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Managers' Corporate Entrepreneurial Actions: Examining Perception and Position Article in Journal of Business Venturing · May 2009 DOI: 10.1016/j.jbusvent.2008.03.002 · Source: RePEc
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Journal of Business Venturing 24 (2009) 236 – 247
Managers' corporate entrepreneurial actions: Examining perception and position ☆ Jeffrey S. Hornsby a , Donald F. Kuratko b , Dean A. Shepherd b,⁎, Jennifer P. Bott c a
College of Business Administration, Kansas State University, Manhattan, KS 66506, United States The Kelley School of Business, Indiana University, Bloomington, IN 47405-1701, United States c Miller College of Business, Ball State University, Muncie, IN 47306, United States
b
Abstract Are organizational factors that support entrepreneurial action supportive for all? We use the literatures on corporate entrepreneurship and managerial levels to propose that managers differ in structural ability to make the most of their organizational environment. Using a sample 458 managers and moderated Poisson regression analysis we found that the relationship between managers' perceptions of the organizational environment and the number of entrepreneurial ideas implemented varied across managers of different structural levels. Specifically, (1) the positive relationship between managerial support and entrepreneurial action is more positive for senior and middle level managers than it is for lower- (first) level managers, and (2) the positive relationship between work discretion and entrepreneurial action is more positive for senior and middle level managers than it is for first-level managers. These findings suggest that managerial level provides a structural ability to “make more of” organizational factors that support entrepreneurial action. Published by Elsevier Inc. Keywords: Corporate entrepreneurship; Managerial levels; Action
1. Executive summary While there is a broadly held belief in the need for and inherent value of entrepreneurial actions on the part of established organizations (Morris et al., 2008), much remains to be understood about how corporate entrepreneurship (CE) as a strategy is enacted in organizational settings. One particular area of interest that has not been sufficiently examined is heterogeneity in the motivation for entrepreneurial action across managerial levels. In the current literature on CE strategies, it is theorized that organizations exhibit a cascading yet integrated set of entrepreneurial actions at the senior, middle, and first-levels of management (Floyd and Lane, 2000). At the senior level, managers act in concert with others throughout the firm to identify effective means through which new businesses can be created or existing ones reconfigured. The entrepreneurial actions expected of middle-level managers are framed around the need for this ☆ The authors would like to thank Phil Phan and two anonymous reviewers for their insightful comments on earlier drafts of the paper. We would also like to thank Matthew Semadeni for his advice. ⁎ Corresponding author. E-mail addresses:
[email protected] (J.S. Hornsby),
[email protected] (D.F. Kuratko),
[email protected] (D.A. Shepherd),
[email protected] (J.P. Bott).
0883-9026/$ - see front matter. Published by Elsevier Inc. doi:10.1016/j.jbusvent.2008.03.002
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group to propose and interpret entrepreneurial opportunities that might create new business for the firm or increase the firm's competitiveness in current business domains. As recipients of these interpretations, first-level managers then work with their people to fashion the entrepreneurial actions through which the firm's core competencies can be used daily to exploit these opportunities. In an effort to study entrepreneurial actions within the context of CE at different levels of management, we conducted an empirical study of 458 managers at different levels in their firms. We found that the relationship between perceived internal antecedents (as measured by the Corporate Entrepreneurship Assessment Instrument [Kuratko et al., 1990]) and corporate entrepreneurial actions (measured by the number of new ideas implemented), differed depending on managerial level. Specifically, (1) the positive relationship between managerial support and entrepreneurial action is more positive for senior and middle level managers than it is for first-level (lower level) managers, and (2) the positive relationship between work discretion and entrepreneurial action is more positive for senior and middle level managers than it is for first-level managers. This paper makes two primary contributions. First, corporate entrepreneurship research has focused on the factors that promote entrepreneurial action but have relatively ignored the different groups that exist within an organization or have implicitly assumed homogeneity within organizations. We propose and find that managers of different levels have different roles that provide