An innovation is a new idea applied to imitating or improving a process, product, or service. The process of innovation is closely allied with the entrepreneurial role in organizations, particularly since that role relates to discovering and exploiting new opportunities. In fact, innovative activities in organizations, especially major ones, have frequently been refereed to as entrepreneurship within organization. More recently, individuals who engage in entrepreneurial roles inside organization are often called entrepreneurs. The term is used to differentiate innovators working inside existing organizations from individuals who innovate by creating new organizations. Encouraging innovation in organizations takes special effort. Furthermore, successful innovations are rarely the product of only one person work. Rather, the innovative process usually involves individuals at various level who fulfill three different types of entrepreneurial roles :

Idea Champion

An idea champion is an individual who generates a new idea or believes in the value of a new idea and supports it in the face of numerous potential obstacles. We often thin of such individuals as entrepreneurs, inventors, creative individuals, or risk takers. They are usually individuals at lower levels in the organization who recognize a problem and help develop a solution.

Sponsor

A sponsor is an individual, usually a middle manager, who recognizes the organizational significance of an idea, helps obtain the necessary funding for development of the innovation, and facilitates its actual implementation. Sponsors tend to be middle manager because their higher-lever position in the organization makes it more feasible for them to provide the strong backing necessary for the survival of innovations.

Orchestrate

An ORCHESTRATOR is a high-level manager who articulates the need for innovation, provides funding for innovating activates, creates incentives for middle managers to sponsor new ideas, and protects idea people. Because innovations often constitute a challenge to the current ways of doing things, they are frequently resisted by those who are comfortable with or have a particular stake in the status quo. An ORCHESTRATOR maintains the balance of power so that new ideas have a chance to be tested in the face of possible negative reactions. By filling the role of orchestrator, top managers encourage innovation.

Without all three roles, major innovations are much less likely to occur. The development of the VHS videocassette recorder at JVC illustrates the importance of entrepreneurial, or innovative, roles at the various levels of the organization.

Ultimately, the indirect intervention of Matsushita as an orchestrator became crucial. These three types of entrepreneurial roles constitute another vertical difference among managers.