situational determinant in developing a new venture is
the density of the entrepreneur's business contacts or Male Versus F e m a l e Entrepreneurs
linkages. The process of sharing contacts and obtaining Even though there has been significantgrowth in female
resources has been found to have a significant relationship self-employment, much of what isknown about the char-
with business foundings and profitability (Aldrich et al., actcristics of entrepreneurs, their motivations, back-
1987). Although developing contacts was significant for grounds, families,educational background, occupational
business foundings,maintaining contactswas a significant experience, and problems isbased on studiesof male en-
predictor for early profit. trepreneurs(Carsrud & Olin, 1986).This isnot surprising
What should be the composition of these contacts because, according to the Small Business Administration,
and of the networks itself?.One network group should be men make up the majority of those who startand own
business associates who are themselves self-employed, their own businesses.
because they have experienced the process of starting and Although, overall,men and w o m e n entrepreneurs
developing a business. Besides these, there are other cat- are very similar,in some respects women entrepreneurs
egories of persons who would be valuable: clients or buyers possess differentmotivations, business skilllevels,and
of the entrepreneur's product or service; suppliers; experts occupational backgrounds than their male counterparts
in various business matters (lawyers, financiers, bankers, (Hisrich & Brush, 1986). Factors in the start-upprocess
marketing experts, and accountants); and colleagues or of a business for male entrepreneurs are also dissimilar
associates from trade associations of professional groups. to those for women, especiallyin such areas as support

February 1990 * American Psychologist 215

systems, sources of funds, and problems encountered. ciations and women's groups, whereas men are not as
Although there are more similarities than differences, likely to have as many outside supporters.
male and female entrepreneurs do differ in several ways. Finally, businesses started by men and women en-
For instance, in terms of motivation, men are often mo- trepreneurs differ in terms of the nature of the venture.
tivated by the drive to control their own destiny, to make Women are more likely to start a business in a service
things happen. This drive often stems from disagreements related area--retail, public relations, or educational ser-
with their bosses or a feeling that they can run things v i c e s - w h e r e a s men are more likely to enter manufac-
better. In contrast, women tend to be more motivated by turing, construction, or high-tech fields. The result is often
independence and achievement that arise from frustration smaller women-owned businesses with lower net earnings.
with a job in which they have not been allowed to perform However, opportunities for women are greater than ever;
at the level of which they are capable. women are starting businesses at a faster rate than m e n m
Departure points and reasons for starting the busi- almost three times the rate--according to the SBA.
ness are similar for both men and women. Both generally
have a strong interest and experience in the area of their
Corporate Versus Intrapreneurial Culture
venture. However, for men the transition from a past oc- The various business and sociological conditions have in-
cupation to the new venture is often facilitated when the deed given rise to a new era in American business, the
new venture is an outgrowth of a present job, sideline, or era of the entrepreneur. There are probably no better
hobby. Women, on the other hand, often leave a previous known entrepreneurs than Sam Walton and Steve Jobs.
occupation with only a high level of job frustration and Walton, the entrepreneur who founded the Wal-Mart
enthusiasm for the new venture rather than extensive empire, has been frequently identified as the richest man
managerial experience, which makes the transition more in America. After successful retail careers with J. C. Pen-
difficult. ney and Ben Franklin stores, Sam Walton opened his first
Start-up financing is another area where male and Wal-Mart store in Rogers, Arkansas in 1952, a first step
female entrepreneurs differ. Whereas men often list in his plan to operate discount stores in smaller cities and
investors, bank loans, or personal loans, in addition to towns that are largely ignored by discount chains. The
personal funds, as sources of start-up capital, women plan developed into one of the most profitable retail em-
usually rely solely on personal assets or savings--reflecting pires in the country today. Steve Jobs became a successful
the fact that the service companies typically formed gen- entrepreneur through his obsession with electronics. He
erally need little, if any, start-up capital. joined with Steve Wozniak to design and build the first
Occupationally, there are also differences between easy-to-use personal computer. The first 200 of these
men and women entrepreneurs. Although both groups primitive computers were produced in 1976 in Steve
tend to have at least some experience in the field of their Jobs's parents' garage by using parts purchased on credit.
ventures, men more often are recognized specialists in This primitive computer was the basis of the highly suc-
their field or have attained competence in a variety of cessful Apple II, first sold in 1977. Jobs's obsession with
business skills. In addition, the nature of their experience his own vision, through which he had started Apple
is often in manufacturing, finance, or technical areas. Computer, also created problems and almost the demise
Most women, in contrast, usually have administrative ex- of the company. He refused to allow the Apple II to be
perience, which is limited to the middle management marketed as a business computer and insulated managers
level, usually in more service-related areas such as edu- in different divisions of the company from each other.
cation, secretarial, or retail sales. After a bitter struggle in 1985, Steve Jobs was asked to
In terms of personality, there are strong similarities resign from the company he founded. However, his ob-
between male and female entrepreneurs. Both tend to be session continues to be at work as Steve Jobs has an-
energetic, goal oriented, and independent. However, men nounced a new computer--the first product of his new
are often more confident and less flexible and tolerant company NEXT.
than women, which can result in different management The current media exposure and success of these
styles for the new venture. and other entrepreneurs are threatening to established
The backgrounds of male and female entrepreneurs corporations. In some cases, small, aggressive, entrepre-
tend to be similar except that most women are a little neurially driven firms have developed new products and
older when they embark on their venture (35-45 vs. 25- become dominant in their markets. Recognizing the
35) and their educational backgrounds are different. Men problem, some companies are attempting to create the
often have studied in technical or business-related areas, same entrepreneurial spirit, the challenges and rewards
whereas most women have a liberal arts education. ofentrepreneurship, within their own organizations. But
Support groups also provide a point of contrast be- what are the differences between corporate and entrepre-
tween the two. Men usually list outside advisors (e.g., neurial cultures? Between managers, entrepreneurs, and
lawyers and accountants) as most important supporters intrapreneurs?
with the spouse second. Women list their spouses first, The typical corporate culture has a climate and re-
close friends second, and business associates third. More- ward system that favors conservative decision making.
over, women usually rely extensively on a variety of Emphasis is on gathering a large amount of data on which
sources for support and information such as trade asso- to base a rational decision, and risky decisions often are