more or less structural ability to implement entrepreneurial ideas. Second, CE strategies have been applied generally to all managers (Kuratko et al., 2005a). Based on our model and empirical testing, it appears that managerial level is important in understanding CE actions and suggests that CE strategies need to be more fine-grained focusing on each specific managerial level. Overall from a practical standpoint, the future strategies and applications of CE strategies need to be more concerned with first, the perception by managers of organizational factors that precipitate CE actions and second, the specific level of management to which expectations are placed for delivering CE actions. Perception and position do make a difference. Based on these empirical results, this study also has implications for current literature in entrepreneurship. The few studies that have explored managerial level (primarily conceptual studies) have emphasized the role of first-level managers in a “bottom–up” process of corporate entrepreneurship (Burgelman, 1983a,b, 1984). We offer a counter-weight to this “bottom–up” process with arguments and empirical support for the notion that given a specific organizational environment more senior managers have greater structural ability to “make more of” the conditions and thus implement more entrepreneurial ideas than do first-level managers. Additionally, while not a central focus of this study, the findings related to the empirical validity of the factors of the Corporate Entrepreneurship Assessment Instrument (CEAI) in explaining entrepreneurial outcomes adds to the growing base of research supporting the construct validity of the CEAI scale. 2. Introduction In the 21st Century corporate entrepreneurship (CE) has increasingly been recognized as a legitimate path to high levels of organizational performance (Ireland et al., 2006a,b; Morris et al., 2008). Although there is a broadly held belief that managers are an important part of this entrepreneurial process (Kuratko et al., 2005a), the CE literature predominantly treats managers as a homogenous group. However, organizational strategy research has acknowledged that managers of different levels have different organizational roles (Floyd and Lane, 2000). Do different managerial levels provide a differential structural ability to capitalize on a supportive organizational environment to act entrepreneurially? By acting entrepreneurially we refer specifically to the number of new ideas implemented (see also Kuratko et al., 2005b). Using a sample 458 managers and moderated Poisson regression analysis we investigated the above research question and found that the relationship between managers' perceptions of the organizational environment and the number of entrepreneurial ideas they implemented varied across managers of different structural levels. This study makes two primary contributions. First, CE research has focused on the factors that promote entrepreneurial action but have relatively ignored the different groups that exist within an organization or have implicitly assumed homogeneity within organizations. We propose and find that managers of different levels have different roles that provide more or less structural ability to implement entrepreneurial ideas. Second, CE strategies have been applied generally to all management levels. Based on our empirical study, it appears that CE strategies need to be more fine-grained focusing on each specific managerial level. Additionally, while not a central focus of this study, the findings related to the empirical validity of the factors of the Corporate Entrepreneurship Assessment Instrument (CEAI) in explaining entrepreneurial outcomes adds to the growing base of research supporting the construct validity of the CEAI scale. Based on these empirical results, this study also has implications for current literature in entrepreneurship. The few studies that have explored managerial level
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(primarily conceptual studies) have emphasized the role of first-level managers in a “bottom–up” process of CE (Burgelman, 1983a,b, 1984). We offer a counter-weight to this “bottom–up” process with arguments and empirical support for the notion that given a specific organizational environment more senior managers have greater structural ability to “make more of” the conditions and thus implement more entrepreneurial ideas than do first-level managers. 