Everything you need to know about the difference between entrepreneur and intrapreneur. The term ‘entrepreneur’ needs to be differentiated from the word ‘intrapreneur’.
An intrapreneur perceives and exploits business opportunities within an existing enterprise. He generally serves as the chief executive of a semi-autonomous product division or subsidiary. Big companies encourage their key executives having good ideas to work like entrepreneurs instead of losing them.
For example, several top executives in HCL-HP, a computer company in India, are operating as intrapreneurs.
An entrepreneur is an independent businessman whereas an intrapreneur works under the chief executive promoter. Secondly, an entrepreneur himself raises the required funds whereas an intrapreneur uses the funds raised by his company.
Thirdly, an entrepreneur assumes the risks of his business enterprise but an intrapreneur may not be required to bear full risks of his enterprise.
The main difference between entrepreneur and intrapreneur lies in the need for affiliation or interaction, and the degree of political and social skills required. Intrapreneurs seek higher levels of affiliation and need greater social skills then entrepreneurs.
Difference between Entrepreneur and Intrapreneur
Difference between Entrepreneur and Intrapreneur
Difference # Entrepreneur:
There is misconception about the entrepreneur and entrepreneurship. General thinking is that there is no difference between the two and both are the same. But conceptually, they are different though in practice they are just like the two sides of a same coin.
Entrepreneur is a person who is a visualiser, creator, innovator, decision maker, risk taker and leader. He is actively engaged in seeking change by exploiting opportunities. Moreover, he accepts risk as part of the process of being entrepreneur. Similarly, he is motivated by independence and the opportunity to create financial surplus or profit.
Entrepreneurship is a process of action to be completed by the entrepreneur. It refers to a process by which entrepreneur is required to complete the innovative process by initiating new or latest technology, idea or perception. Entrepreneurship is a risk taking phenomenon as everything is uncertain and due to this uncertainty it involves risk and entrepreneur is supposed to bear the risk available in the organisation process if any.
Enterprise is the tool to achieve the objectives of entrepreneurship. The capacity to assume risk independently and individually with an objective to earning profits and encashing the available opportunity to maximise earnings through enterprise are the guiding principles before the entrepreneurs.
Thus, there are three components to understand the conceptual framework of entrepreneur and entrepreneurship. These components are entrepreneur, entrepreneurship and an enterprise.
Actually, enterprise is a tool to pursue the business objectives and with the help of an enterprise, entrepreneur ensures production and marketing of goods and services in a viable manner. Entrepreneur is the person who initiates the change by expanding and diversifying the operational behaviour of the enterprise. This is possible only with the help of entrepreneurial process.
Difference # Intrapreneur:
Intrapreneurship is concerned with innovation that leads to new corporate divisions or subsidiary venture in established larger firms. Now days, the term intrapreneurship is getting certain degree of popularity in corporate sector.
In practice, corporate entrepreneurship is referred as intrapreneurship. In corporate firm, innovative employees disrupt the company in constructive ways to instigate new products or services. Generally, corporate managers and employees are given freedom to explore new ideas which may be proved a boon in future for the firm.
Actually these individuals are expected to create something new within the context of their assignments without having any responsibility or personal stake is their creations.
“There is no assumption of personal risk, no assumption of profit and no assumption of loss. In fact, entrepreneurship is not taking place at this point. Entrepreneurship starts when these individuals stop being employees and work as entrepreneurs. They are charged with the responsibility of championing their innovations. These individuals are expected to create an entrepreneurial team that could evolve not a new operating division or a formal subsidiary. The corporate entrepreneurs often still have no direct investment and bear no financial risk. Consequently, they seldom reap rewards beyond bonuses and promotion but they do behave as if they are giving birth to new enterprises.”
Thus, intrapreneur is a person who promotes innovation and creativity within a larger enterprise. In certain cases, larger enterprise welcome creative or new ideas and try to motivate their managers and employees to create something new to enlarge the scope of corporate entrepreneurship.
These motivational efforts involve breaking down formal organisational barriers and control mechanism that have begun to stifle creativity and creating environment that allow people with an entrepreneurial bent to be successful inside the enterprise.
