Business size and impacts on the economy
Micro business
A micro company, sometimes called a microenterprise, is characterized by its small scale, employing fewe than 10 individuals and generating an annual revenue of less than $250,000 Microbusinesses are a w observed company model due to their minimal initial investment requirements and relatively low ongoing expenses Frequently, a microenterprise is started as a recreational pursuit or supplementary endeavor yields additional earnings for the proprietor or solopreneur (Nelson, 2023)
According to Nelson (2023), The below points outline the characteristics of a microenterprise:
Typically, a small-scale or micro enterprise is managed by one individual Nevertheless, it is worth noting that even within the most minute subdivisions overseen by a partnership enterprise or corporation, mo routine activities are often executed by a single partner or director inside the firm
The duration of the gestation period, which refers to the interval preceding an investor's attainment of return on investment, has been reduced
Micro enterprises often have a limited scope, which allows them to effectively address the needs of the local surroundings and the surrounding area
Micro units can use local resources, allowing for their potential establishment in many locations, contingen upon the availability and accessibility of essential resources such as raw materials and labor
Micro enterprises need a notably reduced allocation of time and financial resources towards labor a compared to larger entities
Micro enterprises are characterized by their decentralized nature and distribution throughout rural area making use of locally available resources Hence, the expansion of micro-businesses in rural area contributes to the advancement of regional development via enhanced diversification
Small-scale enterprises possess a notable capacity for adaptability to change, displaying heighten reactivity and sensitivity to social and economic circumstances
A typical example of a micro-enterprise is a small coffee shop called Ha My Coffee that is run by family members and sells milk tea and coffee, and breakfast foods to mainly students The owner can operate business out of his or her kitchen and can sell products on-site or through online channels This business
3 employees and may not generate a high level of revenue; however, the owner does generate income taking advantage of the resources he has and working in a low-pressure environment energetic, active, a fun.
Small enterprise
A small business refers to an enterprise that is privately owned and controlled, often characterized by smaller workforce and lower revenue compared to other enterprises operating within the same industry a broad sense, a small company might be characterized as an enterprise that employs from 9 to 49 peo Due to the comparatively lower profitability of small firms in relation to their larger counterparts, small enterprises are afforded more access to government assistance resources Local small companies o provide unique goods or services tailored to meet the specific requirements of their community Additionally, they may engage in collaborative partnerships or sponsorships to support community initiatives or events (Indeed, 2023)
According to Byjus (2023), The characteristics of small-scale industries refer to the distinguishing feature and attributes that are often associated with these types of economic entities:
Ownership: The entity in question has a single proprietor This business structure is often referred to as sole proprietorship
Management: The owner has control over all managerial activities
Limited Reach: Their operational scope is constrained The entity in question might potentially be either small-scale retail establishment or a larger-scale industrial enterprise situated inside a certain geograp region
Labor-Intensive: Their reliance on technology is minimal since they heavily rely on manual labor and huma resources
Flexibility: Small companies exhibit a greater degree of openness and adaptability to unforesee developments, in contrast to their larger counterparts
Resources: The individuals make use of resources that are accessible within their immediate vicinity The exhibit enhanced exploitation of natural resources and minimize waste.
Medium enterprises
Medium firms are classified as businesses that operate with revenue, assets, or personnel numbers belo certain threshold Each country has its own interpretation of the concept of a medium-sized firm Th consideration of the industry of operation and specific size needs may be sometimes taken into accouAccording to the Organization for Economic Co-operation and Development (OECD, 2021), medium-sized businesses in Vietnam typically employ a workforce ranging from 50 to 249 individuals
Example for this business is New Phuong Dong Club This club provides dance floors, stages, sound a lighting for dance activities and art performances at establishments qualified to operate dance hall servic according to the law Here, we provide a variety of drinks, most of which are alcoholic drinks, for customers to freely choose and enjoy at prices suitable for the experience that the services here bring Phuong DoClub has a total area of up to 2,000 square meters (SontraTravel, 2023) Known as the largest dance halVietnam The bar has an outstanding, majestic appearance The inside is extremely luxurious and splend like a palace The stage is in the middle of 3 floors, decorated with a modern, extremely attractive lightin system Here, customers can also meet guests who are famous artists on a regular basis.