3. Literature review and hypotheses development It is well documented in the conceptual literature that managers at all structural levels have critical strategic roles to fulfill for the organization to be successful (Ireland et al., 2002). According to Floyd and Lane (2000), senior, middle, and first-level managers have distinct responsibilities with respect to each sub-process. Senior-level managers have ratifying, recognizing, and directing roles which are in turn, are associated with particular managerial actions. In examining the role of middle-level managers, Kuratko et al. (2005a) contend that middle-level managers endorse, refine, and shepherd entrepreneurial opportunities and identify, acquire, and deploy resources needed to pursue those opportunities. Whereas first-level managers have experimenting roles corresponding to the competence definition sub-process, adjusting roles corresponding to the competence modification sub-process, and conforming roles corresponding to the competence deployment sub-process (Floyd and Lane, 2000). As Hales (2005) demonstrated with evidence from 135 organizations, first-line manager's core jurisdiction was over routine matters (deciding work priorities, work methods, and resolving problems) while their core areas of accountability were quality, efficiency, output, discipline, and paperwork. Thus, organizations pursuing CE strategies likely exhibit a cascading yet integrated set of entrepreneurial actions at the senior, middle, and first-levels of management. At the senior level, managers act in concert with others throughout the firm to identify effective means through which new businesses can be created or existing ones reconfigured. CE is pursued in light of environmental opportunities and threats, with the purpose of creating a more effective alignment between the company and conditions in its external environment. The entrepreneurial actions expected of middle-level managers are framed around the need for this group to propose and interpret entrepreneurial opportunities that might create new business for the firm or increase the firm's competitiveness in current business domains. Firstline managers exhibit the “experimenting” role as they surface the operational ideas for innovative improvements. An important interpretation of Burgelman's (1983a,b, 1984) work has been the belief that managers would surface ideas for entrepreneurial actions from every level of management especially the first-line and middle levels. Therefore, managers across levels are jointly responsible for their organization's entrepreneurial actions. Specific organizational antecedents of managers' entrepreneurial actions have been identified in the literature — top management support, work discretion, rewards/reinforcement, time availability, organizational boundaries (Kuratko et al., 1990; Hornsby et al., 1999, 2002). Based on the different roles of the different levels of management highlighted above, we contend that managers at different levels have different perceptions of the feasibility and/or desirability of these organizational factors for promoting entrepreneurial action. Top management support refers to the extent to which one perceives that top managers support, facilitate, and promote entrepreneurial behavior; including the championing of innovative ideas and providing the resources people require to take entrepreneurial actions. (Lyon et al., 2000; Antoncic and Hisrich, 2002; Kuratko et al., 2001; Hornsby, et al., 2002; Morris et al., 2008) and has been found to have a positive relationship with an organization's entrepreneurial outcomes. Managers differ in their structural ability to use top management support as a resource for entrepreneurial action. The more senior a manager is the closer he or she is to top management. This closeness enables greater awareness of the nature that support (Floyd and Lane, 2000; Floyd and Wooldridge, 1990, 1992, 1994). For example, senior managers are likely to better know the bounds of top management support and thereby can utilize them by pushing it to the fullest (perhaps even in to the grey area). While first-line managers may be aware of top management support they do not have the structural “proximity” to have a fine-grained knowledge of the nature of that support (Hales, 2005). Not wishing to over step the mark, first-line managers are likely to be more cautious in how they choose to use top management support for their entrepreneurial activities. Thus, to reflect Floyd and colleagues contentions about the differential effect of managerial support: Hypothesis 1. The number of entrepreneurial ideas implemented increases with perceived top management support but at a faster rate for (a) middle and (b) senior-level managers than for first-level managers. Work discretion refers to the extent to which one perceives that the organization tolerates failure, provides decisionmaking latitude and freedom from excessive oversight, and delegates authority and responsibility to lower level