216 February 1990 • American Psychologist

postponed until enough hard facts can be gathered or a fieet different types of individ~]atq and management styles.
consultant is hired to illuminate the unknown. This was A comparison of traditional managers, entrepreneurs, and
just one of the many problems encountered by Art Fry intrapreneurs indicates these differences (see Table 3).
in his attempt to launch Post-It Notes within the tradi- Although traditional managers are motivated primarily
tional organizational structure of 3M. The results of the by promotion and typical corporate rewards, entrepre-
surveys conducted by the marketing department of po- neurs and intrapreneurs thrive on independence and the
tential customers about the concept of a paper with a ability to create. Intrapreneurs expect their performance
weak adhesive on it were terrible. Of course, because there to be suitably rewarded, as do entrepreneurs, except the
had never before been a piece of paper capable of attach- source and form of the reward may differ.
ing and detaching easily, people really could not imagine The difference between the three groups is also re-
how to use it. To overcome this difficulty, Fry distributed flected in their time orientation. Managers emphasize the
samples in several different formats (including the little short runmreturn on investment, sales, price of stock,
yellow note pads that are presently marketed) to em- and profits; entrepreneurs are concerned with the long
ployees as well as executives throughout 3M. By moni- runmthat the enterprise last, that it exist instead of go
toring the usage over time and comparing the usage rates bankrupt, and that sales and profit enable it to survive
with Magic Tape, 3M's biggest orifice supply seller, Fry and grow; and intrapreneurs, a product of both the large
discovered that people used the note pads more, and he and the small, are somewhere in between. Similarly the
convinced top management that there was indeed a mar- primary mode of activity of intrapreneurs falls between
ket. In many companies there are frequently so many the delegation employed by managers and the direct in-
sign offs and approvals required for a large scale project volvement of entrepreneurs. Whereas intrapreneurs and
such as Post-It Notes that no individual feels personally entrepreneurs are both moderate risk takers, managers
responsible (Fast, 1979). are much more cautious about taking any risks at all.
Although traditional corporate cultures do vary "Protecting one's backside" is a way of life of many tra-
greatly from a more bureaucratic inflexible system to a ditional managers. These managers attempt to avoid mis-
more entrepreneurial flexible one, in the extreme cases takes and failures at almost any cost. On the other hand,
the usually guiding principles are: Follow the instructions entrepreneurs usually fail at least once, and intrapreneurs
given; do not make any mistakes; do not fail; do not take learn to conceal risky projects until the last possible mo-
initiative but wait for instructions; stay within your turf; ment.
and protect your backside. This restrictive environment Although the traditional manager reports to those
is not conducive to creativity, flexibility, independence, in the corporation at a higher level in the organization,
and risk takingNthe characteristics of entrepreneurs and entrepreneurs serve themselves and of course their cus-
intrapreneurs. The guiding principles of a good entre- tomers, and intrapreneurs add sponsors to these two cat-
preneurial-intrapreneurial climate are quite different: egories. Instead of building strong relationships with those
Develop visions, goals, and action plans; take action and around them as is the case with entrepreneurs and intra-
be rewarded; suggest, try, and experiment; create and de- preneurs, managers tend to follow the relationships in-
velop regardless of the area; and take responsibility and dicated in the formal organizational chart.
ownership. This environment, of course, supports indi-
viduals in their effort to create something new. Climate for Intrapreneurship
In addition to the corporate climate, there are dif- How can the climate for intrapreneurship be established
