Opportunity Structures in Established Firms: Entrepreneurship versus Intrapreneurship in Mutual Funds

This study revisits the well-established notion that large and mature organizations stifle an employee’s ability and motivation to become an entrepreneur. Using unique data on U.S. mutual funds founded between 1979 and 2005, I examine whether large and mature firms, which are typically associated with lower individual rates of entrepreneurship, are also associated with lower individual rates of intrapreneurship. The findings show that, though employees in large and mature organizations are less likely to transition to entrepreneurship, they nonetheless exhibit a higher propensity to pursue venturing opportunities inside the established firm than employees in smaller and younger firms. The results suggest that the observed negative effect of large, mature organizations on entrepreneurship arises partly due to high rates of intrapreneurship and that the stultification processes in such organizations are far less important than has been generally assumed.