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managers and workers (Hornsby et al., 2002). Often entrepreneurial outcomes arise from those that have work discretion for entrepreneurial experimentation (Kuratko et al., 2001). Managers likely use their work discretion to enhance performance on salient tasks, and task salience differs across managerial level. First-line managers are focused on managing and instructing others to more efficiently perform their tasks, middle level managers are focused on how to link groups and senior managers are focused on scanning the environment for opportunities and threats (Kraut et al., 2005). Entrepreneurial actions are more likely to arise from scanning the external and internal environments than focusing attention more narrowly on efficiency (Lang et al., 1997; Beal, 2000). Therefore, more senior managers are more likely to use work discretion to generate entrepreneurial outcomes. Thus, Hypothesis 2. The number of entrepreneurial ideas implemented increases with perceived work discretion but at a faster rate for (a) middle and (b) senior-level managers than for first-level managers. Rewards and reinforcement refer to the extent to which one perceives that the organization uses systems that reward based on entrepreneurial activity and success (Hornsby et al., 2002). Rewards have been found to be positively related to entrepreneurial outcomes (Sathe, 1989; Sykes, 1986; Block and Ornati, 1987). However, unlike the signals of top management support for which senior managers can more fully appreciate, these signals from rewards and reinforcement are typically less ambiguous. Such rewards and reinforcement are likely to have a more positive influence on lower level managers because, as Hayton (2005) argued, these lower level managers are more risk averse and such rewards likely help overcome that aversion. Thus, Hypothesis 3. The number of entrepreneurial ideas implemented increases with perceived rewards and reinforcements for entrepreneurial activity but at a faster rate for first-level managers than (a) middle and (b) senior managers. Time availability for managers has also been found to be an important resource for generating entrepreneurial outcomes (Sykes and Block, 1989; Stopford and Baden-Fuller, 1994; Das and Teng, 1997; Slevin and Covin, 1997). Similar to work discretion, managers are expected to invest “slack” time on those tasks most salient given their roles and responsibilities. The most salient tasks for first-line managers is narrower in scope and centers more on adjusting and conforming activities (and often focused on efficiency) whereas the more salient tasks of senior managers are broader allowing them to scan more broadly the organization and the external environment (Floyd and Lane, 2000; Kraut et al., 2005). These broader scanning activities are more likely to generate entrepreneurial ideas by scanning the environment and recognizing opportunities (Shepherd et al., 2007). Therefore, more senior managers are better able to use time as a resource to generate entrepreneurial activities than are first-line managers. Thus, Hypothesis 4. The number of entrepreneurial ideas implemented increases with perceived time availability but at a faster rate for (a) middle and (b) senior-level managers than first-level managers. Finally, flexible organizational boundaries are useful in promoting entrepreneurial activity because they enhance the flow of information between the external environment and the organization and between departments/divisions within the organization (Miller et al., 2007). More senior managers are better structurally positioned to access and use this information given their attention is already broadly allocated across the organization and the external environment. First-line managers also benefit from these permeable boundaries but given the structural position, they interact across fewer boundaries due to their narrow job focus and therefore benefit less from boundary permeability (Hales, 2005; Kraut et al., 2005). Thus, Hypothesis 5. The number of entrepreneurial ideas implemented increases with perceived flexible organizational boundaries but at a slower rate for first-level managers than (a) middle and (b) senior-level managers. 4. Methods 4.1. Sample The data utilized for this study was part of a larger effort aimed at examining many relationships between CEAI factors and potential moderating and outcome variables. Initially, we used a sample of 530 managers from different
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levels in their organizations participating in executive education programs conducted by a large Midwestern public university that focused on general management development. Because of the high response rate (approximately 80%), no tests for non-respondent biases or self-selection into/out of the sample were conducted. No incentives were given for survey completion. Although this was a sample of convenience, it appeared highly appropriate for this study because of the differing levels of managers attending the seminars, the range of companies and industries, and the opportunity to guarantee full coverage, completion and return of the survey. This follows Hales' (2005) study of first-line managers and Hornsby et al.'s study described earlier. Seven surveys were discarded due to missing data, resulting in a useable sample size of 523. Sixty five respondents who identified themselves as professional or “other” with no managerial responsibilities were removed. Only those participants who identified themselves as first, middle, or senior-level management were retained for analysis resulting in a research sample of 458. The average age of participants was 41.30 years (SD = 8.35), 86% were male and 64% reported completing a college education with an additional 17.2% reporting two years of college. The average tenure in job for the sample was 4.8 years (SD = 4.59), while average tenure at the organization was 13.24 (SD = 8.46). The most frequently occurring industry classifications for this sample were: Manufacturing /Construction (30.8%), Service (finance and real estate included; 14.9%), and Retail (10.3%). The remainder of the sample was composed of companies that self-identified their industry as wholesale, transportation, and professional and technical services. 