Difference between Entrepreneur and Intrapreneur
The term ‘entrepreneur’ needs to be differentiated from the word ‘intrapreneur’. An intrapreneur perceives and exploits business opportunities within an existing enterprise. He generally serves as the chief executive of a semi-autonomous product division or subsidiary. Big companies encourage their key executives having good ideas to work like entrepreneurs instead of losing them. For example, several top executives in HCL-HP, a computer company in India, are operating as intrapreneurs.
An entrepreneur is an independent businessman whereas an intrapreneur works under the chief executive promoter. Secondly, an entrepreneur himself raises the required funds whereas an intrapreneur uses the funds raised by his company. Thirdly, an entrepreneur assumes the risks of his business enterprise but an intrapreneur may not be required to bear full risks of his enterprise.
The main difference between entrepreneur and intrapreneur lies in the need for affiliation or interaction, and the degree of political and social skills required. Intrapreneurs seek higher levels of affiliation and need greater social skills then entrepreneurs.
This is because the intrapreneur has the advantage of the financial, technical and marketing resources of the parent firm. But he/she must deal with internal politics and bureaucracy. The external entrepreneur must raise finance and develop functional expertise. He/she has the advantage of independence and managerial autonomy.
Difference # Entrepreneur:
1. She/he bears high risk
2. She/he is also the owner of the enterprise.
3. Funds have to be organized by him/her.
4. She/he creates new enterprise.
5. She/he does not require clearance of proposals from anyone.
Difference # Intrapreneur:
1. She/he bears less risk
2. She/he belongs to TLM and is not the owner
3. Funds are arranged by Management.
4. She/he operates in an existing enterprise.
5. Management/owners must clear the proposals before an Intrapreneur can implement them.
Difference between Entrepreneur and Intrapreneur
Entrepreneur:
1. Operates outside the organizational set up.
2. Business opportunity is identified and inputs & processes are worked for new market or products.
3. A complete organization is brought into existence.
4. He looks at the broader perspective of organization, market, competition and economy.
5. Entrepreneur initiates a new business to grow into a larger one.
Intrapreneur:
1. Operates within an organizational boundary and set-up.
2. Ideas are transformed into reality working on the internal organizational environment.
3. A change is brought in the existing equilibrium of the organization’s operations
4. He takes a narrow look.
5. On stagnation, the Intrapreneur reenergizes entrepreneurship within organization.
Difference between Entrepreneur and Intrapreneur
Intrapreneurship is the practice of entrepreneurship by employees within an organization. Employees who are competent and talented often find their way to the top in a company. They generally enjoy enough freedom to do things on their own. When they work with zeal and commitment on a project close to their heart, they are sure to deliver excellent results. So, big companies generally allow such people to pursue a dream and achieve success. If support for such efforts is missing, then such people may leave the company and set up their own business.
Instead of facing competition from their own employees, therefore, big companies generally allow innovative employees to work with the framework of a company, enjoying considerable freedom. For all practical purposes, intrapreneurs think and act like entrepreneurs in order to deliver success. They focus on innovation and creativity (without getting involved in problems confronting a start-up like finding resources, acquiring talent, competition from rivals etc.,) and transform an idea into a profitable venture while operating within the organizational environment.
Difference # Entrepreneur:
1. Definition – An individual who converts an idea into a profitable venture
2. Ownership – Owner of the venture
3. Resources – Pools all resources needed to start a venture
4. Risk bearing – Assumes all kinds of risks associated with a business
5. Reward – Rewards are not assured. They are uncertain and many a time, entrepreneurs have to live with losses for a while. If venture proves to be a hit, he enjoys the fruits of success without having to share with anyone.
Difference # Intrapreneur:
1. Definition – A senior employee trying to deliver success to a company by working on a project independently
2. Ownership – Employee of an organization working on a dream project enjoying considerable freedom
3. Resources – Not required to contribute or pool resources
4. Risk bearing – Not required to bear the risks associated with a venture
5. Reward – He is a salaried employee of a business. Additional rewards and benefits depend on how successful the project ultimately turns out to be.
Difference between Entrepreneur and Intrapreneur
An entrepreneur is an independent businessman who bears full risks of his business whereas an intrapreneur is semi-independent and does not fully bear the risk of the business. He develops and operates. Secondly, the entrepreneur raises the necessary capital from various sources and guarantees the return to people who give him/her finance.
