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Beyond simple utility : incentive design and trade-offs for corporate employee-entrepreneurs

Monsen, Erik and Patzelt, H. and Saxton, T. (2010) Beyond simple utility : incentive design and trade-offs for corporate employee-entrepreneurs. Entrepreneurship Theory and Practice, 34 (1). pp. 105-130. ISSN 1042-2587

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Abstract

To strengthen the theoretical foundations of incentive system design for corporate entrepreneurship, we develop a moderated model of new venture participation, integrating financial, risk, and effort factors to more comprehensively understand the limits of economic utility maximization theory. We make explicit the trade-offs and opportunity costs for corporate employee-entrepreneurs. We use a conjoint field experiment to collect data on 1952 decisions made by 61 corporate employees to test how risk and effort moderate an employee’s decision to participate in a new corporate venture. We find that these factors do interact to affect the choice to engage in corporate entrepreneurship projects.