4.2. Measures Dependent variable: Number of new ideas implemented. Respondents were asked to identify the number of ideas implemented in the past six months. This represents an indication of entrepreneurial action utilized in prior research (i.e., Kuratko et al., 2005b). Researchers conceptualize CE as embodying entrepreneurial actions requiring organizational sanctions and resource commitments for the purpose of developing different types of value-creating innovations (Alterowitz, 1988; Borch et al., 1999; Burgelman, 1984; Jennings & Young, 1990; Kanter, 1985; Schollhammer, 1982). The Corporate Entrepreneurship Assessment Instrument-CEAI (Kuratko et al., 1990; Hornsby et al., 2002) was used to measure employees' perceptions of the internal antecedents of CE within a firm. Top management support for corporate entrepreneurship was measured by 19 items (e.g., “In my business unit, developing one's own ideas is encouraged for the improvement of the organization”), work discretion/autonomy was measured by 10 (e.g., “I have the freedom to decide what I do on my job”), rewards/reinforcement was measured by 6 items (e.g., tangible and intangible rewards; “The rewards I receive are dependent upon my work on the job”), time availability was measured by 6 items (“I always seem to have plenty of time to get everything done”), and organizational boundaries was measured by 7 items (e.g., “There are many written rules and procedures that exist for doing my major tasks”). For each of these five scales, participants responded to a 5 point Likert scale with responses ranging from “Strongly Disagree” to “Strongly Agree.” The factor structure of the CEAI was examined with a confirmatory factor analysis before analyses were performed. The fifth proposed factor, organizational boundaries, did not load on the items as anticipated. Table 1 Means, standard deviations, and correlations between focal variables. Variable
Mean
SD
1
2
3
4
5
6
7
8
9
10
1. Age 2. Years in organization 3. Years in job 4. Current managerial level a 5. Industry b 6. Top management support 7. Work discretion 8. Rewards/reinforcement 9. Time availability 10. New ideas implemented
41.30 13.24 4.80 1.81 7.10 2.87 3.69 3.47 2.55 3.03
8.35 8.46 4.59 0.67 5.22 0.61 0.62 0.62 0.72 4.72
– .56⁎⁎ .39⁎⁎ .29⁎⁎ .07 −.01 .05 −.02 .17⁎ .01
– .39⁎⁎ .09 −.08 .00 .06 .02 .11 −.06
– .10⁎ .14⁎⁎ .01 .05 −.08 .02 −.02
– .27⁎⁎ .16⁎⁎ .21⁎⁎ .09 .13⁎⁎ .09
– .10⁎ .10⁎ −.01 .03 −.02
(.89) .53⁎⁎ .54⁎ .25⁎⁎ .19⁎
(.85) .40⁎⁎ .19⁎⁎ .11⁎
(.72) .16⁎ .15
(.76) − .02
–
N = 432–457. ⁎⁎⁎ p b .01; ⁎⁎ p b .05; ⁎ p b .10. a Categorical variable coded 1 for first-level, 2 for middle-level, and 3 for senior-level. b Industry variable coded.
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Additionally, for the time availability factor, one item did not load and was subsequently eliminated from analysis. Therefore, results for the modified model (4 factors) indicated adequate fit of the data (χ2(728) = 1378.99, p b .001; CFI = .92, TLI .92, RMSEA b .05, SRMR b .06; Hu and Bentler, 1999). Subsequently, all analyses were conducted with four factors of the CEAI scale: management support, work discretion/autonomy, rewards/reinforcement, and time availability. These variables were centered for the regression analysis. Internal consistency reliabilities for these factors are presented on the diagonal of Table 1 (in parentheses). The sample was asked to self-report their managerial level as either senior, middle or first-level managers. Approximately 34% of the sample identified themselves as first-level managers, while the majority of the sample was middle-level management (approximately 51%). Senior-level managers comprised 14.8% of the sample. Prior to conducting the focal analyses, the issue of common method variance was addressed. Common method variance (CMV), or monomethod bias, can alter the relationships between variables that are primarily captured using self-report data collection methodology. As all of the variables were collected in this manner, an examination of this Table 2 Moderated Poisson regression analysis. Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
Step 7
Coeff
Coeff
Coeff
Coeff
Coeff
Coeff
Coeff
Constant
(std error) 0.904⁎⁎⁎ (0.142)
(std error) 0.734⁎⁎⁎ (0.153)
Age
0.010⁎⁎⁎ (0.004)
Years in organization
−0.015⁎⁎⁎ (0.004)
Years in job
−0.005 (0.007)
