The Entrepreneurial Rise in Southeast Asia

The Quadruple Helix Influence on Technological Innovation

Stavros Sindakis, C. Walter

• Publisher: Palgrave Macmillan
• Year: 2015
• Print ISBN: 9781349478415, 9781137378675
• eBook ISBN: 9781137373809
• Topic: Business
• Subtopic: International Business
• Index: Business

The Entrepreneurial Rise in Southeast Asia examines the start-up scene environments in Singapore, Malaysia, Vietnam, Thailand, and Indonesia. The contributors to this volume explore government strategies to support start-up communities, local challenges, and unique strengths of each country. They answer key questions framing policy and strategic decision-making at the firm, industry, national, and regional levels, such as: How does technological advance occur, and what are the process and institutions involved? Which cultural characteristics serve to promote or impede innovation? And, in what ways is wealth distributed or concentrated?

SECTION III

HUMAN CAPITAL AND ORGANIZATIONAL ASPECTS OF INNOVATION

CHAPTER 6

ENTREPRENEURSHIP AND THE HUMAN CAPITAL OF ORGANIZATIONAL INNOVATION: THE INTRAPRENEUR

Sharn Orchard

6.1 AN “INTRAPRENEUR”

Whilst Vora et al. (2012) suggest that studies of entrepreneurship have been prolific since their origins in the 1930s, it is not until relatively recently in academic and business literature that we find the expression intrapreneur documented. Two names are commonly linked to its first usage: Gifford Pinchot III and Norman Macrae. The term was credited to Pinchot by Macrae in 1982. Bouchard and Basso (2011), Franco and Haase (2009), and Kneale (2011), among other authors also attribute Pinchot as the primary source of intrapreneurship to describe entrepreneurship inside the corporation, and that intrapreneurs will act as champions for new ideas progressing from inception to actuality. The infamous quote found in most references to Pinchot’s writings is that “intrapreneurs are dreamers who do” Cottam (1989: 522). Pinchot (1985) explains, “The intrapreneur may be the creator or inventor but it is always the dreamer who figures out how to turn and idea into a profitable reality” (p ix). Other widely used terms are internal entrepreneur, administrative entrepreneur (Gundogdu 2012: 298), intra-corporate entrepreneur (Antoncic and Hisrich 2004: 520), and corporate entrepreneur, the latter being attributed to the work of Drucker (1994). Kenney (2010) introduces an advanced term, globalpreneurship, to define the process of intrapreneurship in large multinational companies, introducing a further employee profile of globalpreneurs, capturing the specific challenges for intrapreneurship in corporate environments where stakeholder and stockholder requirements put considerable external pressures on operational performance metrics. Additionally, Chang (1998) proposes exopreneur to capture intrapreneurship in studies where innovation is delivered by external entrepreneurial resources known as exopreneurs.

Throughout the body of literature it becomes evident that intrapreneur is not the only description that is used to reference individuals who display innovative abilities that can be harnessed to enhance both individual and corporate gain and “make some material difference” (Thompson 2004: 245–246). Whatever title is used, the role and its objectives are fundamentally the same, but the expectations will generally be above those recognized in Project Champions and Project Managers (Prasad 1993). A pertinent distinction could be that entrepreneurs innovate for themselves, while intrapreneurs innovate on behalf of an organization in the capacity of employee (Carrier 1997). Over three decades ago, Kirton (1980) was setting the scene for intrapreneurship by categorizing adaptors as individuals who do things better, and innovators as individuals who do things differently.

6.2 DISTINGUISHING THE INTRAPRENEUR FROM THE ENTREPRENEUR

The fundamental distinctions between an entrepreneur and an intrapreneur necessitate further definition by reviewing the types and characteristics of each. The literature often generalizes the term entrepreneur as a business founder, but many have become what is considered entrepreneurial through working their way through the tiers of a business they now run or own. Risker (1998) and Zhao (2005: 28–29) define two distinguishing factors from the extant literature, the former asserting those that identify entrepreneurship in narrow terms, the latter proposing “a managing founder of an organization where personal capital is at risk,” and those that identify entrepreneurship in broader terms: “a cultural or sociological definition of the entrepreneur as a person who creates value of any kind.” Both authors, along with Zimmerman (2011), similarly caution against viewing entrepreneurship as trait driven, calling upon a 1990 publication from Gartner as proposing that too much focus has been expended on this concept and too little on psychological aspects. Jansen and Wees (1994) concur with this view through evaluating the writings of Drucker on “innovations and entrepreneurship.”