The importance of micro and SMEs in the local and regional level
Small and medium companies (SMEs) have significant significance within most economies, particularly those in emerging nations Small and medium-sized firms (SMEs) constitute a significant proportion o businesses on a global scale and play a crucial role in fostering employment opportunities and facilitatin the development of the global economy Small and medium-sized enterprises (SMEs) constitute over 90 of the global business landscape and account for over 50% of the total employment opportunities availab globally In developing countries, small and medium-sized firms (SMEs) provide a formal contribution of up to 40% to the national revenue, as measured by the gross domestic product (GDP) The inclusion informal small and medium-sized enterprises (SMEs) results in a notable increase in these figures Bas on projections provided by The World Bank, it is anticipated that the worldwide workforce would need around 600 million employment opportunities by the year 2030 Consequently, several government throughout the globe have identified the promotion and advancement of small and medium-sized firms as paramount objective In developing economies, most formal employment opportunities are generated b small and medium-sized firms (SMEs), accounting for 70% of job creation Nevertheless, the lack o financial resources is a significant impediment to the expansion of small and medium-sized enterprise (SMEs), ranking as the second most often cited challenge encountered by SMEs when attempting establish a foothold in new markets According to The World Bank (2023), there is a group of nations know as emerging and developing countries
Figure 1: Share of SMEs in business firms
New Phuong Dong Club might be used as an illustrative case study, representing a specialized establishm offering entertainment services, to substantiate these assertions New Phuong Dong Club demonstrates commitment to bolstering the local economy and fostering job creation by engaging in the procurement o goods from area vendors Furthermore, this establishment actively fosters local tourism via the expansio of its operations, enhancement of service standards, and strategic brand promotion These efforts aim stimulate tourist interest and attract visitors seeking to immerse themselves in the unique ambiance a sophistication offered by this destination The club is recognized as the biggest in Southeast Asia Ne Phuong Dong Club has the potential to contribute to regional growth and integration by sourcing raw materials from both local and foreign sources inside the area For instance, this enterprise has the capabi to engage in the importation of beverages and ingredients from other nations, alongside the procurement domestic fruits, among other items New Phuong Dong has the potential to facilitate commercial and investment movements throughout the area Given the magnitude of this enterprise, it is essential to ens an adequate workforce is in place to cater to client demands and address the local employment requireme
In the broader context of economic development and regional growth, small and medium firms, such a New Phuong Dong Club, assume a significant role The implementation of these measures has the poten to facilitate social inclusion, mitigate poverty, provide employment opportunities, stimulate consumer demand, and foster innovation Hence, within the context of wider endeavors aimed at fostering sustainab and equitable economic growth, it is imperative for policymakers and relevant stakeholders to persist i endorsing and facilitating the growth of small and medium-sized enterprises (SMEs) This profession.
Recommendations to the chosen firms
One potential strategy to enhance distinct tastes and competence in mixology is to introduce specialty beverages These beverages have the potential to captivate customers and distinguish a coffee establishm from its rivals
Establishing collaborations with local suppliers and using regionally procured products not only guarantees the attainment of high standards but also actively contributes to sustainable practices and fos economic support for the local community
Seasonal Specials: Implementing seasonal ingredients and tastes into the creation of special menu item
As an example, one may consider the consumption of crocodile water during the heat season, the use artichoke tea, or the preparation of an avocado smoothie This has the potential to generate enthusia among consumers and motivate them to frequent the establishment to sample novel and distinctive culina offerings
To cater to the primary demographic of university students, it is advisable for Ha My to diversify its menu offerings beyond drinks and include a wider range of culinary options The demand for breakfast and snac among students is substantial, therefore suggesting the possibility for integration between coffee shops a eateries
Establish a loyalty program: Introduce a loyalty program with the aim of incentivizing and acknowledging frequent patrons Various incentives such as discounts, complimentary items, or exclusive promotions ma be used to foster client loyalty and stimulate their transformation into brand supporters
The provision of online ordering and delivery services in the contemporary era of technology may greatly enhance the client base and convenience of a restaurant Collaborating with well-established food delive platforms or establishing an internal delivery system might provide advantageous outcomes
Gather and use consumer feedback: Proactively solicit feedback from customers via surveys, comment cards, or internet reviews Conduct an analysis of the comments obtained and implement enhancements accordance with consumer preferences and ideas
Diverse music and entertainment: Provides a variety of music genres and entertainment options to satis diverse individual interests and inclinations One potential strategy to create a vibrant and captivatin atmosphere is to include live music performances, DJs, themed events, and guests in the repertoire Ca trends and hot characters such as champions, potential contestants of music competitions: Double 2T, Choat, Rhyder Trend challenges how many beers you can drink in 1 minute, Trend Random dance,
Engage in collaborative efforts with local artists and performers: Establish partnerships with artists performers, and entertainers from the local community to create a platform to showcase their abilities the artistic potential within the club premises This not only supports the local arts community but also facilitates the introduction of new and diverse acts, thereby attracting a wider audience
Establishments can enhance the customer experience by implementing dedicated VIP areas and serv offerings, thereby serving these people more appropriately: regular customers or past customers Invoic are among the top of the business This has the potential to attract consumers with higher spending abil and more interest in experiencing the services here, thereby leading to a significant increase in income f an entertainment-oriented business like this
Organize evenings or events with special themes that match contemporary trends or popular cultural them Halloween, Masquerade, Anime Organizing with a concept like this will Helping the Club gain an additional customer base from those who love and admire these cultures
Improve lighting and visual effects: Allocate resources to purchase superior lighting and visual effects equipment to create an aesthetically appealing and captivating atmosphere This has the potential to enha q p y pp g p g p p the overall atmosphere of the club and enhance the experience for its clientele
Social media advertising entails using a variety of social media channels to spread the word about upcomi events, unique experiences, and special offers To enhance brand visibility and attract new consumers, it recommended to actively engage with followers, disseminate visually appealing information, and promot the creation of user-generated material Regularly create minigames to increase interaction for the busines social platforms
Carefully considered bar offerings and menu selection include a variety of cocktails, high-quality spirits and specialty drink alternatives Consider hiring qualified mixologists to produce specialty cocktails and enhance the overall quality of the drinking experience
Ensuring fire prevention and fighting procedures and legal compliance: With a particularly sensitive environment, many businesses have encountered unfortunate incidents This is an issue that is still burn and should be given attention Although this is a must, it is also a bright spot that can help business compete with competitors Proving to customers that New Phuong Dong Club is a place that ensures fi prevention and security systems, does not trade in prohibited goods, and complies with the law will hel customers feel secure and have absolute trust when experiencing entertainment services here.