(std error) 0.745⁎⁎⁎ (0.153) 0.009⁎⁎ (0.004) −0.016⁎⁎⁎ (0.004) −0.003 (0.007) 0.410⁎⁎⁎ (0.063) −0.000 (0.057) 0.186⁎⁎⁎ (0.058) −0.099⁎⁎ (0.041) 0.241⁎⁎⁎ (0.066) 0.232⁎⁎ (0.092)
(std error) 0.533⁎⁎⁎ (0.157) 0.012⁎⁎⁎ (0.004) − 0.017⁎⁎⁎ (0.004) − 0.005 (0.007) 0.388⁎⁎⁎ (0.063) − 0.694⁎⁎⁎ (0.089) 0.164⁎⁎⁎ (0.058) − 0.094⁎⁎ (0.041) 0.340⁎⁎⁎ (0.072) 0.107 (0.116)
(std error) 0.822⁎⁎⁎ (0.155) 0.007 (0.004) − 0.015⁎⁎⁎ (0.004) − 0.004 (0.007) 0.416⁎⁎⁎ (0.063) − 0.003 (0.057) 0.205⁎⁎⁎ (0.058) − 0.099⁎⁎ (0.041) 0.224⁎⁎⁎ (0.066) 0.234⁎⁎ (0.094)
(std error) 0.704⁎⁎⁎ (0.155) 0.010⁎⁎ (0.004) − 0.017⁎⁎⁎ (0.004) − 0.004 (0.007) 0.406⁎⁎⁎ (0.063) − 0.005 (0.057) 0.194⁎⁎⁎ (0.058) − 0.264⁎⁎⁎ (0.081) 0.260⁎⁎⁎ (0.067) 0.257⁎⁎⁎ (0.092)
(std error) 0.589⁎⁎⁎ (0.159) 0.010⁎⁎ (0.004) − 0.016⁎⁎⁎ (0.004) − 0.003 (0.007) 0.368⁎⁎⁎ (0.118) − 0.692⁎⁎⁎ (0.100) 0.220⁎⁎⁎ (0.060) − 0.135⁎ (0.081) 0.308⁎⁎⁎ (0.074) 0.177 (0.117) 0.142 (0.138) − 0.396⁎⁎ (0.175) 0.900⁎⁎⁎ (0.126) 1.625⁎⁎⁎ (0.204) − 0.180⁎⁎⁎ (0.058) 0.108 (0.098) 0.063 (0.099) 0.088 (0.118) 293.665⁎⁎⁎ 275.655⁎⁎⁎
Top management support for CE Work discretion Reward/reinforcement Time availability Job level 1 (first, middle) Job level 2 (first, senior) Management support ⁎ Job level 1 Management support ⁎ Job level 2 Work discretion ⁎ Job level 1 Work discretion ⁎ Job level 2 Reward ⁎ Job level 1
0.009⁎⁎ (0.004) − 0.016⁎⁎⁎ (0.004) − 0.005 (0.007) − 0.023 (0.103) 0.003 (0.057) 0.203⁎⁎⁎ (0.059) − 0.109⁎⁎⁎ (0.041) 0.213⁎⁎⁎ (0.067) 0.211⁎⁎⁎ (0.101) 0.612⁎⁎⁎ (0.116) 0.478⁎⁎⁎ (0.139)
0.952⁎⁎⁎ (0.108) 1.319⁎⁎⁎ (0.160)
Reward ⁎ Job level 2 Time availability ⁎ Job level 1 Time availability ⁎ Job level 2 χ2 Change in χ2
18.010 18.010
⁎⁎⁎ p b .01; ⁎⁎ p b .05; ⁎ p b .10.
166.712⁎⁎⁎ 148.72⁎⁎⁎
194.713⁎⁎⁎ 176.173⁎⁎⁎
270.726⁎⁎⁎ 252.716⁎⁎⁎
− 0.150⁎⁎ (0.058) − 0.053 (0.094)
175.657⁎⁎ 157.647⁎⁎
0.250⁎⁎ (0.097) 0.133 (0.116) 173.610⁎⁎ 155.600⁎⁎
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Fig. 1.
issue was warranted. Podsakoff et al. (2003) published a review and a series of recommendations for handling CMV, which included a number of options for assessing the severity of this issue in datasets. One method, conducting an exploratory factor analysis on all items in the dataset (including dependent variables) was undertaken, following the recommendations of Harman as described by Podsakoff et al. (2003). This method, not without its critics, is a simple method for identifying the likelihood of a problem with CMV; this was undertaken for the current dataset and the unrotated exploratory factor analysis yielded more than one factor. This supports the assertion that CMV was not unduly influential in our dataset (Spector, 2006). We believe this technique of identification, the factor analytic method, balanced the relative costs and benefits of identifying and resolving CMV (for a thorough discussion of the advantages and disadvantages of this and other techniques, please see Podsakoff et al., 2003). 5. Results Means, standard deviations, and correlations are presented in Table 1. To test our hypotheses, we conducted a series of Poisson regression analyses.1 We used Poisson regression because the dependent variable is count data (Cohen et al., 2003, p. 531). As the moderating variable, managerial level, was categorical and contained three levels, we followed recommendations by Aguinis (2003), with first-level managers chosen as the comparison group because their responses were expected to be the most different from middle and senior-level managers (Floyd and Wooldridge, 1992; Floyd and Lane, 2000). For comparison one, first-level managers were compared with middle-level managers; for comparison two, first-level managers were compared with senior-level managers. Table 2 presents a seven-step model to explain the number of ideas implemented. Step 1 includes the control variables. Step 2 includes the main-effects only and significantly increases the explained variance over and above Step 1. The findings indicate that a greater number of ideas are associated with more top management support (coeff = .410; p b .01), greater rewards and positive reinforcement (coeff = .186; p b .01), less available time (coeff = − .099; p b .05), with being a middle manager rather than a first-line manager (coeff = .241; p b .01), and with being a senior manager rather than a first-line manager (coeff = .232; p b .01). Steps 3–6 add the interaction terms involving managerial level 1 To use structural equation modeling would not be appropriate given the stated hypotheses (e.g., Kline, 2005) and we were concerned that the sample sizes were too small to yield stable results from a subgroup analyses within structural equation modeling (e.g., MacCallum et al., 1992). In their introduction to modeling interactions, Rigdon et al. (1998) caution against using the increased complex multisample structural equation modeling in all situations seeking to explore interactions because of the sample size splitting that must occur in the analyses. For these reasons, the more parsimonious regression analysis strategy was chosen.
