The business environment today is faced with increased opportunities that have elements of potential for rewards, high levels of risk and the necessity of innovations. Corporate entrepreneurship involves encouraging entrepreneurship in the organization, especially for employees. The need to adapt to changing times though necessary is faced with multiple obstacles as well as benefits to the organization. The need for corporate entrepreneurship is driven by the desire for increased productivity and efficiency, increased competition and emphasis on innovation, the trend of losing employees to entrepreneurship that is independent, and the decline in the efficiency of corporate management methods.
Intrapreneurship is faced with great obstacles that normally point to the level of effectiveness of management especially in the era of new innovations. Koratko asserts that obstacles to the process are mainly due to traditional practices of management mainly: the management of resources for investment returns which lowers the rate of market penetration and the control aspect which ignores plans thus ignorantly acting on assumptions rather than on facts while planning for long-term basis which considers goals that are non-viable and costly.
Intrapreneurship is thus hindered by the fact that management aims at keeping the risk levels low. This fear of losing makes the organization miss the opportunities that could help in expansion, increasing brand strength and influence globally. The fact that management applies standards that aim at avoiding mistakes poses an obstacle to intrapreneurship. This is because employees are afraid of suggesting new ideas and as a result, they are not able to learn new skills and ways of doing things. The practice of uniform compensation while ensuring compatibility of employees with the aim of looking for employees that fit in the status quo lowers motivation and efficiency even as the company loses innovators who venture out for more flexible places of work.
The management tends to protect the name of the organization because of the obligation they have to the shareholders while judging new ideas on the basis of past experiences. This poses an obstacle to intrapreneurship as decisions on markets and competition are wrongly made. In addition, management based on functions tends to discourage new ventures. Koratko asserts that despite the obstacles facing intrapreneurship, benefits can be achieved by adopting methods such as focusing on critical issues, offering compensation based on contributions to the organization, rewarding intrapreneurial efforts, basing decisions on research and facts as well as making rules that address specific situations.
He states that benefits can be reaped from encouraging multiple projects and interactive learning that cuts across the functions of management. Zahra et al. argue that intrapreneurship is likely to help in the formation of knowledge as a base for the organizational structure and functions. They further point out that this helps in enhancing competence in market assessment and in improving the understanding of products, services and processes which raises the levels of profit.
Zahra et al. also point out the benefits that come from incorporating components such as the clear direction in terms of the strategy, goals, market and positioning of an organization, giving of space in terms of freedom and flexibility to employees, the establishment of support systems especially training and development, information systems, programs for sharing knowledge and balance between work and life as well as the creation of boundaries of operation.