ferences in the shared values and norms of the two cul- in an organization? In establishing an intrapreneurial en-
tures. The extreme traditional corporation is hierarchical vironment, certain factors and leadership characteristics
in nature with established procedures, reporting systems, need to be operant (Hisrich & Peters, 1989; Kanter, 1983;
lines of authority and responsibility, instructions, man- Pinchot, 1985). The first characteristic is that the orga-
dates, standardized hours, and control mechanisms. These nization operates on the frontiers of technology and new
cultural aspects support the corporate climate in prohib- ideas are encouraged and supported, not discouraged, as
iting new venture creation. The culture of a strong intra- frequently occurs in firms where rapid return on invest-
preneurial firm is in stark contrast. Instead of an hier- ment and high sales volume requirements exist. It is par-
archical structure with all the accompanying problems, ticularly important that research and development operate
an intrapreneurial climate has a flat organizational struc- on the cutting edge of the technology of the industry in
ture with networking, teamwork, sponsors, and mentors order for new ideas to be continually generated.
abounding. Close working relationships are established Second, experimentation must be encouraged. New
that allow vision and objectives to be accomplished products or services do not instantaneously appear but
through an atmosphere of trust and counsel. Tasks are rather are often a result of a series of trials and errors. It
viewed as fun activities (not chores) with participants took time and some product failures before the first mar-
gladly putting in the amount of hours necessary to get kemble computer appeared. A company that wants to
the job done. Instead of building barriers to protect turfs, establish an intrapreneurial spirit has to first establish an
advice and cross-fertilization freely occur within and environment that allows mistakes and failures. Even
across functional areas and even divisions. though this is in direct opposition to the established cor-
As may be expected, these two different cultures re- porate career and promotion system, without the oppor-

February 1990 • American Psychologist 217

 I I I . I I

Table 3
Comparison of Entrepreneurs, Intrapreneurs, and Traditional Managers
Trait Traditional managers En~rs Intr~oreneurs

Primary motives Promotion and other traditional Independence, opportunity Independence and ability to
corporate rewards, such as to create, and money. advance in the corporate
office, staff, and power. setting receiving the
corporate rewards.
Time orientation Short run--meeting quotas and Survival and achieving 5 to Between entrepraneufial and
budgets, weekly, monthly, 10-year growth of traditional managers
quarterly, and the annual business. depending on urgency to
planning horizons. meet self-imposed and
corporate timetables.
Activity Delegates and supervises more Direct involvement. Direct involvement more than
than direct involvement. delegation.
Risk Careful. Moderate risk taker. Moderate risk taker.
Status Concerned about status No concern about status Not concerned about
symbols. symbols. traditional corporate status
symbols---desires
independence.
Failure and mistakes Tries to avoid mistakes and Deals with mistakes and Attempts to hide risky
surprises. failures. projects from view until
ready.
Decisions Usually agrees with those in Follows dream wi{h Able to get others to agree to
upper management decisions. help achieve dream.
positions,
Who serves Others. Self and customers. Self, customers, and
sponsors.
Family history Family members worked for Entrepreneurial small- Entrepreneurial small-
large organizations. business, professional, business, professional, or
or farm background. farm background.
Relationship with others Hierarchy as basic relationship. Transactions and deal Transactions within hierarchy.
making as basic
relationship.
Note. An extensively modified version of this table appeared in Intrapreneuring by G. Pinchot, 1985, New York: Harper & Row. Copyright 1985 by Harper & Row.
Usedby permission.
I II I Ii11/ I I I III I I I I I I