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Fig. 2.
separately for each independent variable and model 7 represents the full model. The full model (model 7) explains a significant amount variance over and above the main-effects model (Step 2) indicating that the interaction terms significantly increase the explanation of the number of ideas generated. Based on Step 3, managerial level (middle and first-level managers [coeff = .612; p b .01] and senior and first-level managers [coeff = .478; p b .01]) significantly moderate the relationship between top management support and the number of ideas generated. Based on Step 4, managerial level (middle and first-level managers [coeff = .952; p b .01] and senior and first-level managers [coeff = 1.319; p b .01]) significantly moderate the relationship between work discretion and the number of ideas generated. Based on Step 5, managerial level (middle and first-level managers [coeff = − .150; p b .01]) significantly moderates the relationship between rewards/reinforcement and the number of ideas generated. Based on Step 6, managerial level (middle and first-level managers [coeff = .250; p b .05]) significantly moderates the relationship between work discretion and the number of ideas generated. One note of caution is that two
Fig. 3.
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Fig. 4.
of the interactions that are significant when first introduced are not significant in the full model. We did not find significant moderating relationships for reward and managerial level between senior and first-line managers and for time availability and managerial level between senior and first-line managers. Therefore, we did not find support for Hypotheses 3b and 4b, respectively. Boundary flexibility was dropped from the analysis and therefore we did not provide support for H5a and H5b. In order to better understand the nature of the significant interactions found in the full model (model 7), we used graphing procedures described by Aiken and West (1991). In Fig. 1 the number of ideas implemented increases with top management support faster for both middle managers and senior managers than first-level managers providing support for Hypotheses 1a and 1b, respectively. In Fig. 2, the number of ideas generated increases with work discretion for both middle and senior managers but not for first-level managers, providing support for Hypotheses 2a and 2b, respectively. In Fig. 3 the number of ideas implemented decreases with time availability at a faster rate for first-level managers than middle level managers. This significant relationship does not provide support for H3a. In Fig. 4, the number of ideas implemented increases with rewards faster for first-level managers than middle managers providing support for H5a. As job satisfaction has been found to influence manager's corporate entrepreneurial behaviors (e.g., Kuratko et al., 2005a,b), we also examined the potential mediating role of job satisfaction in translating perceptions of the internal antecedents into ideas implemented. Results of the mediated regression analyses did not support the mediating role. 6. Discussion and conclusions The focus of this research has been on differences across levels in the relationship between perceived antecedents to entrepreneurial activity and the number of ideas implemented. Our findings complement the research on the differential roles of managers suggested by Floyd and Wooldridge (1990, 1992, 1994), Floyd and Lane (2000), Kraut et al. (2005), and others. Specifically, managerial level moderated the relationship between top management support and the number of ideas implemented and moderated the relationship between work discretion and the number of ideas implemented. Managers at higher levels were better able to make the most of top management support and of work discretion. These findings have important implications for scholars of CE. With respect to the first hypothesis, under high levels of perceived managerial support, senior and middle managers, by virtue of their higher ranking positions, were more likely to implement entrepreneurial ideas. First-level managers, however, were relatively unlikely to see their ideas implemented or make unofficial improvements, regardless of the level of managerial support. Hypothesis 2 was also supported, such that the nature of the interaction indicates there was a positive relationship between work discretion and number of ideas implemented for senior and middle-level managers; however, for first-
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level managers, this relationship was negative. These results indicate that work discretion only results in increased entrepreneurial actions (in the form of number of ideas implemented) for senior and middle-level managers, or those individuals with the experience and personal discipline likely necessary to support autonomy and discretion. An explanation for this finding may be that these lower level managers, even though they perceived an environment of work discretion, did not see the link between it and their own activities. Garvin and Levesque (2006) refer to this as the “two cultures problem” where organizations traditionally focus on incremental improvement through a focus on stability and efficiency. CE requires a “melding” of cultures. If the CE strategy has not been integrated down into lower levels of management, an increase focus on traditional practices