Individual intentions towards entrepreneurship vs. intrapreneurship

Abstract

Principal Topic While a significant amount of research has investigated the factors that motivate individuals to start an entrepreneurial new venture, there is little research on the factors that motivate individuals to act entrepreneurially as an employee within an existing business (i.e. as intrapreneurs). We question whether the same underlying factors should be expected for intrapreneurial intentions as for entrepreneurial intentions. Prior research has demonstrated that the motivation to behave entrepreneurially can be explained by the utility-maximizing theory of entrepreneurial behaviour where an individual forms the intention to become self-employed (or otherwise behave entrepreneurially) because that course of action promises the greatest psychic utility (Eisenhauer, 1995; Douglas & Shepherd, 2000). Underlying this motivation is the strength of the individual's abilities (human capital) and their attitudes to elements provided by entrepreneurship, which include autonomy, risk, work effort, income, and net perquisites. In general, individuals desiring more income, more independence, and more net perquisites are more likely to want to engage in entrepreneurial behaviour. Likewise, an individual with a higher tolerance for risk and less aversion to work effort should be expected to be more likely to want to engage in entrepreneurial behaviour (Douglas & Shepherd, 2000). Empirical evidence has shown that the above mentioned attitudes impact to varying extents when individuals form the intention to be self-employed. Substantial research indicates that entrepreneurial individuals are generally more risk tolerant and desire more independence than less entrepreneurial individuals (e.g. Caird, 1991; Begley, 1995; Sexton and Bowman, 1984). Douglas and Shepherd (2002) found that attitudes to independence, risk and income are related to the individual's intention to be self-employed. Similarly, Fitzsimmons and Douglas (2005) found evidence that attitudes to ownership, independence and income were related to the individual's intention to engage in entrepreneurial behaviour. We question whether these same attitudinal preferences apply to the intention to act intrapreneurially within a business organisation. Methodology/Key Propositions The sample consists of 414 students in MBA programs in Australia, China, India and Thailand (n = 46, 39, 204 and 125 students respectively). These individuals may be considered potential entrepreneurs (DeTienne and Shepherd, 2005) and/or potential intrapreneurs, since they were approaching a career decision point at which they might either become entrepreneurs or enter into employment (where they might behave intrapreneurially or not). We measured entrepreneurial/intrapreneurial intentions of the students in the sample using a 7-point Likert scale ranging from very unlikely ('1') to very likely ('7') for a set of items measuring intentions to engage in a range of entrepreneurial behaviour relating to both individual entrepreneurship and corporate entrepreneurship. To obtain measures of the utilities that individuals derive from various aspects of entrepreneurship we used conjoint analysis to measure the individual's attitudes towards income, risk, work effort, independence and firm ownership. Regression analysis was subsequently used to investigate the relationship between the individuals' attitudes to the various rewards from entrepreneurship and their entrepreneurial or intrapreneurial intentions. Results and Implications We find evidence of significant differences between the relationships between entrepreneurial attitudes and entrepreneurial intentions in self-employment and corporate-employment contexts. In general we found that individuals preferring more income, more independence and more ownership had higher individual entrepreneurial intentions. However, in contrast to Douglas and Shepherd (2002), we find no evidence that more risk tolerant individuals had higher individual entrepreneurial intentions, consistent with Brockhaus (1980) and a host of other studies since (e.g. Palich &Bagby 1997, Busenitz & Barney 1997, Busenitz, 1999). In contrast, when considering corporate entrepreneurial intentions we find attitudes to independence, ownership and risk to be significant, with individuals requiring more independence, less ownership and those that are more risk averse having higher intrepreneurial intentions. The results suggest that while risk aversion is not an indicator of entrepreneurial intention it may indicate intrapreneurial intention, where the risk averse may behave entrepreneurially under the protective roof of the employer. Similarly, attitude to ownership appears to differentiate amongst those who want to behave entrepreneurially into two camps: those who want to become individual entrepreneurs and those who want to become intrapreneurs. In addition, we find significant differences in individual human capital characteristics between individuals considering individual entrepreneurship versus entrepreneurial activity within an existing firm. Self-efficacy and preference for independence were significant indicators of intentionality for both types, but both of these independent variables were substantially stronger indicators of individual entrepreneurial intentions than for intrapreneurial intentions. Previous self-employment was a significant indicator of entrepreneurial intentions but not for intrapreneurial intentions. Finally, education and total work experience were both negatively related to individual entrepreneurial intentions but insignificantly related to intrapreneurial intentions, suggesting that younger and less educated individuals are more likely to prefer individual entrepreneurship.

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