The Impact of Managerial Environmental Perceptions on Corporate Entrepreneurship: Towards Understanding Discretionary Slack's Pivotal Role
AbstractThis study seeks to further delineate how a firm's competitive environment influences the firm's pursuit of entrepreneurial activities. To do so, we develop and test a parsimonious model that establishes the role of discretionary slack as a salient mediating mechanism through which managerial environmental perceptions influence corporate entrepreneurship. In addition, we examine two contingencies that further explain discretionary slack's impact on corporate entrepreneurship, including managements' market sensing capacity and use of outcome-based incentives. Using single- and multi-source survey data from 495 small- to medium-sized firms, we find support for our model and its associated hypotheses. Specifically, we find that discretionary slack is significantly influenced by managerial perceptions of environmental munificence and dynamism and, in turn, mediates the impact of these perceptions on corporate entrepreneurship. In addition, we find that discretionary slack's impact on corporate entrepreneurship is significantly enhanced by managements' market sensing capacity but, interestingly, not by outcome-based incentives. Copyright Blackwell Publishing Ltd 2007.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Management Studies.
Volume (Year): 44 (2007)
Issue (Month): 8 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380
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- Neill, Stern & York, Jonathan L., 2012. "The entrepreneurial perceptions of strategy makers: Constructing an exploratory path in the pursuit of radical growth," Journal of Business Research, Elsevier, vol. 65(7), pages 1003-1009.
- Richard Arend, 2014. "Entrepreneurship and dynamic capabilities: how firm age and size affect the ‘capability enhancement–SME performance’ relationship," Small Business Economics, Springer, vol. 42(1), pages 33-57, January.
- Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
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