Entrepreneurship and intrapreneurship are two words that sound so alike so it is easy to confuse one with the other. Some people would even think the latter is a mispronunciation or misspelling of the former. And no one can blame them because even though intrapreneurship was coined in 1978, it can still be considered a relatively new term because, a lot of people are still not familiar with the concept.
But as a business owner, you cannot afford to not know the disparities and even similarities between these concepts.
The concept of intrapreneurship is becoming popular in recent times.
And a lot of companies are adopting it because of the many benefits it attracts to their business.
This article will teach you everything you need to know about entrepreneurship and intrapreneurship.
Let’s start by clearly explaining what both terms mean.
What is Entrepreneurship – Entrepreneurship and Intrapreneurship
Entrepreneurship refers to the concept of starting and managing a new business in a bid to make profits.
Entrepreneurship also serves the community by identifying a market gap and then filling it.
This gap refers to the needs or wants of people in the community.
Therefore, for any entrepreneurial venture to be valuable, it must fill a market gap either via a product or service.
Entrepreneurs typically take full responsibility for their entrepreneurial ventures.
This means they are responsible for the costs of running the business.
They are also responsible for both the risks and profits of the business.
This means that if the business suffers a loss, the entrepreneur is meant to bear the costs.
Likewise, if the business is flourishing, the entrepreneur gets to reap the chief share of the profits.
Entrepreneurs are mostly innovators because they come up with new ideas for products and services.
“Entrepreneur”, therefore, is very befitting for these kinds of individuals since the word was coined from “entreprenerd” which is a French word that means “undertaker” or “adventurer”.
Entrepreneurship is one of the most important factors of production.
It can be added to the same lists of other very important production factors like land, labor, and capital.
This is what makes entrepreneurship a vital component of a thriving economy.
However, entrepreneurship can be a very risky venture because there’s usually no assurance that an entrepreneur’s business idea would succeed.
But if the idea were successful, the entrepreneur stands to enjoy several benefits including high profits, fame, career growth, and so much more.
What is Intrapreneurship – Entrepreneurship and Intrapreneurship
Intrapreneurship on the other hand is the concept of working as an entrepreneur but within an organization.
Individuals who practice this concept are known as intrapreneurs.
And just like their entrepreneur counterparts, they work on new ideas to solve a problem or meet a need.
However, unlike the case of an entrepreneur that owns their business, an intrapreneur develops their ideas within an organization they work for.
So, an intrapreneur is typically an employee that works as an entrepreneur.
This means that the intrapreneur would be given the authority or permission to work somewhat independently to develop their idea.
In companies where intrapreneurship is embraced and encouraged, intrapreneurs are usually given total control to work on their projects.
Most times, an intrapreneur will also have access to the organization’s resources when working on their project.
This is to make sure they carry out the project as effectively as possible.
Intrapreneurs can hold any role or position within an organization; an intern could be an intrapreneur the same way the company’s vice president can be one too.
This means that the position and role do not matter as long as the individual has the qualities and skills required to be an intrapreneur.
Just like entrepreneurs, intrapreneurs must also have entrepreneurial vision and skills.
They must be entrepreneurs at heart even though they work for someone else.
Perhaps, the biggest advantage of being an intrapreneur is that a person can get all the perks of entrepreneurship without being responsible for the risk and loss it entails.
So, an intrapreneur can work on their new ideas and projects without taking on risks.
However, most intrapreneurs often end up as entrepreneurs when they leave the company to start their own company.
Similarities Between Entrepreneurship and Intrapreneurship – Characteristics Entrepreneurs and Intrapreneurs Share
Even though these two terms are different, they still share a lot of similarities.
This is chiefly because both of them encourage the same work ethic albeit in different work environments.
The similarity between both concepts is majorly in the characteristics entrepreneurs and intrapreneurs share.
Below, we’d take a closer look at these characteristics to help you better understand the similarities between these concepts.
One important element needed for the success of both entrepreneurship and intrapreneurship is great leadership.
If an entrepreneur or intrapreneur is not an effective leader, then the chances of them turning their ideas into a valuable product will be significantly reduced.
This is because both entrepreneurs and intrapreneurs most times have to work with a team to make their idea a reality.
And they need to make sure the people on their team equally align with the vision and goals they have.
To do this, they have to know how to motivate these people; and this can only be possible if the entrepreneur or intrapreneur is an effective leader.
An entrepreneur or intrapreneur who is also an effective leader will have no issues getting other people on board with their vision.