The differences between micro-, small-, medium and large business and their impact
Table 1 The differences between micro-, small-, medium and large business and their impact on economy :
Micro business Small business Medium business Large business Concept As per the updated
MSME definitions issued by the finance ministry of India, effective from 01.07.2020, Micro Enterprises are characterized as small-scale businesses tha possess investmen of up to 1 crore and revenues below 5 crores (IIFL, 2023)
Micro businesses include a diverse range of establishments, including small-scale eateries, local grocer shops, and ice cream parlors Typically, small enterprises o this kind start
The revenue threshold for small firms ranges from one to ten crores, while the turnover threshold is capped at 50 crores The size of the staff is rather tiny, and the sales volume is comparatively modest (IIFL, 2023)
Small businesse include a diverse spectrum of enterprises, including successful restaurants, manufacturing factories, and bakeries The mea number of workers for small firms surpasses that o micro-enterprises
On average, medium businesses tend t have a workforce ranging from 50 to
250 employees Medium companies are often classified a firms that have had gradual growth and fall between the micro and small-sized company category (IIFL, 2023)
As a small firm undergoes growth and expansion, i allocates its generate income towards investments in equipment, buildings and personne retention, therefore transitioning into a medium-sized
A large business is defined as a commercial entity that falls under a category characterized by its above-average size, extensive operational capacity, and significant economies of scale The organization employs a substantial numbe of workers and generates a significant amount of income Companies have the potential to focus their efforts on either domestic or global markets operations with little financial resources and maintain a workforce size of fewer than 10 individuals business (Nasrudin, 2021)
Size Typically, the number of workers in such entities is modest, often less than ten individuals
Small businesses often consisting of 10 to 50 workers
The size of the company is generally moderate, ranging from 50 to 250 personnel
In the context of organizational size large refers to entities that generally employ more than 250 individuals
Revenue In general, there is a significant decrease in income and turnover
The revenue is quite modest to moderate
The money generate may be classified a ranging from moderate to high
The generated income is substantial
Market Reach Usually local or regional
Regional or national National or international
The scope of thes businesses is ofte restricted, with a tendency to concentrate on specialized markets or certain goods and services
A broader scope refers to the ability of a business to cater t numerous markets o provide a diverse variety of goods or services
The scope of the organization is broadened, mayb including many business units o divisions
The organization has a broad rang of activities, maybe including worldwide operations or several subsidiary entities
Structure In most cases, th operation of a business is carried ou by the proprietor or a limited group of individuals
A more defined organizational structure may be implemented via the establishment of functional departments or teams
The implementation of a formal organizational structure is characterized by the establishment of distinct hierarchies and departments within an organization
A complicated organizational system with many levels and specialty teams
Restricted availability of financial capital, advanced technologies, and essential resources
The implementation of measures to regulate and contro the availability of financial capital and resources at a moderate level
Enhanced accessibility to financial resources advanced technological tools and essentia resources
Robust access to financial capital, advanced technology, and enough resources.
Decision-making Often made by the owner or a small group of individuals
The decision-making process exhibits a degree of centralization
Decisions rendered by the managemen team or upper-leve executives
The implementation of decentralized decision-making processes, accompanied by p y the appointment of specialist managers Regulatory
Compliance less onerous regulations in comparison to bigge companies moderate standard for regulatory compliance
Growing duties unde regulations extensive reporting and compliance with regulations
Potential difficulties competing with bigger companies confronts competition from both bigger and smaller companies able to successfully compete within its market niche competes with other major companies in the sector
Impact on the economy create local jobs and promote local economic activity create jobs, reduc unemployment, and promote creativity and progress create jobs, contribute to economic growth, and promote competition create jobs, investment, economic growth and have nationa or global influence.