On the other hand, an intrapreneur neither raises the capital himself/herself nor guarantees any return to the suppliers of capital. Thirdly, an entrepreneur operates from outside an organization whereas the intrapreneur is an organization man operating from within the organization.
An intrapreneur is anybody who has the dreams to do; who undertakes a responsibility for creating innovation of any kind within an organization. The intrapreneur maybe the creator or inventor but is always the dreamer who figures out how to turn an idea into profitable reality. Similarly, an entrepreneur is someone who fills the role of an intrapreneur outside the organization.
Difference # Entrepreneur:
1. Primary motives – Independence, opportunity to create, and make money.
2. Time orientation – Survival and achieving 5 to 10 year growth of business.
3. Activity – Direct involvement.
4. Risk – Moderate risk taker.
5. Status – Not concerned about status symbol.
6. Failure and mistakes – Deals with mistakes and failures.
7. Decisions – Follows dream with decisions.
8. Who serves – Self and customers.
9. Family history – Entrepreneurial small business, professional, or farm background.
10. Relationship with others – Transactions and deal making as basic relationship.
Difference # Intrapreneur:
1. Primary motives – Independence and ability to advance in the corporate organization, rewards.
2. Time orientation – Between entrepreneurial and traditional managers, depending on urgency to meet self-imposed and corporate timetable.
3. Activity – Direct involvement more than delegation.
4. Risk – Moderate risk taker.
5. Status – Not concerned about traditional status symbols, desires independence.
6. Failure and mistakes – Attempts to hide risky projects from view until ready.
7. Decisions – Able to get others to agree to help achieve dream.
8. Who serves – Self, customers, and sponsors.
9. Family history – Entrepreneurial small business, professional, or farm background.
10. Relationship with others – Transactions within hierarchy.
Difference between Entrepreneur and Intrapreneur
Entrepreneurship is the process of exploiting an opportunity by a unique combination of resources. It is simply the pursuit of opportunity regardless of currently available resources. Therefore, we can say that entrepreneurs are opportunity driven and not resource driven. Entrepreneurs believe that opportunity comes from identifying changes in the environment.
On the other hand, intrapreneurship is the process of practicing the entrepreneurial skills and approaches within an established enterprise. Intrapreneurs are the individuals, who are engaged in a special project or tasks within an enterprise, and are supposed to behave as entrepreneurs.
In other words, an intrapreneur is an intra- organizational revolutionary, who challenge the status quo supported by entrepreneurs and strive to change the system followed within the enterprise. This sometimes creates a certain amount of friction within the enterprise. This friction can be channelized by creating a culture of mutual respect within the enterprise.
The differences between entrepreneurs and intrapreneurs are as follows:
Entrepreneur:
1. Area of Activity – They work inside as well as outside the enterprise
2. Idea – An entrepreneur generates ideas
3. Employment – An entrepreneur employs intrapreneurs and pays them in exchange of their services
4. Sense of Responsibility – An entrepreneur works overtime to run his/her own business
5. Rewards – The rewards of entrepreneurs depend on the success and profit margins of the enterprise
Intrapreneur:
1. Area of Activity – They are bound to perform within the enterprise
2. Idea – An intrapreneur adopts the idea generated by an entrepreneur and makes it better
3. Employment – An intrapreneur are paid for using their creative thinking and implementing the ideas
4. Sense of Responsibility – An intrapreneur works overtime helping to run someone else’s business for the enterprise’s future
5. Rewards – An intrapreneur is a person employed by an organization whose compensation is fixed
Difference between Entrepreneur and Intrapreneur
Entrepreneurs and intrapreneurs are different, though they have similarities in many respects.
