Intrapreneurship in teams/groups: self-determination theory and compensation

Purpose: The literature on intrapreneurship recognizes the notion that regular employees can be expected to be entrepreneurial. Using self-determination theory as a basis, the purpose of this conceptual paper is to focus on the role of compensation systems in incentivizing entrepreneurial action by regular employees who constitute the bulk of the organizational workforce. Design/methodology/approach: This conceptual paper suggests that greater clarity on the role of compensation systems in entrepreneurial action by regular employees would require an understanding of how entrepreneurial action happens through relationships among employees. An exploration of both compensation systems and the relationships among employees undertaking entrepreneurial action as part of team/group settings can deepen our understanding of intrapreneurship. Self-determination theory and relationship-focused theory allow for such an exploration. Findings: The literature on self-determination theory, has identified the needs of autonomy and relatedness among employees. This conceptual paper will propose that the interaction between compensation systems and the needs for autonomy versus relatedness among employees determines the type of relationships chosen for entrepreneurial action. After the chosen type of relationships are formed and entrepreneurial action begins, challenges in the implementation of compensation systems are likely to emerge – distributive justice issues under individual based compensation and free-riding issues under team-based compensation. The entrepreneurial performance of the team/group will likely be influenced by the interaction between the challenges in the implementation of compensation systems and the type of relationships chosen for entrepreneurial action. Originality/value: This conceptual paper gives a new direction to how collective entrepreneurial processes and outcomes can be understood. Self-determination theory and relationship-focused theory, in unison, can be useful in analyzing the role of intrinsic motivators, extrinsic motivators, and relationships during entrepreneurial action.