tunity to fail, few if any corporate intrapreneurial ventures these funds are available, all too often the established
will be undertaken. Almost every entrepreneurial career reporting requirements make them so difficult to obtain
has at least one failure. that frustration and dissatisfaction occur.
Third, an organization should ensure there are no Fifth, a multidiscipline, team-work approach needs
initial opportunity parameters to inhibit free creative to be encouraged. This open approach with participation
problem solving. Frequently, various turfs in an organi- by individuals regardless of area is the antithesis of cor-
zation are protected, which frustrates attempts by poten- porate organizational structure and theory. Take for ex-
tial intrapreneurs to establish new ventures. In one con- ample the formation of Wil Tel, an intrapreneurial di-
sulting experience with a Fortune 500 company, the at- vision of The Williams Company, a typically structured
tempt at establishing an intrapreneurial environment ran oil and gas company with the traditional fines of authority
into problems and eventually failed when the potential and responsibility. The company was hard hit by the
intraprenenrs were informed that a proposed product was recessions in the energy and agricultural industries, which
not possible because it was in the domain of another di- resulted in a 69% decrease in profits in a short period of
vision. time. Roy Wilkins, an executive in one division of the
Fourth, the resources of the firm must be available company, championed the expenditure of $200 million
and easily accessible. As one intrapreneur stated, "If my to run fiber optic cable through a network of unused
company really wants me to take the time, effort, and pipeline, which allowed the company to enter the tele-
career risks to establish a new venture then it needs to communication industry just as AT&T was breaking up.
have money and people resources on the line." Very often The success of this intrapreneurial venture is attributed
funds are not allocated to the task of creating something in part to the availability of Joe Williams, president of
new but rather are committed to solving problems that The Williams Company, to any member of the Wil Tel
have more immediate impact on the bottom line. When team and to his commitment of resources to an extremely