There are also “social entrepreneurs,” who exhibit the same traits and desire for achievement as a business entrepreneur but operate in a community or voluntary setting (Thompson 2002). Pinchot (1985: 126) advocates that entrepreneurs create enterprises, while intrapreneurs create “intraprises.” Therefore, such entrepreneurs are highly likely to have been intrapreneurs in the past, creating an overlap between these roles. Koh (1996: 13) offers five defining schools of thought: the “great person” school, the “classic” school, the “management” school, the “leadership” school, and the “intrapreneur” school, the latter offering a basic description of “skillful managers within complex organizations.” Given that this work was produced almost two decades ago, it is clearly dated in that it does not acknowledge any entrepreneurial traits as indicative of those of an intrapreneur, simply that the intrapreneur is a “skillful manager.” This typifies how, within the literature, the interpretation of the characteristics of the intrapreneur has moved from a basic to a more complex dimension and in later years has become more aligned to that of the entrepreneur. Sayeed and Gazdar (2003: 78) add that in terms of personal characteristics “what is critically relevant for entrepreneurship is also required for intrapreneurship.” The exceptions being that due to the nature of their respective roles in a business, the entrepreneur is most commonly a generalist while the intrapreneur is a specialist, and whereas the entrepreneur can choose how and if to collaborate and communicate, for the intrapreneur it is vital that he or she does so (Szerb 2003).

Jennings et al. (1994: 3) introduce the term elite independent intrapreneurs, which adds another dimension to this chapter in respect of how each type of entrepreneur interacts with potential intrapreneurs within their business, specifically given that within much of the literature the background of the entrepreneur being studied is often not considered material and is, therefore, not divulged. This is a great weakness in terms of the value of assessing the entrepreneur’s disposition to intrapreneurship and innovation as the reader is unaware of the factors that have driven their past successes or failures. For example, were they taking personal or corporate financial risks? How was their innovative outlook rewarded? The answers may be very different depending on whether the entrepreneur was a founder or an intrapreneurial employee. Additionally, there are fundamental differences in whether elite independent intrapreneurs became business leaders in an environment that was family owned or in a company in which there was no prior family involvement or occupation. This is significant in that various aspects of an individual’s upbringing and life can be considered relevant to which of the above categories they may adopt in their career choices and their chosen work culture, including whether they choose to be a leader, or a follower, as defined by Barringer et al. (2005), Gardner et al. (2005), and Vanderslice (1988). Influencing factors range from levels of education, their personalities being more or less extrovert, their approach to work and work ethics, and, critically, their ambitions for the future.

McFadzean et al. (2005: 364) propose, “Understanding entrepreneurial attitudes is a critical factor in comprehending the link between the entrepreneur and the innovation process.” While many authors turn to personal attributes as defining entrepreneurial inclination, for example, Barringer et al. (2005), Christensen (2005), Holmes et al. (2007), and Pech and Cameron (2006). Thompson (2004: 75) questioned this in terms of whether it is in fact “information about opportunities” that is a determining factor. Throughout the literature, it is difficult to find support for this view as it is generally accepted that many individuals have access to business opportunities, which they reject because their inherent characteristics are alien to business or personal risk. Some individuals are considered to be naturally inclined entrepreneurs having been born into a family with owned business interests. This factor does not exist in the known definitions of an intrapreneur but is pertinent in the context of a family multi-generation-led business environment. Sandberg et al. (2013) acknowledge a further confusion in the use of the word innovator, which can describe either the entrepreneur or intrapreneur within the body of literature. They propose that the entrepreneur is the business leader, who has control over internal resources, both financial and labor, and seeks out business opportunities to advance the firm’s current worth. The innovator is the individual who has the capacity to create or experiment with new ideas.

The early literature, Pinchot (1985), for example, consistently refers to intrapreneurs and intrapreneurship in the sole domain of large organizations, suggesting that their positioning is only relevant in sizable corporations. More recent literature identifies and acknowledges that intrapreneurs exist in small and medium-size companies and that these individuals demonstrate both personal characteristics and abilities that could contribute significantly to organizational innovation. Indicatively, “intrapreneurs are people who dream beyond their mundane domain of something unusual” (Teltumbde 2006: 129). In support of this latter body of published work, it is debatable that the word intrapreneur was created to describe an individual who did not exist when an organization was in its infancy. “Small and medium-sized firms seem to provide a more fertile environment than might at first be thought for the development of rich and varied innovations under the supervision of enthusiastic employees” (Carrier 1997: 9). It is the author’s belief that many companies may not have grown and developed to their current size without some intrapreneurial contribution at employee level combined with an entrepreneurial spirit in the founder(s).