Intelligence is another vital trait that both entrepreneurs and intrapreneurs share.
This is because it does not matter if you are starting a business or in the process of changing things in an organization you work with, you have to be intelligent to successfully attain these.
Intelligence typically covers a whole aspect of business including anticipating and identifying market trends.
And being able to capitalize on these trends.
This is why intelligence and vision have to work hand in hand for the best results.
If you are intelligent but do not have the vision and plan to put your bright ideas to work, they will simply remain ideas.
Adaptability – Entrepreneurship and Intrapreneurship
Even though you are a great leader and you are very intelligent, without adaptability, it will be quite difficult to succeed as an intrapreneur or entrepreneur.
This is because an entrepreneur or intrapreneur will typically face several obstacles and setbacks.
If they lack adaptability, they may give up on their goals and vision because of the challenges they are bound to face.
Differences Between Entrepreneurship and Intrapreneurship
It won’t be a complete comparison if we fail to look at the differences between these concepts.
Yes, they are similar in several ways, but they are more different than they are similar.
Perhaps the biggest difference between these concepts is their meaning.
How are they different in meaning?
Well, an entrepreneur typically starts a business based on a new idea they conceived.
An intrapreneur on the other hand works on their business idea while working in an organization.
The differences in the meaning of these concepts encompass every other dissimilarity you’d find about them.
Below, the other major dissimilarities between entrepreneurship and intrapreneurship will be discussed.
Who They Work For
Entrepreneurs typically work for themselves.
They are often their own bosses.
An intrapreneur on the other hand is an employee.
Intrapreneurs are not their own bosses and are still answerable to their employers.
Because an entrepreneur is their own boss, they are often fully in control.
They can determine their working hours and schedule without having to answer to anyone.
They can also make decisions on their own without having to consult anyone.
Intrapreneurs on the flip side do not have this much control.
They may be given control over the project they are working on, but this does not make them autonomous.
An intrapreneur still needs to answer to their boss and they can’t take any major decisions on their own.
Resources – Entrepreneurship and Intrapreneurship
Entrepreneur makes use of their resources such as labor, machine, money, and so on.
But an intrapreneur’s project is fully funded by the organization they work for.
Therefore, the resources they need are provided by the organization.
This also means that an entrepreneur has the responsibility of funding their business.
Entrepreneurs have several funding strategies available to them such as bootstrapping, venture capital, crowdfunding, and getting funds from investors and silent partners.
But regardless of the strategy they adopt, one thing remains true, they are the ones raising the capital themselves.
An intrapreneur on the other hand doesn’t need to bother themselves with how to raise money for their ideas.
The company they work for typically provides the funds for the project the same way they provide every other resource needed to carry out the project.
Risks – Entrepreneurship and Intrapreneurship
One key element of entrepreneurship is responsibility.
And this responsibility covers both the risks and benefits of running a business.
Therefore, an entrepreneur typically has the responsibility of bearing the uncertainties and risks attached to running their business.
This is unlike an intrapreneur that does not have to carry the risks of their project.
The company they work for bears the risks rather than them.
Yes, the entrepreneurs have to bear the risks attached to running their business.
But this is a good thing in a way because it also means they get to enjoy the chief share of the profits.
An intrapreneur on the flip side does not need to bear any risk.
But if their project turns out successful, they won’t enjoy as many benefits as an entrepreneur would.
An intrapreneur will typically get a salary rise and/or a promotion.
But the success of their project or idea will mainly go to the organization they work for.
Objectives and Motives – Entrepreneurship and Intrapreneurship
An entrepreneur’s objective is mainly to bring a new product or service to the market.
Whereas, an intrapreneur’s main objective is to enhance the strength and sustainability of the organization they work for.
Both sets of individuals also have varying motives.
An entrepreneur’s main motives are making profits, independence, and adding value to society.
Every entrepreneur’s reason for going into entrepreneurship is typically different from that of other entrepreneurs, but the above motives are often common among them.
But intrapreneurs are not concerned with making a profit or serving society.
Rather, their motive is to improve the profits and revenue of the organization they are working for.
Other Important Things to Know About Intrapreneurship – Entrepreneurship and Intrapreneurship
Now that the differences and similarities between both concepts have been discussed, let’s take a closer look at intrapreneurship.
The reason for this is that intrapreneurship is less widely-known than entrepreneurship.
So, you most likely would like to learn more about intrapreneurship.