218 February 1990 * American Psychologist

risky venture in a field totally foreign to the company. In trapreneurship has sponsors and champions throughout
successful eases of intrapreneurship, one key ingredient who not only support the creative activity and any re-
is skunkworks that involve key people before the venture sulting failures but who have the planning flexibility to
is formally recogniTed and announced. These skunkworks establish new objectives and directions as needed. As one
are frequently the unnoticed version of the intrapreneurial manager indicated in a personal interview, "For a new
venture. Take, for example, the case of Michael Phillips. business venture to succeed the intrapreneur needs to be
He was able to launch a string of major banking inno- able to alter plans when needed and not be concerned
vations including consumer certifieates of deposit, sim- about how close they come to achieving the previously
plified checking accounts, and Master Charge in the Bank stated objectives." Corporate structures frequently mea-
of California before management was fully aware of his sure managers on their ability to come in close ~to plan
activities. When they did become aware, Michael Phillips regardless of the quality of performance reflected in this
was able to show success rather than just ideas, which accomplishment (MacMillan, Block, & Narashima,
made it difficult for any valid objections. A company un- 1986).
derstanding this tendency can actually facilitate internal Finally, and perhaps most important, the intrapre-
venturing by legitimizing and formalizing the skunk-works neurial activity must be wholeheartedly supported and
that are already occurring. Developing the needed team embraced by top management (George & MacMillan,
work for intrapreneurship is further complicated by the 1985). Top management must support the effort by phys-
fact that team members' promotion and overall career ical presence as well as making sure the personnel and
within the corporation is related to performance in their financial resources are easily available. Without top man-
current position, not their contribution to the new intra- agement support a successful intrapreneurial environ-
preneurial venture. Organizations interested in establish- ment cannot be created.
ing a strong intrapreneurial environment need to rec-
ognize and credit team members' contfibotion to the in- Characteristics of Intrapreneurs
trapreneurial effort. Within this overall corporate environment, there are cer-
Besides encouraging team work, the corporate en- tain characteristics that appear to be needed to at least
vironment must establish a long time horizon for evalu- some extent for a person to be a successful intrapreneur.
ating the success of the overall program as well as that of These include understanding the environment, being vi-
each individual venture. If a company is not willing to sionary and flexible, creating management options, en-
invest money with no expectation of return for five to ten couraging team work, encouraging open discussion,
years, then it should not attempt to create an internal building a coalition of supporters, and persisting.
venturing program (Siegel, Siegel, & MacMillan, 1988). In order to establish a successful intrapreneurial
This patient money in the corporate setting is no different venture, creativity and a broad understanding of the in-
than the investment-return time horizon used by venture ternal and external environments must be present. Cre-
capitalists who invest in a start-up entrepreneurial effort. ativity, perhaps at its lowest level in large organizations,
Sixth, the spirit ofintrapreneurship cannot be forced generally tends to decrease with age and education.
on persons; it must be on a volunteer basis. There is a The person who is going to establish a successful
difference between corporate thinking and intrapreneurial new intraprenenrial venture must also be a visionary
thinking~ and individuals perform much better on one leaderma person who dreams great dreams. Although
side or the other of the continuum. The majority of man- there are many definitions of leadership, the one that best
agers in a corporation are not capable of being successful describes the needed intrapreneurial leadership is "a
intrapreneurs. This self-selection of participants must be leader is like a gardener. When you want a tomato, you
accompanied by a policy to allow each participant to carry take a seed, put it in fertile soil, and carefully water under
a project through to completion. This is in opposition to tender care. You don't manufacture tomatoes you grow
most corporate procedures for new product development them." Martin Luther King, Jr., said, "I have a dream,"
and introduction, in which different departments and and thousands followed in spite of overwhelming obsta-
persons are involved in each stage of the development des. In order to establish a successful new venture, the
process. An intrapreneur, willing to spend the excess hours intrapreneurial leader must have a dream and work
and effort to create a new venture, falls in love with the against all the obstacles and inertia to achieve it by selling
venture and will do almost anything to help ensure its the dream to others. Chuck House did this on the moon
success. monitor project (an intrapreneurial venture at Hewlett
Seventh, the intrapreneur needs to be appropriately Packard) by allowing others to help develop the final vision
rewarded for all the energy and effort expended in the through exploring markets particularly meaningful to
creation of the new venture. Broad performance objec- them (Pinchot, 1985).
tives should be established, and the intrapreneur should The third characteristic is that the intrapreneur must
receive rewards on their attainment. Of course, an equity be flexible and an experienced venture champion (De-
or ownership position in the new venture is the best mo- Sarbo, MacMillan, & Day, 1987). An intrapreneur does
tivational reward for the amount of activity and effort not mind the store but is playful and irreverent. By chal-
needed for success (Block & Ornati, 1987). lenging the beliefs and assumptions of the corporation,
Eighth, a corporate environment favorable for in- an intrapreneur has the opportunity of creating something

