Exam Technique Advice
Intrapreneurship and Business Profits | AQA Q19, Paper 1 2018
- A Level
Last updated 27 Oct 2020
Here is a suggested response to the 9-mark analysis question on intrapreneurship and business profits from the AQA Paper 1 in 2018.
Intrapreneurship – where a business encourages entrepreneurial activities by employees as they work – can often lead to improved financial performance when it leads to more innovation. Businesses like Google (an employee came up with Gmail) and Sony (an employee had the idea for PlayStation) showed how, by providing employees with time and incentives to search for innovative new product ideas (product innovation) or cost-saving processes (process innovation) significant rises in both revenues and profits can be achieved. If employees are given time to be creative, new product and process ideas are more likely to be researched and developed, particularly if employees have financial incentives to come up with good ideas. The most promising innovations can then be analysed using investment appraisal and the ones which suggest positive financial returns (e.g. a high ARR or positive NPV) can be backed by the business, thereby benefiting financial performance as the returns are achieved.