Impacts of different businesses on different levels
6.1 Impacts of different businesses at national level
The national Gross Domestic Product (GDP) is influenced by the contributions of various enterprises On example of an industry that has the potential to make a substantial contribution to the Gross Domest Product (GDP) is the manufacturing sector In order to evaluate this, scholars have used input-output mode (Leontief, 1936) to comprehend the interconnectedness of sectors within the economy (Chenery et a 1953)
Employment: Enterprises provide employment opportunities, and their influence on the labor market is substantial The evaluation of employment effects may be accomplished by using labor market analys techniques (Hamermesh, 1993) and utilizing econometric modeling approaches (Boeri, 2011)
Community engagement is a practice whereby businesses actively participate in local communities b implementing corporate social responsibility (CSR) programs The evaluation of these effects often entai conducting surveys and social impact evaluations (Owen et al., 2018)
The influence of businesses on social diversity may be significant The assessment of diversity and inclusio may include the examination of workforce demographics and the implementation of social audits (Klarsfeld et al., 2010)
Businesses have the potential to contribute to carbon emissions The evaluation of their ecological influen often depends on studies of carbon footprint and life cycle analysis (Rebitzer et al., 2004)
The evaluation of resource consumption may be conducted via the use of methodologies such as mate flow analysis and ecological footprint assessments (Wiedmann et al., 2015)
6.2 Impacts of different businesses at international level
The Economic Impact: a Contribution to Global GDP: The presence of multinational corporations may have a substantial influenc on the overall global gross domestic product (GDP) The World Bank and the multinational Monetary Fund (IMF) consistently provide assessments of worldwide economic data in order to evaluate the econom consequences of multinational enterprises (World Bank, IMF) b Foreign Direct Investment (FDI): Host nations have the potential to attract foreign direct investment from international enterprises UNCTAD, the United Nations Conference on Trade and Development, offers comprehensive statistics and analysis pertaining to foreign direct investment (FDI) flows and their corresponding effects (UNCTAD)
The social ramifications: a Labor Practices: The operations of multinational corporations have the potential to influence labo practices across national boundaries Non-governmental organizations (NGOs) and labor rights grou engage in research and advocacy endeavors to assess the aforementioned implications As an example International Labor Organization (ILO) is responsible for the monitoring and reporting of labor standards (ILO) b Cultural Influence: Global enterprises has the capacity to exert influence and exert an effect on man cultures around the globe Cultural impact evaluations often include sociological research, ethnograph analysis, and cultural studies as integral components (Hofstede, 1980)
The environmental consequences: a The Impact of International firms on worldwide Carbon Emissions: International firms have the potentia to contribute to the overall levels of carbon emissions on a worldwide scale The evaluation of these effec necessitates the use of global climate accords and emissions statistics provided by reputable organizatio such as the Intergovernmental Panel on Climate Change (IPCC) b Global Resource Depletion: The use of worldwide supply chains by enterprises has the potential t contribute to the depletion of global resources Insights into the implications may be derived from the studie on global resource utilization and the United Nations Environment Programme (UNEP) (UNEP, n.d.)
6.3 Present and enhance the above recommendations
To augment the suggestions pertaining to the evaluation of the ramifications of diverse enterprises on global scale, this study aims to provide more precise directives and approaches for the proficient executio of such evaluations
The Economic Impact: a Contribution of multinational firms to Global GDP: - Utilize input-output models and computable general equilibrium models to assess the impact of multinational firms on the global gross domestic product (GDP
- Establish partnerships with renowned international financial organizations such as the World Bank an the International Monetary Fund (IMF) in order to get access to their comprehensive databases an sophisticated economic models, therefore ensuring the acquisition of precise and reliable data (World Ban IMF) b Foreign Direct Investment (FDI): - It is recommended to consult the World Investment Report, which is issued by the United Nations Conference on Trade and Development (UNCTAD), in order to get insights into the prevailing worldwide trends in FDI This report provides valuable information, including sector- specific statistics, pertaining to FDI on a global scale
The suggestion is to establish a collaborative effort with national investment promotion agencies in order t gather comprehensive data on foreign direct investment (FDI) inflows and the specific sectors that attra international enterprises This proposal is in line with the recommendation put out by the United Nation Conference on Trade and Development (UNCTAD)
Social Impact: a Labor Practices: - Collaborate with non-governmental organizations (NGOs) and labo rights groups to carry out comprehensive evaluations of labor practices inside the supply chains o multinational corporations
- Employ labor rights indexes and databases, such as the Global Rights Index provided by the Internation Trade Union Confederation (ITUC), to evaluate labor practices (ITUC) b Cultural Influence: - Collaborate with experts in the fields of cultural anthropology and sociology to do comprehensive research on the ways in which transnational corporations exert influence on local cultures
One may use cross-cultural management frameworks, such as Hofstede's cultural dimensions, to evalu the cultural implications of multinational enterprises across various geographical areas (Hofstede, 1980).
Environmental Impact: a Global Carbon Emissions: - Utilize emissions data from reputable internationa climate groups such as the IPCC to evaluate the carbon footprint of multinational corporations (IPCC)
One potential strategy is to establish partnerships with reputable groups like the Carbon Disclosure Proje (CDP) in order to get access to comprehensive carbon emissions data and climate-related disclosu provided by corporations (CDP) b Global Resource Depletion: - Utilize a comprehensive global material flow analysis (MFA) methodology to evaluate the worldwide resource consumption and depletion linked to multinational enterprises (Krausmann et al., 2009)
Collaborate with international environmental organizations, such as the United Nations EnvironmenProgramme (UNEP), in order to get access to comprehensive data pertaining to worldwide resource use a the deterioration of the environment (UNEP)