Kneale (2003: 5) also takes a broader perspective by proposing that intrapreneurs can be found in service industries, creating innovations that draw customers away from the competition, and keep a business moving forward to embrace new ideas and develop new products. They drive innovation. However, intrapreneurs are also found in charities, voluntary activities and social groups. They work within systems to develop activities, products and ideas. They motivate and move groups forward. Brenner et al. (1988: 1) advance this with their view that “the entrepreneurial spirit, whether it is called intrapreneurship or entrepreneurship, is a phenomenon that has existed since the world began.” Equally, that intrapreneurs exist in all walks of life. Antoncic and Hisrich (2003) proceed with the view that despite similarities between intrapreneurs and entrepreneurs, there is a divergence in terms of risk taking: primarily in that for the entrepreneur it is financially a sole risk, while for the intrapreneur it is a shared risk. From a personal perspective, the risk for the intrapreneur may be the loss of their job (Szerb 2003). Such risk can be mitigated if appropriate controls and regulations are in place to ensure an employee’s activities can be closely monitored, measured, and financially controlled even within the spirit of innovation. Pinchot (1985: 262) illustrates the process of risk versus non-risk for employees, the focus being toward the achievement of promotion. Whether promotion is a desired occupational outcome for intrapreneurs will be discussed later in this chapter as the motivations and rewards that underpin intrapreneurship. The risks for the entrepreneur making a major mistake with an innovative project are likely to be much harder to recover from than those of the intrapreneur and potentially irretrievable. Consider DeLorean, ex-chairman of General Motors, who took a significant personal gamble by developing a futuristic car, named after him, which failed as a business venture almost instantly. Corporate leaders do however, need to be capable of accepting some failures if they genuinely wish to create an environment for originality and inventiveness to be taken seriously. As Goffee and Jones (2007: 8) suggest, “companies that value diversity are not afraid of failure.”

We may conclude that entrepreneurs position themselves with innovative thinking and actions determined by them, potentially founding businesses based on personal acumen. Intrapreneurs may be selected or impose themselves within the working environment but have no ultimate control over it.

6.3 THE ENTREPRENEUR-INTRAPRENEUR RELATIONSHIP

Within categories of the entrepreneur, we find classifications of entrepreneurial approach and strategy. Brown et al. (2010: 4), Conant et al. (1990: 365, 366), Desarbo et al. (2005: 47), and Dyer and Song (1997: 469) propose that there are four strategic positions adopted by business leaders: defending, prospecting, analyzing, and reacting. Dyer and Song (1997: 469) posit, “Prospectors and defenders are the two poles, while analyzers and reactors pursue a mixture of the two polar positions.” The origin of these terminologies dates back to the Personal Appraisal Development Review (PADR) framework proposed by Miles et al. (1978), and the terminologies used and their definitions adapted or modified in subsequent years to measure many factors within the business environment, not limited to organizational capability, organizational efficiency, market forces, competitive strategy, organizational structure, and company performance, and, by Brown et al. (2010), in the context of entrepreneurial and intrapreneurial sense-making. In the words of Brown et al. (2010: 6), the notion of defending, prospecting, analyzing, or reacting “represent[s] a natural reaction to the business entrepreneurs’ thought worlds, his habits and perceived opportunities,” which becomes significant in terms of their propensity to champion or dismiss the dynamic of intrapreneurship.

Pinchot (1985: 22) records “Ten Commandments” for intrapreneurial success, which have been widely cited by countless authors in subsequent years along with addendums from Sauser (1987: 34). Sauser’s research contribution can also be considered to reflect an organizational culture of control and bureaucracy, which, several years earlier, had been denounced by Ross (1987: 22) as defunct: “corporate planners and autocratic bosses are out; intrapreneurship and corporate culture are in.” Ross along with Van Doorn et al. (2013) debate whether an entrepreneurial organization has the ability to consider employees as innovators and whether the corporate culture can adapt to meet the necessary shift in thinking that would involve these employees. The theory adopted is that in its infancy the business strategy of a mission, vision, and values reflect those of the founder(s), and with growth, these disseminate to others within the organization: critically, to a chosen few who mirror the founder(s) aspirations and share a similar managerial approach. At this juncture there comes a divergence in the writers’ opinion as the suggestion emerges that for continued and sustained growth, a business culture representative of a bureaucracy does in fact become necessary, and, with a focus on structure and systems rather than people, innovation and intrapreneurship can become compromised with the company adopting a more risk-adverse operational approach. From this operational perspective, Antoncic and Hisrich (2003: 11) provide a detailed analysis of the differentials between intrapreneurship and traditional management concepts, clearly highlighting the relevance to intrapreneurialism using classifications of diversification strategy, capabilities, organizational learning, and organizational innovation. Jansen and Wees (1994), Li and Zhang (2010: 9), and Shalley (1995) take a mid-ground stance between Pinchot, Sauser, and Ross in terms of a more rounded interpretation of balancing risk versus innovation, with Li and Zhang proposing a theoretical framework to illustrate that “innovativenes...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables
• List of Figures
• Preface
• Introduction
• Section I: Regional Innovative Capacity and New Business Creation
• Section II: Wealth Creation and Entrepreneurial Financing in Southeast Asia
• Section III: Human Capital and Organizational Aspects of Innovation
• Section IV: The Role of Knowledge and Innovation in Regional Development
• Section V: Innovation and Environmental Sustainability in Asia: Today’s Challenges Fuel Future Business Growth
• Epilogue
• Contributors
• Index