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Institutional Entrepreneurship: Theory & Examples

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  • 1:04 An Institutional…
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Lesson Transcript
Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

How can people change organizations and institutions? In this lesson, we'll examine institutional entrepreneurship. We'll look at what it is, what institutional entrepreneurs have in common, and how they differ from intrapreneurs.

Introduction to Entrepreneurship

Before we start defining institutional entrepreneurship, let's start with an example.

Samir is innovative, creative, and a risk-taker. He can see solutions to problems that many people might miss. Many people have told Samir that he thinks like an entrepreneur. But what does that phrase mean? Put simply, an entrepreneur is a person who creates businesses. Often, entrepreneurs are visionaries, financial risk-takers, and creative people who see the world differently from the traditional view. Successful entrepreneurs focus on innovation and solving problems.

Based on this, Samir sounds a lot like an entrepreneur. But he's not sure that he wants to start his own business. Does that mean he's out of luck? Will he always be working at a boring, dead-end job, where he's not able to innovate? Well, maybe not. To help Samir find his perfect job, let's look at institutional entrepreneurship and what it has to do with intrapreneurship.

An Institutional Entrepreneurship

Ideally, Samir would love to find a job where he can be innovative, creative, and can solve as many problems as he can that come his way. But he doesn't really want to start a business from scratch. So, what can he do? Institutional entrepreneurship occurs when a person or group of people work to drastically change an institution, and in the process form a new institution. So, for example, if Samir thinks that the company that employs him isn't working all that well, he might try to completely change the institution.

There are several things that institutional entrepreneurs have in common. For one thing, they think and act strategically. Let's say that Samir wants to fundamentally change the institution in which he works. He won't want to just go to the CEO and say, 'Let's get rid of this company and start a new one that's better.' That probably won't work. But he can make some strategic moves, such as pointing out legal violations or things that aren't working at the company and suggesting incremental improvements.

Another thing that institutional entrepreneurs have in common is that they gather resources and people in their quest to improve the company. Samir, for example, might need to get others on his side in his mission to transform the company. He also might need resources, such as government contacts, money, or power, to get things done.

Finally, institutional entrepreneurs think outside of the box and outside the institution. Most people think of organizations as being organizations, and that's it. But institutional entrepreneurs can see beyond the existing company to see what a new institution might look like.

Intrapreneurship vs. Institutional Entrepreneurship

Samir likes the sound of being an institutional entrepreneur, but what if he doesn't think that his company needs to be completely changed? What if he just wants to make it a little better, a little more innovative?

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