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IBM. The computer giant five years ago adopted the concept of independent business units, which operate as separate organizations. Now eleven in number, the IBUs each have their own mini-board of directors and can decide on their own manufacturing and marketing strategy, usually without asking for approval from headquarters. One unit is developing automatic teller machines for banks; another is building industrial robots. IBM's best-known IBU produced the company's Personal Computer. A dozen executives led by Philip D. Estridge, 47, set up headquarters in Boca Raton, Fla., in 1980 with a blank check and a mandate to get IBM into the personal-computer business as soon as possible. The group proceeded to break some of the most sacrosanct IBM traditions. Instead of just using IBM's legendary sales organization, it decided to sell through computer retailers as well. To keep costs in line and speed up development, it bought most of the parts from outside suppliers, rather than from inside IBM. The PC has been extraordinarily successful and last year had estimated sales of about $5 billion. The dozen people in the PC group grew into the entry systems division, which now has 10,000 employees.
Hewlett-Packard. Though it failed to recognize the potential of Wozniak's proposal for a personal computer, Hewlett-Packard is highly regarded in Silicon Valley for fostering innovation. In 1982 Engineer Charles House was given a medal for "extraordinary contempt and defiance beyond the normal call of engineering duty." He had ignored an order from Founder David Packard to stop working on a type of high-quality video monitor. Despite the rebuke, House pressed ahead and succeeded in developing the monitor, which has been used to track NASA's manned moon landings and also in heart transplants. Although there were early estimates that the market for such large-screen displays would be only 30 units, more than 17,000 of them, worth about $35 million, were sold.
Pinchot's thesis is stirring discussion within management circles. Peter Drucker, 75, author of more than a dozen books, says that intrapreneurship is really just a new name for an old idea. Says he: "These young people have no memory. It is like every 19-year-old thinking he has just discovered sex." Thomas J. Peters, co-author of the best-selling In Search of Excellence, believes Pinchot is on to something. Says he: "People ought to think about this intensely."
Some business executives are skeptical. They believe that entrepreneurship cannot exist inside a large company on more than a token basis. Harold Geneen, the builder of ITT, contends in his 1984 book, Managing, that "entrepreneurism is the very antithesis of large corporations." Shareholders, he says, will never stand for the risks involved.