The points of difference between them are summarised below:
Difference # Entrepreneur:
1. Dependence – He is independent in every task he undertakes.
2. Finance – He himself raises the funds required for the enterprise.
3. Risk – He bears the entire risk involved in the business.
4. Operations – He operates from out-side.
5. Inspiration – He is not capable of inspiring others in the organization.
Difference # Intrapreneur:
1. Dependence – He is totally dependent on the organisation in which he is working.
2. Finance – Funds are not raised by him, he uses the capital raised by his company.
3. Risk – He does not fully bear the risk involved in the enterprise.
4. Operations – He operates from within the organization itself.
5. Inspiration – He is an inspiration to others as he serves as a champion to others in the organization.
Difference between Entrepreneur and Intrapreneur
The main points of difference between an entrepreneur and intrapreneur may be listed as follows:
1. Definition – An entrepreneur is a person who strives for erecting something new of value, organizes resources, assume risk and own the rewards whereas an Intrapreneur employs in a big organization who commits time and energy to create innovative new products or services by using company recourses – without taking personal investment risks and without owning the rewards.
2. Independence – An entrepreneur is independent or free in his operations and decisions, whereas Intrapreneur is dependent on the owner of a big organization or its system of authority.
3. Capital Investment – An entrepreneur makes personal capital investment in the new venture while an intrapreneur uses the financial and other resources of the big organisation.
4. Risks – An entrepreneur assumes all kinds of risks such as financial, psychological and social involved in creating a new venture, whereas an intrapreneur is a salaried person who innovates new things in an existing big enterprise which may sometimes result in establishment of a new unit.
5. Nature of Venture – Usually, an entrepreneur establishes a new small enterprise, whereas an Intrapreneur is a salaried person who innovates new things in an existing big enterprises, which may sometimes result in the establishment of a new unit in the form a division of a subsidiary company.
6. Rewards – An entrepreneur get the rewards generated from creating new things while an intrapreneur may get some hand, some salary increases or prizes or promotion for creating new products or services, but he does not own increases or prizes or promotion for creating new products or services, but he does not own the rewards generated by such new products or services.
7. Operation – An entrepreneur operates from outside while an Intrapreneur operates from within the big organization and its managerial hierarchy
Difference between Entrepreneur and Intrapreneur
Difference # Entrepreneur:
1. “An Entrepreneur is someone who has the skills, passion and financial backing to create wealth from new business opportunities and is willing to take full responsibility for its success or failure.”
2. The Entrepreneur is typically a visionary who spots an opportunity in the marketplace and has the passion, guile and contact base to set the wheels in motion.
3. Entrepreneur refers to a person who undertakes and operates a new enterprise or venture.
4. An entrepreneur takes substantial risk in being the owner and operator of a business with expectations of financial profit and other rewards that the business may generate.
5. Entrepreneurs take personal financial risk.
6. Entrepreneurs lose houses.
7. Entrepreneurs are the boss.
Difference # Intrapreneur:
1. “An Intrapreneur is someone who manages that business with entrepreneurial flair in line with the expectations of the shareholders.”
2. The Intrapreneur has passion and drive but also has the operational skills of running the “clockwork” of the business to enable a good idea to be turned into commercial reality. He is the “inside entrepreneur”.
3. Intrapreneur – The spirit of entrepreneurship within an existing organization.
4. On the contrary, an intrapreneur is an individual employed by an organization for remuneration, which is based on the financial success of the unit he is responsible for.
5. Intrapreneurs have a different mind-set. They can perform many similar acts to entrepreneurs, but they tend to do so without taking the personal financial risk.
6. Intrapreneurs lose career development points.
7. Intrapreneurs are the employees.
Difference between Entrepreneur and Intrapreneur
The main points of distinction between an entrepreneur and an intrapreneur are summarized below:
Difference # Entrepreneur:
1. An entrepreneur is the owner of the business.
2. An entrepreneur is his own boss and enjoys an independent status as the owner of the business.
3. Every small business does not need an entrepreneur
4. Entrepreneurial ideas are always converted into reality.
5. An entrepreneur operates from outside the organization.
6. Entrepreneurship involves in innovations and creativity.
Difference # Intrapreneur:
1. An intrapreneur works for the business.
2. An intrapreneur is a salaried employee of an entrepreneurial business and is not enjoying independent status.
3. Every small business needs an Intrapreneur.
4. Intrapreneur ideas always create a new idea.
5. An intrapreneur operates from within the organization.
6. An intrapreneur thinks like an entrepreneur and looking out for opportunities, which gives profit to the organization.