February 1990 • American Psychologist 219

 new. Of course, this is not the standard of operation taught organization is very traditional in nature and has a history
in most graduate and undergraduate business schools. of very little change.
The intrapreneur must encourage team work and The first step in this process is to secure commitment
use a multidisciplined approach. Again, this violates the by top management to establishing intrapreneurship in
organizational practices taught in most business schools the organization. Without this commitment the organi-
that are embodied in the established corporate structure. zation will never go through all the corporate cultural
In every new company formation, a broad range of busi- changes necessary for implementation. Once the top
ness skills, such as engineerin~ production, marketing, management of the organization has committed to the
and finance, are needed. Obtaining these skills in forming concept, it should be introduced throughout the organi-
a new venture usually requires crossing the established zation through seminars in which the aspects of intra-
departmental lines, structure, and reporting system. This preneurship are presented and strategies are developed
crossing can of course cause some significant disruption, to transform the organizational culture into an intrapre-
particularly when unconfident turf-protecting managers neurial one. During this process general guidelines need
are involved. To minimize the negative impact of any to be established for developing intrapreneurial ventures.
disruption caused, the intrapreneur must also be a good After the initial framework is established and the concept
diplomat. embraced, intrapreneurial leaders need to be identified,
In developing the team needed for creating some- selected, and trained. The training should focus on ob-
thing new, open discussion must always be encouraged. taining resources within the organization, identifying vi-
Many corporate managers have forgotten the frank, open able opportunities and their markets, and developing the
discussions and disagreements that were a part of their appropriate business plan.
educational process and instead spend time building pro- Ideas and general areas that top management are
tective barriers in their "corporate empire." A successful willing to support should be delineated along with the
new intrapreneurial venture can only be formed when amount of risk money that is available for initial seed
the team involved feels the freedom to disagree and break funding to further develop the concept. Also, overall pro-
down an idea until the best solution is reached. The degree gram expectations and the target results of each intra-
of openness obtained in the team is dependent on the preneurial venture should be established. These should
degree of openness of the intrapreneur. One of the keys be as specific as possible in terms of the time frame, vol-
to success in building a strong open team is to avoid hostile ume, profitability, and impact on the organization. Along
conflicts. This comes naturally to many intrapreneurs with the intrapreneurial training, a mentor-sponsor sys-
like HullO Aldikacti. In developing the intrapreneurial tem should also be established. Without sponsors or
venture--the Fiero--in the Pontiac division of General champions aboundin~ there is not much possibility that
Motors, Hulki kept the focus of all the team discussions the culture of the organization can be transformed into
on the product and its effect on the customers, not on an intrapreneurial one.
personalities of the team. Through his own behavior and After the initial commitment and training, a group
comments, the focus was kept on what was best for the of managers interested in the program should train and
new car that the team was struggling to build instead of share experiences with other members. My experience
individuals and their respective turfs (Pinchot, 1985). has indicated that these training sessions should be con-
Openness assists in developing a strong coalition of ducted about one day per month over an eight-month
supporters and encouragers. The intrapreneur must en- period. Informational items about intrapreneurship in
courage and affirm each team member, particularly dur- general and the specifics of the company's activities should
ing problem times. This encouragement is one of the re- be disseminated through the company's newsletter or
placements of the usual motivators of career path and some other vehicle.
job security, which are not operational in establishing a It is essential that concrete activities occur within
new intrapreneurial venture. A good intrapreneur makes the eight-month period that develop ideas into marketable
everyone a hero. products or services, the basis of the new business venture
Finally, but not of least importance, is persistence. units. The intrapreneurial team will need to develop a
Throughout the establishment of any new intrapreneurial business plan, obtain customer reaction and some initial
venture, frustration and obstacles will occur. Only by intentions to buy, and learn how to coexist within the
persistence on the part of the intrapreneur will these be organizational structure during this process.
overcome and a new venture be created and successful A strong organizational support structure for intra-
commercialization result. preneurship should slowly emerge. This is particularly
important because intrapreneurship is a secondary activ-
Establishing Intrapreneurship or ity in the organization, not the primary one. Because in-
Entrepreneurial Spirit in the Organization trapreneurial ventures do not immediately impact the
An organization needs to implement a procedure to es- bottom line, they can be easily overlooked and not receive
tablish an intrapreneurial environment. Although this can the attention and funding needed. Providing the invest-
be done by employees of the organization, it is frequently ment funds necessary for an intraprenenrial venture to
easier to use an outsider to facilitate the process. This is develop and compete in external markets is essential for
particularly advantageous when the environment of the the success of the program. To be successful a venture

220 February 1990 • American Psychologist

needs flexible, innovative behavior, and the intrapreneurs trapreneurship, industrial/organizational psychologists
must have complete authority over expenditures. When can significantly contribute to the understanding o f the
the intrapreneur has to justify expenses on a daily basis, overall process as well as the development of an integrated
it is really not a new venture but merely an operational theory. Through this effort they not only will contribute
extension of the funding source (Miller & Friesen, 1982; to the understanding of the field but will help organiza-
Peterson & Berger, 1971). tions successfully apply the knowledge gained.
Rewards need to be tied to the performance of the
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222 F e b r u a r y 1990 • A m e r i c a n Psychologist