Stakeholder Engagement: The process of actively involving a wide range of stakeholders, such a government agencies, enterprises, civil society groups, and academic specialists, in order to foster comprehensive understanding of the implications of international commerce
Enhancing intrapreneurship in both public and corporate organizations
Public and corporate enterprise
Public businesses are organizations that are owned and operated by the government or public sector Th organizations were established with the objective of fulfilling societal demands for fundamental items and services, as well as promoting the well-being of the whole population Public businesses include sever areas that have been nationalized, such as healthcare, education, utilities, and transportation Additiona public banks and postal services may also be classified as instances of public companies (Sarokin, 2020
According to Sarokin (2020), Public organizations are commonly acknowledged to possess severa fundamental attributes:
The concept of limited liability ensures that the officers and shareholders of a corporation are not subject personal liability for the financial obligations incurred by the firm a corporation incurs a debt to a If financial institution, such as a bank, the bank has the legal recourse to initiate legal proceedings against t business in order to get repayment However, it is important to note that the bank does not possess t authority to confiscate the personal assets of the company president, such as residential property or perso bank accounts
Transferable shares are a defining characteristic of public firms since they are made available for trading the broader public Shares may be easily purchased and sold without any limitations on ownership eligibility
In contrast, private enterprises can allocate business shares exclusively to a certain cohort, such as th inside the family
Perpetual Existence: Historically, throughout the 19th century and preceding eras, companies were ofte granted charters with finite durations, generally ranging from 10 to 20 years the charter is not renewedIf the corporation would be rendered defunct In contemporary times, it is worth noting that businesses hav the potential to endure indefinitely, at least in theory
Central administration: Even though public firms are owned by their shareholders, most of these owne have little or negligible participation in the overall administration of the organization In contrast, a g g p p g , collective of proficient executives, including a president, chairman or chairwoman, treasurer, and othe relevant roles, have responsibility for supervising the operations of the organization and determining pivota managerial choices
For example: The establishment of Cao Son Coal Joint Stock Company - TKV took place on August 5
2020, as a result of the merger between Cao Son Coal Joint Stock Company - Vinacomin and Tay Nam D Mai Coal Joint Stock Company - Vinacomin This merger was carried out in accordance with the government's policy, specifically Decision No 2006/QD-TTg dated December 12, 2017, which was issued by the Prime Minister to approve the Restructuring Project of Vietnam Coal and Mineral Industry Group for the period 2017 - 2020 The Coal Joint Stock Company Cao Son, a subsidiary of TKV Group, is primarily engaged in opencast coal mining operations, boasting the highest production output within the TKV Group
Following the amalgamation of the Company's workforce, the total number of workers stands at aroun 3,700, distributed across 14 distinct divisions and operating in 25 construction sites and workshops Th firm is now overseeing state-of-the-art equipment inside the nation as well as in the Southeast Asian regio The Company has a fleet of 245 vehicles designed for the transportation of coal and dirt These vehicle have a loading capacity ranging from 25 tons to 98 tons or more In relation to the transportation capaci of coal and earth, several kinds of excavator equipment are used, including electric and hydraulic crawle and wheeled excavators, totaling 64 machines Additionally, there are 36 machines dedicated to gradin equipment and 26 machines specifically designed for drilling purposes All of the Company's primary equipment is in compliance with the production needs of the Company at the present time (Thancaoso 2023)
Corporate enterprises are typically established by two or more founders who collectively decide to form a agreement These enterprises operate by pooling together the assets and/or entrepreneurial or labor activ of the founders or participants, who jointly manage the enterprise They operate under corporate law, whic includes the establishment of governing bodies by the founders Additionally, the founders or participant are involved in the distribution of profits and assume shared risks (Lawinsider, 2023)
According to Accounting Tools Website (2023), Certain traits are exclusive to corporations and cannot be found in any other organization The following list includes these attributes:
Capital Purchasing: Due to the need for more restrictions from a few owners' financial resources, a compa may find it simpler to get loans and equity A company may raise substantial debt financing by issuing bonds, while giant corporations can raise capital by selling shares to new investors
Payouts: A company gives its stockholders dividends as payment This is not the same as the payments owners made by a single proprietorship or partnership
Twofold Tax Rate: Income tax is paid by a company on its profits Investors must pay income tax on any dividends they receive if the company pays them This amounts to the business entity's profits being taxe twice
Life Expectancy: A company may continue to exist long after its owners do On the other hand, the owner have the right to dissolve the company at any moment
Limited Liability: A corporation's stockholders also do not inherit any obligations it incurs Instead, the corporate organization is the only party that may be sued to enforce a responsibility
Ownership The quantity of shares held determines who is the owner of a company A corporation's: ownership may be changed by buying or selling these shares to a different investor A publicly listed firm with hundreds or millions of owners may have its shares exchanged on a busy stock market
Expertise in Management The owners of a firm are often not actively involved in its management Rathe: they employ managers with expertise to take care of the company's management on their behalf
Independent Entity: A company is regarded as a completely distinct legal and operational entity It function independently of its owners and has many of a person's rights and obligations.For instance, The Trung Nguyen Group is a business that engages in contemporary retail, distributio services, franchising, coffee manufacturing, processing, and trade, as well as tourism One of the most we known brands in Vietnam and one that is available in over 60 other countries is Trung Nguyen Coffee.