could result when a lower manager has more discretion and autonomy. Also, specific control systems that exist in the organization, especially managerial flexibility, may lead the lower level managers to perceive the need to spend more time on standard procedures and activities and not engage in more entrepreneurial behavior (Morris et al., 2006). Based on the full regression model no significant moderator relationships for rewards/reinforcement and time availability were found. Therefore, Hypotheses 3 and 4 were not supported. However, when looking at the interactions themselves, there seemed to be some indication that there is a moderating effect between these variables and management level. These ambiguous findings may reflect the fact that if much of the CE activity is viewed as unsanctioned, little formal structure for rewards and resources will be instituted. A recent article by Hayton (2005) argued that for CE to be successful, important human resource practices like adequate rewards for entrepreneurial activities must be in place. His article argued that due to agency theory, lower level managers may be more risk averse and need to be encouraged by tying risk taking to pay outcomes. Therefore, the weak findings for the rewards/ reinforcement antecedent and ideas implemented could be that firms struggle with how to implement formal reward structures for corporate entrepreneurs. The findings of this study advance the research in the area of internal antecedents and the viability of the CE process. This study also replicates the assertions made regarding the role of managerial level in strategy implementation in a CE context. The results indicate that perceived internal antecedents (top management support, work discretion, and rewards/reinforcement) are related to entrepreneurial actions (main-effect relationships), but more importantly, managerial level moderates some of these relationships such that senior and middle-level managers are more influenced by the positive perception of these antecedents. Several explanations for the lack of ideas implemented by first-level managers can be offered. These can include: career stage, technology constraints, or removal from the strategy formulation process (e.g., Hales, 2005). The perception that the role of first-line managers has expanded into more autonomous activities was not supported by this research. Suggesting and implementing new and innovative ideas and processes may, at least in the short run, be viewed as an impediment to achieving those metrics. Also, since first-level managers are seen as the “recipients” of initiatives from middle and senior-level managers, they may not perceive that it is their role to initiate any official or unofficial ideas of their own. Corbett and Hmieleski (2007) argue that the corporate context perpetuates the development of expected behavior within individuals (i.e., role schemas) that are in conflict with entrepreneurial behaviors. They contend that managers within large corporations develop role schemas that can make it difficult for them to carry out entrepreneurial actions. One other explanation for the lack of findings for first-level managers is that the entrepreneurial outcomes measured were insufficient in measuring outcomes pertinent to this level of management. These findings do not support the theoretical arguments proposed Burgelman (1983a,b, 1984), such that autonomous strategic behavior was not shown to be a bottom–up process. First-level managers did not engage in entrepreneurial actions, even when they perceived to have their top manager's support and the necessary discretion to implement new ideas. Perhaps initiatives that enhance better role-goal congruency would be most helpful. For example, if first-line managers were encouraged to generate ideas that better related to their immediate responsibilities then there would be a better opportunity for ideas to surface. 6.1. Limitations and future research This current study has a few limitations that need to be addressed in future research. The sample of managers attending continuing education training on general management development may limit the generalizability of the findings, since those that participate in training and development may be predisposed toward innovation. Future research should be conducted with a broader range of managers. Also, the study utilized single-item dependent variables and self-report data collection methods.
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Partly in response to these issues, some suggestions for future research include continuing to develop and refine performance measures as they relate to entrepreneurial actions. According to Damanpour (1991, 556) corporate innovation is a very broad concept that includes “...the generation, development and implementation of new ideas or actions. An innovation can be a new product or service, an administrative system, or a new plan or program pertaining to organizational members.” this limitation could be addressed in future research by utilizing multiple measures of implementation such as proposing new ideas, receiving funding/approval for new ideas, assembling project teams to develop ideas, and the number of commercialization efforts. Additionally, the dependent variable used in this study, number of new ideas implemented, was likely influenced by factors outside of the manager's control. 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