Chapter 8 Managing Social Intrapreneurship

Opening Discussion Read the case of M-Pesa and answer the following questions:  Two social intrapreneurs at Vodafone were key to the successful launch of M-Pesa: Nick Hughes and Susie Lonie. What distinctive roles did they play in the recognition and exploitation of the business opportunity?  In your view, what other factors contributed to the success of M-Pesa?  How could you consider this a social (and) intrepreneurship?

Chapter Outline Nature of innovation in established organizations A two-phase model of the social intrapreneurial process The role of frontline managers The role of middle managers The role of top managers

Nature of Innovation in Established Organizations Fundamental challenges in managing social intrapreneurship:  How do you manage the conflict between the new and the old?  How do you achieve an appropriate balance between exploration and exploitation? Exploratory opportunity vs. exploitative opportunity

A Two-Phase Model of the Social Intrapreneurial Process

Phase One: The Definition Process The definition process refers to the process through which social intrapreneurial opportunities are discovered by participants of the organization. Communication is central to the development of a pool of ideas and initiatives in the process. Project championing activities help break through the vicious circles in the definition process. Managers have limited time and attentional capacities.

Phase One: The Definition Process Selective attention to entrepreneurial opportunities is shaped by several attention regulators. These jointly influence the allocation of managerial attention among entrepreneurial opportunities, especially exploratory vs. exploitative ones. Strategy types Project champions Structures Slack resources

Phase Two: The Impetus Process Having survived the definition phase, an initiative needs additional impetus before it can receive the necessary resources for further exploitation. “Policy windows” play an important role in top managers’ decision to screen these innovative initiatives and select some for further exploitation. Policy windows may be predictable or unpredictable.

Phase Two: The Impetus Process Predictable policy windows:  Are events such as weekly staff meetings, quarterly strategy meetings, board meetings and retreats, and so on.  Are predictable in that they entail recurrent procedural events.  Create “business as usual” conditions. Funding opportunities – a major type of predictable policy windows in the nonprofit sector context – influence the impetus process in several ways:  Funding opportunities come with financial resources.  Recurring funding opportunities help generate rules and routines.  They may lead to a “competency trap” or “success trap.”

Phase Two: The Impetus Process Unpredictable policy windows:  Result from unexpected, nonroutine events, such as technological shocks and environmental jolts.  Generate a strong sense of urgency and threat.  Evoke an organizational response. Two types of threat situations and their implications:  Resource-related threats – A potential loss of tangible resources, such as a competitor’s launching of a new product  Control-related threats – A potential loss of control, such as a regulatory body issuing a new regulation harmful to the organization

Initiators of Innovations in Organizations Middle managers and frontline staff are the driving force..

The Role of Frontline Managers in the Social Intrapreneurial Process Frontline managers are deeply involved in the process of defining new business opportunities. The recognition of exploratory opportunities requires the presence of project champions. Frontline managers often function as project champions for exploratory opportunities. Examples.

The Role of Middle Managers in the Social Intrapreneurial Process Middle managers are particularly important in the impetus process. Middle managers play dual roles:  They evaluate and sponsor strategic initiatives championed by frontline managers.  They “sell” these initiatives to top management through strategic building and organizational championing activities.

The Role of Top Managers in the Social Intrapreneurial Process The crucial role of top managers is reflected in four aspects:  Transformational leadership  Management control systems  Recruiting strategies  Organizational culture

Discussion What different roles do top, middle, and frontline managers play in the social entrepreneurial process? How do their roles vary across sectors and/or types of organizations?