The definition and the importance of intrapreneurship
According to the definition provided by Sharma and Christman (1999), intrapreneurship may be describe as the proactive engagement of employees inside a company to initiate novel endeavors These initiativ which are generated by subordinates without explicit solicitation, anticipation, or perhaps even authorizatio from higher-level management, are characterized by their innovative nature According to Zahra (1995 intrapreneurship may be described as the systematic procedure of establishing a novel business vent inside established organizations, with the objective of enhancing the profitability and competitive standing of the organization, or alternatively, the strategic revitalization of current business operations Corporat entrepreneurship is the process of generating novel business opportunities via the redefinition of company's goods or services, or by the exploration and development of new markets
In the realm of organizational and economic growth, intrapreneurship is widely recognized as a significan component, owing to its capacity to rejuvenate well-established organizations (Antoncic & Hisrich, 2001) There is an increasingly prevalent viewpoint that established organizations must cultivate entrepreneuri endeavors within their organizational structure effectively compete in dynamic and evolving contextsto Numerous scholars have explored the notion of corporate entrepreneurship as a strategic approach organizations to develop their company concept, adapt to evolving consumer wants and expectations, a strengthen their competitive standing
The presence of intrapreneurial behavior has been identified as a crucial element in enhancing organizatio performance, particularly in situations when there is heightened economic uncertainty This is particularly important as it necessitates the adoption of more inventive, adaptable, and entrepreneurial managem approaches (Davis, 1999)
• Intrapreneurship plays a crucial role in fostering the economic development of a company due to its ability to facilitate the generation of new business growth
• Intrapreneurship fosters a conducive climate for the long-term facilitation and maintenance of innovation
• Intrapreneurship is often regarded as an effective strategy for attracting and retaining entrepreneuria leaders
• Intrapreneurship facilitates efficient acceleration and management of organizational transformationAdditionally, it aids in the personal development and engagement of workers by providing opportunities for growth and expansion
Intrapreneurship offers a platform for workers to actively participate in work that is both intellectually stimulating and personally significant Intrapreneurs exhibit a high level of engagement in their professiona endeavors The fervor and resolute commitment shown by these individuals serve as a catalyst f motivating others to actively participate and explore new endeavors As the organization experience growth, it concurrently witnesses the growth of its constituents The adoption of intrapreneurship ha emerged as a crucial need for all firms and a means of ensuring existence for others Organizations w have adopted the concept of Intrapreneurship have seen enhanced financial performance, heighten productivity, more creativity, and increasing levels of employee engagement (Hiwarkar, 2019).
The differences & similarities between public and corporate intrapreneurship
According to Pinchot (1985), Both public and corporate intrapreneurship place significant emphasis on th crucial role of innovation and creativity in facilitating favorable transformation and expansion The organization fosters a culture that promotes and supports people in generating novel ideas, exploring no traditional solutions, and questioning established norms
Both forms of intrapreneurship foster the development of an entrepreneurial attitude inside the workforce This entails engaging in strategic decision-making, accepting uncertainty, and taking initiative in recognizing and pursuing avenues for improvement and development cooperation and Networking: Both public and corporate intrapreneurship initiatives foster an environmen that promotes cooperation and networking among workers, various departments, as well as extern stakeholders They enable the collaboration of cross-functional teams, collaborations, and knowledg sharing platforms in order to harness a wide range of viewpoints and experience
The significance of fostering an entrepreneurial culture inside an organization is underscored by both publ and corporate intrapreneurship This encompasses the promotion of a development attitude, the provisi of rewards and recognition for creative endeavors, and the cultivation of a work atmosphere that i supportive and inclusive
Public intrapreneurship encompasses the facilitation of entrepreneurial conduct and the cultivation of innovation inside entities operating in the public sector, including government agencies, non-profit organizations, and public institutions The process includes fostering a culture that promotes innovativ thinking, risk-taking, and the development of novel solutions to tackle social issues The following are man fundamental characteristics of public intrapreneurship (Kuratko et al., 2001):
• The concept of public intrapreneurship centers on generating favorable social outcomes and fulfilling public demands The primary objective is to increase the quality of public services, optimize operational effectiveness, and foster societal innovation
• Stakeholder Orientation: Public intrapreneurship entails the active involvement of diverse stakeholders, such as people, legislators, and community groups The primary objective is to integrate a wide range of viewpoints and guarantee that the solutions proposed are to th requirements of the general population
• Governmental intrapreneurship acts within the confines of established governmental rules and laws
To effectively operate inside the public sector, intrapreneurs must adeptly traverse bureaucratic procedures and work within the specified limits
• Funding: Public intrapreneurship often depends on financial resources from public funding sources grants, or collaborations with external groups to sustain and facilitate creative initiatives Budgetary concerns and accountability play a pivotal role in the public sector
• Partnerships and collaborations with external stakeholders, including academia, the corporate secto and civil society, facilitate public intrapreneurship Using talent, resources, and information from other areas is critical to fostering innovation
Corporate intrapreneurship is a concept that pertains to the facilitation and encouragement of entrepreneurial conduct and the fostering of innovation inside privately-owned enterprises This concep entails the empowerment of workers to adopt an entrepreneurial mindset, embrace ri -taking, and engask in the creation of novel goods, services, or business models The following are many fundamenta characteristics associated with corporate intrapreneurship (Kuratko et al., 2001):
• Profit Orientation: The primary objective of corporate intrapreneurship is to generate profits and improve the firm's competitive position The aim is to provide novel sources of income, enhance market standing, and facilitate the firm's expansion
• Market orientation refers to the practice of corporate intrapreneurship, which includes identifying market possibilities, comprehending consumer demands, and creating new solutions to address tho needs effectively The focal points of this approach are market research, product development, an commercialization
• The implementation of corporate intrapreneurship is contingent upon the preexisting organizationa structure of private enterprises To foster innovation, intrapreneurs must adeptly traverse hierarchical structures, decision-making protocols, and the prevailing company culture
• The successful implementation of corporate intrapreneurship requires strategically deploying resources, including financial capital, temporal help, and skilled personnel, to support and p y g g p p p p pp nurture creative initiatives effectively To effectively navigate inside an organization, intrapreneurs often find it necessary to get internal backing and substantiate the future return on investment
• Corporate intrapreneurship entails taking calculated risks and acknowledging the potential for failure In intrapreneurship, individuals who achieve significant inventions are often recognized and rewarded via various means, such as recognition, promotions, or cash incentives.
