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A traditionally organized entity is a hierarchy, a "top-down" enterprise. It is also likely to be organized into functional departments, such as sales, marketing, finance, etc. Furthermore, the traditionally organized entity is prone to have a more formal corporate culture, perhaps even tending toward the punitive. Finally, in such entities, there is unlikely to be any "reward" for intrapeneurship beyond one's paycheck. In combination, these elements are usually the kiss of death to intrapeneurship.
Let's look at an example that shows how these elements fail to nurture and can even repress creativity within the traditional organization. Joe is a salesman for the company, selling commercial vacuum cleaners. He owns one himself and uses it at home. He began tinkering a bit with the vacuum cleaner and made a few adjustments that make the vacuum cleaner perform more effectively, with a less expensive part.
In a traditional organization, where does Joe go with his idea? He must report to his supervisor, who must report to his boss, who must report to his department head. (I am using all male pronouns here to avoid very clumsy sentences.) The sales department head might be able to talk to the engineering or production department, but smooth lines of horizontal communication are not in place in an organization like this, so the idea might move up to a vice-president of sales and then over to another vice-president. Or not. Now, bear in mind that Joe has done this tinkering on his own time, but Joe could very well think to himself that if he does manage to let someone relevant know about this improvement, someone who can effectuate a change, he could be questioned about why he was playing with the product when he should have been out selling it, and he is unlikely to receive any compensation for having had a good idea. So, all in all, there is little to motivate Joe to share his idea and much to discourage him from doing so.
Conversely, an organization that has a matrix structure, that rewards employees for their creativity, either with monetary compensation or even recognition, that has open lines of communication horizontally and vertically, and that allows employees some latitude to pursue their ideas on the job, is one that is going to nurture intrapeneurship. Companies such as Google and 3M provide workplaces that foster the creativity that makes this possible, even creating physical work spaces where people from all areas must mingle with one another and allowing employees a certain percentage of their work week to pursue projects of their choosing. At a company like this, Joe's idea would go somewhere, he would receive, at the very least, recognition for his idea, and he would be encouraged to keep tinkering.
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