IB Business Management HLUnit 1.1 — What Is a Business?Paper 1 & 2Core idea~9 min read
Entrepreneurs and Intrapreneurs
Someone has to decide that a business should exist. That person spots a gap, pulls the resources together and puts something at risk. The interesting twist is that big companies want the same energy inside their own walls — without asking anyone to remortgage their house.
📘 What you need to know
An entrepreneur creates a new business idea and takes the risk of turning it into a business.
Entrepreneurs do three things: organise resources, make decisions, take risks.
An intrapreneur behaves like an entrepreneur but from inside an existing firm, using the firm’s money.
The key difference is who carries the risk and who keeps the reward.
Entrepreneurs need skills (things you can learn) and characteristics (things you tend to be).
Firms encourage intrapreneurship through time, budgets, rewards and a culture that forgives failure.
What an entrepreneur actually does
Strip away the mythology and there are three jobs. Everything else is detail.
The job
What it involves
What goes wrong
Organise resources
Finding premises, money, equipment and people, and getting them working together
Runs out of cash before the first sale; hires the wrong people
Make decisions
What to sell, where to sell it, what to charge, who to hire
A bad pricing or location call wastes money that cannot be won back
Take risks
Investing savings, quitting a secure job, launching into a new market
Personal loss, debt, and in an unlimited liability business, the family home
Notice that “take risks” is not the same as “be reckless”. Good entrepreneurs spend a lot of effort shrinking risk — testing on a small scale, keeping a day job for the first year, borrowing less than they could. That distinction earns evaluation marks.
Entrepreneur or intrapreneur?
Both spot opportunities. Both push ideas through. The difference is whose money is on the table.
Because the intrapreneur risks less, firms have to build in the reward and the freedom that would otherwise be missing. That is what “encouraging intrapreneurship” really means.
Skills and characteristics
The syllabus separates the two, and so should you. Skills can be trained. Characteristics are closer to personality.
The single most valuable skill on this list is persuasion. An entrepreneur has to convince a lender, a co-founder and a first customer, usually before there is anything to show them.
Resilience is the quiet one. Most start-ups fail at something in year one. The founders who survive are the ones who can take a bad month, fix the cause and open again on Monday.
Why big firms want intrapreneurs
A large company has money, brand and distribution. What it often lacks is the willingness to try something odd. Intrapreneurship is the attempt to buy that back.
Free time to experiment. Several well-known firms let staff spend a slice of their week on their own projects. Gmail came out of exactly that kind of policy at Google.
Rewards for ideas — bonuses, recognition, promotion. Without this, the sensible move for an employee is to keep quiet.
Permission to fail. If a failed project ends a career, nobody proposes anything risky again.
Senior sponsorship. The Sony PlayStation started as an internal idea that management first rejected; it needed a senior backer to survive.
Resources. An idea with no budget and no engineers is just a slide.
🧩 How to answer “recommend how X could encourage intrapreneurship”
Name two specific measures, not “a better culture”. Time allowances, an innovation budget, a bonus scheme.
Say what each one changes in employee behaviour and why that matters for this firm.
Give the cost. Paid time on side projects is output the firm does not get. That is the trade-off.
Judge it against the firm’s position. A struggling firm short of cash may not be able to afford it.
EXAM-STYLE
Distinguish between an entrepreneur and an intrapreneur. [4]
Define both
An entrepreneur creates and owns a new business. An intrapreneur develops new ideas from inside an existing firm.
The real difference: riskentrepreneur risks own capital → keeps the profitintrapreneur risks the firm’s capital → earns a salaryThe second difference: freedom
The entrepreneur decides alone; the intrapreneur has to win approval and work inside company rules.
Same behaviour, different owner of the risk“distinguish” means point at the difference explicitly — do not just describe both
EXAM-STYLE
Explain two characteristics that helped a founder succeed. [4]
Case: Priya left a stable engineering job to build a repair service for e-bikes. Her first workshop location failed and she moved twice in a year.
Characteristic 1: risk taking
She gave up guaranteed pay for an unproven idea, which is what got the business started at all.
Characteristic 2: resilience
Two failed sites would end most start-ups.
She treated each move as information about where the customers were, rather than as a reason to quit — so the third site was chosen with real evidence.Named quality + linked to the case = full marks
💡 Exam tip
Always anchor to the case study. “She is creative” is worth nothing. “She redesigned the delivery route to cut fuel costs” is worth marks.
Risk is the discriminator. Any question comparing entrepreneur and intrapreneur is really asking about who loses if it fails.
Skills versus characteristics — if the question names one, do not answer with the other.
Intrapreneurship costs money. Mentioning the paid time and the failed projects shows balance.
Real examples are fine and useful, but the marks come from the link, not from the name of the company.
For 2-mark “state” questions, resist the urge to write four sentences.
⚠ Common mix-up
Entrepreneurs are not always founders. Someone brought in to run and expand an existing firm can behave entrepreneurially too.
Intrapreneur is not just “a good employee”. The idea must be new and must involve some risk to the firm.
Risk taking is not gambling. Calculated risk, with research behind it, is the version examiners reward.
Enterprise is a factor of production, the entrepreneur is the person. Do not use the words as if they mean the same thing.
Being self-employed does not make someone an entrepreneur unless there is a new idea and real risk involved.
Culture cannot be ordered into existence. Saying “the firm should create an innovative culture” with no method attached scores nothing.
Up next: Getting a New Business Off the Ground — the six steps from idea to opening day, where the money comes from, and the problems that kill most start-ups in the first year.
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