The benefits of intrapreneurship and its contribution
Intrapreneurship has a multitude of advantages for those seeking to attain their utmost capabilities, acqu novel proficiencies, and effectuate meaningful change Intrapreneurs are given a significant degree o autonomy in managing their job, setting objectives, and determining the approaches they use Th autonomy has the potential to enhance their levels of motivation, contentment, and productivity Furthermore, intrapreneurs are given the opportunity to delve into innovative concepts, engage i experimentation with diverse approaches, and showcase their ingenuity and foresight Moreove intrapreneurs have the potential to cultivate their entrepreneurial attitude, expand their knowledge base a professional connections, and get acknowledgment and incentives for their achievements Furthermor intrapreneurs have the potential to make significant contributions to organizational innovation and provid value for both consumers and stakeholders (linkedin, 2023)
In the contemporary business landscape, the adoption of intrapreneurship may serve as a valuable resou for employers seeking to maintain their competitive edge, enhance organizational agility, and foste adaptability in the face of dynamic market conditions The innovation process has the potential to provid novel goods, services, processes, or business models that confer a competitive edge and contribute revenue generation or cost reduction Furthermore, this practice has the potential to enhance employ morale and foster a sense of loyalty among individuals who experience a heightened sense of empowerm and inspiration derived from their job Moreover, intrapreneurship has the potential to cultivate a corporat environment characterized by creativity, cooperation, and knowledge acquisition, whereby workers ar incentivized to exchange ideas and provide constructive criticism Ultimately, it allows the firm to promptly address client demands, capitalize on market prospects, and adapt to technology advancements (Liked 2023)
In the context of several enterprises, the implementation of intrapreneurship may serve as a means to att a competitive edge, which not only yields favorable financial outcomes and overall expansion, but als influences the corporate culture in a good manner (Region, 2023 ).
An organizational culture that fosters intrapreneurship may enhance employers' ability to attract a broad range of talented individuals, particularly those who may otherwise be inclined towards startups or othe entities where they see more potential for personal influence and contribution Similarly, the presence of a intrapreneurial culture may also be attractive to younger individuals who would otherwise be hesitant to engage with conventional corporate settings
Entrepreneurs initiate the establishment of a firm with the objective of offering a product or service An intrapreneur engages in the examination of policies, technologies, or applications with the aim of enhancin the operational effectiveness of an established organization It is inevitable that once an intrapreneur has t necessary abilities to identify and address significant challenges, there is a potential for the intrapreneur transition into an entrepreneur (Investopedia, 2023)
4.2 Competitive advantages brought by intrapreneurship
According to CEO Michail Sotirakos, Typically, employees are given the chance to engage in initiatives that enable them to use their entrepreneurial aptitudes foster the creation of novel items or services thto subsequently yield lucrative outcomes for the organization In contrast to entrepreneurs, individuals in th role do not bear the risks often connected with such endeavors However, they also do not reap th substantial financial benefits that may arise from the success of their novel product or service
There exists a prevailing notion that intrapreneurial endeavors have a greater propensity for failure a compared to external entrepreneurial ventures There is a lack of empirical data supporting the notion th intrapreneurial start-ups exhibit lower levels of success
However, in cases when an organization's culture is characterized by deeply ingrained attitudes and practic that are in opposition to fostering innovation and creativity, the implementation of corporate ventures is unlikely to be successful
Sotirakos (2023) mentioned that the act of inaction often poses a greater risk than engaging in potentia advantageous actions, and intrapreneurship encompasses both innovation and change managemen business leaders demonstrate a willingness to reject outdated notions and ineffective management practic potentially sacrificing short-term gains, acknowledging, and considering the possibility of failure, and openly exhibiting a greater level of trust, confidence, and respect towards their workforce, it is likely that job satisfaction will experience a significant increase, leading to overall prosperity for all parties involved. The proof of this may be seen by examining corporations such as Panasonic, Toyota, 3M, Facebook, Goog and many more
Entrepreneurs often function inside a framework characterized by few limitations, but intrapreneurs operat within a context that is marked by many restrictions, mostly stemming from company regulations and managerial approaches For intrapreneurship to achieve success, it is essential for management to guara the integration of innovation into the fundamental structure of their organization, while also assigning it a significant role in job descriptions, processes, and performance assessments (Sotirakos, 2023)
To effectively function, intrapreneurs need a certain level of autonomy while adhering to well-defined parameters that govern their actions Effective managers are those who possess the ability to discern appropriate moments to exercise control and restraint, while avoiding the creation of disillusionment amon their subordinates Furthermore, they are adept at recognizing when it is necessary to relinquish control, fostering and preserving a sense of optimism within the organizational context
Established organizations have a competitive edge due to their preexisting resource base, including seve aspects such as design, marketing, sales, and finance, which innovators lack Nevertheless, if these resou continue to be limited or if intrapreneurs are consistently required to advocate for their allocation, the progress of innovative ideas will be hindered, and they will fail to materialize beyond the conceptual stage Once a decision is reached to proceed with a particular project, it is essential for management to guaran the provision of all necessary resources get a favorable and successful result (Sotirakos, 2023) to
The advent of the digital era has presented significant prospects for companies to leverage innovation a creativity, leading to substantial advantages The realization of substantial wealth generation can only occ when organizational leaders possess a comprehensive comprehension of the methods involved recognizing, fostering, and effectively overseeing the intrapreneurial mindset inside their respective enterprises (Sotirakos, 2023)
