3.9.2 Assessing innovation

Question 1

What is intrapreneurship?

Answer 1

Where large businesses enable employees and mangers to demonstrate entrepreneurial behaviour in their work to the benefit of their employer

Question 2

Entrepreneurship vs intrapreneur ship

Answer 2

Entrepreneurship:

• Entrepreneurial activity by entrepreneur
• Rewards go to person
• Risk taken by person

Intrapreneur ship:

• Entrepreneurial activity by employees and managers
• Rewards mostly go to company
• Risk taken by company

Question 3

Ways to encourage intrapreneurship?

Answer 3

• Structured time away from work to allow employees & managers to develop business ideas
• Build cross-functional teams to lead innovation projects
• Secondment of staff to smaller businesses or startups
• Staff competitions and innovation days (e.g. hackathons)

Question 4

Reasons why large businesses are not entrepreneurial

Answer 4

• Complacency / arrogance
• Bureaucracy (stifling initiative)
• Reward systems do not provide an incentive to innovate
• Short-termism (discouraging long-term thinking or risk-taking)

Question 5

Two examples of intrapreneurship?

Answer 5

Gmail (Google)

• Employees allowed time for personal projects
• Some of Google’s best projects come out of their 20 percent time policy. e.g Gmail, launched on 1 April 2004

PlayStation (Sony)

• Ken Kutaragi, a relatively junior Sony Employee, spent hours tinkering with his daughters Nintendo to make it more powerful and user friendly
• What came from his work turned into one of the world’s most recognisable brands - the Sony PlayStation

Question 6

Benefits of intrapreneurship?

Answer 6

• Can lead to improved financial performance, particularly where intrapreneurship drives greater innovation
• A firm that encourages innovation, or ways to improve operations and products and create new products, the owners and employees enjoy economic stability. This company adapts to changes in the market to stay competitive and therefore has a better chance for survival
• Can allow business the opportunity to innovate its production processes to lower its production costs to increase productivity and become more efficient

Question 7

What is innovation?

Answer 7

Occurs when a new idea is brought to fruition and turned into a good or service that can be used and/or sold

Question 8

Why is innovation important?

Answer 8

• For businesses that want to remain competitive - have to innovate to develop what they offer and how they provide it. If they don’t, their competitors will
• External environment are constantly changing; businesses must anticipate or respond to this, meaning the needs and wants of customers and how businesses compete with each other are constantly evolving and businesses must ensure they continue to be competitive

Question 9

Pressures for innovation (external)

Answer 9

• Political change, new geographical markets
• Economic change, pressure for lower cost solution
• Social change, pressure on business to be environmentally-friendly