Effects of managers' entrepreneurial behavior on subordinates

The recent surge of interest in promoting corporate entrepreneurship seems linked to a growing body of empirical evidence of a positive relationship between a firm's entrepreneurial orientation and its improved financial performance. Logical induction suggests that organizations that promote corporate entrepreneurship must employ managers who are entrepreneurial in their behaviors. By extension, it would seem that managers who are entrepreneurial must have a positive impact on their subordinates if the organization's entrepreneurial initiatives are to be successful. Unfortunately, despite the implicit appeal of this logic, what would “seem” to be true has not yet been substantiated empirically. To address this shortcoming and to provide managers with information from which to judge their efforts to promote corporate entrepreneurship, research was undertaken to address two specific research questions: 1. 1. What behaviors distinguish managers who exhibit an entrepreneurial orientation? 2. 2. How do subordinates judge the actions of managers who work for an organizational metamorphosis to an entrepreneurial model of management? Providing a rigorous assessment of these issues necessitated the selection of a setting not typically seen as receptive to entrepreneurial initiatives. Thus, the data were collected from the two largest units of an electric utility system, one with 8,000 employees and $2.847 billion in 1992 revenues and the other with 10,000 employees and $4.297 billion in 1992 revenues. Together, these units employed 60% of the corporate staff and generated 89% of total corporate revenues. Because of the perception of the company's top management that the prospect of deregulation, if not its inevitability, threatened the viability of the company's traditional management style, executives considered specific programs to become more competitive. They formulated a plan for the long-term development of an entrepreneurial organization based on the belief of the company's executives that its future success required fundamental change in corporate culture and competitive posture. To track the evolution of its managers toward an entrepreneurial orientation, the company used two survey instruments developed with and administered by executives of the company to monitor each manager's progress and to evaluate its impact. To assess the types and frequency of entrepreneurial behaviors among managers, a theoretically driven, management “behaviors” questionnaire wa