Figure 2:The image symbolizes innovation and creativity
4.3 The issues facing intrapreneurs in public sector organizations and in corporate organizations 4.3.1 The issues facing
Regarding the encountered problems, it is noteworthy to emphasize the level of support shown by th management towards novel ideas One of the primary challenges encountered in the pursuit of ne initiatives is the scarcity of resources available to support their growth This encompasses not alon monetary expenditures, but also the provision of suitable physical infrastructure and technology tha facilitates the process of innovation
According to Sampaio and Laniado (2009), the challenges associated with the implementation of new projects at higher education institutions (HEIs) may be categorized into three distinct groups: institutiona political, and socio-cultural According to these authors, the successful execution of new initiatives and modifications within the university setting necessitates institutional backing, suitable organizational framework, and work restructuring Furthermore, these endeavors should be founded upon alterations in t beliefs, attitudes, and perceptions of the individuals engaged in the undertaking:
Table 2: Facilities and difficulties in the developmen of Intrapreneurial itiativ (Sampaio and Laniado, 2009) t in es
4.3.2 The need for developing intrapreneurship in those organizations
Recommendations
In order to foster and strengthen intrapreneurship inside public and private organizations, the following measures are proposed:
Promote the Development of an Innovative Culture: This objective may be accomplished by the implementation of strategies such as fostering transparent communication, encouraging the exploration new ideas and ventures, recognizing, and incentivizing creative endeavors, and establishing a support environment where workers can engage in experimentation and derive valuable insights from setbacks
Allocate sufficient resources, including financial and human capital, to provide committed support for intrapreneurial ventures One potential approach to help intrapreneurs throughout the innovation process to establish various mechanisms, including innovation laboratories, incubators, and mentoring program
These initiatives may provide valuable direction, knowledge, and support to intrapreneurs as they naviga the complexities of innovation
Provide intrapreneurs with a designated level of autonomy and decision-making ability to actively explore their ideas The presence of autonomy enables individuals to assume responsibility for their initiatives, mak well-informed choices, and foster innovation within their own domains of proficiency
Foster an environment that promotes and supports cooperation and multidisciplinary teamwork acros diverse departments and functional areas Establish inclusive platforms and facilitate chances for worke hailing from varied backgrounds to convene, exchange expertise, and engage in collaborative endeavo aimed at fostering innovation The exchange and integration of ideas from different sources migh potentially result in significant advancements and novel discoveries
Provide comprehensive training programs and seminars aimed at augmenting workers' entrepreneurial a innovation proficiencies Offer access to pertinent resources, techniques, and methods that may ass intrapreneurs in cultivating their concepts and efficiently navigating the process of innovation
Developing appropriate incentives and recognition systems is crucial for fostering intrapreneurship insid organizations It is essential to design incentive structures that are in line with the aims and objectives intrapreneurs, hence motivating and encouraging their innovative efforts Additionally, recognizing the valuable contributions made by intrapreneurs is equally important in order to reinforce their commitmen and dedication to driving positive change within the organization The range of potential incentives include performance-based prizes, bonuses, promotions, and specialized recognition programs Promote a disseminate success narratives to foster inspiration and motivation among individuals inside th organizational framework
Foster an environment that motivates workers across hierarchical levels to actively participate in generatin novel ideas and offering valuable proposals for innovation Develop channels and platforms to facilitate th submission and evaluation of ideas by workers, while also establishing robust procedures to guarantee t ideas with potential are thoroughly assessed and then implemented
It is essential to use technology and digital transformation in order to facilitate and expedite intrapreneuria gy g p p endeavors Utilize digital tools and platforms to facilitate the processes of generating ideas, collaboratin with others, creating prototypes, and conducting market testing Advocate for the adoption of a digital-firs mentality and provide the essential framework to facilitate digital advancements
It is important for leaders to actively demonstrate their support and advocacy for intrapreneurship In orde to effectively guide others, it is essential for leaders to serve as role models, exhibiting a proactive inclinatio towards embracing transformative measures, undertaking ventures with inherent uncertainties, an providing backing to pioneering endeavors The presence of leadership support plays a pivotal role establishing an atmosphere conducive to the flourishing of intrapreneurship
Promote a culture that emphasizes the need of ongoing learning and progress Promote the practice introspection, constructive critique, and knowledge acquisition stemming from both accomplishments an setbacks It is important to consistently assess and enhance intrapreneurial programs and activities incorporating feedback and integrating lessons acquired
The economy is heavily influenced by corporate size SMEs are vital to the economy because they fost innovation, create jobs, and boost growth Financial issues may make it hard for firms to get finance Therefore, supporting SMEs is essential for their growth and development Corporate and governme intrapreneurship has been proved to boost innovation and growth Intrapreneurship allows employees develop new ideas without the risks and expenditures of launching a new business Intrapreneursh improves adaptation and competitiveness for organizations Public and commercial enterprises may boo intrapreneurship by encouraging innovation and employee input Corporate companies may rewar intrapreneurial achievement, while government agencies can fund creative projects Promoting intrapreneurship may benefit the firm and the economy regardless of sector In conclusion, corporate siz may affect the economy significantly However, supporting SME investment and intrapreneurship may boost economic growth and business success Organizations may boost the economy by supporti innovation and development
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