Therefore, this section will be discussing some other important things you should know about intrapreneurship.
Importance of Intrapreneurship to a Business – Entrepreneurship and Intrapreneurship
As an entrepreneur running a business, you should know the importance of intrapreneurship to a business.
When you know this, you most likely would see the need to employ intrapreneurs in your organization.
Intrapreneurs can help your business in so many ways including the following.
Can Help Your Business Get into New Markets
Intrapreneurs can come up with ideas that can help your business penetrate a new market that you otherwise would not have thought of.
Maximum Utilization of Human Resources
When intrapreneurship is encouraged in a workplace, employees will think beyond their current roles and positions.
This will cause them to perform beyond their responsibilities and duties within the organization.
Intrapreneurship can help strengthen the bond between you and your employees.
This is because you would be empowering them.
By giving your employees authority and responsibility, you also get to increase their loyalty to your business.
A necessary element for development is idea generation.
And this is what intrapreneurs offer to an organization.
When you take on intrapreneurs in your business, you promote idea generation which in turn fosters innovative growth.
Benefits of Intrapreneurship to a Business – Entrepreneurship and Intrapreneurship
The following benefits of intrapreneurship to a business will give you more reasons to consider embracing intrapreneurship in your company.
Helps You Identify the Potential of Your Employees – Entrepreneurship and Intrapreneurship
In a case where employees are not allowed to share their ideas, their full potential will be hidden.
But when you encourage the spirit of entrepreneurship within your workforce, you get to discover the capabilities of your employees.
Intrapreneurs are natural leaders.
It is one of the traits that set them apart from other people.
But your employee’s leadership skills can be stifled if you stifle their intrapreneurial spirit.
Likewise, when you encourage this spirit in them, their leadership skills will improve.
And these employees can then serve as models to other staff members.
Increases Employee Engagement – Entrepreneurship and Intrapreneurship
Intrapreneurship is a practical and effective way to ensure your employees stay engaged with their work.
This is because they would always be working on themselves to become better intrapreneurs so they can add value to the company.
Boost Growth – Entrepreneurship and Intrapreneurship
A company that comes up with great innovative ideas will typically progress faster than companies that do not.
When you have intrapreneurs that share great ideas within your company, the company’s growth and progress will significantly increase.
Characteristics of Intrapreneurship
If you decide to encourage intrapreneurship in your business, then you should ensure it possesses the following features.
Employees with intrapreneurial spirits are usually focused on coming up with creative and innovative solutions.
Instead of taking the normal route, they would think of new and better ways to achieve a goal.
And this is often done for both their progress and that of the company they work for.
The company is typically responsible for the risks involved with carrying out the project an intrapreneur comes up with.
Because of this, the company often takes its time to analyze the idea.
If they do not think it is worth investing in, they won’t put it onboard.
And if it is worth investing in, they would.
This way, they would only take well-calculated risks.
Both the company and the intrapreneur stand to enjoy benefits if the project ends up successful.
A basic benefit the employee would enjoy is self-actualization and empowerment.
While the company on the other hand would enjoy remarkable growth.
Agreement To Share Profit – Entrepreneurship and Intrapreneurship
A lot of companies that support intrapreneurship often agree to share profit with the intrapreneur.
In cases like this, the employee and the company will have to sign an agreement.
The Disadvantage of Not Embracing Intrapreneurship –
Not encouraging intrapreneurship in your company may not prevent its growth or sustainability.
However, it can reduce the rate at which your company progresses.
With intrapreneurship, your business can grow twice as fast as it should.
Likewise, not supporting this concept can make you miss out on some great opportunities that may have helped to move your company forward.
A typical illustration of this is the case of Kodak and Steven Sasson.
In 1975, Steven Sasson made a digital camera.
This camera was the first of its kind and would have made Kodak the world’s leading digital camera manufacturer since they would have been the innovator of this device.
But the company rejected the project.
The various departments Sasson showed the product to rejected it.
Their reason was that the product could spoil Kodak’s monopoly.
So, when you fail to take intrapreneurs seriously in your company, you may be doing your business more harm than good.
Conclusion on Entrepreneurship and Intrapreneurship
Both entrepreneurship and intrapreneurship encourage innovation among other great qualities.
But while an entrepreneur starts their own business and works for themselves, an intrapreneur works for an organization.
As a business owner, your business can enjoy a lot of benefits by hiring intrapreneurs.
Intrapreneurs can significantly improve the growth of your company by coming up with great innovative ideas.